Quarterly Report (10-q)

Date : 11/07/2019 @ 10:01PM
Source : Edgar (US Regulatory)
Stock : Sientra Inc (SIEN)
Quote : 8.335  0.075 (0.91%) @ 12:59AM
After Hours
Last Trade
Last $ 8.34 ◊ 0.00 (0.00%)

Quarterly Report (10-q)

 

f 18

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission file number: 001-36709

 

SIENTRA, INC.

(Exact Name of Registrant as Specified in its Charter)

 

Delaware

(State or Other Jurisdiction of

Incorporation or Organization)

 

20-5551000

(I.R.S. Employer

Identification No.)

 

420 South Fairview Avenue, Suite 200

Santa Barbara, California

(Address of Principal Executive Offices)

 

93117

(Zip Code)

 

(805) 562-3500

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock, par value $0.01 per share

 

SIEN

 

The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

 

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.       

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

 

As of November 1, 2019, the number of outstanding shares of the registrant’s common stock, par value $0.01 per share, was 49,481,559.

 

 

 


 

SIENTRA, INC.

FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2019

TABLE OF CONTENTS

 

 

 

Page

 

 

 

Part I — Financial Information

 

1

 

 

 

Item 1. Condensed Consolidated Financial Statements - Unaudited

 

1

Condensed Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018

 

1

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2019 and 2018

 

2

Condensed Consolidated Statement of Stockholders' Equity for the Period from December 31, 2018 through September 30, 2019

 

3

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018

 

4

Notes to the Condensed Consolidated Financial Statements

 

5

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

25

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

33

Item 4. Controls and Procedures

 

34

 

 

 

Part II — Other Information

 

35

 

 

 

Item 1. Legal Proceedings

 

35

Item 1A. Risk Factors

 

35

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

39

Item 3. Defaults Upon Senior Securities

 

39

Item 4. Mine Safety Disclosures

 

39

Item 5. Other Information

 

39

Item 6. Exhibits

 

41

 

“Sientra”, “Sientra Platinum20”, “Sientra Full Circle”, “OPUS”, “Allox”, “Allox2”, “BIOCORNEUM”, “Curve”, “Dermaspan”, “Luxe”, “Softspan”, “Silishield”, “miraDry”, “Miramar Labs”, “miraDry and Design”, “miraDry Fresh”, “bioTip”, “The Sweat Stops Here”, “No Sweat No Stress”, “Sweat Less Live More”, “Drop Design”, “miraWave”, “miraSmooth”, “miraFresh”, “freshRewards”, “freshNet”, “freshEquity”,  and “ML Stylized mark” are trademarks of our company. Our logo and our other trade names, trademarks and service marks appearing in this document are our property. Other trade names, trademarks and service marks appearing in this document are the property of their respective owners. Solely for convenience, our trademarks and trade names referred to in the document, appear without the TM or the (R) symbol, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights, or the rights of the applicable licensor to these trademarks and trade names.

 


 

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SIENTRA, INC.

Condensed Consolidated Balance Sheets

(In thousands, except per share and share amounts)

(Unaudited)

 

 

 

September 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

120,915

 

 

$

86,899

 

Accounts receivable, net of allowances of $3,302 and $2,428 at September 30, 2019 and December 31, 2018, respectively

 

 

24,791

 

 

 

22,527

 

Inventories, net

 

 

30,374

 

 

 

24,085

 

Prepaid expenses and other current assets

 

 

3,144

 

 

 

2,612

 

Total current assets

 

 

179,224

 

 

 

136,123

 

Property and equipment, net

 

 

3,980

 

 

 

2,536

 

Goodwill

 

 

4,878

 

 

 

12,507

 

Other intangible assets, net

 

 

9,779

 

 

 

16,495

 

Other assets

 

 

22,021

 

 

 

698

 

Total assets

 

$

219,882

 

 

$

168,359

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Current portion of long-term debt

 

$

7,352

 

 

$

6,866

 

Accounts payable

 

 

8,738

 

 

 

13,184

 

Accrued and other current liabilities

 

 

28,741

 

 

 

27,697

 

Legal settlement payable

 

 

 

 

 

410

 

Customer deposits

 

 

11,686

 

 

 

9,936

 

Sales return liability

 

 

7,563

 

 

 

6,048

 

Total current liabilities

 

 

64,080

 

 

 

64,141

 

Long-term debt

 

 

38,117

 

 

 

27,883

 

Deferred and contingent consideration

 

 

364

 

 

 

6,481

 

Warranty reserve and other long-term liabilities

 

 

21,054

 

 

 

2,976

 

Total liabilities

 

 

123,615

 

 

 

101,481

 

Commitments and contingencies (Note 14)

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.01 par value – Authorized 10,000,000 shares; none

   issued or outstanding

 

 

 

 

 

 

Common stock, $0.01 par value — Authorized 200,000,000 shares; issued 49,534,414 and 28,701,494 and outstanding 49,461,687 and 28,628,767 shares at September 30, 2019 and December 31, 2018 respectively

 

 

495

 

 

 

286

 

Additional paid-in capital

 

 

544,700

 

 

 

428,949

 

Treasury stock, at cost (72,727 shares at September 30, 2019 and December 31, 2018)

 

 

(260

)

 

 

(260

)

Accumulated deficit

 

 

(448,668

)

 

 

(362,097

)

Total stockholders’ equity

 

 

96,267

 

 

 

66,878

 

Total liabilities and stockholders’ equity

 

$

219,882

 

 

$

168,359

 

 

See accompanying notes to condensed consolidated financial statements.

1


 

SIENTRA, INC.

Condensed Consolidated Statements of Operations

(In thousands, except per share and share amounts)

(Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Net sales

 

$

22,412

 

 

$

16,875

 

 

 

60,489

 

 

 

49,104

 

Cost of goods sold

 

 

9,754

 

 

 

6,398

 

 

 

24,041

 

 

 

19,154

 

Gross profit

 

 

12,658

 

 

 

10,477

 

 

 

36,448

 

 

 

29,950

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

18,668

 

 

 

15,254

 

 

 

60,987

 

 

 

45,990

 

Research and development

 

 

3,201

 

 

 

2,881

 

 

 

9,526

 

 

 

7,930

 

General and administrative

 

 

12,249

 

 

 

11,904

 

 

 

37,538

 

 

 

31,419

 

Goodwill and other intangible impairment

 

 

 

 

 

 

 

 

12,674

 

 

 

 

Total operating expenses

 

 

34,118

 

 

 

30,039

 

 

 

120,725

 

 

 

85,339

 

Loss from operations

 

 

(21,460

)

 

 

(19,562

)

 

 

(84,277

)

 

 

(55,389

)

Other income (expense), net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

510

 

 

 

133

 

 

 

1,083

 

 

 

214

 

Interest expense

 

 

(1,344

)

 

 

(953

)

 

 

(3,276

)

 

 

(2,474

)

Other income (expense), net

 

 

(139

)

 

 

(163

)

 

 

(101

)

 

 

(347

)

Total other income (expense), net

 

 

(973

)

 

 

(983

)

 

 

(2,294

)

 

 

(2,607

)

Loss before income taxes

 

 

(22,433

)

 

 

(20,545

)

 

 

(86,571

)

 

 

(57,996

)

Income tax (benefit) expense

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(22,433

)

 

$

(20,545

)

 

 

(86,571

)

 

 

(57,996

)

Basic and diluted net loss per share attributable to

   common stockholders

 

$

(0.45

)

 

$

(0.72

)

 

 

(2.30

)

 

 

(2.39

)

Weighted average outstanding common shares used for

   net loss per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

49,401,094

 

 

 

28,462,975

 

 

 

37,671,215

 

 

 

24,312,300

 

 

See accompanying notes to condensed consolidated financial statements.

 

2


 

SIENTRA, INC.

Condensed Consolidated Statement of Stockholders' Equity

(In thousands, except share amounts)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Total

 

 

 

Preferred stock

 

 

Common stock

 

 

Treasury stock

 

 

paid-in

 

 

Accumulated

 

 

stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

capital

 

 

deficit

 

 

equity

 

Balances at December 31, 2017

 

 

 

 

$

 

 

 

19,474,702

 

 

$

194

 

 

 

72,727

 

 

$

(260

)

 

$

307,159

 

 

$

(279,470

)

 

$

27,623

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,548

 

 

 

 

 

 

2,548

 

Employee stock purchase program (ESPP)

 

 

 

 

 

 

 

 

62,491

 

 

 

1

 

 

 

 

 

 

 

 

 

390

 

 

 

 

 

 

391

 

Vested restricted stock

 

 

 

 

 

 

 

 

271,936

 

 

 

3

 

 

 

 

 

 

 

 

 

(3

)

 

 

 

 

 

 

Shares withheld for tax obligations on vested RSUs

 

 

 

 

 

 

 

 

(92,760

)

 

 

(1

)

 

 

 

 

 

 

 

 

(1,295

)

 

 

 

 

 

(1,296

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(19,423

)

 

 

(19,423

)

Balances at March 31, 2018

 

 

 

 

 

 

 

 

19,716,369

 

 

$

197

 

 

 

72,727

 

 

$

(260

)

 

$

308,799

 

 

$

(298,893

)

 

$

9,843

 

Proceeds from follow-on offering, net of costs

 

 

 

 

 

 

 

 

8,518,519

 

 

 

85

 

 

 

 

 

 

 

 

 

107,466

 

 

 

 

 

 

107,551

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,138

 

 

 

 

 

 

3,138

 

Stock option exercises

 

 

 

 

 

 

 

 

61,203

 

 

 

1

 

 

 

 

 

 

 

 

 

409

 

 

 

 

 

 

410

 

Vested restricted stock

 

 

 

 

 

 

 

 

94,180

 

 

 

1

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,028

)

 

 

(18,028

)

Balances at June 30, 2018

 

 

 

 

$

 

 

 

28,390,271

 

 

$

284

 

 

 

72,727

 

 

$

(260

)

 

$

419,811

 

 

$

(316,921

)

 

$

102,914

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,391

 

 

 

 

 

 

4,391

 

Stock option exercises

 

 

 

 

 

 

 

 

86,260

 

 

 

 

 

 

 

 

 

 

 

 

738

 

 

 

 

 

 

738

 

Employee stock purchase program (ESPP)

 

 

 

 

 

 

 

 

83,125

 

 

 

 

 

 

 

 

 

 

 

 

601

 

 

 

 

 

 

602

 

Vested restricted stock

 

 

 

 

 

 

 

 

98,391

 

 

 

1

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

 

Shares withheld for tax obligations on vested RSUs

 

 

 

 

 

 

 

 

(7,103

)

 

 

 

 

 

 

 

 

 

 

 

(123

)

 

 

 

 

 

(123

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(20,545

)

 

 

(20,545

)

Balances at September 30, 2018

 

 

 

 

$

 

 

 

28,650,944

 

 

 

285

 

 

 

72,727

 

 

 

(260

)

 

 

425,417

 

 

 

(337,466

)

 

 

87,976

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Total

 

 

 

Preferred stock

 

 

Common stock

 

 

Treasury stock

 

 

paid-in

 

 

Accumulated

 

 

stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

capital

 

 

deficit

 

 

equity

 

Balances at December 31, 2018

 

 

 

 

$

 

 

 

28,701,494

 

 

$

286

 

 

 

72,727

 

 

$

(260

)

 

$

428,949

 

 

$

(362,097

)

 

$

66,878

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,772

 

 

 

 

 

 

3,772

 

Stock option exercises

 

 

 

 

 

 

 

 

45,453

 

 

 

 

 

 

 

 

 

 

 

 

106

 

 

 

 

 

 

106

 

Employee stock purchase program (ESPP)

 

 

 

 

 

 

 

 

68,899

 

 

 

1

 

 

 

 

 

 

 

 

 

682

 

 

 

 

 

 

683

 

Vested restricted stock

 

 

 

 

 

 

 

 

671,245

 

 

 

7

 

 

 

 

 

 

 

 

 

(7

)

 

 

 

 

 

 

Shares withheld for tax obligations on vested RSUs

 

 

 

 

 

 

 

 

(212,714

)

 

 

(2

)

 

 

 

 

 

 

 

 

(2,723

)

 

 

 

 

 

(2,725

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(26,484

)

 

 

(26,484

)

Balances at March 31, 2019

 

 

 

 

 

 

 

 

29,274,377

 

 

$

292

 

 

 

72,727

 

 

$

(260

)

 

$

430,779

 

 

$

(388,581

)

 

$

42,230

 

Proceeds from follow-on offering, net of costs

 

 

 

 

 

 

 

 

20,000,000

 

 

 

200

 

 

 

 

 

 

 

 

 

107,534

 

 

 

 

 

 

107,734

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,963

 

 

 

 

 

 

2,963

 

Vested restricted stock

 

 

 

 

 

 

 

 

88,454

 

 

 

1

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

 

Shares withheld for tax obligations on vested RSUs

 

 

 

 

 

 

 

 

(12,565

)

 

 

 

 

 

 

 

 

 

 

 

(100

)

 

 

 

 

 

(100

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(37,654

)

 

 

(37,654

)

Balances at June 30, 2019

 

 

 

 

$

 

 

 

49,350,266

 

 

$

493

 

 

 

72,727

 

 

$

(260

)

 

$

541,175

 

 

$

(426,235

)

 

$

115,173

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,115

 

 

 

 

 

 

3,115

 

Stock option exercises

 

 

 

 

 

 

 

 

3,271

 

 

 

 

 

 

 

 

 

 

 

 

9

 

 

 

 

 

 

9

 

Employee stock purchase program (ESPP)

 

 

 

 

 

 

 

 

106,725

 

 

 

1

 

 

 

 

 

 

 

 

 

533

 

 

 

 

 

 

534

 

Vested restricted stock

 

 

 

 

 

 

 

 

92,676

 

 

 

1

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

 

Shares withheld for tax obligations on vested RSUs

 

 

 

 

 

 

 

 

(18,524

)

 

 

 

 

 

 

 

 

 

 

 

(131

)

 

 

 

 

 

(131

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(22,433

)

 

 

(22,433

)

Balances at September 30, 2019

 

 

 

 

$

 

 

 

49,534,414

 

 

$

495

 

 

 

72,727