10-Q 1 sien-20230930.htm 10-Q 10-Q
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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, 2023

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.)

 

3333 Michelson Drive, Suite 650

Irvine, California

(Address of Principal Executive Offices)

 

92612

(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 9, 2023, the number of outstanding shares of the registrant’s common stock, par value $0.01 per share, was 11,957,712.

 

 

 


SIENTRA, INC.

FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2023

TABLE OF CONTENTS

 

 

Page

 

 

 

Part I — Financial Information

 

3

 

 

 

Item 1. Condensed Consolidated Financial Statements - Unaudited

 

3

Condensed Consolidated Balance Sheets

 

3

Condensed Consolidated Statements of Operations

 

4

Condensed Consolidated Statements of Stockholders' Equity (Deficit)

 

5

Condensed Consolidated Statements of Cash Flows

 

6

Notes to the Condensed Consolidated Financial Statements

 

7

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

 

28

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

40

Item 4. Controls and Procedures

 

40

 

 

 

Part II — Other Information

 

41

 

 

 

Item 1. Legal Proceedings

 

41

Item 1A. Risk Factors

 

41

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

 

42

Item 3. Defaults Upon Senior Securities

 

42

Item 4. Mine Safety Disclosures

 

42

Item 5. Other Information

 

42

Item 6. Exhibits

 

43

 

“Sientra”, “Sientra Platinum20”, “Sientra Full Circle”, “Sientra Smooth”, “Sientra Teardrop”, “AlloX”, “AlloX2”, “AlloX2 Pro”, “Anatomical Controlled”, “BIOCORNEUM”, “Curve”, “Dermaspan”, “Luxe”, “Softspan”, “Silishield”, “AuraClens”, and “Viality” 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 this 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.

2


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,

 

 

 

2023

 

 

2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

15,026

 

 

$

26,071

 

Accounts receivable, net of allowance for doubtful accounts of $2,776 and $3,132 at September 30, 2023 and December 31, 2022, respectively

 

 

29,610

 

 

 

36,892

 

Inventories

 

 

39,268

 

 

 

42,692

 

Prepaid expenses and other current assets

 

 

2,604

 

 

 

2,094

 

Total current assets

 

 

86,508

 

 

 

107,749

 

Property and equipment, net

 

 

13,289

 

 

 

14,941

 

Goodwill

 

 

9,202

 

 

 

9,202

 

Other intangible assets, net

 

 

24,332

 

 

 

25,676

 

Right of use assets, net

 

 

5,753

 

 

 

7,004

 

Other assets

 

 

849

 

 

 

849

 

Total assets

 

$

139,933

 

 

$

165,421

 

Liabilities and Stockholders’ Deficit

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Current portion of long-term debt

 

 

58,810

 

 

$

-

 

Accounts payable

 

 

5,284

 

 

 

6,818

 

Accrued and other current liabilities

 

 

20,655

 

 

 

22,599

 

Customer deposits

 

 

53,598

 

 

 

45,161

 

Sales return liability

 

 

13,745

 

 

 

15,773

 

Total current liabilities

 

 

152,092

 

 

 

90,351

 

Long-term debt

 

 

 

 

 

55,406

 

Derivative liability

 

 

3,153

 

 

 

880

 

Deferred and contingent consideration

 

 

1,794

 

 

 

2,791

 

Warranty reserve

 

 

8,758

 

 

 

8,186

 

Lease liabilities

 

 

4,129

 

 

 

5,518

 

Other liabilities

 

 

2,052

 

 

 

2,698

 

Total liabilities

 

 

171,978

 

 

 

165,830

 

Commitments and contingencies (Note 11)

 

 

 

 

 

 

Stockholders’ deficit:

 

 

 

 

 

 

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 11,375,478 and 10,709,716 and outstanding 11,368,205 and 10,702,444 shares at September 30, 2023 and December 31, 2022, respectively

 

 

114

 

 

 

107

 

Additional paid-in capital

 

 

699,894

 

 

 

694,395

 

Treasury stock, at cost (7,273 shares at September 30, 2023 and December 31, 2022)

 

 

(260

)

 

 

(260

)

Accumulated deficit

 

 

(731,793

)

 

 

(694,651

)

Total stockholders’ deficit

 

 

(32,045

)

 

 

(409

)

Total liabilities and stockholders’ deficit

 

$

139,933

 

 

$

165,421

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

3


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,

 

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

Net sales

 

$

19,544

 

 

$

22,570

 

 

$

65,231

 

$

65,481

 

 

Cost of goods sold

 

 

9,515

 

 

 

9,794

 

 

 

30,440

 

 

 

27,118

 

 

Gross profit

 

 

10,029

 

 

 

12,776

 

 

 

34,791

 

 

 

38,363

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

9,330

 

 

 

12,290

 

 

 

29,487

 

 

 

41,542

 

 

Research and development

 

 

2,476

 

 

 

3,720

 

 

 

7,571

 

 

 

9,823

 

 

General and administrative

 

 

7,620

 

 

 

9,324

 

 

 

24,805

 

 

 

31,589

 

 

Total operating expenses

 

 

19,426

 

 

 

25,334

 

 

 

61,863

 

 

 

82,954

 

 

Loss from operations

 

 

(9,397

)

 

 

(12,558

)

 

 

(27,072

)

 

 

(44,591

)

 

Other (expense) income, net:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

168

 

 

 

41

 

 

 

458

 

 

 

58

 

 

Interest expense

 

 

(2,367

)

 

 

(2,364

)

 

 

(7,250

)

 

 

(6,584

)

 

Change in fair value of derivative liability

 

 

(3,153

)

 

 

 

 

 

(3,153

)

 

 

 

 

Other (expense) income, net

 

 

(24

)

 

 

(6

)

 

 

(125

)

 

 

(1

)

 

Total other (expense) income, net

 

 

(5,376

)

 

 

(2,329

)

 

 

(10,070

)

 

 

(6,527

)

 

Loss from continuing operations before income taxes

 

 

(14,773

)

 

 

(14,887

)

 

 

(37,142

)

 

 

(51,118

)

 

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from continuing operations

 

 

(14,773

)

 

 

(14,887

)

 

 

(37,142

)

 

 

(51,118

)

 

Loss from discontinued operations, net of income taxes

 

 

 

 

 

(94

)

 

 

 

 

 

(208

)

 

Net loss

 

$

(14,773

)

$

(14,981

)

 

$

(37,142

)

$

(51,326

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Basic and diluted net loss per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(1.31

)

 

$

(2.37

)

 

$

(3.23

)

 

$

(8.16

)

 

Discontinued operations

 

 

 

 

 

(0.01

)

 

 

 

 

 

(0.03

)

 

Basic and diluted net loss per share

 

$

(1.31

)

 

$

(2.38

)

 

$

(3.23

)

 

$

(8.19

)

 

Weighted average outstanding common shares used for net loss per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

11,290,699

 

 

 

6,284,817

 

 

 

11,488,310

 

 

 

6,261,350

 

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

4


SIENTRA, INC.

Condensed Consolidated Statements of Stockholders' Equity (Deficit)

(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 (deficit)

 

Balances at December 31, 2021

 

 

 

 

$

 

 

 

6,224,209

 

 

$

62

 

 

 

7,273

 

 

$

(260

)

 

$

662,399

 

 

$

(621,344

)

 

$

40,857

 

Employee stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,196

 

 

 

 

 

 

2,196

 

Employee stock purchase program (ESPP)

 

 

 

 

 

 

 

 

13,958

 

 

 

 

 

 

 

 

 

 

 

 

329

 

 

 

 

 

 

329

 

Vested RSUs

 

 

 

 

 

 

 

 

26,533

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares withheld for tax obligations on vested RSUs

 

 

 

 

 

 

 

 

(9,407

)

 

 

 

 

 

 

 

 

 

 

 

(255

)

 

 

 

 

 

(255

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,041

)

 

 

(18,041

)

Balances at March 31, 2022

 

 

 

 

$

 

 

 

6,255,293

 

 

$

62

 

 

 

7,273

 

 

$

(260

)

 

$

664,669

 

 

$

(639,385

)

 

$

25,086

 

Employee stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,062

 

 

 

 

 

 

2,062

 

Vested RSUs

 

 

 

 

 

 

 

 

33,077

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares repurchased for tax withholding on vesting RSUs

 

 

 

 

 

 

 

 

(8,749

)

 

 

 

 

 

 

 

 

 

 

 

(175

)

 

 

 

 

 

(175

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,304

)

 

 

(18,304

)

Balances at June 30, 2022

 

 

 

 

$

 

 

 

6,279,621

 

 

$

62

 

 

 

7,273

 

 

$

(260

)

 

$

666,556

 

 

$

(657,689

)

 

$

8,669

 

Employee stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,855

 

 

 

 

 

 

1,855

 

Employee stock purchase program (ESPP)

 

 

 

 

 

 

 

 

20,313

 

 

 

 

 

 

 

 

 

 

 

 

144

 

 

 

 

 

 

144

 

Vested RSUs

 

 

 

 

 

 

 

 

7,602

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares repurchased for tax withholding on vesting RSUs

 

 

 

 

 

 

 

 

(2,055

)

 

 

 

 

 

 

 

 

 

 

 

(18

)

 

 

 

 

 

(18

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(14,981

)

 

 

(14,981

)

Balances at September 30, 2022

 

 

 

 

$

 

 

 

6,305,480

 

 

$

62

 

 

 

7,273

 

 

$

(260

)

 

$

668,537

 

 

$

(672,670

)

 

$

(4,331

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Total

 

 

 

Preferred stock

 

 

Common stock

 

 

Treasury stock

 

 

paid-in

 

 

Accumulated

 

 

stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

capital

 

 

deficit

 

 

deficit

 

Balances at December 31, 2022

 

 

 

 

$

 

 

 

10,709,716

 

 

$

107

 

 

 

7,273

 

 

$

(260

)

 

$

694,395

 

 

$

(694,651

)

 

$

(409

)

Derivative liability reclassified to equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

880

 

 

 

 

 

 

880

 

Exercise of warrants

 

 

 

 

 

 

 

 

290,315

 

 

 

3

 

 

 

 

 

 

 

 

 

(3

)

 

 

 

 

 

 

Employee stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,722

 

 

 

 

 

 

1,722

 

Employee stock purchase program (ESPP)

 

 

 

 

 

 

 

 

146,227

 

 

 

1

 

 

 

 

 

 

 

 

 

255

 

 

 

 

 

 

256

 

Vested RSUs

 

 

 

 

 

 

 

 

70,017

 

 

 

1

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

 

Shares repurchased for tax withholding on vesting RSUs

 

 

 

 

 

 

 

 

(25,034

)

 

 

 

 

 

 

 

 

 

 

 

(40

)

 

 

 

 

 

(40

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(12,892

)

 

 

(12,892

)

Balances at March 31, 2023

 

 

 

 

$

 

 

 

11,191,241

 

 

$

112

 

 

 

7,273

 

 

$

(260

)

 

$

697,208

 

 

$

(707,543

)

 

$

(10,483

)

Employee stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,338