View Filing Data

83,549

82,338

65,383

Gross profit

98,163

80,382

86,110

Operating expenses:

General and administrative

71,109

58,420

52,070

Research and development

15,085

14,359

12,874

24,033

20,995

14,090

Lease termination income

(4,000)

Total operating expenses

110,227

93,774

75,034

Income (loss) from operations

(12,064)

(13,392)

11,076

Interest and other income(expense), net

(199)

(123)

^[1]

884

Income (loss) before income taxes

(12,263)

(13,515)

11,960

Income tax (benefit) provision

17,255

(18,033)

Net income (loss)

$ (12,348)

$ (30,770)

$ 29,993

Net loss per share:

Basic (in dollars per share)

$ (0.88)

$ (2.23)

$ 2.16

Diluted (in dollars per share)

$ (0.88)

$ (2.23)

$ 2.04

Weighted-average number of shares used in per share calculations:

Basic (in shares)

14,096

13,771

13,873

Diluted (in shares)

14,096

13,771

14,728

Product [Member]

Net revenue:

Revenue from Contract with Customer, Including Assessed Tax

$ 158,638

$ 142,535

$ 132,660

Cost of revenue:

64,693

66,843

56,363

Operating expenses:

Revenue from Contract with Customer, Including Assessed Tax

58,420

Service [Member]

Net revenue:

23,074

20,185

18,833

Cost of revenue:

$ 18,856

$ 15,495

$ 9,020

[1]	Included in interest and other income, net, is the estimated interest expense for advance payment related to service contracts under the new revenue standard.

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Net income (loss)	$ (12,348)	$ (30,770)	$ 29,993
Available-for-sale investments
Net change in unrealized gain (loss) on available-for-sale investments	9	14	(15)
Less: Reclassification adjustment for net losses (gains) on investments recognized during the year		9	(5)
Net change in unrealized gain (loss) on available-for-sale investments	9	23	(20)
Other comprehensive income (loss), net of tax	9	23	(20)
Comprehensive income (loss)	$ (12,339)	$ (30,747)	$ 29,973

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Balance (in shares) at Dec. 31, 2016	13,773,389
Balance at Dec. 31, 2016	$ 14	$ 88,114	$ (27,046)	$ (72)	$ 61,010
Issuance of common stock for employee purchase plan (in shares)	78,479
Issuance of common stock for employee purchase plan		1,059			$ 1,059
Exercise of stock options (in shares)	488,398				488,398
Exercise of stock options		4,376			$ 4,376
Issuance of common stock in settlement of restricted and performance stock units, net of shares withheld for employee taxes, and stock awards (in shares)	160,309
Issuance of common stock in settlement of restricted and performance stock units, net of shares withheld for employee taxes, and stock awards		(1,469)			(1,469)
Repurchase of common stock (in shares)	(1,022,602)
Repurchase of common stock	$ (1)	(35,165)			(35,166)
Stock-based compensation expense		5,110			5,110
Net income (loss)			29,993		29,993
Net change in unrealized loss on available-for-sale investments				(20)	(20)
Adjustment to opening balance for ASC 606 adoption at Dec. 31, 2016			3,813		3,813
Balance (in shares) at Dec. 31, 2017	13,447,973
Balance at Dec. 31, 2017	$ 13	62,025	2,947	(92)	64,893
Issuance of common stock for employee purchase plan (in shares)	64,511
Issuance of common stock for employee purchase plan	$ 1	1,680			$ 1,680
Exercise of stock options (in shares)	271,902				271,902
Exercise of stock options		2,718			$ 2,718
Issuance of common stock in settlement of restricted and performance stock units, net of shares withheld for employee taxes, and stock awards (in shares)	154,466
Issuance of common stock in settlement of restricted and performance stock units, net of shares withheld for employee taxes, and stock awards		(3,128)			(3,128)
Stock-based compensation expense		7,157			7,157
Net income (loss)			(30,770)		(30,770)
Net change in unrealized loss on available-for-sale investments				23	$ 23
Balance (in shares) at Dec. 31, 2018	13,968,852				13,968,852
Balance at Dec. 31, 2018	$ 14	70,451	(24,010)	(69)	$ 46,386
Issuance of common stock for employee purchase plan (in shares)	82,810
Issuance of common stock for employee purchase plan		1,281			$ 1,281
Exercise of stock options (in shares)	160,798				160,798
Exercise of stock options		1,613			$ 1,613
Issuance of common stock in settlement of restricted and performance stock units, net of shares withheld for employee taxes, and stock awards (in shares)	103,126
Issuance of common stock in settlement of restricted and performance stock units, net of shares withheld for employee taxes, and stock awards		(831)			(831)
Stock-based compensation expense		9,832			9,832
Net income (loss)			(12,348)		(12,348)
Net change in unrealized loss on available-for-sale investments				9	$ 9
Balance (in shares) at Dec. 31, 2019	14,315,586				14,315,586
Balance at Dec. 31, 2019	$ 14	$ 82,346	$ (36,358)	$ (60)	$ 45,942

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Cash flows from operating activities:
Net income (loss)	$ (12,348)	$ (30,770)	$ 29,993
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Stock-based compensation	9,832	7,157	5,110
Depreciation and amortization	1,548	1,209	1,016
Amortization of contract acquisition costs	2,915	1,834
Change in deferred tax assets	34	17,438	(18,678)
Provision for doubtful accounts receivable	(590)	(1,257)	1
Other	127	241	(51)
Changes in assets and liabilities:
Accounts receivable	(2,509)	(117)	(4,229)
Inventories	(5,907)	768	(13,805)
Other current assets and prepaid expenses	(1,762)	(1,070)	(591)
Other long-term assets	(3,355)	(2,754)	6
Accounts payable	1,406	4,277	4,404
Accrued liabilities	7,157	(3,781)	9,345
Extended warranty liabilities	(1,160)	3,159
Other long-term liabilities	(140)	140
Deferred revenue	1,656	1,305	1,557
Income tax liability	(301)	15	211
Net cash provided by (used in) operating activities	(2,217)	308	14,287
Cash flows from investing activities:
Acquisition of property, equipment and software	(991)	(1,488)	(855)
Disposal of property and equipment	45	41	53
Proceeds from sales of marketable investments		13,044	33,640
Proceeds from maturities of marketable investments	14,700	10,050	45,812
Purchase of marketable investments	(12,687)	(10,874)	(60,956)
Net cash provided by investing activities	1,067	10,773	17,694
Cash flows from financing activities:
Repurchase of common stock			(35,167)
Proceeds from exercise of stock options and employee stock purchase plan	2,894	4,399	5,435
Taxes paid related to net share settlement of equity awards	(831)	(3,129)	(1,469)
Payments on capital lease obligation	(649)	(483)	(371)
Net cash provided by (used in) financing activities	1,414	787	(31,572)
Net increase in cash and cash equivalents	264	11,868	409
Cash and cash equivalents at beginning of year	26,052	14,184	13,775
Cash and cash equivalents at end of year	26,316	26,052	14,184
Supplemental cash flow information:
Cash paid for interest	81	85	70
Cash paid for income taxes	59	472	220
Supplemental non-cash investing and financing activities:
Assets acquired under capital lease	$ 738	$ 610	$ 365

Note 1 - Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2019

Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block]

NOTE

1—SUMMARY

SIGNIFICANT

ACCOUNTING

POLICIES

Description of Operations and Principles of Consolidation

Cutera, Inc. (“Cutera” or the “Company”) provides energy-based aesthetic systems for practitioners worldwide. The Company designs, develops, manufactures, distributes and markets energy-based product platforms for use by physicians and other qualified practitioners, enabling them to offer safe and effective aesthetic treatments to their customers. The Company currently markets the following system platforms:

excel, enlighten, Juliet, Secret RF, truSculpt

and

xeo

. Several of the Company’s systems offer multiple hand pieces and applications, providing customers the flexibility to upgrade their systems. The sales of (i) systems, system upgrades, and hand pieces (collectively “Systems” revenue); (ii) replacement hand pieces,

truSculpt iD

and

truSculpt flex

cycle refills, as well as single use disposable tips applicable to

Juliet

and

Secret RF

(“Consumables” revenue); and (iii) the distribution of

third

party manufactured skincare products (“Skincare” revenue); are collectively classified as “Products” revenue. In addition to Products revenue, the Company generates revenue from the sale of post-warranty service contracts, parts, detachable hand piece replacements (except for

Titan

truSculpt

truSculpt iD

and

truSculpt flex

) and service labor for the repair and maintenance of products that are out of warranty, all of which are collectively classified as “Service” revenue.

Headquartered in Brisbane, California, the Company operates wholly-owned subsidiaries in Australia, Belgium, Canada, France, Germany, Hong Kong, Japan, Spain, Switzerland and the United Kingdom. The Company’s wholly owned subsidiary in Italy is currently dormant. These active subsidiaries market, sell and service the Company’s products outside of the United States. The Consolidated Financial Statements include the accounts of the Company and its subsidiaries. All inter-company transactions and balances have been eliminated.

Use of Estimates

The preparation of Consolidated Financial Statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the accompanying notes, and the reported amounts of revenue and expenses during the reported periods. Actual results could differ materially from those estimates.

On an ongoing basis, management evaluates its estimates, including those related to warranty obligations, sales commission, accounts receivable and allowance for credit losses, valuation of inventories, fair value of goodwill, useful lives of property and equipment, incremental borrowing rates related to the Company’s leases, assumptions regarding variables used in calculating the fair value of the Company's equity awards, expected achievement of performance based vesting criteria, management performance bonuses, fair value of investments, the standalone selling price of the Company's products and services, the period of benefit used to capitalize and amortize contracts acquisition costs, variable consideration, contingent liabilities, recoverability of deferred tax assets, and effective income tax rates. Management bases estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

Risks and Uncertainties

The Company's future results of operations involve a number of risks and uncertainties. Factors that could affect the Company's future operating results and cause actual results to vary materially from expectations include, but are

not

limited to, rapid technological change, continued acceptance of the Company's products, stability of global financial markets, cybersecurity breaches and other disruptions that could compromise the Company’s information or results, management of international activities, competition from substitute products and larger companies, ability to obtain and maintain regulatory approvals, government regulations and oversight, patent and other types of litigation, ability to protect proprietary technology from counterfeit versions of the Company's products, strategic relationships and dependence on key individuals.

Comparability

The Company adopted the new revenue standard effective

January 1, 2018,

using the modified retrospective method. Prior period financial statements were

not

retrospectively restated. The financial results for the years ended

December 31, 2019

and

2018

reflect the adoption of this accounting standard whereas financial results for the year ended

December 31, 2017

were prepared using prior revenue recognition guidance. As a result the consolidated statements of operations for the years ended

December 31, 2019

and

2018

are

not

directly comparable to the consolidated statement of operations for the year ended

December 31, 2017.

The Company adopted the new lease standard effective

January 1, 2019,

using the modified retrospective method. Prior period financial statements were

not

retrospectively restated. The financial results for the year ended

December 31, 2019

were prepared using the new lease accounting standard whereas the financial results for the years ended

December 31, 2018

and

2017

were prepared using prior effective guidance. As a result the consolidated balance sheet as of

December 31, 2019

not

directly comparable to the balance sheet as of

December 31, 2018,

and the consolidated statement of operations for the year ended

December

31,2019

not

directly comparable to the consolidated statements of operations for the years ended

December 31, 2018

and

December 31, 2017.

Recently Adopted Accounting Pronouncements

May 2014,

the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

2014

09,

“Revenue from Contracts with Customers,” amending revenue recognition guidance and requiring more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amended guidance, herein referred to as ASC Topic

606,

is effective for annual and interim reporting periods beginning after

December 15, 2017.

The Company adopted ASC Topic

606,

"Revenue from Contracts with Customers," on

January 1, 2018,

applying the modified retrospective method to all agreements that were

not

completed as of

January 1, 2018.

Results for reporting periods beginning after

January 1, 2018

are presented under ASC Topic

606,

while prior period amounts are

not

adjusted and continue to be reported under the accounting standards in effect for the prior periods. A cumulative catch up adjustment was recorded to beginning retained earnings to reflect the impact of all existing arrangements under ASC Topic

606.

Upon adoption of ASC Topic

606,

the Company recorded an increase to retained earnings, net of deferred tax liability, of

$3.8

million for contracts still in force as of

January 1, 2018

for the following items in the

first

quarter of

2018:

●

$237,000

reduction in deferred revenue balances for the differences in the amount of revenue recognized for the Company’s revenue streams as a result of allocation of revenue based on standalone selling prices to the Company’s various performance obligations.

●

$151,000

increase in deferred revenue balances, related to the accretion of financing costs for multi-year post-warranty service contracts for customers who pay more than

one

year in advance of receiving the service. The Company estimated interest expense for such advance payments under the new revenue standard.

●

$210,000

decrease in accrued liabilities.

●

$4.7

million for the capitalization of the incremental contract acquisition costs, such as sales commissions paid in connection with system sales. These contract acquisition costs were capitalized and are being amortized over the period of anticipated support renewals which is estimated to be approximately

2.5

years. The Company expensed such costs when incurred under the prior guidance.

●

$1.2

million deferred tax liability related to the direct tax effect of the ASC Topic

606

adoption.

The following table summarizes the effects of adopting ASC Topic

606

on the Company’s consolidated balance sheet as of

December 31, 2018:

	As reported under ASC Topic 606			Adjustments			Balances under Prior GAAP
	(In thousands)

Other long-term assets	$	5,971		$	(5,217	)	$	754
Deferred revenue		12,566			(106	)		12,460
Retained earnings (deficit)		(24,010	)		4,610			(19,400	)

The following table summarizes the effects of adopting ASC Topic

606

on Company’s consolidated income statement for the year ended

December 31, 2018:

	As reported under Topic 606			Adjustments		Balances under Prior GAAP
	(In thousands)
Products revenue	$	142,535		$	274	$	142,261
Service revenue		20,185			280		19,905
Sales and marketing		58,420			540		58,960
Interest and other income, net*		(123	)		297		174

* Included in interest and other income, net, is the estimated interest expense for advance payment related to service contracts under the new revenue standard.

Adoption of the standard had

impact on total net cash from or used in operating, investing, or financing activities within the consolidated statements of cash flows.

As part of the Company's adoption of ASC Topic

606,

the Company elected to use the following practical expedients: (i)

not

to adjust the promised amount of consideration for the effects of a significant financing component when the Company expects, at contract inception, that the period between the Company's transfer of a promised product or service to a customer and when the customer pays for that product or service will be

one

year or less; (ii) to expense costs as incurred for costs to obtain a contract when the amortization period would have been

one

year or less; (iii)

not

to recast revenue for contracts that begin and end in the same fiscal year; and (iv)

not

to assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer.

February 2018,

the FASB issued ASU

No.

2018

02,

“Income Statement - Reporting Comprehensive Income (Topic

220

) - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income”. This standard allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act and requires certain disclosures about stranded tax effects and became effective beginning

January 1, 2019

and could be applied either in the period of adoption or retrospectively. The Company adopted the standard in the

first

quarter of

2019,

and the adoption had

impact on our consolidated financial statements and related disclosures.

July 2018,

the FASB issued ASU

2018

09,

"Codification Improvements”, which represent changes to clarify, correct errors in, or make minor improvements to the Codification, eliminating inconsistencies and providing clarifications in current guidance. The amendments in this standard include those made to: Subtopic

220

10,

Income Statement-Reporting Comprehensive Income-Overall; Subtopic

470

50,

Debt-Modifications and Extinguishments; Subtopic

480

10,

Distinguishing Liabilities from Equity-Overall; Subtopic

718

740,

Compensation-Stock Compensation-Income Taxes; Subtopic

805

740,

Business Combinations-Income Taxes; Subtopic

815

10,

Derivatives and Hedging-Overall; Subtopic

820

10,

Fair Value Measurement-Overall; Subtopic

940

405,

Financial Services-Brokers and Dealers-Liabilities; and Subtopic

962

325,

Plan Accounting-Defined Contribution Pension Plans-Investments-Other. The transition and effective date guidance is based on the facts and circumstances of each amendment. Some of the amendments do

not

require transition guidance and will be effective upon issuance. However, many of the amendments do have transition guidance with effective dates for annual periods beginning after

December 15, 2018,

for public business entities. The Company adopted subtopics under the standard that are applicable, including Subtopics

718

740

and

820

in the

first

quarter of

2019.

The adoption of this standard had

impact on our consolidated financial statements and related disclosures.

February 2016,

the FASB issued ASU

2016

02,

"Leases," (also known as ASC Topic

842

) which requires, among other items, lease accounting to recognize most leases as assets and liabilities on the balance sheet. Qualitative and quantitative disclosures are enhanced to better present the amount, timing and uncertainty of cash flows arising from leases. In

July 2018,

the FASB issued ASU

2018

11,

"Targeted Improvements," which gives the option to apply the transition provisions of ASU

2016

at its adoption date instead of at the earliest comparative period presented in its financial statements. In addition, ASU

2018

provides a practical expedient that permits lessors to

not

separate non-lease components from the associated lease component if certain conditions are met. Also in

July 2018,

the FASB issued ASU

2018

10,

"Codification Improvements to ASC Topic

842,

Leases," which clarifies certain aspects of ASU

2016

02.

The Company adopted ASU

2016

02,

as of

January 1, 2019,

using the modified retrospective method, to all leases existing at the date of initial application. The comparative period information has

not

been restated and continues to be reported under the accounting standards in effect for the period presented. The new standard provides a number of optional practical expedients in transition. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which allowed the Company to carry forward the Company’s historical conclusions about lease identification, lease classification and initial direct costs. The Company also elected the practical expedient related to land easements, allowing the Company to carry forward the Company’s accounting treatment for land easements on existing agreements. The Company did

not

elect the practical expedient to use hindsight in determining the lease term.

The adoption of the new standard resulted in the recording of additional lease assets and lease liabilities of

$10.2

million and

$10.1

million, respectively, as of

January 1, 2019,

based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases. The difference between the additional lease assets and lease liabilities resulted from rent-free periods which were previously recorded as deferred rent. The Company’s accounting for finance leases remained substantially unchanged. The standard had

material impact on the Company’s consolidated net earnings, results of operations, comprehensive loss, statements of changes in equity, and cash flows.

See below and Note

for additional accounting policy and transition disclosures regarding ASC Topic

842.

Effect of Adoption of the New Lease Standard (ASC Topic

842

) on Consolidated Financial Statements

The following table summarizes the effects of adopting Topic

842

on the Company’s consolidated balance sheet as of

January 1, 2019 (

in thousands):

	As reported under Topic 842			Adjustments			Balances under Prior GAAP
Operating lease right-of-use assets	$	10,049		$	(10,049	)	$	—
Operating lease liabilities		(2,430	)		2,430			—
Other long-term liabilities*		—			140			140
Operating lease liabilities, net of current portion		(7,759	)		7,759			—

*Deferred rent included in other long-term liabilities

June 2016,

the FASB issued ASU

No.

2016

13,

Financial Instruments-Credit Losses (Topic

326

):”Measurement of Credit Losses on Financial Instruments”, which replaces the incurred loss methodology with an expected credit loss methodology that is referred to as the current expected credit loss (CECL) methodology. ASU

2016

is effective for fiscal years beginning after

December 15, 2019,

with early adoption permitted. The amendments in this update are required to be applied using the modified retrospective method with an adjustment to accumulated deficit and are effective for the Company beginning with fiscal year

2020,

including interim periods. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities. An entity with trade receivables will be required to use historical loss information, current conditions, and reasonable and supportable forecasts to determine expected lifetime credit losses. Pooling of assets with similar risk characteristics is also required.

The Company adopted ASU

2016

January 1, 2020

on a modified retrospective basis, and is currently evaluating the impact of adoption of the amendments in these updates on the Company’s financial position, results of operations, and related disclosures.

January 26, 2017,

the FASB issued Accounting Standards Update

No.

2017

04,”

Intangibles—Goodwill and Other (Topic

350

): Simplifying the Test for Goodwill Impairment”. The new guidance requires only a

one

-step quantitative impairment test, whereby a goodwill impairment loss will be measured as the excess of a reporting unit’s carrying amount over its fair value (

not

to exceed the total goodwill allocated to that reporting unit). The new guidance eliminates Step

of the current

two

-step goodwill impairment test, and requires companies to perform the goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. Companies will continue to have the option of performing a qualitative assessment of goodwill impairment; however, if a company performs a qualitative assessment of its goodwill and fails, it must proceed with quantitative impairment testing.

The amendment is effective for the Company for its fiscal years beginning after

December 15, 2019.

The amendment is required to be adopted prospectively. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after

January 1, 2017.

The Company early adopted ASU

2017

04—Intangibles—Goodwill

and Other (Topic

350

): “Simplifying the Test for Goodwill Impairment, on

October 1, 2018.

There was

material impact upon adoption of the new standard to the financial statements.

See “Goodwill and Other Intangible Assets” in Note

– Balance Sheet Detail.

June 2018,

the FASB issued ASU

No.

2018

07,

"Compensation -Stock Compensation (Topic

718

): Improvement to Nonemployee Share-Based Payment Accounting". The new guidance changes the accounting for nonemployee awards including: (

) equity-classified share-based payment awards issued to nonemployees will be measured on the grant date, instead of the previous requirement to remeasure the awards through the performance completion date, (

) for performance conditions, compensation cost associated with the award will be recognized when the achievement of the performance condition is probable, rather than upon achievement of the performance condition, and (

) the current requirement to reassess the classification (equity or liability) for nonemployee awards upon vesting will be eliminated, except for awards in the form of convertible instruments. The new guidance also clarifies that any share-based payment awards issued to customers should be evaluated under ASC Topic

606.

The amendments in the new guidance are effective for annual and interim reporting periods beginning after

December 15, 2018,

with early adoption permitted for public companies, but

earlier than an entity’s adoption date of ASC Topic

606.

The Company adopted the new standard effective

January 1, 2019

and there was

material impact to the financial statements.

August 2018,

the FASB issued ASU

No.

2018

15,

"Intangibles (Topic

350

): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract" (ASU

No.

2018

(Topic

350

)), which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This standard also requires customers to amortize the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement inclusive of expected contract renewals. The Company adopted this standard effective

April 1, 2019,

on a prospective basis for applicable implementation costs and there was

material impact to the financial statements. The adoption of this guidance prospectively resulted in the capitalization of costs related to implementation of a new Enterprise Resource Planning and Customer Relationship Management systems. Refer to Cloud Computing Costs below for further disclosure regarding ASU

No.

2018

(Topic

350

Recently Issued Accounting Pronouncements

Not

Yet Adopted by the Company

August 2018,

the FASB issued ASU

No.

2018

13,

“Fair Value Measurement (Topic

820

): Disclosure Framework- Changes to the Disclosure Requirements for Fair Value Measurement”, to improve the fair value measurement reporting of financial instruments. The amendments in this update require, among other things, added disclosure of the range and weighted average of significant unobservable inputs used to develop Level

fair value measurements. The amendments in this update eliminate, among other things, disclosure of the reasons for and amounts of transfers between Level

and Level

for assets and liabilities that are measured at fair value on a recurring basis and an entity's valuation processes for Level

fair value measurements. The amendments in this update will be effective for the Company beginning with fiscal year

2020,

with early adoption permitted. Retrospective application is required for all amendments in this update except the added disclosures, which should be applied prospectively. The adoption of the amendments in this update is

not

expected to have a material impact on the Company’s consolidated financial position and results of operations.

December 2019,

the FASB issued ASU

No.

2019

“Income Taxes (Topic

740

)-Simplifying the Accounting for Income Taxes”, to remove certain exceptions and improve consistency of application, including, among other things, requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The amendments in this update will be effective for the Company beginning with fiscal year

2021,

with early adoption permitted. Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The adoption of the amendments in this update is

not

expected to have a material impact on the Company’s consolidated financial position and results of operations.

Revenue recognition

Effective

January 1, 2018,

the Company recognized revenue under ASC Topic

606.

Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for promised goods or services. The Company’s performance obligations are satisfied either over time or at a point in time. Revenue from performance obligations that are transferred to customers over time accounted for approximately

13%

and

12%,

respectively, of the Company’s total revenue for the years ended

December 31, 2019

and

2018.

The Company has certain system sale arrangements that contain multiple products and services. For these bundled sale arrangements, the Company accounts for individual products and services as separate performance obligations if they are distinct. The Company’s products and services are distinct if a customer can benefit from the product or service on its own or with other resources that are readily available to the customer, and if the Company’s promise to transfer the products or service to the customer is separately identifiable from other promises in the sale arrangements. The Company’s system sale arrangements can include all or a combination of the following performance obligations: the system and software license (considered as

one

performance obligation), system accessories (hand pieces), training, other accessories, extended service contracts, marketing services, and time and materials services.

For the Company’s system sale arrangements that include an extended service contract, the period of service commences at the expiration of the Company’s standard warranty offered at the time of the system sale. The Company considers the extended service contracts terms in the arrangements that are legally enforceable to be performance obligations. Other than extended service contracts and marketing services, which are satisfied over time, the Company generally satisfies all performance obligations at a point in time. Systems, system accessories (hand pieces), service contracts, training, and time and materials services are also sold on a stand-alone basis, and these performance obligations are satisfied at a point in time. For contracts with multiple performance obligations, the Company allocates the transaction price of the contract to each performance obligation on a relative standalone selling price basis.

Nature of Products and Services

Systems

Systems revenue is generated from the sale of systems and from the sale of upgrades to existing systems. A system consists of a console that incorporates a universal graphic user interface, a laser or other energy based module, control system software and high voltage electronics, as well as

one

or more hand pieces. In certain applications, the laser or other energy-based module is contained in the hand piece, such as with the Company’s

Pearl

and

Pearl Fractional

applications, rather than within the console.

The Company offers customers the ability to select the system that best fits their practice at the time of purchase and then to cost-effectively add applications to their system as their practice grows. This provides customers the flexibility to upgrade their systems whenever they choose and provides the Company with a source of additional Systems revenue.

The system or upgrade and the right to use the embedded software represent a single performance obligation as the software license is integral to the functionality of the system or upgrade.

The Company does

not

identify calibration and installation services for systems other than

enlighten

as performance obligations because such services are immaterial in the context of the contract. The related costs to complete calibration and installation for systems other than

enlighten

are immaterial. Calibration and installation services for

enlighten

systems are identified as separate performance obligations.

For systems sold directly to end-customers that are credit approved, revenue is recognized when the Company transfers control to the end-customer, which occurs when the product is shipped to the customer or when the customer receives the product, depending on the nature of the arrangement. When collectability is

not

established in advance of receipt of payment from the customer, revenue is recognized upon the later of the receipt of payment or the satisfaction of the performance obligation. For systems sold through credit approved distributors, revenue is recognized at the time of shipment to the distributor.

The Company typically receives payment for its system consoles and other accessories within

days of shipment. Certain international distributor arrangements allow for longer payment terms.

Skincare products

The Company sells

third

-party manufactured skincare products in Japan. The

third

-party skincare products are purchased from a

third

-party manufacturer and sold to licensed physicians. The Company acts as the principal in this arrangement, as it determines the price to charge customers for the skincare products, and controls the products before they are transferred to the customer. Sales of skincare products are typically the subject of contracts in which the skincare products represent the sole performance obligations. The Company recognizes revenue for skincare products at a point in time.

Consumables (Other accessories)

The Company classifies its customers' purchases of replacement cycles for truSculpt iD and truSculpt flex, as well as replacement Titan and truSculpt

hand pieces, as Consumable revenue, which provides the Company with a source of recurring revenue from existing customers. The Juliet and Secret RF products have single use disposable tips which must be replaced after every treatment. Sales of these consumable tips further enhance the Company’s recurring revenue. . The Company’s systems offer multiple hand pieces and applications, which allow customers to upgrade their systems. The Company classifies as product revenue the sales of systems, system upgrades, hand pieces, hand piece refills (applicable to Titan® and truSculpt) and the distribution of

third

-party manufactured skincare products.

Extended contract services

The Company offers post-warranty services to its customers through extended service contracts that cover parts and labor for a term of one, two, or

three

years. Service contract revenue is recognized over time, using a time-based measure of progress, as customers benefit from the service throughout the service period. The Company also offers services on a time-and-materials basis for systems and detachable hand piece replacements. Revenue related to services performed on a time-and-materials basis is recognized when performed. These post-warranty services serve as additional sources of recurring revenue from the Company’s installed product base.

Training

Sales of systems to customers include training on the use of the system to be provided within

180

days of purchase. The Company considers training a separate performance obligation as customers can immediately benefit from the training together with the customer’s system. Training is also sold separately from systems. The Company recognizes revenue for training when the training is provided. Training is

not

required for customers to use the systems.

Customer Marketing Support

In North America, the Company offers marketing and consulting phone support to its customers across all system platforms. These customer marketing support services include a practice development model and marketing training, performed remotely with ongoing phone consultations for

six

months from date of purchase. The Company considers customer marketing support a separate performance obligation, and recognizes revenue over the

six

-month term of the contracts.

Significant Judgments

The determination of whether

two

or more contracts entered into at or near the same time with the same customer should be combined and accounted for as

one

contract

may

require the use of significant judgment. In making this determination, the Company considers whether the contracts are negotiated as a package with a single commercial objective, have price interdependencies, or promise goods or services that represent a single performance obligation.

While the Company’s purchase agreements do

not

provide customers with a contractual right of return, the Company maintains a sales allowance to account for potential returns or refunds as a reduction in transaction price at the time of sale. The Company estimates sales returns and other variable consideration based on historical experience.

The Company determines standalone selling price ("SSP") for each performance obligation as follows:

● Systems: The SSPs for systems are based on directly observable sales in similar circumstances to similar customers

● Training: SSP is based on observable price when sold on a standalone basis.

● Extended warranty/Service contracts: SSP is based on observable price when sold on a standalone basis (by customer type).

● Customer Marketing Support: SSP is estimated based on cost plus a margin.

● Set-up /Installation: SSP is based on observable price when sold on a standalone basis.

The calibration and installation service of the enlighten system are treated as separate performance obligations because the Company regularly sells enlighten systems without the calibration and installation service.

Loyalty Program

The Company launched a customer loyalty program during the

third

quarter of

2018

for qualified customers located in the U.S. and Canada. Under the loyalty program, customers accumulate points based on their purchasing levels. Once a loyalty program member achieves a certain tier level, the member earns a reward such as the right to attend the Company’s advanced training event for truSculpt, or a ticket for the Company’s annual forum. A customer’s account must be in good standing to receive the benefits of the rewards program. Rewards are earned on a quarterly basis and must be used in the following quarter. Customers receive a notification regarding their rewards tier by the

fifth

day of the following quarter. All unused rewards are forfeited. The fair value of the reward earned by loyalty program members is included in accrued liabilities and recorded as a reduction of net revenue at the time the reward is earned. As of

December 31, 2019,

the accrual for the loyalty program included in accrued liabilities was

$0.2

million.

Revenue recognition- Period before

January 1, 2018 -

ASC Topic

606

Adoption

The Company recognized revenue under ASC Topic

605

prior to the adoption of ASC Topic

606

effective

January 1 2018.

Under ASC

605,

the Company recognized products revenue when title and risk of ownership was transferred, provided that:

● Persuasive evidence of an arrangement exists;

● The price is fixed or determinable;

● Delivery has occurred or services have been rendered; and

● Collectability is reasonably assured.

Transfer of title and risk of ownership occurs when the product is shipped to the customer or when the customer receives the product, depending on the nature of the arrangement. Revenue is recorded net of customer and distributor discounts. When collectability is

not

reasonably assured, the Company recognizes revenue upon receipt of cash payment. Sales to customers and distributors do

not

include any return or exchange rights. In addition, the Company’s distributor agreements obligate the distributor to pay the Company for the sale regardless of whether the distributor is able to resell the product. Shipping and handling charges are invoiced to customers based on the amount of products sold. Shipping and handling fees are recorded as revenue and the related expense as a component of Products cost of revenue.

Multiple-element Arrangements

A multiple-element arrangement includes the sale of

one

or more tangible product offerings with

one

or more associated services offerings, each of which are individually considered separate units of accounting. The Company determined that its multiple-element arrangements are generally comprised of the following elements that are recognized as separate units of accounting: Product, service contracts, training, and in some cases, marketing support and installation.

For multiple-element arrangements, judgments are required as to the allocation of the proceeds received from an arrangement to the multiple elements of the arrangement. For multiple element arrangements the Company allocates revenue to all deliverables based on their relative selling prices in accordance with the FASB Accounting Standards Codification (“ASC”)

605

25.

Because the Company has neither vendor specific objective evidence (“VSOE”) nor

third

-party evidence of selling price for the Company's systems, the allocation of revenue has been based on the Company's best estimate of selling prices (“BESP”). The objective of BESP is to determine the price at which the Company would transact a sale if the product or service was sold on a stand-alone basis. The Company determines BESP for the Company's deliverables by considering multiple factors including, but

not

limited to, features and functionality of the system, geographies, type of customer and market conditions

With respect to the sale of its earlier generation of the truSculpt product, the Company includes unlimited refills as part of the truSculpt standard warranty and the Company does

not

account for the

truSculpt

warranty as a separate deliverable under the multiple-element arrangement revenue guidance. Upon a

truSculpt

sale, the Company recognizes the estimated costs which will be incurred under the warranty obligation in Products cost of revenue. Revenue from the sale of refills is recorded as Product revenue in the period in which such sales are made.

Customer Marketing Arrangements

The Company has a customer marketing and incentive program called “Cutera Bucks” for its North America customers through which it offers various sales incentives and discounts and pays or reimburses customers for qualifying expenses associated with practice set-up, advertising procedures related to the system purchased, and other expenses. The Company records such incentives as a reduction of revenue at the time when the sale of the system is recorded.

Service Revenue

The Company also offers customers extended service contracts. Revenue under service contracts is recognized on a straight-line basis over the period of the applicable service contract. Revenue from services performed in the absence of a service contract, including installation and training revenue, is recognized when the related services are performed and collectability is reasonably assured. Service revenue billed on a time and material basis, from customers whose systems are

not

under a service contact, is recognized as the services are provided. Service revenue for the years ended

December 31, 2017

was

$18.8

million.

Bill and Hold Arrangement

Under ASC

605

2017

the Company segregated certain products for

one

order at the request of a customer for a limited period of time at a

third

-party storage facility (“bill -and -hold”). Revenue recognition for the bill-and-hold transaction requires consideration of, among other things, whether the customer has made a written fixed commitment to purchase the product; the existence of a substantial business purpose for the arrangement; the bill-and-hold arrangement is at the request of the customer; the scheduled delivery date must be reasonable and consistent with the buyer's business purpose; title and risk of ownership must pass to the customer and

additional performance obligations exist by the Company, at the time of the bill-and-hold the product is complete and ready for shipment and the product has been segregated from the Company's inventory. The Company recognized revenue of

$938,000

for a bill-and-hold transaction in

2017.

Deferred Sales Commissions

Incremental costs of obtaining a contract, which consist primarily of commissions and related payroll taxes, are capitalized and amortized on a straight-line basis over the expected period of benefit, except for costs that are recognized when product is sold. The Company uses the portfolio method to recognize the amortization expense related to these capitalized costs related to initial contracts and such expense is recognized over a period associated with the revenue of the related portfolio, which is generally

two

three

years.

Total capitalized costs for the year ended

December 31, 2019

and

December 31, 2018

were

$4.6

million and

$5.2

million, respectively, and are included in Other long-term assets in the Company’s consolidated balance sheet. Amortization expense for these assets was

$2.9

million and

$1.8

million, respectively, during the

twelve

months ended

December 31, 2019

and

December 31, 2018

and are included in sales and marketing expense in the Company’s consolidated statement of operations.

Cash Equivalents, and Marketable Investments

The Company invests its cash primarily in money market funds, U.S. Treasury bills and in highly liquid debt instruments of U.S. federal and municipal governments and their agencies, commercial paper and corporate debt securities. All highly liquid investments with stated maturities of

three

months or less from date of purchase are classified as cash equivalents; all highly liquid investments with stated maturities of greater than

three

months are classified as marketable investments. The majority of the Company’s cash and investments are held in U.S. banks and the Company's foreign subsidiaries maintain a limited amount of cash in their local banks to cover short term operating expenses.

The Company determines the appropriate classification of its investments in marketable securities at the time of purchase and re-evaluates such designation at each balance sheet date. The Company’s marketable securities are classified and accounted for as available-for-sale securities. Investments with remaining maturities of more than

one

year are viewed by the Company as available to support current operations and are classified as current assets under the caption marketable investments in the accompanying consolidated balance sheets. Investments in marketable securities are carried at fair value, with the unrealized gains and losses reported as a component of stockholders’ equity. Any realized gains or losses on the sale of marketable securities are determined on a specific identification method, and such gains and losses are reflected as a component of interest and other income, net.

Fair Value of Financial Instruments

Fair value is an exit price representing the amount that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy contains

three

levels of inputs that

may

be used to measure fair value, in accordance with ASC

820,

as follows:

● Level

inputs, which include quoted prices in active markets for identical assets or liabilities;

● Level

inputs, which include observable inputs other than Level

inputs, such as quoted prices for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are

not

active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. For available-for-sale securities, the Company reviews trading activity and pricing as of the measurement date. When sufficient quoted pricing for identical securities is

not

available, the Company uses market pricing and other observable market inputs for similar securities obtained from various

third

-party data providers. These inputs either represent quoted prices for similar assets in active markets or have been derived from observable market data; and

● Level

inputs, which include unobservable inputs that are supported by little or

market activity and that are significant to the fair value of the underlying asset or liability. Level

assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies, or similar valuation techniques, as well as significant management judgment or estimation.

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value.

Impairment of Marketable Investments

After determining the fair value of available-for-sales debt instruments, gains or losses on these securities are recorded to other comprehensive income, until either the security is sold or the Company determines that the decline in value is other-than-temporary. The primary differentiating factors that the Company considers in classifying impairments as either temporary or other-than-temporary impairments are the Company’s intent and ability to retain the investment in the issuer for a period of time sufficient to allow for any anticipated recovery in market value or the maturity of the investment, the length of the time and the extent to which the market value of the investment has been less than cost and the financial condition and near-term prospects of the issuer. There were

other-than-temporary impairments in the years ended

December 31, 2019,

2018,

and

2017.

Allowance for Sales Returns and Doubtful Accounts

The allowance for sales returns is based on the Company’s estimates of potential future product returns and other allowances related to current period product revenue. The Company analyzes historical returns, current economic trends and changes in customer demand and acceptance of the Company's products.

In cases where the Company is aware of circumstances that

may

impair a specific customer’s ability to meet its obligations to the Company, the Company records a specific allowance against amounts due from the customer, and thereby reduces the net recognized receivable to the amounts it reasonably believes will be collected

Concentration of Credit Risk and Other Risks and Uncertainties

The Company operates in markets that are highly competitive and rapidly changing. Significant technological changes, shifting customer needs, the emergence of competitive products or services with new capabilities and other factors could negatively impact the Company’s operating results.

The Company is also subject to risks related to changes in the value of the Company’s significant balance of financial instruments. Financial instruments that potentially subject the Company to concentrations of risk consist principally of cash, cash equivalents, marketable investments and accounts receivable. The Company’s cash and cash equivalents are primarily invested in deposits and money market accounts with

three

major financial institutions in the U.S. In addition, the Company has operating cash balances in banks in each of the international locations in which it operates. Deposits in these banks

may

exceed the amount of insurance provided on such deposits, if any. Management believes that these financial institutions are financially sound and, accordingly, believes that minimal credit risk exists. To date, the Company has

not

experienced any losses on its deposits of cash and cash equivalents.

The Company invests in debt instruments, including bonds of the U.S. Government, its agencies and municipalities. The Company has also invested in other high grade investments such as commercial paper and corporate debt securities. The Company has established guidelines relative to credit ratings, diversification and maturities that seek to maintain safety and liquidity. By policy, the Company restricts its exposure to any single issuer by imposing concentration limits. To minimize the exposure due to adverse shifts in interest rates, the Company maintains investments at an average maturity of generally less than

twelve

months.

Accounts receivable are recorded net of an allowance for doubtful accounts, and are typically unsecured and are derived from revenue earned from worldwide customers. The Company controls credit risk through credit approvals, credit limits, and monitoring procedures. The Company performs credit evaluations of its customers and maintains reserves for potential credit losses. As of

December 31, 2019

and

2018,

customer represented more than

10%

of the Company’s net accounts receivable. During the years ended

December 31, 2019,

2018,

and

2017,

domestic revenue accounted for

58%,

62%,

and

62%,

, respectively, of total revenue, while international revenue accounted for

42%,

38%,

and

38%,respectively,

of total revenue.

single customer represented more than

10%

of total revenue for any of the years ended

December 31, 2019,

2018,

and

2017.

Supplier concentration

The Company relies on

third

parties for the supply of components of its products, as well as

third

-party logistics providers. In instances where these parties fail to perform their obligations, the Company

may

be unable to find alternative suppliers or satisfactorily deliver its products to its customers. The Company relies on

one

supplier for its

Secret

product.

Inventories

Inventories are stated at the lower of cost and net realizable value, cost being determined on a standard cost basis which approximates actual cost on a

first

-in,

first

-out basis. Net realizable value is the estimated selling prices in the ordinary course of the Company’s business, less reasonably predictable costs of completion, disposal, and transportation. The cost basis of the Company’s inventory is reduced for any products that are considered excessive or obsolete based upon assumptions about future demand and market conditions.

The Company includes demonstration units within inventories. Demonstration units are carried at cost and amortized over an estimated economic life of

two

years. Amortization expense related to demonstration units is recorded in Products cost of revenue or in the respective operating expense line based on which function and purpose for which the demonstration units are being used. Proceeds from the sale of demonstration units are recorded as revenue and all costs incurred to refurbish the systems prior to sale are charged to Product cost of revenue.

As of

December 31, 2019

and

2018,

demonstration inventories, net of accumulated depreciation, included in finished goods inventory was

$4.1

million and

$2.9

million, respectively.

Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation expense recognized is on a straight-line basis over the estimated useful lives of the assets, generally as follows:

		Useful Lives
Leasehold improvements		Lesser of useful life or term of lease
Office equipment and furniture (in years)		3
Machinery and equipment (in years)		3

Upon sale or retirement of property and equipment, the costs and related accumulated depreciation and amortization are removed from the balance sheet and the resulting gain or loss is reflected in operating expenses. Maintenance and repairs are charged to operations as incurred.

Depreciation expense related to property and equipment for

2019,

2018

and

2017,

was

$1.5

million,

$1.2

million, and

$1.0

million respectively. Amortization expense for vehicles leased under capital leases is included in depreciation expense.

Capitalized Cloud Computing Set-up Cost

The Company capitalizes certain set-up costs for the Company’s cloud computing arrangements. The capitalized implementation costs are then amortized over the term of the cloud computing arrangement inclusive of expected contract renewals, which are generally

three

five

years.

Goodwill and Intangible Assets

Goodwill and intangible assets with indefinite useful lives are

not

amortized, but are tested for impairment at least annually during the

fourth

quarter of the Company’s fiscal year, or if circumstances indicate their value

may

longer be recoverable. Goodwill represents the excess of the purchase price over the fair value of net identifiable assets and liabilities.

The Company continues to operate in

one

segment, which is considered to be the sole reporting unit and, therefore, goodwill was tested for impairment at the enterprise level. As of

December 31, 2019,

there has been

impairment of goodwill. All acquired intangible assets have been fully amortized as of

December 31, 2019.

Warranty Obligations

The Company offers post-warranty services to its customers through extended service contracts that cover replacement parts and labor for a term of one, two, or

three

years. For sales to distributors, the Company generally provides a

month warranty for parts only, with labor being provided to the end customer by the distributor.

The Company also offers services on a time-and-materials basis for detachable hand piece replacements, parts and labor.

Leases

Policy from

January 1, 2019

Effective

January 1, 2019,

the Company adopted ASC

842,

which established a right-of-use ("ROU") model requiring lessees to record a right-of-use ("ROU") asset and lease obligations on the balance sheet for all leases with terms longer than

months. The Company determines if an arrangement is a lease at inception. Where an arrangement is a lease the Company determines if it is an operating lease or a finance lease. At lease commencement, the Company records a lease liability and corresponding right-of- use ("ROU") asset. Lease liabilities represent the present value of our future lease payments over the expected lease term which includes options to extend or terminate the lease when it is reasonably certain those options will be exercised. The present value of the Company’s lease liability is determined using its incremental collateralized borrowing rate at lease inception. ROU assets represent its right to control the use of the leased asset during the lease and are recognized in an amount equal to the lease liability for leases with an initial term greater than

months. Over the lease term (operating leases only), the Company uses the effective interest rate method to account for the lease liability as lease payments are made and the ROU asset is amortized to consolidated statement of operations in a manner that results in straight-line expense recognition. The Company does

not

apply lease recognition requirements for short-term leases. Instead, the Company recognizes payments related to these arrangements in the consolidated statement of operations as lease costs on a straight-line basis over the lease term.

Policy before

January 1, 2019

For periods prior to the Company’s adoption of ASC

842

January 1, 2019,

the Company recognized leases as either an operating lease or a capital lease (finance lease). An operating lease records

asset or liability on the financial statements, the amount paid is expensed as incurred. A capital lease is recorded as both an asset and a liability on the Company’s Consolidated Balance Sheets, generally at the present value of the rental payments. The Company uses the guidance provided by FASB to determine if a lease should be capitalized, and if any

one

of the criteria for capitalization is met, the lease is treated as a capital lease.

Cost of Revenue

Cost of revenue consists primarily of material, finished and semi-finished products purchased from

third

-party manufacturers, labor, stock-based compensation expenses, overhead involved in the Company's internal manufacturing processes, service contracts technology license amortization and royalties, costs associated with product warranties and any inventory write-downs.

The Company's system sales include a control console, universal graphic user interface, control system software, high voltage electronics and a combination of applications (referred to as “hand pieces”). Hand pieces are programmed to have a limited number of uses to ensure the safety of the device to patients. The Company sells refurbished hand pieces, or "refills," of its Titan and truSculpt

products and provides for the cost of refurbishment of these hand pieces as part of cost of revenue. When customers purchase a replacement hand piece or are provided a replacement hand piece under a warranty or service contract, the Company ships the customer a previously refurbished unit. Upon the receipt of the expended hand piece from the customer, the Company capitalizes the expended hand piece as inventory at the estimated fair value. Cost of service revenue includes the costs incurred to refurbish hand pieces.

Research and Development Expenditures

Research and development costs are expensed as incurred and include costs related to research, design, development, testing of products, salaries, benefits and other headcount related costs, facilities, material,

third

party contractors, regulatory affairs, clinical and development costs.

Advertising Costs

Advertising costs are included as part of sales and marketing expense and are expensed as incurred. Advertising expenses for

2019,

2018

and

2017

were

$2.8

million,

$2.8

million, and

$1.8

million, respectively.

Stock-based Compensation

The Company accounts for share-based employee compensation plans using the fair value recognition and measurement provisions under U.S. GAAP. The Company’s share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as expense on a straight- line basis over the requisite service period. The Company estimates expected forfeitures at the time of grant and revises, if necessary, in subsequent periods if actual forfeitures differ from those estimated.

Expected Term

: The expected term represents the weighted-average period that the stock options are expected to be outstanding prior to being exercised. The Company determines expected term based on historical exercise patterns and its expectation of the time it will take for employees to exercise options still outstanding.

Expected Volatility

: The underlying stock price volatility of the Company’s stock. The Company estimates volatility based on a

blend of the Company’s historical volatility and the implied volatility of freely traded options of the Company’s stock in the open market.

Forfeitures:

The amount of stock-based compensation recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest. Under ASC

718

(Stock Based Compensation), the Company has made an accounting policy to estimate forfeitures at the time awards are granted and revises, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

Risk-Free Interest Rate:

The risk-free interest rate is based on the U.S. treasury yield curve in effect at the time of grant for the expected term of the stock option.

The fair value of stock options ("options") on the grant date is estimated using the Black-Scholes option-pricing model using the single-option approach. The Black-Scholes option pricing model requires the use of highly subjective and complex assumptions, including the option's expected term and the price volatility of the underlying stock, to determine the fair value of award. The Company recognizes the expense associated with options using a single award approach over the requisite service period. The Company accounts for all stock options awarded to non-employees at the fair value of the award issued on the day of the grant.

The fair value of restricted stock units (“RSUs”) granted are measured on the grant date using the closing price of the Company's common shares on the grant date. The quantity of the RSUs units granted is calculated by dividing a fixed award amount determined by the Board on the grant date by the average closing price of the Company’s common stock over the

-day period ending on the day of the grant.

The fair value of Performance Stock Units (“PSUs”) that have operational measurement goals, are measured on the grant date using the closing price of the Company's common shares on the grant date. The quantity of the PSUs units granted is calculated by dividing a fixed award amount determined by the Board on the grant date by the average closing price of the Company’s common stock over the

-day period ending on the day of the grant.

See Note

- Stockholders’ Equity, Stock Plans and Stock-Based Compensation Expense for a detailed discussion of the Company’s stock plans and share-based compensation expense.

Income Taxes

The Company is subject to income taxes in the United States and several foreign jurisdictions. Significant judgment is required in determining our provision (benefit) for income taxes and income tax assets and liabilities, including evaluating uncertainties in the application of accounting principles and complex tax laws.

The Company records a provision (benefit) for income taxes for the anticipated tax consequences of the reported results of operations using the asset and liability method. Under this method, we recognize deferred income tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, as well as for loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. We recognize the deferred income tax effects of a change in tax rates in the period of enactment. We record a valuation allowance to reduce our deferred tax assets to the net amount that we believe is more likely than

not

to be realized.

The Company recognizes tax benefits from uncertain tax positions if we believe that it is more likely than

not

that the tax position will be sustained upon examination by the taxing authorities based on the technical merits of the position. Although we believe we have adequately reserved for our uncertain tax positions (including net interest and penalties), we can provide

assurance that the final tax outcome of these matters will

not

be different. We make adjustments to these reserves in accordance with income tax accounting guidance when facts and circumstances change, such as the closing of a tax audit. To the extent that the final tax outcome of these matters is different from the amounts recorded, such differences

may

impact the provision (benefit) for income taxes in the period in which such determination is made. We record interest and penalties related to our uncertain tax positions in our provision (benefit) for income taxes.

The Company’s effective tax rates have differed from the statutory rate primarily due to changes in the valuation allowance, foreign operations, research and development tax credits, state taxes, and certain benefits realized related to stock option activity. The Company’s current effective tax rate does

not

assume U.S. taxes on undistributed profits of foreign subsidiaries. These earnings could become subject to incremental foreign withholding or U.S. federal and state taxes, should they either be deemed or actually remitted to the U.S. The Company’s future effective tax rates could be adversely affected by earnings being lower in countries where the Company has lower statutory rates and being higher in countries where the Company has higher statutory rates, or by changes in tax laws, accounting principles, interpretations thereof, net operating loss carryback, research and development tax credits, and due to changes in the valuation allowance of its U.S. deferred tax assets. In addition, the Company is subject to the examination of the Company’s income tax returns by the Internal Revenue Service and other tax authorities. The Company regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of the Company’s provision for income taxes.

Undistributed earnings of the Company’s foreign subsidiaries at

December 31, 2019

are considered to be indefinitely reinvested and, accordingly,

provision for state income taxes has been provided thereon. Due to the Transition Tax and Global Intangible Low-Tax Income (“GILTI”) regimes as enacted by the

2017

Tax Act, those foreign earnings will

not

be subject to federal income taxes when actually distributed in the form of a dividend or otherwise. The Company, however, could still be subject to state income taxes and withholding taxes payable to various foreign countries. The amounts of taxes which the Company could be subject to are

not

material to the accompanying financial statements.

Computation of Net Income (Loss) per Share

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding. Diluted net income per share is computed by dividing net income by the weighted average number of common shares and the dilutive effect of potential future issuances of common stock from outstanding stock options, RSUs, PSUs and employee stock purchase plan contributions for the period outstanding determined by applying the treasury stock method. In accordance with ASC

718,

the assumed proceeds under the treasury stock method include the average unrecognized compensation expense of in-the-money stock options, RSUs and PSUs. This results in the assumed buyback of additional shares, thereby reducing the dilutive impact of equity awards

Diluted earnings per share is the same as basic earnings per share for the periods in which the Company had a net loss because the inclusion of outstanding common stock equivalents would be anti-dilutive.

Comprehensive Income (Loss)

Comprehensive income (loss) includes all changes in stockholders’ equity except those resulting from investments or contributions by stockholders. For the periods presented, the accumulated other comprehensive income (loss) consisted solely of the unrealized gains or losses on the Company's available for- sale investments, net of tax.

Foreign Currency

The financial statements of the Company’s foreign subsidiaries are translated in accordance with ASC

830,

Foreign Currency Matters. The U.S. Dollar is the functional currency of the Company’s subsidiaries and the Company’s reporting currency. Monetary assets and liabilities are re-measured into U.S. Dollars at the applicable period end exchange rate. Sales and operating expenses are re-measured at average exchange rates in effect during each period. Gains or losses resulting from foreign currency transactions are included in net income (loss) and are insignificant for each of the

three

years ended

December 31, 2019.

The effect of exchange rate changes on cash and cash equivalents was insignificant for each of the

three

years ended

December 31, 2019.

Segments

The Company operates in

one

segment and reports segment information in accordance with ASC

280,

Segment Reporting. Management uses

one

measurement of profitability and does

not

segregate its business for internal reporting. As of

December 31, 2019,

and

2018,

89.3%

and

89.0%

of long-lived assets were in the United States, respectively. Revenue is attributed to a geographic region based on the location of the end customer. See Note

– Segment Information and Revenue by Geography and Products for details relating to revenue by geography.

Note 2 - Investment Securities

12 Months Ended

Dec. 31, 2019

Cash, Cash Equivalents, and Marketable Securities [Text Block]

NOTE

-INVESTMENT SECURITIES

The following tables summarize cash, cash equivalents and marketable securities (in thousands):

	December 31,
	201 9		201 8
Cash and cash equivalents:
Cash	$	20,005	$	21,969
Cash equivalents:
Money market funds		6,311		4,083
Total cash and cash equivalents		26,316		26,052

Marketable securities:
U.S. government notes		4,114		1,397
U.S. government agencies		—		2,677
Municipal securities		—		200
Commercial paper		3,491		2,433
Corporate debt securities		—		2,816
Total marketable securities		7,605		9,523

Total cash, cash equivalents and marketable securities	$	33,921	$	35,575

The following tables summarize the components, and the unrealized gains and losses position, related to the Company’s cash, cash equivalents and marketable investments (in thousands) as of

December 31, 2019

and

December 31, 2018: (

in thousands):

December 31, 201 9	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Market Value
Cash and cash equivalents	$	26,316	$	-	$	-	$	26,316

Marketable investments
U.S. government notes		4,114		-		-		4,114
U.S. government agencies		—		-		-		—
Municipal securities		—		-		-		—
Commercial paper		3,491		-		-		3,491
Corporate debt securities		—		-		-		—
Total marketable securities		7,605		-		-		7,605

Total cash, cash equivalents and marketable securities	$	33,921	$	-	$	-	$	33,921

December 31, 2018	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Market Value
Cash and cash equivalents	$	26,052	$	-	$	-		$	26,052

Marketable investments
U.S. government notes		1,397		-		-			1,397
U.S. government agencies		2,677		-		-			2,677
Municipal securities		200		-		-			200
Commercial paper		2,433		-		-			2,433
Corporate debt securities		2,825		-		(9	)		2,816
Total marketable securities		9,532				(9	)		9,523

Total cash, cash equivalents and marketable securities	$	35,584			$	(9	)	$	35,575

As of

December 31 2019

and

December 31, 2018,

the gross unrealized gains and losses were

nil

and $(

9,000

), respectively, and were related to interest rate changes on available-for-sale marketable investments. The Company has concluded that it is more-likely-than-

not

that the securities will be held until maturity or the recovery of their cost basis.

securities were in an unrealized loss position for more than

months. The Company determined these unrealized losses to be temporary. Factors considered in determining whether a loss is temporary included the length of time and extent to which the investment’s fair value has been less than the cost basis; the financial condition and near-term prospects of the investee; extent of the loss related to credit of the issuer; the expected cash flows from the security; the Company’s intent to sell the security; and whether or

not

the Company will be required to sell the security before the recovery of its amortized cost.

The following table summarizes the contractual maturities of the Company’s available-for-sale securities, classified as marketable investments as of

December 31, 2019 (

in thousands):

	Amount
Due in less than one year	$	7,605
Due in 1 to 3 years		—
Total marketable securities	$	7,605

Fair Value Measurements

As of

December 31, 2019,

financial assets measured and recognized at fair value on a recurring basis and classified under the appropriate level of the fair value hierarchy as described above were as follows (in thousands):

December 31, 201 9	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	6,311	$	-	$	-	$	6,311
Short term marketable investments:
Available-for-sale securities		4,114		3,491		-		7,605
Total assets at fair value	$	10,425	$	3,491	$	-	$	13,916

December 31, 2018 *	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	4,083	$	-	$	-	$	4,083
Short term marketable investments:
Available-for-sale securities		4,274		5,249		-		9,523
Total assets at fair value	$	8,357	$	5,249	$	-	$	13,606

*The

2018

presentation in the table above has been revised to reflect as Level

$4,274

of US Government Notes included within Available for Sale Securities and previously classified as Level

Money market funds and U.S. Treasury bills are highly liquid investments and are actively traded. The pricing information on these investment instruments are readily available and can be independently validated as of the measurement date. This approach results in the classification of these securities as Level

of the fair value hierarchy.

Corporate debt, U.S. government-backed securities, and commercial paper are measured at fair value using Level

inputs. The Company reviews trading activity and pricing for these investments as of each measurement date. When sufficient quoted pricing for identical securities is

not

available, the Company uses market pricing and other observable market inputs for similar securities obtained from various

third

party data providers. These inputs represent quoted prices for similar assets in active markets or these inputs have been derived from observable market data. This approach results in the classification of these securities as Level

of the fair value hierarchy. The average remaining maturity of the Company’s Level

investments as of

December 31, 2019

0.2

years and all of these investments are rated by S&P and Moody’s at A or better. The Company recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period. There were

transfers within the hierarchy during the year ended

December 31, 2019

and

December 31, 2018.

Note 3 - Balance Sheet Detail

12 Months Ended

Dec. 31, 2019

Supplemental Balance Sheet Disclosures [Text Block]

NOTE

3—BALANCE

SHEET DETAIL

Inventories

Valuation adjustments for excess and obsolete inventory, reflected as a reduction of inventory at

December 31, 2019

and

2018,

were

$2.5

million and

$1.8

million, respectively. Inventories, net of these adjustments, consist of the following (in thousands):

	December 31,
	201 9		201 8
Raw materials	$	17,935	$	16,991
Work in process		2,016		2,306
Finished goods		13,970		8,717
Total	$	33,921	$	28,014

Property and Equipment, net

Property and equipment, net, consists of the following (in thousands):

	December 31,
	201 9		201 8
Leasehold improvements	$	867	$	660
Office equipment and furniture		3,110		2,835
Machinery and equipment		7,805		7,304
		11,782		10,799
Less: Accumulated depreciation		(8,965)		(8,127)
Property and equipment, net	$	2,817	$	2,672

Included in machinery and equipment are financed vehicles used by the Company’s sales employees. As of

December 31, 2019

and

2018,

the gross capitalized value of the leased vehicles was

$2.0

million and

$1.9

million and the related accumulated depreciation was

$1.1

million and

$1.1

million, respectively. Included in Property and equipment as of

December 31, 2019,

is construction in progress of

$0.4

million that is yet to be depreciated.

Goodwill and Other Intangible Assets

Goodwill and other intangible assets comprise a patent sublicense acquired from Palomar in

2006,

intangible assets and goodwill related to the acquisition of Iridex’s aesthetic business unit, and, customer relationships in the Benelux countries acquired from a former distributor in

2013.

The components of intangible assets at

December 31, 2019

and

2018

were as follows (in thousands):

	Gross Carrying Amount		Accumulated Amortization & Impairment Amount		Net Amount
December 31, 201 9
Patent sublicense	$	1,218	$	1,218	$	-
Customer relationship intangible related to acquisition		2,510		2,510		-
Other identified intangible assets related to acquisition		780		780		-
Other intangible		155		155		-
Goodwill		1,339		-		1,339
Total	$	6,002	$	4,663	$	1,339
December 31, 2018
Patent sublicense	$	1,218	$	1,218	$	-
Customer relationship intangible related to acquisition		2,510		2,510		-
Other identified intangible assets related to acquisition		780		780		-
Other intangible		155		155		-
Goodwill		1,339		-		1,339
Total	$	6,002	$	4,663	$	1,339

The Company did

not

incur any amortization expense for intangible assets in

2019.

Amortization expense in the

2018

and

2017

fiscal years for intangible assets was

and

$2,000,

respectively. Intangible assets were fully amortized and there were

additions as of

December 31, 2019.

Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

	December 31,
	201 9		201 8
Accrued payroll and related expenses	$	14,341	$	9,377
Sales and marketing accruals		2,527		2,379
Accrued sales tax		3,922		2,935
Warranty liability		4,401		4,666
Other accrued liabilities		5,116		3,943
Total	$	30,307	$	23,300

Product Remediation Liability

During the

fourth

quarter of

2018,

the Company recognized a liability for a product remediation plan related to of

one

of its legacy systems. This was related to a voluntary action initiated by the Company to replace a component in

one

of the Company’s legacy products. The developed remediation plan consists primarily of replacement of a component in the system. The accrued liability consisted of cost of materials and labor costs to replace the component in all units that are under the Company's standard warranty or are covered under existing extended warranty contracts. The Company recorded approximately

$5.0

million related to this remediation, of which

$1.1

million was utilized in the year ended

December 31, 2018.

As of

December 31, 2019

and

2018,

approximately

$0.5

million and

$0.7

million, respectively, of the total product remediation liability balance was accrued as a component of the Company’s product warranty and included in accrued liabilities, and

$2.0

million and

$3.2

million, respectively, was separately recorded as Extended warranty liabilities. Total costs incurred related to product warranty and Extended warranty liabilities during the

twelve

months in

December 31, 2019

were

$0.2

million and

$1.1

million, respectively.

Note 4 - Warranty and Extended Services Contract

12 Months Ended

Dec. 31, 2019

Product Warranty Disclosure [Text Block]

NOTE

4—

WARRANTY AND EXTENDED SERVICES CONTRACT

The Company has a direct field service organization in North America (including Canada). Internationally, the Company provides direct service support in Australia, Belgium, France, Germany, Hong Kong, Japan, and Switzerland, as well as through

third

-party service providers in Spain and the United Kingdom. In several other countries, where the Company does

not

have a direct presence, the Company provides service through a network of distributors and

third

-party service providers.

After the original warranty period, maintenance and support are offered on an extended service contract basis or on a time and materials basis. The Company provides for the estimated cost to repair or replace products under standard warranty at the time of sale. Costs incurred in connection with extended service contracts are recognized at the time when costs are incurred, except the

one

-time extended service contracts charge of

$3.2

million recorded in the year ended

December 31, 2018

related to the cost to replace a component in

one

of the Company's legacy products (Note

) The following table provides the changes in the product standard warranty accrual for the years ended

December 31, 2019

and

2018

(in thousands):

	December 31,
	201 9			201 8
Balance at beginning of year	$	7,827		$	3,508
Add: Accruals for warranties issued during the period		6,467			12,364
Less: Warranty related costs during the period		(7,894	)		(8,045	)
Balance at end of year	$	6,400		$	7,827

Note 5 - Deferred Revenue

12 Months Ended

Dec. 31, 2019

Contract with Customer Liability [Text Block]

NOTE

5—

DEFERRED REVENUE

The Company records deferred revenue when revenue is to be recognized subsequent to invoicing. For extended service contracts, the Company generally invoices customers at the beginning of the extended service contract term. The Company’s extended service contracts typically have one,

two

three

year terms. Deferred revenue also includes payments for installation, training and extended marketing support service. Approximately

76%

of the Company’s deferred revenue balance of

$14.2

million as of

December 31, 2019

will be recognized over the next

months.

The following table provides changes in the deferred contract revenue balance for the years ended

December 31, 2019

and

2018

(in thousands):

	December 31,
	201 9			2018*
Balance at beginning of year	$	12,566	$	11,656
Add: Payments received		17,127		14,883
Less: Revenue deferred as of January 1, 2019		(9,451)		(8,206)
Less: Revenue included in the beginning balance and recognized as revenue in the current year		(6.021)		(5,767)
Balance at end of year	$	14,222	$	12,566

*The

2018

presentation in the table above has been revised to include deferred revenue of

$11,656

January 1, 2018

and

$12,566

December 31, 2018

and related changes therein that were previously excluded.

Costs for extended service contracts in

2019,

2018

and

2017

were

$9.3million,

$7.8

million, and

$6.0

million, respectively. The

$7.8

million in

2018

includes a

one

-time extended service contract cost of

$3.2

million to replace a component in

one

of the Company's legacy products (See Note

Note 6 - Stockholders' Equity, Stock Plans and Stock-based Compensation Expense

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Text Block]

NOTE

6—STOCKHOLDERS’

EQUITY, STOCK PLANS AND STOCK-BASED COMPENSATION EXPENSE

As of

December 31, 2019,

the Company had

one

class of issued common stock with a par value of

$0.001.

Authorized capital stock consists of

55,000,000

shares comprised of

two

classes: (i)

50,000,000

shares of Common Stock, of which

14,315,586

shares are issued and outstanding as of

December 31, 2019,

and (ii)

5,000,000

shares of preferred stock, par value

$0.001

per share (“Preferred Stock”), of which

shares are issued and outstanding.

As of

December 31, 2019,

the Company had the following stock-based employee compensation plans:

2004

Equity Incentive Plan

1998,

the Company adopted the

1998

Stock Plan, or

1998

Plan, under which

4,650,000

shares of the Company’s common stock were reserved for issuance to employees, directors and consultants.

January 12, 2004,

the Board of Directors (“the Board”) adopted the

2004

Equity Incentive Plan. A total of

1,750,000

shares of common stock were originally reserved for issuance pursuant to the

2004

Equity Incentive Plan. In addition, the shares reserved for issuance under the

2004

Equity Incentive Plan included shares reserved but un-issued under the

1998

Plan and shares returned to the

1998

Plan as the result of termination of options or the repurchase of shares. In

2012

the stockholders approved a “fungible share” provision whereby each full-value award issued under the

2004

Equity Incentive Plan results in a requirement to subtract

2.12

shares from the shares reserved under the Plan.

2019

Equity Incentive Plan

At the Company’s Annual Meeting of Stockholders on

June 14, 2019,

the Company’s stockholders approved the

2019

Equity Incentive Plan, which is an amendment and restatement of the

2004

Equity Incentive Plan. The

2004

Equity Incentive Plan was amended to: (i) increase the number of shares available for future grant by

700,000

(in addition to the

9,701,192

shares provided under the

2004

Equity Incentive Plan; (ii) extend the term of the

2004

Equity Incentive Plan to the date of the Annual Meeting of the Company’s stockholders in

2029;

(iii) amend the

2004

Equity Incentive Plan to eliminate the requirement for awards granted on or after

June 14, 2019

that any shares subject to awards with an exercise price less than fair market value on the date of such grant will be counted against the Plan as

2.12

shares for each full value share awarded in accordance with the

2004

Equity Incentive Plan; (iv) amend the

2004

Equity Incentive Plan to remove the requirement that any shares subject to awards with an exercise price less than fair market value on the date of such grant will be counted against the Plan as

2.12

shares for each full value share awarded; (v) amend the

2004

Equity Incentive Plan to remove certain provisions relating to the “performance based compensation” exception under Section

162

(m) of the Internal Revenue Code of

1986,

as amended; (vi) include a minimum

one

-year vesting period with respect to awards granted under the

2004

Equity Incentive Plan.

June 11, 2019,

the Board also approved amended and restated the Company’s Stock Ownership Guidelines adopted on

July 28, 2017

in their entirety, to require all officers (as defined by Rule

16a

(f) of the Securities Exchange Act of

1934,

as amended) to hold at least

50%

of any shares received pursuant to stock options, stock appreciation rights, vested restricted stock awards (“RSAs”), restricted stock units (“RSUs”), performance shares or performance units (net of taxes) for a minimum of

one

year following vesting and delivery.

June 11, 2019,

the Board also adopted a clawback policy to permit recovery of certain compensation paid to Named Executive Officers (as defined in Item

402

of Regulation S-K) of the Company if the Compensation Committee of the Board determines that a Named Executive Officer (i) has violated law, the Company’s Code of Business Conduct and Ethics, or any significant ethics or compliance policies, and (ii) such conduct results in material financial or reputational harm, or results in a need for a restatement of the Company’s consolidated financial statements. The Amended and Restated Plan provides for the grant of incentive stock options, non-statutory stock options, RSAs, RSUs, stock appreciation rights, performance units, performance shares, and other stock or cash awards.

In accordance with the

2019

and

2004

Equity Incentive Plans, prior to

2012,

the Company’s non-employee directors were granted

$60,000

of grant date fair value, fully vested, stock awards annually on the date of the Company’s Annual Meeting of stockholders. The quantity of units granted is determined by dividing the award amount by the

-day moving average stock price ending on the day of the award. Following Board of Directors action on

October 31, 2017,

the Company’s nonemployee directors receive

$60,000

of RSUs granted annually that cliff-vest on the

one

-year anniversary of the grant date. In the years ended

December 31, 2019,

2018

and

2017,

the Company issued

42,236,

13,392,

and

21,605

RSUs, respectively, to its non-employee directors.

In the years ended

December 31, 2019,

2018

and

2017

the Company’s Board of Directors granted

517,402,

210,532,

and

270,707

RSUs, respectively, to its executive officers and certain members of the Company’s management.

25%

of the RSUs granted to the employees vest on each of the

first

four

anniversaries of the vest date subject to the recipients’ continued service. The Company measured the fair market values of the underlying stock on the dates of grant and recognizes the stock-based compensation expense over the vesting period. On the vesting date, the Company issues fully paid up common stock, net of stock withheld to settle the recipient’s minimum statutory tax liability.

In the years ended

December 31, 2019,

2018

and

2017

the Company’s Board of Directors granted its executive officers and certain senior management employees

387,172,

47,824,

and

117,418

of PSUs, respectively. The PSUs vest over

months subject to the recipient’s continued service and the achievement of pre-established performance goals. The PSUs granted in

2019

vest subject to the recipients continued service and the achievement of certain performance goals for the Company’s

2019

fiscal year established by the Board and relating to the achievement of revenue targets for consumable products, revenue targets for international revenue, and specific operational milestones related to product performance and IT systems implementation projects. On

September 5, 2019,

the Board made a modification to all the PSU grants outstanding as of

September 4, 2019,

such that

15%

of the PSUs would now vest upon the achievement of revenue targets for consumable products or revenue targets for international revenue rather than upon the achievement of targets related to IT systems implementation projects. The modified PSUs were valued at the Company’s share price on the date of the modification. As a result of the PSU modification the Company recognized an additional

$1.0

million of stock-based compensation in during the year ended

December 31, 2019.

During the

three

months ended

September 30, 2019

the Company's Board awarded its new CEO, David H. Mowry,

67,897

shares, which are scheduled to vest over

years from

2019

through

2022

(the

2019

tranche is

15%

of the award, or

10,185

PSUs; the

2020

tranche is

25%

of the award, or

16,974

PSUs; the

2021

tranche is

30%

of the award, or

20,269

PSUs; and the

2022

tranche is

30%

of the award, or

20,269

PSUs). These PSUs are subject to certain performance-based criteria related to achieving financial metrics in the Board approved annual budgets for the years

2019

through

2022.

As of

December 31, 2019,

the Company concluded that only the

2019

tranche of

10,185

PSUs meet the criteria for measurement and recognition (

85%

of which vested as of

December 31, 2019).

The

2020

2022

tranches do

not

meet the criteria for measurement and recognition as of

December 31, 2019,

and will meet the criteria for measurement and commencement of recognition when the Company’s Board of Directors establishes the financial metrics for each fiscal year.

January 12, 2004,

the Board of Directors adopted the

2004

Employee Stock Purchase Plan. Under the

2004

Employee Stock Purchase Plan, or

2004

ESPP, eligible employees are permitted to purchase common stock at a discount through payroll deductions. The

2004

ESPP offering and purchase periods are for approximately

six

months. The

2004

ESPP has an evergreen provision based on which shares of common stock eligible for purchase are increased on the

first

day of each fiscal year by an amount equal to the lesser of:

600,000

shares;

2.0%

of the outstanding shares of common stock on such date; or an amount as determined by the Board of Directors.

The Company’s Board of Directors did

not

increase the shares available for future grant on

January 1, 2020,

2019

and

2018.

The price of the common stock purchased is the lower of

85%

of the fair market value of the common stock at the beginning or end of a

six

month offering period. In the years ended

December 31, 2019,

2018

and

2017,

under the

2004

ESPP, the Company issued

82,810,

64,511,

and

78,479

shares, respectively. At

December 31, 2019,

761,705

shares remained available for future issuance.

Option Activity

Activity under the

1998

Plan and

2004

Equity Incentive Plan is summarized as follows:

			Options Outstanding
	Shares Available For Grant		Number of Shares		Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in millions ) (1)
Balances as of December 31, 201 6		721,657		1,116,472	$	9.56		3.70	$	8.70
Options granted		(278,250)		278,250		31.00		-		-
Options exercised		-		(488,398)		8.96		-		-
Options cancelled (expired or forfeited)		66,405		(66,405)		16.54		-		-
Stock awards granted		(873,881)		-		-		-		-
Stock awards cancelled (expired or forfeited)		258.935		-		-		-		-
Additional shares reserved		1,600,000		-		-		-		-
Balances as of December 31, 2017		1,494,866		839,919	$	16.46		3.99	$	24.4
Options granted		(21,010)		21,010	$	50.65		-		-
Options exercised		-		(271,902)		9.99		-		-
Options cancelled (expired or forfeited)		81,322		(81,322)		21,55		-		-
Stock awards granted		(562,070)		-		-		-		-
Stock awards cancelled (expired or forfeited)		148,197		-		-		-		-
Balances as of December 31, 2018		1,141,305		507,705	$	20.52		3.52	$	2.00
Additional shares reserved (2)		700,000
Options exercised		-		(160,798)	$	10.03		-		-
Options cancelled (expired or forfeited)		51,208		(51,208)		24.61		-		-
Stock awards granted		(1,538,128)		-		-		-		-
Stock awards cancelled (expired or forfeited)		407,320		-		-		-		-
Balances as of December 31, 2019		761,705		295,699	$	25.52		3.19	$	3.04
Exercisable as of December 31, 2019				222,400	$	22.16		2.83	$	3.04
Vested and expected to vest, net of estimated forfeitures, as of December 31, 2019				285,462	$	25.08		3.00	$	3.06

(

)

Based

the

closing

stock

price

35.81

the

pan

’

stock

December

31,

201

17.02

December

201

45.35

December

201

and

17.35

December

31,

201

(

)

Approved

the

board

directors

and

stockholders

201

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the aggregate difference between the Company’s closing stock price on the last trading day of the fiscal year and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on

December 31, 2019.

The aggregate intrinsic amount changes based on the fair market value of the Company’s common stock. Total intrinsic value of options exercised in

2019,

2018

and

2017

was

$1.0

million,

$8.3

million, and

$8.0

million, respectively. The options outstanding and exercisable at

December 31, 2019

were in the following exercise price ranges:

Exercise Prices			Number Outstanding		Contractual Life (in years)		Number Exercisable
	$8.80			48,864		0.48		48,864
$9.65	–	$10.79		33,743		1.98		32,806
$10.80	–	$14.04		36,146		3.24		33,752
$15.32	–	$18.55		10,896		3.74		8,584
	$19.55			12,000		4.32		8,292
	$25.70			38,625		4.59		23,594
	$39.30			72,000		4.42		41,230
	$43.40			6,510		0.25		2,849
	$47.40			29,915		3.72		19,116
	$53.90			7,000		5.20		3,313
$ 8.80	–	$ 53.90		295,669		2.83		222,400

Stock Awards (RSU and PSU) Activity Table

Information with respect to RSUs and PSUs activity is as follows (in thousands):

	Number of			Weighted-Average Grant- Date Fair		Aggregate Fair Value (1)			Aggregate Intrinsic Value (2)
	Shares			Value		(in thousands)			(in thousands)
Outstanding at December 31, 2016		445,317		$	11.15				$	7,726
Granted		412,208		$	28.74
Vested (3)		(224,799	)	$	10.91	$	5,168	(4)
Forfeited		(122,139	)	$	13.56
Outstanding at December 31, 2017		510,587		$	24.88				$	23,155
Granted		265,124		$	44.57
Vested (3)		(231,515	)	$	21.10	$	9,483	(5)
Forfeited		(69,905	)	$	20.01
Outstanding at December 31, 2018		474,291		$	38.44				$	8,072
Granted		963,814		$	18.68
Vested (3)		(172,281	)	$	33.66	$	6,169	(6)
Forfeited		(161,022	)	$	37.91
Outstanding at December 31, 2019		1,104,802		$	22.10				$	37,442

(

)

Represents

the

value

the

Company’s

stock

the

date

that

the

restricted

stock

units

and

performance

stock

units

vest.

(

)

Based

the

closing

stock

price

the

Company’s

stock

35.81

December 31, 2019

17.02

December 31, 2018

45.35

December 31

2017

and

$17.35

December 30

2016

(

)

The

number

restricted

stock

units

vested

includes

that

the

Company

withheld

behalf

the

employees

satisfy

the

statutory

tax

withholding

requirements.

(

)

the

grant

date,

the

fair

value

for

these

vested

awards

was

2.5

million.

(

)

the

grant

date,

the

fair

value

for

these

vested

awards

was

$4.9

million.

(

)

the

grant

date,

the

fair

value

for

these

vested

awards

was

$5.9

million.

Stock-Based Compensation

Stock-based compensation expense for the years ended

December 31, 2019,

2018

and

2017

was as follows (in thousands):

	Year Ended December 31,
	201 9		201 8		201 7
Stock options	$	622	$	838	$	815
RSUs		4,786		4,648		1,813
PSUs		3,948		1,105		2,093
ESPP		476		566		389
Total stock-based compensation expense	$	9,832	$	7,157	$	5,110

As of

December 31, 2019,

the unrecognized compensation cost, net of expected forfeitures, was

$12.2

million for stock options and stock awards, which will be recognized over an estimated weighted-average remaining amortization period of

2.64

years. For the ESPP, the unrecognized compensation cost, net of expected forfeitures, was

$0.2

million, which will be recognized over an estimated weighted-average amortization period

0.33

years.

The Company issues new shares of common stock upon the exercise of stock options, vesting of RSUs and PSUs, and the issuance of ESPP shares. The amount of cash received from these issuances (excluding PSUs), net of taxes withheld and paid, in

2019,

2018and

2017

was

$3.9

million,

$1.3

million, and

$4.0

million.

Total stock-based compensation expense recognized during the year ended

December 31, 2019,

2018

and

2017

was recorded in the Consolidated Statement of Operations as follows (in thousands):

	Year Ended December 31,
	201 9		201 8		201 7
Cost of revenue	$	1,572	$	743	$	660
Sales and marketing		4,510		2,105		1,642
Research and development		1,536		824		936
General and administrative		2,214		3,485		1,872
Total stock-based compensation expense	$	9,832	$	7,157	$	5,110

Valuation Assumptions and Fair Value of Stock Options and ESPP Grants

The Company uses the Black-Scholes option pricing model to estimate the fair value of options granted under its equity incentive plans and rights to acquire stock granted under its employee stock purchase plan. The weighted average estimated fair values of the employee stock options and rights granted under the employee stock purchase plan, and the weighted average assumptions used to calculate the grant date fair values, are as follows:

	Stock Options And ESPP									Stock Purchase Plan
	201 9			201 8			201 7			201 9			201 8			201 7

Expected term (in years) (1)		3.65			3.70			3.70			0.50			0.50			0.50
Risk-free interest rate (2)		1.64	%		2.60	%		1.73	%		2.49	%		2.34	%		1.14	%
Volatility (3)		54	%		44	%		40	%		70	%		61	%		42	%
Dividend yield (4)		-	%		-	%		-	%		-	%		-	%		-	%
Weighted average estimated fair value at grant date	$	14.83		$	18.00		$	9.98		$	9.60		$	9.60		$	8.21

(

)

The expected term represents the period during which the Company’s stock-based awards are expected to be outstanding. The estimated term is based on historical experience of similar awards, giving consideration to the contractual terms of the awards, vesting requirements, and expectation of future employee behavior, including post-vesting terminations. The expected term of groups of employees that have similar historical exercise patterns has been considered separately for valuation purposes.

(

)

The risk-free interest rate is based on U.S. Treasury debt securities with maturities close to the expected term of the option or ESSP participation right as of the date of grant.

(

)

Estimated volatility is based on historical volatility. The Company estimates volatility based on a

blend of the Company’s historical volatility and the implied volatility of freely traded options of the Company’s stock in the open market.

(

)

The Company has

not

paid dividends since its inception.

The Company periodically estimates forfeiture rates based on its historical experience for separate groups of employees and adjusts the stock-based compensation expense accordingly. The forfeiture rates used in

2019

ranged from

17.7%.

Non-Employee Stock-Based Compensation

Stock-based compensation expense related to stock options granted to non-employees is recognized based on the fair value of the stock options, determined using the fair value of the award issued on the day of the grant.

The Company granted

9,303

RSU’s to non-employees, during the year ended

December 31, 2019,

3,384

RSUs during the year ended

December 31, 2018,

and

7,745

stock options and

2,478

RSUs during the year ended

2017.

The

7,745

stock options granted in

2017

vests over

years at

25%

on the

first

anniversary of the grant date and

1/48th

each month thereafter.

The

9,303

RSUs granted in

2019

vests over

years at

25%

each anniversary of the grant date. These RSUs and stock options were granted in exchange for consulting services to be rendered and are measured and recognized as they are earned.

Stock Awards Withholdings

For Stock Awards granted to employees, the number of shares issued on the date the Stock Awards vest is net of the tax withholding requirements paid on behalf of the employees. In

2019,

2018,

and

2017,

the Company withheld

42,695,

77,049,

and

64,490

shares of common stock, respectively, to satisfy its employees’ tax obligations of

$0.8

million,

$3.1

million, and

$1.5

million, respectively. The Company paid this amount in cash to the appropriate taxing authorities. Although shares withheld are

not

issued, they are treated as common stock repurchases for accounting and disclosure purposes, as they reduce the number of shares that would have been issued upon vesting.

Note 7 - Income Taxes

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Text Block]

NOTE

7—INCOME

TAXES

The Company files income tax returns in the U.S. federal and various state and local jurisdictions and foreign jurisdictions. The Company’s income (loss) before provision for income taxes consisted of the following (in thousands):

	Year Ended December 31,
	201 9			201 8			201 7
U.S.	$	(13,037)		$	(14,177)		$	11,203
Foreign		774			662			757
Income (loss) before income taxes	$	(12,263	)	$	(13,515	)	$	11,960

The components of the provision (benefit) for income taxes are as follows (in thousands):

	Year Ended December 31,
	201 9		201 8		201 7
Current:
Federal	$	-	$	(15)	$	148
State		101		123		71
Foreign		(76)		303		511
Total Current		25		411		730
Deferred:
Federal		2		15,674		(17,393)
State		1		1,230		(1,348)
Foreign		57		(60)		(22)
Total Deferred		60		16,844		(18,763)
Tax provision	$	85	$	17,255	$	(18,033)

The Company’s net deferred tax assets consists of the following (in thousands):

	December 31,
	2019		2018
Net operating loss carryforwards	$	14,507	$	11,227
Stock-based compensation		1,111		1,040
Other accruals and reserves		2,202		1,924
Credits		11,888		10,857
Foreign		-		457
Accrued warranty		924		1,863
Depreciation and amortization		2,354		2,024
Other		897		282
Operating Lease Asset		3,949		-
Deferred tax asset before valuation allowance		37,831		29,674
Valuation allowance		(32,350)		(27,865)
Deferred tax asset after valuation allowance		5,482		1,809
Deferred tax liability on Accrued commissions 606 cost		(1,076)		(1,269)
Deferred tax liability on goodwill		(97)		(83)
Operating Lease Liability		(3,885)		-
Net deferred tax asset	$	424	$	457

The differences between the U.S. federal statutory income tax rates to the Company’s effective tax rate are as follows:

	Year Ended December 31,
	2019		2018		2017*
U.S. federal statutory income tax rate		21.00%		21.00%		34.00%
State tax rate		2.82		(4.95)		(5.59)
Meals and entertainment		(2.83)		(2.66)		2.15
Permanent differences		(2.58)		-		-
Stock-based compensation		3.78		13.66		(21.55)
SAB 118 Change in Estimate		-		(2.43)		-
Foreign rate differential		(0.34)		0.11		(0.50)
Other		(0.33)		(1.21)		0.65
General business credit		8.14		4.31		(2.72)
Change in Federal Tax Rate		-		-		60.98
Valuation allowance		(38.60)		(155.49)		(218.17)
Change in prior year reserves		2.53		-		-
Deferred true-up		5.71		-		-
Effective tax rate		(0.70)%		(127.66)%		(150.75)%

*	Other balance in 2017 was reclassified for consistency with 2018 and 2019 .

As of

December 31, 2019,

we recorded a valuation allowance of

$32.4

million for the portion of the deferred tax asset that we do

not

expect to be realized. The valuation allowance on the Company’s net deferred taxes increased by

$4.5

million and

$20.6

million during the years ended

December 31, 2019,

and

2018,

respectively. The changes in valuation allowance are primarily due to additional U.S. deferred tax assets and liabilities incurred in the respective year. The Company has

$0.4

million of net deferred tax assets in foreign jurisdictions, which management believes are more-likely-than-

not

to be fully realized given the expectation of future earnings in these jurisdictions. We continue to monitor the realizability of the U.S. deferred tax assets taking into account multiple factors, including the results of operations and magnitude of excess tax deductions for stock-based compensation. We intend to continue maintaining a full valuation allowance on our U.S. deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. Release of all, or a portion, of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period the release is recorded.

December 31, 2019,

the Company had approximately

$60.1

million and

$31.3

million of federal and state net operating loss carryforwards, respectively, available to offset future taxable income. The federal and state net operating loss carryforwards, if

not

utilized will generally begin to expire in

2029

through

2038.

$18.4

million of total federal net operating loss carryforwards were generated post

December 31, 2017

and have

expiration. At

December 31, 2019,

the Company had research and development tax credits available to offset federal, California and Massachusetts tax liabilities in the amount of

$6.6

million,

$8.1

million and

$0.3

million, respectively. Federal credits will begin to expire in

2024,

California state tax credits have

expiration, and Massachusetts tax credits begin to expire in

2021.

Federal and state laws can impose substantial restrictions on the utilization of net operating loss and tax credit carry-forwards in the event of an “ownership change,” as defined in Section

382

of the Internal Revenue Code. We have determined that

significant limitation would be placed on the utilization of our net operating loss and tax credit carry-forwards due to prior ownership changes.

deferred tax liabilities for foreign withholding taxes have been recorded relating to the earnings of our foreign subsidiaries since all such earnings are intended to be indefinitely reinvested. The amount of the unrecognized deferred tax liability associated with these earnings is immaterial.

Uncertain Tax Positions

The Company establishes reserves for uncertain tax positions based on the largest amount that is more-likely-than-

not

to be sustained. An uncertain income tax position will

not

be recognized if it has less than a

50%

likelihood of being sustained. The Company performs a

two

-step approach to recognizing and measuring uncertain tax positions. The

first

step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than

not

that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The

second

step is to measure the tax benefit as the largest amount that is more than

50%

likely of being realized upon settlement.

Although the Company believes it has adequately reserved for its uncertain tax positions,

assurance can be given that the final tax outcome of these matters will

not

be different. The Company adjusts these reserves in light of changing facts and circumstances, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will impact the provision for income taxes in the period in which such determination is made. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate, as well as the related net interest and penalties.

The Company files U.S., state, and foreign income tax returns in jurisdictions with varying statutes of limitations. The

2005

through

2019

tax years generally remain subject to examination by U.S. federal and California state tax authorities due to the Company’s net operating loss and credit carryforwards. For significant foreign jurisdictions, the

2011

through

2018

tax years generally remain subject to examination by their respective tax authorities.

The following table summarizes the activity related to the Company’s gross unrecognized tax benefits in

December 31, 2017

December 31, 2019 (

in thousands):

	Year Ended December 31,
	201 9		201 8			201 7
Balance at beginning of year	$	1,563	$	1,519		$	707
Decreases related to prior year tax positions		(291)		(70	)		643
Increases related to prior year tax positions		25		-			-
Increases related to current year tax positions		129		114			169
Balance at end of year	$	1,426	$	1,563		$	1,519

It is the Company’s policy to recognize interest and penalties related to income tax matters in income tax expense. As of

December 31, 2019,

the Company had accrued interest and penalties of

$58,000

related to uncertain tax positions.

Note 8 - Net Loss Per Share

12 Months Ended

Dec. 31, 2019

Earnings Per Share [Text Block]

NOTE

8—NET

LOSS PER SHARE

Basic net loss per share is computed using the weighted-average number of shares outstanding during the period. In periods of net income, diluted shares outstanding include the dilutive effect of in-the-money equity awards (stock options, RSUs, PSUs and employee stock purchase plan contributions), which is calculated based on the average share price for each fiscal period using the treasury stock method.

In accordance with ASC

260

(Earnings per Share), the assumed proceeds under the treasury stock method include the average unrecognized compensation expense of in-the money stock options and restricted stock units. This results in the assumed buyback of additional shares, thereby reducing the dilutive impact of equity awards.

The following table sets forth the computation of basic and diluted net income (loss) and the weighted average number of shares used in computing basic and diluted net income (loss) per share (in thousands, except per share data):

	Year Ended December 31,
	201 9		201 8		201 7
Numerator:
Net income (loss) (in thousands)	$	(12,348)	$	(30,770)	$	29,993
Denominator:
Weighted average shares of common stock outstanding used in computing net income (loss) per share, basic		14,096		13,771		13,873
Dilutive effect of incremental shares and share equivalents		-		-		855
Weighted average shares of common stock outstanding used in computing net income (loss) per share, diluted		14,096		13,771		14,728
Net loss per share :
Net income (loss) per share, basic	$	(0.88)	$	(2.23)	$	2.16
Net income (loss) per share, diluted	$	(0.88)	$	(2.23)	$	2.04

The following numbers of shares outstanding, prior to the application of the treasury stock method, were excluded from the computation of diluted net loss per common share for the period presented because including them would have had an anti-dilutive effect (in thousands):

	Year Ended December 31,
	201 9		201 8		201 7
Options to purchase common stock		417		664		42
Restricted stock units		559		432		9
Employee stock purchase plan shares		111		133		-
Performance stock units		178		43		-
Total		1,265		1,272		51

Note 9 - Defined Contribution Plan	12 Months Ended
Note 9 - Defined Contribution Plan	Dec. 31, 2019
Notes to Financial Statements
Pension and Other Postretirement Benefits Disclosure [Text Block]	NOTE 9—DEFINED CONTRIBUTION PLAN In the U.S., the Company has an employee savings plan ( “401 (k) Plan”) that qualifies as a deferred salary arrangement under Section 401 (k) of the Internal Revenue Code. Eligible employees may make voluntary contributions to the 401 (k) Plan up to 100% of their annual compensation, subject to statutory annual limitations. In 2019, 2018 and 2017, the Company made discretionary contributions under the 401 (k) Plan of $0.4 million, $0.4 million and $0.3 million, respectively. For the Company’s Japanese subsidiary, a discretionary employee retirement plan has been established. In addition, for some of the Company’s other foreign subsidiaries, the Company deposits funds with insurance companies, third -party trustees, or into government-managed accounts consistent with the requirements of local laws. The Company has fully funded or accrued for its obligations as of December 31, 2019, and the related expense for each of the three years then ended was not significant.

Note 10 - Segment Information and Revenue by Geography and Products

12 Months Ended

Dec. 31, 2019

Segment Reporting Disclosure [Text Block]

NOTE

10—SEGMENT

INFORMATION AND REVENUE BY GEOGRAPHY AND PRODUCTS

Segment reporting is based on the “management approach,” following the method that management organizes the company’s reportable segments for which separate financial information is made available to, and evaluated regularly by, the chief operating decision maker in allocating resources and in assessing performance. The Company’s chief operating decision maker ("CODM") is its Chief Executive Officer ("CEO"), who makes decisions on allocating resources and in assessing performance. The CEO reviews the Company's consolidated results as

one

operating segment. In making operating decisions, the CEO primarily considers consolidated financial information, accompanied by disaggregated information about revenues by geography and product. All of the Company’s principal operations and decision-making functions are located in the U.S. The Company’s CEO views its operations, manages its business, and uses

one

measurement of profitability for the

one

operating segment - which sells aesthetic medical equipment and services, and distributes skincare products, to qualified medical practitioners. Substantially all of the Company’s long-lived assets are located in the U.S.

The following table presents a summary of revenue by geography for the year ended

December 31, 2019,

2018

and

2017

(in thousands):

	Year Ended December 31,
	201 9		201 8		201 7
Revenue mix by geography:
United States	$	106,243	$	101,862	$	94,581
Japan		24,142		17,819		17,264
Asia, excluding Japan		16,110		15,467		13,719
Europe		10,596		8,875		8,317
Rest of the world		24,620		18,696		17,612
Total Consolidated revenue	$	181,712	$	162,720	$	151,493
Revenue mix by product category:
Systems	$	140,478	$	132,594	$	125,883
Consumables		9,648		4,162		2,435
Skincare		8,512		5,778		4,342
Total product revenue		158,638		142,535		132,660
Service		23,074		20,185		18,833
Total Consolidated revenue	$	181,712	$	162,720	$	151,493

Note 11 - Commitments and Contingencies

12 Months Ended

Dec. 31, 2019

Commitments and Contingencies Disclosure [Text Block]

NOTE

11–

COMMITMENTS AND CONTINGENCIES

LEASES

The Company is a party to certain operating and finance leases for vehicles, office space and storages facilities. The Company’s material operating leases consist of office space, as well as storage facilities and finance leases are made up automobiles. The Company’s leases generally have remaining terms of

years, some of which include options to renew the leases for up to

years. The Company leases space for operations in the United States, Japan, Belgium, France and Spain. In addition to the above facility leases, the Company also routinely leases automobiles for certain sales and field service employees under finance leases.

The Company determines if a contract contains a lease at inception. Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments

not

yet paid. Operating lease assets represent the right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments

not

yet paid, the Company estimates the incremental secured borrowing rates corresponding to the maturities of the leases. The Company based the rate estimates on prevailing financial market conditions, credit analysis, and management judgment.

The Company recognizes expense for these leases on a straight-line basis over the lease term. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce the Company’s right-of-use asset related to the lease. These are amortized through the right-of-use asset as reductions of expense over the lease term.

Below is supplemental balance sheet information related to leases (in thousands):

Assets	Classification	Dece mber 3 1 , 2019
Right-of-use assets	Operating lease right-of-use assets	$	7,702
Finance lease	Property and equipment, net *		1,008
Total leased assets		$	8,710

*Finance lease assets included in Property and equipment, net.

Liabilities	Classification	December 3 1 , 2019
Operating lease liabilities
Operating lease liabilities, current	Operating lease liabilities	$	2,800
Operating lease liabilities , non-current	Operating lease liabilities, net of current portion		5,112
Total operating lease liabilities		$	7,912

Finance lease liabilities
Finance lease liabilities, current	Accrued liabilities	$	541
Finance lease liabilities, non-current	Other long-term liabilities		578
Total finance lease liabilities		$	1,119

Lease costs during the

twelve

months ended

December

2019:

Finance lease cost	Amortization expense	$	704
Finance lease cost	Interest for finance lease		88
Operating lease cost	Operating lease expense		2,892

Cash paid for amounts included in the measurement of lease liabilities during the

twelve

months ended

December 31

2019

were as follows:

Operating cash flow	Finance lease	$	88
Financing cash flow	Finance lease		649
Operating cash flow	Operating lease		2,820

Maturities of lease liabilities

Maturities of lease liabilities were as follows as of

December 31,

2019

(in thousands):

	Operating leases
2020	$	2,868
2021		2,613
2022		2,821
2023		326
2024		26
Total lease payments		8,654
Less: imputed interest		742
Present value of lease liabilities	$	7,912

Vehicle Leases

As of

December 31, 2019,

the Company was committed to minimum lease payments for vehicles leased under long-term non-cancelable finance leases as follows (in thousands):

	Operating leases
2020	$	543
2021		412
2022		253
2023		4
Total lease payments		1,212
Less: imputed interest		93
Present value of lease liabilities	$	1,119

As previously disclosed in the Company’s

2018

Annual Report on Form

-K and under the previous lease accounting, maturities of lease liabilities were as follows as of

December 31, 2018:

Facility Leases

As of

December 31, 2018,

the Company was committed to minimum lease payments for facilities and other leased assets under long-term non-cancelable operating leases as follows (in thousands):

	Operating leases
2019	$	3,011
2020		2,939
2021		2,564
2022		2,495
2023 and thereafter		214
Future minimum rental payments	$	11,223

Vehicle Leases –

U.S.

As of

December 31, 2018,

the Company was committed to minimum lease payments for vehicles leased under long-term non-cancelable capital leases as follows (in thousands):

	Operating leases
2019	$	576
2020		287
2021		152
Future minimum lease payments	$	1,015

Weighted-average remaining lease term and discount rate, as of

December 31, 2019,

were as follows:

Lease Term and Discount Rate
Weighted-average remaining lease term (years)
Operating leases	3.0
Finance leases	2.5
Weighted-average discount rate
Operating leases	4.4	%
Finance leases	5.6	%

Purchase Commitments

The Company maintains certain open inventory purchase commitments with its suppliers to ensure a smooth and continuous supply for key components. The Company’s liability in these purchase commitments is generally restricted to an agreed-upon period. These periods can vary among different suppliers. Although open purchase orders are considered enforceable and legally binding, the terms generally allow the Company the option to cancel, reschedule, and adjust their requirements based on the Company's business needs prior to the delivery of goods or performance of services.

Indemnifications

In the normal course of the Company’s business, the Company enters into agreements that contain a variety of representations, warranties, and indemnification obligations. For example, the Company has entered into indemnification agreements with each of its directors and executive officers and certain key employees. The Company’s exposure under its various indemnification obligations is unknown and

not

reasonably estimable as they involve future claims that

may

be made against the Company. As such, the Company has

not

accrued any amounts for such obligations.

Contingencies

The Company is named from time to time as a party to other legal proceedings, product liability, commercial disputes, employee disputes, and contractual lawsuits in the ordinary course of the Company’s business. These matters are subject to many uncertainties and outcomes that are

not

predictable and that

may

not

be known for extended periods of time. A liability and related charge are recorded to earnings in the Company’s consolidated financial statements for legal contingencies when the loss is considered probable and the amount can be reasonably estimated. The assessment is re-evaluated each accounting period and is based on all available information, including discussion with outside legal counsel. If a reasonable estimate of a known or probable loss cannot be made, but a range of probable losses can be estimated, the low-end of the range of losses is recognized if

amount within the range is a better estimate than any other. If a material loss is reasonably possible, but

not

probable and can be reasonably estimated, the estimated loss or range of loss is disclosed in the notes to the consolidated financial statements. The Company expenses legal fees as incurred.

November 2019,

the Company’s former Executive Vice President and CFO Sandra A. Gardiner announced her resignation from the Company. On

November 7, 2019,

Ms. Gardiner filed an arbitration demand against the Company in connection with the terms of her employment and resignation. The Company intends to defend the matter vigorously. At this time, the Company has

not

determined that an award to Ms. Gardiner is probable and does

not

expect any settlement to be material.

As of

December 31, 2019

and

December 31, 2018,

the Company had accrued

Nil

and

$171,000,

respectively related to various pending commercial and product liability lawsuits. The Company does

not

believe that a material loss in excess of accrued amounts is reasonably possible.

Note 12 - Debt	12 Months Ended
Note 12 - Debt	Dec. 31, 2019
Notes to Financial Statements
Debt Disclosure [Text Block]	NOTE 12—DEBT Loan and Security Agreement On May 30, 2018, the Company and Wells Fargo Bank, N.A. (“Wells Fargo”) entered into a Loan and Security Agreement (the “Original Revolving Line of Credit”) in the original principal amount of $25 million. The Original Revolving Line of Credit terminates on May 30, 2021. Covenants The Original Revolving Line of Credit contained financial and other covenants as well as the maintenance of a leverage ratio not to exceed 2.5 to 1.0 and a Trailing Twelve Month ("TTM") adjusted EBITDA of not less than $10 million. A violation of any of the covenants could result in a default under the Original Revolving Line of Credit that would permit the lenders to restrict the Company’s ability to further access the revolving line of credit for loans and letters of credit and require the immediate repayment of any outstanding loans under the Loan and Security Agreement. During the third quarter of 2018, the Company received notice that it was in violation of certain financial covenants in the Original Revolving Line of Credit and entered into discussions with Wells Fargo to amend and revise certain terms of the Original Revolving Line of Credit. On or about November 2, 2018, the Company entered into a First Amendment and Waiver to the Loan and Security Agreement with Wells Fargo (the “First Amended Revolving Line of Credit”). The First Amended Revolving Line of Credit provided for a principal amount of $15 million, with the ability to request an additional $10 million, and a waiver of any existing defaults under the Original Revolving Line of Credit as long as the Company is in compliance with the terms of the First Amended Revolving Line of Credit. On or about March 11, 2019, the Company entered into a Second Amendment and Waiver to the Loan and Security Agreement with Wells Fargo (the “Second Amended Revolving Line of Credit”). The Second Amended Revolving Line of Credit requires the Company to maintain a minimum cash balance of $15 million at Wells Fargo, but removes all other covenants so long as no money is drawn on the line of credit. The Company may draw down on the line of credit at the time it reaches and maintains TTM adjusted EBITDA of not less than $10 million, and a leverage ratio not to exceed 2.5 to 1.0. A violation of any of the covenants could result in a default under the Second Amended Revolving Line of Credit that would permit the lenders to restrict the Company’s ability to further access the revolving line of credit for loans and letters of credit and require the immediate repayment of any outstanding loans under the Second Amended Revolving Line of Credit. As of December 31, 2019, the Company had not drawn on the Original Revolving Line of Credit and the Company is in compliance with all financial covenants of the Original Revolving Line of Credit, as amended by the First Amended Revolving Line of Credit and the Second Amended Revolving Line of Credit.

Note 13 - Related Parties	12 Months Ended
Note 13 - Related Parties	Dec. 31, 2019
Notes to Financial Statements
Related Party Transactions Disclosure [Text Block]	NOTE 13—RELATED PARTIES In 2018 and 2017, the Company paid $63,000 and $196,000, respectively, to a former board member Mr. Dave Gollnick for product development, clinical sales and marketing support services. In addition, as of December 31, 2016, the Company granted Mr. Gollnick 6,500 RSUs with a grant-date fair value of $87,100, that vest over three years at the rate of 33.33% per year on each of the three anniversaries from the vesting commencement date of October 28, 2016, subject to him continuing to provide consulting and/ or board services to the Company. The Company’s Audit Committee approved the extension of Mr. Gollnick’s consulting agreement through December 31, 2018 at the rate of $200 per hour for a maximum of 40 hours per week. The Company signed an agreement with a real estate firm, T3 Advisors, effective September 2017, to assist the Company in real estate related issues (including strategic planning and search for new facilities). One of T3 Advisors’ Senior Vice President "Mr. Austin Barrett" is related to Greg Barrett – a member of the Company’s board of directors. In 2018 and 2017, the Company incurred $192,000 and $38,000 respectively, related to T3 Advisors Real estate brokerage services

Note 14 - Subsequent Events	12 Months Ended
Note 14 - Subsequent Events	Dec. 31, 2019
Notes to Financial Statements
Subsequent Events [Text Block]	NOTE 14—SUBSEQUENT EVENTS The Company evaluates events or transactions that occur after the balance sheet date through to the date which the financial statements are issued, for potential recognition or disclosure in its consolidated financial statements in accordance with Subsequent Events. On January 31, 2020, the Company filed a lawsuit in Federal District Court in California against Lutronic Aesthetics, Inc. and any involved corporate affiliates (“Lutronic”). The lawsuit claims include misappropriation of trade secrets in violation of the Uniform Trade Secrets Act and the Defend Trade Secrets Act; Racketeer Influenced and Corrupt Organizations Act ("RICO") violations; tortious interference with contractual relations and with prospective economic advantage; unfair competition as defined by the California Business and Professions Code; and aiding and abetting the breach of fiduciary duties and/or duty of loyalty owed by certain former Company employees. On January 28, 2020, the Company initiated legal action against certain former employees for multiple claims involving violations of these former employees’ explicit agreements with the Company, as well as violations of duties owed to the Company under California law. In both of these actions, the Company seeks compensatory damages, equitable relief and punitive damages, as well as fees and costs related to the legal action. At this time, the Company is unable to predict the associated costs, expenses and timeline associated therewith due to the early state of this matter.

Supplementary Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2019

Quarterly Financial Information [Text Block]

SUPPLEMENTARY FINANCIAL DATA (UNAUDITED)

(In

thousands,

except

per

amounts)

Quarter ended:	Dec. 31, 201 9			Sept. 30, 201 9			June 30, 201 9			March 31, 201 9			Dec. 31, 201 8			Sept. 30, 201 8			June 30, 201 8			March 31, 201 8
Net revenue	$	51,795		$	46,117		$	47,774		$	36,026		$	45,469		$	40,573		$	42,553		$	34,125
Cost of revenue		23,005			19,884			21,943			18,717			26,683			18,688			20,176			16,791
Gross profit		28,790			26,233			25,831			17,309			18,786			21,885			22,377			17,334
Operating expenses:
Sales and marketing		20,323			17,691			16,992			16,104			15,318			14,479			15,535			13,088
Research and development		4,463			3,643			3,273			3,706			3,464			3,244			4,095			3,556
General and administrative		5,933			7,308			5,267			5,525			5,494			5,160			4,902			5,439
Total operating expenses		30,719			28,642			25,532			25,335			24,276			22,883			24,532			22,083
Income (loss) from operations		(1,929	)		(2,409	)		299			(8,026	)		(5,490	)		(998	)		(2,155	)		(4,749	)
Interest and other income, net		(20	)		(146	)		46			(79	)		(44	)		(49	)		(129	)		98
Income (loss) before income taxes		(1,949	)		(2,555	)		345			(8,105	)		(5,534	)		(1,047	)		(2,284	)		(4,651	)
Income tax provision (benefit)		139			73			(243	)		115			20,760			(174	)		(712	)		(2,619	)
Net income (loss)	$	(2,088	)	$	(2,628	)	$	588		$	(8,220	)	$	(26,293	)	$	(873	)	$	(1,572	)	$	(2,032	)
Net income (loss) per share-basic	$	(0.15	)	$	(0.19	)	$	0.04		$	(0.59	)	$	(1.89	)	$	(0.06	)	$	(0.11	)	$	(0.15	)
Net income (loss) per share-diluted	$	(0.15	)	$	(0.19	)	$	0.04		$	(0.59	)	$	(1.89	)	$	(0.06	)	$	(0.11	)	$	(0.15	)
Weighted average number of shares used in per share calculations:
Basic		14,261			14,182			14,086			14,017			13,932			13,851			13,709			13,587
Diluted		14,261			14,182			14,356			14,017			13,932			13,851			13,709			13,587

Schedule II - Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2019

SEC Schedule, 12-09, Schedule of Valuation and Qualifying Accounts Disclosure [Text Block]

SCHEDULE

CUTERA, INC.

VALUATION

AND

QUALIFYING

ACCOUNTS

(in

thousands)

For

the

Years

Ended

December

31,

201

and

201

	Balance at Beginning of Year		Additions		Deductions		Balance at End of Year
Deferred tax assets valuation allowance
Year ended December 31, 2019	$	27,865	$	7,396	$	2,911	$	32,350
Year ended December 31, 2018	$	7,242	$	22,770	$	2,147	$	27,865
Year ended December 31, 2017	$	31,751	$	617	$	25,126	$	7,242

	Balance at Beginning of Year		Additions		Deductions		Balance at End of Year
Allowance for doubtful accounts receivable
Year ended December 31, 2019	$	1,257		1,361		1,264		1,354
Year ended December 31, 2018	$	9	$	1,880	$	632	$	1,257
Year ended December 31, 2017	$	21	$	14	$	26	$	9

Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Consolidation, Subsidiaries or Other Investments, Consolidated Entities, Policy [Policy Text Block]

Description of Operations and Principles of Consolidation

excel, enlighten, Juliet, Secret RF, truSculpt

and

xeo

truSculpt iD

and

truSculpt flex

cycle refills, as well as single use disposable tips applicable to

Juliet

and

Secret RF

(“Consumables” revenue); and (iii) the distribution of

third

Titan

truSculpt

truSculpt iD

and

truSculpt flex

) and service labor for the repair and maintenance of products that are out of warranty, all of which are collectively classified as “Service” revenue.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

Risks and Uncertainties, Policy [Policy Text Block]

Risks and Uncertainties

not

Comparability of Prior Year Financial Data, Policy [Policy Text Block]

Comparability

The Company adopted the new revenue standard effective

January 1, 2018,

using the modified retrospective method. Prior period financial statements were

not

retrospectively restated. The financial results for the years ended

December 31, 2019

and

2018

reflect the adoption of this accounting standard whereas financial results for the year ended

December 31, 2017

were prepared using prior revenue recognition guidance. As a result the consolidated statements of operations for the years ended

December 31, 2019

and

2018

are

not

directly comparable to the consolidated statement of operations for the year ended

December 31, 2017.

The Company adopted the new lease standard effective

January 1, 2019,

using the modified retrospective method. Prior period financial statements were

not

retrospectively restated. The financial results for the year ended

December 31, 2019

were prepared using the new lease accounting standard whereas the financial results for the years ended

December 31, 2018

and

2017

were prepared using prior effective guidance. As a result the consolidated balance sheet as of

December 31, 2019

not

directly comparable to the balance sheet as of

December 31, 2018,

and the consolidated statement of operations for the year ended

December

31,2019

not

directly comparable to the consolidated statements of operations for the years ended

December 31, 2018

and

December 31, 2017.

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Adopted Accounting Pronouncements

May 2014,

the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

2014

09,

606,

is effective for annual and interim reporting periods beginning after

December 15, 2017.

The Company adopted ASC Topic

606,

"Revenue from Contracts with Customers," on

January 1, 2018,

applying the modified retrospective method to all agreements that were

not

completed as of

January 1, 2018.

Results for reporting periods beginning after

January 1, 2018

are presented under ASC Topic

606,

while prior period amounts are

not

606.

Upon adoption of ASC Topic

606,

the Company recorded an increase to retained earnings, net of deferred tax liability, of

$3.8

million for contracts still in force as of

January 1, 2018

for the following items in the

first

quarter of

2018:

●

$237,000

●

$151,000

increase in deferred revenue balances, related to the accretion of financing costs for multi-year post-warranty service contracts for customers who pay more than

one

year in advance of receiving the service. The Company estimated interest expense for such advance payments under the new revenue standard.

●

$210,000

decrease in accrued liabilities.

●

$4.7

2.5

years. The Company expensed such costs when incurred under the prior guidance.

●

$1.2

million deferred tax liability related to the direct tax effect of the ASC Topic

606

adoption.

The following table summarizes the effects of adopting ASC Topic

606

on the Company’s consolidated balance sheet as of

December 31, 2018:

	As reported under ASC Topic 606			Adjustments			Balances under Prior GAAP
	(In thousands)

Other long-term assets	$	5,971		$	(5,217	)	$	754
Deferred revenue		12,566			(106	)		12,460
Retained earnings (deficit)		(24,010	)		4,610			(19,400	)

The following table summarizes the effects of adopting ASC Topic

606

on Company’s consolidated income statement for the year ended

December 31, 2018:

	As reported under Topic 606			Adjustments		Balances under Prior GAAP
	(In thousands)
Products revenue	$	142,535		$	274	$	142,261
Service revenue		20,185			280		19,905
Sales and marketing		58,420			540		58,960
Interest and other income, net*		(123	)		297		174

* Included in interest and other income, net, is the estimated interest expense for advance payment related to service contracts under the new revenue standard.

Adoption of the standard had

impact on total net cash from or used in operating, investing, or financing activities within the consolidated statements of cash flows.

As part of the Company's adoption of ASC Topic

606,

the Company elected to use the following practical expedients: (i)

not

one

year or less; (ii) to expense costs as incurred for costs to obtain a contract when the amortization period would have been

one

year or less; (iii)

not

to recast revenue for contracts that begin and end in the same fiscal year; and (iv)

not

to assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer.

February 2018,

the FASB issued ASU

No.

2018

02,

“Income Statement - Reporting Comprehensive Income (Topic

220

January 1, 2019

and could be applied either in the period of adoption or retrospectively. The Company adopted the standard in the

first

quarter of

2019,

and the adoption had

impact on our consolidated financial statements and related disclosures.

July 2018,

the FASB issued ASU

2018

09,

220

10,

Income Statement-Reporting Comprehensive Income-Overall; Subtopic

470

50,

Debt-Modifications and Extinguishments; Subtopic

480

10,

Distinguishing Liabilities from Equity-Overall; Subtopic

718

740,

Compensation-Stock Compensation-Income Taxes; Subtopic

805

740,

Business Combinations-Income Taxes; Subtopic

815

10,

Derivatives and Hedging-Overall; Subtopic

820

10,

Fair Value Measurement-Overall; Subtopic

940

405,

Financial Services-Brokers and Dealers-Liabilities; and Subtopic

962

325,

Plan Accounting-Defined Contribution Pension Plans-Investments-Other. The transition and effective date guidance is based on the facts and circumstances of each amendment. Some of the amendments do

not

require transition guidance and will be effective upon issuance. However, many of the amendments do have transition guidance with effective dates for annual periods beginning after

December 15, 2018,

for public business entities. The Company adopted subtopics under the standard that are applicable, including Subtopics

718

740

and

820

in the

first

quarter of

2019.

The adoption of this standard had

impact on our consolidated financial statements and related disclosures.

February 2016,

the FASB issued ASU

2016

02,

"Leases," (also known as ASC Topic

842

July 2018,

the FASB issued ASU

2018

11,

"Targeted Improvements," which gives the option to apply the transition provisions of ASU

2016

at its adoption date instead of at the earliest comparative period presented in its financial statements. In addition, ASU

2018

provides a practical expedient that permits lessors to

not

separate non-lease components from the associated lease component if certain conditions are met. Also in

July 2018,

the FASB issued ASU

2018

10,

"Codification Improvements to ASC Topic

842,

Leases," which clarifies certain aspects of ASU

2016

02.

The Company adopted ASU

2016

02,

as of

January 1, 2019,

using the modified retrospective method, to all leases existing at the date of initial application. The comparative period information has

not

elect the practical expedient to use hindsight in determining the lease term.

The adoption of the new standard resulted in the recording of additional lease assets and lease liabilities of

$10.2

million and

$10.1

million, respectively, as of

January 1, 2019,

material impact on the Company’s consolidated net earnings, results of operations, comprehensive loss, statements of changes in equity, and cash flows.

See below and Note

for additional accounting policy and transition disclosures regarding ASC Topic

842.

Effect of Adoption of the New Lease Standard (ASC Topic

842

) on Consolidated Financial Statements

The following table summarizes the effects of adopting Topic

842

on the Company’s consolidated balance sheet as of

January 1, 2019 (

in thousands):

	As reported under Topic 842			Adjustments			Balances under Prior GAAP
Operating lease right-of-use assets	$	10,049		$	(10,049	)	$	—
Operating lease liabilities		(2,430	)		2,430			—
Other long-term liabilities*		—			140			140
Operating lease liabilities, net of current portion		(7,759	)		7,759			—

*Deferred rent included in other long-term liabilities

June 2016,

the FASB issued ASU

No.

2016

13,

Financial Instruments-Credit Losses (Topic

326

2016

is effective for fiscal years beginning after

December 15, 2019,

2020,

The Company adopted ASU

2016

January 1, 2020

on a modified retrospective basis. The Company has performed an assessment of the impact of adoption of the amendments in these updates on the Company’s consolidated financial position and results of operations. Based on that assessment, the Company estimated that there will be a decrease in allowance for credit losses in the range of

$0.7

million to

$1.0

million.

January 26, 2017,

the FASB issued Accounting Standards Update

No.

2017

04,”

Intangibles—Goodwill and Other (Topic

350

): Simplifying the Test for Goodwill Impairment”. The new guidance requires only a

one

-step quantitative impairment test, whereby a goodwill impairment loss will be measured as the excess of a reporting unit’s carrying amount over its fair value (

not

to exceed the total goodwill allocated to that reporting unit). The new guidance eliminates Step

of the current

two

The amendment is effective for the Company for its fiscal years beginning after

December 15, 2019.

The amendment is required to be adopted prospectively. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after

January 1, 2017.

The Company early adopted ASU

2017

04—Intangibles—Goodwill

and Other (Topic

350

): “Simplifying the Test for Goodwill Impairment, on

October 1, 2018.

There was

material impact upon adoption of the new standard to the financial statements.

See “Goodwill and Other Intangible Assets” in Note

– Balance Sheet Detail.

June 2018,

the FASB issued ASU

No.

2018

07,

"Compensation -Stock Compensation (Topic

718

): Improvement to Nonemployee Share-Based Payment Accounting". The new guidance changes the accounting for nonemployee awards including: (

606.

The amendments in the new guidance are effective for annual and interim reporting periods beginning after

December 15, 2018,

with early adoption permitted for public companies, but

earlier than an entity’s adoption date of ASC Topic

606.

The Company adopted the new standard effective

January 1, 2019

and there was

material impact to the financial statements.

August 2018,

the FASB issued ASU

No.

2018

15,

"Intangibles (Topic

350

): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract" (ASU

No.

2018

(Topic

350

April 1, 2019,

on a prospective basis for applicable implementation costs. The adoption of this guidance prospectively resulted in the capitalization of costs related to implementation of a new Enterprise Resource Planning and Customer Relationship Management systems and are included in “Other current assets and prepaid expenses” on the balance sheet. Refer to Cloud Computing Costs below for further disclosure regarding ASU

No.

2018

(Topic

350

Recently Issued Accounting Pronouncements

Not

Yet Adopted by the Company

August 2018,

the FASB issued ASU

No.

2018

13,

“Fair Value Measurement (Topic

820

fair value measurements. The amendments in this update eliminate, among other things, disclosure of the reasons for and amounts of transfers between Level

and Level

for assets and liabilities that are measured at fair value on a recurring basis and an entity's valuation processes for Level

fair value measurements. The amendments in this update will be effective for the Company beginning with fiscal year

2020,

not

expected to have a material impact on the Company’s consolidated financial position and results of operations.

December 2019,

the FASB issued ASU

No.

2019

“Income Taxes (Topic

740

2021,

not

expected to have a material impact on the Company’s consolidated financial position and results of operations.

Revenue from Contract with Customer [Policy Text Block]

Recently Issued Accounting Pronouncements

Not

Yet Adopted by the Company

August 2018,

the FASB issued ASU

No.

2018

13,

“Fair Value Measurement (Topic

820

fair value measurements. The amendments in this update eliminate, among other things, disclosure of the reasons for and amounts of transfers between Level

and Level

for assets and liabilities that are measured at fair value on a recurring basis and an entity's valuation processes for Level

fair value measurements. The amendments in this update will be effective for the Company beginning with fiscal year

2020,

not

expected to have a material impact on the Company’s consolidated financial position and results of operations.

December 2019,

the FASB issued ASU

No.

2019

“Income Taxes (Topic

740

2021,

not

expected to have a material impact on the Company’s consolidated financial position and results of operations.

Revenue recognition

Effective

January 1, 2018,

the Company recognized revenue under ASC Topic

606.

12%

and

12%,

respectively, of the Company’s total revenue for the years ended

December 31, 2019

and

2018.

one

performance obligation), system accessories (hand pieces), training, other accessories, extended service contracts, marketing services, and time and materials services.

Nature of Products and Services

Systems

one

or more hand pieces. In certain applications, the laser or other energy-based module is contained in the hand piece, such as with the Company’s

Pearl

and

Pearl Fractional

applications, rather than within the console.

The system or upgrade and the right to use the embedded software represent a single performance obligation as the software license is integral to the functionality of the system or upgrade.

The Company does

not

identify calibration and installation services for systems other than

enlighten

as performance obligations because such services are immaterial in the context of the contract. The related costs to complete calibration and installation for systems other than

enlighten

are immaterial. Calibration and installation services for

enlighten

systems are identified as separate performance obligations.

not

The Company typically receives payment for its system consoles and other accessories within

days of shipment. Certain international distributor arrangements allow for longer payment terms.

Skincare products

The Company sells

third

-party manufactured skincare products in Japan. The

third

-party skincare products are purchased from a

third

Consumables (Other accessories)

The Company classifies its customers' purchases of replacement cycles for truSculpt iD and truSculpt flex, as well as replacement Titan and truSculpt

third

-party manufactured skincare products.

Extended contract services

The Company offers post-warranty services to its customers through extended service contracts that cover parts and labor for a term of one, two, or

three

Training

Sales of systems to customers include training on the use of the system to be provided within

180

not

required for customers to use the systems.

Customer Marketing Support

six

months from date of purchase. The Company considers customer marketing support a separate performance obligation, and recognizes revenue over the

six

-month term of the contracts.

Significant Judgments

The determination of whether

two

or more contracts entered into at or near the same time with the same customer should be combined and accounted for as

one

contract

may

While the Company’s purchase agreements do

not

The Company determines standalone selling price ("SSP") for each performance obligation as follows:

● Systems: The SSPs for systems are based on directly observable sales in similar circumstances to similar customers

● Training: SSP is based on observable price when sold on a standalone basis.

● Extended warranty/Service contracts: SSP is based on observable price when sold on a standalone basis (by customer type).

● Customer Marketing Support: SSP is estimated based on cost plus a margin.

● Set-up /Installation: SSP is based on observable price when sold on a standalone basis.

Loyalty Program

The Company launched a customer loyalty program during the

third

quarter of

2018

fifth

December 31, 2019,

the accrual for the loyalty program included in accrued liabilities was

$0.2

million.

Revenue recognition- Period before

January 1, 2018 -

ASC Topic

606

Adoption

The Company recognized revenue under ASC Topic

605

prior to the adoption of ASC Topic

606

effective

January 1 2018.

Under ASC

605,

the Company recognized products revenue when title and risk of ownership was transferred, provided that:

● Persuasive evidence of an arrangement exists;

● The price is fixed or determinable;

● Delivery has occurred or services have been rendered; and

● Collectability is reasonably assured.

not

reasonably assured, the Company recognizes revenue upon receipt of cash payment. Sales to customers and distributors do

not

Multiple-element Arrangements

A multiple-element arrangement includes the sale of

one

or more tangible product offerings with

one

605

25.

Because the Company has neither vendor specific objective evidence (“VSOE”) nor

third

not

limited to, features and functionality of the system, geographies, type of customer and market conditions

With respect to the sale of its earlier generation of the truSculpt product, the Company includes unlimited refills as part of the truSculpt standard warranty and the Company does

not

account for the

truSculpt

warranty as a separate deliverable under the multiple-element arrangement revenue guidance. Upon a

truSculpt

Customer Marketing Arrangements

Service Revenue

not

under a service contact, is recognized as the services are provided. Service revenue for the years ended

December 31, 2017

was

$18.8

million.

Bill and Hold Arrangement

Under ASC

605

2017

the Company segregated certain products for

one

order at the request of a customer for a limited period of time at a

third

$938,000

for a bill-and-hold transaction in

2017.

Deferred Sales Commissions

two

three

years.

Total capitalized costs for the year ended

December 31, 2019

and

December 31, 2018

were

$4.6

million and

$5.2

million, respectively, and are included in Other long-term assets in the Company’s consolidated balance sheet. Amortization expense for these assets was

$2.9

million and

$1.8

million, respectively, during the

twelve

months ended

December 31, 2019

and

December 31, 2018

and are included in sales and marketing expense in the Company’s consolidated statement of operations.

Cash and Cash Equivalents Marketable Investments and Long-term Investments [Policy Text Block]

Cash Equivalents, and Marketable Investments

three

months or less from date of purchase are classified as cash equivalents; all highly liquid investments with stated maturities of greater than

three

one

Fair Value Measurement, Policy [Policy Text Block]

Fair Value of Financial Instruments

three

levels of inputs that

may

be used to measure fair value, in accordance with ASC

820,

as follows:

● Level

inputs, which include quoted prices in active markets for identical assets or liabilities;

● Level

inputs, which include observable inputs other than Level

inputs, such as quoted prices for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are

not

available, the Company uses market pricing and other observable market inputs for similar securities obtained from various

third

-party data providers. These inputs either represent quoted prices for similar assets in active markets or have been derived from observable market data; and

● Level

inputs, which include unobservable inputs that are supported by little or

market activity and that are significant to the fair value of the underlying asset or liability. Level

Marketable Securities, Policy [Policy Text Block]

Impairment of Marketable Investments

other-than-temporary impairments in the years ended

December 31, 2019,

2018,

and

2017.

Allowances for Sales Returns and Doubtful Accounts [Policy Text Block]

Allowance for Sales Returns and Doubtful Accounts

In cases where the Company is aware of circumstances that

may

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Concentration of Credit Risk and Other Risks and Uncertainties

three

major financial institutions in the U.S. In addition, the Company has operating cash balances in banks in each of the international locations in which it operates. Deposits in these banks

may

not

experienced any losses on its deposits of cash and cash equivalents.

twelve

months.

December 31, 2019

and

2018,

customer represented more than

10%

of the Company’s net accounts receivable. During the years ended

December 31, 2019,

2018,

and

2017,

domestic revenue accounted for

58%,

62%,

and

62%,

, respectively, of total revenue, while international revenue accounted for

42%,

38%,

and

38%,respectively,

of total revenue.

single customer represented more than

10%

of total revenue for any of the years ended

December 31, 2019,

2018,

and

2017.

Supplier concentration

The Company relies on

third

parties for the supply of components of its products, as well as

third

-party logistics providers. In instances where these parties fail to perform their obligations, the Company

may

be unable to find alternative suppliers or satisfactorily deliver its products to its customers. The Company relies on

one

supplier for its

Secret

product.

Inventory, Policy [Policy Text Block]

Inventories

Inventories are stated at the lower of cost and net realizable value, cost being determined on a standard cost basis which approximates actual cost on a

first

-in,

first

The Company includes demonstration units within inventories. Demonstration units are carried at cost and amortized over an estimated economic life of

two

As of

December 31, 2019

and

2018,

demonstration inventories, net of accumulated depreciation, included in finished goods inventory was

$4.1

million and

$2.9

million, respectively.

Property, Plant and Equipment, Policy [Policy Text Block]

Property and Equipment

		Useful Lives
Leasehold improvements		Lesser of useful life or term of lease
Office equipment and furniture (in years)		3
Machinery and equipment (in years)		3

Depreciation expense related to property and equipment for

2019,

2018

and

2017,

was

$1.5

million,

$1.2

million, and

$1.0

million respectively. Amortization expense for vehicles leased under capital leases is included in depreciation expense.

Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block]

Capitalized Cloud Computing Set-up Cost

three

five

years. The adoption of this guidance prospectively in the

second

quarter of

2019

resulted in the capitalization of software development costs of

$0.9

million as of

December 31, 2019.

The capitalized costs relate to the implementation of the Company’s new enterprise resource planning and customer relationship management systems and are included in “Other current assets and prepaid expenses” on the accompanying consolidated balance sheet as of

December 31, 2019.

Goodwill and Intangible Assets

Goodwill and intangible assets with indefinite useful lives are

not

amortized, but are tested for impairment at least annually during the

fourth

quarter of the Company’s fiscal year, or if circumstances indicate their value

may

longer be recoverable. Goodwill represents the excess of the purchase price over the fair value of net identifiable assets and liabilities.

The Company continues to operate in

one

segment, which is considered to be the sole reporting unit and, therefore, goodwill was tested for impairment at the enterprise level. As of

December 31, 2019,

there has been

impairment of goodwill. All acquired intangible assets have been fully amortized as of

December 31, 2019.

Standard Product Warranty, Policy [Policy Text Block]

Warranty Obligations

The Company offers post-warranty services to its customers through extended service contracts that cover replacement parts and labor for a term of one, two, or

three

years. For sales to distributors, the Company generally provides a

month warranty for parts only, with labor being provided to the end customer by the distributor.

The Company also offers services on a time-and-materials basis for detachable hand piece replacements, parts and labor.

Lessee, Leases [Policy Text Block]

Leases

Policy from

January 1, 2019

Effective

January 1, 2019,

the Company adopted ASC

842,

which established a right-of-use ("ROU") model requiring lessees to record a right-of-use ("ROU") asset and lease obligations on the balance sheet for all leases with terms longer than

not

Policy before

January 1, 2019

For periods prior to the Company’s adoption of ASC

842

January 1, 2019,

the Company recognized leases as either an operating lease or a capital lease (finance lease). An operating lease records

one

of the criteria for capitalization is met, the lease is treated as a capital lease.

Cost of Goods and Service [Policy Text Block]

Cost of Revenue

Cost of revenue consists primarily of material, finished and semi-finished products purchased from

third

Research and Development Expense, Policy [Policy Text Block]

Research and Development Expenditures

third

party contractors, regulatory affairs, clinical and development costs.

Advertising Cost [Policy Text Block]

Advertising Costs

Advertising costs are included as part of sales and marketing expense and are expensed as incurred. Advertising expenses for

2019,

2018

and

2017

were

$2.8

million,

$2.8

million, and

$1.8

million, respectively.

Share-based Payment Arrangement [Policy Text Block]

Stock-based Compensation

Expected Term

Expected Volatility

: The underlying stock price volatility of the Company’s stock. The Company estimates volatility based on a

blend of the Company’s historical volatility and the implied volatility of freely traded options of the Company’s stock in the open market.

Forfeitures:

The amount of stock-based compensation recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest. Under ASC

718

Risk-Free Interest Rate:

The risk-free interest rate is based on the U.S. treasury yield curve in effect at the time of grant for the expected term of the stock option.

-day period ending on the day of the grant.

See Note

- Stockholders’ Equity, Stock Plans and Stock-Based Compensation Expense for a detailed discussion of the Company’s stock plans and share-based compensation expense.

Income Tax, Policy [Policy Text Block]

Income Taxes

not

to be realized.

The Company recognizes tax benefits from uncertain tax positions if we believe that it is more likely than

not

assurance that the final tax outcome of these matters will

not

may

not

Undistributed earnings of the Company’s foreign subsidiaries at

December 31, 2019

are considered to be indefinitely reinvested and, accordingly,

provision for state income taxes has been provided thereon. Due to the Transition Tax and Global Intangible Low-Tax Income (“GILTI”) regimes as enacted by the

2017

Tax Act, those foreign earnings will

not

material to the accompanying financial statements.

Earnings Per Share, Policy [Policy Text Block]

Computation of Net Income (Loss) per Share

718,

Comprehensive Income, Policy [Policy Text Block]

Comprehensive Income (Loss)

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Currency

The financial statements of the Company’s foreign subsidiaries are translated in accordance with ASC

830,

three

years ended

December 31, 2019.

The effect of exchange rate changes on cash and cash equivalents was insignificant for each of the

three

years ended

December 31, 2019.

Segment Reporting, Policy [Policy Text Block]

Segments

The Company operates in

one

segment and reports segment information in accordance with ASC

280,

Segment Reporting. Management uses

one

measurement of profitability and does

not

segregate its business for internal reporting. As of

December 31, 2019,

and

2018,

89.3%

and

89.0%

of long-lived assets were in the United States, respectively. Revenue is attributed to a geographic region based on the location of the end customer. See Note

– Segment Information and Revenue by Geography and Products for details relating to revenue by geography.

Note 1 - Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block]

	As reported under ASC Topic 606			Adjustments			Balances under Prior GAAP
	(In thousands)

Other long-term assets	$	5,971		$	(5,217	)	$	754
Deferred revenue		12,566			(106	)		12,460
Retained earnings (deficit)		(24,010	)		4,610			(19,400	)

	As reported under Topic 606			Adjustments		Balances under Prior GAAP
	(In thousands)
Products revenue	$	142,535		$	274	$	142,261
Service revenue		20,185			280		19,905
Sales and marketing		58,420			540		58,960
Interest and other income, net*		(123	)		297		174

	As reported under Topic 842			Adjustments			Balances under Prior GAAP
Operating lease right-of-use assets	$	10,049		$	(10,049	)	$	—
Operating lease liabilities		(2,430	)		2,430			—
Other long-term liabilities*		—			140			140
Operating lease liabilities, net of current portion		(7,759	)		7,759			—

Property, Plant, and Equipment Useful Lives [Table Text Block]

		Useful Lives
Leasehold improvements		Lesser of useful life or term of lease
Office equipment and furniture (in years)		3
Machinery and equipment (in years)		3

Note 2 - Investment Securities (Tables)

12 Months Ended

Dec. 31, 2019

Cash, Cash Equivalents and Investments [Table Text Block]

	December 31,
	201 9		201 8
Cash and cash equivalents:
Cash	$	20,005	$	21,969
Cash equivalents:
Money market funds		6,311		4,083
Total cash and cash equivalents		26,316		26,052

Marketable securities:
U.S. government notes		4,114		1,397
U.S. government agencies		—		2,677
Municipal securities		—		200
Commercial paper		3,491		2,433
Corporate debt securities		—		2,816
Total marketable securities		7,605		9,523

Total cash, cash equivalents and marketable securities	$	33,921	$	35,575

Unrealized Gain (Loss) on Investments [Table Text Block]

December 31, 201 9	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Market Value
Cash and cash equivalents	$	26,316	$	-	$	-	$	26,316

Marketable investments
U.S. government notes		4,114		-		-		4,114
U.S. government agencies		—		-		-		—
Municipal securities		—		-		-		—
Commercial paper		3,491		-		-		3,491
Corporate debt securities		—		-		-		—
Total marketable securities		7,605		-		-		7,605

Total cash, cash equivalents and marketable securities	$	33,921	$	-	$	-	$	33,921

December 31, 2018	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Market Value
Cash and cash equivalents	$	26,052	$	-	$	-		$	26,052

Marketable investments
U.S. government notes		1,397		-		-			1,397
U.S. government agencies		2,677		-		-			2,677
Municipal securities		200		-		-			200
Commercial paper		2,433		-		-			2,433
Corporate debt securities		2,825		-		(9	)		2,816
Total marketable securities		9,532				(9	)		9,523

Total cash, cash equivalents and marketable securities	$	35,584			$	(9	)	$	35,575

Investments Classified by Contractual Maturity Date [Table Text Block]

	Amount
Due in less than one year	$	7,605
Due in 1 to 3 years		—
Total marketable securities	$	7,605

Fair Value Measurements, Recurring and Nonrecurring [Table Text Block]

December 31, 201 9	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	6,311	$	-	$	-	$	6,311
Short term marketable investments:
Available-for-sale securities		4,114		3,491		-		7,605
Total assets at fair value	$	10,425	$	3,491	$	-	$	13,916

December 31, 2018 *	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	4,083	$	-	$	-	$	4,083
Short term marketable investments:
Available-for-sale securities		4,274		5,249		-		9,523
Total assets at fair value	$	8,357	$	5,249	$	-	$	13,606

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details

Note 3 - Balance Sheet Detail (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of Inventory, Current [Table Text Block]

	December 31,
	201 9		201 8
Raw materials	$	17,935	$	16,991
Work in process		2,016		2,306
Finished goods		13,970		8,717
Total	$	33,921	$	28,014

Property, Plant and Equipment [Table Text Block]

	December 31,
	201 9		201 8
Leasehold improvements	$	867	$	660
Office equipment and furniture		3,110		2,835
Machinery and equipment		7,805		7,304
		11,782		10,799
Less: Accumulated depreciation		(8,965)		(8,127)
Property and equipment, net	$	2,817	$	2,672

Schedule of Intangible Assets and Goodwill [Table Text Block]

	Gross Carrying Amount		Accumulated Amortization & Impairment Amount		Net Amount
December 31, 201 9
Patent sublicense	$	1,218	$	1,218	$	-
Customer relationship intangible related to acquisition		2,510		2,510		-
Other identified intangible assets related to acquisition		780		780		-
Other intangible		155		155		-
Goodwill		1,339		-		1,339
Total	$	6,002	$	4,663	$	1,339
December 31, 2018
Patent sublicense	$	1,218	$	1,218	$	-
Customer relationship intangible related to acquisition		2,510		2,510		-
Other identified intangible assets related to acquisition		780		780		-
Other intangible		155		155		-
Goodwill		1,339		-		1,339
Total	$	6,002	$	4,663	$	1,339

Schedule of Accrued Liabilities [Table Text Block]

	December 31,
	201 9		201 8
Accrued payroll and related expenses	$	14,341	$	9,377
Sales and marketing accruals		2,527		2,379
Accrued sales tax		3,922		2,935
Warranty liability		4,401		4,666
Other accrued liabilities		5,116		3,943
Total	$	30,307	$	23,300

Note 4 - Warranty and Extended Services Contract (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of Product Warranty Liability [Table Text Block]

	December 31,
	201 9			201 8
Balance at beginning of year	$	7,827		$	3,508
Add: Accruals for warranties issued during the period		6,467			12,364
Less: Warranty related costs during the period		(7,894	)		(8,045	)
Balance at end of year	$	6,400		$	7,827

Note 5 - Deferred Revenue (Tables)

12 Months Ended

Dec. 31, 2019

Contract with Customer, Asset and Liability [Table Text Block]

	December 31,
	201 9			2018*
Balance at beginning of year	$	12,566	$	11,656
Add: Payments received		17,127		14,883
Less: Revenue deferred as of January 1, 2019		(9,451)		(8,206)
Less: Revenue included in the beginning balance and recognized as revenue in the current year		(6.021)		(5,767)
Balance at end of year	$	14,222	$	12,566

Note 6 - Stockholders' Equity, Stock Plans and Stock-based Compensation Expense (Tables)

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement, Option, Activity [Table Text Block]

			Options Outstanding
	Shares Available For Grant		Number of Shares		Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in millions ) (1)
Balances as of December 31, 201 6		721,657		1,116,472	$	9.56		3.70	$	8.70
Options granted		(278,250)		278,250		31.00		-		-
Options exercised		-		(488,398)		8.96		-		-
Options cancelled (expired or forfeited)		66,405		(66,405)		16.54		-		-
Stock awards granted		(873,881)		-		-		-		-
Stock awards cancelled (expired or forfeited)		258.935		-		-		-		-
Additional shares reserved		1,600,000		-		-		-		-
Balances as of December 31, 2017		1,494,866		839,919	$	16.46		3.99	$	24.4
Options granted		(21,010)		21,010	$	50.65		-		-
Options exercised		-		(271,902)		9.99		-		-
Options cancelled (expired or forfeited)		81,322		(81,322)		21,55		-		-
Stock awards granted		(562,070)		-		-		-		-
Stock awards cancelled (expired or forfeited)		148,197		-		-		-		-
Balances as of December 31, 2018		1,141,305		507,705	$	20.52		3.52	$	2.00
Additional shares reserved (2)		700,000
Options exercised		-		(160,798)	$	10.03		-		-
Options cancelled (expired or forfeited)		51,208		(51,208)		24.61		-		-
Stock awards granted		(1,538,128)		-		-		-		-
Stock awards cancelled (expired or forfeited)		407,320		-		-		-		-
Balances as of December 31, 2019		761,705		295,699	$	25.52		3.19	$	3.04
Exercisable as of December 31, 2019				222,400	$	22.16		2.83	$	3.04
Vested and expected to vest, net of estimated forfeitures, as of December 31, 2019				285,462	$	25.08		3.00	$	3.06

Share-based Payment Arrangement, Option, Exercise Price Range [Table Text Block]

Exercise Prices			Number Outstanding		Contractual Life (in years)		Number Exercisable
	$8.80			48,864		0.48		48,864
$9.65	–	$10.79		33,743		1.98		32,806
$10.80	–	$14.04		36,146		3.24		33,752
$15.32	–	$18.55		10,896		3.74		8,584
	$19.55			12,000		4.32		8,292
	$25.70			38,625		4.59		23,594
	$39.30			72,000		4.42		41,230
	$43.40			6,510		0.25		2,849
	$47.40			29,915		3.72		19,116
	$53.90			7,000		5.20		3,313
$ 8.80	–	$ 53.90		295,669		2.83		222,400

Share-based Payment Arrangement, Restricted Stock and Restricted Stock Unit, Activity [Table Text Block]

	Number of			Weighted-Average Grant- Date Fair		Aggregate Fair Value (1)			Aggregate Intrinsic Value (2)
	Shares			Value		(in thousands)			(in thousands)
Outstanding at December 31, 2016		445,317		$	11.15				$	7,726
Granted		412,208		$	28.74
Vested (3)		(224,799	)	$	10.91	$	5,168	(4)
Forfeited		(122,139	)	$	13.56
Outstanding at December 31, 2017		510,587		$	24.88				$	23,155
Granted		265,124		$	44.57
Vested (3)		(231,515	)	$	21.10	$	9,483	(5)
Forfeited		(69,905	)	$	20.01
Outstanding at December 31, 2018		474,291		$	38.44				$	8,072
Granted		963,814		$	18.68
Vested (3)		(172,281	)	$	33.66	$	6,169	(6)
Forfeited		(161,022	)	$	37.91
Outstanding at December 31, 2019		1,104,802		$	22.10				$	37,442

Share-based Payment Arrangement, Cost by Plan [Table Text Block]

	Year Ended December 31,
	201 9		201 8		201 7
Stock options	$	622	$	838	$	815
RSUs		4,786		4,648		1,813
PSUs		3,948		1,105		2,093
ESPP		476		566		389
Total stock-based compensation expense	$	9,832	$	7,157	$	5,110

Share-based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block]

	Year Ended December 31,
	201 9		201 8		201 7
Cost of revenue	$	1,572	$	743	$	660
Sales and marketing		4,510		2,105		1,642
Research and development		1,536		824		936
General and administrative		2,214		3,485		1,872
Total stock-based compensation expense	$	9,832	$	7,157	$	5,110

Valuation Assumptions and Fair Value of Stock Options and ESPP Grants [Table Text Block]

	Stock Options And ESPP									Stock Purchase Plan
	201 9			201 8			201 7			201 9			201 8			201 7

Expected term (in years) (1)		3.65			3.70			3.70			0.50			0.50			0.50
Risk-free interest rate (2)		1.64	%		2.60	%		1.73	%		2.49	%		2.34	%		1.14	%
Volatility (3)		54	%		44	%		40	%		70	%		61	%		42	%
Dividend yield (4)		-	%		-	%		-	%		-	%		-	%		-	%
Weighted average estimated fair value at grant date	$	14.83		$	18.00		$	9.98		$	9.60		$	9.60		$	8.21

Note 7 - Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block]

	Year Ended December 31,
	201 9			201 8			201 7
U.S.	$	(13,037)		$	(14,177)		$	11,203
Foreign		774			662			757
Income (loss) before income taxes	$	(12,263	)	$	(13,515	)	$	11,960

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

	Year Ended December 31,
	201 9		201 8		201 7
Current:
Federal	$	-	$	(15)	$	148
State		101		123		71
Foreign		(76)		303		511
Total Current		25		411		730
Deferred:
Federal		2		15,674		(17,393)
State		1		1,230		(1,348)
Foreign		57		(60)		(22)
Total Deferred		60		16,844		(18,763)
Tax provision	$	85	$	17,255	$	(18,033)

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	December 31,
	2019		2018
Net operating loss carryforwards	$	14,507	$	11,227
Stock-based compensation		1,111		1,040
Other accruals and reserves		2,202		1,924
Credits		11,888		10,857
Foreign		-		457
Accrued warranty		924		1,863
Depreciation and amortization		2,354		2,024
Other		897		282
Operating Lease Asset		3,949		-
Deferred tax asset before valuation allowance		37,831		29,674
Valuation allowance		(32,350)		(27,865)
Deferred tax asset after valuation allowance		5,482		1,809
Deferred tax liability on Accrued commissions 606 cost		(1,076)		(1,269)
Deferred tax liability on goodwill		(97)		(83)
Operating Lease Liability		(3,885)		-
Net deferred tax asset	$	424	$	457

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	Year Ended December 31,
	2019		2018		2017*
U.S. federal statutory income tax rate		21.00%		21.00%		34.00%
State tax rate		2.82		(4.95)		(5.59)
Meals and entertainment		(2.83)		(2.66)		2.15
Permanent differences		(2.58)		-		-
Stock-based compensation		3.78		13.66		(21.55)
SAB 118 Change in Estimate		-		(2.43)		-
Foreign rate differential		(0.34)		0.11		(0.50)
Other		(0.33)		(1.21)		0.65
General business credit		8.14		4.31		(2.72)
Change in Federal Tax Rate		-		-		60.98
Valuation allowance		(38.60)		(155.49)		(218.17)
Change in prior year reserves		2.53		-		-
Deferred true-up		5.71		-		-
Effective tax rate		(0.70)%		(127.66)%		(150.75)%

Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block]

	Year Ended December 31,
	201 9		201 8			201 7
Balance at beginning of year	$	1,563	$	1,519		$	707
Decreases related to prior year tax positions		(291)		(70	)		643
Increases related to prior year tax positions		25		-			-
Increases related to current year tax positions		129		114			169
Balance at end of year	$	1,426	$	1,563		$	1,519

Note 8 - Net Loss Per Share (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Year Ended December 31,
	201 9		201 8		201 7
Numerator:
Net income (loss) (in thousands)	$	(12,348)	$	(30,770)	$	29,993
Denominator:
Weighted average shares of common stock outstanding used in computing net income (loss) per share, basic		14,096		13,771		13,873
Dilutive effect of incremental shares and share equivalents		-		-		855
Weighted average shares of common stock outstanding used in computing net income (loss) per share, diluted		14,096		13,771		14,728
Net loss per share :
Net income (loss) per share, basic	$	(0.88)	$	(2.23)	$	2.16
Net income (loss) per share, diluted	$	(0.88)	$	(2.23)	$	2.04

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

	Year Ended December 31,
	201 9		201 8		201 7
Options to purchase common stock		417		664		42
Restricted stock units		559		432		9
Employee stock purchase plan shares		111		133		-
Performance stock units		178		43		-
Total		1,265		1,272		51

Note 10 - Segment Information and Revenue by Geography and Products (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block]

	Year Ended December 31,
	201 9		201 8		201 7
Revenue mix by geography:
United States	$	106,243	$	101,862	$	94,581
Japan		24,142		17,819		17,264
Asia, excluding Japan		16,110		15,467		13,719
Europe		10,596		8,875		8,317
Rest of the world		24,620		18,696		17,612
Total Consolidated revenue	$	181,712	$	162,720	$	151,493
Revenue mix by product category:
Systems	$	140,478	$	132,594	$	125,883
Consumables		9,648		4,162		2,435
Skincare		8,512		5,778		4,342
Total product revenue		158,638		142,535		132,660
Service		23,074		20,185		18,833
Total Consolidated revenue	$	181,712	$	162,720	$	151,493

Note 11 - Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2019

Leases, Financial Statement Information [Table Text Block]

Assets	Classification	Dece mber 3 1 , 2019
Right-of-use assets	Operating lease right-of-use assets	$	7,702
Finance lease	Property and equipment, net *		1,008
Total leased assets		$	8,710

Liabilities	Classification	December 3 1 , 2019
Operating lease liabilities
Operating lease liabilities, current	Operating lease liabilities	$	2,800
Operating lease liabilities , non-current	Operating lease liabilities, net of current portion		5,112
Total operating lease liabilities		$	7,912

Finance lease liabilities
Finance lease liabilities, current	Accrued liabilities	$	541
Finance lease liabilities, non-current	Other long-term liabilities		578
Total finance lease liabilities		$	1,119

Finance lease cost	Amortization expense	$	704
Finance lease cost	Interest for finance lease		88
Operating lease cost	Operating lease expense		2,892

Operating cash flow	Finance lease	$	88
Financing cash flow	Finance lease		649
Operating cash flow	Operating lease		2,820

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

	Operating leases
2020	$	2,868
2021		2,613
2022		2,821
2023		326
2024		26
Total lease payments		8,654
Less: imputed interest		742
Present value of lease liabilities	$	7,912

Finance Lease, Liability, Maturity [Table Text Block]

	Operating leases
2020	$	543
2021		412
2022		253
2023		4
Total lease payments		1,212
Less: imputed interest		93
Present value of lease liabilities	$	1,119

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

	Operating leases
2019	$	3,011
2020		2,939
2021		2,564
2022		2,495
2023 and thereafter		214
Future minimum rental payments	$	11,223

Schedule of Future Minimum Lease Payments for Capital Leases [Table Text Block]

	Operating leases
2019	$	576
2020		287
2021		152
Future minimum lease payments	$	1,015

Lease, Cost [Table Text Block]

Lease Term and Discount Rate
Weighted-average remaining lease term (years)
Operating leases	3.0
Finance leases	2.5
Weighted-average discount rate
Operating leases	4.4	%
Finance leases	5.6	%

Supplementary Financial Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2019

Quarterly Financial Information [Table Text Block]

Quarter ended:	Dec. 31, 201 9			Sept. 30, 201 9			June 30, 201 9			March 31, 201 9			Dec. 31, 201 8			Sept. 30, 201 8			June 30, 201 8			March 31, 201 8
Net revenue	$	51,795		$	46,117		$	47,774		$	36,026		$	45,469		$	40,573		$	42,553		$	34,125
Cost of revenue		23,005			19,884			21,943			18,717			26,683			18,688			20,176			16,791
Gross profit		28,790			26,233			25,831			17,309			18,786			21,885			22,377			17,334
Operating expenses:
Sales and marketing		20,323			17,691			16,992			16,104			15,318			14,479			15,535			13,088
Research and development		4,463			3,643			3,273			3,706			3,464			3,244			4,095			3,556
General and administrative		5,933			7,308			5,267			5,525			5,494			5,160			4,902			5,439
Total operating expenses		30,719			28,642			25,532			25,335			24,276			22,883			24,532			22,083
Income (loss) from operations		(1,929	)		(2,409	)		299			(8,026	)		(5,490	)		(998	)		(2,155	)		(4,749	)
Interest and other income, net		(20	)		(146	)		46			(79	)		(44	)		(49	)		(129	)		98
Income (loss) before income taxes		(1,949	)		(2,555	)		345			(8,105	)		(5,534	)		(1,047	)		(2,284	)		(4,651	)
Income tax provision (benefit)		139			73			(243	)		115			20,760			(174	)		(712	)		(2,619	)
Net income (loss)	$	(2,088	)	$	(2,628	)	$	588		$	(8,220	)	$	(26,293	)	$	(873	)	$	(1,572	)	$	(2,032	)
Net income (loss) per share-basic	$	(0.15	)	$	(0.19	)	$	0.04		$	(0.59	)	$	(1.89	)	$	(0.06	)	$	(0.11	)	$	(0.15	)
Net income (loss) per share-diluted	$	(0.15	)	$	(0.19	)	$	0.04		$	(0.59	)	$	(1.89	)	$	(0.06	)	$	(0.11	)	$	(0.15	)
Weighted average number of shares used in per share calculations:
Basic		14,261			14,182			14,086			14,017			13,932			13,851			13,709			13,587
Diluted		14,261			14,182			14,356			14,017			13,932			13,851			13,709			13,587

Schedule II - Valuation and Qualifying Accounts (Tables)

12 Months Ended

Dec. 31, 2019

Summary of Valuation Allowance [Table Text Block]

	Balance at Beginning of Year		Additions		Deductions		Balance at End of Year
Deferred tax assets valuation allowance
Year ended December 31, 2019	$	27,865	$	7,396	$	2,911	$	32,350
Year ended December 31, 2018	$	7,242	$	22,770	$	2,147	$	27,865
Year ended December 31, 2017	$	31,751	$	617	$	25,126	$	7,242

	Balance at Beginning of Year		Additions		Deductions		Balance at End of Year
Allowance for doubtful accounts receivable
Year ended December 31, 2019	$	1,257		1,361		1,264		1,354
Year ended December 31, 2018	$	9	$	1,880	$	632	$	1,257
Year ended December 31, 2017	$	21	$	14	$	26	$	9

Note 1 - Summary of Significant Accounting Policies (Details Textual) - USD ($)

12 Months Ended

Dec. 31, 2019

Dec. 31, 2018

Dec. 31, 2017

Jan. 01, 2019

Jan. 01, 2018

Dec. 31, 2016

Cumulative Effect of New Accounting Principle in Period of Adoption

$ 3,813,000

Deferred Revenue, Total

$ 12,566,000

Capitalized Contract Cost, Net, Total

$ 4,600,000

5,200,000

Operating Lease, Liability, Total

7,702,000

$ 10,049,000

7,912,000

Contract with Customer, Liability, Total

14,222,000

12,566,000

^[1]

$ 11,656,000

^[1]

$ 11,656,000

Revenue from Contract with Customer, Including Assessed Tax

181,712,000

162,720,000

151,493,000

Other-than-temporary Impairment Loss, Debt Securities, Available-for-sale, Total

Inventory, Finished Goods, Gross, Total

4,100,000

2,900,000

Depreciation, Total

$ 1,500,000

1,200,000

1,000,000

Number of Operating Segments

Goodwill, Impairment Loss

$ 0

Advertising Expense

$ 2,800,000

2,800,000

1,800,000

Minimum [Member] | Distributors [Member]

Standard Warranty Period

1 year 60 days

Maximum [Member] | Distributors [Member]

Standard Warranty Period

1 year 120 days

Capitalized Cloud Computing Set-up Cost [Member] | Minimum [Member]

Finite-Lived Intangible Asset, Useful Life

3 years

Capitalized Cloud Computing Set-up Cost [Member] | Maximum [Member]

Finite-Lived Intangible Asset, Useful Life

5 years

UNITED STATES

Revenue from Contract with Customer, Including Assessed Tax

$ 106,243,000

$ 101,862,000

$ 94,581,000

Percentage of Assets

89.30%

89.00%

Customer Concentration Risk [Member] | Revenue Benchmark [Member] | UNITED STATES

Concentration Risk, Percentage

58.00%

62.00%

Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Non-US [Member]

Concentration Risk, Percentage

42.00%

38.00%

Selling and Marketing Expense [Member]

Capitalized Contract Cost, Amortization

$ 2,900,000

$ 1,800,000

Loyalty [Member]

Contract with Customer, Liability, Total

200,000

Service [Member]

Revenue from Contract with Customer, Including Assessed Tax

$ 23,074,000

$ 20,185,000

$ 18,833,000

Bill and Hold Arrangement [Member]

Revenue from Contract with Customer, Including Assessed Tax

$ 938,000

Transferred over Time [Member]

Revenue from Contract with Customer, Including Assessed Tax, Percent of Total Revenues

13.00%

12.00%

Retained Earnings [Member]

Cumulative Effect of New Accounting Principle in Period of Adoption

$ 3,813,000

Accounting Standards Update 2014-09 [Member]

Deferred Revenue, Total

(237,000)

Extended Product Warranty Accrual, Ending Balance

151,000

Variable Consideration

210,000

Capitalized Contract Cost, Net, Total

4,700,000

Deferred Income Tax Liabilities, Net, Total

1,200,000

Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member]

Cumulative Effect of New Accounting Principle in Period of Adoption

$ 3,800,000

Accounting Standards Update 2016-02 [Member]

Operating Lease, Liability, Total

10,200,000

$ 10,100,000

[1]	The 2018 presentation in the table above has been revised to include deferred revenue of $11,656 at January 1, 2018 and $12,566 at December 31, 2018 and related changes therein that were previously excluded.

Note 1 - Summary of Significant Accounting Policies - Effect of Adoption of the New Standard (Details) - USD ($)

3 Months Ended

12 Months Ended

Dec. 31, 2019

Sep. 30, 2019

Jun. 30, 2019

Mar. 31, 2019

Dec. 31, 2018

Sep. 30, 2018

Jun. 30, 2018

Mar. 31, 2018

Dec. 31, 2019

Dec. 31, 2018

Dec. 31, 2017

Jan. 01, 2019

Jan. 01, 2018

Other long-term assets

$ 6,411,000

$ 5,971,000

$ 6,411,000

$ 5,971,000

Retained earnings (deficit)

12,566,000

(36,358,000)

(24,010,000)

(36,358,000)

(24,010,000)

181,712,000

162,720,000

$ 151,493,000

Interest and other income, net*

20,323,000

$ 17,691,000

$ 16,992,000

$ 16,104,000

15,318,000

$ 14,479,000

$ 15,535,000

$ 13,088,000

71,109,000

58,420,000

52,070,000

(20,000)

$ (146,000)

$ 46,000

$ (79,000)

(44,000)

$ (49,000)

$ (129,000)

$ 98,000

(199,000)

(123,000)

^[1]

884,000

Operating lease liabilities

7,702,000

$ 10,049,000

(2,800,000)

(2,430,000)

Other long-term liabilities*

578,000

553,000

578,000

553,000

^[1]

Operating lease liabilities, net of current portion

$ (5,112,000)

(5,112,000)

(7,759,000)

Accounting Standards Update 2016-02 [Member]

Operating lease liabilities

(10,049,000)

2,430,000

Other long-term liabilities*

^[1]

140,000

Operating lease liabilities, net of current portion

$ 7,759,000

Previous Accounting Guidance [Member]

Operating lease liabilities

Other long-term liabilities*

^[1]

140,000

Operating lease liabilities, net of current portion

Accounting Standards Update 2014-09 [Member]

Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member]

$ (237,000)

Other long-term assets

(5,217,000)

Retained earnings (deficit)

(106,000)

4,610,000

Interest and other income, net*

^[1]

297,000

Calculated under Revenue Guidance in Effect before Topic 606 [Member]

Other long-term assets

754,000

Retained earnings (deficit)

12,460,000

$ (19,400,000)

(19,400,000)

Interest and other income, net*

^[1]

174,000

Product [Member]

158,638,000

142,535,000

132,660,000

Product [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member]

58,420,000

274,000

Product [Member] | Calculated under Revenue Guidance in Effect before Topic 606 [Member]

540,000

142,261,000

58,960,000

$ 23,074,000

20,185,000

$ 18,833,000

Service [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member]

Service [Member] | Calculated under Revenue Guidance in Effect before Topic 606 [Member]

280,000

Revenue, Remaining Performance Obligation, Percentage

$ 19,905,000

[1]	Included in interest and other income, net, is the estimated interest expense for advance payment related to service contracts under the new revenue standard.

Note 1 - Summary of Significant Accounting Policies - Useful Lives of Property, Plant and Equipment (Details)	12 Months Ended
	Dec. 31, 2019
Equipment and Furniture [Member]
Property, plant, and equipment, useful lives (Year)	3 years
Machinery and Equipment [Member]
Property, plant, and equipment, useful lives (Year)	3 years

Note 2 - Investment Securities (Details Textual) xbrli-pure in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Debt Securities, Available-for-sale, Unrealized Gain (Loss), Total		$ (9,000)
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Number of Positions	0
Fair Value, Inputs, Level 2 [Member]
Average Remaining Maturity of Investment	73 days
US Treasury and Government [Member] \| Fair Value, Inputs, Level 1 [Member]
Debt Securities, Available-for-sale, Total	$ 4,274

Note 2 - Investment Securities - Cash, Cash Equivalents and Marketable Securities (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Cash	$ 20,005	$ 21,969
Cash equivalents	26,316	26,052
Marketable securities	7,605	9,523
Total cash, cash equivalents and marketable securities	33,921	35,575
US Treasury and Government [Member]
Marketable securities	4,114	1,397
US Government Agencies Debt Securities [Member]
Marketable securities		2,677
US States and Political Subdivisions Debt Securities [Member]
Marketable securities		200
Corporate Debt Securities [Member]
Marketable securities		2,816
Money Market Funds [Member]
Cash equivalents	6,311	4,083
Commercial Paper [Member]
Cash equivalents	$ 3,491	$ 2,433

Note 2 - Investment Securities - Unrealized Gains and Losses Related to Marketable Investments (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Cash and cash equivalents, Amortized Cost	$ 26,316	$ 26,052	$ 14,184	$ 13,775
Cash and cash equivalents, Fair Market Value	26,316	26,052
Marketable investments, Amortized Cost	7,605	9,532
Marketable investments, Gross Unrealized Gains
Marketable investments, Gross Unrealized Losses		(9)
Marketable investments, Fair Market Value	7,605	9,523
Marketable investments, Gross Unrealized Losses		9
Total cash, cash equivalents and marketable securities, Amortized Cost	33,921	35,584
Total cash, cash equivalents and marketable securities, Fair Market Value	33,921	35,575
US Treasury and Government [Member]
Marketable investments, Amortized Cost	4,114	1,397
Marketable investments, Gross Unrealized Gains
Marketable investments, Gross Unrealized Losses
Marketable investments, Fair Market Value	4,114	1,397
Marketable investments, Gross Unrealized Losses
US Government Agencies Debt Securities [Member]
Marketable investments, Amortized Cost		2,677
Marketable investments, Gross Unrealized Gains
Marketable investments, Gross Unrealized Losses
Marketable investments, Fair Market Value		2,677
Marketable investments, Gross Unrealized Losses
US States and Political Subdivisions Debt Securities [Member]
Marketable investments, Amortized Cost		200
Marketable investments, Gross Unrealized Gains
Marketable investments, Gross Unrealized Losses
Marketable investments, Fair Market Value		200
Marketable investments, Gross Unrealized Losses
Commercial Paper, Not Included with Cash and Cash Equivalents [Member]
Marketable investments, Amortized Cost	3,491	2,433
Marketable investments, Gross Unrealized Gains
Marketable investments, Gross Unrealized Losses
Marketable investments, Fair Market Value	3,491	2,433
Marketable investments, Gross Unrealized Losses
Corporate Debt Securities [Member]
Marketable investments, Amortized Cost		2,825
Marketable investments, Gross Unrealized Gains
Marketable investments, Gross Unrealized Losses		(9)
Marketable investments, Fair Market Value		2,816
Marketable investments, Gross Unrealized Losses		$ 9

Note 2 - Investment Securities - Maturities of Available-for-sale Securities (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Due in less than one year	$ 7,605
Due in 1 to 3 years
Total marketable securities	$ 7,605	$ 9,523

Note 2 - Investment Securities - Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Cash equivalents	$ 26,316	$ 26,052
Available-for-sale securities	7,605	9,523
Fair Value, Recurring [Member]
Available-for-sale securities	7,605	9,523
Total assets at fair value	13,916	13,606
Fair Value, Recurring [Member] \| Fair Value, Inputs, Level 1 [Member]
Available-for-sale securities	4,114	4,274
Total assets at fair value	10,425	8,357
Fair Value, Recurring [Member] \| Fair Value, Inputs, Level 2 [Member]
Available-for-sale securities	3,491	5,249
Total assets at fair value	3,491	5,249
Fair Value, Recurring [Member] \| Fair Value, Inputs, Level 3 [Member]
Available-for-sale securities
Total assets at fair value
Money Market Funds [Member] \| Fair Value, Recurring [Member]
Cash equivalents	6,311	4,083
Money Market Funds [Member] \| Fair Value, Recurring [Member] \| Fair Value, Inputs, Level 1 [Member]
Cash equivalents	6,311	4,083
Money Market Funds [Member] \| Fair Value, Recurring [Member] \| Fair Value, Inputs, Level 2 [Member]
Cash equivalents
Money Market Funds [Member] \| Fair Value, Recurring [Member] \| Fair Value, Inputs, Level 3 [Member]
Cash equivalents

Note 3 - Balance Sheet Detail (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Inventory Valuation Reserves, Ending Balance	$ 2,500,000	$ 1,800,000
Property, Plant and Equipment, Net, Ending Balance	2,817,000	2,672,000
Amortization of Intangible Assets, Total	0	0	$ 2,000
Standard Product Warranty Accrual, Ending Balance	6,400,000	7,827,000	$ 3,508,000
Standard Product Warranty Accrual, Decrease for Payments	7,894,000	8,045,000
Product Remediation Liability [Member]
Standard and Extended Product Warranty Accrual, Increase for Warranties Issued, Total		5,000,000
Standard and Extended Product Warranty Accrual, Decrease for Payments, Total		1,100,000
Standard Product Warranty Accrual, Ending Balance	500,000	700,000
Extended Product Warranty Accrual, Ending Balance	2,000,000	3,200,000
Standard Product Warranty Accrual, Decrease for Payments	200,000
Extended Product Warranty Accrual, Decrease for Payments	1,100,000
Vehicles [Member]
Finance Lease, Right-of-Use Asset	2,000,000	1,900,000
Finance Lease, Right-of-Use Asset, Accumulated Amortization	1,100,000	$ 1,100,000
Construction in Progress [Member]
Property, Plant and Equipment, Net, Ending Balance	$ 400,000

Note 3 - Balance Sheet Detail - Inventories (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Raw materials	$ 17,935	$ 16,991
Work in process	2,016	2,306
Finished goods	13,970	8,717
Total	$ 33,921	$ 28,014

Note 3 - Balance Sheet Detail - Property and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Property, plant and equipment, gross	$ 11,782	$ 10,799
Less: Accumulated depreciation	(8,965)	(8,127)
Property and equipment, net	2,817	2,672
Leasehold Improvements [Member]
Property, plant and equipment, gross	867	660
Equipment and Furniture [Member]
Property, plant and equipment, gross	3,110	2,835
Machinery and Equipment [Member]
Property, plant and equipment, gross	$ 7,805	$ 7,304

Note 3 - Balance Sheet Detail - Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Accumulated amortization and impairment amount	$ 4,663	$ 4,663
Goodwill, gross carrying amount	1,339	1,339
Goodwill	1,339	1,339
Total, gross carrying amount	6,002	6,002
Total	1,339	1,339
Patents [Member]
Gross carrying amount	1,218	1,218
Accumulated amortization and impairment amount	1,218	1,218
Net amount
Customer Relationships [Member]
Gross carrying amount	2,510	2,510
Accumulated amortization and impairment amount	2,510	2,510
Net amount
Other Intangible Assets [Member]
Gross carrying amount	780	780
Accumulated amortization and impairment amount	780	780
Net amount
Other Intangible [Member]
Gross carrying amount	155	155
Accumulated amortization and impairment amount	155	155
Net amount

Note 3 - Balance Sheet Detail - Accrued Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Accrued payroll and related expenses	$ 14,341	$ 9,377
Sales and marketing accruals	2,527	2,379
Accrued sales tax	3,922	2,935
Warranty liability	4,401	4,666
Other accrued liabilities	5,116	3,943
Total	$ 30,307	$ 23,300

Note 4 - Warranty and Extended Services Contract (Details Textual) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Extended Product Warranty Accrual, Current	$ 1,999	$ 3,159

Note 4 - Warranty and Extended Services Contract - Summary of Warranties (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Balance at beginning of year	$ 7,827	$ 3,508
Add: Accruals for warranties issued during the period	6,467	12,364
Less: Warranty related costs during the period	(7,894)	(8,045)
Balance at end of year	$ 6,400	$ 7,827

Note 5 - Deferred Revenue (Details Textual) - USD ($)

12 Months Ended

Dec. 31, 2019

Dec. 31, 2018

Dec. 31, 2017

Jan. 01, 2018

76.00%

Revenue, Remaining Performance Obligation, Amount

$ 14,200,000

Contract with Customer, Liability, Total

14,222,000

$ 12,566,000

^[1]

$ 11,656,000

^[1]

$ 11,656,000

Deferred Revenue Costs Incurred

9,300,000

7,800,000

$ 6,000,000

Extended Product Warranty Accrual, Current

$ 1,999,000

$ 3,159,000

[1]	The 2018 presentation in the table above has been revised to include deferred revenue of $11,656 at January 1, 2018 and $12,566 at December 31, 2018 and related changes therein that were previously excluded.

Note 5 - Deferred Revenue - Summary of Deferred Service Contract Revenue (Details) - USD ($)

12 Months Ended

Dec. 31, 2019

Dec. 31, 2018

Balance at beginning of year

^[1]

$ 12,566,000

$ 11,656,000

Add: Payments received

17,127,000

14,883,000

^[1]

Less: Revenue deferred as of January 1, 2019

(9,451,000)

(8,206,000)

^[1]

Less: Revenue included in the beginning balance and recognized as revenue in the current year

(6,021)

(5,767,000)

^[1]

Balance at end of year

$ 14,222,000

$ 12,566,000

^[1]

[1]	The 2018 presentation in the table above has been revised to include deferred revenue of $11,656 at January 1, 2018 and $12,566 at December 31, 2018 and related changes therein that were previously excluded.

Note 6 - Stockholders' Equity, Stock Plans and Stock-based Compensation Expense (Details Textual) - USD ($)		3 Months Ended	12 Months Ended
	Jun. 14, 2019	Sep. 30, 2019	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Oct. 31, 2017	Dec. 31, 2012
Common Stock, Par or Stated Value Per Share			$ 0.001	$ 0.001
Capital Stock, Shares Authorized			55,000,000
Common Stock, Shares Authorized			50,000,000	50,000,000
Common Stock, Shares, Issued, Total			14,315,586	13,968,852
Common Stock, Shares, Outstanding, Ending Balance			14,315,586	13,968,852
Preferred Stock, Shares Authorized			5,000,000
Preferred Stock, No Par Value			$ 0.001
Preferred Stock, Shares Issued, Total			0
Preferred Stock, Shares Outstanding, Ending Balance			0
Share-based Payment Arrangement, Expense			$ 9,832,000	$ 7,157,000	$ 5,110,000
Share Price			$ 35.81	$ 17.02	$ 45.35	$ 17.35
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value			$ 1,000,000	$ 8,300,000	$ 8,000,000
Proceeds from Issuance of Shares under Incentive and Share-based Compensation Plans, Including Stock Options, Net			$ 3,900,000	$ 1,300,000	$ 4,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross				21,010	278,250
Share-based Payment Arrangement, Shares Withheld for Tax Withholding Obligation			42,695	77,049	64,490
Share-based Payment Arrangement, Decrease for Tax Withholding Obligation			$ 800,000	$ 3,100,000	$ 1,500,000
Minimum [Member]
Share Based Compensation, Forfeiture Rate			0.00%
Maximum [Member]
Share Based Compensation, Forfeiture Rate			17.70%
Non-employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross				3,384	7,745
Restricted Stock Units (RSUs) [Member]
Share-based Payment Arrangement, Expense			$ 4,786,000	$ 4,648,000	$ 1,813,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period				963,814	265,124	412,208
Share Price			$ 35.81	$ 17.02	$ 45.35	$ 17.35
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value			$ 5,900,000	$ 4,900,000	$ 2,500,000
Restricted Stock Units (RSUs) [Member] \| Non-employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period			9,303		2,478
Performance Shares [Member]
Share-based Payment Arrangement, Expense			$ 3,948,000	1,105,000	$ 2,093,000
Share-based Payment Arrangement, Option [Member]
Share-based Payment Arrangement, Expense			622,000	$ 838,000	$ 815,000
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total			$ 12,200,000
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition			2 years 233 days
Stock Purchase Plan [Member]
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total			$ 200,000
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition			120 days
1998 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized			4,650,000
Two Thousand Four Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized			1,750,000
Number of Stock Awards Counted for Every Share Granted or Canceled			2.12
Two Thousand Nineteen Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	9,701,192
Number of Stock Awards Counted for Every Share Granted or Canceled	2.12
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized	700,000
Share Based Compensation by Share Based Payment Fully Vested Stock Awards Grant Date Fair Value								$ 60,000
Two Thousand Nineteen Equity Incentive Plan [Member] \| Restricted Stock Units (RSUs) [Member]
Share Based Compensation by Share Based Payment Fully Vested Stock Awards Grant Date Fair Value							$ 60,000
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period			517,402	210,532	270,707
Two Thousand Nineteen Equity Incentive Plan [Member] \| Restricted Stock Units (RSUs) [Member] \| Vest Over Each Anniversary of the Grant Date [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			25.00%
Two Thousand Nineteen Equity Incentive Plan [Member] \| Restricted Stock Units (RSUs) [Member] \| Non-employee Directors [Member]
Share Based Compensation by Share Based Payment Fully Vested Stock Awards Grant Date Fair Value			$ 42,236	$ 13,392	$ 21,605
Two Thousand Nineteen Equity Incentive Plan [Member] \| Restricted Stock Units (RSUs) [Member] \| Non-employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			4 years		4 years
Two Thousand Nineteen Equity Incentive Plan [Member] \| Restricted Stock Units (RSUs) [Member] \| Non-employees [Member] \| Vest Over Each Anniversary of the Grant Date [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage					25.00%
Two Thousand Nineteen Equity Incentive Plan [Member] \| Restricted Stock Units (RSUs) [Member] \| Non-employees [Member] \| Vesting Each Anniversary of Grant Date [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			25.00%
Two Thousand Nineteen Equity Incentive Plan [Member] \| Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted			387,172	47,824	117,418
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			1 year
Share-based Payment Arrangement, Expense			$ 1,000,000
Two Thousand Nineteen Equity Incentive Plan [Member] \| Performance Shares [Member] \| Chief Executive Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period		67,897
Two Thousand Nineteen Equity Incentive Plan [Member] \| Performance Shares [Member] \| Chief Executive Officer [Member] \| Vesting Over 2019 Through 2022 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period		4 years
Two Thousand Nineteen Equity Incentive Plan [Member] \| Performance Shares [Member] \| Chief Executive Officer [Member] \| Tranche 2019 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage		15.00%
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period		10,185
Share Based Compensation Arrangement by Share Based Payment Award, Equity Instruments Other Than Options, Vested in Period, Percentage			85.00%
Two Thousand Nineteen Equity Incentive Plan [Member] \| Performance Shares [Member] \| Chief Executive Officer [Member] \| Tranche 2020 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage		25.00%
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period		16,974
Two Thousand Nineteen Equity Incentive Plan [Member] \| Performance Shares [Member] \| Chief Executive Officer [Member] \| Tranche 2021 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage		30.00%
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period		20,269
Two Thousand Nineteen Equity Incentive Plan [Member] \| Performance Shares [Member] \| Chief Executive Officer [Member] \| Tranche 2022 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage		30.00%
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period		20,269
2004 Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized			600,000
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent			85.00%
Stock Issued During Period, Shares, Employee Stock Ownership Plan			82,810	64,511	78,479
Common Stock, Capital Shares Reserved for Future Issuance			761,705

Note 6 - Stockholders' Equity, Stock Plans and Stock-based Compensation Expense - Activity Under the 2004 Equity Incentive Plan (Details) - USD ($)
$ / shares in Units, $ in Thousands

12 Months Ended

Dec. 31, 2019

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

Balances, shares available for grant (in shares)

1,141,305

1,494,866

721,657

Balances, stock options outstanding (in shares)

507,705

839,919

1,116,472

Balances, weighted-average exercise price (in dollars per share)

$ 20.52

$ 16.46

$ 9.56

Balances, options outstanding weighted-average remaining contractual life (Year)

3 years 69 days

3 years 189 days

3 years 361 days

3 years 255 days

Balances, aggregate intrinsic value

^[1]

$ 3,040

$ 2,000

$ 24,400

$ 8,700

Options granted, shares available for grant (in shares)

(21,010)

(278,250)

Options granted, stock options outstanding (in shares)

21,010

278,250

Options granted, weighted-average exercise price (in dollars per share)

$ 50.65

$ 31

Options exercised, stock options outstanding (in shares)

(160,798)

(271,902)

(488,398)

Options exercised, weighted-average exercise price (in dollars per share)

$ 10.03

$ 9.99

$ 8.96

Options cancelled (expired or forfeited), shares available for grant (in shares)

51,208

81,322

66,405

Options cancelled (expired or forfeited), stock options outstanding (in shares)

(51,208)

(81,322)

(66,405)

Options cancelled (expired or forfeited), weighted-average exercise price (in dollars per share)

$ 24.61

$ 2,155

$ 16.54

Stock awards granted, shares available for grant (in shares)

(1,538,128)

(562,070)

(873,881)

Stock awards cancelled (expired or forfeited), shares available for grant (in shares)

407,320

148,197

258.935

Additional shares reserved, shares available for grant (in shares)

700,000

^[2]

1,600,000

Balances, shares available for grant (in shares)

761,705

1,141,305

1,494,866

721,657

Balances, stock options outstanding (in shares)

295,699

507,705

839,919

1,116,472

Balances, weighted-average exercise price (in dollars per share)

$ 25.52

$ 20.52

$ 16.46

$ 9.56

Exercisable, stock options outstanding (in shares)

222,400

Exercisable, weighted-average exercise price (in dollars per share)

$ 22.16

Exercisable, options outstanding weighted-average remaining contractual life (Year)

2 years 302 days

Exercisable, aggregate intrinsic value

^[1]

$ 3,040

Vested and expected to vest (in shares)

285,462

Vested and expected to vest, weighted-average exercise price (in dollars per share)

$ 25.08

Vested and expected to vest, weighted-average remaining contractual life (Year)

3 years

Vested and expected to vest, aggregate intrinsic value

^[1]

$ 3,060

[1]	Based on the closing stock price of $35.81 of the Company's stock on December 31, 2019, $17.02 on December 31, 2018, $45.35 on December 31 2017 and $17.35 on December 31, 2016.
[2]	Approved by the board of directors and stockholders in 2019.

Note 6 - Stockholders' Equity, Stock Plans and Stock-based Compensation Expense - Options Outstanding and Exercisable Price Ranges (Details)	12 Months Ended
	Dec. 31, 2019 $ / shares shares
Exercise Price Range 1 [Member]
Range of exercise prices, upper limit (in dollars per share) \| $ / shares	$ 8.80
Options outstanding, number outstanding (in shares)	48,864
Options outstanding, weighted-average remaining contractual life (Year)	175 days
Options exercisable, number outstanding (in shares)	48,864
Exercise Price Range 2 [Member]
Options outstanding, number outstanding (in shares)	33,743
Options outstanding, weighted-average remaining contractual life (Year)	1 year 357 days
Options exercisable, number outstanding (in shares)	32,806
Range of exercise prices (in dollars per share) \| $ / shares	$ 10.79
Range of exercise prices, lower limit (in dollars per share) \| $ / shares	$ 9.65
Exercise Price Range 3 [Member]
Options outstanding, number outstanding (in shares)	36,146
Options outstanding, weighted-average remaining contractual life (Year)	3 years 87 days
Options exercisable, number outstanding (in shares)	33,752
Range of exercise prices (in dollars per share) \| $ / shares	$ 14.04
Range of exercise prices, lower limit (in dollars per share) \| $ / shares	$ 10.80
Exercise Price Range 4 [Member]
Options outstanding, number outstanding (in shares)	10,896
Options outstanding, weighted-average remaining contractual life (Year)	3 years 270 days
Options exercisable, number outstanding (in shares)	8,584
Range of exercise prices (in dollars per share) \| $ / shares	$ 18.55
Range of exercise prices, lower limit (in dollars per share) \| $ / shares	15.32
Exercise Price Range 5 [Member]
Range of exercise prices, upper limit (in dollars per share) \| $ / shares	$ 19.55
Options outstanding, number outstanding (in shares)	12,000
Options outstanding, weighted-average remaining contractual life (Year)	4 years 116 days
Options exercisable, number outstanding (in shares)	8,292
Exercise Price Range 6 [Member]
Range of exercise prices, upper limit (in dollars per share) \| $ / shares	$ 27.50
Options outstanding, number outstanding (in shares)	38,625
Options outstanding, weighted-average remaining contractual life (Year)	4 years 215 days
Options exercisable, number outstanding (in shares)	23,594
Exercise Price Range 7 [Member]
Range of exercise prices, upper limit (in dollars per share) \| $ / shares	$ 39.30
Options outstanding, number outstanding (in shares)	72,000
Options outstanding, weighted-average remaining contractual life (Year)	4 years 153 days
Options exercisable, number outstanding (in shares)	41,230
Exercise Price Range 8 [Member]
Range of exercise prices, upper limit (in dollars per share) \| $ / shares	$ 43.40
Options outstanding, number outstanding (in shares)	6,510
Options outstanding, weighted-average remaining contractual life (Year)	91 days
Options exercisable, number outstanding (in shares)	2,849
Exercise Price Range 9 [Member]
Range of exercise prices, upper limit (in dollars per share) \| $ / shares	$ 47.40
Options outstanding, number outstanding (in shares)	29,915
Options outstanding, weighted-average remaining contractual life (Year)	3 years 262 days
Options exercisable, number outstanding (in shares)	19,116
Exercise Price Range 10 [Member]
Range of exercise prices, upper limit (in dollars per share) \| $ / shares	$ 53.90
Options outstanding, number outstanding (in shares)	7,000
Options outstanding, weighted-average remaining contractual life (Year)	5 years 73 days
Options exercisable, number outstanding (in shares)	3,313
Exercise Price Range 11 [Member]
Options outstanding, number outstanding (in shares)	295,669
Options outstanding, weighted-average remaining contractual life (Year)	2 years 302 days
Options exercisable, number outstanding (in shares)	222,400
Range of exercise prices (in dollars per share) \| $ / shares	$ 53.90
Range of exercise prices, lower limit (in dollars per share) \| $ / shares	$ 8.80

Note 6 - Stockholders' Equity, Stock Plans and Stock-based Compensation Expense - Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs) [Member] - USD ($)
$ / shares in Units, $ in Thousands

12 Months Ended

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

Dec. 31, 2015

Outstanding, number of shares (in shares)

474,291

510,587

445,317

Outstanding, weighted-average grant date fair value (in dollars per share)

$ 38.44

$ 24.88

$ 11.15

Outstanding, aggregate intrinsic value

^[1]

$ 37,442

$ 8,072

$ 23,155

$ 7,726

Granted, number of shares (in shares)

963,814

265,124

412,208

Granted, weighted-average grant date fair value (in dollars per share)

$ 18.68

$ 44.57

$ 28.74

Vested, number of shares (in shares)

^[2]

(172,281)

(231,515)

(224,799)

Vested, weighted-average grant date fair value (in dollars per share)

^[2]

$ 33.66

$ 21.10

$ 10.91

Vested, aggregate fair value

^[2],[4]

$ 6,169

^[3]

$ 9,483

^[5]

$ 5,168

^[6]

Forfeited, number of shares (in shares)

(161,022)

(69,905)

(122,139)

Forfeited, weighted-average grant date fair value (in dollars per share)

$ 37.91

$ 20.01

$ 13.56

Outstanding, number of shares (in shares)

1,104,802

474,291

510,587

Outstanding, weighted-average grant date fair value (in dollars per share)

$ 22.10

$ 38.44

$ 24.88

[1]	Based on the closing stock price of the Company's stock of $35.81 on December 31, 2019, $17.02 on December 31, 2018, $45.35 on December 31, 2017 and $17.35 on December 30, 2016.
[2]	The number of restricted stock units vested includes shares that the Company withheld on behalf of the employees to satisfy the statutory tax withholding requirements.
[3]	On the grant date, the fair value for these vested awards was $5.9 million.
[4]	Represents the value of the Company's stock on the date that the restricted stock units and performance stock units vest.
[5]	On the grant date, the fair value for these vested awards was $4.9 million.
[6]	On the grant date, the fair value for these vested awards was $2.5 million.

Note 6 - Stockholders' Equity, Stock Plans and Stock-based Compensation Expense - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Allocated share-based compensation expense	$ 9,832	$ 7,157	$ 5,110
Share-based Payment Arrangement, Option [Member]
Allocated share-based compensation expense	622	838	815
Restricted Stock Units (RSUs) [Member]
Allocated share-based compensation expense	4,786	4,648	1,813
Performance Shares [Member]
Allocated share-based compensation expense	3,948	1,105	2,093
ESPP [Member]
Allocated share-based compensation expense	$ 476	$ 566	$ 389

Note 6 - Stockholders' Equity, Stock Plans and Stock-based Compensation Expense - Stock-based Compensation Expense by Department (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Allocated share-based compensation expense	$ 9,832	$ 7,157	$ 5,110
Cost of Sales [Member]
Allocated share-based compensation expense	1,572	743	660
Selling and Marketing Expense [Member]
Allocated share-based compensation expense	4,510	2,105	1,642
Research and Development Expense [Member]
Allocated share-based compensation expense	1,536	824	936
General and Administrative Expense [Member]
Allocated share-based compensation expense	$ 2,214	$ 3,485	$ 1,872

Note 6 - Stockholders' Equity, Stock Plans and Stock-based Compensation Expense - Valuation Assumptions and Fair Value of Stock Option and ESPP Grants (Details) - $ / shares

12 Months Ended

Dec. 31, 2019

Dec. 31, 2018

Dec. 31, 2017

Share-based Payment Arrangement, Option [Member]

Expected term (in years) (Year)

^[1]

3 years 237 days

3 years 255 days

Risk-free interest rate

^[2]

1.64%

2.60%

1.73%

Volatility

^[3]

54.00%

44.00%

40.00%

Dividend yield

^[4]

Weighted average estimated fair value at grant date (in dollars per share)

$ 14.83

$ 18

$ 9.98

Stock Purchase Plan [Member]

Expected term (in years) (Year)

^[1]

182 days

Risk-free interest rate

^[2]

2.49%

2.34%

1.14%

Volatility

^[3]

70.00%

61.00%

42.00%

Dividend yield

^[4]

Weighted average estimated fair value at grant date (in dollars per share)

$ 9.60

$ 8.21

[1]	The expected term represents the period during which the Company's stock-based awards are expected to be outstanding. The estimated term is based on historical experience of similar awards, giving consideration to the contractual terms of the awards, vesting requirements, and expectation of future employee behavior, including post-vesting terminations. The expected term of groups of employees that have similar historical exercise patterns has been considered separately for valuation purposes.
[2]	The risk-free interest rate is based on U.S. Treasury debt securities with maturities close to the expected term of the option or ESSP participation right as of the date of grant.
[3]	Estimated volatility is based on historical volatility. The Company estimates volatility based on a 50-50 blend of the Company's historical volatility and the implied volatility of freely traded options of the Company's stock in the open market.
[4]	The Company has not paid dividends since its inception.

Note 7 - Income Taxes (Details Textual) - USD ($)	12 Months Ended
Note 7 - Income Taxes (Details Textual) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Deferred Tax Assets, Valuation Allowance, Total	$ 32,350,000	$ 27,865,000
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount	4,500,000	20,600,000
Deferred Tax Assets, Net, Total	$ 424,000	$ 457,000
Open Tax Year	2011 2012 2013 2014 2015 2016 2017 2018
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued, Total	$ 58,000
Foreign Tax Authority [Member]
Deferred Tax Assets, Net, Total	400,000
Domestic Tax Authority [Member]
Operating Loss Carryforwards, Total	60,100,000
Operating Loss Carryforwards Without Expiration	18,400,000
Domestic Tax Authority [Member] \| Research Tax Credit Carryforward [Member]
Tax Credit Carryforward, Amount	6,600,000
State and Local Jurisdiction [Member]
Operating Loss Carryforwards, Total	31,300,000
State and Local Jurisdiction [Member] \| Research Tax Credit Carryforward [Member] \| California Franchise Tax Board [Member]
Tax Credit Carryforward, Amount	8,100,000
State and Local Jurisdiction [Member] \| Research Tax Credit Carryforward [Member] \| Massachusetts Department of Revenue [Member]
Tax Credit Carryforward, Amount	$ 300,000

Note 7 - Income Taxes - Income (Loss) Before Provision for Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
U.S.									$ (13,037)	$ (14,177)	$ 11,203
Foreign									774	662	757
Income (loss) before income taxes	$ (1,949)	$ (2,555)	$ 345	$ (8,105)	$ (5,534)	$ (1,047)	$ (2,284)	$ (4,651)	$ (12,263)	$ (13,515)	$ 11,960

Note 7 - Income Taxes - Income Tax Provision (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Federal										$ (15)	$ 148
State									101	123	71
Foreign									(76)	303	511
Total Current									25	411	730
Federal									2	15,674	(17,393)
State									1	1,230	(1,348)
Foreign									57	(60)	(22)
Total Deferred									60	16,844	(18,763)
Tax provision	$ 139	$ 73	$ (243)	$ 115	$ 20,760	$ (174)	$ (712)	$ (2,619)	$ 85	$ 17,255	$ (18,033)

Note 7 - Income Taxes - Deferred Tax Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Net operating loss carryforwards	$ 14,507	$ 11,227
Stock-based compensation	1,111	1,040
Other accruals and reserves	2,202	1,924
Credits	11,888	10,857
Foreign		457
Accrued warranty	924	1,863
Depreciation and amortization	2,354	2,024
Other	897	282
Operating Lease Asset	3,949
Deferred tax asset before valuation allowance	37,831	29,674
Valuation allowance	(32,350)	(27,865)
Deferred tax asset after valuation allowance	5,482	1,809
Deferred tax liability on Accrued commissions 606 cost	(1,076)	(1,269)
Deferred tax liability on goodwill	(97)	(83)
Operating Lease Liability	(3,885)
Net deferred tax asset	$ 424	$ 457

Note 7 - Income Taxes - Reconciliation of Effective Tax Rate (Details)

12 Months Ended

Dec. 31, 2019

Dec. 31, 2018

Dec. 31, 2017

U.S. federal statutory income tax rate

21.00%

34.00%

State tax rate

2.82%

(4.95%)

(5.59%)

^[1]

Meals and entertainment

^[1]

(2.83%)

(2.66%)

2.15%

Permanent differences

(2.58%)

^[1]

Stock-based compensation

3.78%

13.66%

(21.55%)

^[1]

SAB 118 Change in Estimate

(2.43%)

^[1]

Foreign rate differential

(0.34%)

0.11%

(0.50%)

^[1]

Other

^[1]

(0.33%)

(1.21%)

0.65%

General business credit

8.14%

4.31%

(2.72%)

^[1]

Change in Federal Tax Rate

60.98%

^[1]

Valuation allowance

(38.60%)

(155.49%)

(218.17%)

^[1]

Change in prior year reserves

2.53%

^[1]

Deferred true-up

5.71%

^[1]

Effective tax rate

(0.70%)

(127.66%)

(150.75%)

^[1]

[1]	Other balance in 2017 was reclassified for consistency with 2018 and 2019.

Note 7 - Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Unrecognized tax benefits	$ 1,563	$ 1,519	$ 707
Decreases related to prior year tax positions	(291)	(70)
Increases related to prior year tax positions	25		643
Increases related to current year tax positions	129	114	169
Unrecognized tax benefits	$ 1,426	$ 1,563	$ 1,519

Note 8 - Net Loss Per Share - Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Net income (loss)	$ (2,088)	$ (2,628)	$ 588	$ (8,220)	$ (26,293)	$ (873)	$ (1,572)	$ (2,032)	$ (12,348)	$ (30,770)	$ 29,993
Weighted average shares of common stock outstanding used in computing net income (loss) per share, basic (in shares)	14,261	14,182	14,086	14,017	13,932	13,851	13,709	13,587	14,096	13,771	13,873
Dilutive effect of incremental shares and share equivalents (in shares)											855
Weighted average shares of common stock outstanding used in computing net income (loss) per share, diluted (in shares)	14,261	14,182	14,356	14,017	13,932	13,851	13,709	13,587	14,096	13,771	14,728
Net income (loss) per share-basic (in dollars per share)	$ (0.15)	$ (0.19)	$ 0.04	$ (0.59)	$ (1.89)	$ (0.06)	$ (0.11)	$ (0.15)	$ (0.88)	$ (2.23)	$ 2.16
Net income (loss) per share-diluted (in dollars per share)	$ (0.15)	$ (0.19)	$ 0.04	$ (0.59)	$ (1.89)	$ (0.06)	$ (0.11)	$ (0.15)	$ (0.88)	$ (2.23)	$ 2.04

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

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-Name Accounting Standards Codification
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+ Details

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
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+ Details

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Note 8 - Net Loss Per Share - Antidilutive Securities Excluded From Computation of Earnings Per Share (Details) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Antidilutive Securities (in shares)	1,265	1,272	51
Share-based Payment Arrangement, Option [Member]
Antidilutive Securities (in shares)	417	664	42
Restricted Stock Units (RSUs) [Member]
Antidilutive Securities (in shares)	559	432	9
ESPP [Member]
Antidilutive Securities (in shares)	111	133
Performance Shares [Member]
Antidilutive Securities (in shares)	178	43

Note 9 - Defined Contribution Plan (Details Textual) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Defined Contribution Plan, Employer Discretionary Contribution Amount	$ 0.4	$ 0.4	$ 0.3
Maximum [Member]
Defined Contribution Plan Maximum Percentage of Employee Voluntary Contribution	100.00%

Note 10 - Segment Information and Revenue by Geography and Products (Details Textual)	12 Months Ended
	Dec. 31, 2019
Number of Operating Segments	1

Note 10 - Segment Information and Revenue by Geography and Products - Revenue by Geographic Region (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Revenue from Contract with Customer, Including Assessed Tax	$ 181,712	$ 162,720	$ 151,493
Systems [Member]
Revenue from Contract with Customer, Including Assessed Tax	140,478	132,594	125,883
Hand Piece Refills [Member]
Revenue from Contract with Customer, Including Assessed Tax	9,648	4,162	2,435
Skincare [Member]
Revenue from Contract with Customer, Including Assessed Tax	8,512	5,778	4,342
Product [Member]
Revenue from Contract with Customer, Including Assessed Tax	158,638	142,535	132,660
Service [Member]
Revenue from Contract with Customer, Including Assessed Tax	23,074	20,185	18,833
UNITED STATES
Revenue from Contract with Customer, Including Assessed Tax	106,243	101,862	94,581
JAPAN
Revenue from Contract with Customer, Including Assessed Tax	24,142	17,819	17,264
Asia, Excluding Japan [Member]
Revenue from Contract with Customer, Including Assessed Tax	16,110	15,467	13,719
Europe [Member]
Revenue from Contract with Customer, Including Assessed Tax	10,596	8,875	8,317
Rest of World [Member]
Revenue from Contract with Customer, Including Assessed Tax	$ 24,620	$ 18,696	$ 17,612

Note 11 - Commitments and Contingencies (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Estimated Litigation Liability		$ 171,000
Minimum [Member]
Lessee, Leases, Remaining Term	1 year
Maximum [Member]
Lessee, Leases, Remaining Term	10 years
Lessee, Lease, Renewal Term	5 years

Note 11 - Leases - Financial Statement Information (Details) - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2019

Jan. 01, 2019

Dec. 31, 2018

Operating lease liabilities, current

$ 7,702

$ 10,049

Total leased assets

8,710

2,800

2,430

Operating lease liabilities , non-current

5,112

$ 7,759

Operating Lease, Liability, Total

7,912

Total finance lease liabilities

1,119

704

2,892

649

2,820

Operating Lease Assets [Member]

Operating Lease Liabilities [Member]

7,702

Operating lease liabilities, current

2,800

Accrued Liabilities, Current [Member]

Finance lease liabilities, current

541

Property and Equipment, Net [Member]

Finance Lease, Right-of-Use Asset

^[1]

1,008

Operating Lease Liabilities, Net of Current Portion [Member]

Operating lease liabilities , non-current

5,112

Other Current Liabilities [Member]

Finance lease liabilities, non-current

$ 578

[1]	Finance leases assets included in Property and equipment, net.

Note 11 - Leases - Maturities of Lease Liabilities (Details) $ in Thousands	Dec. 31, 2019 USD ($)
2020	$ 2,868
2021	2,613
2022	2,821
2023	326
2024	26
Total lease payments	8,654
Less: imputed interest	742
Present value of lease liabilities	$ 7,912

Note 11 - Leases - Maturities of Finance Liabilities (Details) $ in Thousands	Dec. 31, 2019 USD ($)
2020	$ 543
2021	412
2022	253
2023	4
Total lease payments	1,212
Less: imputed interest	93
Present value of lease liabilities	$ 1,119

Note 11 - Leases - Minimum Lease and Other Leased Assets Under Long-term Non-cancellable Operating Leases (Details) $ in Thousands	Dec. 31, 2018 USD ($)
2019	$ 3,011
2020	2,939
2021	2,564
2022	2,495
2023 and thereafter	214
Future minimum rental payments	$ 11,223

Note 11 - Leases - Minimum Lease Payments for Leased Vehicles Under Long-term Non-cancellable Capital Leases (Details) $ in Thousands	Dec. 31, 2018 USD ($)
2019	$ 576
2020	287
2021	152
Future minimum lease payments	$ 1,015

Note 11 - Leases - Lease Information (Details)	Dec. 31, 2019
Operating leases (Year)	3 years
Finance leases (Year)	2 years 182 days
Operating leases	4.40%
Finance leases	5.60%

Note 12 - Debt (Details Textual) $ in Thousands		12 Months Ended
Note 12 - Debt (Details Textual) $ in Thousands	Mar. 11, 2019 USD ($)	Dec. 31, 2019 USD ($)	Nov. 02, 2018 USD ($)	May 30, 2018 USD ($)
Revolving Line of Credit [Member] \| Wells Fargo [Member]
Line of Credit Facility, Maximum Borrowing Capacity				$ 25,000
Revolving Credit Facility [Member]
Leverage Ratio, Maximum	2.5	2.5
Debt Instrument, Minimum Adjusted EBITDA	$ 10,000	$ 10,000
Long-term Line of Credit, Total		$ 0
Revised Revolving Line of Credit [Member] \| Wells Fargo [Member]
Line of Credit Facility, Maximum Borrowing Capacity			$ 15,000
Line of Credit Facility, Additional Requestable Maximum Borrowing Capacity			$ 10,000
Debt Instrument, Debt Covenant, Minimum Unrestricted Cash Balance	$ 15,000

Note 13 - Related Parties (Details Textual) - USD ($)	12 Months Ended
Note 13 - Related Parties (Details Textual) - USD ($)	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	963,814	265,124	412,208
Director [Member] \| Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period			6,500
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Fair Value			$ 87,100
Director [Member] \| Restricted Stock Units (RSUs) [Member] \| Vesting Commencing on August 15, 2016 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			3 years
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			33.33%
Director [Member] \| Product Development, Clinical Sales and Marketing Support Services [Member]
Related Party Transaction, Amounts of Transaction	$ 63,000	$ 196,000
T3 Advisors [Member] \| Real Estate Brokerage Services [Member]
Related Party Transaction, Amounts of Transaction	$ 192,000	$ 38,000

Supplementary Financial Data (Unaudited) - Supplementary Financial Data (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands

3 Months Ended

12 Months Ended

Dec. 31, 2019

Sep. 30, 2019

Jun. 30, 2019

Mar. 31, 2019

Dec. 31, 2018

Sep. 30, 2018

Jun. 30, 2018

Mar. 31, 2018

Dec. 31, 2019

Dec. 31, 2018

Dec. 31, 2017

Net revenue

$ 51,795

$ 46,117

$ 47,774

$ 36,026

$ 45,469

$ 40,573

$ 42,553

$ 34,125

23,005

19,884

21,943

18,717

26,683

18,688

20,176

16,791

Gross profit

28,790

26,233

25,831

17,309

18,786

21,885

22,377

17,334

$ 98,163

$ 80,382

$ 86,110