0001437749-21-006866 | 10-K | XBRL Viewer

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Document And Entity Information - USD ($)	12 Months Ended
Document And Entity Information - USD ($)	Dec. 31, 2020	Mar. 10, 2021	Jun. 30, 2020
Document Information [Line Items]
Entity Central Index Key	0001162461
Entity Registrant Name	CUTERA INC
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2020
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2020
Document Transition Report	false
Entity File Number	000-50644
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	77-0492262
Entity Address, Address Line One	3240 Bayshore Blvd
Entity Address, City or Town	Brisbane
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94005
City Area Code	415
Local Phone Number	657-5500
Title of 12(b) Security	Common Stock ($0.001 par value)
Trading Symbol	CUTR
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Public Float			$ 143,000,000
Entity Common Stock, Shares Outstanding		17,782,872

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 47,047	$ 26,316
Marketable investments	0	7,605
Accounts receivable, net of allowance for credit losses of $1,598 and $1,354, respectively	21,962	21,556
Inventories	28,508	33,921
Other current assets and prepaid expenses	8,779	5,648
Total current assets	106,296	95,046
Property and equipment, net	2,299	2,817
Deferred tax assets	643	423
Operating lease right-of-use assets	17,076	7,702
Goodwill	1,339	1,339
Other long-term assets	5,080	6,411
Total assets	132,733	113,738
Current liabilities:
Accounts payable	6,684	12,685
Accrued liabilities	31,079	30,307
Operating lease liabilities	2,260	2,800
PPP Loan Payable	3,630	0
Extended warranty liabilities	1,216	1,999
Deferred revenue	9,489	10,831
Total current liabilities	54,358	58,622
Deferred revenue, net of current portion	1,748	3,391
Income tax liability	0	93
Operating lease liabilities, net of current portion	15,950	5,112
PPP Loan payable, net of current portion	3,555	0
Other long-term liabilities	242	578
Total liabilities	75,853	67,796
Commitments and contingencies (Note 11)
Stockholders’ equity:
Common stock, $0.001 par value: Authorized: 50,000,000 shares; Issued and outstanding: 17,679,232 and 14,315,586 shares at December 31, 2020 and 2019, respectively	18	14
Additional paid-in capital	117,097	82,346
Accumulated deficit	(60,235)	(36,358)
Accumulated other comprehensive loss	0	(60)
Total stockholders’ equity	56,880	45,942
Total liabilities and stockholders’ equity	$ 132,733	$ 113,738

Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Trade accounts receivable, allowance	$ 1,598	$ 1,354
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized (in shares)	50,000,000	50,000,000
Common stock, issued (in shares)	17,679,232	14,315,586
Common stock, outstanding (in shares)	17,679,232	14,315,586

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Net revenue:
Revenue	$ 147,683	$ 181,712	$ 162,720
Cost of revenue:
Cost of revenue	71,911	83,549	82,338
Gross profit	75,772	98,163	80,382
Operating expenses:
Sales and marketing	52,766	71,109	58,420
Research and development	14,322	15,085	14,359
General and administrative	31,512	24,033	20,995
Total operating expenses	98,600	110,227	93,774
Loss from operations	(22,828)	(12,064)	(13,392)
Interest and other expense, net	(579)	(199)	(123)
Loss before income taxes	(23,407)	(12,263)	(13,515)
Income tax provision	470	85	17,255
Net loss	$ (23,877)	$ (12,348)	$ (30,770)
Net loss per share:
Basic and diluted (in dollars per share)	$ (1.43)	$ (0.88)	$ (2.23)
Weighted-average number of shares used in per share calculations:
Basic and diluted (in shares)	16,691	14,096	13,771
Product [Member]
Net revenue:
Revenue	$ 125,113	$ 158,638	$ 142,535
Cost of revenue:
Cost of revenue	58,325	64,693	66,843
Service [Member]
Net revenue:
Revenue	22,570	23,074	20,185
Cost of revenue:
Cost of revenue	$ 13,586	$ 18,856	$ 15,495

Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Net loss	$ (23,877)	$ (12,348)	$ (30,770)
Available-for-sale investments
Net change in unrealized gain (loss) on available-for-sale investments	(3)	9	14
Less: Reclassification adjustment for net losses on investments recognized during the year	63	0	9
Total change in unrealized gain (loss) on available-for-sale investments	60	9	23
Other comprehensive income, net of tax	60	9	23
Comprehensive loss	$ (23,817)	$ (12,339)	$ (30,747)

- Definition

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

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+ Details

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Cumulative Effect, Period of Adoption, Adjusted Balance [Member] Common Stock [Member]	Cumulative Effect, Period of Adoption, Adjusted Balance [Member] Additional Paid-in Capital [Member]	Cumulative Effect, Period of Adoption, Adjusted Balance [Member] Retained Earnings [Member]	Cumulative Effect, Period of Adoption, Adjusted Balance [Member] AOCI Attributable to Parent [Member]	Cumulative Effect, Period of Adoption, Adjusted Balance [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Balance (in shares) at Dec. 31, 2017						13,477,973
Balance at Dec. 31, 2017	$ 0	$ 0	$ 3,813	$ 0	$ 3,813	$ 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	0	0	$ 1,681
Exercise of stock options (in shares)						271,902				271,902
Exercise of stock options						$ 0	2,718	0	0	$ 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						$ 0	(3,129)	0	0	(3,129)
Stock-based compensation expense						0	7,157	0	0	7,157
Net loss						0	0	(30,770)	0	(30,770)
Net change in unrealized gain on available-for-sale investments						$ 0	0	0	23	23
Balance (in shares) at Dec. 31, 2018						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						$ 0	1,281	0	0	$ 1,281
Exercise of stock options (in shares)						160,798				160,798
Exercise of stock options						$ 0	1,613	0	0	$ 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						$ 0	(831)	0	0	(831)
Stock-based compensation expense						0	9,832	0	0	9,832
Net loss						0	0	(12,348)	0	(12,348)
Net change in unrealized gain on available-for-sale investments						$ 0	0	0	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
Issuance of common stock for employee purchase plan (in shares)						56,751
Issuance of common stock for employee purchase plan						$ 0	632	0	0	$ 632
Exercise of stock options (in shares)						73,227				73,227
Exercise of stock options							947	0	0	$ 947
Issuance of common stock in settlement of restricted and performance stock units, net of shares withheld for employee taxes, and stock awards (in shares)						490,918
Issuance of common stock in settlement of restricted and performance stock units, net of shares withheld for employee taxes, and stock awards						$ 1	(3,429)	0	0	(3,428)
Stock-based compensation expense						0	10,109	0	0	10,109
Net loss						0	0	(23,877)	0	(23,877)
Net change in unrealized gain on available-for-sale investments						$ 0	0	0	60	60
Issuance of common stock in connection with public offering, net of issuance costs of $2,303 (in shares)						2,742,750
Issuance of common stock in connection with public offering, net of issuance costs of $2,303						$ 3	26,492			$ 26,495
Balance (in shares) at Dec. 31, 2020						17,679,232				17,679,232
Balance at Dec. 31, 2020						$ 18	$ 117,097	$ (60,235)	$ 0	$ 56,880

Consolidated Statements of Stockholders' Equity (Parentheticals) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Offering costs	$ 2,303	$ (0)	$ (0)

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Cash flows from operating activities:
Net loss	$ (23,877)	$ (12,348)	$ (30,770)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Stock-based compensation	10,109	9,832	7,157
Depreciation and amortization	1,394	1,548	1,209
Amortization of contract acquisition costs	2,593	2,915	1,834
Impairment of capitalized cloud computing costs	805	0	0
Change in deferred tax assets	(220)	34	17,438
Provision for credit losses	2,144	590	1,257
Change in right-of-use asset	2,522	2,502	0
Other	513	(83)	241
Changes in assets and liabilities:
Accounts receivable	(2,550)	(2,509)	(117)
Inventories	5,413	(5,907)	768
Other current assets and prepaid expenses	(3,164)	(1,762)	(1,070)
Other long-term assets	(2,067)	(3,355)	(2,754)
Accounts payable	(6,034)	1,406	4,277
Accrued liabilities	944	7,157	(3,781)
Extended warranty liabilities	(783)	(1,160)	3,159
Other long-term liabilities	0	(140)	140
Operating lease liabilities	(1,598)	(2,292)
Deferred revenue	(2,985)	1,656	1,305
Income tax liability	(93)	(301)	15
Net cash provided by (used in) operating activities	(16,934)	(2,217)	308
Cash flows from investing activities:
Acquisition of property and equipment	(1,279)	(991)	(1,488)
Disposal of property and equipment	30	45	41
Proceeds from sales of marketable investments	5,648	0	13,044
Proceeds from maturities of marketable investments	28,050	14,700	10,050
Purchase of marketable investments	(26,060)	(12,687)	(10,874)
Net cash provided by investing activities	6,389	1,067	10,773
Cash flows from financing activities:
Proceeds from exercise of stock options and employee stock purchase plan	1,579	2,894	4,399
Proceeds from long-term debt	7,167	0	0
Gross proceeds from issuance of common stock in connection with public offering	28,798	0	0
Issuance costs on the public offering	(2,303)	0	0
Taxes paid related to net share settlement of equity awards	(3,428)	(831)	(3,129)
Payments on capital lease obligation	(537)	(649)	(483)
Net cash provided by financing activities	31,276	1,414	787
Net increase in cash and cash equivalents	20,731	264	11,868
Cash and cash equivalents at beginning of year	26,316	26,052	14,184
Cash and cash equivalents at end of year	47,047	26,316	26,052
Supplemental cash flow information:
Cash paid for interest	63	81	85
Cash paid (refunded) for income taxes, net of (refunds) payments	(1)	59	472
Supplemental non-cash investing and financing activities:
Assets acquired under finance lease	43	738	610
Assets acquired under operating lease	$ 11,735	$ 0	$ 0

Note 1 - Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2020

Notes to Financial Statements

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

NOTE 1—SUMMARY OF 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 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: enlighten, excel, Secret PRO, 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, Titan, truSculpt 3D,truSculpt iD and truSculpt flex cycle refills, as well as single use disposable tips applicable to Secret PRO, Juliet and Secret RF (“Consumables” revenue); (iii) the distribution of third party manufactured skincare products (“Skincare” revenue); and (iv) the leasing of equipment through a membership program; 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 3D, 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.

The Company’s corporate headquarters and U.S. operations are located in Brisbane, California, where the Company conducts manufacturing, warehousing, research and development, regulatory, sales and marketing, service, and administrative activities. The Company also maintains regional distribution centers (“RDCs”) in selection locations across the U.S. These RDCs serve as forward warehousing for systems and service parts in various geographies. The Company markets sells and services the Company’s products through direct sales and service employees in North America (including Canada), Australia, Austria, Belgium, France, Germany, Hong Kong, Japan, Spain, Switzerland, and the United Kingdom. Sales and services outside of these direct markets are made through a worldwide distributor network in over 42 countries. 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, allowance for credit losses, sales allowances, valuation of inventories, fair value of goodwill, useful lives of property and equipment, impairment testing for long-lived-assets, implicit and 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, assumptions used in operating and sales-type lease classification, the standalone selling price of the Company's products and services, the period of benefit used to capitalize and amortize contract acquisition costs, variable consideration, contingent liabilities, recoverability of deferred tax assets, residual value of leased equipment, lease term 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, business disruptions that are caused by natural disasters or pandemic events, 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.

In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. The COVID-19 outbreak has negatively affected the United States and global economies. The spread of the coronavirus, which caused a broad impact in 2020 globally, including restrictions on travel, shifting work force to work remotely and quarantine policies put into place by businesses and governments, had a material economic effect on the Company’s business during the year ended December 31, 2020. Notably, healthcare facilities in many countries effectively banned elective procedures. Many of the Company’s products are used in aesthetic elective procedures and as such, the bans on elective procedures substantially reduced the Company’s sales and marketing efforts in the early months of the pandemic and led the Company to implement cost control measures. While the Company hopes that the customers will return and the amount of revenue will increase in 2021 as the economic environment outlook due to the COVID-19 pandemic improves, the COVID-19 outbreak continues to be fluid and the aftermath of the business and economic disruptions due to the COVID-19 is still uncertain, making it difficult to forecast the final impact it could have on the Company’s future operations, including disruptions in the Company's supply chain and contract manufacturing operations. The Company cannot presently predict the scope and severity of any impacts in future periods from the business shutdowns or disruptions due to the COVID-19 pandemic, but the impact on economic activity such as the possibility of recession or financial market instability could have a material adverse effect on the Company’s business, revenue, operating results, cash flows and financial condition. As a result of the events and impact surrounding the COVID-19 pandemic, the Company assessed whether any impairment of its goodwill or its long-lived assets had occurred, and has determined that no charges other than an impairment loss of $0.8 million on capitalized cloud computing costs related to the indefinite delay of the implementation of cloud-based enterprise resource planning software had occurred during 2020. The Company’s assumptions about future conditions important to its assessment of potential impairment of its long-lived assets, and goodwill, including the impacts of the COVID–19 pandemic and other ongoing impacts to its business, are subject to uncertainty, and the Company will continue to monitor these conditions in future periods as new information becomes available, and will update its analyses accordingly.

Comparability

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 years ended December 31, 2020 and 2019 were prepared using the new lease accounting standard whereas the financial results for the year ended December 31, 2018 were prepared using prior effective guidance. As a result, the consolidated statement of operations for the years ended December 31, 2020 and 2019 is not directly comparable to the consolidated statements of operations for the year ended December 31, 2018.

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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 2016-13 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, available for sale securities and held-to-maturity debt securities. An entity with available for sale securities and 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 2016-13 on January 1, 2020 on a modified retrospective basis. Upon adoption, the standard did not have a material impact on the consolidated financial statements.

The Company identified trade receivables and available-for-sale debt securities as impacted by the new guidance. However, the Company determined that the historical losses related to these available-for-sale debt securities are not material as the Company invests in high grade short-term securities.

The Company establishes an allowance for credit losses on trade receivables based on the credit quality of clients, current economic conditions, the age of the accounts receivable balances, historical loss information, and current conditions and forecasted information, and write-off amounts against the allowance when they are deemed uncollectible.

The Company’s allowance for credit losses increased from $1.4 million at January 1, 2020 to $1.6 million at December 31, 2020, due to increase in aged accounts receivable. During the year ended December 31, 2020, the Company recognized a provision for credit losses of $2.1 million and wrote off $1.2 million against the allowance for credit losses.

In 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 3 fair value measurements. The amendments in this update eliminate, among other things, disclosure of the reasons for and amounts of transfers between Level 1 and Level 2 for assets and liabilities that are measured at fair value on a recurring basis and an entity's valuation processes for Level 3 fair value measurements. The amendments in this update are 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 did not have a material impact on the Company’s consolidated financial position and results of operations.

Recently Issued Accounting Pronouncements Not Yet Adopted by the Company

In December 2019, the FASB issued ASU No. 2019-12 “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.

In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” ASU No. 2020-04 provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships, subject to meeting certain criteria that reference LIBOR or another rate that is expected to be discontinued. The amendments in ASU No. 2020-04 are effective for all entities as of March 12, 2020 through December 31, 2022. The Company is currently assessing the impact of ASU No. 2020-04 and the LIBOR transition on its consolidated financial statements.

In August 2020, the FASB issued ASU No. 2020-06, "Debt – Debt with Conversion and Other Options (Topic 470) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Topic 815)." This amendment simplifies the accounting for convertible debt instruments by removing the beneficial conversion and cash conversion separation models for convertible instruments. Under the amendment, the embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives or that do not result in substantial premiums accounted for as paid-in capital. The update also amends the accounting for certain contracts in an entity’s own equity that are currently accounted for as derivatives because of specific settlement provisions. In addition, the new guidance modifies how particular convertible instruments and certain contracts that may be settled in cash or shares impact the computation of diluted earnings per share. The amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

The Company reviewed all other recently issued, but not yet effective, accounting pronouncements and does not expect the future adoption of any such pronouncements will have a material impact on the Company’s consolidated financial statements.

Revenue recognition

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 15%, 13% and 12%, respectively, of the Company’s total revenue for the years ended December 31, 2020, 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.

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 30 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 skincare products are purchased from a third-party manufacturer and sold to medical offices and licensed physicians. The Company warrants that the skincare products are free of significant defects in workmanship and materials for 90 days from shipment. These are typically sold in a separate contract as the only performance obligations. The Company acts as the principal in this arrangement, as the Company determines the price to charge customers for the skincare products and controls the products before they are transferred to the customer. The Company recognizes revenue for skincare products at a point in time upon shipment.

Consumables and other accessories

The Company classifies its customers' purchases of replacement cycles for truSculpt iD and truSculpt flex, as well as replacement hand pieces, Titan and truSculpt 3D hand pieces, and single use disposable tips applicable to Secret PRO, Juliet, and Secret RF, as Consumable revenue, which provides the Company with a source of recurring revenue from existing customers. The Juliet and Secret RF products’ single use disposable tips 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.

Equipment leasing

The Company leases equipment to customers through membership programs and receives a fixed monthly fee over the term of the arrangement. The Company classifies its lease income as product revenue. The Company recognizes lease income over the term of the lease if the lease is classified as an operating lease. For agreements that grant customers the right to purchase the leased system, the Company typically classifies the lease as a sales-type lease as the Company has determined it is reasonably certain that the customer will exercise the purchase option. On the commencement of sales-type leases, the Company recognizes revenue upfront in product revenue and the corresponding receivables recorded in Other current assets and prepaid expenses on the consolidated balance sheets (Notes 1 and 11). Revenue from equipment leases was not material in the year ended December 31, 2020.

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.

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.

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 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.

● Extended service contracts: SSP is based on observable price when sold on a standalone basis to similar customers.

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 which can be redeemed for such rewards 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. 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, 2020, the accrual for the loyalty program included in accrued liabilities was $0.3 million.

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 to three years.

Total capitalized costs for the year ended December 31, 2020 and December 31, 2019 were $3.4 million and $4.6 million, respectively, and are included in Other long-term assets in the Company’s consolidated balance sheet. Amortization expenses for these assets were $2.6 million, $2.9 million and $1.8 million, respectively, during the years ended December 31, 2020, 2019 and 2018 and were 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 (expense), 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 1: inputs, which include quoted prices in active markets for identical assets or liabilities;

● Level 2: inputs, which include observable inputs other than Level 1 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 3: inputs, which include unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the underlying asset or liability. Level 3 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. The Company had no investments as of December 31, 2020. There were no other-than-temporary impairments in the years ended December 31, 2020, 2019 and 2018.

Allowance for Sales Returns and Credit Losses

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.

The allowance for credit losses on trade receivables is based on the credit quality of clients, current economic conditions, the age of the accounts receivable balances, historical loss information, and current conditions and forecasted information. The Company writes off amounts against the allowance when they are deemed uncollectible.

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 federally insured limits or any other 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 its 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 credit losses 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 an allowance for potential credit losses. As of December 31, 2020, and 2019, no customer represented more than 10% of the Company’s net accounts receivable. During the years ended December 31, 2020, 2019, and 2018, domestic revenue accounted for 41%, 58% and 62%, respectively, of total revenue, while international revenue accounted for 59%, 42% and 38%, respectively, of total revenue. No single customer represented more than 10% of total revenue for any of the years ended December 31, 2020, 2019 and 2018.

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 and Secret PRO products and one supplier for its skincare products.

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.

During the year ended December 31, 2020, the Company wrote-off $0.8 million of inventory on hand related to its Juliet platform due to declining sales. Sales related to Juliet have been declining due to the COVID-19 pandemic and the FDA letter issued on July 30, 2018 expressing concerns regarding “vaginal rejuvenation” procedures using energy-based devices. As of December 31, 2020 and 2019, demonstration inventories, net of accumulated depreciation, included in finished goods inventory was $2.2 million and $4.1 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

Equipment leasing
4.5

Office equipment and furniture
3

Machinery and equipment
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 2020, 2019 and 2018, was $1.4 million, $1.5 million, and $1.2 million, respectively. Amortization expense for vehicles leased under capital leases is included in depreciation expense. Amortization expense related to equipment leasing accounted for as sales type is included in cost of revenue and was immaterial as of December 31, 2020.

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 to five years. The Company periodically assesses the capitalized asset for impairment and, when required, will record an associated impairment loss. During the year ended December 31, 2020, the Company recognized in general and administrative expense an impairment loss of $0.8 million for capitalized cloud computing costs related to a cloud-based enterprise resource planning software.

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 no 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, 2020, there has been no impairment of goodwill. All acquired intangible assets have been fully amortized as of December 31, 2020.

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 14 to 16 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

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 asset ("ROU asset") and lease obligations on the balance sheet for all leases with terms longer than 12 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 ROU asset. Lease liabilities represent the present value of the Company’s 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 12 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.

Accounting for Leases as a Lessor

During the second quarter of 2020, the Company began leasing equipment to customers through a membership program where the customer pays a fixed monthly fee over the lease term. Along with the leased equipment, the membership program provides customers with a warranty service and a fixed amount of consumables per month for the term of the lease. The Company has made an accounting policy election to account for qualifying lease components and associated non-lease components as a single component; accordingly, a lease component and an associated warranty service non-lease component are combined and accounted for as an operating lease. The consumables do not qualify for the practical expedient and are accounted for as a separate non-lease component in accordance with Topic 606 on Revenue from Contracts with Customers. The Company allocates the membership program contract consideration to each component proportionately on a relative standalone selling price basis.

The lease agreements are typically for three years; however, the customer has the ability to terminate the lease after twelve months with no penalty. As such, the Company has determined the initial term of the lease to be twelve-months, after which the lease converts to a month-to-month lease for up to an additional two years. Rental charges are a fixed monthly fee, paid at the beginning of each month, over the term of the lease. Except when modified to include a purchase option as discussed below, all leases entered into under the membership program during the year were classified as operating leases.

The initial direct costs related to the Company’s operating leases for equipment rentals include the related commissions paid to employees upon the origination of a lease agreement. These costs are included in Other current assets and prepaid expenses on the consolidated balance sheets and are amortized over the lease term of twelve-months. The amount of initial direct costs and the related amortization recognized during the year ended December 31, 2020 was immaterial.

During the fourth quarter of 2020, the Company modified certain membership agreements under the program to grant the lessee the exclusive right and option to purchase the leased system from the Company, at any time during the period of 12 months from signing the amended agreement. The option will expire if it remained unexercised by the customer within that time frame. Upon the expiration of the option, the agreement will revert back to the original membership agreement, with no purchase option. For contracts signed under the amended membership agreement, and that met the Company’s credit approval policy, the Company classified the lease agreements as sales-type leases due to the purchase option. Under the sales-type lease, both the consumables and warranty services are accounted for as a separate non-lease component in accordance with Topic 606 on Revenue from Contracts with Customers.

At the commencement of these sales-type leases, the Company recognizes revenue up-front, and amounts due from the customer under the lease contract are recognized as lease receivables on the consolidated balance sheets. Interest income is recognized as net revenue over the term of the lease based on the effective interest method. The Company has elected not to include sales and other taxes collected from the lessee as part of lease revenue.

For these sales-type leases, the Company derecognized the underlying assets under the lease and recorded the net investment in the lease. As the Company determined at the commencement of the sales-type lease that it is reasonably certain the customer will exercise its purchase option, the Company does not expect to derive any additional value from the underlying assets and thus recognizes no unguaranteed residual assets.

In determining the proper classification and treatment of the equipment leases, the Company used significant judgment in forming the following assumptions and estimates: lease term, implicit rate, fair value of equipment at option exercise date, useful life, residual value of the leased equipment, and the likelihood that lessees will exercise the purchase option.

See Note 11 to the consolidated financial statements for more information regarding leasing arrangements.

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 equipment leasing, 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 3D 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 2020, 2019 and 2018 were $1.2 million, $2.8 million and $2.8 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.

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: For the underlying stock price volatility of the Company’s stock, the Company estimates volatility solely based on the Company’s historical volatility of its stock price.

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.

c

The fair value of stock options ("options") on the grant date using the closing price of the Company's common shares 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. 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 50-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 50-day period ending on the day of the grant.

See Note 6 - "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 the Company’s 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, the Company recognizes 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. The Company recognizes the deferred income tax effects of a change in tax rates in the period of enactment. The Company records a valuation allowance to reduce the Company’s deferred tax assets to the net amount that the Company believes is more likely than not to be realized.

The Company recognizes tax benefits from uncertain tax positions if the Company believes 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 the Company believes it has adequately reserved for the Company’s uncertain tax positions (including net interest and penalties), the Company can provide no assurance that the final tax outcome of these matters will not be different. The Company makes 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. The Company records interest and penalties related to the Company’s uncertain tax positions in the Company’s 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, 2020 are considered to be indefinitely reinvested and, accordingly, no 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.

On March 27, 2020, the U.S. federal government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The CARES Act changed several of the existing U.S. corporate income tax laws by, among other things, increasing the amount of deductible interest, allowing companies to carry back certain Net Operating Losses (“NOLs”) and increasing the amount of NOLs that corporations can use to offset income. The CARES Act did not have a material impact on the Company's income tax provision, deferred tax assets and liabilities, and related taxes payable. The Company is currently assessing the future implications of these provisions within the CARES Act on the Company's consolidated financial statements but does not expect the impact to be material.

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. Also, the issuance of the Convertible Senior Notes on March 9, 2021 will have a dilutive effect on the diluted net income per share. 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, 2020. The effect of exchange rate changes on cash and cash equivalents was insignificant for each of the three years ended December 31, 2020.

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, 2020 and 2019, 98.0% and 89.3% 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 10 – "Segment Information and Revenue by Geography and Products" for details relating to revenue by geography.

Note 2 - Investment Securities

12 Months Ended

Dec. 31, 2020

Notes to Financial Statements

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

NOTE 2-INVESTMENT SECURITIES

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

	December 31,
	2020		2019
Cash and cash equivalents:
Cash	$	47,047	$	20,005
Cash equivalents:
Money market funds		—		6,311
Total cash and cash equivalents		47,047		26,316

Marketable securities:
U.S. government notes		—		4,114
Commercial paper		—		3,491
Total marketable securities		—		7,605

Total cash, cash equivalents and marketable securities	$	47,047	$	33,921

The following tables summarize the components, and the unrealized gains and losses position, related to the Company’s cash, cash equivalents and marketable investments as of December 31, 2020 and 2019 (in thousands):

December 31, 2020	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Market Value
Cash and cash equivalents	$	47,047	$	—	$	—	$	47,047

Total cash, cash equivalents and marketable securities	$	47,047	$	—	$	—	$	47,047

December 31, 2019	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
Commercial paper		3,491		—		—		3,491
Total marketable securities		7,605		—		—		7,605
Total cash, cash equivalents and marketable securities	$	33,921	$	—	$	—	$	33,921

As of December 31, 2019, there were no gross unrealized gains and losses. The Company had no marketable securities as of December 31, 2020.

Fair Value Measurements

As of December 31, 2020, the Company had no financial assets measured and recognized at fair value. 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, 2019	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

Money market funds are highly liquid investments and are actively traded. The pricing information on these investment instruments is readily available and can be independently validated as of the measurement date. This approach results in the classification of these securities as Level 1 of the fair value hierarchy.

Corporate debt, U.S. government-backed securities and commercial paper are measured at fair value using Level 2 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 2 of the fair value hierarchy. The Company had no Level 1 or Level 2 investments as of December 31, 2020. The Company recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period.

Note 3 - Balance Sheet Detail

12 Months Ended

Dec. 31, 2020

Notes to Financial Statements

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, 2020 and 2019, were $3.9 million and $2.5 million, respectively. Inventories, net of these adjustments, consist of the following (in thousands):

	December 31,
	2020		2019
Raw materials	$	14,874	$	17,935
Work in process		1,030		2,016
Finished goods		12,604		13,970
Total	$	28,508	$	33,921

Property and Equipment, net

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

	December 31,
	2020			2019
Leasehold improvements	$	1,051		$	867
Equipment leasing		186			—
Office equipment and furniture		3,407			3,110
Machinery and equipment		7,683			7,805
		12,327			11,782
Less: Accumulated depreciation		(10,028	)		(8,965	)
Property and equipment, net	$	2,299		$	2,817

Included in machinery and equipment are financed vehicles used by the Company’s sales employees. As of December 31, 2020 and 2019, the gross capitalized value of the leased vehicles was $1.6 million and $2.0 million, respectively, and the related accumulated depreciation was $1.2 million and $1.1 million, respectively. Included in Property and equipment as of December 31, 2020 and 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. Goodwill was $1,339 as of December 31, 2020 and 2019 and there were no changes to Goodwill during the years then ended. Intangible assets were fully amortized as of December 31, 2020 and 2019 and there were no additions during the years then ended. As such, the Company did not incur any amortization expense for intangible assets during the years ended December 31, 2020, 2019 and 2018. There were no impairments or additions to goodwill during the years ended December 31, 2020 or 2019.

Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

	December 31,
	2020		2019
Accrued payroll and related expenses	$	12,197	$	14,341
Sales and marketing accruals		2,352		2,527
Warranty liability		2,908		4,401
Accrued sales tax		5,343		3,922
Other accrued liabilities		8,279		5,116
Total	$	31,079	$	30,307

Product Remediation Liability

During the fourth quarter of 2018, the Company recognized a liability for a product remediation plan related to 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 remediation plan consists primarily of replacement of a component in the system. The accrued liability consists of the estimated cost of materials and labor to replace the component in all units that were under the Company's standard warranty or were covered under the existing extended warranty contracts. The Company recorded a liability of approximately $5.0 million in 2018.

As of December 31, 2020 and December 31, 2019, approximately $0.4 million and $0.5 million, respectively, of the total product remediation liability balance was accrued as a component of the Company’s product warranty liability and included in accrued liabilities, and $1.2 million and $2.0 million, respectively, was separately recorded as extended warranty liabilities. In the year ended December 31, 2020, the Company settled $0.6 million related to extended warranty liability and recorded $0.2 million of the reversal of excess reserve during the fourth quarter of 2020 and $0.1 million in product remediation warranty, respectively.

Note 4 - Warranty and Extended Services Contract

12 Months Ended

Dec. 31, 2020

Notes to Financial Statements

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 in connection with extended service contracts are recognized at the time when costs are incurred. The following table provides the changes in the product standard warranty accrual for the years ended December 31, 2020 and 2019 (in thousands):

	December 31,
	2020			2019 ⁽¹⁾
Balance at beginning of year	$	4,401		$	4,666
Add: Accruals for warranties issued during the period		4,475			7,629
Less: Settlements made during the period		(5,968	)		(7,894	)
Balance at end of year	$	2,908		$	4,401

⁽¹⁾Presentation of the 2019 warranty liability rollforward table has been changed for consistency. The $4.6 million as of the beginning of 2019 excluded one-time extended service contracts costs of $3.2 million to replace components in one of the Company’s legacy products.

The settlements presented in the table exclude costs related to extended service contracts cost, which were $0.6 million and $1.1 million for the years ended December 31, 2020 and 2019, respectively, to replace a component in one of the Company's legacy products.

Note 5 - Deferred Revenue

12 Months Ended

Dec. 31, 2020

Notes to Financial Statements

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- or three-year terms. Deferred revenue also includes payments for training and extended marketing support service. Approximately 84% of the Company’s deferred revenue balance of $11.2 million as of December 31, 2020 will be recognized over the next 12 months.

The following table provides changes in the deferred contract revenue balance for the years ended December 31, 2020 and 2019 (in thousands):

	December 31,
	2020			2019
Balance at beginning of year	$	14,222		$	12,566
Add: Payments received		14,131			17,127
Less: Revenue		(6,337	)		(6,020	)
Less: Revenue included in the beginning balance and recognized as revenue in the current year		(10,779	)		(9,451	)
Balance at end of year	$	11,237		$	14,222

Costs for extended service contracts were $8.2 million, $9.3 million and $7.8 million, respectively, for the years ended December 31, 2020, 2019 and 2018.

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

12 Months Ended

Dec. 31, 2020

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

NOTE 6—STOCKHOLDERS’ EQUITY, STOCK PLANS AND STOCK-BASED COMPENSATION EXPENSE

As of December 31, 2020, 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 17,679,232 shares are issued and outstanding as of December 31, 2020, and (ii) 5,000,000 shares of preferred stock, par value $0.001 per share (“Preferred Stock”), of which no shares are issued and outstanding.

Issuances of Common Stock

On April 21, 2020, the Company issued and sold an aggregate of 2,742,750 shares of the Company’s common stock, par value $0.001 per share at a price to the public of $10.50 per share. The shares include the full exercise of the underwriter’s option to purchase an additional 357,750 shares of common stock. The Company received net proceeds from the offering of approximately $26.5 million, after deducting underwriting discounts, commissions and offering expenses of $2.3 million.

As of December 31, 2020, the Company had the following stock-based employee compensation plans:

2004 Equity Incentive Plan

In 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.

On 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.

On 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-1(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.

On 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 June 2020, stockholders approved an amendment and restatement of the 2019 Equity Incentive Plan (the “Prior Plan”) as the Amended and Restated 2019 Equity Incentive Plan (the “Restated Plan”) and approved an additional 600,000 shares, available for future grants. The Restated Plan provides for the grant of incentive stock options, non-statutory stock options, RSAs, RSUs, stock appreciation rights, performance stock units, performance shares, and other stock or cash awards.

In accordance with the 2019 Restated Plan 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 50-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, 2020, 2019 and 2018, the Company issued 35,735, 42,236 and 13,392 RSUs, respectively, to its non-employee directors.

In the years ended December 31, 2020, 2019 and 2018, the Company’s Board of Directors granted 650,964, 517,402 and 210,532 RSUs, respectively, to its executive officers, directors 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, 2020, 2019 and 2018 the Company’s Board of Directors granted its executive officers and certain senior management employees 98,580, 387,172, and 47,824 of PSUs, respectively. The PSUs vest over 12 or 24 months subject to the recipient’s continued service and the achievement of pre-established performance goals. The PSUs granted in 2020 vest subject to the recipients continued service and the achievement of certain performance goals for the Company’s 2020 fiscal year established by the Board and relating to the achievement of specific operational and regulatory milestones. During the years ended December 31, 2020, 2019 and 2018, 219,549 shares, 23,053 shares 97,418 shares of the PSUs vested, respectively.

During the quarter ended September 30, 2019 the Company's Board awarded its new CEO, David H. Mowry, 67,897 shares, which are scheduled to vest over 4 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 20,369 PSUs; and the 2022 tranche is 30% of the award, or 20,369 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, 2020, the Company concluded that the 2019 and 2020 tranches met the criteria for measurement and recognition. The 8,657 shares of the 2019 tranche vested during the year ended December 31, 2020. None of the shares for the 2020 tranche vested. The 2021 and 2022 tranches do not meet the criteria for measurement and recognition as of December 31, 2020 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.

On August 2, 2020, the Board awarded its new CFO, Rohan Seth, an option grant for 60,000 shares, which vests over 5 years, and a PSU award covering a target of 22,423 shares, which vests over 2.5 years and is subject to performance-based criteria relating to the achievement of certain goals with 40% based on achievement of Finance department goals and 60% based on the Company’s achievement of financial performance goals. The maximum number of Shares that may vest under the award is 150% of the target number of shares of Common Stock subject to the award.

On April 1, 2020, the Company issued RSUs to settle bonuses owed to management under the 2019 Management Bonus Program. In the past, the Company has paid these bonuses with cash on hand. However, due to the economic conditions resulting from COVID-19, fully vested shares were issued in lieu of cash. The Company issued 209,981 shares related to this bonus payment to management and recognized $2.6 million in stock-based compensation expense. The Company also recorded an equivalent reduction in bonus expense as a result of the settlement of the bonus in shares.

On 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, 2021, 2020 and 2019. 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, 2020, 2019, and 2018, under the 2004 ESPP, the Company issued 56,751, 82,810, and 64,511 shares, respectively. At December 31, 2020, 704,954 shares remained available for future issuance.

Option and Award Activity

Activity under the 2004 Plan and 2019 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, 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
Additional shares reserved⁽²⁾		600,000
Options granted		(71,088	)		71,088		$	14.85
Options exercised		—			(73,227	)	$	12.91
Options cancelled (expired or forfeited)		76,553			(76,553	)	$	36.65
Stock awards granted		(804,949	)		—			—
Stock awards cancelled (expired or forfeited)		522,949			—			—
Balances as of December 31, 2020		1,085,170			217,007		$	22.35		3.75	$	1.47
Exercisable as of December 31, 2020					132,641		$	24.60		2.84	$	1.47
Vested and expected to vest, net of estimated forfeitures, as of December 31, 2020					212,025		$	22.31		3.63	$	1,451

(1)	Based on the closing stock price of $24.11 of the Company’s stock on December 31, 2020, $35.81 on December 31, 2019, $17.02 on December 31, 2018 and $45.35 on December 31, 2017.
(2)	Approved by the board of directors and stockholders in 2019 and 2020.

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, 2020. The aggregate intrinsic amount changes based on the fair market value of the Company’s common stock. Total intrinsic value of options exercised in 2020, 2019 and 2018 was $0.4 million, $1.0 million, and $8.3 million, respectively. The options outstanding and exercisable at December 31, 2020 were in the following exercise price ranges:

Exercise Prices			Number Outstanding		Contractual Life (in years)		Number Exercisable
$9.65	-	$10.79		22,319		1.08		22,319
$10.80	-	$14.04		34,459		2.23		34,459
	$14.01			60,000		4.59		—
$15.32	-	$18.55		8,396		2.64		8,271
	$18.93			11,088		9.83		—
	$19.55			10,000		3.32		9,375
	$25.70			11,000		3.59		9,730
	$39.30			45,000		3.83		37,292
	$47.40			7,745		3.96		6,132
	$53.90			7,000		4.20		5,063
$9.65	-	$53.9		217,007		3.75		132,641

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, 2017		510,587		$	24.88				$	23,155
Granted		265,124		$	44.57
Vested ⁽³⁾		(231,515	)	$	21.10	$	9,483	(4)
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	(5)
Forfeited		(161,022	)	$	37.91
Outstanding at December 31, 2019		1,104,802		$	22.10				$	37,442
Granted		667,694		$	20.66
Vested ⁽³⁾		(684,491	)	$	17.82	$	12,036	(6)
Forfeited		(308,248	)	$	23.24
Outstanding at December 31, 2020		779,757		$	23.96				$	18,800

(1) Represents the value of the Company’s stock on the date that the restricted stock units and performance stock units vest.

(2) Based on the closing stock price of the Company’s stock of $24.11 on December 31, 2020, $35.81 on December 31, 2019, $17.02 on December 31, 2018, and $45.35 on December 31, 2017.

(3) 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.

(4) On the grant date, the fair value for these vested awards was $4.9 million.

(5) On the grant date, the fair value for these vested awards was $5.9 million.

(6) On the grant date, the fair value for these vested awards was $12.2 million.

Stock-Based Compensation

Stock-based compensation expense for the years ended December 31, 2020, 2019 and 2018 was as follows (in thousands):

	Year Ended December 31,
	2020		2019		2018
Stock options	$	370	$	622	$	838
RSUs		8,849		4,786		4,648
PSUs		666		3,948		1,105
ESPP		224		476		566
Total stock-based compensation expense	$	10,109	$	9,832	$	7,157

As of December 31, 2020, the unrecognized compensation cost, net of expected forfeitures, was $0.7 million for stock options, which will be recognized over an estimated weighted-average remaining amortization period of 3.9 years. The unrecognized compensation cost, net of expected forfeitures, for stock awards, including performance-based awards, was $12.3 million, which will be recognized over an estimated weighted-average remaining amortization period of 2.3 years. For the ESPP, the unrecognized compensation cost, net of expected forfeitures, was $0.1 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 through exercise of options and shares purchased through ESPP, net of taxes withheld and paid, in 2020, 2019 and 2018 was $1.6 million, $3.9 million and $1.3 million.

Total stock-based compensation expense recognized during the year ended December 31, 2020, 2019 and 2018 was recorded in the Consolidated Statement of Operations as follows (in thousands):

	Year Ended December 31,
	2020		2019		2018
Cost of revenue	$	1,665	$	1,572	$	743
Sales and marketing		3,385		4,510		2,105
Research and development		1,669		1,536		824
General and administrative		3,390		2,214		3,485
Total stock-based compensation expense	$	10,109	$	9,832	$	7,157

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									Stock Purchase Plan (ESPP)
	2020			2019			2018			2020			2019			2018

Expected term (in years)⁽¹⁾		4.84			3.65			3.70			0.50			0.50			0.50
Risk-free interest rate⁽²⁾		0.15	%		1.64	%		2.60	%		0.11	%		2.49	%		2.34	%
Volatility⁽³⁾		63	%		54	%		44	%		76	%		70	%		61	%
Dividend yield⁽⁴⁾		—	%		—	%		—	%		—	%		—	%		—	%
Weighted average estimated fair value at grant date	$	7.63		$	14.83		$	18.00		$	6.13		$	9.60		$	9.60

(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 ESPP participation right as of the date of grant.

(3)

Estimated volatility is based on historical volatility. The Company estimates volatility based on the Company’s historical volatility of its stock price.

(4)

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 2020 ranged from 0% to 20.8%.

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 2020, 2019, and 2018, the Company withheld 193,573, 42,695 and 77,049 shares of common stock, respectively, to satisfy its employees’ tax obligations of $3.4 million, $0.8 million and $3.1 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, 2020

Notes to Financial Statements

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,
	2020			2019			2018
U.S.	$	(25,793	)	$	(13,037	)	$	(14,177	)
Foreign		2,386			774			662
Loss before income taxes	$	(23,407	)	$	(12,263	)	$	(13,515	)

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

	Year Ended December 31,
	2020			2019			2018
Current:
Federal	$	—		$	—		$	(15	)
State		(53	)		101			123
Foreign		747			(76	)		303
Total Current		694			25			411
Deferred:
Federal		2			2			15,674
State		1			1			1,230
Foreign		(227	)		57			(60	)
Total Deferred		(224	)		60			16,844
Tax provision	$	470		$	85		$	17,255

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

	December 31,
	2020			2019
Net operating loss carryforwards	$	18,270		$	14,507
Stock-based compensation		869			1,111
Other accruals and reserves		3,670			2,202
Credits		12,653			11,887
Accrued warranty		976			924
Depreciation and amortization		2,191			2,354
Other		979			897
Operating Lease Liability		4,311			3,949
Deferred tax asset before valuation allowance		43,919			37,831
Valuation allowance		(38,321	)		(32,350	)
Deferred tax asset after valuation allowance		5,598			5,481
Deferred contract acquisition costs		(803	)		(1,076	)
Goodwill		(110	)		(97	)
Right of Use Asset		(4,042	)		(3,885	)
Net deferred tax asset	$	643		$	423

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,
	2020			2019			2018
U.S. federal statutory income tax rate		21.00	%		21.00	%		21.00	%
State tax rate		2.77			2.82			(4.95	)
Meals and entertainment		(0.65	)		(2.83	)		(2.66	)
Permanent differences		(2.87	)		(2.58	)		—
Stock-based compensation		(1.07	)		3.78			13.66
SAB 118 Change in Estimate		—			—			(2.43	)
Foreign rate differential		(1.05	)		(0.34	)		0.11
Other		0.15			(0.33	)		(1.21	)
General business credit		2.74			8.14			4.31
Valuation allowance		(25.51	)		(38.60	)		(155.49	)
Change in prior year reserves		0.40			2.53			—
Deferred true-up		2.08			5.71			—
Effective tax rate		(2.01	)%		(0.70	)%		(127.66	)%

As of December 31, 2020, the Company recorded a valuation allowance of $38.3 million for the portion of the deferred tax asset that it does not expect to be realized. The valuation allowance on the Company’s net deferred taxes increased by $6.0 million and $4.5 million during the years ended December 31, 2020 and 2019, 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 $0.6 million of net deferred tax assets in foreign jurisdictions, which management believes are more-likely-than-not to be realized given the expectation of future earnings in these jurisdictions. The Company continues 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. The Company intends to continue maintaining a full valuation allowance on its 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.

At December 31, 2020, the Company had approximately $76.6 million and $36.6 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 2039. Approximately $34.9 million of total federal net operating loss carryforwards were generated post December 31, 2017 and have no expiration. At December 31, 2020, the Company had research and development tax credits available to offset federal, California and Massachusetts tax liabilities in the amount of $6.3 million, $7.8 million and $0.2 million, respectively. Federal credits will begin to expire in 2024, California state tax credits have no expiration, and Massachusetts tax credits begin to expire in 2021.

On March 27, 2020, the U.S. federal government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The CARES Act changed several of the existing U.S. corporate income tax laws by, among other things, increasing the amount of deductible interest, allowing companies to carry back certain Net Operating Losses (“NOLs”) and increasing the amount of NOLs that corporations can use to offset income. Further, in December 2020, the Consolidated Appropriations Act, 2021 was signed into law. It clarified that gross income does not include any amount that would otherwise arise from the forgiveness of a PPP loan. The CARES Act did not have a material impact on the Company's income tax provision, deferred tax assets and liabilities, and related taxes payable.

Federal and state laws can impose substantial restrictions on the utilization of net operating loss and tax credit carryforwards in the event of an “ownership change,” as defined in Section 382 of the Internal Revenue Code. The Company has determined that no significant limitation would be placed on the utilization of the Company’s net operating loss and tax credit carryforwards due to prior ownership changes.

No deferred tax liabilities have been recorded relating to the earnings of the Company’s 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, no 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 2020 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 2015 through 2020 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, excluding related interest and penalties, in December 31, 2018 to December 31, 2020 (in thousands):

	Year Ended December 31,
	2020			2019			2018
Balance at beginning of year	$	1,426		$	1,563		$	1,519
Decreases related to prior year tax positions		(32	)		(291	)		(70	)
Increases related to prior year tax positions		—			25			—
Increases related to current year tax positions		470			129			114
Balance at end of year	$	1,864		$	1,426		$	1,563

It is the Company’s policy to recognize interest and penalties related to income tax matters in income tax expense. The amount of interest and penalties recognized in income tax expense was immaterial for the years ended December 31, 2020 and December 31, 2019. As of December 31, 2020, the Company had no accrued interest and penalties related to uncertain tax positions.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Note 8 - Net Loss Per Share

12 Months Ended

Dec. 31, 2020

Notes to Financial Statements

Earnings Per Share [Text Block]

NOTE 8—NET LOSS PER SHARE

Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares outstanding during the period, without consideration for potential dilutive shares of common stock, such as in-the-money equity awards (stock options, RSUs, PSUs and employee stock purchase plan contributions). Shares of common stock subject to repurchase are excluded from the weighted-average shares. Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share since the effects of potentially dilutive securities are antidilutive.

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

	Year Ended December 31,
	2020			2019			2018
Numerator:
Net loss (in thousands)	$	(23,877	)	$	(12,348	)	$	(30,770	)
Denominator:
Weighted average shares of common stock outstanding used in computing net loss per share, basic and diluted		16,691			14,096			13,771
Net loss per share:
Net loss per share, basic and diluted	$	(1.43	)	$	(0.88	)	$	(2.23	)

On March 9, 2021, the Company issued and sold $125 million aggregate principal amount of 2.25% Convertible Senior Notes. Such issuance will have the impact on the number of potential common shares outstanding in the future periods. See Note 13 – "Subsequent Events" for detailed discussion.

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,
	2020		2019		2018
Options to purchase common stock		244		417		664
Restricted stock units		724		559		432
Employee stock purchase plan shares		87		111		133
Performance stock units		68		178		43
Total		1,123		1,265		1,272

Note 9 - Defined Contribution Plan

12 Months Ended

Dec. 31, 2020

Notes to Financial Statements

Retirement Benefits [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 2020, 2019 and 2018, the Company made discretionary contributions under the 401(k) Plan of $0.2 million, $0.4 million and $0.4 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, 2020, and the related expense for each of the three years then ended was not significant.

- Definition

The entire disclosure for retirement benefits.

+ References

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+ Details

Note 10 - Segment Information and Revenue by Geography and Products

12 Months Ended

Dec. 31, 2020

Notes to Financial Statements

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 makers ("CODM") are its Chief Executive Officer ("CEO") and Chief Financial Officer (“CFO”), who make decisions on allocating resources and in assessing performance. The CEO and CFO review the Company's consolidated results as one operating segment. In making operating decisions, the CODM 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 CODM view 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, 2020, 2019 and 2018 (in thousands):

	Year Ended December 31,
	2020		2019		2018
Revenue mix by geography:
United States	$	61,202	$	106,243	$	101,862
Japan		43,265		24,142		17,819
Asia, excluding Japan		11,900		16,110		15,467
Europe		9,503		10,596		8,875
Rest of the world		21,813		24,621		18,697
Total Consolidated revenue	$	147,683	$	181,712	$	162,720
Revenue mix by product category:
Systems	$	90,765	$	140,478	$	132,595
Consumables		9,287		9,648		4,162
Skincare		25,061		8,512		5,778
Total product revenue		125,113		158,638		142,535
Service		22,570		23,074		20,185
Total Consolidated revenue	$	147,683	$	181,712	$	162,720

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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+ Details

Note 11 - Commitments and Contingencies

12 Months Ended

Dec. 31, 2020

Notes to Financial Statements

Lessee, Leases [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 consist of automobiles. The Company’s leases generally have remaining terms of 1 to 10 years, some of which include options to renew the leases for up to 5 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.

In 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 2016-02 at its adoption date instead of at the earliest comparative period presented in its financial statements. In addition, ASU 2018 2018-11 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 no material impact on the Company’s consolidated net earnings, results of operations, comprehensive loss, statements of changes in equity, and cash flows.

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

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):

		Year Ended December 31,
		2020		2019
Assets	*Classification*
Right-of-use assets	Operating lease right-of-use assets	$	17,076	$	7,702
Finance lease	Property and equipment, net⁽¹⁾		467		1,008
Total leased assets		$	17,543	$	8,710

(1) Finance lease assets included in Property and equipment, net (in thousands):

		Year Ended December 31,
		2020		2019
Liabilities	*Classification*
Operating lease liabilities
Operating lease liabilities, current	Operating lease liabilities	$	2,260	$	2,800
Operating lease liabilities , non-current	Operating lease liabilities, net of current portion		15,950		5,112
Total operating lease liabilities		$	18,210	$	7,912

		Year Ended December 31,
	Classification	2020		2019
Finance lease liabilities
Finance lease liabilities, current	Accrued liabilities	$	370	$	541
Finance lease liabilities, non-current	Other long-term liabilities		241		578
Total finance lease liabilities		$	611	$	1,119

Lease costs during the twelve months ended December 31, 2020 and December 31, 2019 (in thousands):

		Year Ended December 31,
		2020		2019
Finance lease cost	Amortization expense	$	431	$	704
Finance lease cost	Interest for finance lease	$	63	$	88
Operating lease cost	Operating lease expense	$	3,275	$	2,892

Cash paid for amounts included in the measurement of lease liabilities during the twelve months ended December 31, 2020 and December 31, 2019 were as follows (in thousands):

		Year Ended December 31,
		2020		2019
Operating cash flow	Finance lease	$	63	$	88
Financing cash flow	Finance lease	$	537	$	649
Operating cash flow	Operating lease	$	2,139	$	2,820

Maturities of lease liabilities

Maturities of operating lease liabilities were as follows as of December 31, 2020 (in thousands):

	Amount
2021	$	3,062
2022		3,112
2023		3,207
2024		2,884
2025		2,875
Thereafter		6,308
Total lease payments		21,448
Less: imputed interest		(3,238	)
Present value of lease liabilities	$	18,210

Vehicle Leases

As of December 31, 2020, the Company was committed to minimum lease payments for vehicles leased under long-term non-cancelable finance leases as follows (in thousands):

	Amount
2021	$	374
2022		249
2023		12
Total lease payments		635
Less: imputed interest		(24	)
Present value of lease liabilities	$	611

Weighted-average remaining lease term and discount rate, as of December 31, 2020, were as follows:

Lease Term and Discount Rate
Weighted-average remaining lease term (years)
Operating leases	6.7
Finance leases	2.2
Weighted-average discount rate
Operating leases	4.7	%
Finance leases	5.6	%

Lessor Information related to the Company’s system leasing

The Company also enters into leasing transactions, in which the Company is the lessor, offered through the Company's membership program. The Company's leases for equipment rentals were all accounted for as operating leases during the second and third quarter of 2020.

During the fourth quarter ended December 31, 2020, certain of the membership program agreements were amended, granting the customers the exclusive right and option to purchase the leased system from the Company, at any time during the period of 12 months from signing the amended agreement. For contracts signed under the amended membership agreement, the Company classified and accounted for the arrangements as sales-type leases as of December 31, 2020, as the Company determined it is reasonably certain that the customer will exercise the purchase option

For the sales-type leases, the net investment of the Company’s lease receivable is measured at the commencement date and is included in the consolidated balance sheets as a component of Other current assets and prepaid expenses. The following table, which reflects management’s assumption that lessees will exercise the purchase option, summarizes the amount of sales-type lease income included in product revenue in the accompanying consolidated statements of operations for the year ended December 31, 2020 (in thousands):

	Year Ended December 31, 2020
Gross future lease payments from Customers	$	790
Less: Present value of lease receipts and purchase option price⁽¹⁾		683
Difference between undiscounted cash flows and discounted cash flows	$	107

⁽¹⁾Present value of lease receipts and purchase option price was included in Product revenue in the Company's Consolidated Statement of Operations in the year ended December 31, 2020.

The revenue related to non-lease components, which comprise service contracts and consumables, are deferred and recognized either over time or at the point of delivery. The non-lease component revenue amount as of December 31, 2020 was immaterial.

Equipment lease revenue for operating lease agreements is recognized over the life of the lease. The following table summarizes the amount of operating lease income included in product revenue in the accompanying consolidated statements of operations for the year ended December 31, 2020 (in thousands):

		Year Ended December 31, 2020
Operating lease income from equipment rentals		$	367

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 normal course of business. 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 no 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.

In 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 settled this matter with Ms. Gardiner during the second quarter of 2020 with a cash payment of $0.4 million and issuance of 15,408 shares of common stock.

As of December 31, 2020 and 2019, the Company had accrued $0.4 million and Nil, 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

Dec. 31, 2020

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 “Wells Fargo Revolving Line of Credit”) in the original principal amount of $25 million.

On July 9, 2020, the Company terminated its undrawn revolving line of credit with Wells Fargo and subsequently entered into a Loan and Security Agreement with Silicon Valley Bank for a four-year secured revolving loan facility (“SVB Revolving Line of Credit”) in an aggregate principal amount of up to $30.0 million. The SVB Revolving Line of Credit matures on July 9, 2024.

Covenants

In order to draw on the full amount of the SVB Revolving Line of Credit, the Company must satisfy certain liquidity ratios. If the Company is unable to meet these liquidity ratios, then availability under the revolving line is calculated as 80% of the Company’s qualifying accounts receivable. The proceeds of the revolving loans may be used for general corporate purposes. The Company’s obligations under the Loan and Security Agreement with Silicon Valley Bank are secured by substantially all of the assets of the Company. Interest on principal amount outstanding under the revolving line shall accrue at a floating per annum rate equal to the greater of either 1.75% above the Prime Rate or five percent (5.0%). The Company paid a non-refundable revolving line commitment fee of $0.3 million, on the effective date of the Loan and Security Agreement with Silicon Valley Bank of July 9, 2020, and the Company is required to pay an anniversary fee of $0.3 million on each twelve month anniversary of the effective date of the Loan and Security Agreement.

The Loan and Security Agreement with Silicon Valley Bank contains customary affirmative covenants, such as financial statement reporting requirements and delivery of borrowing base certificates, as well as customary covenants that restrict the Company’s ability to, among other things, incur additional indebtedness, sell certain assets, guarantee obligations of third parties, declare dividends or make certain distributions, and undergo a merger or consolidation or certain other transactions. The Loan and Security Agreement also contains certain financial condition covenants, including maintaining a minimum revenue of $90.0 million, determined in accordance with GAAP on a trailing twelve-month basis. This minimum revenue requirement is performed quarterly and subject to renegotiation at the beginning of each fiscal year.

As of December 31, 2020, the Company had not drawn on the SVB Revolving Line of Credit and the Company is in compliance with all financial covenants of the SVB Revolving Line of Credit.

The Paycheck Protection Program (PPP) Loan

On April 22, 2020, the Company received loan proceeds of $7.1 million pursuant to the Paycheck Protection Program (the “PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The loan, which is in the form of a promissory note dated April 21, 2020, between the Company and Silicon Valley Bank as the lender, matures on April 21, 2022 and bears interest at a fixed rate of 1.00% per annum, payable monthly commencing September 2021. There is no prepayment penalty. Under the terms of the PPP, all or a portion of the principal may be forgiven if the loan proceeds are used for qualifying expenses as described in the CARES Act, such as payroll costs, benefits, rent, and utilities. No assurance is provided that the Company will obtain forgiveness of the loan in whole or in part. With respect to any portion of the loan that is not forgiven, the loan will be subject to customary provisions for a loan of this type, including customary events of default relating to, among other things, payment defaults and breaches of the provisions of the loan.

The application for these funds required the Company to, in good faith, certify that the current economic uncertainty made the loan request necessary to support the ongoing operations of the Company. Subsequently released guidance instructs all applicants and recipients to take into account their current business activity and the Company's ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental to their business. On April 28, 2020, in press conference remarks, the Secretary of the U.S. Department of the Treasury stated that the SBA intends to perform a review of PPP loans over $2.0 million. The required certification made by the Company is subject to interpretation. If, despite the good-faith belief that given the Company’s circumstances the Company satisfied all eligible requirements for the PPP loan, it is later determined the Company was ineligible to apply for and receive the PPP loan, the Company may be required to repay the PPP loan in its entirety and the Company could be subject to additional penalties. The company is in the process of applying for forgiveness of the PPP Loan, as of December 31, 2020. However, the Company can provide no assurance that the loan will be forgiven.

The PPP loan will be derecognized upon repayment of the loan in accordance with its terms and/or upon confirmation of forgiveness from the SBA.

Note 13 - Subsequent Events

12 Months Ended

Dec. 31, 2020

Notes to Financial Statements

Subsequent Events [Text Block]

NOTE 13—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 March 9, 2021, the Company offered $125 million aggregate principal amount of 2.25% convertible senior notes due 2026 (the “notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). Cutera also granted the initial purchasers of the notes an option to purchase up to an additional $13.25 million aggregate principal amount of the notes on the same terms and conditions. The Initial Purchasers exercised their option in full on March 5, 2021, bringing the total aggregate principal amount of the Notes to $138.25 million.

The Company entered into capped call transactions, in connection with the offering, with one or more of the initial purchasers and/or their respective affiliates and/or other financial institutions (the “option counterparties”). The capped call transactions are expected generally to reduce potential dilution to Cutera’s common stock upon any conversion of notes, with such reduction subject to a cap. If the initial purchasers exercise their option to purchase additional notes, the Company expects to enter into additional capped call transactions with the option counterparties.

The net proceeds from the offering, before deducting purchasers’ discounts and offering expenses were approximately $134.1 million. The Company used $16.1 million of the net proceeds to pay the cost of the capped call transactions described above and the remainder of the net proceeds for general corporate purposes, which may include working capital, capital expenditures and potential acquisitions and strategic transactions.

In connection with the offering, the Company entered into Amendment No. 1 to Loan and Security Agreement on March 4, 2021, which amends the Company’s Loan and Security Agreement, dated as of July 9, 2020 between the Company, as borrower, and Silicon Valley Bank. The Amendment amends the Loan and Security Agreement to (i) permit the Company to issue the Notes and perform its obligations in connection therewith, and (ii) permit the Capped Call transactions.

The Company has become aware that InMode Ltd. has filed a complaint with the United States International Trade Commission alleging that Ilooda, Co., Ltd’s Secret RF fractional radiofrequency microneedling system, distributed in the United States by the Company, infringes U.S. Patent No. 10,799,285 ("285 patent"). The complaint has not been served on the Company. The Company intends to vigorously defend against this lawsuit and, based on a preliminary investigation, believes that the Company has strong defenses and that this patent is likely invalid in view of prior art. Based on the current information available to the Company, it believes that any possible loss will not be material. If, following a successful third-party action for infringement, the Company cannot obtain a license for the Company’s products, it may have to stop selling the applicable products.

Supplementary Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2020

Notes to Financial Statements

Quarterly Financial Information [Text Block]

SUPPLEMENTARY FINANCIAL DATA (UNAUDITED)

(In thousands, except per share amounts)

Quarter ended:	Dec. 31, 2020			Sept. 30, 2020			June 30, 2020			March 31, 2020			Dec. 31, 2019			Sept. 30, 2019			June 30, 2019			March 31, 2019
Net revenue	$	49,943		$	39,132		$	26,369		$	32,239		$	51,795		$	46,117		$	47,774		$	36,026
Cost of revenue		21,877			17,386			14,745			17,903			23,005			19,884			21,943			18,717
Gross profit		28,066			21,746			11,624			14,336			28,790			26,233			25,831			17,309
Operating expenses:
Sales and marketing		14,656			12,286			11,035			14,789			20,323			17,691			16,992			16,104
Research and development		4,029			3,432			2,991			3,870			4,463			3,643			3,273			3,706
General and administrative		7,938			7,239			8,529			7,806			5,933			7,308			5,267			5,525
Total operating expenses		26,623			22,957			22,555			26,465			30,719			28,642			25,532			25,335
Income (loss) from operations		1,443			(1,211	)		(10,931	)		(12,129	)		(1,929	)		(2,409	)		299			(8,026	)
Interest and other income (expense), net		7			(382	)		3			(207	)		(20	)		(146	)		46			(79	)
Income (loss) before income taxes		1,450			(1,593	)		(10,928	)		(12,336	)		(1,949	)		(2,555	)		345			(8,105	)
Income tax provision (benefit)		(738	)		664			466			78			139			73			(243	)		115
Net income (loss)	$	2,188		$	(2,257	)	$	(11,394	)	$	(12,414	)	$	(2,088	)	$	(2,628	)	$	588		$	(8,220	)
Net income (loss) per share-basic	$	0.12		$	(0.13	)	$	(0.67	)	$	(0.86	)	$	(0.15	)	$	(0.19	)	$	0.04		$	(0.59	)
Net income (loss) per share- diluted	$	0.12		$	(0.13	)	$	(0.67	)	$	(0.86	)	$	(0.15	)	$	(0.19	)	$	0.04		$	(0.59
Weighted average number of shares used in per share calculations:
Basic		17,653			17,603			17,055			14,433			14,261			14,182			14,086			14,017
Diluted		17,840			17,603			17,055			14,433			14,261			14,182			14,356			14,017

Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

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

Description of Operations and Principles of Consolidation

Cutera, Inc. (“Cutera” or the “Company”) provides energy-based aesthetic systems for practitioners worldwide. The Company 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: enlighten, excel, Secret PRO, 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, Titan, truSculpt 3D,truSculpt iD and truSculpt flex cycle refills, as well as single use disposable tips applicable to Secret PRO, Juliet and Secret RF (“Consumables” revenue); (iii) the distribution of third party manufactured skincare products (“Skincare” revenue); and (iv) the leasing of equipment through a membership program; 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 3D, 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.

The Company’s corporate headquarters and U.S. operations are located in Brisbane, California, where the Company conducts manufacturing, warehousing, research and development, regulatory, sales and marketing, service, and administrative activities. The Company also maintains regional distribution centers (“RDCs”) in selection locations across the U.S. These RDCs serve as forward warehousing for systems and service parts in various geographies. The Company markets sells and services the Company’s products through direct sales and service employees in North America (including Canada), Australia, Austria, Belgium, France, Germany, Hong Kong, Japan, Spain, Switzerland, and the United Kingdom. Sales and services outside of these direct markets are made through a worldwide distributor network in over 42 countries. 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, Policy [Policy Text Block]

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, allowance for credit losses, sales allowances, valuation of inventories, fair value of goodwill, useful lives of property and equipment, impairment testing for long-lived-assets, implicit and 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, assumptions used in operating and sales-type lease classification, the standalone selling price of the Company's products and services, the period of benefit used to capitalize and amortize contract acquisition costs, variable consideration, contingent liabilities, recoverability of deferred tax assets, residual value of leased equipment, lease term 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, Policy [Policy Text Block]

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, business disruptions that are caused by natural disasters or pandemic events, 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.

In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. The COVID-19 outbreak has negatively affected the United States and global economies. The spread of the coronavirus, which caused a broad impact in 2020 globally, including restrictions on travel, shifting work force to work remotely and quarantine policies put into place by businesses and governments, had a material economic effect on the Company’s business during the year ended December 31, 2020. Notably, healthcare facilities in many countries effectively banned elective procedures. Many of the Company’s products are used in aesthetic elective procedures and as such, the bans on elective procedures substantially reduced the Company’s sales and marketing efforts in the early months of the pandemic and led the Company to implement cost control measures. While the Company hopes that the customers will return and the amount of revenue will increase in 2021 as the economic environment outlook due to the COVID-19 pandemic improves, the COVID-19 outbreak continues to be fluid and the aftermath of the business and economic disruptions due to the COVID-19 is still uncertain, making it difficult to forecast the final impact it could have on the Company’s future operations, including disruptions in the Company's supply chain and contract manufacturing operations. The Company cannot presently predict the scope and severity of any impacts in future periods from the business shutdowns or disruptions due to the COVID-19 pandemic, but the impact on economic activity such as the possibility of recession or financial market instability could have a material adverse effect on the Company’s business, revenue, operating results, cash flows and financial condition. As a result of the events and impact surrounding the COVID-19 pandemic, the Company assessed whether any impairment of its goodwill or its long-lived assets had occurred, and has determined that no charges other than an impairment loss of $0.8 million on capitalized cloud computing costs related to the indefinite delay of the implementation of cloud-based enterprise resource planning software had occurred during 2020. The Company’s assumptions about future conditions important to its assessment of potential impairment of its long-lived assets, and goodwill, including the impacts of the COVID–19 pandemic and other ongoing impacts to its business, are subject to uncertainty, and the Company will continue to monitor these conditions in future periods as new information becomes available, and will update its analyses accordingly.

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

Comparability

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 years ended December 31, 2020 and 2019 were prepared using the new lease accounting standard whereas the financial results for the year ended December 31, 2018 were prepared using prior effective guidance. As a result, the consolidated statement of operations for the years ended December 31, 2020 and 2019 is not directly comparable to the consolidated statements of operations for the year ended December 31, 2018.

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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 2016-13 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, available for sale securities and held-to-maturity debt securities. An entity with available for sale securities and 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 2016-13 on January 1, 2020 on a modified retrospective basis. Upon adoption, the standard did not have a material impact on the consolidated financial statements.

The Company identified trade receivables and available-for-sale debt securities as impacted by the new guidance. However, the Company determined that the historical losses related to these available-for-sale debt securities are not material as the Company invests in high grade short-term securities.

The Company establishes an allowance for credit losses on trade receivables based on the credit quality of clients, current economic conditions, the age of the accounts receivable balances, historical loss information, and current conditions and forecasted information, and write-off amounts against the allowance when they are deemed uncollectible.

The Company’s allowance for credit losses increased from $1.4 million at January 1, 2020 to $1.6 million at December 31, 2020, due to increase in aged accounts receivable. During the year ended December 31, 2020, the Company recognized a provision for credit losses of $2.1 million and wrote off $1.2 million against the allowance for credit losses.

In 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 3 fair value measurements. The amendments in this update eliminate, among other things, disclosure of the reasons for and amounts of transfers between Level 1 and Level 2 for assets and liabilities that are measured at fair value on a recurring basis and an entity's valuation processes for Level 3 fair value measurements. The amendments in this update are 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 did not have a material impact on the Company’s consolidated financial position and results of operations.

Recently Issued Accounting Pronouncements Not Yet Adopted by the Company

In December 2019, the FASB issued ASU No. 2019-12 “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.

In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” ASU No. 2020-04 provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships, subject to meeting certain criteria that reference LIBOR or another rate that is expected to be discontinued. The amendments in ASU No. 2020-04 are effective for all entities as of March 12, 2020 through December 31, 2022. The Company is currently assessing the impact of ASU No. 2020-04 and the LIBOR transition on its consolidated financial statements.

In August 2020, the FASB issued ASU No. 2020-06, "Debt – Debt with Conversion and Other Options (Topic 470) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Topic 815)." This amendment simplifies the accounting for convertible debt instruments by removing the beneficial conversion and cash conversion separation models for convertible instruments. Under the amendment, the embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives or that do not result in substantial premiums accounted for as paid-in capital. The update also amends the accounting for certain contracts in an entity’s own equity that are currently accounted for as derivatives because of specific settlement provisions. In addition, the new guidance modifies how particular convertible instruments and certain contracts that may be settled in cash or shares impact the computation of diluted earnings per share. The amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

The Company reviewed all other recently issued, but not yet effective, accounting pronouncements and does not expect the future adoption of any such pronouncements will have a material impact on the Company’s consolidated financial statements.

Revenue from Contract with Customer [Policy Text Block]

Revenue recognition

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 15%, 13% and 12%, respectively, of the Company’s total revenue for the years ended December 31, 2020, 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.

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 30 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 skincare products are purchased from a third-party manufacturer and sold to medical offices and licensed physicians. The Company warrants that the skincare products are free of significant defects in workmanship and materials for 90 days from shipment. These are typically sold in a separate contract as the only performance obligations. The Company acts as the principal in this arrangement, as the Company determines the price to charge customers for the skincare products and controls the products before they are transferred to the customer. The Company recognizes revenue for skincare products at a point in time upon shipment.

Consumables and other accessories

The Company classifies its customers' purchases of replacement cycles for truSculpt iD and truSculpt flex, as well as replacement hand pieces, Titan and truSculpt 3D hand pieces, and single use disposable tips applicable to Secret PRO, Juliet, and Secret RF, as Consumable revenue, which provides the Company with a source of recurring revenue from existing customers. The Juliet and Secret RF products’ single use disposable tips 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.

Equipment leasing

The Company leases equipment to customers through membership programs and receives a fixed monthly fee over the term of the arrangement. The Company classifies its lease income as product revenue. The Company recognizes lease income over the term of the lease if the lease is classified as an operating lease. For agreements that grant customers the right to purchase the leased system, the Company typically classifies the lease as a sales-type lease as the Company has determined it is reasonably certain that the customer will exercise the purchase option. On the commencement of sales-type leases, the Company recognizes revenue upfront in product revenue and the corresponding receivables recorded in Other current assets and prepaid expenses on the consolidated balance sheets (Notes 1 and 11). Revenue from equipment leases was not material in the year ended December 31, 2020.

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.

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.

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 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.

● Extended service contracts: SSP is based on observable price when sold on a standalone basis to similar customers.

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 which can be redeemed for such rewards 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. 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, 2020, the accrual for the loyalty program included in accrued liabilities was $0.3 million.

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 to three years.

Total capitalized costs for the year ended December 31, 2020 and December 31, 2019 were $3.4 million and $4.6 million, respectively, and are included in Other long-term assets in the Company’s consolidated balance sheet. Amortization expenses for these assets were $2.6 million, $2.9 million and $1.8 million, respectively, during the years ended December 31, 2020, 2019 and 2018 and were 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

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 (expense), net.

Fair Value Measurement, Policy [Policy Text Block]

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

● Level 2: inputs, which include observable inputs other than Level 1 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 3: inputs, which include unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the underlying asset or liability. Level 3 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.

Marketable Securities, Policy [Policy Text Block]

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. The Company had no investments as of December 31, 2020. There were no other-than-temporary impairments in the years ended December 31, 2020, 2019 and 2018.

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

Allowance for Sales Returns and Credit Losses

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.

The allowance for credit losses on trade receivables is based on the credit quality of clients, current economic conditions, the age of the accounts receivable balances, historical loss information, and current conditions and forecasted information. The Company writes off amounts against the allowance when they are deemed uncollectible.

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

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 federally insured limits or any other 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 its 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 credit losses 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 an allowance for potential credit losses. As of December 31, 2020, and 2019, no customer represented more than 10% of the Company’s net accounts receivable. During the years ended December 31, 2020, 2019, and 2018, domestic revenue accounted for 41%, 58% and 62%, respectively, of total revenue, while international revenue accounted for 59%, 42% and 38%, respectively, of total revenue. No single customer represented more than 10% of total revenue for any of the years ended December 31, 2020, 2019 and 2018.

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 and Secret PRO products and one supplier for its skincare products.

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-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.

During the year ended December 31, 2020, the Company wrote-off $0.8 million of inventory on hand related to its Juliet platform due to declining sales. Sales related to Juliet have been declining due to the COVID-19 pandemic and the FDA letter issued on July 30, 2018 expressing concerns regarding “vaginal rejuvenation” procedures using energy-based devices. As of December 31, 2020 and 2019, demonstration inventories, net of accumulated depreciation, included in finished goods inventory was $2.2 million and $4.1 million, respectively.

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

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
Equipment leasing		4.5
Office equipment and furniture		3
Machinery and equipment		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 2020, 2019 and 2018, was $1.4 million, $1.5 million, and $1.2 million, respectively. Amortization expense for vehicles leased under capital leases is included in depreciation expense. Amortization expense related to equipment leasing accounted for as sales type is included in cost of revenue and was immaterial as of December 31, 2020.

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

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 to five years. The Company periodically assesses the capitalized asset for impairment and, when required, will record an associated impairment loss. During the year ended December 31, 2020, the Company recognized in general and administrative expense an impairment loss of $0.8 million for capitalized cloud computing costs related to a cloud-based enterprise resource planning software.

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 no 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, 2020, there has been no impairment of goodwill. All acquired intangible assets have been fully amortized as of December 31, 2020.

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 14 to 16 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

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 asset ("ROU asset") and lease obligations on the balance sheet for all leases with terms longer than 12 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 ROU asset. Lease liabilities represent the present value of the Company’s 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 12 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.

Lessor, Leases [Policy Text Block]

Accounting for Leases as a Lessor

During the second quarter of 2020, the Company began leasing equipment to customers through a membership program where the customer pays a fixed monthly fee over the lease term. Along with the leased equipment, the membership program provides customers with a warranty service and a fixed amount of consumables per month for the term of the lease. The Company has made an accounting policy election to account for qualifying lease components and associated non-lease components as a single component; accordingly, a lease component and an associated warranty service non-lease component are combined and accounted for as an operating lease. The consumables do not qualify for the practical expedient and are accounted for as a separate non-lease component in accordance with Topic 606 on Revenue from Contracts with Customers. The Company allocates the membership program contract consideration to each component proportionately on a relative standalone selling price basis.

The lease agreements are typically for three years; however, the customer has the ability to terminate the lease after twelve months with no penalty. As such, the Company has determined the initial term of the lease to be twelve-months, after which the lease converts to a month-to-month lease for up to an additional two years. Rental charges are a fixed monthly fee, paid at the beginning of each month, over the term of the lease. Except when modified to include a purchase option as discussed below, all leases entered into under the membership program during the year were classified as operating leases.

The initial direct costs related to the Company’s operating leases for equipment rentals include the related commissions paid to employees upon the origination of a lease agreement. These costs are included in Other current assets and prepaid expenses on the consolidated balance sheets and are amortized over the lease term of twelve-months. The amount of initial direct costs and the related amortization recognized during the year ended December 31, 2020 was immaterial.

During the fourth quarter of 2020, the Company modified certain membership agreements under the program to grant the lessee the exclusive right and option to purchase the leased system from the Company, at any time during the period of 12 months from signing the amended agreement. The option will expire if it remained unexercised by the customer within that time frame. Upon the expiration of the option, the agreement will revert back to the original membership agreement, with no purchase option. For contracts signed under the amended membership agreement, and that met the Company’s credit approval policy, the Company classified the lease agreements as sales-type leases due to the purchase option. Under the sales-type lease, both the consumables and warranty services are accounted for as a separate non-lease component in accordance with Topic 606 on Revenue from Contracts with Customers.

At the commencement of these sales-type leases, the Company recognizes revenue up-front, and amounts due from the customer under the lease contract are recognized as lease receivables on the consolidated balance sheets. Interest income is recognized as net revenue over the term of the lease based on the effective interest method. The Company has elected not to include sales and other taxes collected from the lessee as part of lease revenue.

For these sales-type leases, the Company derecognized the underlying assets under the lease and recorded the net investment in the lease. As the Company determined at the commencement of the sales-type lease that it is reasonably certain the customer will exercise its purchase option, the Company does not expect to derive any additional value from the underlying assets and thus recognizes no unguaranteed residual assets.

In determining the proper classification and treatment of the equipment leases, the Company used significant judgment in forming the following assumptions and estimates: lease term, implicit rate, fair value of equipment at option exercise date, useful life, residual value of the leased equipment, and the likelihood that lessees will exercise the purchase option.

See Note 11 to the consolidated financial statements for more information regarding leasing arrangements.

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-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 equipment leasing, 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 3D 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 Expense, Policy [Policy Text Block]

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 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 2020, 2019 and 2018 were $1.2 million, $2.8 million and $2.8 million, respectively.

Share-based Payment Arrangement [Policy Text Block]

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.

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: For the underlying stock price volatility of the Company’s stock, the Company estimates volatility solely based on the Company’s historical volatility of its stock price.

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 using the closing price of the Company's common shares 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. 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 50-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 50-day period ending on the day of the grant.

See Note 6 - "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

The Company is subject to income taxes in the United States and several foreign jurisdictions. Significant judgment is required in determining the Company’s 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, the Company recognizes 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. The Company recognizes the deferred income tax effects of a change in tax rates in the period of enactment. The Company records a valuation allowance to reduce the Company’s deferred tax assets to the net amount that the Company believes is more likely than not to be realized.

The Company recognizes tax benefits from uncertain tax positions if the Company believes 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 the Company believes it has adequately reserved for the Company’s uncertain tax positions (including net interest and penalties), the Company can provide no assurance that the final tax outcome of these matters will not be different. The Company makes 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. The Company records interest and penalties related to the Company’s uncertain tax positions in the Company’s 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, 2020 are considered to be indefinitely reinvested and, accordingly, no 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.

On March 27, 2020, the U.S. federal government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The CARES Act changed several of the existing U.S. corporate income tax laws by, among other things, increasing the amount of deductible interest, allowing companies to carry back certain Net Operating Losses (“NOLs”) and increasing the amount of NOLs that corporations can use to offset income. The CARES Act did not have a material impact on the Company's income tax provision, deferred tax assets and liabilities, and related taxes payable. The Company is currently assessing the future implications of these provisions within the CARES Act on the Company's consolidated financial statements but does not expect the impact to be material.

Earnings Per Share, Policy [Policy Text Block]

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. Also, the issuance of the Convertible Senior Notes on March 9, 2021 will have a dilutive effect on the diluted net income per share. 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, Policy [Policy Text Block]

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 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, 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, 2020. The effect of exchange rate changes on cash and cash equivalents was insignificant for each of the three years ended December 31, 2020.

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, 2020 and 2019, 98.0% and 89.3% 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 10 – "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, 2020

Notes Tables

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

		Useful Lives
Leasehold improvements		Lesser of useful life or term of lease
Equipment leasing		4.5
Office equipment and furniture		3
Machinery and equipment		3

Note 2 - Investment Securities (Tables)

12 Months Ended

Dec. 31, 2020

Notes Tables

Cash, Cash Equivalents and Investments [Table Text Block]

	December 31,
	2020		2019
Cash and cash equivalents:
Cash	$	47,047	$	20,005
Cash equivalents:
Money market funds		—		6,311
Total cash and cash equivalents		47,047		26,316

Marketable securities:
U.S. government notes		—		4,114
Commercial paper		—		3,491
Total marketable securities		—		7,605

Total cash, cash equivalents and marketable securities	$	47,047	$	33,921

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

December 31, 2020	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Market Value
Cash and cash equivalents	$	47,047	$	—	$	—	$	47,047

Total cash, cash equivalents and marketable securities	$	47,047	$	—	$	—	$	47,047

December 31, 2019	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
Commercial paper		3,491		—		—		3,491
Total marketable securities		7,605		—		—		7,605
Total cash, cash equivalents and marketable securities	$	33,921	$	—	$	—	$	33,921

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

December 31, 2019	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

- Definition

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, 2020

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	December 31,
	2020		2019
Raw materials	$	14,874	$	17,935
Work in process		1,030		2,016
Finished goods		12,604		13,970
Total	$	28,508	$	33,921

Property, Plant and Equipment [Table Text Block]

	December 31,
	2020			2019
Leasehold improvements	$	1,051		$	867
Equipment leasing		186			—
Office equipment and furniture		3,407			3,110
Machinery and equipment		7,683			7,805
		12,327			11,782
Less: Accumulated depreciation		(10,028	)		(8,965	)
Property and equipment, net	$	2,299		$	2,817

Schedule of Accrued Liabilities [Table Text Block]

	December 31,
	2020		2019
Accrued payroll and related expenses	$	12,197	$	14,341
Sales and marketing accruals		2,352		2,527
Warranty liability		2,908		4,401
Accrued sales tax		5,343		3,922
Other accrued liabilities		8,279		5,116
Total	$	31,079	$	30,307

Note 4 - Warranty and Extended Services Contract (Tables)

12 Months Ended

Dec. 31, 2020

Notes Tables

Schedule of Product Warranty Liability [Table Text Block]

	December 31,
	2020			2019 ⁽¹⁾
Balance at beginning of year	$	4,401		$	4,666
Add: Accruals for warranties issued during the period		4,475			7,629
Less: Settlements made during the period		(5,968	)		(7,894	)
Balance at end of year	$	2,908		$	4,401

Note 5 - Deferred Revenue (Tables)

12 Months Ended

Dec. 31, 2020

Notes Tables

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

	December 31,
	2020			2019
Balance at beginning of year	$	14,222		$	12,566
Add: Payments received		14,131			17,127
Less: Revenue		(6,337	)		(6,020	)
Less: Revenue included in the beginning balance and recognized as revenue in the current year		(10,779	)		(9,451	)
Balance at end of year	$	11,237		$	14,222

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

12 Months Ended

Dec. 31, 2020

Notes Tables

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, 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
Additional shares reserved⁽²⁾		600,000
Options granted		(71,088	)		71,088		$	14.85
Options exercised		—			(73,227	)	$	12.91
Options cancelled (expired or forfeited)		76,553			(76,553	)	$	36.65
Stock awards granted		(804,949	)		—			—
Stock awards cancelled (expired or forfeited)		522,949			—			—
Balances as of December 31, 2020		1,085,170			217,007		$	22.35		3.75	$	1.47
Exercisable as of December 31, 2020					132,641		$	24.60		2.84	$	1.47
Vested and expected to vest, net of estimated forfeitures, as of December 31, 2020					212,025		$	22.31		3.63	$	1,451

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

Exercise Prices			Number Outstanding		Contractual Life (in years)		Number Exercisable
$9.65	-	$10.79		22,319		1.08		22,319
$10.80	-	$14.04		34,459		2.23		34,459
	$14.01			60,000		4.59		—
$15.32	-	$18.55		8,396		2.64		8,271
	$18.93			11,088		9.83		—
	$19.55			10,000		3.32		9,375
	$25.70			11,000		3.59		9,730
	$39.30			45,000		3.83		37,292
	$47.40			7,745		3.96		6,132
	$53.90			7,000		4.20		5,063
$9.65	-	$53.9		217,007		3.75		132,641

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, 2017		510,587		$	24.88				$	23,155
Granted		265,124		$	44.57
Vested ⁽³⁾		(231,515	)	$	21.10	$	9,483	(4)
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	(5)
Forfeited		(161,022	)	$	37.91
Outstanding at December 31, 2019		1,104,802		$	22.10				$	37,442
Granted		667,694		$	20.66
Vested ⁽³⁾		(684,491	)	$	17.82	$	12,036	(6)
Forfeited		(308,248	)	$	23.24
Outstanding at December 31, 2020		779,757		$	23.96				$	18,800

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

	Year Ended December 31,
	2020		2019		2018
Stock options	$	370	$	622	$	838
RSUs		8,849		4,786		4,648
PSUs		666		3,948		1,105
ESPP		224		476		566
Total stock-based compensation expense	$	10,109	$	9,832	$	7,157

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

	Year Ended December 31,
	2020		2019		2018
Cost of revenue	$	1,665	$	1,572	$	743
Sales and marketing		3,385		4,510		2,105
Research and development		1,669		1,536		824
General and administrative		3,390		2,214		3,485
Total stock-based compensation expense	$	10,109	$	9,832	$	7,157

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

	Stock Options									Stock Purchase Plan (ESPP)
	2020			2019			2018			2020			2019			2018

Expected term (in years)⁽¹⁾		4.84			3.65			3.70			0.50			0.50			0.50
Risk-free interest rate⁽²⁾		0.15	%		1.64	%		2.60	%		0.11	%		2.49	%		2.34	%
Volatility⁽³⁾		63	%		54	%		44	%		76	%		70	%		61	%
Dividend yield⁽⁴⁾		—	%		—	%		—	%		—	%		—	%		—	%
Weighted average estimated fair value at grant date	$	7.63		$	14.83		$	18.00		$	6.13		$	9.60		$	9.60

Note 7 - Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Notes Tables

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

	Year Ended December 31,
	2020			2019			2018
U.S.	$	(25,793	)	$	(13,037	)	$	(14,177	)
Foreign		2,386			774			662
Loss before income taxes	$	(23,407	)	$	(12,263	)	$	(13,515	)

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

	Year Ended December 31,
	2020			2019			2018
Current:
Federal	$	—		$	—		$	(15	)
State		(53	)		101			123
Foreign		747			(76	)		303
Total Current		694			25			411
Deferred:
Federal		2			2			15,674
State		1			1			1,230
Foreign		(227	)		57			(60	)
Total Deferred		(224	)		60			16,844
Tax provision	$	470		$	85		$	17,255

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

	December 31,
	2020			2019
Net operating loss carryforwards	$	18,270		$	14,507
Stock-based compensation		869			1,111
Other accruals and reserves		3,670			2,202
Credits		12,653			11,887
Accrued warranty		976			924
Depreciation and amortization		2,191			2,354
Other		979			897
Operating Lease Liability		4,311			3,949
Deferred tax asset before valuation allowance		43,919			37,831
Valuation allowance		(38,321	)		(32,350	)
Deferred tax asset after valuation allowance		5,598			5,481
Deferred contract acquisition costs		(803	)		(1,076	)
Goodwill		(110	)		(97	)
Right of Use Asset		(4,042	)		(3,885	)
Net deferred tax asset	$	643		$	423

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

	Year Ended December 31,
	2020			2019			2018
U.S. federal statutory income tax rate		21.00	%		21.00	%		21.00	%
State tax rate		2.77			2.82			(4.95	)
Meals and entertainment		(0.65	)		(2.83	)		(2.66	)
Permanent differences		(2.87	)		(2.58	)		—
Stock-based compensation		(1.07	)		3.78			13.66
SAB 118 Change in Estimate		—			—			(2.43	)
Foreign rate differential		(1.05	)		(0.34	)		0.11
Other		0.15			(0.33	)		(1.21	)
General business credit		2.74			8.14			4.31
Valuation allowance		(25.51	)		(38.60	)		(155.49	)
Change in prior year reserves		0.40			2.53			—
Deferred true-up		2.08			5.71			—
Effective tax rate		(2.01	)%		(0.70	)%		(127.66	)%

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

	Year Ended December 31,
	2020			2019			2018
Balance at beginning of year	$	1,426		$	1,563		$	1,519
Decreases related to prior year tax positions		(32	)		(291	)		(70	)
Increases related to prior year tax positions		—			25			—
Increases related to current year tax positions		470			129			114
Balance at end of year	$	1,864		$	1,426		$	1,563

Note 8 - Net Loss Per Share (Tables)

12 Months Ended

Dec. 31, 2020

Notes Tables

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

	Year Ended December 31,
	2020			2019			2018
Numerator:
Net loss (in thousands)	$	(23,877	)	$	(12,348	)	$	(30,770	)
Denominator:
Weighted average shares of common stock outstanding used in computing net loss per share, basic and diluted		16,691			14,096			13,771
Net loss per share:
Net loss per share, basic and diluted	$	(1.43	)	$	(0.88	)	$	(2.23	)

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

	Year Ended December 31,
	2020		2019		2018
Options to purchase common stock		244		417		664
Restricted stock units		724		559		432
Employee stock purchase plan shares		87		111		133
Performance stock units		68		178		43
Total		1,123		1,265		1,272

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

12 Months Ended

Dec. 31, 2020

Notes Tables

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

	Year Ended December 31,
	2020		2019		2018
Revenue mix by geography:
United States	$	61,202	$	106,243	$	101,862
Japan		43,265		24,142		17,819
Asia, excluding Japan		11,900		16,110		15,467
Europe		9,503		10,596		8,875
Rest of the world		21,813		24,621		18,697
Total Consolidated revenue	$	147,683	$	181,712	$	162,720
Revenue mix by product category:
Systems	$	90,765	$	140,478	$	132,595
Consumables		9,287		9,648		4,162
Skincare		25,061		8,512		5,778
Total product revenue		125,113		158,638		142,535
Service		22,570		23,074		20,185
Total Consolidated revenue	$	147,683	$	181,712	$	162,720

Note 11 - Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2020

Notes Tables

Accounting Standards Update and Change in Accounting Principle [Table Text Block]

	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			—

Leases, Financial Statement Information [Table Text Block]

		Year Ended December 31,
		2020		2019
Assets	*Classification*
Right-of-use assets	Operating lease right-of-use assets	$	17,076	$	7,702
Finance lease	Property and equipment, net⁽¹⁾		467		1,008
Total leased assets		$	17,543	$	8,710

		Year Ended December 31,
		2020		2019
Liabilities	*Classification*
Operating lease liabilities
Operating lease liabilities, current	Operating lease liabilities	$	2,260	$	2,800
Operating lease liabilities , non-current	Operating lease liabilities, net of current portion		15,950		5,112
Total operating lease liabilities		$	18,210	$	7,912

		Year Ended December 31,
	Classification	2020		2019
Finance lease liabilities
Finance lease liabilities, current	Accrued liabilities	$	370	$	541
Finance lease liabilities, non-current	Other long-term liabilities		241		578
Total finance lease liabilities		$	611	$	1,119

		Year Ended December 31,
		2020		2019
Finance lease cost	Amortization expense	$	431	$	704
Finance lease cost	Interest for finance lease	$	63	$	88
Operating lease cost	Operating lease expense	$	3,275	$	2,892

		Year Ended December 31,
		2020		2019
Operating cash flow	Finance lease	$	63	$	88
Financing cash flow	Finance lease	$	537	$	649
Operating cash flow	Operating lease	$	2,139	$	2,820

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

	Amount
2021	$	3,062
2022		3,112
2023		3,207
2024		2,884
2025		2,875
Thereafter		6,308
Total lease payments		21,448
Less: imputed interest		(3,238	)
Present value of lease liabilities	$	18,210

Finance Lease, Liability, Fiscal Year Maturity [Table Text Block]

	Amount
2021	$	374
2022		249
2023		12
Total lease payments		635
Less: imputed interest		(24	)
Present value of lease liabilities	$	611

Lease, Cost [Table Text Block]

Lease Term and Discount Rate
Weighted-average remaining lease term (years)
Operating leases	6.7
Finance leases	2.2
Weighted-average discount rate
Operating leases	4.7	%
Finance leases	5.6	%

Sales-type Lease, Lease Income [Table Text Block]

	Year Ended December 31, 2020
Gross future lease payments from Customers	$	790
Less: Present value of lease receipts and purchase option price⁽¹⁾		683
Difference between undiscounted cash flows and discounted cash flows	$	107

Operating Lease, Lease Income [Table Text Block]

		Year Ended December 31, 2020
Operating lease income from equipment rentals		$	367

Supplementary Financial Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2020

Notes Tables

Quarterly Financial Information [Table Text Block]

Quarter ended:	Dec. 31, 2020			Sept. 30, 2020			June 30, 2020			March 31, 2020			Dec. 31, 2019			Sept. 30, 2019			June 30, 2019			March 31, 2019
Net revenue	$	49,943		$	39,132		$	26,369		$	32,239		$	51,795		$	46,117		$	47,774		$	36,026
Cost of revenue		21,877			17,386			14,745			17,903			23,005			19,884			21,943			18,717
Gross profit		28,066			21,746			11,624			14,336			28,790			26,233			25,831			17,309
Operating expenses:
Sales and marketing		14,656			12,286			11,035			14,789			20,323			17,691			16,992			16,104
Research and development		4,029			3,432			2,991			3,870			4,463			3,643			3,273			3,706
General and administrative		7,938			7,239			8,529			7,806			5,933			7,308			5,267			5,525
Total operating expenses		26,623			22,957			22,555			26,465			30,719			28,642			25,532			25,335
Income (loss) from operations		1,443			(1,211	)		(10,931	)		(12,129	)		(1,929	)		(2,409	)		299			(8,026	)
Interest and other income (expense), net		7			(382	)		3			(207	)		(20	)		(146	)		46			(79	)
Income (loss) before income taxes		1,450			(1,593	)		(10,928	)		(12,336	)		(1,949	)		(2,555	)		345			(8,105	)
Income tax provision (benefit)		(738	)		664			466			78			139			73			(243	)		115
Net income (loss)	$	2,188		$	(2,257	)	$	(11,394	)	$	(12,414	)	$	(2,088	)	$	(2,628	)	$	588		$	(8,220	)
Net income (loss) per share-basic	$	0.12		$	(0.13	)	$	(0.67	)	$	(0.86	)	$	(0.15	)	$	(0.19	)	$	0.04		$	(0.59	)
Net income (loss) per share- diluted	$	0.12		$	(0.13	)	$	(0.67	)	$	(0.86	)	$	(0.15	)	$	(0.19	)	$	0.04		$	(0.59
Weighted average number of shares used in per share calculations:
Basic		17,653			17,603			17,055			14,433			14,261			14,182			14,086			14,017
Diluted		17,840			17,603			17,055			14,433			14,261			14,182			14,356			14,017

Schedule II - Valuation and Qualifying Accounts (Tables)

12 Months Ended

Dec. 31, 2020

Notes Tables

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, 2020	$	32,350	$	7,986	$	2,015	$	38,321
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

	Balance at Beginning of Year		Additions		Deductions		Balance at End of Year
Allowance for credit losses, accounts receivable
Year ended December 31, 2020	$	1,354	$	2,144	$	1,900	$	1,598
Year ended December 31, 2019	$	1,257	$	1,361	$	1,264	$	1,354
Year ended December 31, 2018	$	9	$	1,880	$	632	$	1,257

Note 1 - Summary of Significant Accounting Policies (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Capitalized Computer Software, Impairments	$ 805	$ 0	$ 0
Accounts Receivable, Allowance for Credit Loss, Current	1,598	1,354
Accounts Receivable, Credit Loss Expense (Reversal)	2,144	590	1,257
Accounts Receivable, Allowance for Credit Loss, Writeoff	1,200
Contract with Customer, Liability, Total	11,237	14,222	12,566
Capitalized Contract Cost, Net, Total	3,400	4,600
Other-than-temporary Impairment Loss, Debt Securities, Available-for-sale, Total	0	0	0
Inventory Write-down	800
Inventory, Finished Goods, Gross, Total	2,200	4,100
Depreciation, Total	$ 1,400	1,500	1,200
Number of Operating Segments	1
Goodwill, Impairment Loss	$ 0
Lessor, Operating Lease, Term of Contract (Year)	3 years
Lessor, Operating Lease, Initial Term of Contract (Month)	12 months
Lessor, Operating Lease, Additional Term, Month To Month Basis (Year)	2 years
Advertising Expense	$ 1,200	$ 2,800	$ 2,800
Minimum [Member] \| Distributors [Member]
Standard Warranty Period (Month)	14 months
Maximum [Member] \| Distributors [Member]
Standard Warranty Period (Month)	16 months
Capitalized Cloud Computing Set-up Cost [Member] \| Minimum [Member]
Finite-Lived Intangible Asset, Useful Life (Year)	3 years
Capitalized Cloud Computing Set-up Cost [Member] \| Maximum [Member]
Finite-Lived Intangible Asset, Useful Life (Year)	5 years
UNITED STATES
Percentage of Assets	98.00%	89.30%
Customer Concentration Risk [Member] \| Revenue Benchmark [Member] \| UNITED STATES
Concentration Risk, Percentage	41.00%	58.00%	62.00%
Customer Concentration Risk [Member] \| Revenue Benchmark [Member] \| Non-US [Member]
Concentration Risk, Percentage	59.00%	42.00%	38.00%
Selling and Marketing Expense [Member]
Capitalized Contract Cost, Amortization	$ 2,600	$ 2,900	$ 1,800
Loyalty [Member]
Contract with Customer, Liability, Total	$ 300
Transferred over Time [Member]
Revenue from Contract with Customer, Including Assessed Tax, Percent of Total Revenues	15.00%	13.00%	12.00%

Note 1 - Summary of Significant Accounting Policies - Useful Lives of Property, Plant and Equipment (Details)	12 Months Ended
	Dec. 31, 2020
Assets Leased to Others [Member]
Property, plant, and equipment, useful lives (Year)	4 years 6 months
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) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Debt Securities, Available-for-sale, Net Accumulated Gross Unrealized Gain (Loss), before Tax		$ 0
Marketable Securities, Total	$ 0

Note 2 - Investment Securities - Cash, Cash Equivalents and Marketable Securities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Cash	$ 47,047	$ 20,005
Cash equivalents	47,047	26,316
Marketable securities	0	7,605
Total cash, cash equivalents and marketable securities	47,047	33,921
US Treasury and Government [Member]
Marketable securities	0	4,114
Money Market Funds [Member]
Cash equivalents	0	6,311
Commercial Paper [Member]
Cash equivalents	$ 0	$ 3,491

Note 2 - Investment Securities - Unrealized Gains and Losses Related to Marketable Investments (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Cash and cash equivalents, Amortized Cost	$ 47,047	$ 26,316
Cash and cash equivalents, Fair Market Value	47,047	26,316
Total cash, cash equivalents and marketable securities, Amortized Cost	47,047	33,921
Total cash, cash equivalents and marketable securities, Gross Unrealized Gains	0	0
Total cash, cash equivalents and marketable securities, Gross Unrealized Losses	0	0
Total cash, cash equivalents and marketable securities, Fair Market Value	$ 47,047	33,921
Marketable investments, Amortized Cost		7,605
Marketable investments, Fair Market Value		7,605
US Treasury and Government [Member]
Total cash, cash equivalents and marketable securities, Gross Unrealized Gains		0
Total cash, cash equivalents and marketable securities, Gross Unrealized Losses		0
Marketable investments, Amortized Cost		4,114
Marketable investments, Fair Market Value		4,114
Commercial Paper, Not Included with Cash and Cash Equivalents [Member]
Total cash, cash equivalents and marketable securities, Gross Unrealized Gains		0
Total cash, cash equivalents and marketable securities, Gross Unrealized Losses		0
Marketable investments, Amortized Cost		3,491
Marketable investments, Fair Market Value		$ 3,491

Note 2 - Investment Securities - Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Cash equivalents	$ 47,047	$ 26,316
Available-for-sale securities		7,605
Fair Value, Recurring [Member]
Available-for-sale securities		7,605
Total assets at fair value		13,916
Fair Value, Recurring [Member] \| Fair Value, Inputs, Level 1 [Member]
Available-for-sale securities		4,114
Total assets at fair value		10,425
Fair Value, Recurring [Member] \| Fair Value, Inputs, Level 2 [Member]
Available-for-sale securities		3,491
Total assets at fair value		3,491
Fair Value, Recurring [Member] \| Fair Value, Inputs, Level 3 [Member]
Available-for-sale securities		0
Total assets at fair value		0
Money Market Funds [Member] \| Fair Value, Recurring [Member]
Cash equivalents		6,311
Money Market Funds [Member] \| Fair Value, Recurring [Member] \| Fair Value, Inputs, Level 1 [Member]
Cash equivalents		6,311
Money Market Funds [Member] \| Fair Value, Recurring [Member] \| Fair Value, Inputs, Level 2 [Member]
Cash equivalents		0
Money Market Funds [Member] \| Fair Value, Recurring [Member] \| Fair Value, Inputs, Level 3 [Member]
Cash equivalents		$ 0

Note 3 - Balance Sheet Detail (Details Textual) - USD ($)
$ in Thousands

3 Months Ended

12 Months Ended

Dec. 31, 2020

Dec. 31, 2019

Dec. 31, 2018

Inventory Valuation Reserves, Ending Balance

$ 3,900

$ 2,500

Property, Plant and Equipment, Net, Ending Balance

2,299

2,817

Goodwill, Ending Balance

1,339

Goodwill, Period Increase (Decrease), Total

Amortization of Intangible Assets, Total

$ 0

Goodwill and Intangible Asset Impairment, Total

Standard Product Warranty Accrual, Ending Balance

2,908

4,401

^[1]

4,666

^[1]

Extended Product Warranty Accrual, Ending Balance

4,600

Extended Product Warranty Accrual, Decrease for Payments

600

1,100

Standard Product Warranty Accrual, Decrease for Payments

5,968

7,894

^[1]

Product Remediation Liability [Member]

Standard and Extended Product Warranty Accrual, Increase for Warranties Issued, Total

$ 5,000

Standard Product Warranty Accrual, Ending Balance

400

500

Extended Product Warranty Accrual, Ending Balance

1,200

2,000

Extended Product Warranty Accrual, Decrease for Payments

600

Extended Product Warranty Accrual, Reversal of Excess Reserve

200

Standard Product Warranty Accrual, Decrease for Payments

100

Vehicles [Member]

Finance Lease, Right-of-Use Asset, after Accumulated Amortization, Total

1,600

2,000

Finance Lease, Right-of-Use Asset, Accumulated Amortization

1,200

1,100

Construction in Progress [Member]

Property, Plant and Equipment, Net, Ending Balance

$ 400

[1]	Presentation of the 2019 warranty liability rollforward table has been changed for consistency. The $4.6 million as of the beginning of 2019 excluded one-time extended service contracts costs of $3.2 million to replace components in one of the Company’s legacy products.

Note 3 - Balance Sheet Detail - Inventories (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Raw materials	$ 14,874	$ 17,935
Work in process	1,030	2,016
Finished goods	12,604	13,970
Total	$ 28,508	$ 33,921

Note 3 - Balance Sheet Detail - Property and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Property, plant and equipment, gross	$ 12,327	$ 11,782
Less: Accumulated depreciation	(10,028)	(8,965)
Property and equipment, net	2,299	2,817
Leasehold Improvements [Member]
Property, plant and equipment, gross	1,051	867
Assets Leased to Others [Member]
Property, plant and equipment, gross	186	0
Equipment and Furniture [Member]
Property, plant and equipment, gross	3,407	3,110
Machinery and Equipment [Member]
Property, plant and equipment, gross	$ 7,683	$ 7,805

Note 3 - Balance Sheet Detail - Accrued Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Accrued payroll and related expenses	$ 12,197	$ 14,341
Sales and marketing accruals	2,352	2,527
Warranty liability	2,908	4,401
Accrued sales tax	5,343	3,922
Other accrued liabilities	8,279	5,116
Total	$ 31,079	$ 30,307

Note 4 - Warranty and Extended Services Contract (Details Textual) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Extended Product Warranty Accrual, Ending Balance		$ 4.6
Product Warranty Expense		3.2
Extended Product Warranty Accrual, Decrease for Payments	$ 0.6	$ 1.1

Note 4 - Warranty and Extended Service Contract - Summary of Warranties (Details) - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2020

Dec. 31, 2019

Balance at beginning of year

^[1]

$ 4,401

$ 4,666

Add: Accruals for warranties issued during the period

4,475

7,629

^[1]

Less: Settlements made during the period

(5,968)

(7,894)

^[1]

Balance at end of year

$ 2,908

$ 4,401

^[1]

[1]	Presentation of the 2019 warranty liability rollforward table has been changed for consistency. The $4.6 million as of the beginning of 2019 excluded one-time extended service contracts costs of $3.2 million to replace components in one of the Company’s legacy products.

Note 5 - Deferred Revenue (Details Textual) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Revenue, Remaining Performance Obligation, Percentage	84.00%
Revenue, Remaining Performance Obligation, Amount	$ 11.2
Deferred Revenue Costs Incurred	$ 8.2	$ 9.3	$ 7.8

Note 5 - Deferred Revenue - Summary of Deferred Service Contract Revenue (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Balance at beginning of year	$ 14,222	$ 12,566
Add: Payments received	14,131	17,127
Less: Revenue	(6,337)	(6,020)
Less: Revenue included in the beginning balance and recognized as revenue in the current year	(10,779)	(9,451)
Balance at end of year	$ 11,237	$ 14,222

Note 6 - Stockholders' Equity, Stock Plans and Stock-based Compensation Expense (Details Textual) - USD ($)

1 Months Ended

3 Months Ended

12 Months Ended

Aug. 02, 2020

Apr. 21, 2020

Apr. 01, 2020

Jun. 14, 2019

Jan. 12, 2004

Jun. 30, 2020

Sep. 30, 2019

Dec. 31, 2020

Dec. 31, 2019

Dec. 31, 2018

Dec. 31, 2012

Dec. 31, 2017

Oct. 31, 2017

Dec. 31, 2011

Dec. 31, 1998

Common Stock, Par or Stated Value Per Share (in dollars per share)

$ 0.001

Capital Stock, Shares Authorized (in shares)

55,000,000

Common Stock, Shares Authorized (in shares)

50,000,000

Common Stock, Shares, Issued, Total (in shares)

17,679,232

14,315,586

Preferred Stock, Shares Authorized (in shares)

5,000,000

Preferred Stock, No Par Value (in dollars per share)

$ 0.001

Preferred Stock, Shares Issued, Total (in shares)

Proceeds from Issuance of Common Stock

$ 28,798,000

$ 0

Payments of Stock Issuance Costs

$ 2,303,000

(0)

$ (0)

Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares)

71,088

21,010

Share-based Payment Arrangement, Expense

$ 10,109,000

$ 9,832,000

$ 7,157,000

Share Price (in dollars per share)

$ 24.11

$ 35.81

$ 17.02

$ 45.35

Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value

$ 400,000

$ 1,000,000.0

$ 8,300,000

Proceeds from Issuance of Shares under Incentive and Share-based Compensation Plans, Including Stock Options, Net

$ 1,600,000

$ 3,900,000

$ 1,300,000

Share-based Payment Arrangement, Shares Withheld for Tax Withholding Obligation (in shares)

193,573

42,695

77,049

Share-based Payment Arrangement, Decrease for Tax Withholding Obligation

$ 3,400,000

$ 800,000

$ 3,100,000

Common Stock, Shares, Outstanding, Ending Balance (in shares)

17,679,232

14,315,586

Preferred Stock, Shares Outstanding, Ending Balance (in shares)

Chief Financial Officer [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares)

60,000

Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Maximum Percentage

150.00%

Restricted Stock Units (RSUs) [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)

667,694

963,814

265,124

Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period (in shares)

^[1]

684,491

172,281

231,515

Share-based Payment Arrangement, Expense

$ 8,849,000

$ 4,786,000

$ 4,648,000

Share Price (in dollars per share)

$ 24.11

$ 35.81

$ 17.02

$ 45.35

Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value

$ 4,900,000

$ 5,900,000

$ 12,200,000

Restricted Stock Units (RSUs) [Member] | Share-based Payment Arrangement, Nonemployee [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)

35,735

42,236

13,392

Restricted Stock Units (RSUs) [Member] | Share-based Payment Arrangement, Employee [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)

650,964

517,402

210,532

Restricted Stock Units (RSUs) [Member] | Share-based Payment Arrangement, Employee [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%

Performance Shares [Member]

Share-based Payment Arrangement, Expense

$ 666,000

$ 3,948,000

$ 1,105,000

Performance Shares [Member] | Chief Executive Officer [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)

4 years

Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)

67,897

Performance Shares [Member] | Chief Financial Officer [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)

2 years 6 months

Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)

22,423

Performance Shares [Member] | Tranche 2019 [Member] | Chief Executive Officer [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)

10,185

8,657

Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage

15.00%

Performance Shares [Member] | Tranche 2020 [Member] | Chief Executive Officer [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)

16,974

Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage

25.00%

Performance Shares [Member] | Tranche 2021 [Member] | Chief Executive Officer [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)

20,369

Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage

30.00%

Performance Shares [Member] | Tranche 2022 [Member] | Chief Executive Officer [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)

20,369

Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage

30.00%

Performance Shares [Member] | Vesting Based on Finance Department Goals [Member] | Chief Financial Officer [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage

40.00%

Performance Shares [Member] | Vesting Based on Company Performance Goals [Member] | Chief Financial Officer [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage

60.00%

Performance Shares [Member] | Share-based Payment Arrangement, Employee [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)

98,580

387,172

47,824

Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period (in shares)

219,549

23,053

97,418

Share-based Payment Arrangement, Option [Member]

Share-based Payment Arrangement, Expense

$ 370,000

$ 622,000

$ 838,000

Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total

$ 700,000

Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)

3 years 10 months 24 days

Share-based Payment Arrangement, Option [Member] | Chief Financial Officer [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)

5 years

Restricted Stock Units and Performance Share Units [Member]

Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total

$ 12,300,000

Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)

2 years 3 months 18 days

Minimum [Member]

Share Based Compensation, Forfeiture Rate

0.00%

Minimum [Member] | Performance Shares [Member] | Share-based Payment Arrangement, Employee [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)

12 months

Maximum [Member]

Share Based Compensation, Forfeiture Rate

20.80%

Maximum [Member] | Performance Shares [Member] | Share-based Payment Arrangement, Employee [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)

24 months

1998 Stock Plan [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in shares)

4,650,000

Two Thousand Four Equity Incentive Plan [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in shares)

1,750,000

Number of Stock Awards Counted for Every Share Granted or Canceled (in shares)

2.12

Two Thousand Four Equity Incentive Plan [Member] | Minimum [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)

1 year

Two Thousand Nineteen Equity Incentive Plan [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in shares)

9,701,192

Number of Stock Awards Counted for Every Share Granted or Canceled (in shares)

2.12

Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized (in shares)

700,000

Share Based Compensation by Share Based Payment Fully Vested Stock Awards Grant Date Fair Value

$ 60,000

The Amended and Restated 2019 Equity Incentive Plan [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized (in shares)

600,000

The 2019 Management Bonus Program [Member]

Stock Issued During Period, Shares, Issued for Bonuses (in shares)

209,981

Share-based Payment Arrangement, Expense

$ 2,600,000

2004 Employee Stock Purchase Plan [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized (in shares)

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 (in shares)

56,751

82,810

64,511

Common Stock, Capital Shares Reserved for Future Issuance (in shares)

704,954

Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total

$ 100,000

Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)

3 months 29 days

Underwritten Public Offering [Member]

Common Stock, Par or Stated Value Per Share (in dollars per share)

$ 0.001

Stock Issued During Period, Shares, New Issues (in shares)

2,742,750

Shares Issued, Price Per Share (in dollars per share)

$ 10.50

Proceeds from Issuance of Common Stock

$ 26,500,000

Payments of Stock Issuance Costs

$ 2,300,000

Underwritten Public Offering [Member] | Underwriter [Member]

Stock Issued During Period, Shares, New Issues (in shares)

357,750

[1]	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.

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, 2020

Dec. 31, 2019

Dec. 31, 2018

Dec. 31, 2017

Balances, shares available for grant (in shares)

761,705

1,141,305

1,494,866

Balances, stock options outstanding (in shares)

295,699

507,705

839,919

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

$ 25.52

$ 20.52

$ 16.46

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

3 years 9 months

3 years 2 months 8 days

3 years 6 months 7 days

3 years 11 months 26 days

Balances, aggregate intrinsic value

^[1]

$ 1,470

$ 3,040

$ 2,000

$ 24,400

Options granted, shares available for grant (in shares)

(71,088)

(21,010)

Options granted, stock options outstanding (in shares)

71,088

21,010

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

$ 14.85

$ 50.65

Options exercised, stock options outstanding (in shares)

(73,227)

(160,798)

(271,902)

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

$ 12.91

$ 10.03

$ 9.99

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

76,553

51,208

81,322

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

(76,553)

(51,208)

(81,322)

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

$ 36.65

$ 24.61

$ 21.55

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

(804,949)

(1,538,128)

(562,070)

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

522,949

407,320

148,197

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

^[2]

600,000

700,000

Balances, shares available for grant (in shares)

1,085,170

761,705

1,141,305

1,494,866

Balances, stock options outstanding (in shares)

217,007

295,699

507,705

839,919

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

$ 22.35

$ 25.52

$ 20.52

$ 16.46

Exercisable, stock options outstanding (in shares)

132,641

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

$ 24.60

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

2 years 10 months 2 days

Exercisable, aggregate intrinsic value

^[1]

$ 1,470

Vested and expected to vest (in shares)

212,025

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

$ 22.31

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

3 years 7 months 17 days

Vested and expected to vest, aggregate intrinsic value

^[1]

$ 1,451,000

[1]	Based on the closing stock price of $24.11 of the Company's stock on December 31, 2020, $35.81 on December 31, 2019, $17.02 on December 31, 2018 and $45.35 on December 31, 2017.
[2]	Approved by the board of directors and stockholders in 2019 and 2020.

Note 6 - Stockholders' Equity, Stock Plans and Stock-based Compensation Expense - Options Outstanding and Exercisable Price Ranges (Details)	12 Months Ended
	Dec. 31, 2020 $ / shares shares
Range of exercise prices, lower limit (in dollars per share) \| $ / shares	$ 9.65
Range of exercise prices, upper limit (in dollars per share) \| $ / shares	$ 53.9
Options outstanding, number outstanding (in shares)	217,007
Options outstanding, weighted-average remaining contractual life (Year)	3 years 9 months
Options exercisable, number outstanding (in shares)	132,641
Exercise Price Range 1 [Member]
Range of exercise prices, lower limit (in dollars per share) \| $ / shares	$ 9.65
Range of exercise prices, upper limit (in dollars per share) \| $ / shares	$ 10.79
Options outstanding, number outstanding (in shares)	22,319
Options outstanding, weighted-average remaining contractual life (Year)	1 year 29 days
Options exercisable, number outstanding (in shares)	22,319
Exercise Price Range 2 [Member]
Range of exercise prices, lower limit (in dollars per share) \| $ / shares	$ 10.80
Range of exercise prices, upper limit (in dollars per share) \| $ / shares	$ 14.04
Options outstanding, number outstanding (in shares)	34,459
Options outstanding, weighted-average remaining contractual life (Year)	2 years 2 months 23 days
Options exercisable, number outstanding (in shares)	34,459
Exercise Price Range 3 [Member]
Options outstanding, number outstanding (in shares)	60,000
Options outstanding, weighted-average remaining contractual life (Year)	4 years 7 months 2 days
Options exercisable, number outstanding (in shares)	0
Range of exercise prices (in dollars per share) \| $ / shares	$ 14.01
Exercise Price Range 4 [Member]
Range of exercise prices, lower limit (in dollars per share) \| $ / shares	15.32
Range of exercise prices, upper limit (in dollars per share) \| $ / shares	$ 18.55
Options outstanding, number outstanding (in shares)	8,396
Options outstanding, weighted-average remaining contractual life (Year)	2 years 7 months 20 days
Options exercisable, number outstanding (in shares)	8,271
Exercise Price Range 5 [Member]
Options outstanding, number outstanding (in shares)	11,088
Options outstanding, weighted-average remaining contractual life (Year)	9 years 9 months 29 days
Options exercisable, number outstanding (in shares)	0
Range of exercise prices (in dollars per share) \| $ / shares	$ 18.93
Exercise Price Range 6 [Member]
Options outstanding, number outstanding (in shares)	10,000
Options outstanding, weighted-average remaining contractual life (Year)	3 years 3 months 25 days
Options exercisable, number outstanding (in shares)	9,375
Range of exercise prices (in dollars per share) \| $ / shares	$ 19.55
Exercise Price Range 7 [Member]
Options outstanding, number outstanding (in shares)	11,000
Options outstanding, weighted-average remaining contractual life (Year)	3 years 7 months 2 days
Options exercisable, number outstanding (in shares)	9,730
Range of exercise prices (in dollars per share) \| $ / shares	$ 25.70
Exercise Price Range 8 [Member]
Options outstanding, number outstanding (in shares)	45,000
Options outstanding, weighted-average remaining contractual life (Year)	3 years 9 months 29 days
Options exercisable, number outstanding (in shares)	37,292
Range of exercise prices (in dollars per share) \| $ / shares	$ 39.30
Exercise Price Range 9 [Member]
Options outstanding, number outstanding (in shares)	7,745
Options outstanding, weighted-average remaining contractual life (Year)	3 years 11 months 15 days
Options exercisable, number outstanding (in shares)	6,132
Range of exercise prices (in dollars per share) \| $ / shares	$ 47.40
Exercise Price Range 10 [Member]
Options outstanding, number outstanding (in shares)	7,000
Options outstanding, weighted-average remaining contractual life (Year)	4 years 2 months 12 days
Options exercisable, number outstanding (in shares)	5,063
Range of exercise prices (in dollars per share) \| $ / shares	$ 53.90

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, 2020

Dec. 31, 2019

Dec. 31, 2018

Dec. 31, 2017

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

Outstanding, aggregate intrinsic value

^[1]

$ 18,800

$ 37,442

$ 8,072

$ 23,155

Granted, number of shares (in shares)

667,694

963,814

265,124

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

$ 20.66

$ 18.68

$ 44.57

Vested, number of shares (in shares)

^[2]

(684,491)

(172,281)

(231,515)

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

^[2]

$ 17.82

$ 33.66

$ 21.10

Vested, aggregate fair value

^[2],[4]

$ 12,036

^[3]

$ 6,169

^[5]

$ 9,483

^[6]

Forfeited, number of shares (in shares)

(308,248)

(161,022)

(69,905)

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

$ 23.24

$ 37.91

$ 20.01

Outstanding, number of shares (in shares)

779,757

1,104,802

474,291

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

$ 23.96

$ 22.10

$ 38.44

[1]	Based on the closing stock price of the Company’s stock of $24.11 on December 31, 2020, $35.81 on December 31, 2019, $17.02 on December 31, 2018, and $45.35 on December 31, 2017.
[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 $12.2 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 $5.9 million.
[6]	On the grant date, the fair value for these vested awards was $4.9 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, 2020	Dec. 31, 2019	Dec. 31, 2018
Allocated share-based compensation expense	$ 10,109	$ 9,832	$ 7,157
Share-based Payment Arrangement, Option [Member]
Allocated share-based compensation expense	370	622	838
Restricted Stock Units (RSUs) [Member]
Allocated share-based compensation expense	8,849	4,786	4,648
Performance Shares [Member]
Allocated share-based compensation expense	666	3,948	1,105
ESPP [Member]
Allocated share-based compensation expense	$ 224	$ 476	$ 566

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, 2020	Dec. 31, 2019	Dec. 31, 2018
Allocated share-based compensation expense	$ 10,109	$ 9,832	$ 7,157
Cost of Sales [Member]
Allocated share-based compensation expense	1,665	1,572	743
Selling and Marketing Expense [Member]
Allocated share-based compensation expense	3,385	4,510	2,105
Research and Development Expense [Member]
Allocated share-based compensation expense	1,669	1,536	824
General and Administrative Expense [Member]
Allocated share-based compensation expense	$ 3,390	$ 2,214	$ 3,485

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, 2020

Dec. 31, 2019

Dec. 31, 2018

Share-based Payment Arrangement, Option [Member]

Expected term (in years) (Year)

^[1]

4 years 10 months 2 days

3 years 7 months 24 days

3 years 8 months 12 days

Risk-free interest rate

^[2]

0.15%

1.64%

2.60%

Volatility

^[3]

63.00%

54.00%

44.00%

Dividend yield

^[4]

0.00%

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

$ 7.63

$ 14.83

$ 18.00

Stock Purchase Plan [Member]

Expected term (in years) (Year)

^[1]

6 months

Risk-free interest rate

^[2]

0.11%

2.49%

2.34%

Volatility

^[3]

76.00%

70.00%

61.00%

Dividend yield

^[4]

0.00%

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

$ 6.13

$ 9.60

[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 ESPP participation right as of the date of grant.
[3]	Estimated volatility is based on historical volatility. The Company estimates volatility based on the Company’s historical volatility of its stock price.
[4]	The Company has not paid dividends since its inception.

Note 7 - Income Taxes (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Deferred Tax Assets, Valuation Allowance, Total	$ 38,321	$ 32,350
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount	6,000	4,500
Deferred Tax Assets, Net, Total	$ 643	$ 423
Open Tax Year	2015 2016 2017 2018 2019 2020
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued, Total	$ 0
Foreign Tax Authority [Member]
Deferred Tax Assets, Net, Total	600
Deferred Tax Liabilities, Net, Total	0
Domestic Tax Authority [Member]
Operating Loss Carryforwards, Total	76,600
Operating Loss Carryforwards Without Expiration	34,900
Domestic Tax Authority [Member] \| Internal Revenue Service (IRS) [Member] \| Research Tax Credit Carryforward [Member]
Tax Credit Carryforward, Amount	6,300
State and Local Jurisdiction [Member]
Operating Loss Carryforwards, Total	36,600
State and Local Jurisdiction [Member] \| California Franchise Tax Board [Member] \| Research Tax Credit Carryforward [Member]
Tax Credit Carryforward, Amount	7,800
State and Local Jurisdiction [Member] \| Massachusetts Department of Revenue [Member] \| Research Tax Credit Carryforward [Member]
Tax Credit Carryforward, Amount	$ 200

Note 7 - Income Taxes - Income (Loss) Before Provision for Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
U.S.									$ (25,793)	$ (13,037)	$ (14,177)
Foreign									2,386	774	662
Loss before income taxes	$ 1,450	$ (1,593)	$ (10,928)	$ (12,336)	$ (1,949)	$ (2,555)	$ 345	$ (8,105)	$ (23,407)	$ (12,263)	$ (13,515)

Note 7 - Income Taxes - Income Tax Provision (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Federal									$ 0	$ 0	$ (15)
State									(53)	101	123
Foreign									747	(76)	303
Total Current									694	25	411
Federal									2	2	15,674
State									1	1	1,230
Foreign									(227)	57	(60)
Total Deferred									(224)	60	16,844
Tax provision	$ (738)	$ 664	$ 466	$ 78	$ 139	$ 73	$ (243)	$ 115	$ 470	$ 85	$ 17,255

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Note 7 - Income Taxes - Deferred Tax Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Net operating loss carryforwards	$ 18,270	$ 14,507
Stock-based compensation	869	1,111
Other accruals and reserves	3,670	2,202
Credits	12,653	11,887
Accrued warranty	976	924
Depreciation and amortization	2,191	2,354
Other	979	897
Operating Lease Liability	4,311	3,949
Deferred tax asset before valuation allowance	43,919	37,831
Valuation allowance	(38,321)	(32,350)
Deferred tax asset after valuation allowance	5,598	5,481
Deferred contract acquisition costs	(803)	(1,076)
Goodwill	(110)	(97)
Right of Use Asset	(4,042)	(3,885)
Net deferred tax asset	$ 643	$ 423

Note 7 - Income Taxes - Reconciliation of Effective Tax Rate (Details)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
U.S. federal statutory income tax rate	21.00%	21.00%	21.00%
State tax rate	2.77%	2.82%	(4.95%)
Meals and entertainment	(0.65%)	(2.83%)	(2.66%)
Permanent differences	(2.87%)	(2.58%)	0.00%
Stock-based compensation	(1.07%)	3.78%	13.66%
SAB 118 Change in Estimate	0.00%	0.00%	(2.43%)
Foreign rate differential	(1.05%)	(0.34%)	0.11%
Other	0.15%	(0.33%)	(1.21%)
General business credit	2.74%	8.14%	4.31%
Valuation allowance	(25.51%)	(38.60%)	(155.49%)
Change in prior year reserves	0.40%	2.53%	0.00%
Deferred true-up	2.08%	5.71%	0.00%
Effective tax rate	(2.01%)	(0.70%)	(127.66%)

Note 7 - Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Unrecognized tax benefits	$ 1,426	$ 1,563	$ 1,519
Decreases related to prior year tax positions	(32)	(291)	(70)
Increases related to prior year tax positions		25
Increases related to current year tax positions	470	129	114
Unrecognized tax benefits	$ 1,864	$ 1,426	$ 1,563

Note 8 - Net Loss Per Share (Details Textual) - Convertible Senior Notes Due 2026 [Member] - Convertible Debt [Member] - Subsequent Event [Member] $ in Millions	Mar. 09, 2021 USD ($)
Debt Instrument, Face Amount	$ 125
Debt Instrument, Interest Rate, Stated Percentage	2.25%

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, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Net income (loss)	$ 2,188	$ (2,257)	$ (11,394)	$ (12,414)	$ (2,088)	$ (2,628)	$ 588	$ (8,220)	$ (23,877)	$ (12,348)	$ (30,770)
Weighted average shares of common stock outstanding used in computing net loss per share, basic and diluted (in shares)									16,691	14,096	13,771
Basic and diluted (in dollars per share)									$ (1.43)	$ (0.88)	$ (2.23)

- Definition

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, 2020	Dec. 31, 2019	Dec. 31, 2018
Antidilutive Securities (in shares)	1,123	1,265	1,272
Share-based Payment Arrangement, Option [Member]
Antidilutive Securities (in shares)	244	417	664
Restricted Stock Units (RSUs) [Member]
Antidilutive Securities (in shares)	724	559	432
ESPP [Member]
Antidilutive Securities (in shares)	87	111	133
Performance Shares [Member]
Antidilutive Securities (in shares)	68	178	43

Note 9 - Defined Contribution Plan (Details Textual) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Defined Contribution Plan, Employer Discretionary Contribution Amount	$ 0.2	$ 0.4	$ 0.4
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, 2020
Number of Operating Segments	1

Note 10 - Segment Information and Revenue by Geography and Products - Summary of Revenue (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Revenue	$ 147,683	$ 181,712	$ 162,720
Systems [Member]
Revenue	90,765	140,478	132,595
Hand Piece Refills [Member]
Revenue	9,287	9,648	4,162
Skincare [Member]
Revenue	25,061	8,512	5,778
Product [Member]
Revenue	125,113	158,638	142,535
Service [Member]
Revenue	22,570	23,074	20,185
UNITED STATES
Revenue	61,202	106,243	101,862
JAPAN
Revenue	43,265	24,142	17,819
Asia, Excluding Japan [Member]
Revenue	11,900	16,110	15,467
Europe [Member]
Revenue	9,503	10,596	8,875
Rest of World [Member]
Revenue	$ 21,813	$ 24,621	$ 18,697

Note 11 - Commitments and Contingencies (Details Textual) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2020	Dec. 31, 2019	Jan. 01, 2019
Operating Lease, Right-of-Use Asset		$ 17,076	$ 7,702	$ 10,049
Operating Lease, Liability, Total		18,210	7,912
Estimated Litigation Liability		$ 400	$ 0
Former Executive VP and CFO [Member]
Loss Contingency, Damages Paid, Value	$ 400
Stock Issued During Period, Shares, Litigation Settlement (in shares)	15,408
Accounting Standards Update 2016-02 [Member]
Operating Lease, Right-of-Use Asset				10,200
Operating Lease, Liability, Total				$ 10,100
Minimum [Member]
Lessee, Leases, Remaining Term (Year)		1 year
Maximum [Member]
Lessee, Leases, Remaining Term (Year)		10 years
Lessee, Lease, Renewal Term (Year)		5 years

Note 11 - Commitments and Contingencies - Effect of Adoption of the New Standard (Details) - USD ($)
$ in Thousands

Dec. 31, 2020

Dec. 31, 2019

Jan. 01, 2019

Dec. 31, 2018

Operating Lease, Right-of-Use Asset

$ 17,076

$ 7,702

$ 10,049

Operating lease liabilities

(2,260)

(2,800)

(2,430)

Other long-term liabilities*

242

578

^[1]

Operating lease liabilities, net of current portion

$ (15,950)

$ (5,112)

(7,759)

Accounting Standards Update 2016-02 [Member]

Operating Lease, Right-of-Use Asset

(10,049)

Operating lease liabilities

2,430

Other long-term liabilities*

^[1]

140

Operating lease liabilities, net of current portion

$ 7,759

Previous Accounting Guidance [Member]

Operating Lease, Right-of-Use Asset

$ 0

Operating lease liabilities

Other long-term liabilities*

^[1]

140

Operating lease liabilities, net of current portion

$ 0

[1]	Deferred rent included in other long-term liabilities

Note 11 - Commitments and Contingencies - Financial Statement Information (Details) - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2020

Dec. 31, 2019

Jan. 01, 2019

Operating Lease, Right-of-Use Asset

$ 17,076

$ 7,702

$ 10,049

Total leased assets

17,543

8,710

Operating lease liabilities, current

2,260

2,800

2,430

Operating lease liabilities , non-current

15,950

5,112

$ 7,759

Operating Lease, Liability, Total

18,210

7,912

Finance lease liabilities, current

370

541

Finance lease liabilities, non-current

241

578

Total finance lease liabilities

611

1,119

Finance lease cost

431

704

Finance lease cost

Operating lease cost

3,275

2,892

Operating cash flow

Financing cash flow

537

649

Operating cash flow

2,139

2,820

Operating Lease Assets [Member]

Operating Lease, Right-of-Use Asset

17,076

7,702

Operating Lease Liabilities [Member]

Operating lease liabilities, current

2,260

2,800

Property and Equipment, Net [Member]

Finance Lease, Right-of-Use Asset, after Accumulated Amortization, Total

^[1]

467

1,008

Operating Lease Liabilities, Net of Current Portion [Member]

Operating lease liabilities , non-current

$ 15,950

$ 5,112

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

Note 11 - Commitments and Contingencies - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Operating Lease, Liability, Total	$ 18,210	$ 7,912
Facility Operating Leases [Member]
2021	3,062
2022	3,112
2023	3,207
2024	2,884
2025	2,875
Thereafter	6,308
Total lease payments	21,448
Less: imputed interest	(3,238)
Operating Lease, Liability, Total	$ 18,210

Note 11 - Commitments and Contingencies - Maturities of Finance Leases Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Present value of lease liabilities	$ 611	$ 1,119
Vehicle Finance Leases [Member]
2021	374
2022	249
2023	12
Total lease payments	635
Less: imputed interest	(24)
Present value of lease liabilities	$ 611

Note 11 - Commitments and Contingencies - Lease Information (Details)	Dec. 31, 2020
Operating leases (Year)	6 years 8 months 12 days
Finance leases (Year)	2 years 2 months 12 days
Operating leases	4.70%
Finance leases	5.60%

Note 11 - Commitments and Contingencies - Sales-type Lease (Details)
$ in Thousands

Dec. 31, 2020

USD ($)

Gross future lease payments from Customers

$ 790

Less: Present value of lease receipts and purchase option price(1)

683

^[1]

Difference between undiscounted cash flows and discounted cash flows

$ 107

[1]	Present value of lease receipts and purchase option price was included in Product revenue in the Company's Consolidated Statement of Operations in the year ended December 31, 2020.

Note 11 - Commitments and Contingencies - Operating Lease Income (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($)
Operating lease income from equipment rentals	$ 367

Note 12 - Debt (Details Textual) - USD ($) $ in Thousands			12 Months Ended
Note 12 - Debt (Details Textual) - USD ($) $ in Thousands	Jul. 09, 2020	Apr. 22, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	May 30, 2018
Proceeds from Issuance of Long-term Debt, Total			$ 7,167	$ 0	$ 0
Paycheck Protection Program CARES Act [Member]
Proceeds from Issuance of Long-term Debt, Total		$ 7,100
Revolving Line of Credit [Member] \| Wells Fargo [Member]
Line of Credit Facility, Maximum Borrowing Capacity						$ 25,000
Revolving Credit Facility [Member]
Long-term Line of Credit, Total			0
Revolving Credit Facility [Member] \| Silicon Valley Bank [Member] \| Loan and Security Agreement [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 30,000
Debt Instrument, Term (Year)	4 years
Debt Instrument, Percentage of Qualifying Accounts Receivable	80.00%
Debt Instrument, Interest Rate, Stated Percentage	5.00%
Line of Credit Facility, Commitment Fee Amount	$ 300
Debt Instrument, Anniversary Fee Amount	$ 300
Debt Covenant, Quarterly Minimum Revenue			$ 90,000
Revolving Credit Facility [Member] \| Silicon Valley Bank [Member] \| Loan and Security Agreement [Member] \| Prime Rate [Member]
Debt Instrument, Basis Spread on Variable Rate	1.75%

Note 13 - Subsequent Events (Details Textual) - Subsequent Event [Member] $ in Thousands	Mar. 09, 2021 USD ($)
Capped Call Transactions Costs	$ 16,100
Convertible Senior Notes Due 2026 [Member]
Proceeds from Convertible Debt	134,100
Convertible Senior Notes Due 2026 [Member] \| Convertible Debt [Member]
Debt Instrument, Face Amount	$ 125,000
Debt Instrument, Interest Rate, Stated Percentage	2.25%
Debt Instrument, Option to Purchase Additional Principal	$ 13,250
Debt Instrument, Face Amount, Including Options to Purchase Additional Principal	$ 138,250

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, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Net revenue	$ 49,943	$ 39,132	$ 26,369	$ 32,239	$ 51,795	$ 46,117	$ 47,774	$ 36,026
Cost of revenue	21,877	17,386	14,745	17,903	23,005	19,884	21,943	18,717
Gross profit	28,066	21,746	11,624	14,336	28,790	26,233	25,831	17,309	$ 75,772	$ 98,163	$ 80,382
Sales and marketing	14,656	12,286	11,035	14,789	20,323	17,691	16,992	16,104	52,766	71,109	58,420
Research and development	4,029	3,432	2,991	3,870	4,463	3,643	3,273	3,706	14,322	15,085	14,359
General and administrative	7,938	7,239	8,529	7,806	5,933	7,308	5,267	5,525	31,512	24,033	20,995
Total operating expenses	26,623	22,957	22,555	26,465	30,719	28,642	25,532	25,335	98,600	110,227	93,774
Income (loss) from operations	1,443	(1,211)	(10,931)	(12,129)	(1,929)	(2,409)	299	(8,026)	(22,828)	(12,064)	(13,392)
Interest and other income (expense), net	7	(382)	3	(207)	(20)	(146)	46	(79)	(579)	(199)	(123)
Income (loss) before income taxes	1,450	(1,593)	(10,928)	(12,336)	(1,949)	(2,555)	345	(8,105)	(23,407)	(12,263)	(13,515)
Income tax provision (benefit)	(738)	664	466	78	139	73	(243)	115	470	85	17,255
Net income (loss)	$ 2,188	$ (2,257)	$ (11,394)	$ (12,414)	$ (2,088)	$ (2,628)	$ 588	$ (8,220)	$ (23,877)	$ (12,348)	$ (30,770)
Net income (loss) per share-basic (in dollars per share)	$ 0.12	$ (0.13)	$ (0.67)	$ (0.86)	$ (0.15)	$ (0.19)	$ 0.04	$ (0.59)
Net income (loss) per share- diluted (in dollars per share)	$ 0.12	$ (0.13)	$ (0.67)	$ (0.86)	$ (0.15)	$ (0.19)	$ 0.04	$ (0.59)
Basic (in shares)	17,653	17,603	17,055	14,433	14,261	14,182	14,086	14,017
Diluted (in shares)	17,840	17,603	17,055	14,433	14,261	14,182	14,356	14,017

Schedule II - Valuation and Qualifying Accounts - Summary of the Deferred Tax Assets Valuation Allowance and Allowance for Doubtful Accounts Receivable (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
SEC Schedule, 12-09, Valuation Allowance, Deferred Tax Asset [Member]
Balance at beginning of year	$ 32,350	$ 27,865	$ 7,242
Additions	7,986	7,396	22,770
Deductions	2,015	2,911	2,147
Balance at end of year	38,321	32,350	27,865
SEC Schedule, 12-09, Allowance, Loan and Lease Loss [Member]
Balance at beginning of year	1,354	1,257	9
Additions	2,144	1,361	1,880
Deductions	1,900	1,264	632
Balance at end of year	$ 1,598	$ 1,354	$ 1,257