|12 Months Ended|
Dec. 31, 2020
|Subsequent Events [Abstract]|
|Subsequent Events||Subsequent Events
On January 21, 2021, the Company entered into a collaborative agreement with the United States Navy to further study the impact of the RAP device on the treatment of keloid and hypertrophic scars. The Company plans to initiate this study in the first half of 2021.
Also on January 21, 2021, the Company's Board granted certain individuals options to purchase 38,750 shares of common stock with an exercise price of $9.74 per share, a contractual term of 10 years and a vesting period of 25% per year
over 4 years. Additionally, the Company's Board granted certain individuals and members of management options to purchase 372,900 shares of common stock subject to shareholder approval of the increase in the shares subject to the 2018 Stock Plan with an exercise price of $9.74 per share, a contractual term of 10 years, and vesting periods of 25% per year over 4 years. The options issued and fully approved had an aggregated grant date fair value of $0.3 million that was calculated using the Black-Scholes option pricing model. The options subject to shareholder approval had an aggregated grant date fair value of $2.7 million that was calculated using the Black-Scholes option pricing model. Variables used in the Black-Scholes option pricing model include: (1) a discount rate of 0.19% based on the daily yield curve rates for U.S. Treasury obligations, (2) expected life of 6.25 years based on the simplified method (vesting plus contractual term divided by two), (3) expected volatility of 88.90% based on the historical volatility of comparable companies' stock, (4) no expected dividends and (5) fair market value of the Company's stock of $9.74 per share. The options subject to shareholder approval will be valued using the Black-Scholes option pricing model upon shareholder approval.
On January 29, 2021, the FDA provided a 510(k) clearance for the Company's RAP device for temporary improvement in the appearance of cellulite.
On March 1, 2021, the Company entered into amendments to its amended and restated employment agreements dated February 25, 2019 with Lori Bisson, our chief financial officer, and Joe Tanner, our chief operating officer, pursuant to which the Company agreed to amend the severance period set forth in the employment agreements to 12 months from 9 months, and pursuant to which such officers agreed to extend the length of their non-solicitation and non-competition periods after termination from 9 months to 12 months.
On March 1, 2021, the Company adopted an executive severance plan (the “Severance Plan”) for each of the Company's executives with the title of vice president or above that do not have an employment agreement that provides severance benefits. Under the Severance Plan, if the Company terminates an executive other than for cause or good reason, each as defined in the Severance Plan, the executive will receive certain severance benefits for 6 months. As a condition to receiving these severance benefits, the executive is required to execute a release of claims agreement in favor of the Company. Although the Company has the right to amend or terminate the Severance Plan, the Company may not do so in any manner that diminishes any benefits being paid to an executive at the time of such amendment or termination.
The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef