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Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2018	Apr. 30, 2018
Document And Entity Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q1
Entity Registrant Name	ReShape Lifesciences Inc.
Entity Central Index Key	0001371217
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		33,583,781

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 841,643	$ 10,163,208
Accounts receivable (net of allowance for bad debts of $155,872 at March 31, 2018 and December 31, 2017)	962,357	488,613
Inventory	2,795,332	2,817,112
Prepaid expenses and other current assets	723,074	467,783
Total current assets	5,322,406	13,936,716
Property and equipment, net	349,277	438,621
Goodwill	27,186,620	27,186,620
Other intangible assets, net	45,477,404	46,152,577
Other assets	232,193	990,015
Total assets	78,567,900	88,704,549
Current liabilities:
Accounts payable	2,917,798	1,088,271
Accrued expenses	5,865,623	5,955,518
Total current liabilities	8,783,421	7,043,789
Deferred income taxes	3,910,238	5,292,291
Common stock warrant liability	443	1,600
Total liabilities	12,694,102	12,337,680
Commitments and contingencies (Note 7)
Stockholders' equity:
Common stock, $0.01 par value; 275,000,000 shares authorized at March 31, 2018 and December 31, 2017; 30,957,113 shares issued and outstanding at March 31, 2018 and December 31, 2017	309,571	309,571
Additional paid-in capital	411,556,015	410,815,637
Accumulated deficit	(345,992,803)	(334,759,354)
Total stockholders' equity	65,873,798	76,366,869
Total liabilities and stockholders' equity	78,567,900	88,704,549
Series B convertible preferred stock
Stockholders' equity:
Preferred stock, 5,000,000 shares authorized:	61	61
Series C convertible preferred stock
Stockholders' equity:
Preferred stock, 5,000,000 shares authorized:	$ 954	$ 954

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Net of allowance for bad debts	$ 155,872	$ 155,872
Preferred stock, authorized	5,000,000	5,000,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	275,000,000	275,000,000
Common stock, shares issued	30,957,113	30,957,113
Common stock, shares outstanding	30,957,113	30,957,113
Series B convertible preferred stock
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, issued	20,000	20,000
Preferred stock, outstanding	6,055	0
Series C convertible preferred stock
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, issued	187,772	187,772
Preferred stock, outstanding	95,388	95,388

Condensed Consolidated Statements of Operations - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Total revenue	$ 949,998	$ 40,040
Cost of Revenue	828,958	29,523
Gross profit	121,040	10,517
Operating expenses:
Selling, general and administrative	10,046,694	5,928,986
Research and development	2,687,535	1,124,413
Total operating expenses	12,734,229	7,053,399
Operating loss	(12,613,189)	(7,042,882)
Other income (expense):
Interest income	411	100
Interest expense	(1,823)
Change in value of warrant liability	1,157	(323,130)
Other, net	(2,058)	(900)
Income (loss) before income taxes	(12,615,502)	(7,366,812)
Income tax benefit	1,382,053
Net loss	$ (11,233,449)	$ (7,366,812)
Net loss per share-basic and diluted	$ (0.36)	$ (1.27)
Shares used to compute basic and diluted net loss per share	30,957,113	5,788,282
Product
Total revenue	$ 941,431	$ 40,040
Other
Total revenue	$ 8,567

Condensed Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Cash flows from operating activities:
Net loss	$ (11,233,449)	$ (7,366,812)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	89,344	29,122
Deferred income taxes	(1,382,053)
Stock-based compensation	740,378	2,246,400
Amortization of intangible assets	675,173
Change in value of warrant liability	(1,157)	323,130
Change in operating assets and liabilities:
Accounts receivable	(473,744)	75,539
Inventory	21,780	86,650
Prepaid expenses and other current assets	(255,291)	74,867
Other assets	757,813	435,063
Accounts payable	1,829,527	(778,109)
Accrued expenses	(89,886)	432,492
Net cash used in operating activities	(9,321,565)	(4,441,658)
Cash flows from financing activities:
Proceeds from warrants exercised		3,318,013
Proceeds from sale of common stock and warrants for purchase of common stock		6,468,148
Proceeds from sale of convertible preferred stock		12,531,000
Common stock financing costs		(2,505,244)
Net cash provided by financing activities		19,811,917
Net increase in cash and cash equivalents	(9,321,565)	15,370,259
Cash and cash equivalents:
Beginning of period	10,163,208	10,163,208
End of period	$ 841,643	$ 18,681,046
Noncash investing and financing activities:
Conversion of convertible preferred shares to common stock		12,531,000

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2018

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

(1) Summary of Significant Accounting Policies

Description of Business

ReShape Lifesciences Inc. (the Company) is focused on the design, development and commercialization of transformative technology to treat obesity and metabolic diseases. The Company was incorporated in the state of Minnesota on December 19, 2002, originally as two separate legal entities, Alpha Medical, Inc. and Beta Medical, Inc., both of which were owned 100% by a common stockholder. Effective October 1, 2003, the two entities were combined and the combined entity changed its name to EnteroMedics Inc. The Company reincorporated in Delaware on July 22, 2004. The Company has devoted substantially all of its resources to recruiting personnel, developing its product technology, obtaining patents to protect its intellectual property, commercialization activities and raising capital and has recently commenced commercial operations in the United States deriving revenues from its primary business activity in 2015 with the vBloc System (ReShape vBloc). On May 22, 2017, the Company acquired BarioSurg, Inc. (BarioSurg), a company developing the Gastric Vest System (ReShape Vest) and on October 2, 2017 it acquired ReShape Medical, Inc. (ReShape Medical), a company that develops, manufactures and markets a minimally invasive intragastric balloon (ReShape Balloon) designed to treat certain obesity patients. ReShape Medical LLC became a wholly-owned subsidiary of the Company on October 2, 2017 and its balance sheet and statement operations for the period October 2, 2017 through December 31, 2017 are included with the Company's 2017 consolidated financial statements. Subsequent to the acquisition of ReShape Medical, the Company relocated its headquarters from St. Paul, Minnesota to San Clemente, California.

Risks and Uncertainties

The Company is focused on the design, development and commercialization of transformative technology to treat obesity and metabolic diseases and its growing and differentiated product portfolio is utilized by bariatric surgeons, general surgeons, and gastroenterologists. We believe obesity is a global epidemic and that the majority of patients need treatment options that are anatomy friendly and provide for weight loss and comorbidity improvements along with long-term, ongoing obesity support and prevention.

We have a limited operating history and the Company's products require approval from the U.S. Food and Drug Administration (FDA) or corresponding foreign regulatory agencies prior to commercial sales. On January 14, 2015, the vBloc® System, our initial product, which we now refer to as ReShape vBloc, received U.S. Food and Drug Administration (FDA) approval for vBloc Therapy, delivered via the ReShape vBloc. vBloc Therapy is delivered via a pacemaker-like device that helps patients feel full and eat less by intermittently blocking hunger signals on the vagus nerve. Our therapy limits the expansion of the stomach, helps control hunger sensations between meals, reduces the frequency and intensity of stomach contractions and produces a feeling of early and prolonged fullness.

On May 22, 2017 the Company acquired the Gastric Vest System (ReShape Vest) through the acquisition of BarioSurg, Inc. The ReShape Vest is an investigational, minimally invasive, laparoscopically implanted medical device being studied for weight loss in obese and morbidly obese patients. The ReShape Vest wraps around the stomach after it has been rearranged into a banana-like shape using sutures, emulating the effect of conventional weight-loss surgery, and is intended to enable gastric volume reduction without permanently changing patient anatomy.

On October 2, 2017 the Company acquired ReShape Medical, a privately-held medical technology company that develops, manufactures and markets the ReShape® Dual Weight Loss Balloon (the ReShape Balloon), an FDA-approved, minimally invasive intragastric balloon designed to treat obesity patients with a body mass index (BMI) between 30 and 40, with one or more related comorbid conditions. The acquisition of and results of operations for ReShape Medical beginning October 2, 2017 are included in these condensed consolidated financial statements.

The medical device industry is characterized by frequent and extensive litigation and administrative proceedings over patent and other intellectual property rights. Whether a product infringes a patent involves complex legal and factual issues, the determination of which is often difficult to predict, and the outcome may be uncertain until the court has entered final judgment and all appeals are exhausted. The Company’s competitors may assert that its products or the use of the Company’s products are covered by U.S. or foreign patents held by them.

The Company’s activities are subject to significant risks and uncertainties, including the ability to obtain additional financing, and there can be no assurance that the Company will be successful in obtaining additional financing on favorable terms, or at all. If adequate funds are not available, the Company may have to further reduce its cost structure until financing is obtained and/or delay development or commercialization of products or license to third parties the rights to commercialize products or technologies that the Company would otherwise seek to commercialize.

Basis of Presentation

The Company has prepared the accompanying condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. The Company’s fiscal year ends on December 31.

The accompanying condensed consolidated financial statements and notes thereto are unaudited. In the opinion of the Company’s management, these statements include all adjustments, which are of a normal recurring nature, necessary to present a fair presentation. Interim results are not necessarily indicative of results for a full year. The condensed consolidated balance sheet as of December 31, 2017 was derived from audited consolidated financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. The information included in this Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All intercompany transactions and accounts have been eliminated in consolidation.

Fair Value of Financial Instruments

Carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued liabilities approximate fair value due to their short maturities. Certain of the Company’s common stock warrants are required to be reported at fair value. The fair values of common stock warrants and investments in debt and equity securities, if any, are disclosed in Note 4 – Goodwill and Other Intangible Assets.

Common Stock Warrant Liability

Common stock warrants that were issued in connection with the July 8, 2015 public offering (the Series A Warrants) are classified as a liability in the condensed consolidated balance sheets. The fair value of these common stock warrants is re-measured at each financial reporting period and immediately before exercise, with any changes in fair value being recognized as a component of other income (expense) in the condensed consolidated statements of operations.

Cash and Cash Equivalents

The Company considers highly liquid investments generally with maturities of 90 days or less when purchased to be cash equivalents. Cash equivalents are stated at cost, which approximates market value. The Company’s cash equivalents are primarily in money market funds and certificates of deposit. The Company deposits its cash and cash equivalents in high-quality credit institutions.

Inventory

The Company accounts for inventory at the lower of cost or market and records any long-term inventory as other assets in the condensed consolidated balance sheets. The Company establishes inventory reserves for obsolescence based upon projected sales and for defect based upon specific identification of defective or unsalable units.

Property and Equipment, Net

Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation of property and equipment is computed using the straight-line method over their estimated useful lives of five to seven years for furniture and equipment and three to five years for computer hardware and software. Leasehold improvements are amortized on a straight-line basis over the lesser of their useful life or the term of the lease. Upon retirement or sale, the cost and related accumulated depreciation or amortization are removed from the condensed consolidated balance sheets and the resulting gain or loss is reflected in the condensed consolidated statements of operations. Repairs and maintenance are expensed as incurred.

Impairment of Long-Lived Assets, Intangible Assets and Goodwill

The Company evaluates its long-lived assets, including its finite-lived intangible assets, for impairment by comparison of the carrying amounts to future net undiscounted cash flows expected to be generated by such assets when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Should an impairment exist, the impairment loss would be measured based on the excess carrying value of the asset over the asset's fair value or estimates of future discounted cash flows.

For goodwill and indefinite-lived intangible assets, in-process research and development, the Company reviews for impairment annually and upon the occurrence of certain events as required by Accounting Standards Codification ("ASC") Topic 350, "Intangibles - Goodwill and Other." Goodwill and indefinite-lived intangible assets are tested at least annually for impairment and more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company reviews goodwill for impairment by first assessing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. If the Company is able to determine that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company would conclude that goodwill is not impaired. If the carrying amount of a reporting unit is zero or negative, the second step of the impairment test is performed to measure the amount of impairment loss, if any, when it is more likely than not that a goodwill impairment exists. The Company did not record any losses for impairment during the quarter year ended March 31, 2018. See Note 13 for additional information.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance for deferred income tax assets is recorded when it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The Company has provided a full valuation allowance against the net deferred tax assets, excluding indefinite-lived deferred tax assets and liabilities, as of March 31, 2018 and December 31, 2017. The Company’s policy is to classify interest and penalties related to income taxes as income tax expense in the condensed consolidated statements of operations.

Medical Device Excise Tax

The Company is required to pay a quarterly Medical Device Tax which is a part of the Affordable Care Act, which imposes a 2.3% excise tax on the sale of certain medical devices, including ReShape vBloc and the ReShape Balloon, by device manufacturers, producers or importers (The Medical Device Tax). The excise tax was effective on sales of devices made after December 31, 2012. The Company records the Medical Device Tax as an operating expense in the condensed consolidated statements of operations, which totaled $1,363 for 2015. A moratorium was placed on the Medical Device Tax for 2016 and 2017, and consequently, the Company was not required to pay the Medical Device Tax in 2016 and 2017. In January 2018, the moratorium was extended to 2018 and 2019.

Comprehensive Loss

Comprehensive loss is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding transactions resulting from investment owners and distributions to owners. There was no difference from reported net loss for the three months ended March 31, 2018 and 2017.

Research and Development Expenses

Research and development expenses are charged to expense as incurred. Research and development expenses include, but are not limited to, product development, clinical trial expenses, including supplies, devices, explants and revisions, quality assurance, regulatory expenses, payroll and other personnel expenses, materials and consulting costs.

Patent Costs

Costs associated with the submission of a patent application are expensed as incurred given the uncertainty of the patents resulting in probable future economic benefits to the Company.

Stock-Based Compensation

The fair value method is applied to all share-based payment awards issued to employees and where appropriate, nonemployees, unless another source of literature applies. All option grants are expensed on a straight-line basis over the vesting period.

Net Loss Per Share

Basic net loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is based on the weighted-average common shares outstanding during the period plus dilutive potential common shares calculated using the treasury stock method. Such potentially dilutive shares are excluded when the effect would be to reduce a net loss per share. The Company’s potential dilutive shares, which include outstanding common stock options and warrants, have not been included in the computation of diluted net loss per share for all periods as the result would be anti-dilutive.

The following table sets forth the computation of basic and diluted net loss per share for the three months ended March 31, 2018 and 2017:


	Three Months Ended
	March 31,
	2018		2017
Numerator:
Net loss	$	(11,233,449)	$	(7,366,812)
Denominator for basic and diluted net loss per share:
Weighted-average common shares outstanding		30,957,113		5,788,282
Net loss per share—basic and diluted	$	(0.36)	$	(1.27)

The following table sets forth the potential shares of common stock that are not included in the calculation of diluted net loss per share because to do so would be anti-dilutive as of the end of each period presented:


	March 31,
	2018	2017
Stock options outstanding	3,431,600	19,840
Common shares underlying convertible preferred stock	12,172,725	—
Warrants to purchase common stock	14,303,715	55,044

Segment Reporting

Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker ("CODM") in deciding how to allocate resources and in assessing performance. Our CODM is the Chief Executive Officer.

Under the provisions of ASC 280, Segment Reporting, we have determined that we have one operating segment related to the design, development and commercialization of transformative technology to treat obesity and metabolic diseases. The CODM evaluates operating performance and allocates resources on a total portfolio basis.

Recently Issued or Adopted Accounting Standards

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The standard’s core principle is that an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted the standard on January 1, 2018 using the modified retrospective method applied to those contracts which were not completed as of December 31, 2017. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior-period amounts have not been retrospectively adjusted and continue to be reported in accordance with Topic 605, Revenue Recognition. Based upon the Company’s contracts which were not completed as of December 31, 2017, the Company was not required to make an adjustment to the opening balance of retained earnings as of January 1, 2018. See Note 8 for further discussion.

In February 2016 FASB issued Accounting Standards Update No. 2016-02 Leases (Topic 842) that changes the recognition of lease assets and lease liabilities by lessees for those leases classified as operating lease. The amendments in this Update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years for a public business entity. Early adoption is permitted. Management is evaluating the standard's impact on the consolidated financial statements.

In January 2017 FASB issued Accounting Standards Update No. 2017-04 Intangibles-Goodwill and Other (Topic 350) Simplifying the Test for Goodwill Impairment. Under the amendments in this update an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The amendments in this Update are required for public business entities in fiscal years beginning after December 15, 2019. The adoption of this standard is not expected to have a material impact to the Company's consolidated financial statements.

In March 2018, FASB issued ASU 2018-05, Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118. The ASU updates the income tax accounting in U.S. GAAP to reflect the SEC interpretive guidance released on December 22, 2017, when the legislation referred to as the Tax Cuts and Jobs Act (the "2017 Tax Act") was signed into law. We have adopted this ASU, as further discussed in Note 12 – Income Taxes.

There have been no other significant changes in recent accounting pronouncements during the three months ended March 31, 2018 as compared to the recent accounting pronouncements described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

Liquidity and Management's Plans	3 Months Ended
Liquidity and Management's Plans	Mar. 31, 2018
Liquidity and Management's Plans
Liquidity and Management's Plans	(2) Liquidity and Management’s Plans The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company currently is not generating revenue from operations that is significant relative to its level of operating expenses, and does not anticipate generating revenue sufficient to offset operating costs in the short-term to mid-term. The Company has financed its operations to date principally through the sale of equity securities, debt financing and interest earned on investments. The Company’s history of operating losses, limited cash resources and lack of certainty regarding obtaining significant third-party reimbursement for the vBloc System or timing thereof, raise substantial doubt about our ability to continue as a going concern absent a strengthening of our cash position. On January 23, 2017, the Company closed an underwritten public offering consisting of units of common stock, convertible preferred stock and warrants to purchase common stock. Gross proceeds of the offering were $19.0 million, prior to deducting underwriting discounts and commissions and offering expenses of $2.5 million. During 2017, common stock warrants for 559,670 shares of common stock were exercised by warrant holders with proceeds to the Company of $3.3 million. On August 16, 2017, the Company closed an underwritten public offering consisting of units of Series B Convertible Preferred Stock and warrants to purchase common stock. Gross proceeds of the offering were $20.0 million, prior to deducting underwriting discounts and commissions and offering expenses of approximately $2.0 million. As of March 31, 2018, the Company had $842,000 of cash and cash equivalents to fund its operations. This cash balance was supplemented with approximately $5.1 million raised from a registered direct offering of securities that closed on April 3, 2018 (see Note 13 – Subsequent Events). The Company’s anticipated operations include plans to (i) integrate the sales and operations of the Company with the newly acquired ReShape Medical in order to expand sales of both the ReShape Balloon and vBloc as well as to obtain cost savings synergies, (ii) expand the controlled commercial launch of vBloc Therapy, delivered via the vBloc System, (iii) continue development of the ReShape Vest, (vi) seek opportunities to leverage the Company’s intellectual property portfolio and custom development services to provide third party sales and licensing opportunities, and (v) explore and capitalize on synergistic opportunities to expand our portfolio and offer future minimally invasive treatments and therapies in the obesity continuum of care. The Company believes that it has the flexibility to manage the growth of its expenditures and operations depending on the amount of available cash flows, which could include reducing expenditures for marketing, clinical and product development activities. However, the Company will ultimately need to achieve sufficient revenues from product sales and obtain additional debt or equity financing to support its operations. Management is currently pursuing various funding options, including seeking additional equity financing as well as a strategic merger or other transaction to obtain additional funding or expand its product line to continue the development of, and to successfully commercialize, the ReShape Balloon, the ReShape vBloc and the ReShape Vest. While the October 2017 acquisition of ReShape Medical does provide incremental revenues to the Company, the cost to further develop and commercialize the ReShape Balloon is expected to significantly exceed revenues for the foreseeable future. While there can be no assurance that the Company will be successful in its efforts, the Company has a long history of raising equity financing to fund its development activities. Should the Company be unable to obtain adequate financing in the near term, the Company’s business, result of operations, liquidity and financial condition would be materially and negatively affected, and the Company would be unable to continue as a going concern. Additionally, there can be no assurance that, assuming the Company is able to strengthen its cash position, it will achieve sufficient revenue or profitable operations to continue as a going concern.

Acquisitions

3 Months Ended

Mar. 31, 2018

Acquisitions

Acquisitions

(3) Acquisitions

BarioSurg, Inc.

On May 22, 2017, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") to acquire all of the ownership interests of BarioSurg, Inc. ("BarioSurg"), a company developing the Gastric Vest System (which we now refer to as the “ReShape Vest”), an investigational, minimally invasive, laparoscopically implanted medical device being studied for weight loss in obese and morbidly obese patients.

The consideration paid by the Company for all of the outstanding shares of capital stock and outstanding options of BarioSurg consisted of: (i) 1.38 million shares of common stock, par value $0.01 per share, of the Company ("Company Common Stock"), (ii) 1.0 million shares of newly created conditional convertible preferred stock, par value $0.01 per share, of the Company ("Company Preferred Stock"), which shares were converted into 5.0 million shares of Company Common Stock on October 25, 2017 upon the post-closing approval of the Company's stockholders in accordance with the NASDAQ Stock Market Rules, and (iii) $2.0 million in cash. The total consideration paid by the Company, preliminarily valued at $28.3 million, includes: (a) $2.0 million in cash paid from our existing cash balances and (b) $26.3 million from the issuance of Company Common Stock and Company Preferred Stock. The preliminary valuation of the Company Common Stock and Company Preferred Stock took into account (i) the conversion ratio of the Company Preferred Stock, (ii) the closing prices of our common stock on the NASDAQ Stock Market on the date the transaction was announced and the three trading days following the announcement, and (iii) a 19% discount for lack of marketability related to the shares issued in the transaction.

The purchase price consideration of $28.3 million does not include expenses for legal, accounting, audit, valuation and other services that were incurred after the May 22, 2017 acquisition date and were expensed as incurred.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as a result of the BarioSurg acquisition. The excess of the cost of the acquisition over the fair value of assets acquired was recorded as goodwill. The assessment of fair value and the determination of deferred tax assets acquired is preliminary and is based on information that was available at the time the consolidated condensed financial statements were prepared. Accordingly, the allocation of purchase price to intangible assets and to deferred tax assets and liabilities to the acquired intangible assets is preliminary and, therefore, subject to adjustment in future periods.


Cash	$	151,280
Property and equipment		3,000
Goodwill		14,004,573
In Process Research & Development		20,720,939
Trademarks/tradenames		1,090,363
Covenant not to compete		75,884
Other assets		5,826
Current liabilities assumed		(186,000)
Deferred income tax liability		(7,606,902)
Net assets acquired	$	28,258,963

We believe that the amount of goodwill relative to identifiable intangible assets relates to several factors including (i) potential synergies related to market opportunities for multiple product offerings, (ii) future technology, and (iii) initial relationships and awareness of the ReShape Vest.

In-process research and development (“IPR&D”) consists of the ReShape Vest, which has not yet been clinically tested in the United States and has not yet been approved by the FDA. Acquired IPR&D assets are initially recognized at fair value and are classified as indefinite-lived assets until the successful completion or abandonment of the associated research and development efforts. The value assigned to IPR&D was determined by estimating the net cash flows from the ReShape Vest development project and discounting the net cash flows to their present value. During the development period, this asset will not be amortized as charges to earnings; instead, this asset will be subject to periodic impairment testing. Upon successful completion of the development process for the acquired IPR&D, the asset would then be considered a finite-lived intangible asset and amortization will commence. Trademarks/tradenames were valued using the relief from royalty method and are being amortized over a 10-year period. The covenant not to compete is being amortized over a three-year period. The values of these intangible assets are considered Level 3 measurements.

ReShape Medical, Inc.

On October 2, 2017 the Company acquired ReShape Medical, Inc., a privately-held medical technology company that develops, manufactures and markets the ReShape® Dual Weight Loss Balloon, an FDA and CE marked approved, minimally invasive intragastric balloon designed to treat obesity patients with a body mass index (BMI) between 30 and 40, with one or more related comorbid conditions.

The consideration paid by the Company for ReShape Medical consisted of: (i) 2,356,729 shares of Company Common Stock, par value $0.01 per share, (ii) 187,772 shares of series C convertible preferred stock (which became convertible into 18,777,200 shares of common stock upon the December 19, 2017 approval of the Company's stockholders under NASDAQ rules, of which 8.3 million shares of common stock were automatically converted on that date), and (iii) approximately $5.0 million in cash, which amount was immediately used to pay ReShape Medical's outstanding senior secured indebtedness and certain transaction expenses of ReShape Medical.

The total consideration paid by the Company, preliminarily valued at $39.0 million, includes: (a) $5.0 million in cash paid from our existing cash balances and (b) $34.0 million from the issuance of the common stock and the series C convertible preferred stock. The preliminary valuation of the common stock and series C preferred stock took into account (i) the conversion ratio of the series C convertible preferred stock, (ii) the closing price of our common stock on the NASDAQ Stock Market on the date the transaction was announced, and (iii) a 20% discount for lack of marketability related to the shares issued in the transaction.

The purchase price consideration of $39.0 million does not include expenses for legal, accounting, audit, valuation and other services that were incurred after the October 2, 2017 acquisition date and were expensed as incurred.

The transaction was accounted for as a business combination and the following table summarizes the estimated fair values of the assets acquired and liabilities assumed as a result of the ReShape Medical acquisition. The excess of the cost of the acquisition over the fair value of assets acquired was recorded as goodwill. The assessment of fair value and the determination of deferred tax assets acquired is preliminary and is based on information that was available at the time the consolidated condensed financial statements were prepared. Accordingly, the allocation of purchase price to intangible assets and to deferred tax assets and liabilities to the acquired intangible assets is preliminary and, therefore, subject to adjustment in future periods.


Cash	$	617,229
Accounts receivable		385,690
Inventory		1,095,975
Prepaid expenses and other current assets		173,743
Property and equipment		303,291
Goodwill		13,182,047
Developed technology		18,451,360
Trademarks/tradenames		2,780,448
Customer relationships		3,753,533
Other assets		77,058
Current liabilities assumed		(1,837,941)
Net assets acquired	$	38,982,433

Developed technology consists of the ReShape® Dual Weight Loss Balloon (the ReShape Balloon), an FDA-approved, minimally invasive intragastric balloon designed to treat obesity patients with a body mass index (BMI) between 30 and 40, with one or more related comorbid conditions. The acquired developed technology assets are valued by estimating cash flows using an income approach and they are amortized over a 12-year period, consistent with the remaining lives of the technology's key patents. Trademarks/tradenames are valued using the relief from royalty method and are being amortized over a 10-year period. Customer relationships are valued using the with-and-without method under the income approach and are being amortized over 5 years. The values of these intangible assets are considered Level 3 measurements.

Goodwill and Other Intangible Assets

3 Months Ended

Mar. 31, 2018

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

(4) Goodwill and Other Intangible Assets

Allocations of purchase prices related to the acquisitions of BarioSurg and ReShape Medical during the year ended December 31, 2017 resulted in the recording of $27.2 million of goodwill and $46.9 million of other intangible assets as discussed in Note 4 – Goodwill and Other Intangible Assets.

The following table summarizes the activity of intangible assets, excluding goodwill, for the quarter ended March 31, 2018:


	Useful Life (years)	Gross Carrying Amount		Accumulated Amortization		Impairment		Net Book Value
In Process Research & Development	indefinite	$	20,720,939	$	—	$	—	$	20,720,939
Trademarks/Tradenames	10		3,870,811		(229,885)		—		3,640,926
Covenant not to compete	3		75,884		(21,079)		—		54,805
Developed technology	12		18,451,360		(768,806)		—		17,682,554
Customer relationships	5		3,753,533		(375,353)		—		3,378,180
Total		$	46,872,527	$	(1,395,123)	$	—	$	45,477,404

The following table summarizes the expected future amortization of intangible assets as of March 31, 2018:


Year ending December 31,
2018 (remaining)	$	2,025,523
2019		2,700,696
2020		2,685,940
2021		2,675,401
2022		2,487,722
Thereafter		12,181,183
	$	24,756,465

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Fair Value Measurements

3 Months Ended

Mar. 31, 2018

Fair Value Measurements

Fair Value Measurements

(5) Fair Value Measurements

Fair value of financial assets and liabilities is defined as the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy has been established that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2—Quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active or model-derived valuations for which all significant inputs are observable, either directly or indirectly.

Level 3—Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable.

The Company’s assets that are measured at fair value on a recurring basis are classified within Level 1 or Level 2 of the fair value hierarchy. The Company does not hold any recurring assets that are measured at fair value using Level 3 inputs.

The Company did not hold any short-term investments classified as available for sale or held to maturity as of March 31, 2018 and December 31, 2017.

The fair value of the Company’s common stock warrant liability is calculated using a Black-Scholes valuation model and is classified as Level 2 in the fair value hierarchy. The fair values are presented below along with the valuation assumptions:


		Series A Warrants
	March 31, 2018			December 31, 2017
Risk-free interest rates		2.09	%		1.76	%
Expected life		9	months		12	months
Expected dividends		—	%		—	%
Expected volatility		87.27	%		193.28	%
Fair value	$	443		$	1,600

Inventory

3 Months Ended

Mar. 31, 2018

Inventory

Inventory

(6) Inventory

The Company accounts for inventory at the lower of cost or market and records any long-term inventory as other assets in the condensed consolidated balance sheets. There was $1.0 million and $676,000 of long-term inventory, primarily consisting of raw materials, as of March 31, 2018 and December 31, 2017, respectively. The Company recorded an inventory reserve of $1.0 million at March 31, 2018 related to excess quantities of ReShape vBloc inventory components, resulting in a zero net book value in long-term inventory as of that date.

Current inventory consists of the following as of:


	March 31,		December 31,
	2018		2017
Raw materials	$	1,082,193	$	707,919
Work-in-process		1,179,733		1,494,278
Finished goods		533,406		614,915
Inventory	$	2,795,332	$	2,817,112

Commitments and Contingencies

3 Months Ended

Mar. 31, 2018

Commitments and Contingencies

Commitments and Contingencies

(7) Commitments and Contingencies

Operating Leases

The Company rents office, warehouse and laboratory facilities in St. Paul, Minnesota, under an operating lease, which was originally set to expire on September 30, 2015. On August 25, 2015, the Company entered into an amendment extending the term of the operating lease for three years until September 30, 2018, with monthly base rent ranging from $18,925 to $20,345.

With the acquisition of BarioSurg, the Company also leases space in Lake Forest, California under an operating lease with monthly base rent of approximately $2,200 per month through September 30, 2018.

With the October 2, 2017 acquisition of ReShape Medical, the Company leases separate office and manufacturing/warehouse space in San Clemente, California. The operating lease for office space has a term that runs through June 30, 2022 with base rent of approximately $24,600 per month and with annual rent escalations of approximately 3%. The operating lease for manufacturing/warehouse space has a term that runs through October 31, 2019 with base rent of approximately $10,900 per month.

Total rent expense recognized for each of the three month periods ended March 31, 2018 and 2017 was $174,000 and $59,000. At March 31, 2018, future minimum payments for the Company are as follows:


Year ending December 31,
2018 (remaining)	$	574,790
2019		419,082
2020		319,262
2021		327,949
2022		165,061
	$	1,806,144

Clinical Trials

The Company continues to evaluate the vBloc System in human clinical trials, including the EMPOWER trial and ReCharge trial. Both of these clinical trials require patients to be followed out to 60 months. The Company is required to pay for patient follow up visits only to the extent they occur. In the event a patient does not attend a follow up visit, the Company has no financial obligation. The Company is also required to pay for explants or revisions, including potential conversions of ReCharge control devices to active devices, should a patient request or be required to have one during the course of the clinical trials. The Company has no financial obligation unless an explant, revision or conversion is requested or required. Clinical trial costs are expensed as incurred.

Product Liability Claims

The Company is exposed to product liability claims that are inherent in the testing, production, marketing and sale of medical devices. Management believes any losses that may occur from these matters are adequately covered by insurance, and the ultimate outcome of these matters will not have a material effect on the Company’s financial position or results of operations. The Company is not currently a party to any product liability litigation and is not aware of any pending or threatened product liability litigation that could have a material adverse effect on the Company’s business, operating results or financial condition.

Litigation

On February 28, 2017, the Company received a class action and derivative complaint filed on February 24, 2017 in U. S. District Court for the District of Delaware by Vinh Du, one of the Company’s shareholders. The complaint names as defendants ReShape Lifesciences, the board of directors and four members of our senior management, namely, Scott Youngstrom, Nick Ansari, Peter DeLange and Paul Hickey, and contains a purported class action claim for breach of fiduciary duty against the board of directors and derivative claims for breach of fiduciary duty against the board of directors and unjust enrichment against our senior management. The allegations in the complaint relate to the increase in the number of shares authorized for grant under our Second Amended and Restated 2003 Stock Incentive Plan (the “Plan”), which was approved by our shareholders at the Special Meeting of Shareholders held on December 12, 2016 (the “Special Meeting”), and to our subsequent grant of stock options on February 8, 2017, to the Company’s Directors and senior management to purchase an aggregate of 1,093,450 shares of our common stock (the “Option Grants”). In the complaint, the plaintiff contends that (i) the number of shares authorized for grant under the Plan, as adjusted by the board of directors after the Special Meeting for the subsequent recapitalization of the Company, resulted from an alleged breach of fiduciary duties by the board of directors, and (ii) our senior management was allegedly unjustly enriched by the subsequent Option Grants. The plaintiff seeks relief in the form of an order rescinding the Plan as approved by the shareholders at the Special Meeting, an order cancelling the Option Grants, and an award to plaintiff for his costs, including fees and disbursements of attorneys, experts and accountants. On April 17, 2017, we filed a motion to dismiss the complaint based on the plaintiff’s failure to satisfy Delaware’s demand requirement for a derivative action and failure to state a valid claim. The court denied the motion to dismiss on November 30, 2017. While the Company continues to believe that the allegations in the complaint are without merit, the parties are currently negotiating the terms of a settlement of this matter. However, we are currently unable to estimate a loss or range of loss for this matter.

On April 20, 2017, Fulfillium, Inc. filed a Complaint against ReShape Medical, Inc. (which the Company acquired in October 2017 and is now a wholly-owned subsidiary of the Company) in the United States District Court for the District of Delaware, which alleged misappropriation of trade secrets and infringement of two United States Patents. On July 28, 2017, ReShape Medical moved to dismiss both the misappropriation of trade secret claim and the claims of patent infringement, and to transfer the litigation to the United States District Court for the Central District of California. On October 16, 2017, the Court granted ReShape Medical’s motion to dismiss the trade secret and willful infringement claims, and ordered the case transferred to the United States District Court for the Central District of California. Fulfillium has since amended its Complaint, ReShape Medical has filed its Answer and Counterclaims to the Amended Complaint, including counterclaims for declarations of non-infringement, invalidity, unenforceability and/or co-inventorship of the asserted Fulfillium patents and state-law tort claims against Fulfillium and its founder personally, and the parties have filed additional motions with the Court. The Court has assigned key dates for the litigation, including close of fact discovery on September 15, 2018, last day for filing motions on September 19, 2018, pretrial conference on November 19, 2018 and first day of trial on December 4, 2018. On April 20, 2018, ReShape Medical filed Inter Partes Review (“IPR”) petitions with the Patent Trial and Appeal Board of the U.S. Patent and Trademark Office to have all claims of both of the currently asserted Fulfillium patents canceled as unpatentable over various combinations of prior art. On April 24, 2018, as required under the applicable local rules, ReShape Medical informed Fulfillium of ReShape Medical’s forthcoming motion to stay the litigation until disposition of ReShape Medical’s IPR petitions. The Company intends to vigorously defend itself against Fulfillium, Inc.’s claims and to vigorously pursue its counterclaims. We currently are unable to estimate a loss or range of loss for this matter.

Except as disclosed in the foregoing paragraphs, the Company is not currently a party to any litigation and the Company is not aware of any pending or threatened litigation against it that could have a material adverse effect on the Company’s business, operating results or financial condition. The medical device industry in which the Company operates is characterized by frequent claims and litigation, including claims regarding patent and other intellectual property rights as well as improper hiring practices. As a result, the Company may be involved in various legal proceedings from time to time.

Revenue Recognition

3 Months Ended

Mar. 31, 2018

Revenue Recognition

Revenue Recognition

(8) Revenue Recognition

Revenue from Product Sales

The following table presents the Company’s revenue disaggregated by product and geography, based on management’s assessment of available data:


	Three Months Ended March 31, 2018								Three Months Ended March 31, 2017
	U.S.		OUS*		Total Revenues		% of Total Revenues		U.S.		OUS*		Total Revenues		% of Total Revenues
ReShape vBloc product	$	138,820	$	—	$	138,820		14.6%	$	40,040	$	—	$	40,040		100.0%
ReShape Balloon product		655,173		147,438		802,611		84.5%		—		—		—		0.0%
Other		8,567		—		8,567		0.9%		—		—		—		0.0%
Total	$	802,560	$	147,438	$	949,998		100.0%	$	40,040	$	—	$	40,040		100.0%

*Outside the United States

The Company’s revenue consists primarily of sales of products designed to treat obesity and metabolic diseases. The Company sells its products directly to physicians and medical device distributors using employed sales representatives. Contract terms for unit price, quantity, shipping and payment are governed by sales agreements or invoices which the Company considers to be a customer’s contract in all cases. The unit price is considered the observable stand-alone selling price for the arrangements. Any volume sales discounts are applied evenly to the units sold for purposes of calculating standalone selling price.

Under Topic 606, the Company recognizes revenue when it satisfies a performance obligation by transferring control of the promised goods or services to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company has elected the accounting policy to exclude sales taxes from revenue.

Product sales consist of a single performance obligation that the Company satisfies at a point in time. The Company recognizes product revenue when the following events have occurred: (a) the Company has transferred physical possession of the products, (b) the Company has a present right to payment, (c) the customer has legal title to the products, and (d) the customer bears significant risks and rewards of ownership of the products. Based on the Company’s historical practices and shipping terms specified in the sales agreements and invoices, these criteria are generally met when the products are:

implanted in the patient (for ReShape vBloc sales)

shipped from the Company’s facilities (“FOB shipping point”, which is the Company’s standard shipping term for US ReShape Balloon sales). For these sales, the Company determined that the customer is able to direct the use of, and obtain substantially all of the benefits from, the products at the time the products are shipped.

transferred at port of entry of the destination country (“FOB port of entry”, which is the Company’s standard shipping term for OUS ReShape Balloon sales). International sales occur through a medical device distributor and the Company has determined that the customer is able to direct the use of, and substantially all of the benefits from, the products at the time the products are delivered to the customer in the destination country.

The Company’s standard payment terms for its customers are generally 30 to 60 days after the Company satisfies the performance obligations.

All amounts billed to a customer in a sales transaction related to shipping and handling, if any, represent revenues earned for the goods provided, and these amounts have been included in other revenue. Costs related to such shipping and handling billing are classified as cost of sales.

Variable Consideration

The Company records revenue from customers in an amount that reflects the transaction price it expects to be entitled to after transferring control of those goods or services. From time to time, the Company offers rebate incentives to patients in which the ultimate transaction price is tied to a patient’s weight loss measured over a period of time. The Company estimates the price adjustments using the expected value method, which takes into account historical weight loss metrics for similar patients, based upon clinical and commercial data. Variable consideration is estimated at contract inception only to the extent that it is probable that a significant reversal of revenue will not occur, and updated at the end of each reporting period as additional information becomes available.

Warranty

The Company generally provides one-year warranties against defects in materials and workmanship and will either repair the products or provide replacements at no charge to customers. As they are considered assurance-type warranties, the Company does not account for them as separate performance obligations. Warranty reserve requirements are based on a specific assessment of the products sold with warranties where a customer asserts a claim for warranty or a product defect.

Contract Balances

The Company records a receivable when it has an unconditional right to receive consideration after the performance obligations are satisfied. As of March 31, 2018, and December 31, 2017, accounts receivable totaled $962,357 and $488,613, respectively. For the three months ended March 31, 2018, the Company did not incur material impairment losses with respect to its receivables.

The Company defers revenue from product sales subject to the rebate incentives described under Variable Consideration unless it is probable the rebate will not be earned by the patient, which is based upon historical weight loss metrics gathered in clinical and commercial settings. As of March 31, 2018 and December 31, 2017, the Company deferred $118,000 and $0, respectively, of revenue related to rebate incentives, which is reported in accrued expenses.

Practical Expedients

The Company has elected the practical expedient not to determine whether contacts with customers contain significant financing components.

Stock-based Compensation

3 Months Ended

Mar. 31, 2018

Stock-based Compensation

Stock-based Compensation

(9) Stock-based Compensation

The fair value method of accounting for share-based payments is applied to all share-based payment awards issued to employees and where appropriate, nonemployees, unless another source of literature applies.

Based on the application of these standards, stock-based compensation expense for stock-based awards for the three months ended March 31, 2018 and 2017, including $8,000 and $142,000 for nonemployees, respectively, was allocated to operating expenses follows:


	Three Months Ended
	March 31,
	2018		2017
Selling, general and administrative	$	682,255	$	2,217,200
Research and development		58,123		29,200
Total	$	740,378	$	2,246,400

As of March 31, 2018 there was approximately $7.1 million of total unrecognized compensation costs, related to employee unvested stock option awards, which are expected to be recognized over a weighted-average period of 2.7 years.

The estimated grant-date fair values of the stock options were calculated using the Black-Scholes valuation model, based on the following assumptions for the three months ended March 31, 2018 and 2017:



	Three Months Ended March 31,
	2018	2017
Risk-free interest rates	n/a	1.94%
Expected life	n/a	6.25 years
Expected dividends	n/a	0%
Expected volatility	n/a	117.19%

Option activity under the Plan for the three months ended March 31, 2018 was as follows:


		Outstanding Options

	Shares				Aggregate
	Available For	Number of	Weighted-Average		Intrinsic
	Grant	Shares (1)	Exercise Price (1)		Value
Balance, December 31, 2017	5,964,522	2,530,755	$	8.68	$	—
Options granted	—	—		—
Options exercised	—	—		—
Options cancelled	49,847	(49,847)		8.87

Balance, March 31, 2018	6,014,369	2,480,908	$	8.43	$	—

In addition to the stock options granted pursuant to the Plan, the Company from time to time grants options to individuals as an inducement to accepting positions as employees (Inducement Grants). These Inducement Grants are made at the discretion of the board of directors and are issued outside of the Plan. Inducement Grant activity is summarized below:


		Outstanding Options

	Shares				Aggregate
	Available For	Number of	Weighted-Average		Intrinsic
	Grant	Shares	Exercise Price		Value
Balance, December 31, 2017	—	1,299,692	$	3.75	$	—
Shares reserved	—	—		—
Options granted	—	—		—
Options exercised	—	—		—
Options cancelled	—	(349,000)		2.05

Balance, March 31, 2018	—	950,692	$	4.38	$	—

Stock Sales	3 Months Ended
Stock Sales	Mar. 31, 2018
Stock Sales
Stock Sales	(10) Stock Sales January 2017 Issuance of Common Stock, Convertible Preferred Stock and Warrants On January 23, 2017, the Company closed an underwritten public offering consisting of units of common stock, convertible preferred stock and warrants to purchase common stock. Gross proceeds of the offering were $19.0 million, prior to deducting underwriting discounts and commissions and offering expenses of $2.5 million. The offering was comprised of Class A Units, priced at a public offering price of $5.31 per unit, with each unit consisting of one share of common stock and one five-year warrant (each, a "2017 Warrant") to purchase one share of common stock with an exercise price of $5.84 per share, and Class B Units, priced at a public offering price of $1,000 per unit, with each unit comprised of one share of Series A Preferred Stock (the Preferred Stock), which was convertible into 188 shares of common stock, and 2017 Warrants to purchase 188 shares of common stock. The conversion price of the Preferred Stock issued in the transaction as well as the exercise price of the 2017 Warrants are fixed priced and do not contain any variable pricing features nor any price based anti-dilutive features apart from customary adjustments for splits and reverse splits of common stock and both have been recorded within Shareholders’ Equity in the condensed consolidated balance sheet. The Preferred Stock included a beneficial ownership limitation of 4.99%, but had no dividend preference (except to extent dividends are also paid on the common stock), liquidation preference or other preferences over common stock. The securities comprising the units were issued separately in the offering. On January 23 and January 24, 2017 all shares of Preferred Stock issued in conjunction with the offering were converted by their holders into 2,359,894 shares of common stock. August 2017 Issuance of Convertible Preferred Stock and Warrants On August 16, 2017, the Company closed a firm commitment underwritten public offering (the “Offering”) of 20,000 units consisting of one share of Series B Convertible Preferred Stock, par value $0.01 per share (the “Series B Preferred Stock”), which is convertible into 435 shares of common stock, par value $0.01 share (the “Common Stock”), at a conversion price of $2.30 per share, and one seven-year warrant to purchase 435 shares of Common Stock at an exercise price of $2.30 per share (the “Warrants”), at a public offering price of $1,000 per unit. The net proceeds received by the Company from the sale of the units was approximately $18.0 million, after deducting underwriting discounts and offering expenses. The Series B Preferred Stock was determined to not be mandatorily redeemable under ASC 480. Additionally, the Company identified two embedded features within the Series B Preferred Stock: (1) optional conversion by the holder, and (2) redemption in the event of a fundamental change and the Company determined that neither of these embedded features required bifurcation under ASC 815. Since the Series B Preferred Stock is only redeemable in an ordinary liquidation, upon the occurrence of a fundamental transaction which is solely within the Company’s control, or in circumstances when all common shareholders are entitled to receive the same form of consideration, the Series B Preferred Stock is presented within permanent equity. The warrants issued with the Series B Preferred Stock were also classified in stockholders’ equity as they are both indexed to the Company’s own stock and meet the scope exception in ASC 815-10-15-74(a) and, accordingly, do not require derivative liability accounting pursuant to ASC 815. The terms of the warrants contain an anti-dilution feature that, if triggered, require the Company to evaluate and account for the value attributable to the reduced warrant exercise price. As of March 31, 2018, 6,055 shares of the Series B Preferred Stock were outstanding. On August 16, 2017, the Company also issued warrants to purchase an aggregate of 2,575,000 shares of Common Stock to certain parties (each, a “Holder”) to the Securities Purchase Agreement (as amended, the “Purchase Agreement”), dated November 4, 2015, between the Company and the other parties named therein, as consideration for the waiver by each of the Holders of their right to participate in future securities offerings by the Company, which rights were granted pursuant to the Purchase Agreement. These warrants are in substantially the same form, and on the same terms as, the Warrants issued pursuant to the Offering.

Warrants

3 Months Ended

Mar. 31, 2018

Warrants

Warrants

(11) Warrants

Stock warrant activity for the three months ended Mach 31, 2018 is as follows:


		Weighted
		Average
	Common	Exercise
	Shares	Price
Balance, December 31, 2017	14,308,337		3.51
Granted	—		—
Exercised	—		—
Cancelled	(4,622)		1,197.00
Balance, March 31, 2018	14,303,715	$	3.13

Income Taxes	3 Months Ended
Income Taxes	Mar. 31, 2018
Income Taxes
Income Taxes	(12) Income Taxes On December 22, 2017, H.R. 1, originally known as the Tax Cuts and Jobs Act ("2017 Tax Act"), was enacted into law in the United States, resulting in significant changes from previous tax law. We have adopted ASU 2018-05, which allows for the recording of provisional amounts during a measurement period not to extend beyond one year of the enactment date since the 2017 Tax Act was passed. As a result of the 2017 Tax Act, NOLs generated in taxable years ending after December 31, 2017 have an indefinite carryforward period. The Company continues to evaluate the extent that deductible temporary differences are expected to reverse and generate an indefinite-lived NOL and the related impact on the valuation allowance. The accounting for the valuation allowance is, therefore, considered to be incomplete due to the forthcoming guidance and the Company’s ongoing analysis of final year-end data and tax positions. There were no adjustments made in the first quarter with respect to the estimates made for the 2017 Tax Act. We also anticipate additional IRS guidance relative to the impacts of the Tax Act will be forthcoming throughout 2018. We recorded an income tax benefit of $1.4 million in the first quarter of 2018. This amount reflects the tax impact of net operating losses generated in first quarter of 2018 which have an indefinite carryover period. A portion of these net operating losses are supported by expected taxable income from the reversal of indefinite life intangibles, such that they are more likely than not to be realized.

Subsequent Events	3 Months Ended
Subsequent Events	Mar. 31, 2018
Subsequent Events
Subsequent Events	(13) Subsequent Events April 2018 Financing Transaction On April 3, 2018 the Company entered into a securities purchase agreement with an institutional investor providing for the purchase and sale in a registered direct offering of shares of series D convertible preferred stock and a warrant to purchase shares of common stock for a purchase price of $6.0 million less approximately $900,000 in placement agent fees and other offering expenses. The shares of series D convertible preferred stock are convertible into an aggregate of 8.0 million shares of common stock at a conversion price of $0.75 per share and the warrants will have a one-year term (or, if later, eight months after the requisite stockholder approval is obtained) and be exercisable for 35 million shares of common stock at an exercise price of $0.75 per share. At the April 3, 2017 closing, the Company received net proceeds of approximately $5.1 million after deducting placement agent fees and other offering expenses. If the requisite stockholder approval is obtained, and if the warrants are exercised in full, the Company would receive an additional $26.25 million in gross proceeds based on the initial warrant exercise price of $0.75 per share. The Company intends to use the net proceeds from the registered direct offering to continue its commercialization efforts, for clinical and product development activities, and for other working capital and general corporate purposes. The Company will ask its stockholders at its 2018 annual meeting for the requisite approval for the conversion or exercise of the securities described above into shares of common stock exceeding 19.99% of the company's currently outstanding common stock for purposes of the NASDAQ Stock Market Rules and has entered into voting agreements with stockholders representing a majority of the company's outstanding common stock pursuant to which those stockholders have agreed to vote in favor of that proposal. As a result of this offering, the Company’s outstanding warrants that were issued in July 2015 and August 2017 were reset to an exercise price of $0.75 per share and the Company’s Series B convertible preferred stock’s conversion ratio was reset to 1,333.33 shares of common stock for each share of Series B preferred stock. Evaluation of Goodwill for Impairment The Company conducts its annual goodwill impairment analysis for its businesses during the fourth quarter of each year or when circumstances suggest that an indicator for impairment may be present. Subsequent to the Company’s registered direct securities offering on April 3, 2018, the price of the Company’s common stock declined significantly and, given the decline, it would appear that as of the date of filing of this Quarterly Report on Form 10-Q, the net equity of the Company would exceed the fair value of the Company. This decline in the Company’s fair market value may indicate impairment of some or all of the Company’s goodwill, requiring the Company to perform an impairment analysis that would include valuing all the tangible and intangible assets of the business. Assuming the Company’s stock price does not recover before the end of the 2018 second quarter, the Company intends to perform this impairment analysis during the 2018 second quarter.

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2018

Summary of Significant Accounting Policies

Description of Business

Risks and Uncertainties

Basis of Presentation

Use of Estimates

Principles of Consolidation

Fair Value of Financial Instruments

Common Stock Warrant Liability

Cash and Cash Equivalents

Inventory

Property and Equipment, Net

Impairment of Long-Lived Assets, Intangible Assets and Goodwill

Income Taxes

Medical Device Excise Tax

Comprehensive Loss

Research and Development Expenses

Patent Costs

Costs associated with the submission of a patent application are expensed as incurred given the uncertainty of the patents resulting in probable future economic benefits to the Company.

Stock-Based Compensation

Net Loss Per Share

The following table sets forth the computation of basic and diluted net loss per share for the three months ended March 31, 2018 and 2017:


	Three Months Ended
	March 31,
	2018		2017
Numerator:
Net loss	$	(11,233,449)	$	(7,366,812)
Denominator for basic and diluted net loss per share:
Weighted-average common shares outstanding		30,957,113		5,788,282
Net loss per share—basic and diluted	$	(0.36)	$	(1.27)


	March 31,
	2018	2017
Stock options outstanding	3,431,600	19,840
Common shares underlying convertible preferred stock	12,172,725	—
Warrants to purchase common stock	14,303,715	55,044

Segment Reporting

Recently Issued or Adopted Accounting Standards

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2018

Summary of Significant Accounting Policies

Computation of Basic and Diluted Net Loss per Share


	Three Months Ended
	March 31,
	2018		2017
Numerator:
Net loss	$	(11,233,449)	$	(7,366,812)
Denominator for basic and diluted net loss per share:
Weighted-average common shares outstanding		30,957,113		5,788,282
Net loss per share—basic and diluted	$	(0.36)	$	(1.27)

Antidilutive Securities


	March 31,
	2018	2017
Stock options outstanding	3,431,600	19,840
Common shares underlying convertible preferred stock	12,172,725	—
Warrants to purchase common stock	14,303,715	55,044

Acquisitions (Tables)

3 Months Ended

Mar. 31, 2018

BarioSurg

Schedule of allocation of purchase price


Cash	$	151,280
Property and equipment		3,000
Goodwill		14,004,573
In Process Research & Development		20,720,939
Trademarks/tradenames		1,090,363
Covenant not to compete		75,884
Other assets		5,826
Current liabilities assumed		(186,000)
Deferred income tax liability		(7,606,902)
Net assets acquired	$	28,258,963

ReShape Medical, Inc

Schedule of allocation of purchase price


Cash	$	617,229
Accounts receivable		385,690
Inventory		1,095,975
Prepaid expenses and other current assets		173,743
Property and equipment		303,291
Goodwill		13,182,047
Developed technology		18,451,360
Trademarks/tradenames		2,780,448
Customer relationships		3,753,533
Other assets		77,058
Current liabilities assumed		(1,837,941)
Net assets acquired	$	38,982,433

Goodwill and Other Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2018

Goodwill and Other Intangible Assets

Schedule of Finite-Lived intangible assets excluding goodwill

The following table summarizes the activity of intangible assets, excluding goodwill, for the quarter ended March 31, 2018:


	Useful Life (years)	Gross Carrying Amount		Accumulated Amortization		Impairment		Net Book Value
In Process Research & Development	indefinite	$	20,720,939	$	—	$	—	$	20,720,939
Trademarks/Tradenames	10		3,870,811		(229,885)		—		3,640,926
Covenant not to compete	3		75,884		(21,079)		—		54,805
Developed technology	12		18,451,360		(768,806)		—		17,682,554
Customer relationships	5		3,753,533		(375,353)		—		3,378,180
Total		$	46,872,527	$	(1,395,123)	$	—	$	45,477,404

Schedule of future amortization of Finite-Lived intangible assets

The following table summarizes the expected future amortization of intangible assets as of March 31, 2018:


Year ending December 31,
2018 (remaining)	$	2,025,523
2019		2,700,696
2020		2,685,940
2021		2,675,401
2022		2,487,722
Thereafter		12,181,183
	$	24,756,465

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2018

Fair Value Measurements

Fair Value Calculated Using Valuation Model


		Series A Warrants
	March 31, 2018			December 31, 2017
Risk-free interest rates		2.09	%		1.76	%
Expected life		9	months		12	months
Expected dividends		—	%		—	%
Expected volatility		87.27	%		193.28	%
Fair value	$	443		$	1,600

Inventory (Tables)

3 Months Ended

Mar. 31, 2018

Inventory

Schedule of current Inventory


	March 31,		December 31,
	2018		2017
Raw materials	$	1,082,193	$	707,919
Work-in-process		1,179,733		1,494,278
Finished goods		533,406		614,915
Inventory	$	2,795,332	$	2,817,112

Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2018

Commitments and Contingencies

Future Minimum Lease Payments


Year ending December 31,
2018 (remaining)	$	574,790
2019		419,082
2020		319,262
2021		327,949
2022		165,061
	$	1,806,144

Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2018

Revenue Recognition

Schedule of disaggregation of revenue by product and geography


	Three Months Ended March 31, 2018								Three Months Ended March 31, 2017
	U.S.		OUS*		Total Revenues		% of Total Revenues		U.S.		OUS*		Total Revenues		% of Total Revenues
ReShape vBloc product	$	138,820	$	—	$	138,820		14.6%	$	40,040	$	—	$	40,040		100.0%
ReShape Balloon product		655,173		147,438		802,611		84.5%		—		—		—		0.0%
Other		8,567		—		8,567		0.9%		—		—		—		0.0%
Total	$	802,560	$	147,438	$	949,998		100.0%	$	40,040	$	—	$	40,040		100.0%

Stock-based Compensation (Tables)

3 Months Ended

Mar. 31, 2018

Summary of Operating Expenses and Employee and Nonemployees


	Three Months Ended
	March 31,
	2018		2017
Selling, general and administrative	$	682,255	$	2,217,200
Research and development		58,123		29,200
Total	$	740,378	$	2,246,400

Stock Option Valuation Assumptions



	Three Months Ended March 31,
	2018	2017
Risk-free interest rates	n/a	1.94%
Expected life	n/a	6.25 years
Expected dividends	n/a	0%
Expected volatility	n/a	117.19%

Summary of Stock Option Activity


		Outstanding Options

	Shares				Aggregate
	Available For	Number of	Weighted-Average		Intrinsic
	Grant	Shares	Exercise Price		Value
Balance, December 31, 2017	—	1,299,692	$	3.75	$	—
Shares reserved	—	—		—
Options granted	—	—		—
Options exercised	—	—		—
Options cancelled	—	(349,000)		2.05

Balance, March 31, 2018	—	950,692	$	4.38	$	—

Stock Incentive Plan 2003

Summary of Stock Option Activity


		Outstanding Options

	Shares				Aggregate
	Available For	Number of	Weighted-Average		Intrinsic
	Grant	Shares (1)	Exercise Price (1)		Value
Balance, December 31, 2017	5,964,522	2,530,755	$	8.68	$	—
Options granted	—	—		—
Options exercised	—	—		—
Options cancelled	49,847	(49,847)		8.87

Balance, March 31, 2018	6,014,369	2,480,908	$	8.43	$	—

Warrants (Tables)

3 Months Ended

Mar. 31, 2018

Warrants

Stock Warrants Activity


		Weighted
		Average
	Common	Exercise
	Shares	Price
Balance, December 31, 2017	14,308,337		3.51
Granted	—		—
Exercised	—		—
Cancelled	(4,622)		1,197.00
Balance, March 31, 2018	14,303,715	$	3.13

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

+ References + Details

Summary of Significant Accounting Policies (Details)		3 Months Ended	12 Months Ended
Summary of Significant Accounting Policies (Details)	Oct. 02, 2017 item	Mar. 31, 2018 USD ($) segment entity	Dec. 31, 2015 USD ($)	Dec. 31, 2017 USD ($)
Schedule Of Significant Accounting Policies [Line Items]
Number of legal entities \| entity		2
Cash Equivalents Maturity Period Maximum		90 days
Goodwill and Intangible Asset Impairment \| $		$ 0
Excise tax rate on medical devices		2.30%
Revenue related to rebate incentives \| $		$ 118,000		$ 0
Number of operating segments \| segment		1
Operating Expense
Schedule Of Significant Accounting Policies [Line Items]
Medical device tax \| $			$ 1,363
ReShape Medical, Inc
Schedule Of Significant Accounting Policies [Line Items]
Minimum Number Of Obesity Related Or Comorbid Conditions \| item	1
Minimum \| ReShape Medical, Inc
Schedule Of Significant Accounting Policies [Line Items]
Body Mass Index Value \| item	30
Maximum \| ReShape Medical, Inc
Schedule Of Significant Accounting Policies [Line Items]
Body Mass Index Value \| item	40
Furniture and Fixtures \| Minimum
Schedule Of Significant Accounting Policies [Line Items]
Property and equipment estimated useful lives		5 years
Furniture and Fixtures \| Maximum
Schedule Of Significant Accounting Policies [Line Items]
Property and equipment estimated useful lives		7 years
Computer hardware and software \| Minimum
Schedule Of Significant Accounting Policies [Line Items]
Property and equipment estimated useful lives		3 years
Computer hardware and software \| Maximum
Schedule Of Significant Accounting Policies [Line Items]
Property and equipment estimated useful lives		5 years
Alpha Medical, Inc.
Schedule Of Significant Accounting Policies [Line Items]
Ownership percentage of an entity combined to form the Company		100.00%
Beta Medical, Inc.
Schedule Of Significant Accounting Policies [Line Items]
Ownership percentage of an entity combined to form the Company		100.00%

Summary of Significant Accounting Policies - Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Numerator:
Net loss	$ (11,233,449)	$ (7,366,812)
Denominator for basic and diluted net loss per share:
Weighted-average common shares outstanding	30,957,113	5,788,282
Net loss per share-basic and diluted	$ (0.36)	$ (1.27)

Summary of Significant Accounting Policies - Additional Information (Details) - shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Stock Option Outstanding
Anti-dilutive Securities
Anti-dilutive as of end of each period	3,431,600	19,840
Common shares underlying convertible preferred stock
Anti-dilutive Securities
Anti-dilutive as of end of each period	12,172,725
Warrants to purchase common stock
Anti-dilutive Securities
Anti-dilutive as of end of each period	14,303,715	55,044

Liquidity and Management's Plans (Details) - USD ($)				3 Months Ended	12 Months Ended
Liquidity and Management's Plans (Details) - USD ($)	Apr. 03, 2018	Aug. 16, 2017	Jan. 23, 2017	Mar. 31, 2017	Dec. 31, 2017	Mar. 31, 2018	Dec. 31, 2016	Dec. 31, 2015
Liquidity and Managements Plans [Line Items]
Gross proceeds before deducting estimate offering expenses			$ 19,000,000
Offering costs			$ 2,500,000
Common stock warrants		2,575,000			559,670
Proceeds from warrants exercised				$ 3,318,013	$ 3,300,000
Cash and cash equivalents				18,681,046	$ 10,163,208	$ 841,643	$ 10,163,208	$ 3,310,787
Proceeds from Issuance of Convertible Preferred Stock				12,531,000
Underwriting discounts and commissions and offering expenses				$ 2,505,244
Series B convertible preferred stock
Liquidity and Managements Plans [Line Items]
Proceeds from Issuance of Convertible Preferred Stock		$ 20,000,000
Underwriting discounts and commissions and offering expenses		$ 2,000,000
Subsequent Event \| Securities Purchase Agreement
Liquidity and Managements Plans [Line Items]
Common stock warrants	35,000,000
Proceeds from warrants exercised	$ 26,250,000
Net proceeds	$ 5,100,000

Acquisition (Details)				3 Months Ended
Acquisition (Details)	Dec. 19, 2017 shares	Oct. 02, 2017 USD ($) item $ / shares shares	May 22, 2017 USD ($) $ / shares shares	Mar. 31, 2018 USD ($) $ / shares	Dec. 31, 2017 USD ($) $ / shares	Mar. 31, 2017 shares
Acquisition
Common stock, par value \| $ / shares				$ 0.01	$ 0.01
Conversion of convertible preferred shares to common stock \| shares						12,531,000
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Goodwill				$ 27,186,620	$ 27,186,620
Amortization period				3 years
Trademarks/tradenames
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Amortization period				10 years
Covenant not to compete
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Amortization period				3 years
Developed technology
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Amortization period				12 years
Customer relationships
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Amortization period				5 years
Series C convertible preferred stock
Acquisition
Preferred stock, par value \| $ / shares				$ 0.01	$ 0.01
BarioSurg
Acquisition
Conversion of convertible preferred shares to common stock \| shares			5,000,000
Cash consideration			$ 2,000,000
Total consideration			28,300,000
Value of equity consideration			$ 26,300,000
Number of trading days			3 days
Discount for lack of marketability (in percentage)			19.00%
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Cash				$ 151,280
Property and equipment				3,000
Goodwill				14,004,573
Other assets				5,826
Current liabilities assumed				(186,000)
Deferred income tax liability				(7,606,902)
Net assets acquired				28,258,963
BarioSurg \| In Process Research & Development
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Intangible assets				20,720,939
BarioSurg \| Trademarks/tradenames
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Intangible assets				1,090,363
BarioSurg \| Covenant not to compete
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Intangible assets				75,884
BarioSurg \| Common Stock
Acquisition
Number of shares issued \| shares			1,380,000
Common stock, par value \| $ / shares			$ 0.01
BarioSurg \| Conditional convertible preferred stock
Acquisition
Number of shares issued \| shares			1,000,000
Preferred stock, par value \| $ / shares			$ 0.01
ReShape Medical, Inc
Acquisition
Number of shares issued \| shares	18,777,200
Conversion of convertible preferred shares to common stock \| shares		8,300,000
Cash consideration		$ 5,000,000
Total consideration		39,000,000
Value of equity consideration		$ 34,000,000
Discount for lack of marketability (in percentage)		20.00%
Minimum number of obesity or related comorbid conditions \| item		1
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Cash				617,229
Accounts receivable				385,690
Inventory				1,095,975
Prepaid expenses and other current assets				173,743
Property and equipment				303,291
Goodwill				13,182,047
Other assets				77,058
Current liabilities assumed				(1,837,941)
Net assets acquired				38,982,433
Weighted Average Useful Life		12 years
ReShape Medical, Inc \| Minimum
Acquisition
BMI index \| item		30
ReShape Medical, Inc \| Maximum
Acquisition
BMI index \| item		40
ReShape Medical, Inc \| Trademarks/tradenames
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Intangible assets				2,780,448
Amortization period		10 years
ReShape Medical, Inc \| Developed technology
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Intangible assets				18,451,360
ReShape Medical, Inc \| Customer relationships
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Intangible assets				$ 3,753,533
Amortization period		5 years
ReShape Medical, Inc \| Common Stock
Acquisition
Number of shares issued \| shares		2,356,729
Common stock, par value \| $ / shares		$ 0.01
ReShape Medical, Inc \| Series C convertible preferred stock
Acquisition
Number of shares issued \| shares		187,772

Goodwill and Other Intangible Assets (Details) - USD ($)	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Summary of intangible assets excluding goodwill
Goodwill	$ 27,186,620	$ 27,186,620
Other intangible assets, net	$ 45,477,404	$ 46,152,577
Useful Life (years)	3 years
Gross Carrying Amount	$ 46,872,527
Accumulated amortization	(1,395,123)
Finite-Lived Intangible Assets, Net, Total	45,477,404
In Process Research & Development
Summary of intangible assets excluding goodwill
Gross Carrying Amount	20,720,939
Finite-Lived Intangible Assets, Net, Total	$ 20,720,939
Trademarks/tradenames
Summary of intangible assets excluding goodwill
Useful Life (years)	10 years
Gross Carrying Amount	$ 3,870,811
Accumulated amortization	(229,885)
Finite-Lived Intangible Assets, Net, Total	$ 3,640,926
Covenant not to compete
Summary of intangible assets excluding goodwill
Useful Life (years)	3 years
Gross Carrying Amount	$ 75,884
Accumulated amortization	(21,079)
Finite-Lived Intangible Assets, Net, Total	$ 54,805
Developed technology
Summary of intangible assets excluding goodwill
Useful Life (years)	12 years
Gross Carrying Amount	$ 18,451,360
Accumulated amortization	(768,806)
Finite-Lived Intangible Assets, Net, Total	$ 17,682,554
Customer relationships
Summary of intangible assets excluding goodwill
Useful Life (years)	5 years
Gross Carrying Amount	$ 3,753,533
Accumulated amortization	(375,353)
Finite-Lived Intangible Assets, Net, Total	$ 3,378,180

Goodwill and Other Intangible Assets - Expected Amortization (Details)	Mar. 31, 2018 USD ($)
Goodwill and Other Intangible Assets
2018 (remaining)	$ 2,025,523
2019	2,700,696
2020	2,685,940
2021	2,675,401
2022	2,487,722
Thereafter	12,181,183
Total expected amortization of Intangible Assets	$ 24,756,465

Fair Value Measurements (Details) - Warrants Issued July 8, 2015 - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Risk-free interest rates	2.09%	1.76%
Expected life	9 months	12 months
Expected volatility	87.27%	193.28%
Fair value	$ 443	$ 1,600

Inventory (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Inventory
Long-term inventory	$ 1,000,000	$ 676,000
Inventory reserve	1,000,000
Net book value in long-term inventory	$ 0

Inventory - Additional Information (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Inventory
Raw materials	$ 1,082,193	$ 707,919
Work-in-process	1,179,733	1,494,278
Finished goods	533,406	614,915
Inventory	$ 2,795,332	$ 2,817,112

Commitments and Contingencies (Details)				3 Months Ended
Commitments and Contingencies (Details)	Oct. 02, 2017 USD ($)	Feb. 28, 2017 item shares	Aug. 25, 2015 USD ($)	Mar. 31, 2018 USD ($)	Mar. 31, 2017 USD ($)
Loss Contingencies [Line Items]
Operating lease agreement expiration date			Sep. 30, 2018	Sep. 30, 2015
Operating lease agreement term			3 years
Total rent expense				$ 174,000	$ 59,000
Number of months that require patients to be followed out in clinical trials				60 months
Lake Forest, California
Loss Contingencies [Line Items]
Operating lease agreement expiration date				Sep. 30, 2018
Operating lease, monthly base rent				$ 2,200
Du Litigation
Loss Contingencies [Line Items]
Number of shareholders \| item		1
Number of Senior Management members \| item		4
Number of Shares \| shares		1,093,450
Minimum
Loss Contingencies [Line Items]
Operating lease, monthly base rent			$ 18,925
Maximum
Loss Contingencies [Line Items]
Operating lease, monthly base rent			$ 20,345
ReShape Medical, Inc \| Office space
Loss Contingencies [Line Items]
Operating lease agreement expiration date	Jun. 30, 2022
Operating lease, monthly base rent	$ 24,600
Annual rent escalations, percentage	3.00%
ReShape Medical, Inc \| Manufacturing/warehousing space
Loss Contingencies [Line Items]
Operating lease, monthly base rent	$ 10,900

Commitments and Contingencies - Additional Information (Details)	Mar. 31, 2018 USD ($)
Commitments and Contingencies
Remaining six months of 2017	$ 574,790
2019	419,082
2020	319,262
2021	327,949
2022	165,061
Operating Leases, Future Minimum Payments Due, Total	$ 1,806,144

Revenue Recognition (Details) - USD ($)	3 Months Ended
Revenue Recognition (Details) - USD ($)	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Revenue Recognition
Revenue from Contract with Customer, Including Assessed Tax	$ 949,998,000	$ 40,040,000
Percentage of Total Revenue	100.00%	100.00%
Accounts receivable	$ 962,357		$ 488,613
Warrant Term	1 year
Revenue related to rebate incentives	$ 118,000		$ 0
Minimum
Revenue Recognition
Payment terms of contract with customers	30 days
Maximum
Revenue Recognition
Payment terms of contract with customers	60 days
US
Revenue Recognition
Revenue from Contract with Customer, Including Assessed Tax	$ 802,560,000	$ 40,040,000
Outside US
Revenue Recognition
Revenue from Contract with Customer, Including Assessed Tax	147,438,000
ReShape vBloc product [Member]
Revenue Recognition
Revenue from Contract with Customer, Including Assessed Tax	$ 138,820,000	$ 40,040,000
Percentage of Total Revenue	14.60%	100.00%
ReShape vBloc product [Member] \| US
Revenue Recognition
Revenue from Contract with Customer, Including Assessed Tax	$ 138,820,000	$ 40,040,000
ReShape Balloon product [Member]
Revenue Recognition
Revenue from Contract with Customer, Including Assessed Tax	$ 802,611,000
Percentage of Total Revenue	84.50%	0.00%
ReShape Balloon product [Member] \| US
Revenue Recognition
Revenue from Contract with Customer, Including Assessed Tax	$ 655,173,000
ReShape Balloon product [Member] \| Outside US
Revenue Recognition
Revenue from Contract with Customer, Including Assessed Tax	147,438,000
Other
Revenue Recognition
Revenue from Contract with Customer, Including Assessed Tax	$ 8,567,000
Percentage of Total Revenue	0.90%	0.00%
Other \| US
Revenue Recognition
Revenue from Contract with Customer, Including Assessed Tax	$ 8,567,000

Stock-based Compensation - Expense for Stock-Based Awards (Details) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation	$ 740,378	$ 2,246,400
Total unrecognized compensation costs related to non-vested stock options	$ 7,100,000
Total unrecognized compensation costs related to non-vested stock options, weighted-average period of recognition	2 years 8 months 12 days
Selling, general and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation	$ 682,255	2,217,200
Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation	58,123	29,200
Nonemployees
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation	$ 8,000	$ 142,000

Stock-based Compensation - Estimated Grant-Date Fair Values of Employee Stock Options (Details)	3 Months Ended
	Mar. 31, 2017
Stock-based Compensation
Risk-free interest rates	1.94%
Expected life	6 years 3 months
Expected dividends	0.00%
Expected volatility	117.19%

Stock-based Compensation - Summary of Stock Option Activity (Details)	3 Months Ended
	Mar. 31, 2018 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding Options, Number of Shares, Beginning Balance	1,299,692
Outstanding Options, Number of Shares, Options cancelled	(349,000)
Outstanding Options, Number of Shares, Ending Balance	950,692
Outstanding Options, Weighted-Average Exercise Price, Beginning Balance \| $ / shares	$ 3.75
Outstanding Options, Weighted-Average Exercise Price, Options cancelled \| $ / shares	2.05
Outstanding Options, Weighted-Average Exercise Price, Ending Balance \| $ / shares	$ 4.38
Stock Incentive Plan 2003
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares Available For Grant, Beginning Balance	5,964,522
Shares Available For Grant, Options cancelled	49,847
Shares Available For Grant, Ending Balance	6,014,369
Outstanding Options, Number of Shares, Beginning Balance	2,530,755
Outstanding Options, Number of Shares, Options cancelled	(49,847)
Outstanding Options, Number of Shares, Ending Balance	2,480,908
Outstanding Options, Weighted-Average Exercise Price, Beginning Balance \| $ / shares	$ 8.68
Outstanding Options, Weighted-Average Exercise Price, Options cancelled \| $ / shares	8.87
Outstanding Options, Weighted-Average Exercise Price, Ending Balance \| $ / shares	$ 8.43

Stock Sales (Details) $ / shares in Units, $ in Millions					3 Months Ended
Stock Sales (Details) $ / shares in Units, $ in Millions	Aug. 16, 2017 USD ($) $ / shares shares	Jan. 24, 2017 shares	Jan. 23, 2017 USD ($) $ / shares shares	Aug. 16, 2016 item	Mar. 31, 2018 $ / shares shares	Dec. 31, 2017 $ / shares shares	Mar. 31, 2017 shares	Jul. 31, 2015 $ / shares
Class of Stock [Line Items]
Gross proceeds before deducting estimate offering expenses \| $			$ 19.0
Offering costs \| $			$ 2.5
Number of common stock					30,957,113	30,957,113
Common stock upon the exercise of outstanding warrants	2,575,000					559,670
Warrant Term					1 year
Exercise price \| $ / shares								$ 0.75
Beneficial ownership percentage			4.99%
Common stock, par value \| $ / shares					$ 0.01	$ 0.01
Conversion of convertible preferred shares to common stock							12,531,000
Class A Units
Class of Stock [Line Items]
Share Price \| $ / shares			$ 5.31
Number of common stock			1
Common stock upon the exercise of outstanding warrants			1
Warrant Term			5 years
Exercise price \| $ / shares			$ 5.84
Shares issued upon conversion (in shares)			188
Class B Units
Class of Stock [Line Items]
Share Price \| $ / shares			$ 1,000
Preferred Stock.
Class of Stock [Line Items]
Shares issued upon conversion (in shares)		2,359,894	2,359,894
Series B convertible preferred stock
Class of Stock [Line Items]
Number of common stock					20,000	20,000
Preferred stock, par value \| $ / shares					$ 0.01	$ 0.01
Preferred stock ( in shares)					6,055	0
Warrants 2017
Class of Stock [Line Items]
Common stock upon the exercise of outstanding warrants			188
Over-allotment option
Class of Stock [Line Items]
Net proceeds \| $	$ 18.0
Over-allotment option \| Series B convertible preferred stock
Class of Stock [Line Items]
Shares issued upon conversion (in shares)	435
Common stock shares issued (in shares)	20,000
Number of common stock	1
Preferred stock, par value \| $ / shares	$ 0.01
Common stock, par value \| $ / shares	0.01
Conversion Price Per Share \| $ / shares	2.30
Number of embedded features \| item				2
Over-allotment option \| Warrants to purchase common stock
Class of Stock [Line Items]
Share Price \| $ / shares	$ 1,000
Common stock upon the exercise of outstanding warrants	1
Warrant Term	7 years
Exercise price \| $ / shares	$ 2.30
Conversion of convertible preferred shares to common stock	435

Warrants (Details)	3 Months Ended
Warrants (Details)	Mar. 31, 2018 $ / shares shares
Warrants
Beginning Balance \| shares	14,308,337
Cancelled \| shares	(4,622)
Ending Balance \| shares	14,303,715
Beginning Balance \| $ / shares	$ 3.51
Cancelled \| $ / shares	1,197.00
Ending Balance \| $ / shares	$ 3.13

Income Taxes (Details)	3 Months Ended
Income Taxes (Details)	Mar. 31, 2018 USD ($)
Income Taxes
Income tax benefit	$ (1,382,053)

Subsequent Events (Details)		1 Months Ended	3 Months Ended		12 Months Ended
Subsequent Events (Details)	Apr. 03, 2018 USD ($) $ / shares shares	Aug. 31, 2017	Mar. 31, 2018	Mar. 31, 2017 USD ($) shares	Dec. 31, 2017 USD ($) shares	Aug. 16, 2017 shares	Jul. 31, 2015 $ / shares
Shares of convertible preferred stock convertible into Number of shares of common stock \| shares				12,531,000
Common stock warrants \| shares					559,670	2,575,000
Exercise price of warrants \| $ / shares							$ 0.75
Gross proceeds from exercise of warrant				$ 3,318,013	$ 3,300,000
Percentage of common stock outstanding			19.99%
Series B convertible preferred stock
Series B convertible preferred stock’s conversion ratio		1,333.33
Subsequent Event \| Securities Purchase Agreement
Issuance of common stock	$ 6,000,000
Placement agent fees and other offering expenses	$ 900,000
Term of warrants	1 year
Number of months after the requisite stockholder approval obtained	8 months
Common stock warrants \| shares	35,000,000
Exercise price of warrants \| $ / shares	$ 0.75
Net Proceeds From Issuance Of Common Stock After Deductions	$ 5,100,000
Gross proceeds from exercise of warrant	$ 26,250,000
Subsequent Event \| Series D Convertible Preferred Stock [Member] \| Securities Purchase Agreement
Shares of convertible preferred stock convertible into Number of shares of common stock \| shares	8,000,000
Conversion price \| $ / shares	$ 0.75