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Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2018	Apr. 22, 2019	Jun. 30, 2018
Document And Entity Information
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Entity Registrant Name	ReShape Lifesciences Inc.
Entity Central Index Key	0001371217
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Shell Company	false
Entity Voluntary Filers	No
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		8,895,233
Entity Public Float			$ 7,608,535

Consolidated Balance Sheets - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 5,547,745	$ 10,163,208
Accounts receivable (net of allowance for bad debts of $235,567 and $155,872 at December 31, 2018 and December 31, 2017)	916,813	488,613
Inventory	984,735	1,968,546
Prepaid expenses and other current assets	1,269,741	467,783
Current assets of discontinued operations		848,566
Total current assets	8,719,034	13,936,716
Property and equipment, net	63,548	341,976
Goodwill		14,004,573
Other intangible assets, net	36,927,221	21,808,827
Other assets	562,863	990,015
Noncurrent assets of discontinued operations		37,622,442
Total assets	46,272,666	88,704,549
Current liabilities:
Accounts payable	1,626,545	1,088,271
Accrued and other liabilities	4,829,176	5,955,518
Asset purchase consideration payable, current	1,906,821
Total current liabilities	8,362,542	7,043,789
Asset purchase consideration payable, noncurrent	4,403,389
Deferred income taxes	1,844,297	5,292,291
Common stock warrant liability		1,600
Total liabilities	14,610,228	12,337,680
Commitments and contingencies (Note 11)
Stockholders’ equity:
Preferred stock, 5,000,000 shares authorized:
Common stock, $0.01 par value; 275,000,000 shares authorized at December 31, 2018 and 2017; 8,770,433 and 14,742 shares issued and outstanding at December 31, 2018 and 2017, respectively	87,704	147
Additional paid-in capital	450,563,689	411,125,061
Accumulated deficit	(418,989,911)	(334,759,354)
Total stockholders’ equity	31,662,438	76,366,869
Total liabilities and stockholders’ equity	46,272,666	88,704,549
Series B Convertible Preferred Stock
Stockholders’ equity:
Preferred stock, 5,000,000 shares authorized:	2	61
Series C convertible preferred stock
Stockholders’ equity:
Preferred stock, 5,000,000 shares authorized:	$ 954	$ 954

Consolidated Balance Sheets (Parenthetical) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Allowance for bad debts	$ 235,567	$ 155,872
Preferred stock, authorized (in shares)	5,000,000	5,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	275,000,000	275,000,000
Common stock, issued (in shares)	8,770,433	14,742
Common stock, outstanding (in shares)	8,770,433	14,742
Series B Convertible Preferred Stock
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, issued (in shares)	159	6,055
Preferred stock, outstanding (in shares)	159	6,055
Series C convertible preferred stock
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, issued (in shares)	95,388	95,388
Preferred stock, outstanding (in shares)	95,388	95,388

Consolidated Statements of Operations - USD ($)	12 Months Ended
Consolidated Statements of Operations - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Total revenue	$ 606,710	$ 569,160
Cost of revenue	164,299	333,276
Gross profit	442,411	235,884
Operating expenses:
Selling, general and administrative	19,261,680	22,848,922
Research and development	5,722,117	5,441,189
Goodwill impairment	14,004,573
Total operating expenses	38,988,370	28,290,111
Operating loss	(38,545,959)	(28,054,227)
Other expense (income), net
Interest expense, net	12,378	2,808
Warrant expense	144,751	4,721,246
Other, net	10,643	652
Loss from continuing operations before income taxes	(38,713,731)	(32,778,933)
Income tax benefit	3,446,708	2,314,611
Loss from continuing operations	(35,267,023)	(30,464,322)
Loss from discontinued operations, net of tax	(45,884,552)	(3,353,650)
Net loss	(81,151,575)	(33,817,972)
Less: Down round adjustments for convertible preferred stock and warrants	(3,078,982)
Net loss attributable to common shareholders	$ (84,230,557)	$ (33,817,972)
Net loss per share - basic and diluted:
Continuing operations (in dollars per share)	$ (34.28)	$ (5,803.84)
Discontinued operations (in dollars per share)	(41.03)	(638.91)
Net loss per share-basic and diluted (in dollars per share)	$ (75.31)	$ (6,442.75)
Shares used to compute basic and diluted net loss per share	1,118,439	5,249
Product
Total revenue	$ 606,710	$ 319,160
Cost of revenue	$ 164,299	173,745
Service and other revenue
Total revenue		250,000
Cost of revenue		$ 159,531

Consolidated Statements of Stockholders' Equity - USD ($)	Preferred Stock Series A Convertible Preferred Stock January 2017 public offering	Preferred Stock Series A Convertible Preferred Stock	Preferred Stock Conditional Convertible Preferred Stock BarioSurg	Preferred Stock Conditional Convertible Preferred Stock	Preferred Stock Series B Convertible Preferred Stock August 2017 public offering	Preferred Stock Series B Convertible Preferred Stock	Preferred Stock Series C convertible preferred stock ReShape Medical, Inc.	Preferred Stock Series C convertible preferred stock	Preferred Stock Series D convertible preferred stock April 2018 institutional sale	Preferred Stock Series D convertible preferred stock	Common Stock January 2017 public offering	Common Stock June, July, August and November 2018 institutional sales	Common Stock September 2018 public offering	Common Stock October 2018 ATM public offering	Common Stock BarioSurg	Common Stock ReShape Medical, Inc.	Common Stock	Additional Paid-in Capital January 2017 public offering	Additional Paid-in Capital August 2017 public offering	Additional Paid-in Capital April 2018 institutional sale	Additional Paid-in Capital June, July, August and November 2018 institutional sales	Additional Paid-in Capital September 2018 public offering	Additional Paid-in Capital October 2018 ATM public offering	Additional Paid-in Capital BarioSurg	Additional Paid-in Capital ReShape Medical, Inc.	Additional Paid-in Capital	Accumulated Deficit	January 2017 public offering	August 2017 public offering	April 2018 institutional sale	June, July, August and November 2018 institutional sales	September 2018 public offering	October 2018 ATM public offering	BarioSurg	ReShape Medical, Inc.	Total
Balance at Dec. 31, 2016																	$ 13									$ 303,879,935	$ (300,941,382)									$ 2,938,566
Balance (in shares) at Dec. 31, 2016																	1,304
Changes in Stockholders' Equity
Net loss																											(33,817,972)									(33,817,972)
Stock-based compensation expense																										4,436,797										4,436,797
Stock issued in offering	$ 125				$ 200						$ 6							$ 16,493,773	$ 17,980,039									$ 16,493,904	$ 17,980,239
Stock issued (in shares)	12,531				20,000						581
Issuance of warrants																										4,438,149										4,438,149
Stock issued in acquisition			$ 10,002				$ 1,878								$ 6	$ 11								$ 26,248,955	$ 33,981,468									$ 26,258,963	$ 33,983,357
Stock issued in acquisition (in shares)			1,000,181				187,772								658	1,123
Conversions of convertible preferred stock into common stock		$ (125)		$ (10,002)		$ (139)		$ (924)									$ 108									11,082
Conversions of convertible preferred stock into common stock (in shares)		(12,531)		(1,000,181)		(13,945)		(92,384)									10,790
Issuance of common stock upon exercise of warrants																	$ 3									3,654,863										3,654,866
Issuance of common stock upon exercise of warrants (in shares)																	286
Balance at Dec. 31, 2017						$ 61		$ 954									$ 147									411,125,061	(334,759,354)									76,366,869
Balance (in shares) at Dec. 31, 2017						6,055		95,388									14,742
Changes in Stockholders' Equity
Net loss																											(81,151,575)									(81,151,575)
Stock-based compensation expense																										3,097,806										3,097,806
Down round adjustments for convertible preferred stock and warrants																										3,078,982	(3,078,982)
Stock issued in offering									$ 60			$ 6,920	$ 835	$ 62,636						$ 5,081,128	$ 14,309,416	$ 445,825	$ 13,322,197							$ 5,081,188	$ 14,316,336	$ 446,660	$ 13,384,833
Stock issued (in shares)									6,000			692,041	83,493	6,263,576
Redemption of stock										$ (5)																(499,995)										(500,000)
Redemption of stock (in shares)										(500)
Conversions of convertible preferred stock into common stock						$ (59)				$ (55)							$ 5,847									(5,733)
Conversions of convertible preferred stock into common stock (in shares)						(5,896)				(5,500)							584,699
Issuance of common stock upon exercise of warrants																	$ 11,319									609,002										620,321
Issuance of common stock upon exercise of warrants (in shares)																	1,131,892
Balance at Dec. 31, 2018						$ 2		$ 954									$ 87,704									$ 450,563,689	$ (418,989,911)									$ 31,662,438
Balance (in shares) at Dec. 31, 2018						159		95,388									8,770,443

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
Consolidated Statements of Cash Flows - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Cash flows from operating activities:
Net loss	$ (81,151,575)	$ (33,817,972)
Loss from discontinued operations, net of tax	45,884,552	3,353,650
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense	242,410	189,796
Provision for doubtful accounts	79,695	12,666
Deferred income taxes	(3,447,994)	(2,314,611)
Accretion of interest on asset purchase consideration payable	13,792
Stock-based compensation	3,097,806	4,436,797
Warrant expense	144,751	4,721,246
Goodwill impairment	14,004,573
Amortization of intangible assets	198,147	78,359
Change in operating assets and liabilities:
Accounts receivable	(507,895)	28,103
Inventory	1,977,651	(178,968)
Prepaid expenses and other current assets	(801,958)	182,584
Other assets	998,679	212,274
Accounts payable	317,081	(223,435)
Accrued and other liabilities	(1,126,342)	1,180,236
Net cash used in operating activities - continuing operations	(20,076,627)	(22,139,275)
Net cash used in operating activities - discontinued operations	(7,413,543)	(2,448,933)
Net cash used in operating activities	(27,490,170)	(24,588,208)
Cash flows from investing activities:
Acquisition of Lap-Band product line assets, including transaction costs	(10,278,807)
Acquisition of BarioSurg, Inc., net of cash acquired, excluding transaction costs		(1,848,720)
Purchases of property and equipment	(49,579)	(137,123)
Net cash used in investing activities - continuing operations	(10,328,386)	(1,985,843)
Net cash used in investing activities - discontinued operations		(4,381,847)
Net cash used in investing activities	(10,328,386)	(6,367,690)
Cash flows from financing activities:
Proceeds from warrants exercised	513,136	3,334,176
Proceeds from sale and issuance of equity securities	37,745,233	38,999,148
Payments of equity issuance costs	(4,555,276)	(4,525,005)
Preferred stock redemption	(500,000)
Net cash provided by financing activities - continuing operations	33,203,093	37,808,319
Net cash provided by financing activities	33,203,093	37,808,319
Net (decrease) increase in cash and cash equivalents	(4,615,463)	6,852,421
Cash and cash equivalents:
Cash and cash equivalents at beginning of year	10,163,208	3,310,787
Cash and cash equivalents at end of year	5,547,745	10,163,208
Noncash investing and financing activities:
Acquisition of Lap-Band product line assets, asset purchase consideration payable	6,296,418
Down round adjustment for convertible preferred stock and warrants	3,078,982
Conversion of convertible preferred shares to common stock	$ 114	11,190
Issuance of convertible preferred shares and common shares for acquisitions - continuing operations		26,258,963
Issuance of convertible preferred shares and common shares for acquisitions - discontinued operations		$ 33,983,357

Description of the Business and Risks and Uncertainties	12 Months Ended
Description of the Business and Risks and Uncertainties	Dec. 31, 2018
Description of the Business and Risks and Uncertainties
Description of the Business and Risks and Uncertainties	(1)Description of the Business and Risks and Uncertainties Description of Business ReShape Lifesciences Inc. (the “Company”) was originally incorporated in the state of Minnesota in December 2002 and reincorporated in the state of Delaware in July 2004. The Company is headquartered in San Clemente, California. The Company is a developer of minimally invasive medical devices that advance bariatric surgery to treat obesity and metabolic diseases. The Company’s current portfolio includes the LAP-BAND® Adjustable Gastric Banding System and the ReShape VestTM, an investigational device, to help treat more patients with obesity. EnteroMedics Europe Sárl (“EnteroMedics Europe”), a wholly owned subsidiary of the Company, was formed in Switzerland in January 2006. EnteroMedics Europe was established as a means to conduct clinical trials in Switzerland. The functional currency of EnteroMedics Europe is the U.S. Dollar. Risks and Uncertainties The Company continues to devote significant resources to developing its product technology, commercialization activities and raising capital. These 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. Refer to Note 3 for additional information about the Company’s liquidity and management’s plans. 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. Refer to Note 11 for additional information about contingencies and litigation matters.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2018

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

(2)Summary of Significant Accounting Policies

Basis of Presentation

The Company has prepared the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

Certain reclassifications have been made to previously reported amounts to conform to the current presentation of interest expense, which is net of immaterial amounts of interest income, and warrant expense, which includes immaterial amounts of change in fair value of warrant liability.

Reverse Stock Splits

During 2018, the Company’s board of directors and stockholders approved the following reverse stock splits:

1-for-15 reverse split of the Company’s outstanding common stock that became effective after the close of market on June 1, 2018.

1-for-140 reverse split of the Company’s outstanding common stock that became effective after the close of market on November 7, 2018.

In connection with the reverse stock splits, proportional adjustments were made to the number of shares of common stock issuable upon exercise or conversion, and the per share exercise or conversion price, of the Company’s outstanding warrants, stock options and convertible preferred stock, in each case in accordance with their terms. Neither of the reverse stock splits altered the par value of the Company’s common stock or preferred stock or reduced the number of common or preferred shares authorized by the Company’s certificate of incorporation. All share and per-share amounts have been retroactively adjusted to reflect the reverse stock splits for all periods presented.

Principles of Consolidation

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

Use of Estimates

The preparation of financial statements in conformity with GAAP 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.

Discontinued Operations

The assets and operating results of the ReShape Balloon product line prior to disposal have been reflected as discontinued operations in the Consolidated Financial Statements (see Note 5). In addition, the cash flows associated with discontinued operations are presented separately in the accompanying Consolidated Statements of Cash Flows. Unless otherwise noted, amounts in these Notes to the Consolidated Financial Statements exclude amounts attributable to discontinued 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 noncurrent inventory within other assets in the 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 Consolidated Balance Sheets and the resulting gain or loss is reflected in the Consolidated Statements of Operations. Repairs and maintenance are expensed as incurred.

Goodwill and Other Intangible Assets

Goodwill represents the excess of the cost of an acquired business over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination.

Indefinite-lived intangible assets relate to in-process research and development ("IPR&D") acquired in business combinations. The estimated fair values of IPR&D projects acquired in a business combination which have not reached technological feasibility are capitalized and accounted for as indefinite-lived intangible assets until completion or abandonment of the projects. In accordance with guidance within Financial Accounting Standards Board (FASB) Accounting Standards Codification (“ASC”) 350 “Intangibles - Goodwill and Other,” goodwill and identifiable intangible assets with indefinite lives are not subject to amortization but must be evaluated for impairment.

Impairment of Goodwill and Long-Lived Assets

Goodwill and indefinite-lived intangible assets are reviewed for impairment annually in the fourth quarter of each fiscal year or whenever an event occurs or circumstances change that would indicate that the carrying amount may be impaired. For purposes of impairment testing, the Company has identified one reporting unit as defined within ASC 350 “Intangibles – Goodwill and Other.” The Company compares the estimated fair value of the reporting unit to the carrying amount, including existing goodwill. If the carrying value of the reporting unit exceeds its estimated fair value, then the Company measures the amount of the impairment loss by comparing the implied fair value of goodwill to its carrying value. See Note 8 for additional information.

The Company evaluates long-lived assets under the provisions of ASC 360 “Property, Plant, and Equipment” which addresses financial accounting and reporting for the impairment of long-lived assets and for long-lived assets to be disposed of. For purposes of assessing the recoverability of long-lived assets, the Company has one asset group which includes all assets of the Company. For assets to be held and used, the Company compares 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 assets over the assets’ fair value or estimates of future discounted cash flows.

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’s policy is to classify interest and penalties related to income taxes as income tax expense in the consolidated statements of operations.

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 distributions to owners. As there was no other comprehensive income or loss for the years ended December 31, 2018 and 2017, reported net loss and comprehensive loss were the same.

Equity

Certain issuances of the Company’s convertible preferred stock and warrants classified within equity contain non-standard down round features that result in the strike price being reduced on the basis of the pricing of future equity offerings. The value of the effect of the down round feature when it is triggered is recorded similar to a dividend and as a numerator adjustment in the basic earnings per share calculation.

Revenue Recognition

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. 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.

For the Company’s Lap-Band product, these criteria are met under the agreements with most customers upon product shipment. This includes sales to distributors, who sell the products to their customers, take title to the products and assume all risks of ownership at the time of shipment. Distributors are obligated to pay within specified terms regardless of when, if ever, they sell the products. For the Company’s ReShape vBloc product, these criteria were met when the product was implanted in the patient. Refer to Note 14 for additional information about the Company’s products and contractual arrangements.

Taxes collected from customers and remitted to governmental authorities are accounted for on a net basis. Accordingly, such amounts are excluded from revenues. Amounts billed to customers related to shipping and handling are included in revenues. Shipping and handling costs related to revenue producing activities are included in cost of sales.

Research and Development Expenses

Research and development expenses consist of costs incurred to further the Company’s research and development activities, including product development, clinical trial expenses, quality assurance, regulatory expenses, payroll and other personnel expenses, materials and consulting costs. Certain of these activities, such as pre-clinical studies and clinical trials, may be conducted by third party service providers at the direction of the Company. In addition, during 2018, the Company entered into an arrangement with a Contract Research Organization (“CRO”) under which the CRO performs and manages research and development activities on the Company’s behalf.

The Company records the estimated costs of research and development activities performed by third party service providers based upon the estimated services provided but not yet invoiced and includes these costs in accrued expenses and other payables in the Consolidated Balance Sheets and within Research and Development expense in the Consolidated Statements of Operations. The Company accrues for these costs based on factors such as estimates of the work completed and in accordance with agreements established with its third party service providers. As actual costs become known, the Company adjusts its accrued liabilities.

The Company’s CRO arrangement generally requires payments in advance of services. Upon making a payment, the Company makes a determination as to the amount to record as a deferred charge and the amount of research and development expense. The amount of CRO related costs included in research and development expense each period is based upon the Company’s estimate of the time period over which services will be performed, enrollment of patients, number of sites activated and level of effort to be expended. Any amount of advances paid in excess of expense recognized is included in Prepaid expenses and other current assets on the Consolidated Balance Sheets. If the actual timing of the CRO’s performance of services or the level of effort varies from the Company’s estimate, the amount of prepaid CRO expense is adjusted accordingly.

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. Patent-related legal expenses included in selling, general and administrative costs were $257,000 and $305,000 for the years ended December 31, 2018 and 2017, respectively.

Stock-Based Compensation

The Company applies ASC 718 Compensation — Stock Compensation and accordingly records compensation expense for stock options over the vesting or service period using the fair value on the date of grant, as calculated by the Company using the Black-Scholes model. The Company’s stock-based compensation plans are more fully described in Note 16.

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. For purposes of basic and diluted per share computations, loss from continuing operations and net loss are reduced by the down round adjustments for convertible preferred stock and warrants.

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:


	December 31,
	2018	2017
Stock options outstanding	4,225	1,826
Common shares underlying convertible preferred stock	131,743	5,797
Warrants to purchase common stock	15,304,722	6,814

Concentration of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. Cash and cash equivalents are primarily deposited in demand and money market accounts. At times, such deposits may be in excess of insured limits. Investments in money market funds are not considered to be bank deposits and are not insured or guaranteed by the federal deposit insurance company or other government agency. These money market funds seek to preserve the value of the investment at $1.00 per share; however, it is possible to lose money investing in these funds. The Company has not experienced any losses on its deposits of cash and cash equivalents.

Fair Value of Financial Instruments

The carrying amounts of the Company’s financial instruments, including cash equivalents, accounts receivable, accounts payable and certain accrued and other liabilities approximate fair value due to their short-term maturities. For additional information, see Note 4 regarding the asset purchase consideration payable as of December 31, 2018 and Note 13 regarding the common stock warrant liability as of December 31, 2017.

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. The Company’s CODM is the Chief Executive Officer.

Under the provisions of ASC 280, “Segment Reporting,” the Company has determined that it has three operating segments: the Lap-Band segment, the ReShape Vest segment, and the ReShape vBloc Segment. The Lap-Band is an FDA approved minimally invasive treatment designed to treat severe obesity. The ReShape Vest is an investigational, minimally invasive, laparoscopically implanted medical device being studied for weight loss in morbidly obese adults with a BMI of at least 35. ReShape vBloc uses vBloc Therapy to block the gastrointestinal effects of the vagus nerve using high-frequency, low-energy electrical impulses to intermittently interrupt naturally occurring neural impulses on the vagus nerve between the brain and the digestive system. The Company is not currently actively marketing ReShape vBloc.

The Company’s CODM evaluates segment performance based on gross margin. Gross profit for the Lap-Band segment was $373,008 and $0 for years ended December 31, 2018 and 2017, respectively. Gross profit for the ReShape vBloc product was $69,403 and $145,415 for years ended December 31, 2018 and 2017, respectively. In addition, there was $90,469 of non-segment gross profit from other revenue for the year ended December 31, 2017. There were no revenues or gross profit recorded for the ReShape Vest operating segment in 2018 or 2017 because the ReShape Vest is still in the development stage. Operating segment revenues for Lap-Band and ReShape vBloc are reported in Note 14. The Company’s CODM does not use operating segment assets information to allocate resources or to assess performance of the operating segments and thus total segment assets have not been disclosed.

Recent Accounting Pronouncements

New accounting standards adopted by the Company in 2018 are discussed below or in the related notes, where appropriate.

In May 2014, the FASB issued Accounting Standards Update, or ASU, 2014-09, Revenue from Contracts with Customers (“ASC Topic 606”), which amends the guidance for accounting for revenue from contracts with customers. This ASU supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition, and creates a new ASC Topic 606, Revenue from Contracts with Customers. In 2015, 2016 and 2017, the FASB issued additional ASUs related to ASC Topic 606, including ASUs 2015-14, 2016-08, 2016-10, 2016-12, 2016-20, 2017-13, 2017-14, that delayed the effective date of and clarified various aspects of the new guidance, including principal versus agent considerations, identifying performance obligations, and licensing. 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 14 for further discussion.

In August 2016, the FASB issued ASU No. 2016‑15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which clarifies the classification of certain cash receipts and cash payments in the statements of cash flow to eliminate the diversity in practice related to eight specific cash flow issues. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2017, with early adoption permitted. The Company adopted this guidance effective January 1, 2018. The adoption of this guidance had no effect on the Company’s consolidated financial statements and disclosures.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires the presentation of changes in restricted cash or restricted cash equivalents on the statement of cash flows. This guidance was effective for the fiscal years and interim periods within those years beginning after December 15, 2017, with early adoption permitted. The adoption of this guidance had no effect on the Company’s Consolidated Statements of Cash Flows.

In January 2017 FASB issued ASU No. 2017-04 Intangibles-Goodwill and Other (Topic 350) Simplifying the Test for Goodwill Impairment. The guidance removes step two of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The amendments in this update are required for public business entities in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted the standard during the second quarter of 2018. Please refer to Note 8 for further discussion.

In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting, which provides guidance on the types of changes to the terms and conditions of share-based payment awards to which an entity would be required to apply modification accounting. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions and classification of the awards are the same immediately before and after the modification. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2017, with early adoption permitted. The Company adopted this guidance effective January 1, 2018. The adoption of this guidance had no effect on the Company’s consolidated financial statements and disclosures.

In January 2017, the FASB issued ASU 2017-01, Business Combinations: Clarifying the Definition of a Business. The amendment clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. The guidance was effective for annual periods beginning after December 15, 2017, including interim periods within those periods.

In March 2018, FASB issued ASU No. 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 15 – Income Taxes.

New accounting standards not yet adopted are discussed below.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) in order to increase transparency and comparability among organizations by, and among other provisions, recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous GAAP. For public companies, ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 (including interim periods within those periods) using a modified retrospective approach and early adoption is permitted. In transition, entities may also elect a package of practical expedients that must be applied in its entirety to all leases commencing before the adoption date, unless the lease is modified, and permits entities to not reassess (a) the existence of a lease, (b) lease classification or (c) determination of initial direct costs, as of the adoption date, which effectively allows entities to carryforward accounting conclusions under previous GAAP. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which provides entities an optional transition method to apply the guidance under Topic 842 as of the adoption date, rather than as of the earliest period presented. The Company adopted Topic 842 on January 1, 2019, using the optional transition method to apply the new guidance as of January 1, 2019, rather than as of the earliest period presented, and elected the package of practical expedients described above. On the date of adoption, the Company recorded a right-of-use asset and corresponding lease liability of approximately $1 million on its balance sheet primarily related to the operating lease agreement for its corporate headquarters.

In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting, which is intended to simplify the accounting for nonemployee share-based payment transactions by expanding the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2018, with early adoption permitted. The Company does not expect the adoption of this guidance will have a material impact on its consolidated financial statements as there were no share-based payment transactions with nonemployees in 2018 and such transactions in prior years, all of which had an established measurement date, were not material.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements on fair value measurements and is intended to improve the effectiveness of disclosures, including the consideration of costs and benefits. The guidance is effective for the fiscal years and interim periods within those years beginning after January 1, 2020. Early adoption is permitted, and an entity is permitted to early adopt any removed or modified disclosures and delay adoption of additional disclosures until their effective date. The Company is evaluating the effects of ASU 2018-13 on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15 Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40), Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The amendments in this update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The ASU is effective for the Company on January 1, 2020. Early adoption of the ASU is permitted. The Company is evaluating the effects of ASU 2018-15 on its consolidated financial statements.

Various other accounting standards and interpretations have been issued with 2019 effective dates and effective dates subsequent to December 31, 2018. The Company has evaluated the recently issued accounting pronouncements that are currently effective or will be effective in 2019 and believe that none of them have had or will have a material effect on the Company’s financial position, results of operations or cash flows.

Liquidity and Management's Plans	12 Months Ended
Liquidity and Management's Plans	Dec. 31, 2018
Liquidity and Management's Plans
Liquidity and Management's Plans	(3)Liquidity and Management’s Plans The accompanying 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’s history of operating losses, limited cash resources and lack of certainty regarding obtaining significant third-party reimbursement for its products, raise substantial doubt about its ability to continue as a going concern. During the years ended December 31, 2018 and 2017, the Company received aggregate net proceeds of $33.2 million and $34.5 million, respectively, from equity offerings and $0.5 million and $3.3 million, respectively, from the exercise of warrants to purchase common stock. Refer to Note 12 for detailed information about equity offerings and warrants. As of December 31, 2018, the Company had $5.5 million of cash and cash equivalents to fund its operations into early 2019. The Company’s anticipated operations include plans to (i) integrate the sales and operations of the Company with the newly acquired Lap-Band product line; (ii) continue development of the ReShape Vest, (iii) seek opportunities to leverage the Company’s intellectual property portfolio and custom development services to provide third party sales and licensing opportunities, and (iv) 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 equity or debt financing to support its operations. Management is currently pursuing various funding options, including seeking additional equity or debt financing as well as a strategic merger or other transaction to obtain additional funding to support the expansion of Lap-Band product sales and to continue the development of, and to successfully commercialize, the ReShape Vest. While the acquisition of Lap-Band product line does provide incremental revenues to the Company, the cost to support the European clinical trial of the ReShape Vest is expected to 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

12 Months Ended

Dec. 31, 2018

Acquisitions

Acquisitions

(4)Acquisitions

Lap-Band Product Line Assets

On December 17, 2018, the Company acquired from Apollo Endosurgery, Inc. (“Apollo”) substantially all of the assets exclusively related to Apollo’s Lap-Band product line and Apollo acquired from the Company substantially all of the assets exclusively related to the Company’s ReShape Balloon product line (“Asset Purchase Agreement”). In addition to the transfer to Apollo of the ReShape Balloon product line assets, the Company is required to pay Apollo cash consideration of $17 million, of which $10 million was paid at the closing of the transaction, $2 million is payable on the first anniversary of the closing date, $2 million is payable on the second anniversary of the closing date and $3 million is payable on the third anniversary of the closing date. Pursuant to a transition services agreement, supply agreement and distribution agreement, Apollo will manufacture the Lap-Band product for the Company for up to two years, serve as the Company’s distributor of the Lap-Band product outside of the United States for up to one year and provide other specified services.

The Company evaluated the Lap-Band product line asset acquisition under the guidance of ASU 2017-01, “Clarifying the Definition of a Business” and concluded that the group of assets acquired did not meet the definition of a business. Accordingly, the Lap-Band product line asset purchase was accounted for as an asset acquisition and the assets acquired were recorded at their relative fair values during the fourth quarter of 2018. The disposal of the Reshape Balloon product line assets has been accounted for as a discontinued operation.

The total transaction cost for the assets acquired was comprised of the net present value of the consideration transferred plus the transaction costs. The Company determined that the ReShape Balloon product line assets transferred as part of the Lap-Band product line purchase transaction had no value, as management’s projections of the ReShape Balloon product line as of the transaction date indicated negative cash flows. See Note 5 for additional information regarding the sale to Apollo of the Reshape Balloon product line.


Asset purchase consideration paid at closing	$	10,000,000
Aggregate asset purchase consideration payable		7,000,000
Adjustment to net present value of asset purchase consideration payable		(703,582)
Present value of asset purchase consideration		16,296,418
Asset purchase transaction costs		500,000
Fair value of ReShape Balloon product line assets transferred		—
Total transaction cost	$	16,796,418

The Company has granted Apollo a security interest in substantially all of the Company’s assets as security for the payment and performance when due of all of all of its obligations under the Asset Purchase Agreement, including the remaining asset purchase consideration. The security interest will be terminated upon the earlier of the date the Company pays the asset purchase consideration to Apollo in full or completes an equity financing raising gross proceeds of at least $15 million. The net present value of the secured asset purchase consideration payable was determined using a discount rate of 5.1%. At December 31, 2018, the aggregate carrying value of the current and noncurrent asset purchase consideration payable of $6,310,210, as adjusted for accretion of interest of $13,792, approximates fair value.

Under the asset acquisition method of accounting, the total transaction cost is allocated to the relative fair values of the assets acquired. The table below represents the allocation of the relative fair values of the Lap-Band product line tangible and intangible assets acquired as of the December 17, 2018 acquisition date.


Developed technology/know-how	$	14,361,732
Trademarks		954,809
Inventory		993,840
Fixed assets		486,037
Total transaction cost	$	16,796,418

Apollo retained all other working capital associated with the Lap-Band product line, including accounts receivable, accounts payable and certain accrued and other liabilities arising from operations before the closing of the Apollo transaction, and there was no transfer of workforce. The Lap-Band related fixed assets have been included in Other assets in the Consolidated Balance Sheet as the Company will not take possession of the fixed assets until the expiration of the transition services and supply agreements.

The Company used the income approach valuation technique to measure the fair value of the intangible assets, based on the present value of their future economic benefits reflecting current market expectations. Specifically, the developed technology/know-how was valued using a multi-period excess earnings method and the relief from royalty method was used to value the trademark. The assumptions used in these fair value measurements are not observable in active markets and thus represent Level 3 fair value measurements.

BarioSurg, Inc.

On May 22, 2017, the Company acquired all of the ownership interests of BarioSurg, Inc. ("BarioSurg"), a company developing the Gastric Vest System (rebranded “ReShape Vest” subsequent to the acquisition), 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 of $28.3 million Surg consisted of: (i) $2.0 million in cash; (ii) 658 shares of the Company’s common stock; and (iii) 1,000,181 shares of newly created conditional convertible preferred stock, par value $0.01 per share (“Conditional Preferred Stock”). The aggregate of the equity consideration was valued $26.3 million. The valuation of the equity consideration took into account (i) the conversion ratio of the conditional convertible preferred stock, (ii) the closing prices of the Company’s common stock on the NASDAQ Stock Market on the date the transaction was announced, and (iii) a 19% discount for lack of marketability related to the shares issued in the transaction. Transaction related expenses, excluded from the acquisition cost, were $454,000 and were expensed as incurred. Refer to Note 12 for additional information regarding the equity securities issued in connection with the BarioSurg acquisition.

The acquisition was accounted for as a business combination. Tangible and intangible assets acquired were recorded based on their estimated fair values at the acquisition date. The excess of the purchase price over the fair value of net assets acquired was recorded to goodwill. The final determination of fair values was completed during the second quarter of 2018 and did not result in any adjustments. The following table summarizes the fair values of the assets acquired and liabilities assumed:


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

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. The covenant not to compete was valued using the comparative business valuation method-income approach. See Note 9 for additional information regarding other intangible assets and amortization periods.

The amount of goodwill relative to identifiable intangible assets at the acquisition date related 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 gastric vest. During the second quarter of 2018, the Company recorded an impairment charge of $14.0 million for the full write-down of the goodwill recorded in connection with the BarioSurg acquisition. Refer to Note 8 for additional information regarding evaluation of goodwill for impairment.

The result of operations of BarioSurg have been included in the accompanying consolidated financial statements from the date of acquisition. For the period from May 22, 2017 through December 31, 2017, BarioSurg had revenues of zero and a loss of $832,000. Pro forma results have not been presented as the effect of pro forma adjustments in 2017, primarily related to a full year of intangible asset amortization, are not material in relation to the consolidated financial statements of the Company. In addition, the full year effect in 2017 of the common and common equivalent shares issued in connection with the BarioSurg acquisition is anti-dilutive.

Discontinued Operations

12 Months Ended

Dec. 31, 2018

Discontinued Operations.

Discontinued operations

(5)Discontinued Operations

Effective December 17, 2018, the Company sold substantially all of the assets exclusively related to its ReShape Balloon product line to Apollo in connection with the Company’s acquisition of substantially all of the assets exclusively related to Apollo’s Lap-Band product line. The ReShape Balloon product line assets sold to Apollo consisted of inventory, property and equipment and the related intellectual property underlying the intangible assets. In connection with the Apollo transaction, the Company retained all other working capital associated with the ReShape Balloon product line, including accounts receivable, accounts payable and certain accrued and other liabilities arising from operations before the closing of the Apollo transaction, and there was no transfer of workforce. The ReShape Balloon product line was the primary operating activity of ReShape Medical, Inc. (“ReShape Medical”), a business the Company acquired in October 2017 and accounted for as a business combination. The purchase accounting was finalized during the fourth quarter of 2018 and did not result in any changes to the purchase price allocation. The assets and operations of the ReShape Balloon product line are shown as discontinued operations in the accompanying Consolidated Financial Statements. See Note 4 for more information regarding the Lap-Band product line acquisition.

In the second quarter of 2018, the Company recorded an impairment charge of $13.2 million for the full write-down of the goodwill recorded in connection with its acquisition of ReShape Medical. Refer to Note 8 for additional information regarding evaluation of goodwill for impairment. In connection with the determination of the fair value of the Lap-Band assets acquired, no value was assigned to the ReShape Balloon product line assets sold as projections updated during the fourth quarter of 2018 indicated negative cash flows. Accordingly, the loss on disposal of discontinued operations consists of an impairment charge of $22.6 million for the full write-down of the ReShape Balloon product line assets disposed of, which had the following carrying values as of December 17, 2018 prior to the write-down:


Inventory	$	670,011
Property and equipment, net		42,163
Other intangible assets, net		21,884,317
	$	22,596,491

The components of loss from discontinued operations for the years ended December 31, 2018 and 2017 (period from the October 2, 2017 acquisition date through December 31, 2017) consisted of the following:


	Year Ended December 31,
	2018		2017
Total revenue	$	2,285,115	$	717,994
Loss from operations and disposal/impairment of discontinued operations before income taxes		(45,884,552)		(3,353,650)
Income tax benefit		—		—
Loss from discontinued operations, net of tax	$	(45,884,552)	$	(3,353,650)

There were no assets associated with the ReShape Balloon product line at December 31, 2018. The assets associated with discontinued operations included in the Company’s Consolidated Balance Sheet as of December 31, 2017 consisted of the following:


ASSETS:
Current assets:
Inventory	$	848,566
Current assets of discontinued operations		848,566
Noncurrent assets:
Property and equipment, net		96,645
Goodwill		13,182,047
Other intangible assets, net		24,343,750
Noncurrent assets of discontinued operations		37,622,442
Total assets of discontinued operations	$	38,471,008

Inventory

12 Months Ended

Dec. 31, 2018

Inventory

Inventory

(6)Inventory

Current inventory consists of the following:


	December 31,
	2018		2017
Raw materials	$	—	$	496,156
Work-in-process		—		1,353,877
Finished goods		984,735		118,513
Inventory	$	984,735	$	1,968,546

There was no noncurrent inventory as of December 31, 2018 and approximately $1.0 million of noncurrent inventory as of December 31, 2017, primarily consisting of raw materials.

During the year ended December 31, 2018, the Company recorded a $2.9 million write-down of the carrying amount of the ReShape vBloc inventories due to excess quantities of ReShape vBloc components. The write-down is included within selling, general and administrative expense. As a result of the acquisition of the Lap-Band product line, the Company will no longer be actively marketing its ReShape vBloc product.

Property and Equipment

12 Months Ended

Dec. 31, 2018

Property and Equipment

Property and Equipment

(7)Property and Equipment

Property and equipment consist of the following:


	December 31,
	2018		2017
Furniture and equipment	$	2,341,507	$	2,393,644
Computer hardware and software		781,724		774,697
Leasehold improvements		81,298		123,542
		3,204,529		3,291,883
Less accumulated depreciation and amortization		(3,140,981)		(2,949,907)
Property and equipment, net	$	63,548	$	341,976

Goodwill

12 Months Ended

Dec. 31, 2018

Goodwill.

Goodwill

(8)Goodwill

Goodwill resulted from the acquisition of BarioSurg in 2017. Goodwill and the changes in the carrying amount of goodwill for the years ended December 31, 2018 and 2017 are as follows:


Balance as of December 31, 2016	$	—
BarioSurg acquisition		14,004,573
Balance as of December 31, 2017		14,004,573
Impairment		(14,004,573)
Balance as of December 31, 2018	$	—

The gross amount and accumulated impairment loss of goodwill are as follows:


	December 31,
	2018		2017
Gross amount	$	14,004,573	$	14,004,573
Accumulated impairment loss		(14,004,573)		—
Goodwill, net	$	—	$	14,004,573

Evaluation of Goodwill for Impairment

Subsequent to the Company’s registered direct securities offering on April 3, 2018, the price of the Company’s common stock declined significantly. Management determined that this event was an indicator of potential impairment as the magnitude of the decline indicated that the net equity of the Company may be in excess of its fair market value and conducted an impairment analysis during the second quarter of 2018. The Company determined that the carrying values of the assets of BarioSurg and ReShape Medical, both of which were acquired during 2017 and accounted for as business combinations, exceeded their current fair values. The resulting impairment charge was $14.0 million associated with BarioSurg and $13.2 million associated with the ReShape Medical. The impairment charges represented a complete write-down of the goodwill associated with these acquisitions. As described in Note 5, the results of operations of ReShape Medical’s ReShape Balloon product line are classified as discontinued operations, including the related goodwill impairment charge.

The fair market values were determined under an income approach using discounted cash flows. Fair value calculated using a discounted cash flow analysis is classified within level 3 of the fair value hierarchy and requires several assumptions including risk adjusted discount rates and financial forecasts.

The determination of the fair value of the reporting unit and the allocation of that value to individual assets and liabilities within the reporting unit requires the Company to make significant estimates and assumptions. These estimates and assumptions primarily include, but are not limited to, the selection of appropriate peer group companies, control premiums appropriate for acquisitions in the industries in which the Company competes, the discount rate, terminal growth rates, and forecasts of revenue, operating income, and capital expenditures.

Other Intangible Assets

12 Months Ended

Dec. 31, 2018

Other Intangible Assets

Other intangible assets

(9)Other Intangible Assets

Identifiable intangible assets were recorded in connection with the acquisitions of the Lap-Band product line assets in 2018 and BarioSurg in 2017.

Other intangible assets consist of the following:


	December 31, 2018
	Amortization Period (years)	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Finite-lived intangible assets:
Developed technology	10	$	14,361,732	$	(59,841)	$	14,301,891
Trademarks/Tradenames	10		2,045,172		(176,615)		1,868,557
Covenant not to compete	3		75,884		(40,050)		35,834
			16,482,788		(276,506)		16,206,282
Indefinite-lived intangible assets:
In-process research and development	indefinite		20,720,939		—		20,720,939
Total		$	37,203,727	$	(276,506)	$	36,927,221


	December 31, 2017
	Amortization Period (years)	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Finite-lived intangible assets:
Trademarks/Tradenames	10	$	1,090,363	$	(63,604)	$	1,026,759
Covenant not to compete	3		75,884		(14,755)		61,129
			1,166,247		(78,359)		1,087,888
Indefinite-lived intangible assets:
In-process research and development	indefinite		20,720,939		—		20,720,939
Total		$	21,887,186	$	(78,359)	$	21,808,827

In conjunction with the evaluation of goodwill for impairment in the second quarter of 2018 discussed in Note 8, the Company performed a qualitative impairment analysis on indefinite-lived intangible assets other than goodwill, and assessed the recoverability of finite-lived intangible assets. The Company did not identify any impairments of such indefinite-lived or finite-lived intangible assets as a result the performance of these analyses.

Estimated amortization expense for each of the years ending December 31 is as follows:


Year ending December 31,
2019	$	1,665,985
2020		1,651,229
2021		1,640,690
2022		1,640,690
2023		1,640,690
Thereafter		7,966,998
	$	16,206,282

Accrued and Other Liabilities

12 Months Ended

Dec. 31, 2018

Accrued and Other Liabilities

Accrued and Other Liabilities

(10)Accrued and Other liabilities

Accrued and other liabilities consist of the following:


	December 31,
	2018		2017
Professional service related expenses	$	3,094,769	$	2,643,342
Payroll related expenses		1,146,114		2,480,219
Other accrued liabilities		588,293		831,957
Accrued and other liabilities	$	4,829,176	$	5,955,518

Commitments and Contingencies

12 Months Ended

Dec. 31, 2018

Commitments and Contingencies

Commitments and Contingencies

(11)Commitments and Contingencies

Operating Lease

The Company leases separate office and warehouse space in San Clemente, California under noncancelable operating leases that expire in June 2022 and October 2019, respectively. The Company also has certain office equipment that is subject to noncancelable operating leases that expire at various dates through 2022.

For the years ended December 31, 2018 and 2017, total rent expense recognized for all operating leases was $767,000 and $357,000, respectively. Future minimum lease commitments under noncancelable operating leases as of December 31, 2018 are as follows:


Year ending December 31,
2019	$	449,226
2020		331,990
2021		331,229
2022		165,511
Total	$	1,277,956

Clinical Trials

The Company has ongoing commitments under the pre-approval ReCharge and post-approval ReNew clinical trials related to its ReShape vBloc product which are expected to be completed in 2019 and 2022, respectively. 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. The Company recognizes expense when incurred with respect to these clinical trials.

Litigation

Du. 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 named 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 contained 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 related 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 521 shares of our common stock (the “Option Grants”). In the complaint, the plaintiff contended 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 sought 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. The parties settled the matter on December 17, 2018. The terms of the settlement require us to (i) rescind and cancel the Option Grants, with the exception of options that were already rescinded when certain individuals left the company in the last fiscal quarter of 2017, (ii) amend the Plan to add a provision establishing the maximum total annual equity compensation for non-employee directors and to seek stockholder approval of this amendment at the Company’s next annual meeting of stockholders, and (iii) proportionally adjust all share reserves and limitations in the Plan (and any other equity compensation plan for the company) in connection with any future split of the company’s stock during the next five years unless otherwise brought to and approved by stockholder vote. The Company is required to make a payment to the plaintiff of $197,000, which has been fully accrued in 2018 and is included in Selling, General and Administrative Expenses in the Consolidated Statement of Operations.

Fulfillium. On April 20, 2017, Fulfillium, Inc. filed a complaint against ReShape Medical, Inc. (which the Company acquired in October 2017 and which is now a wholly owned subsidiary of the Company) in the U.S. District Court for the District of Delaware, which alleged misappropriation of trade secrets and infringement of two U.S. Patents (“Fulfillium I”). On July 28, 2017, ReShape Medical moved to dismiss both the trade secret claim and certain aspects of the patent infringement claim, and to transfer the litigation to the U.S. 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 U.S. District Court for the Central District of California. Fulfillium twice amended its complaint, narrowing its original trade secret claim and adding further patent infringement claims and additional parties. On June 4, 2018, ReShape Medical filed a motion to dismiss the patent infringement claims for lack of standing, which the Court granted on July 5, 2018. On August 10, 2018, the Court dismissed without prejudice the trade secret claim for lack of subject matter jurisdiction and terminated the case. Fulfillium has appealed these dismissals and ReShape Medical has appealed the grant and denial of certain attorney fee awards. On July 20, 2018, Fulfillium filed a new complaint against ReShape Lifesciences, Inc. (and its wholly owned subsidiary ReShape Medical LLC) in the U.S. District Court for the Central District of California (“Fulfillium II”) reasserting the patent infringement claims asserted in Fulfillium I. On August 15, 2018, Fulfillium amended its complaint in Fulfillium II to reassert the trade secret misappropriation claim asserted in Fulfillium I against ReShape Medical LLC and others. On September 7, 2018, Fulfillium filed a complaint in California state court alleging the same trade secret misappropriation claim asserted in both Fulfillium I and Fulfillium II. On November 7, 2018, the Court dismissed the non-Company parties from Fulfillium II. 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 (the “PTAB”) to have all claims of both of the originally asserted Fulfillium patents canceled as unpatentable over various combinations of prior art. On November 6, 2018, the PTAB denied those petitions. The parties held a mediation on April 9, 2019, but were unable to resolve the matter. The Company intends to continue to vigorously defend itself against Fulfillium’s claims. We currently are unable to estimate the losses or range of loss for these two matters where there is a reasonable possibility of a loss or it is probable that a loss may have been incurred.

Alpha and Iroquois. On July 12, 2018, Alpha Capital Anstalt (“Alpha”) filed a complaint against the Company in the U.S. District Court for the Southern District of New York. In August 2017, Alpha acquired shares of the Company’s series B convertible preferred stock and warrants to purchase shares of the Company’s common stock in an underwritten public offering. Pursuant to the terms of the series B convertible preferred stock and warrants, the conversion price of the series B convertible preferred stock and exercise price of the warrants was subject to adjustment in the case of, among other things, dilutive issuances of securities by the Company. The complaint alleges breach of contract, claiming that the Company should have adjusted the conversion price of the series B convertible preferred stock and exercise price of the warrants to not less than $420.00 per share, rather than the $1,575.00 per share to which the Company actually adjusted such conversion price and exercise price, in connection with its registered direct offering of series D convertible preferred stock and warrants to purchase common stock that it completed and announced in April 2018. Alpha seeks declaratory relief, damages of not less than approximately $3.6 million (less the proceeds of actual sales of the Company’s common stock made by Alpha) and attorneys’ fees. The Company believes the claims alleged are without merit and intends to vigorously protect and defend itself. However, we are currently unable to estimate a loss or range of loss for this matter.

On July 26, 2018, Iroquois Capital Investment Group, LLC and Iroquois Master Fund, Ltd. filed a complaint against the Company in the U.S. District Court for the Southern District of New York, with substantially the same claims and seeking substantially the same relief as Alpha’s complaint described above, except that Iroquois claims that the conversion price of the series D convertible preferred stock and exercise price of the warrants should have been adjusted to $189.00 per share, and Iroquois is claiming damages estimated to exceed $5 million. The Company believes the claims alleged are without merit and intends to vigorously protect and defend itself. However, we are currently 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.

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.

Equity	12 Months Ended
Equity	Dec. 31, 2018
Equity
Equity	(12)Equity The Company may issue preferred stock, common stock, or both, in connection with underwritten public offerings, registered direct offerings, or business acquisitions. Such issuances of equity typically include the issuance or sale of warrants to purchase common stock. Certain issuances of convertible preferred stock and warrants may contain anti-dilutive features apart from customary adjustments for splits and reverse splits of common stock (collectively, “down round features”). When a series of convertible preferred stock contains this non-standard down round feature, the Company is required to adjust the conversion price in the event of future stock sales at a lower unit price. In the event the anti-dilution is triggered, the Company is required to evaluate whether a contingent beneficial conversion feature has been met and, if so, evaluate and account for any value attributable to the contingent beneficial conversion feature. When warrants issued in connection with an equity transaction contain, or are amended to contain, this non-standard down round feature, the Company is required to adjust the exercise price upon the issuance of any shares of common stock or securities convertible into shares of common stock below the then-existing exercise price and evaluate and account for the value attributable to the reduced warrant exercise price. All series of the Company’s convertible preferred stock are classified in stockholders’ equity, including those with the down round feature as discussed in more detail below, when applicable to the equity transaction. Warrants to purchase common stock are classified in stockholders’ equity, including, beginning in 2017, those issued with the down round feature, as they are both indexed to the Company’s own stock and meet the scope exception in ASC 815 “Derivatives and Hedging,” paragraph 10-74(a), as amended by ASU 2017-11. In the event down round adjustments are triggered, the values attributable to the adjustment to the convertible preferred stock conversion price and warrant exercise price are recorded as an increase to additional paid-in capital and increase to accumulated deficit. During the year ended December 31, 2018, the Company recorded a total of $0.2 million attributable to changes in the conversion price of convertible preferred stock and $2.9 million attributable to the reductions in the exercise price of warrants. Warrants issued to investors in connection with the sale of convertible preferred stock in April 2018 and August 2017 contain non-standard down round features. Effective September 17, 2018, warrants issued to investors in connection with the sale of common stock in June, July and August 2018 were amended to add the non-standard down round feature. As of December 31, 2018, the exercise price of these warrants was $1.25 per share, as last reset effective with a direct financing completed on November 26, 2018. The value attributable to the exercise price reductions was estimated using the Black Scholes model using risk-free interest rates ranging from 2.13% to 2.96%; expected lives ranging from less than one year to 9.4 years; expected dividends of zero and expected volatility ranging from 111.63% to 293.32%. The Company had the following equity transactions during the years ended December 31, 2018 and 2017: November 2018 Issuance of Common Stock and Warrants On November 28, 2018, the Company completed a registered direct offering with two healthcare focused institutional investors which included the sale of 670,000 shares of common stock at a purchase price of $1.25 per share and pre-funded warrants to purchase 7,330,000 shares of common stock at a purchase price of $1.24 per share. The exercise price of each pre-funded warrant is $0.01 per share. The Company also issued Series A warrants to purchase 8,000,000 shares of common stock at an exercise price of $1.50 per share. In connection with the registered direct offering, the placement agent received warrants to purchase 560,000 shares of common stock at an exercise price of $1.5625 per share. Net proceeds from the registered direct offering were $9.1 million, after deducting placement agent fees and other transaction costs. 2018 At-the-Market Offering During the period from October 9, 2018 through November 28, 2018, the Company issued an aggregate of 6,263,576 shares of common stock in an at-the-market public offering (“2018 ATM”) at an average price per share of $2.39. In connection with the ATM, the placement agent received warrants to purchase a total of 438,450 shares of common stock at exercise prices ranging from $1.2625 per share to $7.4755 per share. Net proceeds from the ATM were $13.4 million, after deducting placement agent fees and other transaction costs. September 2018 Issuance of Common Stock and Warrants and Exchange of Series D Convertible Preferred Stock for Common Stock and Warrants On September 20, 2018, the Company completed a public offering which included the issuance of 83,493 shares of common stock at a purchase price of $6.30 per share and warrants to purchase 41,747 shares of common stock at an exercise price of $6.30 per share. In connection with the public offering, the placement agent received warrants to purchase 5,845 shares of common stock at an exercise price of $7.875 per share. Net proceeds from the public offering were $0.4 million, after deducting placement agent fees and other transaction costs. Pursuant to the terms of the April 2018 securities purchase agreement, on September 20, 2018, the purchasers exercised their right to exchange their shares of series D convertible preferred stock into the common stock and warrants included in the September 2018 public offering. As a result, an aggregate of 178,875 shares of series D convertible preferred stock was exchanged for the issuance of 28,393 shares of common stock and warrants to purchase 14,197 shares of common stock at an exercise price of $6.30 per share. August 2018 Issuance of Common Stock and Warrants On August 3, 2018, the Company completed a registered direct offering which included the sale of 7,143 shares of common stock at a purchase price of $84.00 per share and warrants to purchase 7,143 shares of common stock at an initial exercise price of $154.00 per share. In connection with the registered direct offering, the placement agent received warrants to purchase 500 shares of common stock at an exercise price of $105 per share. Net proceeds from the registered direct offering were $0.5 million, after deducting placement agent fees and other transaction costs. July 2018 Issuance of Common Stock and Warrants On July 12, 2018, the Company completed a registered direct offering which included the sale of 8,868 shares of common stock at a purchase price of $287.00 per share and warrants to purchase 8,868 shares of common stock at a purchase price of $17.50 per share. The initial exercise price of each warrant was $288.40 per share. In connection with the registered direct offering, the placement agent received warrants to purchase 621 shares of common stock at an exercise price of $380.66 per share. Net proceeds from the registered direct offering were $2.2 million, after deducting placement agent fees and other transaction costs. June 2018 Issuances of Common Stock and Warrants On June 21, 2018, the Company completed a registered direct offering which included the sale of 3,354 shares of common stock at a purchase price of $429.80 per share per share and warrants to purchase 3,354 shares of common stock at a purchase price of $17.50 per share. The initial exercise price of each warrant was $431.20 per share. In connection with the registered direct offering, the placement agent received warrants to purchase 163 shares of common stock at an exercise price of $558.60 per share. Net proceeds from the registered direct offering were $1.3 million, after deducting placement agent fees and other transaction costs. The Company used $500,000 of the net proceeds of the offering to redeem 500 of the then currently 5,250 outstanding shares of its series D convertible preferred stock, which the Company agreed to as an inducement to obtain the required consent of the holder of series D convertible preferred stock for the Company to complete the offering. On June 9, 2018, the Company completed a registered direct offering which included the sale of 2,676 shares of common stock at a purchase price of $548.80 per share per share and warrants to purchase 2,007 shares of common stock at a purchase price of $17.50 per share. The initial exercise price of each warrant was $550.20 per share. In connection with the registered direct offering, the placement agent received warrants to purchase 188 shares of common stock at an exercise price of $701.40 per share. Net proceeds from the registered direct offering were $1.2 million, after deducting placement agent fees and other transaction costs. April 2018 Issuance of Convertible Preferred Stock and Warrants On April 3, 2018 the Company completed a registered direct offering which included the sale of 6,000 shares of series D convertible preferred stock, par value $0.01 per share (“Series D Preferred Stock”), at a purchase price of $1,000 per share and warrants to purchase 16,667 shares of common stock at an initial exercise price of $1,575 per share. Net proceeds from the registered direct offering were $5.1 million, after deducting placement agent fees and other transaction costs. In connection with the registered direct offering completed on June 21, 2018, 500 shares of the Series D Preferred Stock were redeemed. During the year ended December 31, 2018, all of the remaining 5,500 shares of the Series D Preferred Stock were converted into 108,353 shares of common stock. October 2017 Issuance of Common Stock and Convertible Preferred Stock to Acquire Reshape Medical In connection with the Company’s acquisition of ReShape Medical on October 2, 2017, in addition to $5.0 million of cash consideration, the Company issued equity securities valued at $34.0 million, which included 1,123 shares of common stock and 187,772 shares of series C convertible preferred stock (“Series C Preferred Stock”). The 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 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. On December 19, 2017, the Company’s stockholders approved the issuance of up to 8,942 shares of common stock upon the conversion of 187,772 shares of Series C Preferred Stock issued to the former equity holders of ReShape Medical. On that date, a total 92,384 shares of Series C Preferred Stock were converted into 4,397 shares of common stock. At December 31, 2018, the remaining 95,388 shares of Series C Preferred Stock were convertible into 4,543 shares of common stock. August 2017 Issuance of Convertible Preferred Stock and Warrants On August 16, 2017, the Company completed an underwritten public offering which included the sale of 20,000 shares of series B convertible preferred stock, par value $0.01 per share (the “Series B Preferred Stock”), and warrants to purchase an aggregate of 4,143 shares of common stock at an initial exercise price of $4,830.00 per share. The Series B Preferred Stock was initially convertible into 4,143 shares of common stock based on an initial conversion price of $4,830.00 per share. Net proceeds from the Series B Preferred Stock offering were approximately $18.0 million, after deducting approximately $2.0 million of underwriting discounts and offering expenses. The Series B Preferred Stock was determined to not be mandatorily redeemable under ASC 480. 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 Series B Preferred Stock and the warrants issued with the Series B Preferred Stock each contain the down round feature discussed above. During the years ended December 31, 2018 and 2017, 5,896 shares and 13,945 shares, respectively of Series B Preferred Stock were converted into 476,346 shares and 2,889 shares, respectively, of common stock. At December 31, 2018, the remaining 159 shares of Series B Preferred stock are convertible into 127,200 shares of common stock. May 2017 Issuance of Common Stock and Convertible Preferred Stock to Acquire BarioSurg As discussed in Note 4, in connection with the Company’s acquisition of BarioSurg on May 22, 2017, in addition to $2.0 million of cash consideration, the Company issued equity securities valued at $26.3 million, which included 658 shares of common stock and 1,000,181 shares of Conditional Preferred Stock. On October 25, 2017, upon the post-closing approval of the Company's stockholders in accordance with the Nasdaq Stock Market Rules, all of the Conditional Preferred Stock converted into 2,381 shares of common stock. January 2017 Issuance of Common Stock, Convertible Preferred Stock and Warrants On January 23, 2017, the Company completed an underwritten public offering which included the sale of Class A units consisting, of common stock and warrants to purchase common stock, and Class B units, consisting of series A convertible preferred stock, par value $0.01 per share (Series A Preferred Stock), and warrants to purchase common stock. Net proceeds from the offering were $16.5 million, after deducting underwriting discounts and commissions and offering expenses of $2.5 million. A total of 581 shares of common stock, 12,531 shares of Series A Preferred Stock warrants to purchase 1,704 shares of common stock at an exercise price of $12,264.00 were issued in the offering including the underwriters’ exercise of their over-allotment option. The conversion price of the Series A Preferred Stock did not contain any variable pricing features nor any nonstandard anti-dilution features. The Series A Preferred Stock included a beneficial ownership limitation of 4.99%, but had no dividend preference (except to the extent dividends are also paid on the common stock), liquidation preference or other preferences over common stock. On January 23 and January 24, 2017 all shares of Series A Preferred Stock issued in conjunction with the offering were converted by their holders into 1,123 shares of common stock.

Warrants

12 Months Ended

Dec. 31, 2018

Warrants

Warrants

(13)Warrants

The Company’s grants of warrants to purchase common stock are primarily in connection with equity financings. See Note 12 for additional information about equity financings and the related issuance of warrants. Warrant activity was as follows:


		Weighted
		Average
		Exercise
	Shares	Price
Balance, December 31, 2016	27	$	501,690.00
Granted	7,074		6,615.00
Exercised	(286)		11,676.00
Cancelled	(1)		501,690.00
Balance December 31, 2017	6,814		11,464.67
Granted	16,429,804		2.82
Exercised	(1,131,892)		0.45
Cancelled	(4)		4,035,150.00
Balance December 31, 2018	15,304,722		2.96

Most of the warrants issued during the years ended December 31, 2018 and 2017 had terms ranging from 5.0 years to 5.5 years. At December 31, 2018 and 2017, the weighted-average remaining contractual term of outstanding warrants was 4.9 years and 6.1 years, respectively. Subject to certain ownership limitations of certain investors, all of the warrants outstanding are currently exercisable at the option of the holder into the equivalent number of shares of common stock.

On May 24, 2018, an institutional investor agreed to exercise an aggregate of 751 warrants to purchase common stock in exchange for a reduction in the warrant exercise price. The warrant exercise was accounted for as a warrant inducement and the related fair value adjustment to the exercised warrants of $146,245 was recorded as Warrant expense in the Consolidated Statements of Operations for the year ended December 31, 2018. The value attributable to the exercise price reductions was estimated using the Black Scholes option pricing model using risk-free interest rates ranging from 2.28% to 2.65%; expected lives ranging from less than one year to 3.7 years; expected dividends of zero and expected volatility ranging from 120.44% to 142.78%.

In connection with the Company’s public offering of Series B Preferred Stock, in August 2017, the Company issued warrants to purchase an aggregate of 1,226 shares of common stock to certain investors as consideration for the waiver by each investor of their right to participate in future securities offerings by the Company, which rights were granted pursuant to a financing transaction completed in November 2015. Because the Company received no additional consideration or future rights related to such warrants, the warrant value of $4.4 million was recorded as Warrant expense in the Consolidated Statements of Operations for the year ended December 31, 2017. The value of the warrants was estimated using the Black Scholes option pricing model using a risk-free interest rate of 2.03%, an expected life of 7.0 years, expected dividends of zero and expected volatility of 112.03%.

Certain of the Company’s outstanding warrants to purchase common stock originally issued in July 2015 (“July 2015 Warrants”) were recorded at fair value and classified as a liability. The fair value of the July 2015 Warrants was re-measured at each financial reporting period and immediately before exercise, with any changes in fair value recorded as Warrant expense in the Consolidated Statements of Operations. The fair value of the July 2015 Warrant liability was $0 and $1,600 at December 31, 2018 and 2017, respectively. The fair value at December 31, 2017 was calculated using a Black-Scholes option pricing model using a risk-free interest rate of 1.76%, an expected life of 12 months, expected dividends of zero and expected volatility of 193.28%.

Revenue Recognition

12 Months Ended

Dec. 31, 2018

Revenue Recognition

Revenue Recognition

(14)Revenue Recognition

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


	Year Ended December 31, 2018
	U.S.		OUS *		Total Revenues		% of Total Revenues
Lap-Band product	$	446,895	$	3,470	$	450,365		74.2%
ReShape vBloc product		156,345		—		156,345		25.8%
Total	$	603,240	$	3,470	$	606,710		100.0%


	Year Ended December 31, 2017
	U.S.		OUS *		Total Revenues		% of Total Revenues
ReShape vBloc product	$	319,160	$	—	$	319,160		56.1%
Other		250,000		—		250,000		43.9%
Total	$	569,160	$	—	$	569,160		100.0%

*All revenues outside the United States for the year ended December 31, 2018 were in Canada.

Lap-Band product sales are for the period from the date of acquisition of the product line assets of December 17, 2018 through December 31, 2018. As a result of the acquisition of the Lap-Band product line, the Company will no longer be actively marketing its ReShape vBloc product. The Company’s standard payment terms for its customers are generally 30 to 60 days after the Company satisfies the performance obligations.

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. Returns and exchanges of ReShape vBloc product have not been significant. Customers and distributors of Lap-Band product generally have the right to return or exchange products purchased for up to thirty days from the date of product shipment. Any such return or exchange of Lap-Band products will be recorded as a reduction of revenue in the period incurred until sufficient historical information is available to enable management to estimate returns and exchanges as variable consideration when determining the amount of revenue to recognize.

Certain Lap-Band customers may in the future receive volume rebates or discounts. These incentives, when offered, will be accounted for as variable consideration. The estimate of the expected amount to be provided to customers will reduce the revenue recognized. The Company has not offered rebate incentives with respect to sales of its ReShape vBloc product.

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.

Practical Expedients

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

Income Taxes

12 Months Ended

Dec. 31, 2018

Income Taxes

Income Taxes

(15)Income Taxes

Income tax expense (benefit) consists of the following:


	Year ended December 31,
	2018		2017
Deferred:
Federal	$	(3,585,679)	$	(2,538,611)
State		137,685		224,000
Deferred income tax benefit		(3,447,994)		(2,314,611)
Current state and local income tax expense		1,286		—
Total income tax benefit, net	$	(3,446,708)	$	(2,314,611)

A reconciliation of the U.S. federal statutory income tax rate to the Company's effective income tax rate is as follows:


	Year ended December 31,
	2018			2017
Income tax benefit at U.S. federal statutory rate		21.0	%		34.0	%
Goodwill impairment		(7.6)			—
Other permanent differences		(0.4)	%		(6.0)	%
Research and development credit		0.9	%		0.8	%
Impact of U.S. Tax Cuts and Jobs Act		—	%		(112.0)	%
Change in state tax rate		(1.1)			—
Change in valuation allowance		(3.9)	%		90.3	%
Effective income tax rate		8.9	%		7.1	%

The components of deferred tax assets and liabilities are as follows:


	December 31,
	2018		2017
Deferred tax assets:
Start-up costs	$	1,239,000	$	4,166,000
Capitalized research and development costs		728,000		12,494,000
Reserves and accruals		7,465,000		7,642,000
Property and equipment		—		46,000
Research and development credit		1,334,000		4,387,000
Net operating loss carryforwards		22,721,000		63,794,000
Total gross deferred tax assets		33,487,000		92,529,000
Valuation allowance		(29,904,000)		(86,033,000)
Deferred tax assets, net of valuation allowance		3,583,000		6,496,000
Intangible assets		(5,385,000)		(11,788,000)
Property and equipment		(42,000)		—
Total gross deferred tax liabilities		(5,427,000)		(11,788,000)
Net deferred tax liability	$	(1,844,000)	$	(5,292,000)

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. Based on the level of historical losses, projections of losses in future periods and potential limitations pursuant to changes in ownership under Internal Revenue Code (“IRC”) Section 382, the Company provided a valuation allowance at both December 31, 2018 and 2017. The remaining net deferred tax liability at December 31, 2018 is the result of the deferred tax liability associated with the indefinite-lived intangible asset of $5.1 million, less the deferred tax asset associated with U.S. federal net operating loss carryforwards that do not expire of $3.3 million. At December 31, 2017, the remaining net deferred tax liability was due to the deferred tax liability associated with the indefinite-lived intangible asset of $5.3 million.

As of December 31, 2018 and 2017, the Company had U.S. federal net operating loss carryforwards of $350.1 million and $253.8 million, respectively. Of the total U.S. federal net operating loss carryforwards at December 31, 2018, $302.6 million will be limited as a result of Section 382 as described below and will expire unused. Losses generated in 2018 will carryover indefinitely. The Company had state net operating loss carryforwards of $200.4 million and $160.9 million at December 31, 2018 and 2017, respectively and had foreign net operating loss carryforwards of $0.2 million at both December 31, 2018 and 2017. Net operating loss carryforwards of the Company are subject to review and possible adjustment by the taxing authorities. With certain exceptions (e.g. the net operating loss carryforwards), the Company is no longer subject to U.S. federal, state or local examinations by tax authorities for years prior to 2015. There are no tax examinations currently in progress.

The Company’s ability to utilize its net operating loss carryforwards, tax credits, and built-in items of deduction, including capitalized start-up costs and research and development costs, has been, and may continue to be substantially limited due to ownership changes. These ownership changes limit the amount of net operating loss carryforwards, credits and built-in items of deduction that can be utilized annually to offset future taxable income. In general, an ownership change, as defined in IRC Section 382, results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50% of the outstanding stock of a company by certain stockholders or public groups. In 2018, the Company completed an IRC Section 382 review and determined that ownership changes had occurred, which resulted in the determination that $302.6 million of U.S. federal net operating loss carryforwards and $3.5 million of U.S. federal research and development credit will expire unused as a result of ownership changes and the resulting Section 382 limitations. Further, an aggregate of $40.8 million of other future tax deductible amounts have been reduced. Both the deferred tax assets and the deferred tax valuation allowance were reduced by $67.2 million for the tax effect of these lost benefits, with no net effect on results of operations for the year ended December 31, 2018. Due to the valuation allowance against deferred tax assets at December 31, 2018, the net effect of any further limitation will have no impact on results of operations.

The enactment of the Tax Cuts and Jobs Act in December 2017 (“2017 Act) reduced the federal corporate income tax rate to 21% effective January 1, 2018. The rate change resulted in a remeasurement of deferred tax assets and liabilities and the effect on the Company’s effective income tax rate for the year ended December 31, 2017 is shown in the table above.

In December 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued, which allowed for the recording of provisional amounts during a measurement period not to extend beyond one year of the enactment date of the 2017 Act in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the 2017 Act. As a result of the 2017 Tax Act, NOLs generated in taxable years ending after December 31, 2017 have an indefinite carryforward period. In accordance with SAB 118, a provisional tax benefit of $2.3 million was recorded during the year ended December 31, 2017. The Company completed its analysis during 2018 and concluded no further adjustments were required in 2018.

Stock-based Compensation

12 Months Ended

Dec. 31, 2018

Stock-based Compensation

Stock-based Compensation

(16)Stock-based Compensation

The ReShape Lifesciences Inc. Second Amended and Restated 2003 Stock Incentive Plan (the “Plan”) provides for the grant of stock options or other stock-based awards to employees, officers, non-employee directors and outside consultants of the Company. In 2018 and 2017, the Company’s stockholders approved amendments to the Plan that increased the number of shares authorized for issuance by 3,096 shares and 2,620 shares, respectively. The Plan amendment in 2018 also added an automatic share increase provision that provides for an annual increase on January 1 of each year beginning in 2019 such that the number of shares of common stock authorized for issuance under the Plan is equal to 15% of the total shares of common stock outstanding, on an as converted basis, as of the last day of the immediately preceding fiscal year. The increased number of shares available for issuance under the Plan is subject to adjustment in accordance with certain provisions of the Plan. As of January 1, 2019, the number of shares authorized for issuance increased from 7,143 to 3,631,035 and there were 3,627,053 shares of common stock available for issuance under the Plan.

The Plan is administered by the board of directors, which determines the types of awards to be granted, including the number of shares subject to the awards, the exercise price and the vesting schedule. Options granted under the Plan expire no later than ten years from the date of grant. The exercise price of each option may not be less than 100% of the fair market value of the common stock at the date of grant. Options may be granted to stockholders possessing more than 10% of the total combined voting power of all classes of stocks of the Company at an exercise price at least 110% of the fair value of the common stock at the date of grant and the options are not exercisable after the expiration of 10 years from the date of grant. Employee stock options generally vest over four years.

Stock Options

Stock option activity for the Plan is as follows:


				Weighted
		Weighted		Average
		Average		Remaining
		Exercise Price		Contractual
	Shares	Per Share		Life (years)
Outstanding at December 31, 2016	4	$	3,832,227.00
Options granted	1,280		8,946.00
Options exercised	—		—
Options cancelled	(78)		34,923.00
Outstanding at December 31, 2017	1,206		178,872.14
Options granted	2,868		1,336.72
Options exercised	—		—
Options cancelled	(92)		214,040.20
Outstanding at December 31, 2018	3,982		48,910.71	8.8
Exercisable at December 31, 2018	661		283,490.51	7
Vested and expected to vest at December 31, 2018	3,979		34,035.16	8.9

As of December 31, 2018, stock options under the Plan that were outstanding, exercisable and vested and expected to vest under had no intrinsic value.

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. Each of the Inducement Grants vests over a period of four years from the date of the officer’s employment agreement. Inducement Grants are summarized below:


				Weighted
		Weighted		Average
		Average		Remaining
		Exercise Price		Contractual
	Shares	Per Share		Life (years)
Outstanding at December 31, 2016	7	$	401,352.00
Options granted	657		4,284.00
Options exercised	—		—
Options cancelled	(44)		8,778.00
Outstanding at December 31, 2017	620		7,733.48
Options granted	—		—
Options exercised	—		—
Options cancelled	(377)		4,163.63
Outstanding at December 31, 2018	243		—	8.4
Exercisable at December 31, 2018	86		25,298.42	7.8
Vested and expected to vest at December 31, 2018	243		13,595.10	8.4

As of December 31, 2018, Inducement Grants outstanding, exercisable and vested and expected to vest had no intrinsic value.

The total estimated grant date fair value of stock options granted during the years ended December 31, 2018 and 2017 was $3.5 million and $11.5 million, respectively. Compensation cost for stock options granted to employees is based on the estimated grant-date fair value and is recognized over the vesting period of the applicable award on a straight-line basis. The fair value of stock option awards was estimated at the date of grant using a Black‑Scholes option pricing model with the following assumptions:


	Year Ended December 31,
	2018	2017
Risk-free interest rates	2.85%	1.94% - 2.38%
Expected term (in years)	6.25	6.25 - 10.0
Expected dividends	0%	0%
Expected volatility	121.52%	114.94% - 131.24%

Risk-Free Interest Rate. The risk-free interest rate is estimated using the U.S. Treasury yield curve and is based on the expected term of the award.

Expected Term. The expected term of stock option awards granted is estimated based on the “simplified” method described in the SEC Staff Accounting Bulletin, Topic 14: Share-Based Payment. The Company uses historical data to estimate stock option forfeitures.

Expected Dividends. The Company has never paid dividends on its common stock and has no plans to pay dividends on its common stock.

Expected Volatility. Expected volatility is estimated based on the Company’s historical stock price volatility and expected stock price volatility over the term of the awards.

Compensation expense related to stock options was recognized as follows:


	Year Ended
	December 31,
	2018		2017
Selling, general and administrative	$	2,923,834	$	4,313,907
Research and development		173,972		122,890
Total	$	3,097,806	$	4,436,797

As of December 31, 2018, there was approximately $6.2 million of total unrecognized compensation related to unvested stock option awards, which is expected to be recognized over a weighted-average period of 2.5 years.

Retirement Plan	12 Months Ended
Retirement Plan	Dec. 31, 2018
Retirement Plan
Retirement Plan	(17)Retirement Plan The Company has a 401(k) profit-sharing plan that provides retirement benefits to employees. Eligible employees may contribute a percentage of their annual compensation, subject to Internal Revenue Service limitations. The Company’s matching is at the discretion of the Company’s board of directors. For the years ended December 31, 2018 and 2017, the Company did not provide any matching of employees’ contributions.

Subsequent Events	12 Months Ended
Subsequent Events	Dec. 31, 2018
Subsequent Events
Subsequent Events	(18)Subsequent Events On February 1, 2019, pursuant to an exchange agreement with Sabby Volatility Warrant Master Fund, Ltd. (“Sabby”) 1,192,000 shares of the Company’s common stock were exchanged for an aggregate of 1,192,000 shares of series E convertible preferred stock, par value $0.01 per share (“Series E Preferred Stock”) in a noncash transaction. Each share of Series E Preferred Stock will initially be convertible into one share of common stock at Sabby’s election. The Series E Preferred Stock includes a provision which limits the holder’s right to convert shares of Series E Preferred Stock into common stock such that its beneficial ownership may not exceed 9.99% of the Company’s outstanding common stock. On March 29, 2019, the Company completed a private placement with two healthcare focused institutional investors for the sale of secured subordinated original issue discount convertible debentures for a purchase price of $2 million. The debentures are due June 28, 2019 and have a face amount of $2.2 million, reflecting a 10% original issue discount. At any time after June 28, 2019, if the debentures have not been repaid, subject to certain investor ownership limitations, the debentures will be convertible into shares of common stock at a conversion price equal to the lesser of $0.33 and 80% of the average of the lowest two volume weighted average prices of the Company’s common stock during the 20 trading days prior to conversion. As collateral for the Company’s obligations under the debentures, the Company has granted the debenture holders a subordinated security interest in all of the assets of the Company and its subsidiary. In connection with the financing, the Company amended the exercise price of warrants to purchase up to 8 million shares of common stock held by the investors that were issued on November 28, 2018 from $1.50 per share to $0.01 per share.

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2018

Summary of Significant Accounting Policies

Basis of Presentation

The Company has prepared the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

Reverse Stock Splits

During 2018, the Company’s board of directors and stockholders approved the following reverse stock splits:

1-for-15 reverse split of the Company’s outstanding common stock that became effective after the close of market on June 1, 2018.

1-for-140 reverse split of the Company’s outstanding common stock that became effective after the close of market on November 7, 2018.

Principles of Consolidation

Use of Estimates

Discontinued Operations

Cash and Cash Equivalents

Inventory

Property and Equipment, Net

Goodwill and Other Intangible Assets

Goodwill represents the excess of the cost of an acquired business over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination.

Impairment of Goodwill and Long-Lived Assets

Research and Development Expenses

Patent Costs

Stock-Based Compensation

Net Loss Per Share


	December 31,
	2018	2017
Stock options outstanding	4,225	1,826
Common shares underlying convertible preferred stock	131,743	5,797
Warrants to purchase common stock	15,304,722	6,814

Concentration of Credit Risk

Fair Value of Financial Instruments

Segment Reporting

Recent Accounting Pronouncements

New accounting standards adopted by the Company in 2018 are discussed below or in the related notes, where appropriate.

New accounting standards not yet adopted are discussed below.

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2018

Summary of Significant Accounting Policies

Antidilutive Securities


	December 31,
	2018	2017
Stock options outstanding	4,225	1,826
Common shares underlying convertible preferred stock	131,743	5,797
Warrants to purchase common stock	15,304,722	6,814

Acquisitions (Tables)

12 Months Ended

Dec. 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

Apollo’s Lap-Band Product Line

Schedule of allocation of purchase price


Asset purchase consideration paid at closing	$	10,000,000
Aggregate asset purchase consideration payable		7,000,000
Adjustment to net present value of asset purchase consideration payable		(703,582)
Present value of asset purchase consideration		16,296,418
Asset purchase transaction costs		500,000
Fair value of ReShape Balloon product line assets transferred		—
Total transaction cost	$	16,796,418

Schedule of allocation of the fair values of assets acquired


Developed technology/know-how	$	14,361,732
Trademarks		954,809
Inventory		993,840
Fixed assets		486,037
Total transaction cost	$	16,796,418

Discontinued Operations (Tables)

12 Months Ended

Dec. 31, 2018

Discontinued Operations.

Schedule of assets and liabilities associated with discontinued operations

Accordingly, the loss on disposal of discontinued operations consists of an impairment charge of $22.6 million for the full write-down of the ReShape Balloon product line assets disposed of, which had the following carrying values as of December 17, 2018 prior to the write-down:


Inventory	$	670,011
Property and equipment, net		42,163
Other intangible assets, net		21,884,317
	$	22,596,491


	Year Ended December 31,
	2018		2017
Total revenue	$	2,285,115	$	717,994
Loss from operations and disposal/impairment of discontinued operations before income taxes		(45,884,552)		(3,353,650)
Income tax benefit		—		—
Loss from discontinued operations, net of tax	$	(45,884,552)	$	(3,353,650)


ASSETS:
Current assets:
Inventory	$	848,566
Current assets of discontinued operations		848,566
Noncurrent assets:
Property and equipment, net		96,645
Goodwill		13,182,047
Other intangible assets, net		24,343,750
Noncurrent assets of discontinued operations		37,622,442
Total assets of discontinued operations	$	38,471,008

- Definition

Tabular disclosure of information related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

+ References

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+ Details

Inventory (Tables)

12 Months Ended

Dec. 31, 2018

Inventory

Schedule of current Inventory


	December 31,
	2018		2017
Raw materials	$	—	$	496,156
Work-in-process		—		1,353,877
Finished goods		984,735		118,513
Inventory	$	984,735	$	1,968,546

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2018

Property and Equipment

Property and Equipment


	December 31,
	2018		2017
Furniture and equipment	$	2,341,507	$	2,393,644
Computer hardware and software		781,724		774,697
Leasehold improvements		81,298		123,542
		3,204,529		3,291,883
Less accumulated depreciation and amortization		(3,140,981)		(2,949,907)
Property and equipment, net	$	63,548	$	341,976

Goodwill (Tables)

12 Months Ended

Dec. 31, 2018

Goodwill.

Schedule of goodwill and changes in carrying amount and gross amount and accumulated impairment loss of goodwill

Goodwill and the changes in the carrying amount of goodwill for the years ended December 31, 2018 and 2017 are as follows:


Balance as of December 31, 2016	$	—
BarioSurg acquisition		14,004,573
Balance as of December 31, 2017		14,004,573
Impairment		(14,004,573)
Balance as of December 31, 2018	$	—

The gross amount and accumulated impairment loss of goodwill are as follows:


	December 31,
	2018		2017
Gross amount	$	14,004,573	$	14,004,573
Accumulated impairment loss		(14,004,573)		—
Goodwill, net	$	—	$	14,004,573

Other Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2018

Other Intangible Assets

Summary of identifiable intangible assets


	December 31, 2018
	Amortization Period (years)	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Finite-lived intangible assets:
Developed technology	10	$	14,361,732	$	(59,841)	$	14,301,891
Trademarks/Tradenames	10		2,045,172		(176,615)		1,868,557
Covenant not to compete	3		75,884		(40,050)		35,834
			16,482,788		(276,506)		16,206,282
Indefinite-lived intangible assets:
In-process research and development	indefinite		20,720,939		—		20,720,939
Total		$	37,203,727	$	(276,506)	$	36,927,221


	December 31, 2017
	Amortization Period (years)	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Finite-lived intangible assets:
Trademarks/Tradenames	10	$	1,090,363	$	(63,604)	$	1,026,759
Covenant not to compete	3		75,884		(14,755)		61,129
			1,166,247		(78,359)		1,087,888
Indefinite-lived intangible assets:
In-process research and development	indefinite		20,720,939		—		20,720,939
Total		$	21,887,186	$	(78,359)	$	21,808,827

Schedule of future amortization of Finite-Lived intangible assets

Estimated amortization expense for each of the years ending December 31 is as follows:


Year ending December 31,
2019	$	1,665,985
2020		1,651,229
2021		1,640,690
2022		1,640,690
2023		1,640,690
Thereafter		7,966,998
	$	16,206,282

Accrued and Other Liabilities (Tables)

12 Months Ended

Dec. 31, 2018

Accrued and Other Liabilities

Schedule of components of accrued and other liabilities


	December 31,
	2018		2017
Professional service related expenses	$	3,094,769	$	2,643,342
Payroll related expenses		1,146,114		2,480,219
Other accrued liabilities		588,293		831,957
Accrued and other liabilities	$	4,829,176	$	5,955,518

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2018

Commitments and Contingencies

Schedule of future minimum lease payments

Future minimum lease commitments under noncancelable operating leases as of December 31, 2018 are as follows:


Year ending December 31,
2019	$	449,226
2020		331,990
2021		331,229
2022		165,511
Total	$	1,277,956

Warrants (Tables)

12 Months Ended

Dec. 31, 2018

Warrants

Schedule of warrant activity


		Weighted
		Average
		Exercise
	Shares	Price
Balance, December 31, 2016	27	$	501,690.00
Granted	7,074		6,615.00
Exercised	(286)		11,676.00
Cancelled	(1)		501,690.00
Balance December 31, 2017	6,814		11,464.67
Granted	16,429,804		2.82
Exercised	(1,131,892)		0.45
Cancelled	(4)		4,035,150.00
Balance December 31, 2018	15,304,722		2.96

- 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

Revenue Recognition (Tables)

12 Months Ended

Dec. 31, 2018

Revenue Recognition

Schedule of disaggregation of revenue by product and geography


	Year Ended December 31, 2018
	U.S.		OUS *		Total Revenues		% of Total Revenues
Lap-Band product	$	446,895	$	3,470	$	450,365		74.2%
ReShape vBloc product		156,345		—		156,345		25.8%
Total	$	603,240	$	3,470	$	606,710		100.0%


	Year Ended December 31, 2017
	U.S.		OUS *		Total Revenues		% of Total Revenues
ReShape vBloc product	$	319,160	$	—	$	319,160		56.1%
Other		250,000		—		250,000		43.9%
Total	$	569,160	$	—	$	569,160		100.0%

*All revenues outside the United States for the year ended December 31, 2018 were in Canada.

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Income Taxes

Components of income tax expense (benefit)


	Year ended December 31,
	2018		2017
Deferred:
Federal	$	(3,585,679)	$	(2,538,611)
State		137,685		224,000
Deferred income tax benefit		(3,447,994)		(2,314,611)
Current state and local income tax expense		1,286		—
Total income tax benefit, net	$	(3,446,708)	$	(2,314,611)

Reconciliation of effective income tax rate to statutory


	Year ended December 31,
	2018			2017
Income tax benefit at U.S. federal statutory rate		21.0	%		34.0	%
Goodwill impairment		(7.6)			—
Other permanent differences		(0.4)	%		(6.0)	%
Research and development credit		0.9	%		0.8	%
Impact of U.S. Tax Cuts and Jobs Act		—	%		(112.0)	%
Change in state tax rate		(1.1)			—
Change in valuation allowance		(3.9)	%		90.3	%
Effective income tax rate		8.9	%		7.1	%

Components of deferred tax assets and liabilities


	December 31,
	2018		2017
Deferred tax assets:
Start-up costs	$	1,239,000	$	4,166,000
Capitalized research and development costs		728,000		12,494,000
Reserves and accruals		7,465,000		7,642,000
Property and equipment		—		46,000
Research and development credit		1,334,000		4,387,000
Net operating loss carryforwards		22,721,000		63,794,000
Total gross deferred tax assets		33,487,000		92,529,000
Valuation allowance		(29,904,000)		(86,033,000)
Deferred tax assets, net of valuation allowance		3,583,000		6,496,000
Intangible assets		(5,385,000)		(11,788,000)
Property and equipment		(42,000)		—
Total gross deferred tax liabilities		(5,427,000)		(11,788,000)
Net deferred tax liability	$	(1,844,000)	$	(5,292,000)

Stock-based Compensation (Tables)

12 Months Ended

Dec. 31, 2018

Stock Option Valuation Assumptions


	Year Ended December 31,
	2018	2017
Risk-free interest rates	2.85%	1.94% - 2.38%
Expected term (in years)	6.25	6.25 - 10.0
Expected dividends	0%	0%
Expected volatility	121.52%	114.94% - 131.24%

Summary of stock-based compensation for stock-based awards for nonemployees allocated to operating expenses


	Year Ended
	December 31,
	2018		2017
Selling, general and administrative	$	2,923,834	$	4,313,907
Research and development		173,972		122,890
Total	$	3,097,806	$	4,436,797

Stock Incentive Plan 2003

Summary of Stock Option Activity


				Weighted
		Weighted		Average
		Average		Remaining
		Exercise Price		Contractual
	Shares	Per Share		Life (years)
Outstanding at December 31, 2016	4	$	3,832,227.00
Options granted	1,280		8,946.00
Options exercised	—		—
Options cancelled	(78)		34,923.00
Outstanding at December 31, 2017	1,206		178,872.14
Options granted	2,868		1,336.72
Options exercised	—		—
Options cancelled	(92)		214,040.20
Outstanding at December 31, 2018	3,982		48,910.71	8.8
Exercisable at December 31, 2018	661		283,490.51	7
Vested and expected to vest at December 31, 2018	3,979		34,035.16	8.9

Inducement grants

Summary of Stock Option Activity


				Weighted
		Weighted		Average
		Average		Remaining
		Exercise Price		Contractual
	Shares	Per Share		Life (years)
Outstanding at December 31, 2016	7	$	401,352.00
Options granted	657		4,284.00
Options exercised	—		—
Options cancelled	(44)		8,778.00
Outstanding at December 31, 2017	620		7,733.48
Options granted	—		—
Options exercised	—		—
Options cancelled	(377)		4,163.63
Outstanding at December 31, 2018	243		—	8.4
Exercisable at December 31, 2018	86		25,298.42	7.8
Vested and expected to vest at December 31, 2018	243		13,595.10	8.4

Summary of Significant Accounting Policies - General (Details)			12 Months Ended
	Nov. 07, 2018	Jun. 01, 2018	Dec. 31, 2018 USD ($) item	Dec. 31, 2017 USD ($)	Dec. 31, 2008 USD ($)
Significant accounting policies
Reverse stock split ratio	0.007143	0.066667
Number of reporting units \| item			1
Other comprehensive income or loss			$ 0	$ 0
Patent related legal expenses				$ 305,000	$ 257,000
Furniture and equipment \| Minimum
Significant accounting policies
Property and equipment estimated useful life			5 years
Furniture and equipment \| Maximum
Significant accounting policies
Property and equipment estimated useful life			7 years
Computer hardware and software \| Minimum
Significant accounting policies
Property and equipment estimated useful life			3 years
Computer hardware and software \| Maximum
Significant accounting policies
Property and equipment estimated useful life			5 years

Summary of Significant Accounting Policies - Anti-dilutive Securities (Details) - shares	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Stock options
Anti-dilutive Securities
Anti-dilutive securities (in shares)	4,225	1,826
Convertible preferred stock
Anti-dilutive Securities
Anti-dilutive securities (in shares)	131,743	5,797
Warrants
Anti-dilutive Securities
Anti-dilutive securities (in shares)	15,304,722	6,814

Summary of Significant Accounting Policies - Credit Risk Concentration (Details)	12 Months Ended
	Dec. 31, 2017 $ / shares
Credit risk
Concentration risk
Money market funds preserve the value of investment per share	$ 1.00

Summary of Significant Accounting Policies - Segment Reporting (Details)	12 Months Ended
	Dec. 31, 2018 USD ($) segment	Dec. 31, 2017 USD ($)
Segment reporting
Number of operating segments \| segment	3
Revenue	$ 606,710	$ 569,160
Gross Profit	442,411	235,884
Operating segments \| Lap Band segment
Segment reporting
Gross Profit	373,008	0
Operating segments \| ReShape vBloc segment
Segment reporting
Gross Profit	69,403	145,415
Operating segments \| ReShape Vest segment
Segment reporting
Revenue	0	0
Gross Profit	$ 0	0
Non-Segment \| Other
Segment reporting
Gross Profit		$ 90,469

Summary of Significant Accounting Policies - Topic 842 (Details) - ASU 2016-02 - Adjustment $ in Millions	Jan. 01, 2019 USD ($)
New accounting pronouncements
Right of use asset	$ 1.0
Operating lease liability	$ 1.0

Liquidity and Management's Plans (Details) - USD ($)	12 Months Ended
Liquidity and Management's Plans (Details) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Liquidity and Management's Plans
Proceeds from equity offerings	$ 33,200,000	$ 34,500,000
Proceeds from Warrant Exercises	513,136	3,334,176
Cash and Cash Equivalents, at Carrying Value	$ 5,547,745	$ 10,163,208

Acquisitions - Lap-Band Product Line Assets (Details) - USD ($)		12 Months Ended
	Dec. 17, 2018	Dec. 31, 2018
Asset acquisition, total transaction cost
Accretion of interest		$ 13,792
Apollo’s Lap-Band Product Line
Acquisitions
Consideration payable on the first anniversary of the closing date	$ 2,000,000
Consideration payable on the second anniversary of the closing date	2,000,000
Consideration payable on the third anniversary of the closing date	$ 3,000,000
Threshold period for manufacturing product	2 years
Threshold period for serving as distributor of product	1 year
Asset acquisition, total transaction cost
Aggregate asset purchase consideration payable		6,310,210
Minimum gross proceeds on equity financing required to terminate security interest	$ 15,000,000
Discount rate (as a percent)	5.10%
Accretion of interest		$ 13,792
Fair Value, Measurements, Nonrecurring \| Apollo’s Lap-Band Product Line
Asset acquisition, total transaction cost
Asset purchase consideration paid at closing	$ 10,000,000
Aggregate asset purchase consideration payable	7,000,000
Adjustment to net present value of asset purchase consideration payable	(703,582)
Present value of asset purchase consideration	16,296,418
Asset purchase transaction costs	500,000
Total transaction cost	16,796,418
Asset acquisition, fair values of assets acquired
Inventory	993,840
Fixed assets	486,037
Total transaction cost	16,796,418
Developed technology/know-how \| Fair Value, Measurements, Nonrecurring \| Apollo’s Lap-Band Product Line
Asset acquisition, fair values of assets acquired
Intangible assets	14,361,732
Trademarks \| Fair Value, Measurements, Nonrecurring \| Apollo’s Lap-Band Product Line
Asset acquisition, fair values of assets acquired
Intangible assets	$ 954,809

Acquisitions - BarioSurg, Inc. (Details) - USD ($)		3 Months Ended	7 Months Ended	12 Months Ended
Acquisitions - BarioSurg, Inc. (Details) - USD ($)	May 22, 2017	Jun. 30, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2016
Acquisition
Common stock, par value (in dollars per share)			$ 0.01	$ 0.01
Business combination, fair values of the assets acquired and liabilities assumed
Goodwill			$ 14,004,573		$ 0
Goodwill impairment associated with continuing operations		$ 14,000,000		$ 14,004,573
BarioSurg
Acquisition
Total transaction cost	$ 28,300,000
Cash consideration	2,000,000
Value of equity consideration	$ 26,300,000
Discount for lack of marketability (in percentage)	19.00%
Acquisition related cost	$ 454,000
Business combination, fair values of the assets acquired and liabilities assumed
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
Goodwill impairment associated with continuing operations		$ 14,000,000
Revenue since acquisition			0
Net loss since acquisition			$ 832,000
BarioSurg \| Trademarks/tradenames
Business combination, fair values of the assets acquired and liabilities assumed
Intangible assets				1,090,363
BarioSurg \| Covenant not to compete
Business combination, fair values of the assets acquired and liabilities assumed
Intangible assets				75,884
BarioSurg \| In-process research and development
Business combination, fair values of the assets acquired and liabilities assumed
Intangible assets				$ 20,720,939
BarioSurg \| Common Stock
Acquisition
Number of shares issued	658
BarioSurg \| Conditional Convertible Preferred Stock
Acquisition
Number of shares issued	1,000,181
Preferred stock, par value (in dollars per share)	$ 0.01

Discontinued Operations - Disposal Group (Details) - USD ($)	3 Months Ended
	Dec. 31, 2018	Jun. 30, 2018	Dec. 17, 2018	Dec. 31, 2017
Carrying values of ReShape Balloon product line assets at transaction date:
Current assets of discontinued operations				$ 848,566
ReShape Balloon product line \| Discontinued operations held-for-sale
Discontinued operations
Goodwill impairment		$ 13,200,000
Carrying values of ReShape Balloon product line assets at transaction date:
Inventory			$ 670,011	848,566
Property and equipment, net			42,163
Other intangible assets, net			21,884,317
Current assets of discontinued operations			$ 22,596,491	$ 848,566
ReShape Balloon product line \| Discontinued operations, held-for-sale or sold
Discontinued operations
Loss on disposal/impairment of discontinued operations	$ 22,600,000

Discontinued Operations - Components of Loss (Details) - USD ($)	3 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Components of loss from discontinued operations
Loss from discontinued operations, net of tax		$ (45,884,552)	$ (3,353,650)
Discontinued operations, held-for-sale or sold \| ReShape Balloon product line
Components of loss from discontinued operations
Revenue		2,285,115
Loss from operations and disposal/impairment of discontinued operations before income taxes		(45,884,552)
Loss from discontinued operations, net of tax		$ (45,884,552)
Discontinued operations held-for-sale \| ReShape Balloon product line
Components of loss from discontinued operations
Revenue	$ 717,994
Loss from operations and disposal/impairment of discontinued operations before income taxes	(3,353,650)
Loss from discontinued operations, net of tax	$ (3,353,650)

- Definition

Amount before tax of income (loss) from a discontinued operation. Includes, but is not limited to, the income (loss) from operations during the phase-out period, gain (loss) on disposal, gain (loss) for reversal of write-down (write-down) to fair value, less cost to sell, and adjustments to a prior period gain (loss) on disposal.

+ References + Details

- Definition

Amount after tax of income (loss) from a discontinued operation attributable to the parent. Includes, but is not limited to, the income (loss) from operations during the phase-out period, gain (loss) on disposal, gain (loss) for reversal of write-down (write-down) to fair value, less cost to sell, and adjustments to a prior period gain (loss) on disposal.

+ References + Details

Discontinued Operations - Assets and Liabilities (Details) - USD ($)	Dec. 17, 2018	Dec. 31, 2017
Current assets:
Current assets of discontinued operations		$ 848,566
Noncurrent assets:
Noncurrent assets of discontinued operations		37,622,442
Discontinued operations held-for-sale \| ReShape Balloon product line
Current assets:
Inventory	$ 670,011	848,566
Current assets of discontinued operations	$ 22,596,491	848,566
Noncurrent assets:
Property and equipment, net		96,645
Goodwill		13,182,047
Other intangible assets, net		24,343,750
Noncurrent assets of discontinued operations		37,622,442
Total assets of discontinued operations		$ 38,471,008

Inventory - Components of Current (Details) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Current inventory components
Raw materials		$ 496,156
Work-in-process		1,353,877
Finished goods	$ 984,735	118,513
Inventory	$ 984,735	$ 1,968,546

Inventory - Write downs and Noncurrent Amount (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Noncurrent inventory
Noncurrent inventory	$ 0	$ 1,000,000
ReShape vBloc product \| Selling, general and administrative expense
Inventory adjustments
Inventory write-downs	$ 2,900,000

Property and Equipment (Detail) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Property and equipment
Property and Equipment, Gross	$ 3,204,529	$ 3,291,883
Less accumulated depreciation and amortization	(3,140,981)	(2,949,907)
Property and equipment, net	63,548	341,976
Furniture and equipment
Property and equipment
Property and Equipment, Gross	2,341,507	2,393,644
Computer hardware and software
Property and equipment
Property and Equipment, Gross	781,724	774,697
Leasehold improvements
Property and equipment
Property and Equipment, Gross	$ 81,298	$ 123,542

Goodwill - Activity (Detail) - USD ($)	3 Months Ended	12 Months Ended
Goodwill - Activity (Detail) - USD ($)	Jun. 30, 2018	Dec. 31, 2018	Dec. 31, 2017
Goodwill activity
Balance at beginning of year		$ 14,004,573	$ 0
Impairment	$ (14,000,000)	(14,004,573)
Balance at end of year			14,004,573
BarioSurg
Goodwill activity
Acquisition			$ 14,004,573
Impairment	$ (14,000,000)
Balance at end of year		$ 14,004,573

Goodwill - Impairment (Detail) - USD ($)	3 Months Ended	12 Months Ended
Goodwill - Impairment (Detail) - USD ($)	Jun. 30, 2018	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Goodwill
Gross amount		$ 14,004,573	$ 14,004,573
Accumulated impairment loss		(14,004,573)
Goodwill, net			$ 14,004,573	$ 0
Goodwill impairment
Goodwill impairment associated with continuing operations	$ 14,000,000	$ 14,004,573
Discontinued operations held-for-sale \| ReShape Balloon product line
Goodwill impairment
Goodwill associated with discontinued operations	$ 13,200,000

Other Intangible Assets - Components (Details) - USD ($)	3 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2018	Dec. 31, 2017
Summary of identifiable intangible assets
Gross Carrying Amount		$ 16,482,788	$ 1,166,247
Accumulated amortization		(276,506)	(78,359)
Total finite-lived intangible assets		16,206,282	1,087,888
Gross carrying amount		37,203,727	21,887,186
Net book value		$ 36,927,221	$ 21,808,827
Impairment of intangible assets other than goodwill
Indefinite-lived intangible assets impairment	$ 0
Finite-lived intangible assets impairment	$ 0
Developed technology/know-how
Summary of identifiable intangible assets
Amortization period		10 years
Gross Carrying Amount		$ 14,361,732
Accumulated amortization		(59,841)
Total finite-lived intangible assets		$ 14,301,891
Trademarks/tradenames
Summary of identifiable intangible assets
Amortization period		10 years	10 years
Gross Carrying Amount		$ 2,045,172	$ 1,090,363
Accumulated amortization		(176,615)	(63,604)
Total finite-lived intangible assets		$ 1,868,557	$ 1,026,759
Covenant not to compete
Summary of identifiable intangible assets
Amortization period		3 years	3 years
Gross Carrying Amount		$ 75,884	$ 75,884
Accumulated amortization		(40,050)	(14,755)
Total finite-lived intangible assets		35,834	61,129
In-process research and development
Summary of identifiable intangible assets
Indefinite-lived intangible assets		$ 20,720,939	$ 20,720,939

Other Intangible Assets - Expected Amortization (Details) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Estimated amortization of intangible assets
2019	$ 1,665,985
2020	1,651,229
2021	1,640,690
2022	1,640,690
2023	1,640,690
Thereafter	7,966,998
Total finite-lived intangible assets	$ 16,206,282	$ 1,087,888

Accrued and Other Liabilities (Detail) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Accrued and Other Liabilities
Professional service related expenses	$ 3,094,769	$ 2,643,342
Payroll related expenses	1,146,114	2,480,219
Other accrued liabilities	588,293	831,957
Accrued and other liabilities	$ 4,829,176	$ 5,955,518

Commitments and Contingencies - Future Minimum Lease Payments and Rent Expense (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Future minimum lease commitments under noncancelable operating leases
2019	$ 449,226
2020	331,990
2021	331,229
2022	165,511
Total	1,277,956
Rent expense for all operating leases
Total rent expense	$ 767,000	$ 357,000

Commitments and Contingencies - Litigation (Details)				12 Months Ended
Commitments and Contingencies - Litigation (Details)	Jul. 26, 2018 USD ($) $ / shares	Jul. 12, 2018 USD ($) $ / shares	Feb. 28, 2017 plaintiff item shares	Dec. 31, 2018 USD ($)	Apr. 30, 2018 $ / shares	Aug. 16, 2017 $ / shares
August 2017 investor warrants
Loss contingencies
Exercise price of warrants (in dollars per share)					$ 1,575
Series B Convertible Preferred Stock
Loss contingencies
Conversion price (in dollars per share)					$ 1,575.00	$ 4,830.00
Stock options
Loss contingencies
Award granted, shares \| shares			521
Du Litigation
Loss contingencies
Parties to complaint \| plaintiff			1
Number of senior management members \| item			4
Number of years				5 years
Du Litigation \| Selling, general and administrative expense
Loss contingencies
Settlement expense \| $				$ 197,000
Iroquois Litigation \| April 3, 2018 investor warrants
Loss contingencies
Exercise price of warrants (in dollars per share)	$ 189
Iroquois Litigation \| Series D convertible preferred stock
Loss contingencies
Conversion price (in dollars per share)	$ 189.00
Minimum \| Alpha Litigation
Loss contingencies
Damages sought \| $		$ 3,600,000
Minimum \| Iroquois Litigation
Loss contingencies
Damages sought \| $	$ 5,000,000
Maximum \| Alpha Litigation \| August 2017 investor warrants
Loss contingencies
Exercise price of warrants (in dollars per share)		$ 420
Maximum \| Alpha Litigation \| Series B Convertible Preferred Stock
Loss contingencies
Conversion price (in dollars per share)		$ 420.00

Equity - Full-Ratchet Amendment (Details) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2018 USD ($) $ / shares
Warrants
Down round adjustments for convertible preferred stock	$ 0.2
Down round adjustments for warrants	$ 2.9
Minimum
Warrants
Warrants term	5 years
Maximum
Warrants
Warrants term	5 years 6 months
Risk-free interest rates \| Minimum
Warrants
Warrant fair value measurement inputs	2.13
Risk-free interest rates \| Maximum
Warrants
Warrant fair value measurement inputs	2.96
Expected lives \| Minimum
Warrants
Warrants term	1 year
Expected lives \| Maximum
Warrants
Warrants term	9 years 4 months 24 days
Expected dividends
Warrants
Warrant fair value measurement inputs	0.00
Expected volatility \| Minimum
Warrants
Warrant fair value measurement inputs	111.63
Expected volatility \| Maximum
Warrants
Warrant fair value measurement inputs	293.32
Investor warrants issued June 8, June 21, July 12 and August 3, 2018
Warrants
Exercise price of warrants (in dollars per share) \| $ / shares	$ 1.25

Equity - Equity Transactions (Details) - USD ($)															2 Months Ended	12 Months Ended
Equity - Equity Transactions (Details) - USD ($)	Nov. 28, 2018	Sep. 20, 2018	Aug. 03, 2018	Jul. 12, 2018	Jun. 21, 2018	Jun. 09, 2018	Apr. 03, 2018	Dec. 19, 2017	Oct. 25, 2017	Oct. 02, 2017	Aug. 16, 2017	May 22, 2017	Jan. 24, 2017	Jan. 23, 2017	Nov. 28, 2018	Dec. 31, 2018	Dec. 31, 2017	Jun. 20, 2018	Apr. 30, 2018	Dec. 18, 2017
Equity transactions
Proceeds from warrants exercised																$ 513,136	$ 3,334,176
Redemption of convertible preferred stock					$ 500,000
Underwriting discounts and commissions and offering expenses																$ 4,555,276	$ 4,525,005
Conversion of series D preferred stock into common stock
Equity transactions
Shares issued		28,393														108,353
Conversion of series C preferred stock into common stock
Equity transactions
Shares issued								4,397
Conversion of series B preferred stock into common stock
Equity transactions
Shares issued																476,346	2,889
Conversion conditional preferred stock into common stock
Equity transactions
Shares issued									2,381
Conversion of series A preferred stock into common stock
Equity transactions
Shares issued													1,123	1,123
November 28, 2018 series A investor warrants
Equity transactions
Warrants issued (in shares)	8,000,000														8,000,000
Exercise price of warrants (in dollars per share)	$ 1.50														$ 1.50
September 20, 2018 series D preferred investor warrants
Equity transactions
Warrants issued (in shares)		14,197
Exercise price of warrants (in dollars per share)		$ 6.30
Series D convertible preferred stock
Equity transactions
Redemption of preferred stock (in shares)					500
Preferred stock, par value (in dollars per share)							$ 0.01
Series D convertible preferred stock \| Conversion of series D preferred stock into common stock
Equity transactions
Conversion of stock shares converted		178,875														5,500
Series A Convertible Preferred Stock
Equity transactions
Preferred stock, par value (in dollars per share)														$ 0.01
Percentage of beneficial ownership limitation														4.99%
Series B Convertible Preferred Stock
Equity transactions
Conversion price (in dollars per share)											$ 4,830.00								$ 1,575.00
Preferred stock, outstanding (in shares)																159	6,055
Preferred stock, par value (in dollars per share)											$ 0.01					$ 0.01	$ 0.01
Shares issuable upon conversion of preferred stock											4,143					127,200
Preferred stock outstanding ( in shares)																159	6,055
Series B Convertible Preferred Stock \| Conversion of series B preferred stock into common stock
Equity transactions
Conversion of stock shares converted																5,896	13,945
Series C convertible preferred stock
Equity transactions
Preferred stock, outstanding (in shares)																95,388	95,388			187,772
Preferred stock, par value (in dollars per share)																$ 0.01	$ 0.01
Shares issuable upon conversion of preferred stock																4,543
Preferred stock outstanding ( in shares)																95,388	95,388			187,772
Series C convertible preferred stock \| Maximum
Equity transactions
Shares issuable upon conversion of preferred stock								8,942
Series C convertible preferred stock \| Conversion of series C preferred stock into common stock
Equity transactions
Conversion of stock shares converted								92,384
BarioSurg
Equity transactions
Stock issued (in shares)												658
Cash consideration												$ 2,000,000
Value of equity consideration												$ 26,300,000
BarioSurg \| Conditional Convertible Preferred Stock
Equity transactions
Stock issued (in shares)												1,000,181
ReShape Medical, Inc.
Equity transactions
Stock issued (in shares)										1,123
Cash consideration										$ 5,000,000
Value of equity consideration										$ 34,000,000
Percentage of Discount on share price										20.00%
ReShape Medical, Inc. \| Series C convertible preferred stock
Equity transactions
Stock issued (in shares)										187,772
June, July, August and November 2018 institutional sales
Equity transactions
Net proceeds received in transaction	$ 9,100,000		$ 500,000	$ 2,200,000	$ 1,300,000	$ 1,200,000
June, July, August and November 2018 institutional sales \| November 28, 2018 prefunded investor warrants
Equity transactions
Purchase price (in dollars per share)	$ 1.24														$ 1.24
Warrants issued (in shares)	7,330,000														7,330,000
Exercise price of warrants (in dollars per share)	$ 0.01														$ 0.01
June, July, August and November 2018 institutional sales \| November 28, 2018 series A investor warrants
Equity transactions
Warrants issued (in shares)	8,000,000														8,000,000
Exercise price of warrants (in dollars per share)	$ 1.50														$ 1.50
June, July, August and November 2018 institutional sales \| August 3, 2018 investor warrants
Equity transactions
Warrants issued (in shares)			7,143
Exercise price of warrants (in dollars per share)			$ 154.00
June, July, August and November 2018 institutional sales \| July 12, 2018 investor warrants
Equity transactions
Purchase price (in dollars per share)				$ 17.50
Warrants issued (in shares)				8,868
Exercise price of warrants (in dollars per share)				$ 288.40
June, July, August and November 2018 institutional sales \| June 21, 2018 investor warrants
Equity transactions
Purchase price (in dollars per share)					$ 17.50
Warrants issued (in shares)					3,354
Exercise price of warrants (in dollars per share)					$ 431.20
June, July, August and November 2018 institutional sales \| June 8, 2018 investor warrants
Equity transactions
Purchase price (in dollars per share)						$ 17.50
Warrants issued (in shares)						2,007
Exercise price of warrants (in dollars per share)						$ 550.20
June, July, August and November 2018 institutional sales \| Placement agent warrants
Equity transactions
Warrants issued (in shares)	560,000		500	621	163	188									560,000
Exercise price of warrants (in dollars per share)	$ 1.5625		$ 105	$ 380.66	$ 558.60	$ 701.40									$ 1.5625
June, July, August and November 2018 institutional sales \| Common stock
Equity transactions
Stock issued (in shares)	670,000		7,143	8,868	3,354	2,676
Purchase price (in dollars per share)	$ 1.25		$ 84.00	$ 287.00	$ 429.80	$ 548.80									$ 1.25
June, July, August and November 2018 institutional sales \| Series D convertible preferred stock
Equity transactions
Preferred stock, outstanding (in shares)																		5,250
Preferred stock outstanding ( in shares)																		5,250
October 2018 ATM public offering
Equity transactions
Net proceeds received in transaction															$ 13,400,000
October 2018 ATM public offering \| Placement agent warrants
Equity transactions
Warrants issued (in shares)	438,450														438,450
October 2018 ATM public offering \| Placement agent warrants \| Minimum
Equity transactions
Exercise price of warrants (in dollars per share)	$ 1.2625														$ 1.2625
October 2018 ATM public offering \| Placement agent warrants \| Maximum
Equity transactions
Exercise price of warrants (in dollars per share)	7.4755														$ 7.4755
October 2018 ATM public offering \| Common stock
Equity transactions
Stock issued (in shares)															6,263,576
October 2018 ATM public offering \| Common stock \| Average
Equity transactions
Purchase price (in dollars per share)	$ 2.39														$ 2.39
September 2018 public offering
Equity transactions
Net proceeds received in transaction		$ 400,000
September 2018 public offering \| September 20, 2018 investor warrants
Equity transactions
Warrants issued (in shares)		41,747
Exercise price of warrants (in dollars per share)		$ 6.30
September 2018 public offering \| Placement agent warrants
Equity transactions
Warrants issued (in shares)		5,845
Exercise price of warrants (in dollars per share)		$ 7.875
September 2018 public offering \| Common stock
Equity transactions
Stock issued (in shares)		83,493
Purchase price (in dollars per share)		$ 6.30
April 2018 institutional sale
Equity transactions
Net proceeds received in transaction							$ 5,100,000
April 2018 institutional sale \| April 3, 2018 investor warrants
Equity transactions
Warrants issued (in shares)							16,667
Exercise price of warrants (in dollars per share)							$ 1,575
April 2018 institutional sale \| Series D convertible preferred stock
Equity transactions
Stock issued (in shares)							6,000
Purchase price (in dollars per share)							$ 1,000
August 2017 public offering
Equity transactions
Warrants issued (in shares)											4,143
Exercise price of warrants (in dollars per share)											$ 4,830.00
Underwriting discounts and commissions and offering expenses											$ 2,000,000
August 2017 public offering \| Series B Convertible Preferred Stock
Equity transactions
Stock issued (in shares)											20,000
January 2017 public offering
Equity transactions
Warrants issued (in shares)														1,704
Exercise price of warrants (in dollars per share)														$ 12,264.00
Net proceeds received in transaction														$ 16,500,000
Underwriting discounts and commissions and offering expenses														$ 2,500,000
January 2017 public offering \| Common stock
Equity transactions
Stock issued (in shares)														581
January 2017 public offering \| Series A Convertible Preferred Stock
Equity transactions
Stock issued (in shares)														12,531
Over-allotment option \| Series B Convertible Preferred Stock
Equity transactions
Net proceeds received in transaction											$ 18,000,000

Warrants - Activity (Details) - $ / shares	12 Months Ended
Warrants - Activity (Details) - $ / shares	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Warrants
Balance (in shares)	6,814	27
Granted (in shares)	16,429,804	7,074
Exercised (in shares)	(1,131,892)	(286)
Cancelled (in shares)	(4)	(1)
Balance (in shares)	15,304,722	6,814
Granted (in dollars per share)	$ 2.82	$ 6,615.00
Exercised (in dollars per share)	0.45	11,676.00
Cancelled (in dollars per share)	4,035,150.00	501,690.00
Balance (in dollars per share)	$ 2.96	$ 11,464.67	$ 501,690.00

Warrants - Remaining Contractual Life (Details)	12 Months Ended
Warrants - Remaining Contractual Life (Details)	Dec. 31, 2018	Dec. 31, 2017
Warrants
Weighted average remaining contractual term	4 years 10 months 24 days	6 years 1 month 6 days
Minimum
Warrants
Warrants term	5 years
Maximum
Warrants
Warrants term	5 years 6 months

Warrants - Additional Information (Details)		12 Months Ended
Warrants - Additional Information (Details)	May 24, 2018 USD ($) shares	Dec. 31, 2018 USD ($) shares	Dec. 31, 2017 USD ($) shares	Aug. 31, 2017 $ / shares shares
Warrants
Warrants exercised (in shares) \| shares		1,131,892	286
Common stock warrant liability			$ 1,600
Warrant expense		$ 144,751	4,721,246
Minimum
Warrants
Warrants term		5 years
Maximum
Warrants
Warrants term		5 years 6 months
Risk-free interest rates \| Minimum
Warrants
Warrant fair value measurement inputs		2.13
Risk-free interest rates \| Maximum
Warrants
Warrant fair value measurement inputs		2.96
Expected lives \| Minimum
Warrants
Warrants term		1 year
Expected lives \| Maximum
Warrants
Warrants term		9 years 4 months 24 days
Expected dividends
Warrants
Warrant fair value measurement inputs		0.00
Expected volatility \| Minimum
Warrants
Warrant fair value measurement inputs		111.63
Expected volatility \| Maximum
Warrants
Warrant fair value measurement inputs		293.32
Investor inducement warrants
Warrants
Warrants exercised (in shares) \| shares	751
Warrant expense	$ 146,245
Investor inducement warrants \| Risk-free interest rates \| Minimum
Warrants
Warrant fair value measurement inputs	2.28
Investor inducement warrants \| Risk-free interest rates \| Maximum
Warrants
Warrant fair value measurement inputs	2.65
Investor inducement warrants \| Expected lives \| Minimum
Warrants
Warrants term		1 year
Investor inducement warrants \| Expected lives \| Maximum
Warrants
Warrants term	3 years 8 months 12 days
Investor inducement warrants \| Expected dividends
Warrants
Warrant fair value measurement inputs	0
Investor inducement warrants \| Expected volatility \| Minimum
Warrants
Warrant fair value measurement inputs	120.44
Investor inducement warrants \| Expected volatility \| Maximum
Warrants
Warrant fair value measurement inputs	142.78
August 2017 investor waiver warrants
Warrants
Warrants issued (in shares) \| shares				1,226
Purchase price (in dollars per share) \| $ / shares				$ 0
Warrant expense			$ 4,400,000
August 2017 investor waiver warrants \| Risk-free interest rates
Warrants
Warrant fair value measurement inputs			2.03
August 2017 investor waiver warrants \| Expected lives
Warrants
Warrants term			7 years
August 2017 investor waiver warrants \| Expected dividends
Warrants
Warrant fair value measurement inputs			0
August 2017 investor waiver warrants \| Expected volatility
Warrants
Warrant fair value measurement inputs			112.03
July 2015 warrants
Warrants
Common stock warrant liability		$ 0	$ 1,600
July 2015 warrants \| Risk-free interest rates
Warrants
Warrant fair value measurement inputs			1.76
July 2015 warrants \| Expected lives
Warrants
Warrants term			12 months
July 2015 warrants \| Expected dividends
Warrants
Warrant fair value measurement inputs			0
July 2015 warrants \| Expected volatility
Warrants
Warrant fair value measurement inputs			193.28

Revenue Recognition (Details) - USD ($)	12 Months Ended
Revenue Recognition (Details) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Revenue Recognition
Revenue	$ 606,710	$ 569,160
Percentage of Total Revenue	100.00%	100.00%
Warranty term	1 year
Practical Expedients	true
Minimum
Revenue Recognition
Payment terms of contract with customers	30 days
Maximum
Revenue Recognition
Payment terms of contract with customers	60 months
US
Revenue Recognition
Revenue	$ 603,240	$ 569,160
Outside US
Revenue Recognition
Revenue	3,470
Lap-Band product line
Revenue Recognition
Revenue	$ 450,365
Percentage of Total Revenue	74.20%
Threshold period for right to return or exchange products purchased	30 days
Lap-Band product line \| US
Revenue Recognition
Revenue	$ 446,895
Lap-Band product line \| Outside US
Revenue Recognition
Revenue	3,470
ReShape vBloc product
Revenue Recognition
Revenue	$ 156,345	$ 319,160
Percentage of Total Revenue	25.80%	56.10%
ReShape vBloc product \| US
Revenue Recognition
Revenue	$ 156,345	$ 319,160
Service and other revenue
Revenue Recognition
Revenue		$ 250,000
Percentage of Total Revenue		43.90%
Service and other revenue \| US
Revenue Recognition
Revenue		$ 250,000

Income Taxes - Income Tax Benefit (Detail) - USD ($)	12 Months Ended
Income Taxes - Income Tax Benefit (Detail) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Deferred:
Federal	$ (3,585,679)	$ (2,538,611)
State	137,685	224,000
Deferred income tax benefit	(3,447,994)	(2,314,611)
Current state and local income tax expense	1,286
Total income tax benefit, net	$ (3,446,708)	$ (2,314,611)

Income Taxes - Tax Rate Reconciliation (Detail)		12 Months Ended
Income Taxes - Tax Rate Reconciliation (Detail)	Jan. 01, 2018	Dec. 31, 2018	Dec. 31, 2017
Income Taxes
Income tax benefit at U.S. federal statutory rate	21.00%	21.00%	34.00%
Goodwill impairment		(7.60%)
Other permanent differences		(0.40%)	(6.00%)
Research and development credit		0.90%	0.80%
Impact of U.S. Tax Cuts and Jobs Act			(112.00%)
Change in state tax rate		(1.10%)
Change in valuation allowance		(3.90%)	90.30%
Effective income tax rate		8.90%	7.10%

Income Taxes - Components of deferred tax assets and liabilities (Detail) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Components of deferred tax assets and liabilities
Start-up costs	$ 1,239,000	$ 4,166,000
Capitalized research and development costs	728,000	12,494,000
Reserves and accruals	7,465,000	7,642,000
Property and equipment		46,000
Research and development credit	1,334,000	4,387,000
Net operating loss carryforwards	22,721,000	63,794,000
Total gross deferred tax assets	33,487,000	92,529,000
Valuation allowance	(29,904,000)	(86,033,000)
Deferred tax assets, net of valuation allowance	3,583,000	6,496,000
Intangible assets	(5,385,000)	(11,788,000)
Property and equipment	(42,000)
Total gross deferred tax liabilities	(5,427,000)	(11,788,000)
Net deferred tax liability	(1,844,000)	(5,292,000)
Net deferred tax liability
Deferred tax liability associated with indefinite-lived intangible asset	5,100,000	$ 5,300,000
Deferred tax asset associated with net operating loss carryforwards that do not expire	$ 3,300,000

Income Taxes - Deferred tax asset and Liability Netting and Carryforwards (Detail) - USD ($)		12 Months Ended
	Jan. 01, 2018	Dec. 31, 2018	Dec. 31, 2017
Income Taxes [Line Items]
Tax credit carryforwards subject to expiration and IRC Section 382 limitation		$ 3,500,000
Other future tax deductible amounts subject to IRC Section 382 limitation		40,800,000
Reduction in deferred tax assets for tax effect of lost benefits under IRC Section 382		67,200,000
Reduction in deferred tax valuation allowance for tax effect of lost benefits under IRC Section 382		$ 67,200,000
U.S. federal income tax rate (as a percent)	21.00%	21.00%	34.00%
Provisional income tax benefit		$ 2,300,000
2017 Tax Act, adjustments during measurement period		0
Minimum
Income Taxes [Line Items]
Percentage of change in ownership			50.00%
State
Income Taxes [Line Items]
Net operating loss carryforwards		200,400,000	$ 160,900,000
Foreign
Income Taxes [Line Items]
Net operating loss carryforwards		200,000	200,000
U.S. federal
Income Taxes [Line Items]
Net operating loss carryforwards		350,100,000	$ 253,800,000
Net operating loss carryforwards subject to expiration and IRC Section 382 limitation		$ 302,600,000

Stock-based Compensation - Plan (Detail) - USD ($)			12 Months Ended
Stock-based Compensation - Plan (Detail) - USD ($)	Jan. 01, 2019	Feb. 28, 2017	Dec. 31, 2018	Dec. 31, 2017
Stock plans
Number of additional shares authorized			3,096	2,620
Number of shares authorized for plan on percentage of stock outstanding	15.00%
Stock incentive plan, shares authorized	3,631,035		7,143
Shares available for grant	3,627,053
Option expiration period			10 years
Minimum percentage of exercise price on fair value of option			100.00%
Minimum percentage of voting power required for shares granted			10.00%
Minimum percentage of fair value of stock and options not exercisable			110.00%
Stock-based compensation			$ 3,097,806	$ 4,436,797
Total unrecognized compensation costs related to non-vested stock options			$ 6,200,000
Total unrecognized compensation costs related to non-vested stock options, weighted-average period of recognition			2 years 6 months
Stock options
Stock plans
Award granted, shares		521
Stock options \| Employee Awards
Stock plans
Award vesting period			4 years

Stock-based Compensation - Summary of Stock Option Activity (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Stock Incentive Plan 2003
Stock plans
Outstanding Options, Number of Shares, Beginning Balance	1,206	4
Outstanding Options, Number of Shares, Options granted	2,868	1,280
Outstanding Options, Number of Shares, Options cancelled	(92)	(78)
Outstanding Options, Number of Shares, Ending Balance	3,982	1,206
Outstanding Options, Weighted-Average Exercise Price, Options granted	$ 1,336.72	$ 8,946.00
Outstanding Options, Weighted-Average Exercise Price, Options cancelled	214,040.20	34,923.00
Outstanding Options, Weighted-Average Exercise Price	$ 48,910.71	$ 178,872.14	$ 3,832,227.00
Weighted Average Remaining Contractual Life (years)	8 years 9 months 18 days
Outstanding Options, Number of Shares, Exercisable	661
Outstanding Options, Weighted-Average Exercise Price, Options exercisable	$ 283,490.51
Outstanding options, Weighted Average Remaining Contractual Life, Exercisable (years)	7 years
Outstanding Options, Number of Shares, Vested and expected to vest	3,979
Outstanding Options, Weighted-Average Exercise Price, Vested and expected to vest	$ 34,035.16
Outstanding options, Weighted Average Remaining Contractual Life, Vested and expected to vest (years)	8 years 10 months 24 days
Aggregate Intrinsic Value of options outstanding	$ 0
Intrinsic value of options exercisable	$ 0
Inducement grants
Stock plans
Outstanding Options, Number of Shares, Beginning Balance	620	7
Outstanding Options, Number of Shares, Options granted		657
Outstanding Options, Number of Shares, Options cancelled	(377)	(44)
Outstanding Options, Number of Shares, Ending Balance	243	620
Outstanding Options, Weighted-Average Exercise Price, Options granted		$ 4,284.00
Outstanding Options, Weighted-Average Exercise Price, Options cancelled	$ 4,163.63	8,778.00
Outstanding Options, Weighted-Average Exercise Price		$ 7,733.48	$ 401,352.00
Weighted Average Remaining Contractual Life (years)	8 years 4 months 24 days
Outstanding Options, Number of Shares, Exercisable	86
Outstanding Options, Weighted-Average Exercise Price, Options exercisable	$ 25,298.42
Outstanding options, Weighted Average Remaining Contractual Life, Exercisable (years)	7 years 9 months 18 days
Outstanding Options, Number of Shares, Vested and expected to vest	243
Outstanding Options, Weighted-Average Exercise Price, Vested and expected to vest	$ 13,595.10
Outstanding options, Weighted Average Remaining Contractual Life, Vested and expected to vest (years)	8 years 4 months 24 days
Aggregate Intrinsic Value of options outstanding	$ 0
Intrinsic value of options exercisable	0
Intrinsic value of options Vested and expected to vest	$ 0
Vesting Period	4 years

Stock-based Compensation - Estimated Grant-Date Fair Values of Employee Stock Options (Details) - Stock options - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Stock plans
Fair value of stock options	$ 3.5	$ 11.5
Risk-free interest rates	2.85%
Expected term (in years)	6 years 3 months
Expected dividends	0.00%	0.00%
Expected volatility	121.52%
Minimum
Stock plans
Risk-free interest rates		1.94%
Expected term (in years)		6 years 3 months
Expected volatility		114.94%
Maximum
Stock plans
Risk-free interest rates		2.38%
Expected term (in years)		10 years
Expected volatility		131.24%

Stock-based Compensation - Expense for Stock-Based Awards (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Compensation expense	$ 3,097,806	$ 4,436,797
Total unrecognized compensation costs related to non-vested stock options	$ 6,200,000
Total unrecognized compensation costs related to non-vested stock options, weighted-average period of recognition	2 years 6 months
Selling, general and administrative expense
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Compensation expense	$ 2,923,834	4,313,907
Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Compensation expense	$ 173,972	$ 122,890

Retirement Plan (Detail) - USD ($)	12 Months Ended
Retirement Plan (Detail) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Retirement Plan
Matching of employees’ contributions	$ 0	$ 0

Subsequent Events (Details) $ / shares in Units, $ in Millions	Mar. 29, 2019 USD ($) D item $ / shares	Feb. 01, 2019 $ / shares shares	Nov. 28, 2018 $ / shares shares
November 28, 2018 series A investor warrants
Subsequent Events
Warrants Purchased \| shares			8,000,000
Exercise price (in dollars per share) \| $ / shares			$ 1.50
Subsequent Event
Subsequent Events
Shares issued \| shares		1,192,000
Conversion of stock shares converted \| shares		1,192,000
Shares issuable upon conversion of preferred stock \| shares		1
Beneficial ownership threshold Percentage		9.99%
Subsequent Event \| November 28, 2018 series A investor warrants
Subsequent Events
Exercise price (in dollars per share) \| $ / shares	$ 0.01
Subsequent Event \| Secured subordinated convertible debentures due June 28, 2019
Subsequent Events
Purchase price \| $	$ 2.0
Face amount \| $	$ 2.2
Original issue discount (as a percent)	10.00%
Conversion price \| $ / shares	$ 0.33
Percentage of average of lowest two volume weighted average price of common stock	80.00%
Number of volume weighted average price of common stock \| item	2
Number of trading days prior to conversion \| D	20
Subsequent Event \| Series E Preferred Stock
Subsequent Events
Preferred stock, par value (in dollars per share) \| $ / shares		$ 0.01