What changed in this filing

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Item 1. Financial Statements

2021-11-08 compared with 2021-08-09 · 131 added, 141 removed, 282 unchanged (49% of the section changed)

2 unchanged sentences

(In thousands, except share and per share data)

September 30,

Current assets:

16 unchanged sentences

Commitments and contingencies

Convertible preferred stock, $ 0.01 par value, 237,370,645 authorized as of June 30, 2021 and December 31, 2020;

223,541,754 shares issued and outstanding as of June 30, 2021 and December 31, 2020

Convertible preferred stock, $ 0.01 par value, 10,000,000 and 237,370,645 authorized as of September 30, 2021 and December 31, 2020, respectively;

0 and 223,541,754 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

Stockholders’ equity (deficit):

Common stock, $ 0.01 par value, 625,217,795 authorized as of June 30, 2021 and December 31, 2020;

366,342 and 360,412 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively

Additional paid-in capital, common stock

Common stock, $ 0.01 par value, 200,000,000 and 625,217,795 authorized as of September 30, 2021 and December 31, 2020, respectively;

20,351,779 and 360,412 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

Additional paid-in capital

Accumulated deficit

Accumulated other comprehensive loss

Total stockholders’ deficit

Total liabilities, convertible preferred stock, and stockholders’ deficit

Total stockholders’ equity (deficit)

Total liabilities, convertible preferred stock, and stockholders’ equity (deficit)

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

Three months ended

Six months ended

Nine months ended

September 30,

Cost of goods sold

13 unchanged sentences

The accompanying notes are an integral part of these condensed consolidated financial statements.

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(In thousands, except share data)

2 unchanged sentences

comprehensive

Balances as of March 31, 2021

Balances as of June 30, 2021

Exercise of stock options

Employee stock compensation

Net loss for the three months ended June 30, 2021

Issuance of common stock, net of offering costs

Reverse stock split

Conversion of Series G preferred stock

( 223,541,754 )

Net loss for the three months ended September 30, 2021

Cumulative translation adjustment

Balances as of September 30, 2021

Balances as of June 30, 2020

Balances as of March 31, 2020

Exercise of stock options

Employee stock compensation

Net loss for the three months ended June 30, 2020

Issuance of Series G preferred stock, net of costs

Accretion of Series G issuance costs

Net loss for the three months ended September 30, 2020

Cumulative translation adjustment

Balances as of June 30, 2020

Balances as of September 30, 2020

stockholders’

4 unchanged sentences

Employee stock compensation

Net loss for the six months ended June 30, 2021

Issuance of common stock, net of offering costs

Reverse stock split

Conversion of Series G preferred stock

( 223,541,754 )

Net loss for the nine months ended September 30, 2021

Cumulative translation adjustment

Balances as of June 30, 2021

Balances as of September 30, 2021

Balances as of December 31, 2019

Exercise of stock options

Repurchase of common stock

Employee stock compensation

Net loss for the six months ended June 30, 2020

Issuance of Series G preferred stock, net of costs

Accretion of Series G issuance costs

Net loss for the nine months ended September 30, 2020

Cumulative translation adjustment

Balances as of June 30, 2020

Balances as of September 30, 2020

The accompanying notes are an integral part of these condensed consolidated financial statements.

1 unchanged sentence

(In thousands)

Six months ended

Nine months ended

September 30,

Cash flows from operating activities:

15 unchanged sentences

Proceeds from the exercise of common stock options

Proceeds from issuance of Series G Preferred Stock, net of fees

Payments related to reverse stock split

Proceeds from the issuance of common stock, net of offering costs

Net cash provided by financing activities

14 unchanged sentences

There is no assurance that the Company will generate sufficient product sales to produce positive earnings or cash flows.

The Company anticipates that the existing cash balance together with cash generated from the collections of existing accounts receivable and revenue resulting from new and existing customers will be adequate to meet its working capital requirements for at least the next twelve months.

The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary if the Company is unable to continue as a going concern.

Summary of significant accounting policies

16 unchanged sentences

Cash and cash equivalents include highly liquid investments with an original maturity of three months or less.

As of June 30, 2021 and 2020, cash equivalents consisted of money market funds, which are stated at cost and approximate fair value.

As of September 30, 2021 and December 31, 2020, cash equivalents consisted of money market funds, which are stated at cost and approximate fair value.

Inventory is stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis.

5 unchanged sentences

Under Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”), revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services.

To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performed the following five steps:

To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps:

(i) identify the contract(s) with a customer;

13 unchanged sentences

Selected balance sheet information

Inventory consists of the following on:

Inventory consists of the following at:

September 30,

(in thousands)

1 unchanged sentence

Finished goods

Property and equipment, net consists of the following on:

Property and equipment, net consists of the following at:

September 30,

(in thousands)

5 unchanged sentences

Accumulated depreciation and amortization

Depreciation expense was $ 37,000 and $ 18,000 for the three months ended June 30, 2021 and 2020, respectively, and $ 70,000 and $ 35,000 for the six months ended June 30, 2021 and 2020, respectively.

Accrued expenses consist of the following on:

Depreciation expense was $ 42,000 and $ 17,000 for the three months ended September 30, 2021 and 2020, respectively, and $ 112,000 and $ 52,000 for the nine months ended September 30, 2021 and 2020, respectively.

Accrued expenses consist of the following at:

September 30,

(in thousands)

1 unchanged sentence

Paid time off

Interest payable

Fair value measurements

7 unchanged sentences

(in thousands)

Balance as of June 30, 2021

Convertible preferred stock warrant liability

Total liabilities

Balance as of December 31, 2020

1 unchanged sentence

Total liabilities

The Company’s recurring fair value measurements using significant unobservable inputs (Level 3) relate solely to the Company’s convertible preferred stock warrant liability.

In connection with the loan and security agreement entered into by the Company in September 2014 and the amendment in July 2015, the Company issued a warrant to purchase shares of Series F-2 convertible preferred stock.

In connection with the loan and security agreement entered into in May 2016, the Company issued a warrant to purchase shares of Series G convertible preferred stock (“Series G Preferred Shares”).

The Company issued to Biosense Webster, Inc.

(“BWI”), an affiliate of Johnson & Johnson Innovation — JJDC, Inc., a warrant to purchase shares of Series E-2 convertible preferred stock that only becomes exercisable in the event of an acquisition or asset transfer involving the Company and it expires on the earlier of (i) a qualifying public company transaction, as defined, and (ii) 180 days after receipt of the data from the post-market stage of the BeAT-HF pivotal trial.

In September of 2018, the Company also issued to BWI a warrant to purchase up to 10,000,000 Series G Preferred Shares with an exercise price of $ 0.01 per share.

The warrant to purchase Series G Preferred Shares shall become exercisable if and only if a qualifying public company transaction is consummated and expires on the earlier of (i) an acquisition or asset transfer involving the Company or (ii) 180 days after receipt of the data from the post-market stage of the BeAT-HF pivotal trial.

Accordingly, under no event will the BWI warrant to purchase Series E-2 convertible preferred stock and the BWI warrant to purchase Series G Preferred Shares both become exercisable.

In connection with the closing of the initial public offering (“IPO”), the BWI warrant to purchase Series G Preferred Shares became exercisable for 607,725 shares of common stock in connection with the automatic conversion of the Series G Preferred Shares into common stock, with an exercise price of $ 0.16 per share .

In connection with the loan and security agreement entered into in September 2019, the Company issued a warrant to purchase Series G Preferred Shares.

The convertible preferred stock warrant liability is remeasured at each financial reporting period with any changes in fair value being recognized as a component of other income (expense), net in the condensed consolidated statements of operations and comprehensive loss.

The fair value of the convertible preferred stock warrant liability was determined using the Black-Scholes option pricing model with the following inputs during the six months ended:

Expected life in years

Expected volatility

00.0 % – 57.9 %

46.2 % – 60.7 %

Expected dividend yield

Risk-free interest rate

0.00 % – 1.21 %

0.16 % – 0.66 %

The following table sets forth a summary of changes in the estimated fair value of the Company’s convertible preferred stock warrants during the six months ended:

The convertible preferred stock warrant liability related to warrants issued in connection with loan and security agreements entered into in September 2014, as amended in July 2015, in May 2016 and in September 2019.

These warrants were originally issued to purchase shares of Series F-2 convertible preferred stock and Series G convertible preferred stock (“Series G Preferred Shares”).

In connection with the closing of the initial public offering (“IPO”), these convertible preferred stock warrants became warrants to purchase 108,406 shares of common stock and were reclassified to equity.

The convertible preferred stock warrant liability also related to a warrant issued to Biosense Webster, Inc.

(“BWI”), an affiliate of Johnson & Johnson Innovation — JJDC, Inc., to purchase Series G Preferred Shares with an exercise price of $ 0.01 per share.

In connection with the closing of the IPO, the BWI warrant to purchase Series G Preferred Shares became exercisable to purchase 607,725 shares of common stock at an exercise price of $ 0.16 per share .

The Company’s recurring fair value measurements using significant unobservable inputs (Level 3) related solely to the Company’s convertible preferred stock warrant liability.

The convertible preferred stock warrant liability was remeasured at each financial reporting period with any changes in fair value being recognized as a component of other income (expense), net in the condensed consolidated statements of operations and comprehensive loss.

In connection with the closing of the IPO, all of the outstanding convertible preferred stock warrants were converted to common stock warrants.

The related liability was remeasured at the time of the IPO and reclassed to additional paid-in capital.

The fair value of the convertible preferred stock warrant liability was determined using the Black-Scholes option pricing model with the following inputs during the nine months ended:

The following table sets forth a summary of changes in the estimated fair value of the Company’s convertible preferred stock warrants during the nine months ended:

September 30,

(in thousands)

1 unchanged sentence

Change in fair value

Conversion to common stock warrants

End of the period

There were no transfers in or out of Level 1, Level 2 or Level 3 fair value measurements during the periods ended June 30, 2021 and December 31, 2020.

There were no transfers in or out of Level 1, Level 2 or Level 3 fair value measurements during the periods ended September 30, 2021 and December 31, 2020.

Horizon loan agreement

In September 2019, the Company entered into a loan and security agreement with Horizon Technology Finance Corporation (“Horizon loan agreement”) under which it could borrow up to a total of $ 20 million at a floating per annum rate equal to 10 % plus the amount by which the 30-day U.S.

In September 2019, the Company entered into a loan and security agreement (“Horizon loan agreement”) with Horizon Technology Finance Corporation (“Horizon”) under which it could borrow up to a total of $ 20.0 million at a floating per annum rate equal to 10 % plus the amount by which the 30-day U.S.

dollar LIBOR rate on the first business day of the month exceeds 2.2 %.

1 unchanged sentence

A final payment of $ 0.7 million, equal to 3.5 % of the original principal, is due in October 2024.

The Horizon loan agreement initially required the Company to maintain cash on deposit in accounts in which Horizon maintains an account control agreement of not less than $ 5.0 million.

The Horizon loan agreement initially required the Company to maintain cash on deposit of not less than $ 5.0 million in accounts over which Horizon maintained an account control agreement.

This minimum cash on deposit requirement was released in July 2020, following the satisfaction of a financing milestone.

1 unchanged sentence

The Horizon loan agreement requires the payment of certain penalties if the loan is paid off prior to maturity for any reason, including pursuant to a subjective acceleration clause, and includes various restrictive covenants, including a restriction on the payment of dividends.

The Company was in compliance with these covenants as of June 30, 2021.

The Company was in compliance with these covenants as of September 30, 2021.

In August 2020, the Company entered into an amended agreement with Horizon to extend the interest only period through April 2022, followed by 30 monthly principal and interest payments beginning in May 2022.

3 unchanged sentences

The Company used the Black-Scholes option pricing model to determine the grant date fair value of these warrants.

The annual principal maturities of debt as of June 30, 2021 are as follows (in thousands):

The annual principal maturities of debt as of September 30, 2021 are as follows (in thousands):

Unamortized debt costs and discounts

current portion

Long-term debt

Stockholders’ equity

Reverse Stock Split

In connection with the IPO, the Company’s Board of Directors and stockholders approved a 1-for- 39.548 reverse stock split of the Company’s common stock.

The reverse stock split became effective on June 22, 2021.

The par value of the common stock was not adjusted as a result of the reverse stock split.

Adjustments corresponding to the reverse stock split were made to the ratio at which the convertible preferred stock will convert into common stock in connection with the closing of the IPO.

Accordingly, all share and per-share amounts for all periods presented in these financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the reverse stock split and the adjustment of the conversion ratio of the convertible preferred stock.

Series G Preferred stock issuance

Initial Public Offering

During 2016, the Company issued 72,125,000 shares of Series G Preferred Shares at a price of $ 0.80 per share, for net proceeds to the Company of approximately $ 57.4 million after deducting offering expenses payable by the Company.

The same Series G investors have agreed to purchase an additional $ 35.3 million of Series G Preferred Shares upon the Company’s achievement of a certain operational milestone, subject to limited closing conditions.

The same Series G investors agreed to purchase an additional $ 35.3 million of Series G Preferred Shares upon the Company’s achievement of a certain operational milestone, subject to limited closing conditions.

In January 2019, May 2019, and August 2019 , the Series G investors purchased additional Series G Preferred Shares, resulting in net proceeds to the Company of $ 24.7 million.

5 unchanged sentences

The Series A-2, Series B-2, Series C-2, Series D-2, Series E-2, Series F-2 and Series G Preferred Shares are referred to collectively as the “Preferred Shares.”

As of June 30, 2021, convertible preferred stock consists of the following (in thousands, except share data):

Carrying Value

All Preferred Shares were automatically converted into common stock upon the closing of the IPO on July 2, 2021.

Series G Preferred Shares were converted into common stock on a 15.819 -for-1 basis, and all other Preferred Shares were automatically converted into common stock on a 39.548 -for-1 basis.

As of June 30, 2021, the Company had reserved 12,670,154 shares of unissued common stock for the purpose of effecting the conversion of the Preferred Shares.

Voting rights

The holders of Preferred Shares were entitled to a number of votes equal to the number of shares of common stock into which such shares of Preferred Shares are convertible.

In addition, an affirmative vote of the holders of a majority of the outstanding Preferred Shares, on an as-converted basis, is required to, among other things, sell the Company and approve certain amendments to the Company’s Certificate of Incorporation.

Furthermore, each series of Preferred Shares has certain series voting rights on matters affecting that series.

The holders of Preferred Shares were entitled to receive noncumulative dividends in preference to any dividend on the common stock.

The dividend rate for the Preferred Shares is 8 % of the applicable respective liquidation price per share.

Dividends shall be payable on the Preferred Shares from funds legally available for declaration of dividends, only if and when declared by the Company’s Board of Directors.

No such dividends have been declared.

Liquidation preference

In the event of any liquidation, dissolution or winding up of the Company, including a merger, acquisition or reorganization, where the beneficial owners of the Company’s common stock and Preferred Shares do not own a majority of the outstanding shares of the surviving, purchasing or newly resulting corporation, or where a sale occurs of all or substantially all of the assets of the Company, holders of Series G Preferred Shares are entitled to a per share distribution in preference to other holders of Preferred Shares and the common stockholders equal to $ 2.80 , plus declared but unpaid dividends.

After payment of these amounts to the holders of Series G Preferred Shares, Series F-2 stockholders are entitled to a per share distribution in preference to other holders of Preferred Shares and the common stockholders equal to $ 3.53 , plus declared but unpaid dividends.

After payment of these amounts to the holders of Series F-2 Preferred Shares, Series E-2 stockholders are entitled to a per share distribution in preference to other holders of Preferred Shares and the common stockholders equal to the original issue price per share of $ 7.58 , plus declared but unpaid dividends.

After payment of these amounts to the holders of Series E-2 Preferred Shares, Series D-2 stockholders are entitled to a per share distribution in preference to other holders of Preferred Shares and the common stockholders equal to the original issue price per share of $ 6.20 , plus any declared but unpaid dividends.

After payment of these amounts to the holders of Series D-2 Preferred Shares, holders of Series A-2 Preferred Shares, Series B-2 Preferred Shares and Series C-2 Preferred Shares are entitled to a per share distribution in preference to common stockholders equal to the original issue price per share of $ 2.00 , $ 2.54 and $ 3.05 , respectively, plus any declared but unpaid dividends.

In the event that the remaining assets are insufficient to make a complete liquidation distribution to holders of the Series A-2 Preferred Shares, Series B-2 Preferred Shares and Series C-2 Preferred Shares, the holders shall share ratably in proportion to the applicable liquidation amount each holder is otherwise entitled to receive.

After these distributions, the remaining assets, if any, shall be distributed pro rata among the holders of the common stock, Series F-2 Preferred Shares and Series G Preferred Shares (treating such Series F-2 Preferred Shares and Series G Preferred Shares on an as-converted basis).

The Company’s Board of Directors approved a Sale Bonus Plan (the “Plan”).

Pursuant to the terms of the Plan, in certain circumstances constituting a change in control and/or partial sale or license of assets of the Company, the Company’s employees may be entitled to the payment of a bonus.

This Plan is terminated upon the completion of an initial public offering.

The payments under the Plan shall be made prior to the determination of any liquidation preferences payable to the holders of Preferred Shares.

In connection with the IPO, which took place on July 2, 2021, this Plan was terminated.

On July 2, 2021, the Company closed its IPO of 8,050,000 shares of its common stock at a public offering price of $ 18.00 per share, which included 1,050,000 shares of common stock issued upon the exercise in full by the underwriters of their option to purchase additional shares, for net proceeds from the IPO, after

deducting the underwriting discount and other offering expenses payable by the Company totaling $ 1.6 million, of $ 133.2 million.

Upon the closing of the IPO, all shares of convertible preferred stock were automatically converted into common stock.

Series G Preferred Shares were converted into common stock on a 15.819 -for-1 basis, and all other shares of convertible preferred stock were automatically converted into common stock on a 39.548 -for-1 basis.

The conversion of the outstanding preferred stock resulted in an aggregate of 11,929,584 shares of common stock.

Reverse Stock Split

In connection with the IPO, the Company’s Board of Directors and stockholders approved a 1-for- 39.548 reverse stock split of the Company’s common stock.

The reverse stock split became effective on June 22, 2021.

The par value of the common stock was not adjusted as a result of the reverse stock split.

Adjustments corresponding to the reverse stock split were made to the ratio at which the convertible preferred stock will convert into common stock in connection with the closing of the IPO.

Common Stock Warrants

In connection with the IPO, the warrants to purchase shares of convertible preferred stock automatically converted into warrants to purchase common stock, resulting in the reclassification of the related convertible preferred stock warrant liability to additional paid-in capital.

Upon the closing of the IPO these warrants to purchase convertible preferred stock became exercisable for 716,131 shares of common stock upon conversion at a weighted average exercise price of $ 2.39 per share.

Stock-Based compensation

9 unchanged sentences

No further awards can be made under the 2001 Plan following the adoption of the 2021 Plan.

As of June 30, 2021, there were 1,801,032 shares available for future issuance under the 2021 Plan.

As of September 30, 2021, there were 1,791,888 shares available for future issuance under the 2021 Plan.

Options are granted at exercise prices not less than the fair market value (as determined by the Board of Directors) of the Company’s common stock on the date of grant.

During the years 2008 through June 30, 2021, the Board of Directors authorized the grant of stock options for the purchase of shares of common stock to the employers of certain nonemployee directors.

The options were not granted under the 2001 Plan, but terms are substantially the same as the Company’s standard form of option agreement for nonemployee directors as they have an exercise price not less than the fair market value on the grant date and vest over 48 months from the date of grant.

During the years 2008 through September 30, 2021, the Board of Directors authorized the grant of stock options for the purchase of shares of common stock to the employers of certain nonemployee directors.

The options were not granted under the 2001 Plan or the 2021 Plan, but terms are substantially the same as the Company’s standard form of option agreement for nonemployee directors as they have an exercise price not less than the fair market value on the grant date and vest over 48 months from the date of grant.

The following is a summary of stock option activity:

2 unchanged sentences

Cancelled / Forfeited

Balance as of June 30, 2021

Options exercisable as of June 30, 2021

As of June 30, 2021, stock options outstanding included 9,993 options that were not granted under the 2001 Plan.

For options outstanding as of June 30, 2021, the weighted average remaining contractual life was 8.5 years.

For options exercisable as of June 30, 2021, the weighted average remaining contractual life was 5.4 years.

Balance as of September 30, 2021

Options exercisable as of September 30, 2021

As of September 30, 2021, stock options outstanding included 9,993 options that were not granted under the 2001 Plan or the 2021 Plan.

For options outstanding as of September 30, 2021, the weighted average remaining contractual life was 8.4 years.

For options exercisable as of September 30, 2021, the weighted average remaining contractual life was 7.3 years.

In connection with the IPO, the Company’s Board of Directors and stockholders also established an Employee Stock Purchase Plan (the “ESPP”).

4 unchanged sentences

The Company expects the first purchase period to commence in 2022.

Accordingly, as of June 30, 2021 no shares of common stock have been purchased under the ESPP.

Accordingly, as of September 30, 2021, no shares of common stock have been purchased under the ESPP.

Stock-based compensation expense

3 unchanged sentences

The Company estimates pre-vesting forfeitures at the time of grant by analyzing historical data and revises those estimates in subsequent periods if actual forfeitures differ from those estimates.

The following table provides the weighted average fair value of options granted to employees and the related assumptions used in the Black-Scholes option pricing model for the six months ended June 30, 2021.

The following table provides the weighted average fair value of options granted to employees and the related assumptions used in the Black-Scholes option pricing model for the nine months ended September 30, 2021.

No options were issued during the nine months ended September 30, 2020.

September 30,

Weighted average fair value of options granted

8 unchanged sentences

The expected term of an award was determined based on the Company’s analysis of historical exercise behavior while taking into consideration various participant demographics and option characteristics.

We utilize the simplified method to develop the estimate of the expected term .

The expected volatility is based upon observed volatility of comparable public companies.

2 unchanged sentences

Treasury securities for a period approximating the expected term of the options being valued.

For the three and six months ended June 30, 2021 and 2020, the Company recognized stock-based compensation expense as follows:

Three Months Ended June 30,

Six Months Ended June 30,

For the three and nine months ended September 30, 2021 and 2020, the Company recognized stock-based compensation expense as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

2 unchanged sentences

Cost of goods sold

As of June 30, 2021, unrecognized compensation expense related to unvested stock-based compensation arrangements was $ 7.2 million.

As of June 30, 2021, the related weighted average period over which it is expected to be recognized is approximately 3.7 years.

As of September 30, 2021, unrecognized compensation expense related to unvested stock-based compensation arrangements was $ 6.3 million.

As of September 30, 2021, the related weighted average period over which it is expected to be recognized is approximately 3.5 years.

Performance-Based options

As of June 30, 2021, the Company had 10,493 stock options outstanding that contained vesting conditions contingent on the achievement of certain milestones.

As of September 30, 2021, the Company had 10,493 stock options outstanding that contained vesting conditions contingent on the achievement of certain milestones.

Assuming continued service by the employees, the options would start vesting over a 48-month period upon achievement of the performance criteria.

As of June 30, 2021, the Company determined that the likelihood of achieving the milestones was not probable and therefore no stock-based compensation expense was recorded.

As of June 30, 2021, the Company had 1,000,590 stock options outstanding that contained restrictions on vesting and exercisability contingent on the achievement of certain financing milestones.

These stock options would have been cancelled at the completion of a change in control event if completed before an initial public offering.

As of June 30, 2021, the Company determined that the likelihood of achieving the milestones was probable and therefore the Company has recorded the associated stock-based compensation expense.

As of September 30, 2021, the Company determined that the likelihood of achieving the milestones was not probable and therefore no stock-based compensation expense was recorded.

Early exercise of stock options

3 unchanged sentences

This repurchase right expires based upon the original option vesting schedule.

As of June 30, 2021 and 2020, there have been no early exercises and therefore there is no liability recorded for the early exercise of stock options.

As of both June 30, 2021 and 2020, a valuation allowance was recorded against all deferred tax assets due to the Company’s cumulative net loss position.

Income tax expense for the three months ended June 30, 2021 and 2020 was $ 26,000 and $ 22,000 , respectively.

Income tax expense for the six months ended June 30, 2021 and 2020 was $ 43,000 and $ 45,000 , respectively.

As of December 31, 2020, the Company had federal and state net operating loss carryforwards, or NOLs, of approximately $ 296.1 million and $ 88.0 million, respectively.

As of September 30, 2021 and 2020, there have been no early exercises and therefore there is no liability recorded for the early exercise of stock options.

As of both September 30, 2021 and 2020, a valuation allowance was recorded against all deferred tax assets due to the Company’s cumulative net loss position.

Provision for income taxes for the three months ended September 30, 2021 and 2020 was $ 23,000 and $ 19,000 , respectively.

Provision for income taxes for the nine months ended September 30, 2021 and 2020 was $ 66,000 and $ 64,000 , respectively.

As of December 31, 2020, the Company had federal and state net operating loss carryforwards (“NOLs”) of approximately $ 296.1 million and $ 88.0 million, respectively.

The federal NOLs begin to expire in 2021 and the state NOLs began expiring in 2020.

The Company has federal and state tax credit carryforwards of approximately $ 8.6 million and $ 1.5 million, respectively.

As of December 31, 2020, the Company had federal and state tax credit carryforwards of approximately $ 8.6 million and $ 1.5 million, respectively.

The federal and state tax credit carryforwards begin to expire in 2021 and 2028, respectively.

Utilization of the net operating loss carryforward may be subject to an annual limitation due to the ownership change limitations provided by Section 382 of the Internal Revenue Code of 1986 and similar state provisions.

Utilization of net operating loss carryforwards may be subject to an annual limitation due to the ownership change limitations provided by Section 382 of the Internal Revenue Code of 1986 and similar state provisions.

The Company has not performed a detailed analysis to determine whether an ownership change has occurred.

Such a change of ownership would limit the Company’s utilization of the net operating losses and could be triggered by subsequent sales of securities by the Company or its stockholders.

Earnings Per Share

(Loss) Earnings Per Share

Basic and diluted net loss per share attributable to common stockholders was calculated as follows (in thousands, except share and per share data):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Accretion of preferred stock to redemption value

2 unchanged sentences

Net loss per share attributable to common stockholders — basic and diluted

The Company’s potentially dilutive securities, which include stock options, shares of convertible preferred stock and warrants to purchase shares of convertible preferred stock, have been excluded from the computation of diluted net loss per share attributable to common stockholders as the effect would be to reduce the net loss per share attributable to common stockholders.

The Company’s potentially dilutive securities, which include stock options, shares of convertible preferred stock, warrants to purchase shares of convertible preferred stock and warrants to purchase shares of common stock, have been excluded from the computation of diluted net loss per share attributable to common stockholders, as the effect would be to reduce the net loss per share attributable to common stockholders.

Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same.

The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:

Six Months Ended June 30,

Nine Months Ended September 30,

Options to purchase common stock

Warrants to purchase redeemable convertible preferred stock (as converted to common stock)

Warrants to purchase common stock

Redeemable convertible preferred stock (as converted to common stock)

2 unchanged sentences

The Company has entered into an operating lease agreement for its office, manufacturing and research facility, which expires in 2024.

Rent expense for the three months ended June 30, 2021 and 2020 was $ 93,000 and $ 94,000 , respectively.

Rent expense for the six months ended June 30, 2021 and 2020 was $ 187,000 and $ 184,000 , respectively.

Future minimum lease payments under all operating leases as of June 30, 2021, are as follows for the years ending (in thousands):

Rent expense for the three months ended September 30, 2021 and 2020 was $ 91,000 and $ 90,000 , respectively.

Rent expense for the nine months ended September 30, 2021 and 2020 was $ 279,000 and $ 276,000 , respectively.

Future minimum lease payments under all operating leases as of September 30, 2021, are as follows for the years ending (in thousands):

December 31, 2021

5 unchanged sentences

The Company accrues a liability for such matters when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated.

There have been no contingent liabilities requiring accrual or disclosure as of June 30, 2021 or 2020.

There have been no contingent liabilities requiring accrual or disclosure as of September 30, 2021 or December 31, 2020.

Employee benefit plans

The Company sponsors a voluntary defined-contribution employee retirement plan, or 401(k) plan, for its U.S.

The Company sponsors a voluntary defined-contribution employee retirement plan (the “401(k) plan”) for its U.S.

The 401(k) plan provides that each participant may contribute pre-tax or post-tax compensation up to the statutory limit allowable.

8 unchanged sentences

The Company derives all its revenues from sales to customers in Europe and the U.S.

The following table provides revenue by country for each location accounting for more than 10% of the total revenue for the three and six months ended (in thousands):

The following table provides revenue by country for each location accounting for more than 10% of the total revenue for the three and nine months ended (in thousands):

Three months ended

Six months ended

Nine months ended

September 30,

Other countries

As June 30, 2021 and 2020, long-lived assets were located primarily in the U.S.

As September 30, 2021 and 2020, long-lived assets were located primarily in the U.S.

Subsequent events

The table below presents the Company’s balance sheet data as of June 30, 2021 on an actual basis and on a pro forma as adjusted basis to give effect to:

● the conversion of all outstanding shares of the Company’s convertible preferred stock into an aggregate of 11,929,584 shares of common stock upon the closing of the IPO;

● the sale of 8,050,000 shares of common stock in the IPO, after deducting the underwriting discount and estimated offering expenses payable by the Company.

As of June 30, 2021

(in thousands, except share data)

Cash and cash equivalents

Convertible preferred stock warrant liability

Redeemable convertible preferred stock

Total stockholders’ (deficit) equity

Shares of common stock outstanding

On November 3, 2021 the Company fully repaid all amounts outstanding under the $ 20.0 million principal amount Horizon loan agreement.

The total repayment amount was $ 21.3 million, inclusive of prepayment and other fees, and will be reflected within the Company’s financial statements for the fiscal year ended December 31, 2021.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements