What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-08-01 compared with 2022-05-02 · 83 added, 46 removed, 302 unchanged (30% of the section changed)

20 unchanged sentences

Stockholders’ equity:

Common stock, $ 0.01 par value, 200,000,000 authorized as of March 31, 2022 and December 31, 2021;

20,486,971 and 20,399,337 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively

Common stock, $ 0.01 par value, 200,000,000 authorized as of June 30, 2022 and December 31, 2021;

20,576,149 and 20,399,337 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively

Additional paid-in capital

7 unchanged sentences

Three months ended

Six months ended

Cost of goods sold

18 unchanged sentences

comprehensive

Balances as of December 31, 2021

Balances as of March 31, 2022

Exercise of stock options

Proceeds from Employee Stock Purchase Plan

Employee stock compensation

Net loss for the three months ended March 31, 2022

Net loss for the three months ended June 30, 2022

Cumulative translation adjustment

Balances as of June 30, 2022

Balances as of March 31, 2021

Exercise of stock options

Employee stock compensation

Net loss for the three months ended June 30, 2021

Cumulative translation adjustment

Balances as of June 30, 2021

stockholders’

preferred stock

comprehensive

Balances as of December 31, 2021

Exercise of stock options

Proceeds from Employee Stock Purchase Plan

Employee stock compensation

Net loss for the three months ended March 31, 2021

Net loss for the six months ended June 30, 2022

Cumulative translation adjustment

Balances as of March 31, 2021

Balances as of June 30, 2022

Balances as of December 31, 2020

Exercise of stock options

Employee stock compensation

Net loss for the six months ended June 30, 2021

Cumulative translation adjustment

Balances as of June 30, 2021

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

1 unchanged sentence

(In thousands)

Three months ended

Six months ended

Cash flows from operating activities:

15 unchanged sentences

Proceeds from the exercise of common stock options

Proceeds from Employee Stock Purchase Plan

Net cash provided by financing activities

1 unchanged sentence

Net change in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

28 unchanged sentences

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

As of March 31, 2022 and December 31, 2021, cash equivalents consisted of money market funds, which are stated at cost and approximate fair value.

As of June 30, 2022 and December 31, 2021, cash equivalents consisted of money market funds, which are stated at cost and approximate fair value.

Accounts Receivable

31 unchanged sentences

Recent accounting pronouncements

On January 1, 2022, the Company adopted Accounting Standards Codification (“ASC”) Topic 842, Leases , utilizing the alternative modified retrospective transition approach.

On January 1, 2022, the Company adopted Accounting Standards Codification Topic 842, Leases (“ASC 842”), utilizing the alternative modified retrospective transition approach.

Under the alternative modified retrospective transition approach, the reported results for 2022 reflect the application of Topic 842 guidance, whereas comparative periods and their respective disclosures prior to the adoption of Topic 842 are presented using the legacy guidance of ASC 840.

As a result of adopting the new standard, the Company recognized right-of-use assets of $ 579,000 and lease liabilities of $ 561,000 as of January 1, 2022.

As a result of adopting the new standard, the Company recognized ROU assets of $ 579,000 and lease liabilities of $ 561,000 as of January 1, 2022.

The lease liabilities represent the present value of the remaining lease payments, discounted using the Company’s incremental borrowing rate as of January 1, 2022.

14 unchanged sentences

Accumulated depreciation and amortization

Depreciation expense was $ 62,000 and $ 33,000 for the three months ended March 31, 2022 and 2021, respectively.

Depreciation expense was $ 95,000 and $ 37,000 for the three months ended June 30, 2022 and 2021, respectively, and $ 157,000 and $ 70,000 for the six months ended June 30, 2022 and 2021, respectively.

Accrued expenses consist of the following at:

4 unchanged sentences

Operating lease liability, current portion

Employee stock purchase plan

Fair value measurements

5 unchanged sentences

● Level 3 — Inputs are unobservable for the asset or liability.

There was no convertible preferred stock warranty liability as of the periods ended March 31, 2022 and December 31, 2021.

There was no convertible preferred stock warranty liability as of the periods ended June 30, 2022 and December 31, 2021.

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

2 unchanged sentences

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

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

(in thousands)

3 unchanged sentences

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 March 31, 2022 and 2021.

There were no transfers in or out of Level 1, Level 2 or Level 3 fair value measurements during the periods ended June 30, 2022 and 2021.

We lease 23,890 square feet of office space in Minneapolis, Minnesota, which houses our principal executive offices and our manufacturing facility.

2 unchanged sentences

Our operating lease agreement includes an option to renew for one additional period of five years .

The exercise of the lease renewal option is at our sole discretion and was not included in the lease term for the calculation of the ROU asset and lease liability upon adoption of Accounting Standards Update 2016-02, Leases (Topic 842) on January 1, 2022, as it is not reasonably certain of exercise.

The exercise of the lease renewal option is at our sole discretion and was not included in the lease term for the calculation of the ROU asset and lease liability upon adoption of ASC 842 on January 1, 2022, as it is not reasonably certain of exercise.

In addition to base rent, we will also pay our proportionate share of operating expenses, as defined in the lease.

8 unchanged sentences

Total operating lease liabilities

Maturities of our lease liability for our operating lease are as follows as of March 31, 2022:

Maturities of our lease liability for our operating lease are as follows as of June 30, 2022:

(in thousands)

2 unchanged sentences

Present value of lease liability

As of March 31, 2022, the remaining lease term was 2.3 years and the discount rate was 5.0 %.

The operating cash outflows from our operating lease were $ 0.2 million for the three months ended March 31, 2022.

As of June 30, 2022, the remaining lease term was 2.1 years and the discount rate was 5.0 %.

The operating cash outflows from our operating lease were $ 0.6 million for the six months ended June 30, 2022.

Stockholders’ equity

26 unchanged sentences

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

As of March 31, 2022, there were 2,042,964 shares available for future issuance under the 2021 Plan.

As of June 30, 2022, there were 1,850,346 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 March 31, 2022, the Board of Directors authorized the grant of stock options for the purchase of shares of common stock to the employers of certain non-employee directors.

During the years 2008 through June 30, 2022, the Board of Directors authorized the grant of stock options for the purchase of shares of common stock to the employers of certain non-employee 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 non-employee 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.

3 unchanged sentences

Cancelled / Forfeited

Balance as of March 31, 2022

Options exercisable as of March 31, 2022

As of March 31, 2022, stock options outstanding included 9,993 options that were not granted under the 2001 Plan or the 2021 Plan.

For options outstanding as of March 31, 2022, the weighted average remaining contractual life was 8.3 years.

For options exercisable as of March 31, 2022, the weighted average remaining contractual life was 6.9 years.

Balance as of June 30, 2022

Options exercisable as of June 30, 2022

As of June 30, 2022, stock options outstanding included 8,796 options that were not granted under the 2001 Plan or the 2021 Plan.

For options outstanding as of June 30, 2022, the weighted average remaining contractual life was 8.0 years.

For options exercisable as of June 30, 2022, the weighted average remaining contractual life was 6.8 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

employees to purchase shares of the Company’s common stock at a price per share not less than 85 % of the l ower of (i) the closing market price per share of the Company’s common stock on the first day of the applicable purchase period or (ii) the closing market price per share of the Company’s common stock on the purchase date at the end of the applicable six-month purchase period.

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

Accordingly, as of March 31, 2022, no shares of common stock have been purchased under the ESPP.

As of March 31, 2022 there were 482,163 shares available for issuance under the ESPP.

The first purchase date under the ESPP was June 30, 2022.

Accordingly, as of June 30, 2022, 57,681 shares of common stock have been purchased under the ESPP for $ 0.3 million of employee contributions.

As of June 30, 2022, there were 424,482 shares available for issuance under the ESPP.

Stock-based compensation expense

The Company uses the Black-Scholes option pricing model to determine the fair value of stock options on the grant date.

The Company measures stock-based compensation expense based on the grant date fair value of the award and recognizes compensation expense over the requisite service period, which is generally the vesting period.

The amount of stock-based compensation expense recognized during a period is based on the portion of the awards that are ultimately expected to vest.

The Company uses the Black-Scholes option pricing model to determine the fair value of stock options and ESPP purchase rights on the grant date.

The amount of stock-based compensation expense recognized for stock option awards during a period is based on the portion of the awards that are ultimately expected to vest.

The amount of stock-based

compensation expense recognized for ESPP purchase rights during a period is based on the estimated purchase rights as of the grant date.

The Company accounts for forfeitures as they occur.

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 three months ended March 31, 2022.

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, 2022:

Weighted average fair value of options granted

6 unchanged sentences

1.75 % to 3.07

0.17 % to 0.47

The following table provides the weighted average fair value of ESPP purchase rights and the related assumptions used in the Black-Scholes option pricing model for the six months ended June 30, 2022:

Weighted average fair value per ESPP purchase right

Expected term (in years)

Expected volatility

Expected dividend yield

Risk-free interest rate

There were no ESPP purchase rights for the six months ended June 30, 2021.

The Company reviews these assumptions on a periodic basis and adjusts them, as necessary.

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.

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

The expected term of an ESPP purchase right is based on the offering period.

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

3 unchanged sentences

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

The Company recognized stock-based compensation expense for the periods indicated:

The following table presents the components and classification of stock-based compensation expense for the periods indicated:

Three Months Ended

Six months ended

(in thousands)

Stock options

Employee Stock Purchase Plan

Total stock-based compensation expense

Selling, general & administrative

1 unchanged sentence

Cost of goods sold

As of March 31, 2022, unrecognized compensation expense related to unvested stock-based compensation arrangements was $ 9.1 million.

As of March 31, 2022, the related weighted average period over which the expense is expected to be recognized is approximately 3.3 years.

As of June 30, 2022, unrecognized compensation expense related to unvested stock-based compensation arrangements was $ 8.7 million.

As of June 30, 2022, the related weighted average period over which the expense is expected to be recognized is approximately 2.8 years.

Early exercise of stock options

3 unchanged sentences

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

As of March 31, 2022 and 2021, there have been no early exercises and therefore there is no liability recorded for the early exercise of stock options.

As of March 31, 2022 and December 31, 2021, 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 March 31, 2022 and 2021 was $ 26,000 and $ 17,000 , respectively.

As of June 30, 2022 and 2021, there have been no early exercises and therefore there is no liability recorded for the early exercise of stock options.

As of June 30, 2022 and December 31, 2021, 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 June 30, 2022 and 2021 was $ 23,000 and $ 26,000 , respectively.

Provision for income taxes for the six months ended June 30, 2022 and 2021 was $ 49,000 and $ 43,000 , respectively.

As of December 31, 2021, the Company had federal and state net operating loss carryforwards (“NOLs”) of approximately $ 324.8 million and $ 6.5 million, respectively.

8 unchanged sentences

Three Months Ended

Six months ended

Weighted average common shares outstanding — basic and diluted

2 unchanged sentences

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:

Three months ended

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

Options to purchase common stock

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 March 31, 2022 or December 31, 2021.

There have been no contingent liabilities requiring accrual or disclosure as of June 30, 2022 or December 31, 2021.

Employee benefit plans

6 unchanged sentences

The Chief Executive Officer reviews financial information presented on a consolidated basis, accompanied by information about revenue by geographic region, for purposes of allocating resources and evaluating financial performance.

Company has one business activity and there are no segment managers who are held accountable for operations, operating results or plans for levels or components below the consolidated unit level.

The Company has one business activity and there are no segment managers who are held accountable for operations, operating results or plans for levels or components below the consolidated unit level.

Accordingly, the Company has determined that it has a single reportable and operating segment structure.

3 unchanged sentences

Three months ended

Six months ended

Other countries

As of March 31, 2022 and December 31, 2021, long-lived assets were located primarily in the U.S.

As of June 30, 2022 and December 31, 2021, long-lived assets were located primarily in the U.S.

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