What changed in this filing

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Item 1. Financial Statements

2022-11-04 compared with 2022-08-01 · 89 added, 53 removed, 332 unchanged (30% of the section changed)

2 unchanged sentences

(In thousands, except share and per share data)

September 30,

Current assets:

16 unchanged sentences

Stockholders’ equity:

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

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

20,578,963 and 20,399,337 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively

Additional paid-in capital

7 unchanged sentences

Three months ended

Six months ended

Nine months ended

September 30,

Cost of goods sold

5 unchanged sentences

Interest expense

Other expense, net

Other income (expense), net

Loss before income taxes

10 unchanged sentences

comprehensive

Balances as of March 31, 2022

Balances as of June 30, 2022

Exercise of stock options

Proceeds from Employee Stock Purchase Plan

Employee stock compensation

Net loss for the three months ended June 30, 2022

Net loss for the three months ended September 30, 2022

Cumulative translation adjustment

Balances as of September 30, 2022

Balances as of June 30, 2021

Balances as of March 31, 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 June 30, 2021

Balances as of September 30, 2021

stockholders’

5 unchanged sentences

Employee stock compensation

Net loss for the six months ended June 30, 2022

Net loss for the nine months ended September 30, 2022

Cumulative translation adjustment

Balances as of June 30, 2022

Balances as of September 30, 2022

Balances as of December 31, 2020

1 unchanged sentence

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

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:

16 unchanged sentences

Proceeds from Employee Stock Purchase Plan

Payments related to reverse stock split

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

Net cash provided by financing activities

32 unchanged sentences

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

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.

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

Accounts Receivable

39 unchanged sentences

Inventory consists of the following at:

September 30,

(in thousands)

2 unchanged sentences

Property and equipment, net consists of the following at:

September 30,

(in thousands)

5 unchanged sentences

Accumulated depreciation and amortization

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.

Depreciation expense was $ 127,000 and $ 42,000 for the three months ended September 30, 2022 and 2021, respectively, and $ 284,000 and $ 112,000 for the nine months ended September 30, 2022 and 2021, respectively.

Accrued expenses consist of the following at:

September 30,

(in thousands)

10 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 June 30, 2022 and December 31, 2021.

There was no convertible preferred stock warranty liability as of the periods ended September 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.

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 expense, net in the condensed consolidated statements of operations and comprehensive loss.

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 initial public offering (“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 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 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)

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 June 30, 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 September 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.

6 unchanged sentences

The following table presents the lease balances within the condensed consolidated balance sheets:

September 30,

(in thousands)

5 unchanged sentences

Total operating lease liabilities

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

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

September 30,

(in thousands)

2 unchanged sentences

Present value of lease liability

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.

As of September 30, 2022, the remaining lease term was 1.8 years and the discount rate was 5.0 %.

The operating cash outflows from our operating lease were $ 0.3 million for the nine months ended September 30, 2022.

Stockholders’ equity

8 unchanged sentences

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 converted 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.

Adjustments corresponding to the reverse stock split were made to the ratio at which the convertible preferred stock

converted 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.

Common Stock Warrants

13 unchanged sentences

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

As of June 30, 2022, there were 1,850,346 shares available for future issuance under the 2021 Plan.

As of September 30, 2022, there were 1,576,113 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, 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 September 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 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.

Balance as of September 30, 2022

Options exercisable as of September 30, 2022

As of September 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 September 30, 2022, the weighted average remaining contractual life was 8.0 years.

For options exercisable as of September 30, 2022, the weighted average remaining contractual life was 6.7 years.

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

5 unchanged sentences

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.

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

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

Stock-based compensation expense

5 unchanged sentences

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 six months ended June 30, 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 nine months ended September 30, 2022 and 2021:

September 30,

Weighted average fair value of options granted

3 unchanged sentences

56.3 % to 58.6

56.1 % to 63.4

Expected dividend yield

2 unchanged sentences

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:

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 nine months ended September 30, 2022:

September 30,

Weighted average fair value per ESPP purchase right

1 unchanged sentence

Expected volatility

51.3 % to 62.9

Expected dividend yield

Risk-free interest rate

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

0.22 % to 2.52

There were no ESPP purchase rights for the nine months ended September 30, 2021.

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

8 unchanged sentences

Three Months Ended

Six months ended

Nine months ended

September 30,

(in thousands)

5 unchanged sentences

Cost of goods sold

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.

As of September 30, 2022, unrecognized compensation expense related to unvested stock-based compensation arrangements was $ 9.2 million.

As of September 30, 2022, the related weighted average period over which the expense is expected to be recognized is approximately 2.7 years.

Early exercise of stock options

3 unchanged sentences

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

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 September 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 September 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 September 30, 2022 and 2021 was $ 32,000 and $ 23,000 , respectively.

Provision for income taxes for the nine months ended September 30, 2022 and 2021 was $ 81,000 and $ 66,000 , 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

Nine months ended

September 30,

Weighted average common shares outstanding — basic and diluted

4 unchanged sentences

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

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)

Commitments and contingencies

1 unchanged sentence

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, 2022 or December 31, 2021.

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

Employee benefit plans

12 unchanged sentences

Three months ended

Six months ended

Nine months ended

September 30,

Other countries

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

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

Subsequent events

On October 31, 2022, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with Innovatus Life Sciences Fund I, LP, as the collateral agent and a lender, under which the Company may borrow, subject to the Company’s achievement of certain milestones, up to a total of $ 50.0 million in a series of term loans.

On the closing date, the Company borrowed the minimum amount of $ 7.5 million under the Loan Agreement.

The terms loans advanced pursuant to the Loan Agreement (collectively, the “Term Loans”) will bear interest at a floating rate per annum equal to the sum of (a) the greater of (i) the prime rate and (ii) 5.50 % plus (b) 2.65 %.

The Term Loans mature on January 31, 2028 and require interest-only payments until November 1, 2027.

The Term Loans are secured by substantially all of the personal property of the Company.

The remaining amount of the facility will be available to be drawn in three separate tranches prior to December 2024.

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