What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-08-03 compared with 2023-05-11 · 73 added, 51 removed, 290 unchanged (30% of the section changed)

21 unchanged sentences

Stockholders’ equity:

Common stock, $ 0.01 par value, 200,000,000 authorized as of March 31, 2023 and December 31, 2022;

20,708,940 and 20,633,736 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively

Common stock, $ 0.01 par value, 200,000,000 authorized as of June 30, 2023 and December 31, 2022;

20,750,910 and 20,663,736 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

Additional paid-in capital

7 unchanged sentences

Three months ended

Six months ended

Cost of goods sold

17 unchanged sentences

stockholders’

Balances as of December 31, 2022

Balances as of March 31, 2023

Exercise of stock options

Proceeds from Employee Stock Purchase Plan

Employee stock compensation

Net loss for the three months ended March 31, 2023

Net loss for the three months ended June 30, 2023

Cumulative translation adjustment

Balances as of June 30, 2023

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 June 30, 2022

Cumulative translation adjustment

Balances as of June 30, 2022

comprehensive

stockholders’

Balances as of December 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 six months ended June 30, 2023

Cumulative translation adjustment

Balances as of March 31, 2022

Balances as of June 30, 2023

Balances as of December 31, 2021

Exercise of stock options

Proceeds from Employee Stock Purchase Plan

Employee stock compensation

Net loss for the six months ended June 30, 2022

Cumulative translation adjustment

Balances as of June 30, 2022

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

Proceeds from debt financing

7 unchanged sentences

Cash paid for interest

Cash paid for income taxes

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

24 unchanged sentences

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

As of March 31, 2023 and December 31, 2022, cash equivalents consisted of money market funds, which are stated at cost and approximate fair value.

Additionally, as of March 31, 2023 and December 31, 2022, our cash and cash equivalents were maintained with two financial institutions in the U.S., and our current deposits are likely in excess of insured limits.

As of June 30, 2023 and December 31, 2022, cash equivalents consisted of money market funds, which are stated at cost and approximate fair value.

Additionally, as of June 30, 2023 and December 31, 2022, our cash and cash equivalents were maintained with two financial institutions in the U.S., and our current deposits are likely in excess of insured limits.

Accounts Receivable

24 unchanged sentences

Stock-Based Compensation

We recognize equity-based compensation expense for awards of equity instruments to employees and non-employees based on the grant date fair value of those awards in accordance with Financial Accounting Standards Board (“FASB”) ASC Topic 718, Compensation—Stock Compensation (“ASC 718”).

We recognize equity-based compensation expense for awards of equity instruments to employees and non-employees based on the grant date fair value of those awards in accordance with Financial Accounting Standards Board ASC Topic 718, Compensation—Stock Compensation (“ASC 718”).

ASC 718 requires all equity-based compensation awards to employees and non-employee directors, including grants of restricted shares and stock options, to be recognized as expense in the statements of operations and comprehensive loss based on their grant date fair values.

1 unchanged sentence

We account for forfeitures as they occur.

the fair value of our equity-based compensation awards granted to employees on a straight-line basis over the associated service period, which is generally the period in which the related services are received.

Recent accounting pronouncements

In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses ("ASU 2016-13"), to require the measurement of expected credit losses for financial instruments held at the reporting date to be based on historical experience, current conditions, and reasonable forecasts.

ASU 2016-13 became effective for us for interim and annual periods beginning January 1, 2023.

The adoption of ASU 2016-13 did not have a material impact on our results of operations, cash flows, or financial position.

We expense the fair value of

our equity-based compensation awards granted to employees on a straight-line basis over the associated service period, which is generally the period in which the related services are received.

Selected balance sheet information

13 unchanged sentences

Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or the term of the lease.

Depreciation expense was $ 129,000 and $ 62,000 for the three months ended March 31, 2023 and 2022, respectively.

Depreciation expense was $ 127,000 and $ 95,000 for the three months ended June 30, 2023 and 2022, respectively, and $ 256,000 and $ 157,000 for the six months ended June 30, 2023 and 2022, respectively.

Accrued expenses consist of the following at:

(in thousands)

Clinical trial and other professional fees

Paid time off

Clinical trial and other professional fees

Customer rebates

6 unchanged sentences

A final payment of $ 0.7 million, equal to 4.5 % of the original borrowed principal, is due in January 2028.

The terms loans advanced pursuant to the Loan Agreement (collectively, the “Term Loans”) 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 advanced pursuant to the Loan Agreement (collectively, the “Term Loans”) 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 are secured by substantially all of the personal property of the Company.

The Company has the option to draw down (i) up to $ 30.0 million less the amount funded from the first tranche between September 1, 2023 and December 15, 2023 if the Company achieves trailing three months revenue of $ 5.75 million prior to June 30, 2023, and (ii) up to $ 20.0 million between September 1, 2024 and December 15, 2024 if the Company achieves trailing three months revenue of $ 9.0 million prior to June 30, 2024.

The Company has the option to draw down (i) up to $ 30.0 million less the amount funded from the first tranche between September 1, 2023 and December 15, 2023 if the Company achieves trailing three months revenue of $ 5.75 million prior to June 30, 2023 (which was achieved), and (ii) up to $ 20.0 million between September 1, 2024 and December 15, 2024 if the Company achieves trailing three months revenue of $ 9.0 million prior to June 30, 2024.

A performance covenant takes effect at the earlier of September 30, 2025 or the third tranche funding requiring that the Company achieve 50 % of the trailing twelve months revenue target set in the Board-approved revenue plan in effect for such period.

The Loan Agreement requires the payment of certain penalties if the Term Loans are paid off prior to maturity for any reason, including pursuant to an acceleration clause, and includes various restrictive covenants, including a restriction on the payment of dividends or making other distributions or payments on the Company’s capital stock, subject to limited exceptions.

The Company was in compliance with these covenants as of March 31, 2023.

The Company was in compliance with these covenants as of June 30, 2023.

In connection with the Loan Agreement, the Company recorded $ 0.8 million of debt issuance costs and discounts as a reduction of long-term debt.

4 unchanged sentences

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

We lease this space under an operating lease agreement that commenced December 1, 2008 and expires July 31, 2024.

We lease this space under an operating lease agreement that commenced December 1, 2008 and was scheduled to expire August 31, 2024.

On April 21, 2023, we extended our operating lease for our office space in Minneapolis, Minnesota for an additional 49 consecutive months through August 31, 2028.

We intend to add new facilities as we grow, and we believe that suitable additional or substitute space will be available as needed to accommodate any such expansion of our operations.

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

Our operating lease agreement includes an option to renew for one additional period of three

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, as it is not reasonably certain of exercise.

9 unchanged sentences

Total operating lease liabilities

Maturities of our lease liability for our operating lease are as follows as of March 31, 2023:

Maturities of our lease liability for our operating lease are as follows as of June 30, 2023:

(in thousands)

2023, remainder

Total undiscounted lease payments

1 unchanged sentence

Present value of lease liability

As of March 31, 2023, the remaining lease term was 1.3 years and the discount rate was 5.0 %.

The operating cash outflows from our operating lease were $ 0.1 million and $ 0.2 million for the three months ended March 31, 2023 and 2022, respectively.

As of June 30, 2023, the remaining lease term was 5.2 years and the discount rate was 5.0 %.

The operating cash outflows from our operating lease were $ 0.2 million and $ 0.6 million for the six months ended June 30, 2023 and 2022, respectively.

Stockholders’ equity

Common Stock Warrants

In connection with the initial public offering (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.

The Company has common stock warrants exercisable for 716,131 shares of common stock upon conversion at a weighted average exercise price of $ 2.39 per share.

Stock-based compensation

10 unchanged sentences

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

As of March 31, 2023, there were 1,832,425 shares available for future issuance under the 2021 Plan.

As of June 30, 2023, there were 1,741,895 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 the IPO, 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 the initial public offering (the “IPO”), 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, 2023

Options exercisable as of March 31, 2023

As of March 31, 2023, stock options outstanding included 8,796 options that were not granted under the 2001 Plan or the 2021 Plan.

For options outstanding as of March 31, 2023, the weighted average remaining contractual life was 7.9 years.

For options exercisable as of March 31, 2023, the weighted average remaining contractual life was 6.5 years.

Balance as of June 30, 2023

Options exercisable as of June 30, 2023

As of June 30, 2023, 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, 2023, the weighted average remaining contractual life was 7.7 years.

For options exercisable as of June 30, 2023, the weighted average remaining contractual life was 6.4 years.

The Company’s Board of Directors and stockholders also established an Employee Stock Purchase Plan (the “ESPP”).

3 unchanged sentences

The ESPP permits certain of the Company’s U.S.

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.

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

As of March 31, 2023, there were 574,910 shares available for issuance under the ESPP.

For the six months ended June 30, 2023, 34,421 shares of common stock were purchased under the ESPP for $ 0.5 million of employee contributions.

As of June 30, 2023, there were 540,489 shares available for issuance under the ESPP.

Stock-based compensation expense

4 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 three months ended March 31, 2023 and 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, 2023 and 2022:

Weighted average fair value of options granted

8 unchanged sentences

1.75 % to 3.07

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 three months ended March 31, 2023 and 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 six months ended June 30, 2023 and 2022:

Weighted average fair value per ESPP purchase right

13 unchanged sentences

Three Months Ended

Six months ended

(in thousands)

5 unchanged sentences

Cost of goods sold

As of March 31, 2023, unrecognized compensation expense related to unvested stock-based compensation arrangements was $ 15.1 million.

As of March 31, 2023, the related weighted average period over which the expense is expected to be recognized is approximately 2.7 years.

As of March 31, 2023 and December 31, 2022, 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, 2023 and 2022 was $ 34,000 and $ 26,000 , respectively.

As of June 30, 2023, unrecognized compensation expense related to unvested stock-based compensation arrangements was $ 14.8 million.

As of June 30, 2023, the related weighted average period over which the expense is expected to be recognized is approximately 2.7 years.

As of June 30, 2023 and December 31, 2022, 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, 2023 and 2022 was $ 34,000 and $ 23,000 , respectively.

Provision for income taxes for the six months ended June 30, 2023 and 2022 was $ 68,000 and $ 49,000 , respectively.

As of December 31, 2022, the Company had federal and state net operating loss carryforwards (“NOLs”) of approximately $ 361.0 million and $ 6.2 million, respectively.

8 unchanged sentences

Three Months Ended

Six months ended

Weighted average common shares outstanding — basic and diluted

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, 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.

The Company’s potentially dilutive securities, which include stock options 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:

Three months ended

Six months ended

Options to purchase common stock

3 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, 2023 or December 31, 2022.

There have been no contingent liabilities requiring accrual or disclosure as of June 30, 2023 or December 31, 2022.

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.

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.

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, 2023 and December 31, 2022, long-lived assets were located primarily in the U.S.

Subsequent events

On April 21, 2023, we extended our operating lease for our office space in Minneapolis, Minnesota for an additional 49 consecutive months, commencing August 1, 2024 through August 31, 2028.

This amendment to our operating lease agreement includes an option to renew for one additional period of three years .

The amendment also requires the landlord to provide us with a cash allowance not to exceed $ 50,000 for the construction of standard tenant improvements to be mutually agreed upon.

As of June 30, 2023 and December 31, 2022, 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