What changed in this filing

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Item 1. Financial Statements

2023-10-31 compared with 2023-08-03 · 70 added, 49 removed, 314 unchanged (27% of the section changed)

2 unchanged sentences

(In thousands, except share and per share data)

September 30,

Current assets:

17 unchanged sentences

Stockholders’ equity:

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

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

20,813,612 and 20,663,736 shares issued and outstanding as of September 30, 2023 and December 31, 2022, 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 income (expense), net

Other income, net

Loss before income taxes

9 unchanged sentences

stockholders’

Balances as of March 31, 2023

Balances as of June 30, 2023

Exercise of stock options

Proceeds from Employee Stock Purchase Plan

Employee stock compensation

Net loss for the three months ended June 30, 2023

Net loss for the three months ended September 30, 2023

Cumulative translation adjustment

Balances as of September 30, 2023

Balances as of June 30, 2022

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

Net loss for the three months ended September 30, 2022

Cumulative translation adjustment

Balances as of June 30, 2022

Balances as of September 30, 2022

comprehensive

4 unchanged sentences

Employee stock compensation

Net loss for the six months ended June 30, 2023

Net loss for the nine months ended September 30, 2023

Cumulative translation adjustment

Balances as of June 30, 2023

Balances as of September 30, 2023

Balances as of December 31, 2021

2 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

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:

52 unchanged sentences

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

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.

As of September 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 September 30, 2023 and December 31, 2022, a majority of 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

32 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)

7 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 $ 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.

Depreciation expense was $ 137,000 and $ 127,000 for the three months ended September 30, 2023 and 2022, respectively, and $ 393,000 and $ 284,000 for the nine months ended September 30, 2023 and 2022, respectively.

Accrued expenses consist of the following at:

September 30,

(in thousands)

2 unchanged sentences

Customer rebates

Employee Stock Purchase Plan

Operating lease liability, current portion

10 unchanged sentences

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 June 30, 2023.

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

The annual principal maturities of debt under the Loan Agreement are as follows:

September 30,

(in thousands)

3 unchanged sentences

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.

On April 21, 2023, we extended the 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.

4 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, 2023:

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

September 30,

(in thousands)

3 unchanged sentences

Present value of lease liability

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.

As of September 30, 2023, the remaining lease term was 4.9 years and the discount rate was 5.0 %.

The operating cash outflows from our operating lease were $ 0.3 million for each of the nine months ended September 30, 2023 and 2022.

Stockholders’ equity

13 unchanged sentences

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

As of June 30, 2023, there were 1,741,895 shares available for future issuance under the 2021 Plan.

As of September 30, 2023, there were 1,724,683 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.

5 unchanged sentences

Cancelled / Forfeited

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.

Balance as of September 30, 2023

Options exercisable as of September 30, 2023

As of September 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 September 30, 2023, the weighted average remaining contractual life was 7.5 years.

For options exercisable as of September 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”).

5 unchanged sentences

(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.

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.

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

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

As of September 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 six months ended June 30, 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 nine months ended September 30, 2023 and 2022:

September 30,

Weighted average fair value of options granted

8 unchanged sentences

1.75 % to 3.97

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:

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, 2023 and 2022:

September 30,

Weighted average fair value per ESPP purchase right

1 unchanged sentence

Expected volatility

76.2 % to 84.6

51.3 % to 62.9

Expected dividend yield

Risk-free interest rate

4.77 % to 5.53

0.22 % to 2.52

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, 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 September 30, 2023, unrecognized compensation expense related to unvested stock-based compensation arrangements was $ 14.1 million.

As of September 30, 2023, the related weighted average period over which the expense is expected to be recognized is approximately 2.5 years.

As of September 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 September 30, 2023 and 2022 was $ 40,000 and $ 32,000 , respectively.

Provision for income taxes for the nine months ended September 30, 2023 and 2022 was $ 108,000 and $ 81,000 , 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

Nine months ended

September 30,

Weighted average common shares outstanding — basic and diluted

3 unchanged sentences

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

Nine months ended

September 30,

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 June 30, 2023 or December 31, 2022.

There have been no contingent liabilities requiring accrual or disclosure as of September 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.

The Company and its Chief Executive Officer evaluate performance based primarily on revenue in the geographic locations in which the Company operates.

and its Chief Executive Officer evaluate performance based primarily on revenue in the geographic locations in which the Company operates.

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

1 unchanged sentence

Three months ended

Six months ended

Nine months ended

September 30,

Other countries

As of June 30, 2023 and December 31, 2022, long-lived assets were located primarily in the U.S.

As of September 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