CVRx, Inc. 10-Q

Item 1. Financial Statements CVRx, INC. Condensed Consolidated Balance Sheets (In thousands, except share and per share data) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ March 31, December 31, ​ ​ 2024 ​ 2023 Assets ​ ​ Current assets: ​ ​ Cash and cash equivalents ​ $ 80,115 ​ $ 90,569 Accounts receivable, net of allowances of $ 647 and $ 508 , respectively ​ 8,495 ​ 7,551 Inventory ​ 11,056 ​ 10,983 Prepaid expenses and other current assets ​ 2,656 ​ 2,987 Total current assets ​ 102,322 ​ 112,090 Property and equipment, net ​ 2,549 ​ 1,763 Operating lease right-of-use asset ​ ​ 1,274 ​ ​ 1,349 Other non-current assets ​ 26 ​ 27 Total assets ​ $ 106,171 ​ $ 115,229 Liabilities and Stockholders’ Equity ​ ​ Current liabilities: ​ ​ Accounts payable ​ $ 2,608 ​ $ 1,884 Accrued expenses ​ 5,790 ​ 5,980 Total current liabilities ​ 8,398 ​ 7,864 Long-term debt ​ ​ 29,270 ​ ​ 29,222 Operating lease liability, non-current portion ​ ​ 1,092 ​ ​ 1,160 Other long-term liabilities ​ 1,150 ​ 1,036 Total liabilities ​ 39,910 ​ 39,282 Commitments and contingencies (Note 10) ​ ​ Stockholders’ equity: ​ ​ Common stock, $ 0.01 par value, 200,000,000 authorized as of March 31, 2024 and December 31, 2023; 21,593,173 and 20,879,199 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively ​ 216 ​ 209 Additional paid-in capital ​ 565,822 ​ 553,326 Accumulated deficit ​ ( 499,567 ) ​ ( 477,381 ) Accumulated other comprehensive loss ​ ( 210 ) ​ ( 207 ) Total stockholders’ equity ​ 66,261 ​ 75,947 Total liabilities and stockholders’ equity ​ $ 106,171 ​ $ 115,229 ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 5 Table of Contents CVRx, INC. Condensed Consolidated Statements of Operations and Comprehensive Loss (In thousands, except share and per share data) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ March 31, ​ ​ 2024 2023 Revenue ​ $ 10,770 ​ $ 7,979 Cost of goods sold ​ 1,615 ​ 1,328 Gross profit ​ 9,155 ​ 6,651 Operating expenses: ​ ​ Research and development ​ 3,057 ​ 3,416 Selling, general and administrative ​ 28,330 ​ 15,397 Total operating expenses ​ 31,387 ​ 18,813 Loss from operations ​ ( 22,232 ) ​ ( 12,162 ) Interest expense ​ ( 960 ) ​ ( 240 ) Other income, net ​ 1,044 ​ 1,062 Loss before income taxes ​ ( 22,148 ) ​ ( 11,340 ) Provision for income taxes ​ ( 38 ) ​ ( 34 ) Net loss ​ ( 22,186 ) ​ ( 11,374 ) Cumulative translation adjustment ​ ( 3 ) ​ 3 Comprehensive loss ​ $ ( 22,189 ) ​ $ ( 11,371 ) Net loss per share, basic and diluted ​ $ ( 1.04 ) ​ $ ( 0.55 ) Weighted-average common shares used to compute net loss per share, basic and diluted ​ 21,232,009 ​ 20,693,224 ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 6 Table of Contents ​ CVRx, INC. Condensed Consolidated Statements of Stockholders’ Equity (In thousands, except share data) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ other ​ Total ​ ​ Common stock ​ paid-in ​ Accumulated ​ comprehensive ​ stockholders’ ​ Shares ​ Amount capital deficit loss equity Balances as of December 31, 2023 20,879,199 $ 209 ​ $ 553,326 ​ $ ( 477,381 ) ​ $ ( 207 ) ​ $ 75,947 Exercise of stock options ​ 86,610 1 ​ 814 ​ — ​ — ​ 815 Employee stock compensation — — ​ 11,141 ​ — ​ — ​ 11,141 Issuance of common stock ​ 23,364 ​ ​ — ​ ​ 547 ​ ​ — ​ ​ — ​ ​ 547 Issuance of common stock upon net exercise of common warrants ​ 604,000 ​ ​ 6 ​ ​ ( 6 ) ​ ​ — ​ ​ — ​ ​ — Net loss for the three months ended March 31, 2024 — — ​ — ​ ( 22,186 ) ​ — ​ ( 22,186 ) Cumulative translation adjustment — — ​ — ​ — ​ ( 3 ) ​ ( 3 ) Balances as of March 31, 2024 21,593,173 $ 216 ​ $ 565,822 ​ $ ( 499,567 ) ​ $ ( 210 ) ​ $ 66,261 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balances as of December 31, 2022 20,663,736 $ 207 ​ $ 545,362 ​ $ ( 436,182 ) ​ $ ( 207 ) ​ $ 109,180 Exercise of stock options ​ 45,204 ​ ​ — ​ ​ 128 ​ ​ — ​ ​ — ​ ​ 128 Employee stock compensation — — ​ 1,705 ​ — ​ — ​ 1,705 Net loss for the three months ended March 31, 2023 — — ​ ​ — ​ ( 11,374 ) ​ — ​ ( 11,374 ) Cumulative translation adjustment — — ​ — ​ — ​ 3 ​ 3 Balances as of March 31, 2023 20,708,940 $ 207 ​ $ 547,195 ​ $ ( 447,556 ) ​ $ ( 204 ) ​ $ 99,642 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 7 Table of Contents CVRx, INC. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ March 31, ​ ​ 2024 2023 Cash flows from operating activities: ​ ​ Net loss ​ $ ( 22,186 ) ​ $ ( 11,374 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ Stock-based compensation ​ 11,141 ​ 1,705 Depreciation of property and equipment ​ 131 ​ 129 Loss on disposal of equipment ​ ​ — ​ ​ 4 Amortization of deferred financing costs and loan discount ​ 48 ​ 31 Changes in operating assets and liabilities: ​ ​ Accounts receivable ​ ( 944 ) ​ ( 930 ) Inventory ​ ( 73 ) ​ ( 1,284 ) Prepaid expenses and other current assets ​ 345 ​ 1,591 Accounts payable ​ 724 ​ 277 Accrued expenses ​ ( 82 ) ​ ( 398 ) Net cash used in operating activities ​ ( 10,896 ) ​ ( 10,249 ) Cash flows from investing activities: ​ ​ Purchase of property and equipment ​ ( 917 ) ​ ( 240 ) Net cash used in investing activities ​ ( 917 ) ​ ( 240 ) Cash flows from financing activities: ​ ​ Proceeds from the exercise of common stock options ​ 815 ​ 128 Proceeds from the issuance of common stock ​ ​ 547 ​ ​ — Proceeds from debt financing ​ ​ — ​ ​ 7,500 Debt financing costs ​ ​ — ​ ​ ( 60 ) Net cash provided by financing activities ​ 1,362 ​ 7,568 Effect of currency exchange on cash and cash equivalents ​ ( 3 ) ​ 3 Net change in cash and cash equivalents ​ ( 10,454 ) ​ ( 2,918 ) Cash and cash equivalents at beginning of period ​ 90,569 ​ 106,194 Cash and cash equivalents at end of period ​ $ 80,115 ​ $ 103,276 Supplemental Information: ​ ​ Cash paid for interest ​ $ 770 ​ $ 188 Cash paid for income taxes ​ $ — ​ $ — ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 8 Table of Contents CVRx, INC. Notes to Condensed Consolidated Financial Statements (Unaudited) 1. Business organization CVRx, Inc. (the “Company”) was incorporated in Delaware and is headquartered in Minneapolis, Minnesota. The Company has developed and is marketing a medical device, Barostim, for heart failure (“HF”) and resistant hypertension. The Company is focused on the sale of its product in the U.S. and Europe. Management expects that operating losses and negative cash flows from operations could continue in the foreseeable future. There is no assurance that the Company will generate sufficient product sales to produce positive earnings or cash flows. 2. Summary of significant accounting policies Statement presentation and basis of consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) applicable to interim financial statements. In the Company’s opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary for a fair presentation of the Company’s statements of financial position, results of operations, and cash flows for the periods presented. The results of operations for the interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole or any other future period. The condensed consolidated financial statements include the accounts of CVRx, Inc., its wholly owned subsidiary, CVRx Switzerland LLC, and its sales branch in Italy, which was closed during 2023. All intercompany balances and transactions have been eliminated in consolidation. JOBS Act accounting election We are an emerging growth company under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As a result, we have elected to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. Use of estimates Preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and the accompanying notes. Actual results could differ from those estimates. Cash and cash equivalents Cash and cash equivalents include highly liquid investments with an original maturity of three months or less. As of March 31, 2024 and December 31, 2023, cash equivalents consisted of money market funds, which are stated at cost and approximate fair value. Additionally, as of March 31, 2024 and December 31, 2023, 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. 9 Table of Contents Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Customer credit terms are established prior to shipment with the standard generally being net 30 days. We evaluate the collectability of our accounts receivable based on known collection risks and historical experience. In circumstances where we are aware of a specific customer's inability to meet its financial obligations to us, we record a specific allowance for bad debts against amounts due to reduce the carrying amount of accounts receivable to the amount we reasonably believe will be collected. ​ Inventory Inventory is stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. We regularly review inventory quantities in consideration of actual loss experiences, projected future demand and remaining shelf life to record a provision for excess and obsolete inventory when appropriate. Leases Operating leases are included in operating lease right-of-use (“ROU”) asset, accrued expenses, and operating lease liability – non-current portion in our balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. We used the incremental borrowing rate based on information readily available at the time of recognition to determine the present value of the lease payments. The determination of our incremental borrowing rate requires management judgement based on information available at lease commencement. Revenue recognition We sell our products primarily through a direct sales force and to a lesser extent through a combination of sales agents and independent distributors. Our revenue consists primarily of the sale of our Barostim, which consists of two implantable components: a pulse generator and a stimulation lead. Under Accounting Standards Codification (“ASC”) 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, we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. We only apply the five-step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services it transfers to the customer. We recognize net revenue on product sales, adjusted for any applicable estimates of variable consideration, when the customer obtains control of our product, which generally occurs at a point in time upon delivery based on the contractual shipping terms of a contract. Our contracts have a single performance obligation, and our payment terms with customers are generally between 30 and 90 days. Variable consideration related to certain customer rebates is estimated based on the amounts expected to be paid under the agreement with the customer. 10 Table of Contents 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”) Accounting Standards Codification 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. We estimate the grant date fair value of stock options using the Black-Scholes option pricing model. We account for forfeitures as they occur. 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. ​ Recent accounting pronouncements In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires public companies to disclose for each reportable segment the significant expense categories and amounts for such expenses. ASU 2023-07 is effective for annual periods beginning December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. This ASU will be effective for our annual period ended December 31, 2024. We are currently evaluating the effect of this new guidance on our condensed consolidated financial statements and disclosures. ​ In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires public business entities to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 is effective for annual periods beginning after December 15, 2023. This ASU will be effective for our annual period ended December 31, 2024. We are evaluating the impact of this new guidance on our income tax disclosures. ​ 3. Selected balance sheet information Inventory consists of the following at: ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, December 31, (in thousands) ​ 2024 ​ 2023 Raw material ​ $ 4,544 ​ $ 4,714 Work-in-process ​ 750 ​ 654 Finished goods ​ 5,762 ​ 5,615 ​ ​ $ 11,056 ​ $ 10,983 ​ Property and equipment, net consists of the following at: ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, December 31, (in thousands) ​ 2024 ​ 2023 Office furniture and equipment ​ $ 410 ​ $ 402 Lab equipment ​ 2,721 ​ 2,721 Computer equipment and software ​ 788 ​ 776 Leasehold improvements ​ 98 ​ 98 Capital equipment in process ​ 1,451 ​ 554 ​ ​ 5,468 ​ 4,551 Less: Accumulated depreciation and amortization ​ 2,919 ​ 2,788 ​ ​ $ 2,549 ​ $ 1,763 ​ 11 Table of Contents Depreciation is determined using the straight-line method over the estimated useful lives of the respective assets, generally three to five years . 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 $ 131,000 and $ 129,000 for the three months ended March 31, 2024 and 2023, respectively. ​ Accrued expenses consist of the following at: ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, December 31, (in thousands) ​ 2024 ​ 2023 Bonuses ​ $ 2,106 ​ $ 3,335 Paid time off ​ ​ 898 ​ ​ 770 Customer rebates ​ ​ 591 ​ ​ 411 Accrued interest payable ​ ​ 284 ​ ​ 220 Employee stock purchase plan ​ ​ 270 ​ ​ 27 Clinical trial and other professional fees ​ ​ 242 ​ ​ 277 Operating lease liability, current portion ​ ​ 239 ​ ​ 231 401(k) match ​ ​ 218 ​ ​ — Taxes ​ ​ 145 ​ ​ 125 Other ​ 797 ​ 584 ​ ​ $ 5,790 ​ $ 5,980 ​ ​ ​ ​ 4. Debt Innovatus Loan Agreement On October 31, 2022, we 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 we may borrow, subject to our achievement of certain milestones, up to a total of $ 50.0 million in a series of term loans. On the closing date, we borrowed the minimum amount of $ 7.5 million under the Loan Agreement. On March 10, 2023, we borrowed the $ 7.5 million remaining under the first tranche of the Loan Agreement. On December 15, 2023, we borrowed an additional $ 15.0 million under the second tranche of the Loan Agreement. The Loan Agreement initially requires interest only payments through November 2027, followed by three monthly principal and interest payments. A final payment of $ 1.4 million, equal to 4.5 % of the original borrowed principal, is due in January 2028. 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 our personal property. We have the option to draw down up to $ 20.0 million between September 1, 2024 and December 15, 2024 if we achieve 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 we 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 our capital stock, subject to limited exceptions. We were in compliance with these covenants as of March 31, 2024. ​ In connection with the Loan Agreement, we recorded $ 1.0 million of debt issuance costs and discounts as a reduction of long-term debt. ​ 12 Table of Contents The annual principal maturities of debt under the Loan Agreement are as follows: ​ ​ ​ ​ ​ ​ March 31, (in thousands) ​ 2024 2024 $ — 2025 ​ — 2026 ​ — 2027 ​ ​ 20,000 2028 ​ ​ 10,000 ​ ​ 30,000 Less: Unamortized debt costs and discounts ​ ( 730 ) Long-term debt ​ $ 29,270 ​ ​ ​ ​ 5. Leases We lease 31,505 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 was scheduled to expire August 31, 2024. 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. On November 7, 2023, we expanded our existing office space with the addition of 7,615 square feet of property adjacent to our principal executive offices and our manufacturing facility. The term on this expanded property is for 57 consecutive months that will run concurrently with the term on the existing lease. 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 three 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, as it is not reasonably certain of exercise. In addition to base rent, we also pay our proportionate share of operating expenses, as defined in the lease. These payments are made monthly and are adjusted annually to reflect actual charges incurred for operating expenses, such as common area maintenance, taxes and insurance. The following table presents the lease balances within the condensed consolidated balance sheets: ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, (in thousands) ​ 2024 ​ 2023 Right-of-use assets: ​ ​ ​ ​ ​ ​ Operating lease right-of-use asset ​ $ 1,274 ​ $ 1,349 Operating lease liabilities: ​ ​ ​ ​ ​ ​ Accrued expenses ​ ​ 239 ​ ​ 231 Operating lease liability, non-current portion ​ ​ 1,092 ​ ​ 1,160 Total operating lease liabilities ​ $ 1,331 ​ $ 1,391 ​ 13 Table of Contents Maturities of our lease liability for our operating lease are as follows as of March 31, 2024: ​ ​ ​ ​ ​ ​ ​ March 31, (in thousands) ​ 2024 2024 ​ $ 233 2025 ​ ​ 350 2026 ​ ​ 362 2027 ​ ​ 374 2028 ​ ​ 223 Total undiscounted lease payments ​ ​ 1,542 Less: imputed interest ​ ​ ( 211 ) Present value of lease liability ​ $ 1,331 ​ As of March 31, 2024, the remaining lease term was 4.4 years and the weighted average discount rate was 6.7 %. The operating cash outflows from our operating lease were $ 0.1 million for each of the three months ended March 31, 2024 and 2023. ​ 6 . Stockholders’ equity Common Stock Warrants We have common stock warrants exercisable for 108,406 shares of common stock upon conversion at a weighted average exercise price of $ 14.92 per share outstanding at March 31, 2024. Johnson & Johnson Innovation – JJDC, Inc. had common stock warrants exercisable for 607,725 shares of our common stock with an exercise price of $ 0.16 per share that were all exercised through a net exercise transaction for 604,000 shares of common stock during the three months ended March 31, 2024. At-the-Market (“ATM”) Offering In January 2024, we commenced an ATM offering, which allows us to issue and sell shares of our common stock having an aggregate offering price of up to $ 50.0 million . We issued 23,364 shares of common stock for gross proceeds of $ 0.6 million under the ATM offering during the three months ended March 31, 2024. We have remaining capacity to issue and sell up to approximately $ 49.4 million of additional shares of common stock under this ATM offering. 7. Stock-based compensation Summary of plans and activity In June 2001, our Board of Directors and stockholders established the 2001 Stock Incentive Award Plan (“2001 Plan”). Under the 2001 Plan, as amended, 2,674,749 shares of common stock had been reserved for the issuance of incentive stock options granted to employees, non-employee directors, consultants, or independent contractors. Options granted under the 2001 Plan have vesting terms that range from the date of grant to four years and expire within a maximum term of 10 years from the grant date. In 2021, our Board of Directors and stockholders established the 2021 Equity Incentive Plan (“2021 Plan”). The number of shares of common stock initially reserved for issuance under the 2021 Plan was 1,854,490 newly reserved shares in addition to the 600,737 shares that remained available for issuance under the 2001 Plan. The shares available for issuance under the 2021 Plan automatically increase on the first day of each year, commencing January 1, 2022, and ending on (and including) January 1, 2031, in an amount equal to 5 % of the total number of shares of the Company’s common stock outstanding on the last day of the calendar month before the date of each automatic increase, or such lesser number of shares as determined by the Board of Directors. The annual increase resulted in an additional 1,043,959 shares being reserved for issuance under the 2021 Plan as of January 1, 2024. The 2021 Plan provides for the issuance of stock options, stock appreciation rights, restricted stock awards, stock unit awards and other stock-based awards 14 Table of Contents and cash incentive awards to employees, consultants and non-employee directors of the Company and its subsidiaries. Awards granted under the 2021 Plan will have such vesting schedules and other terms as determined by the Compensation Committee and stock options and stock appreciation rights have a maximum term of 10 years from the grant date. No further awards can be made under the 2001 Plan following the adoption of the 2021 Plan. As of March 31, 2024, there were 1,880,988 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 our common stock on the date of grant. 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 our 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. The following is a summary of stock option activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Number ​ Average ​ Aggregate ​ ​ of ​ Exercise ​ Intrinsic ​ ​ Options ​ Price ​ Value ​ ​ ​ ​ ​ ​ (in thousands) Balance as of December 31, 2023 4,488,845 ​ $ 9.77 ​ $ ​ 97,266 Granted 2,014,489 ​ 14.94 ​ ​ Cancelled / Forfeited ( 1,180,316 ) ​ 8.20 ​ ​ Exercised ( 86,610 ) ​ 9.41 ​ ​ Balance as of March 31, 2024 5,236,408 ​ $ 12.12 ​ $ ​ 37,108 Options exercisable as of March 31, 2024 2,711,871 ​ $ 7.96 ​ $ ​ 27,885 ​ As of March 31, 2024, stock options outstanding included 4,520 options that were not granted under the 2001 Plan or the 2021 Plan. For options outstanding as of March 31, 2024, the weighted average remaining contractual life was 7.1 years. For options exercisable as of March 31, 2024, the weighted average remaining contractual life was 5.9 years. Our Board of Directors and stockholders also established an Employee Stock Purchase Plan (the “ESPP”). The number of shares of common stock initially reserved for issuance under the ESPP was 278,170 . The shares available for issuance under the ESPP automatically increase on the first day of each year, commencing January 1, 2022, and ending on (and including) January 1, 2031, in an amount equal to 1 % of the total number of shares of our common stock outstanding on the last day of the calendar month before the date of each automatic increase, or such lesser number of shares as determined by the Board of Directors. The annual increase resulted in an additional 208,791 shares being reserved for issuance under the ESPP as of January 1, 2024. The ESPP permits certain of our U.S. employees to purchase shares of our common stock at a price per share not less than 85 % of the l ower of (i) the closing market price per share of our common stock on the first day of the applicable purchase period or (ii) the closing market price per share of our common stock on the purchase date at the end of the applicable six-month purchase period. As of March 31, 2024, there were 712,425 shares available for issuance under the ESPP. Stock-based compensation expense We use the Black-Scholes option pricing model to determine the fair value of stock options and ESPP purchase rights on the grant date. We measure stock-based compensation expense based on the grant date fair value of the award and recognize compensation expense over the requisite service period, which is generally the vesting period for stock options and the offering period for ESPP purchase rights. The amount of stock-based compensation expense recognized for stock option awards during a period is based on the 15 Table of Contents 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. We account 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, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ ​ ​ ​ 2024 ​ ​ 2023 Weighted average fair value of options granted $ 12.20 ​ ​ $ 10.72 ​ Expected term (in years) — non-officer employees ​ 5.5 to 6.1 ​ ​ ​ 6.1 ​ Expected term (in years) — officer employees ​ 2.5 to 6.1 ​ ​ ​ 2.5 to 6.1 ​ Expected volatility ​ 90.9 % to 92.8 % ​ ​ 77.6 % to 79.2 % Expected dividend yield ​ — % ​ ​ — % Risk-free interest rate ​ 3.95 % to 4.28 % ​ ​ 3.40 % to 4.18 % ​ ​ 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, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ ​ ​ ​ 2024 ​ ​ 2023 ​ Weighted average fair value per ESPP purchase right $ — ​ ​ $ — ​ Expected term (in years)  ​ 0.5 ​ ​ ​ 0.5 ​ Expected volatility ​ 74.0 % ​ ​ 84.6 % Expected dividend yield ​ — % ​ ​ — % Risk-free interest rate ​ 5.24 % ​ ​ 4.77 % ​ We review these assumptions on a periodic basis and adjust them, as necessary. We utilize the simplified method to develop the estimate of the expected term for stock option awards and ESPP purchase rights. The expected volatility is based upon observed volatility of comparable public companies. The expected dividend yield is assumed to be zero , as we have never paid dividends and have no current plans to do so. The risk-free interest rate is based on the yield on U.S. Treasury securities for a period approximating the expected term of the options being valued. The following table presents the components and classification of stock-based compensation expense for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ March 31, (in thousands) ​ 2024 ​ 2023 Stock options ​ $ 11,028 ​ $ 1,584 Employee Stock Purchase Plan ​ ​ 113 ​ ​ 121 Total stock-based compensation expense ​ $ 11,141 ​ $ 1,705 ​ ​ ​ ​ ​ ​ ​ Selling, general & administrative ​ $ 10,824 ​ $ 1,180 Research & development ​ ​ 285 ​ 508 Cost of goods sold ​ ​ 32 ​ 17 ​ ​ $ 11,141 ​ $ 1,705 ​ 16 Table of Contents As of March 31, 2024, unrecognized compensation expense related to unvested stock-based compensation arrangements was $ 27.9 million. As of March 31, 2024, the related weighted average period over which the expense is expected to be recognized is approximately 2.6 years. On January 30, 2024, we amended the terms and conditions of certain stock option award agreements granted under the 2001 Plan and 2021 Plan between us and our former CEO in connection with his retirement, which occurred on February 11, 2024. The option agreements were amended to provide that, if not already vested at the time of termination of his employment due to retirement, the options will continue to vest on the previously scheduled vesting dates following his retirement, subject to his compliance with certain covenants. Additionally, the option agreements were modified so that the options may be exercised, to the extent vested, by our former CEO until the earlier of (a) five years following his retirement date, or (b) the applicable option expiration date. The modification of these option awards resulted in an additional $ 8.4 million of non-cash stock-based compensation expense recognized during the three months ended March 31, 2024. 8. Income taxes As of March 31, 2024 and December 31, 2023, a valuation allowance was recorded against all deferred tax assets due to our cumulative net loss position. Provision for income taxes for the three months ended March 31, 2024 and 2023 was $ 38,000 and $ 34,000 , respectively. As of December 31, 2023, we had federal and state net operating loss carryforwards (“NOLs”) of approximately $ 389.9 million and $ 7.3 million, respectively. The federal NOLs began expiring in 2021 and the state NOLs began expiring in 2020. As of December 31, 2023, we had federal and state tax credit carryforwards of approximately $ 9.8 million and $ 2.0 million, respectively. The federal tax credit carryforwards began expiring in 2021 and the state tax credit carryforwards will begin expiring in 2028. Utilization of NOLs may be subject to an annual limitation due to the ownership change limitations provided by Section 382 of the Internal Revenue Code of 1986, as amended, and similar state provisions. We have not performed a detailed analysis to determine whether an ownership change has occurred. Such a change of ownership would limit our utilization of the NOLs and could be triggered by subsequent sales of securities by us or our stockholders. 9. Loss Per Share Basic and diluted net loss per share attributable to common stockholders was calculated for the periods indicated (in thousands, except share and per share data): ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ March 31, ​ ​ 2024 ​ 2023 Numerator: ​ ​ ​ Net loss ​ $ ( 22,186 ) ​ $ ( 11,374 ) Denominator: ​ ​ Weighted average common shares outstanding — basic and diluted ​ 21,232,009 ​ 20,693,224 Net loss per share attributable to common stockholders — basic and diluted ​ $ ( 1.04 ) ​ $ ( 0.55 ) ​ 17 Table of Contents Our 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. We 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 ​ ​ March 31, ​ ​ 2024 2023 Options to purchase common stock 5,236,408 4,426,605 Warrants to purchase common stock ​ 108,406 ​ 716,131 ​ 5,344,814 5,142,736 ​ ​ ​ 10. Commitments and contingencies From time to time, we may have certain contingent liabilities that arise in the ordinary course of business. We accrue 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, 2024 or December 31, 2023. ​ 11. Employee benefit plans We sponsor a voluntary defined-contribution employee retirement plan (the “401(k) plan”) for our U.S. employees. The 401(k) plan provides that each participant may contribute pre-tax or post-tax compensation up to the statutory limit allowable. Under the 401(k) plan, each participant is fully vested in his or her deferred salary contributions when contributed. Beginning January 1, 2024, we adopted a policy to match a portion of employee contributions for all qualified employees participating in the 401(k) plan. We recorded an expense for matching contributions of $ 0.2 million and $ 0 for the three months ended March 31, 2024 and 2023, respectively. ​ 12. Segment, geographic information, and revenue disaggregation The chief operating decision maker for the Company is the Chief Executive Officer. 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. We have 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, we have determined that we have a single reportable and operating segment structure. We and our Chief Executive Officer evaluate performance based primarily on revenue in the geographic locations in which the Company operates. 18 Table of Contents We derive all our 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 periods indicated (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ March 31, ​ ​ 2024 2023 U.S. ​ $ 9,835 ​ $ 6,942 Germany ​ 877 ​ 891 Other countries ​ 58 ​ 146 ​ ​ $ 10,770 ​ $ 7,979 ​ As of March 31, 2024 and December 31, 2023, long-lived assets were located primarily in the U.S. ​