What changed in this filing

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Item 1. Financial Statements

2021-08-06 compared with 2021-05-06 · 108 added, 153 removed, 295 unchanged (47% of the section changed)

29 unchanged sentences

Preferred stock, $ 0.001 par value;

5,000 shares authorized, and no shares issued and outstanding as of March 31, 2021 and December 31, 2020

5,000 shares authorized, and no shares issued and outstanding as of June 30, 2021 and December 31, 2020

Common stock, $ 0.001 par value;

300,000 shares authorized as of March 31, 2021 and December 31, 2020;

42,888 and 42,722 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively

300,000 shares authorized as of June 30, 2021 and December 31, 2020;

46,225 and 42,722 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively

Additional paid-in capital

8 unchanged sentences

Three Months Ended

Six Months Ended

Product revenue

13 unchanged sentences

Interest expense

Change in fair value of redeemable convertible preferred stock warrant liability

Change in fair value of redeemable convertible preferred stock

warrant liability

Loss before provision for income taxes

Provision for income taxes

Net income (loss) attributable to common stockholders:

Net income (loss) per share attributable to common stockholders:

Weighted-average shares used in computing net income (loss) per share attributable to

common stockholders:

Net loss attributable to common stockholders, basic and diluted

Net loss per share attributable to common stockholders,

basic and diluted

Weighted-average shares used in computing net loss per share

attributable to common stockholders, basic and diluted

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

3 unchanged sentences

Three Months Ended

Six Months Ended

Other comprehensive loss:

Unrealized loss on available-for-sale securities

Unrealized gain (loss) on available-for-sale securities

Comprehensive loss

15 unchanged sentences

Balance as of March 31, 2021

Issuance of common stock upon follow-on

public offering, net of issuance costs

Issuance of common stock for settlement of

Stock option exercises

Stock-based compensation expense

Unrealized loss on available-for-sale

Balance as of June 30, 2021

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

20 unchanged sentences

Balance as of March 31, 2020

Stock option exercises

Stock-based compensation expense

Unrealized gain on available-for-sale

Balance as of June 30, 2020

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

2 unchanged sentences

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

20 unchanged sentences

Purchases of property and equipment

Purchases of short-term investments

Sales and maturities of short-term investments

Purchases of investment securities

Sales and maturities of investment securities

Net cash (used in) provided by investing activities

Cash flows from financing activities:

Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs

Proceeds from issuance of common stock upon follow-on public offering,

net of issuance costs

Proceeds from issuance of redeemable convertible preferred stock,

net of issuance costs

Proceeds from stock option exercises and employee stock purchase plan purchases

Repayment of finance lease

Payment of deferred offering costs

Net cash provided by financing activities

6 unchanged sentences

Cash paid for amounts included in the measurement of operating lease liabilities

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

Outset Medical, Inc.

Condensed Statements of Cash Flows

(in thousands)

Six Months Ended June 30,

Supplemental non-cash investing and financing activities:

Capital expenditures included in accounts payable and accrued expenses

Transfer of inventories to property and equipment

Right-of-use assets obtained in exchange for lease liabilities

Deemed dividend on settlement of accrued dividend

1 unchanged sentence

Issuance of common stock on settlement of accrued dividend

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

Debt issuance costs included in accrued expenses

Deferred offering costs included in accrued expenses

Transfer of property and equipment to inventories

Outset Medical, Inc.

2 unchanged sentences

Outset Medical, Inc.

(the “Company”) was originally incorporated on May 5, 2003 in the state of Delaware under the name Home Dialysis Plus, Ltd.

The name of the Company was changed to Outset Medical, Inc.

on January 5, 2015.

Outset Medical, Inc.

is a medical technology company pioneering a first-of-its-kind technology to reduce the cost and complexity of dialysis.

The Tablo Hemodialysis System enables dialysis care in acute and chronic settings.

(the “Company”) is a medical technology company pioneering a first-of-its-kind technology to reduce the cost and complexity of dialysis.

The Tablo® Hemodialysis System, FDA cleared for use from the hospital to the home, represents a significant technological advancement that transforms the dialysis experience for patients and operationally simplifies it for providers.

Tablo serves as a single enterprise solution that can be utilized across the continuum of care, allowing dialysis to be delivered anytime, anywhere and by anyone.

The integration of water purification and on-demand dialysate production enables Tablo to serve as a dialysis clinic on wheels, with 2-way wireless data transmission and a proprietary data analytics platform powering a new holistic approach to dialysis care.

The Company’s headquarters are located in San Jose, CA.

2 unchanged sentences

Including the full exercise of the underwriters’ option to purchase additional shares, the Company received aggregate net proceeds of $ 254.8 million after deducting offering costs, underwriting discounts and commissions of $ 23.1 million.

On April 13, 2021, the Company completed a follow-on public offering and sold 2,946,000 shares of common stock (see Note 11 for further discussion) .

On April 13, 2021, the Company completed a follow-on public offering and sold 2,946,000 shares of common stock (which included 446,000 shares that were offered and sold pursuant to the full exercise of the underwriters’ option to purchase additional shares) at a price to the public of $ 53.50 per share.

The Company received aggregate net proceeds of approximately $ 149.1 million after deducting offering costs, underwriting discounts and commissions of $ 8.5 million.

Reverse Stock Split

4 unchanged sentences

Since inception, the Company has incurred net losses and negative cash flows from operations.

During the three months ended March 31, 2021 and 2020, the Company incurred a net loss of $30.0 million and $20.7 million, respectively.

As of March 31, 2021, the Company had an accumulated deficit of $524.1 million.

As of March 31, 2021, the Company had cash, cash equivalents and short-term investments of $277.5 million, which are available to fund future operations, and restricted cash of $33.3 million, for a total cash, cash equivalents, restricted cash and short-term investments balance of $310.8 million.

During the six months ended June 30, 2021 and 2020, the Company incurred a net loss of $ 60.2 million and $ 47.2 million, respectively.

As of June 30, 2021, the Company had an accumulated deficit of $ 554.3 million.

As of June 30, 2021, the Company had cash, cash equivalents and short-term investments of $ 396.2 million, which are available to fund future operations, and restricted cash of $ 33.3 million, for a total cash, cash equivalents, restricted cash and short-term investments balance of $ 429.5 million.

Management expects to continue to incur significant expenses for the foreseeable future and to incur operating losses in the near term while the Company makes investments to support its anticipated growth.

Management believes that the Company’s existing cash, cash equivalents and short-term investments, which include the proceeds from the IPO, and cash generated from revenues from its products and services, as well as the proceeds from the follow-on public offering (see Note 11 for further discussion), will be sufficient to meet its anticipated needs for at least the next 12 months from the issuance date of the accompanying condensed financial statements.

Management believes that the Company’s existing cash, cash equivalents and short-term investments , which include the proceeds from the IPO and the follow-on public offering, and cash generated from revenues from its products and services, will be sufficient to meet its anticipated needs for at least the next 12 months from the issuance date of the accompanying condensed financial statements.

Basis of Presentation

2 unchanged sentences

GAAP”) and on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, that are necessary for the fair statement of the Company’s financial position, results of operations, comprehensive loss and cash flows for the interim periods presented.

The financial data and the other financial information disclosed in these notes to the condensed financial statements related to the three-month period are also unaudited.

The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results of operations to be anticipated for any other future annual or interim period.

The financial data and the other financial information disclosed in these notes to the condensed financial statements related to the three-and six-month period are also unaudited.

The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results of operations to be anticipated for any other future annual or interim period.

The condensed balance sheet as of December 31, 2020 included herein was derived from the audited financial statements as of that date.

These unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements and related notes for the year ended December 31, 2020, which are included in the Annual Report on Form 10-K filed with SEC on March 22, 2021.

All share amounts disclosed in the notes to the condensed financial statements are rounded to the nearest thousand except for per share data.

Summary of Significant Accounting Policies

During the three months ended March 31, 2021, there have been no changes to the Company’s significant accounting policies as described in its Annual Report on Form 10-K for the fiscal year ended December 31, 2020 that have had a material impact on the Company’s condensed financial statements and related notes, except as described below, including under “Recently Adopted Accounting Pronouncements.”

During the three and six months ended June 30, 2021, there have been no changes to the Company’s significant accounting policies as described in its 2020 Annual Report that have had a material impact on the Company’s condensed financial statements and related notes, except as described below.

Cash, Cash Equivalents and Restricted Cash

As of March 31, 2021 and December 31, 2020, the restricted cash balance of $33.3 million primarily relates to contractual obligations under the SVB Loan and Security Agreement (see Note 7) and collateral for building leases in San Jose, CA and Tijuana Mexico.

As of June 30, 2021 and December 31, 2020, the restricted cash balance of $ 33.3 million primarily relates to contractual obligations under the SVB Loan and Security Agreement (see Note 7) and collateral for building leases in San Jose, CA and Tijuana Mexico.

The following table provides a reconciliation of cash, cash equivalents and restricted cash that sum to the total of the amounts shown in the accompanying condensed statements of cash flows (in thousands):

2 unchanged sentences

Total cash, cash equivalents and restricted cash

Fair Value of Financial Instruments

The Company determines the fair value of an asset or liability based on the assumptions that market participants would use in pricing the asset or liability in an orderly transaction between market participants at the measurement date.

The identification of market participant assumptions provides a basis for determining what inputs are to be used for pricing each asset or liability.

A fair value hierarchy has been established which gives precedence to fair value measurements calculated using observable inputs over those using unobservable inputs.

This hierarchy prioritizes the inputs into three broad levels as follows:

Quoted prices in active markets for identical instruments;

Other significant observable inputs (including quoted prices in active markets for similar instruments);

Significant unobservable inputs (including assumptions in determining the fair value of certain investments).

The Company’s cash and cash equivalents, restricted cash, short-term investments, accounts receivable, accounts payable and accrued liabilities approximate their fair value due to their short maturities.

Management believes that its term loan bears interest at the prevailing market rates for instruments with similar characteristics;

accordingly, the carrying value of this instrument approximates its fair value.

The Company’s investment securities are recorded at fair value based on the fair value hierarchy.

Money market funds and U.S.

Treasury securities are classified within Level 1 of the fair value hierarchy.

Commercial paper, corporate debt and Yankee debt securities are within Level 2 of the fair value hierarchy.

Unrealized gains and losses, deemed temporary in nature, are reported as a separate component of accumulated other comprehensive income (loss).

Accrued Warranty Liability

The Company generally provides a one-year warranty for defective parts and workmanship on its Tablo consoles, commencing upon the transfer of title and risk of loss to the customer.

The Company accrues the estimated cost of product warranties when it invoices the customer, based on historical experience and expected results.

Should actual product failure rates and material usage costs differ from these estimates, revisions to the estimated warranty liability would be required.

The Company periodically assesses the adequacy of its recorded product warranty liabilities and adjusts the balance as required.

Warranty expense is recorded as a component of cost of product revenue in the accompanying condensed statements of operations.

Contract Liabilities - Deferred Revenue

The timing of revenue recognition may differ from the timing of invoicing to customers.

The Company records deferred revenue when revenue is recognized subsequent to invoicing.

For multi-year service agreements, the Company generally invoices customers annually at the beginning of each annual coverage period.

Deferred revenue that will be recognized during the 12 months following the balance sheet date is recorded as the current portion of deferred revenue and the remaining portion is recorded as noncurrent.

The Company’s revenue is generated primarily from the sale of its products and services.

Product revenue consists primarily of sales of the Tablo console and related consumables, including Tablo cartridges, used in treatment delivery.

Service and other revenue consists primarily of revenue generated from consoles service contracts and other revenue from shipping and handling charged to customers.

The Company considers each product and each service contract to be a distinct performance obligation.

Revenue is recognized when a performance obligation is satisfied, which occurs when control of the promised products or services is transferred to the customer in an amount that reflects the consideration the Company expects to receive in exchange for those products or services.

Revenue from product sales is recognized at a point in time when management has determined that control has transferred to the customer, which is generally when legal title has transferred to the customer.

Revenue from service contracts is recognized as the output of the service is transferred to the customer over time, typically evenly over the contract term.

Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities.

The Company’s contracts with customers often include promises to transfer multiple products and services to a customer.

Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment.

Judgment is also required to determine the stand-alone selling price (SSP) for each distinct performance obligation.

The Company uses an observable price to estimate SSP for items that are sold separately, including customer support agreements.

In instances where SSP is not directly observable, such as when the Company does not sell the product or service separately, the Company determines the SSP using information that may include market conditions and other observable inputs.

The Company may offer additional goods or services to customers at the inception of customer contracts at prices not at SSP.

This may be considered a material right and an additional performance obligation of the contract.

SSP is assigned based on the estimated value of the material right.

Costs associated with product sales include commissions.

The Company applies the practical expedient to expense the commissions as incurred as the expected amortization period is one year or less.

Commissions are recorded as sales and marketing expenses in the accompanying condensed statements of operations.

Operating Lease Arrangements

The Company enters into operating lease arrangements that contain both lease and non-lease elements.

The lease element includes Tablo consoles, while non-lease elements include consumables, services and training.

Revenue related to such arrangements is allocated to lease and non-lease elements based on their relative SSP.

Revenue for the lease element, net of any taxes collected from customers, is recognized on a straight-line basis as product revenue over the lease term, generally three months to one year, in the statements of operations.

The costs of the leased Tablo consoles are included in property and equipment, net in the balance sheets and amortized to cost of product revenue.

Shipping and Handling Costs

Shipping and handling charged to customers are recorded as revenue.

Shipping and handling costs are expensed as incurred and are included in sales and marketing expenses.

Stock-Based Compensation Expense

18 unchanged sentences

Stock-based compensation expense related to these PSUs is recognized using the accelerated attribution method and not reversed if the achievement of the market condition does not occur.

Net Income (Loss) Per Share Attributable to Common Stockholders

The Company follows the two-class method when computing net income (loss) per share as the Company has issued shares that meet the definition of participating securities.

The two-class method determines net income (loss) per share for each class of common and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings.

The two-class method requires income available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed.

Basic net income (loss) per share attributable to common stockholders is calculated by dividing the net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period, without consideration for potential dilutive securities.

Diluted net income (loss) per share is computed by dividing the net income (loss) by the weighted-average number of common shares and common share equivalents of potentially dilutive securities outstanding for the period.

For purposes of the diluted net income (loss) per share calculation, redeemable convertible preferred stock, awards under the Company’s equity compensation plan and warrants are considered to be potentially dilutive securities.

For periods in which the Company reports net losses, basic net loss per share attributable to common stockholders is the same as diluted net loss per share attributable to common stockholders because the effects of potentially dilutive securities are antidilutive.

Recently Adopted Accounting Pronouncements

14 unchanged sentences

Revenue by source consists of the following (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Total product revenue

1 unchanged sentence

Total revenue

For the three months ended March 31, 2021 and 2020, $1.3 million and $0.6 million of consoles revenue were from console operating lease arrangements.

Performance Obligations

As of March 31, 2021, the aggregate amount of the transaction price allocated to the remaining performance obligations related to customer service contracts that are unsatisfied or partially unsatisfied was $4.1 million, which is recorded as deferred revenue on the Company’s condensed balance sheets.

Of that amount, $3.6 million will be recognized as revenue during the next 12 months and approximately $0.5 million thereafter.

Contract Liabilities

For the three and six months ended June 30, 2021, $ 1.3 million and $ 2.6 million of consoles revenue were from console operating lease arrangements, compared to $ 0.6 million and $ 1.2 million for the three and six months ended June 30, 2020.

Performance Obligations and Contract Liabilities

As of June 30, 2021, the aggregate amount of the transaction price allocated to the remaining performance obligations related to customer service contracts that are unsatisfied or partially unsatisfied was $ 4.9 million, which is recorded as deferred revenue on the Company’s condensed balance sheets.

Of that amount, $ 4.4 million will be recognized as revenue during the next 12 months and $ 0.5 million thereafter .

The contract liabilities consist of deferred revenue which represents payments received in advance of revenue recognition related to console service agreements and for prepayments for products or services yet to be delivered.

Revenue under these agreements is recognized over the related service period.

The following table summarizes the Company’s contract liabilities (in thousands):

Deferred revenue, current

Deferred revenue, noncurrent

Total deferred revenue

Revenue recorded during the three months ended March 31, 2021 included $2.4 million of previously deferred revenue that was included in contract liabilities as of December 31, 2020.

Revenue recorded during the three and six months ended June 30 , 2021 included $ 1.0 million and $ 2.6 million , respectively, of previously deferred revenue that was included in contract liabilities as of December 31, 20 20 .

Fair Value Measurements

The following tables summarize the Company’s financial assets measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands):

March 31, 2021

Valuation Hierarchy

Amortized Costs

Gross Unrealized Holding Gains

Gross Unrealized Holding Losses

Aggregate Fair Value

June 30, 2021

Cash equivalents:

1 unchanged sentence

Short-term investments:

Commercial paper

Corporate debt

Commercial paper

Yankee debt securities

2 unchanged sentences

December 31, 2020

Valuation Hierarchy

Amortized Costs

Gross Unrealized Holding Gains

Gross Unrealized Holding Losses

Aggregate Fair Value

Cash equivalents:

5 unchanged sentences

short-term investments

As of March 31, 2021, the remaining contractual maturities for available-for-sale securities were less than one year.

As of June 30, 2021, the remaining contractual maturities for available-for-sale securities were between one month to sixteen months.

Impairment assessments are made at the individual security level at each reporting period.

When the fair value of an available-for-sale security is less than its cost at the balance sheet date, a determination is made as to whether the impairment is other-than-temporary and, if it is other-than-temporary, an impairment loss is recognized in earnings equal to the difference between the investment’s amortized cost and fair value at such date.

There were no unrealized losses for securities in an unrealized loss position for more than 12 months as of March 31, 2021.

During the three months ended March 31, 2021 and 2020, the Company did not recognize other-than-temporary impairment losses related to its short-term investments.

There were no unrealized losses for securities in an unrealized loss position for more than 12 months as of June 30, 2021.

During the three and six months ended June 30, 2021 and 2020, the Company did no t recognize other-than- temporary impairment losses related to its investment securities.

Balance Sheet Components

19 unchanged sentences

Indemnifications

In the ordinary course of business, the Company often includes standard indemnification provisions in its arrangements with its partners, customer and suppliers.

In the ordinary course of business, the Company often includes standard indemnification provisions in its arrangements with its partners, customers and suppliers.

Pursuant to these provisions, the Company may be obligated to indemnify such parties for losses or claims suffered or incurred in connection with its service, breach of representations or covenants, intellectual property infringement or other claims made against such parties.

10 unchanged sentences

Payments under the SVB Term Loan are for interest only through May 2023 , and then 30 monthly principal and interest payments from June 2023 until maturity.

The SVB Term Loan bears interest at the greater of (A) 0.5% above the Prime Rate as reported in the Wall Street Journal and (B) 3.75% (3.75% as of March 31, 2021).

Company is obligated to maintain a restricted cash balance greater or equal to the outstanding principal balance of $ 30.0 million of the SVB Term Loan.

The SVB Term Loan bears interest at the greater of (A) 0.5 % above the Prime Rate as reported in the Wall Street Journal and (B) 3.75% ( 3.75 % as of June 30, 2021).

The Company is obligated to maintain a restricted cash balance greater or equal to the outstanding principal balance of $ 30.0 million of the SVB Term Loan.

There is also a final payment fee equal to 6.75 % of the original principal amount of the SVB Term Loan, or approximately $ 2.0 million, due at maturity (or any earlier date of optional pre-payment or acceleration of principal due to an event of default).

1 unchanged sentence

The Company may, at its option, prepay the SVB Term Loan in full, subject to an additional prepayment fee ranging between 1 % and 3 % of the outstanding principal amount of the SVB Term Loan.

In the event of default or change in control, all unpaid principal and all accrued and unpaid interest amounts (if any) become immediately due and payable including the prepayment fee.

In the event of a default or change in control, all unpaid principal and all accrued and unpaid interest amounts (if any) become immediately due and payable including the prepayment fee.

Events of default include, but are not limited to, a payment default, a material adverse change, and insolvency.

3 unchanged sentences

These debt discounts, along with the final payment fee, are being amortized over the term of the SVB Term Loan using the effective interest rate method.

As of March 31, 2021, the unamortized debt discount was $0.3 million, which is recorded as a direct deduction from the SVB Term Loan on the accompanying condensed balance sheets.

As of June 30, 2021, the unamortized debt discount was $ 0.3 million, which is recorded as a direct deduction from the SVB Term Loan on the accompanying condensed balance sheets.

Equity Incentive Plan

Equity Incentive Plans

On January 1, 2021, the number of shares of common stock reserved for the issuance of awards under the 2020 Equity Incentive Plan (the “2020 Plan”) was increased by 1,709,000 shares as a result of the automatic increase pursuant to the 2020 Plan.

As of March 31, 2021, 4,460,000 shares were reserved for future issuance under the 2020 Plan.

On January 1, 2021, the number of shares of common stock reserved for the issuance of awards under the Company’s 2020 Equity Incentive Plan (the “2020 Plan”) was increased by 1,709,000 shares as a result of the automatic increase pursuant to the 2020 Plan.

As of June 30, 2021, 4,364,000 shares were reserved for future issuance under the 2020 Plan.

Employees Share Purchase Plan (ESPP)

On January 1, 2021, the number of shares of common stock reserved for purchase under the Employee Share Purchase Plan (ESPP) was increased by 427,000 shares as a result of the automatic increase pursuant to the ESPP.

As of March 31, 2021, 1,034,000 shares of common stock were reserved for issuance in connection with the current and future offering periods under the ESPP.

The price at which common stock is purchased under the ESPP is equal to 85% of the fair market value of the common stock on the first day of the offering period or purchase date, whichever is lower.

During the three months ended March 31, 2021, 80,000 shares of common stock were issued under the ESPP.

No shares of common stock were issued during the three months ended March 31, 2020 as the ESPP was adopted in September 2020.

On January 1, 2021, the number of shares of common stock reserved for purchase under the Company’s Employee Share Purchase Plan (“ESPP”) was increased by 427,000 shares as a result of the automatic increase pursuant to the ESPP.

As of June 30, 2021, 1,034,000 shares of common stock were reserved for issuance in connection with the current and future offering periods under the ESPP.

The price at which common stock is purchased under the ESPP is equal to 85 % of the fair market value of the common stock on the first day of the offering period or the purchase date, whichever is lower.

During the three and six months ended June 30, 2021, zero and 80,000 shares, respectively, of common stock were issued under the ESPP.

No shares of common stock were issued during the three and six months ended June 30, 2020 as the ESPP was adopted in September 2020.

Stock-Based Compensation Expense

1 unchanged sentence

Three Months Ended

Six Months Ended

Cost of revenue

6 unchanged sentences

The options vest over the requisite service period if the Company achieves both (i) a performance condition tied to a liquidity event, which includes the effectiveness of an IPO, and (ii) certain market conditions, provided the optionee is providing services on the date of the event.

As of March 31, 2021, all outstanding stock options with performance and market-based vesting conditions were fully vested other than 151,000 shares of these stock options that are scheduled to vest in September 2021.

For the three months ended March 31, 2021 , the Company recorded stock-based compensation expense of $4.2 million related to these stock options .

No such expense was recognized for the three months ended March 31, 2020 as the performance vesting condition w as not satisfied un til the closing of the IPO in September 2020 .

Unamortized stock -based compensation expense related to these awards amounted to $0.5 million as of March 31, 2021 , which the Company expects to recognize over an estimated weighted-average period of 0.

For the three months ended March 31, 2021 and 2020, the Company incurred an income tax provision of an insignificant amount and zero, respectively.

federal and state net deferred tax assets have been fully reserved, as the Company believes it is not more likely than not that the benefit will be realized.

Net Income (Loss) Per Share Attributable to Common Stockholders

A reconciliation of the numerator and denominator used in the calculation of basic and diluted net income (loss) per share attributable to common stockholders is as follows (in thousands except per share amounts):

Three Months Ended March 31,

Adjustment to redemption value on redeemable convertible preferred stock

As of June 30, 2021, all outstanding stock options with performance and market-based vesting conditions were fully vested other than 151,000 shares of these stock options that are scheduled to vest in September 2021 .

For the three and six months ended June 30, 2021, the Company recorded stock-based compensation expense of $ 0.3 million and $ 4.5 million, respectively, related to these stock options.

No such expense was recognized for the three and six months ended June 30, 2020 as the performance vesting condition was not satisfied until the closing of the IPO in September 2020.

Unamortized stock-based compensation expense related to these awards amounted to $ 0.3 million as of June 30, 2021, which the Company expects to recognize over an estimated weighted-average period of 0.2 years .

For each of the three and six months ended June 30, 2021 and 2020, the Company incurred an income tax provision of an insignificant amount .

federal and state net deferred tax assets have been fully offset by a valuation allowance, as the Company believes it is not more likely than not that the deferred tax assets will be realized.

Net Loss Per Share Attributable to Common Stockholders

A reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share attributable to common stockholders is as follows (in thousands except per share amounts):

Three Months Ended June 30,

Six Months Ended June 30,

Adjustment to redemption value on redeemable

convertible preferred stock

Deemed dividend on settlement of accrued dividend

Undistributed earnings allocated to participating securities

Net income (loss) attributable to common stockholders, basic

Undistributed earnings reallocated to dilutive potential common shares

Net income (loss) attributable to common stockholders, diluted

Weighted-average shares of common stock, basic

Effect of dilutive stock options

Weighted-average shares of common stock, diluted

Net income (loss) per share attributable to common stockholders

The following outstanding potentially dilutive shares were excluded from the calculation of diluted net income (loss) per share due to their anti-dilutive effect (in thousands):

Net loss attributable to common stockholders,

basic and diluted

Weighted-average shares of common stock,

basic and diluted

Net loss per share attributable to common stockholders,

basic and diluted

The following outstanding potentially dilutive shares were excluded from the calculation of diluted net loss per share due to their anti-dilutive effect (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Stock options to purchase common stock

2 unchanged sentences

Shares committed under ESPP

Redeemable convertible preferred stock, on an as-if converted basis

Redeemable convertible preferred stock,

on an as-if converted basis

Warrants to purchase redeemable convertible preferred stock

Subsequent Event

On April 13, 2021, the Company completed its follow-on public offering and sold 2,946,000 shares of its common stock (which included 446,000 shares that were offered and sold pursuant to the full exercise of the underwriters’ option to purchase additional shares) at a price to the public of $53.50 per share.

The Company received aggregate net proceeds of approximately $149.7 million after deducting underwriting discounts and commissions and before expenses.

On July 1, 2021, the Company announced the departure of Rebecca Chambers from her position as the Company’s Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer, effective July 16, 2021 as well as the appointment of Nabeel Ahmed , the Company’s Vice President , Finance , as the Company’s Interim Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer, effective upon Ms.

Chambers’ departure until such time as a permanent replacement was named .

Subsequently, the Company announced that Nabeel Ahmed transitioned to the permanent role of Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer, effective July 30, 2021.

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