What changed in this filing

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Item 1. Financial Statements

2021-08-06 compared with 2021-05-07 · 112 added, 72 removed, 500 unchanged (27% of the section changed)

29 unchanged sentences

150,000,000 shares authorized;

shares and 27,175,305 shares issued and outstanding at March 31, 2021

shares and 27,175,305 shares issued and outstanding at June 30, 2021

and December 31, 2020, respectively

7 unchanged sentences

(In thousands, except share and per share amounts)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Cost of revenue

18 unchanged sentences

(In thousands)

Three Months Ended March 31,

Other comprehensive income:

Three Months Ended June 30,

Six Months Ended June 30,

Other comprehensive income (loss):

Foreign currency translation adjustment

Unrealized gains on marketable securities,

Unrealized gains (losses) on marketable securities,

net of tax of $ 0

Total other comprehensive income

Total other comprehensive income (loss)

Comprehensive loss

4 unchanged sentences

Stockholders'

December 31, 2020

Balances at December 31, 2020

Issuance of common stock upon the

6 unchanged sentences

Balances at March 31, 2021

Issuance of common stock upon the

exercise of common stock options

Stock-based compensation expense

Foreign currency translation

Unrealized losses on marketable

Balances at June 30, 2021

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

TRANSMEDICS GROUP, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share amounts)

Stockholders'

December 28, 2019

Balances at December 28, 2019

Issuance of common stock upon the

6 unchanged sentences

Balances at March 31, 2020

Issuance of common stock

upon the exercise of

common stock options

Issuance of common stock

in public offering, net of

discounts and issuance

costs of $ 628

Stock-based compensation

Foreign currency

translation adjustment

Unrealized losses on

marketable securities

Balances at June 30, 2020

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

2 unchanged sentences

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

4 unchanged sentences

Net amortization of premiums on marketable securities

Unrealized foreign currency transaction losses

Unrealized foreign currency transaction (gains) losses

Changes in operating assets and liabilities:

10 unchanged sentences

Proceeds from sales and maturities of marketable securities

Net cash provided by investing activities

Net cash provided by (used in) investing activities

Cash flows from financing activities:

Payments of public offering costs and other financing costs

Proceeds from issuance of common stock in public offering, net of

underwriting discounts and commissions

Proceeds from issuance of common stock upon exercise of stock options

1 unchanged sentence

purchase plan

Proceeds from Paycheck Protection Program loan

Repayment of Paycheck Protection Program loan

Net cash provided by financing activities

6 unchanged sentences

Purchases of property and equipment included in accounts payable and accrued expenses

Offering costs included in accounts payable and accrued expenses

Reconciliation of cash, cash equivalents and restricted cash:

15 unchanged sentences

The accompanying consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the ordinary course of business.

The Company has incurred recurring losses since inception, including net losses attributable to the Company of $7.9 million for the three months ended March 31, 2021 and $28.7 million for the year ended December 31, 2020.

As of March 31, 2021, the Company had an accumulated deficit of $406.1 million.

The Company has incurred recurring losses since inception, including net losses attributable to the Company of $ 18.6 million for the six months ended June 30, 2021 and $ 28.7 million for the year ended December 31, 2020.

As of June 30, 2021, the Company had an accumulated deficit of $ 416.8 million.

The Company expects to continue to generate operating losses in the foreseeable future.

The Company believes that its existing cash, cash equivalents, and marketable securities of $118.1 million as of March 31, 2021 will be sufficient to fund its operations, capital expenditures, and debt service payments for at least the next 12 months following the filing of this Quarterly Report on Form 10-Q.

The Company believes that its existing cash, cash equivalents, and marketable securities of $ 112.2 million as of June 30, 2021 will be sufficient to fund its operations, capital expenditures, and debt service payments for at least the next 12 months following the filing of this Quarterly Report on Form 10-Q.

The Company may need to seek additional funding through equity financings, debt financings or strategic alliances.

8 unchanged sentences

The impact of the COVID-19 pandemic has been and will likely continue to be extensive in many aspects of society, which has resulted in and will likely continue to result in significant disruptions to the global economy, as well as businesses and capital markets around the world.

Impacts to the Company’s business as a result of COVID-19 include the temporary disruption of transplant procedures at many of the organ transplant centers that purchase OCS products;

Impacts to the Company’s business as a result of COVID-19 include:

the temporary disruption of transplant procedures at many of the organ transplant centers that purchase OCS products;

customer delays or reductions in customer capital expenditures and operating budgets and the related impact on our product sales;

disruptions to the Company’s manufacturing operations and supply chain caused by facility closures, reductions in operating hours, staggered shifts and other social distancing efforts;

2 unchanged sentences

restrictions on or delays of the Company’s clinical trials and studies;

delays of reviews and approvals by the Food and Drug Administration (“FDA”) and other health authorities;

delays of reviews and approvals by the Food and Drug Administration (“FDA”) and other health authorities, including with respect to the Company’s OCS Heart Pre-Market Approval (“PMA”) application;

limitations on its employees’ and customers’ ability to travel, and delays in product installations, trainings or shipments to and from affected countries and within the United States.

In addition, the Company’s sales and clinical adoption team was restricted in visiting many transplant centers in person between April 2020 and September 2020.

In response to the pandemic, healthcare providers have, and may need to further, reallocate resources, such as physicians, staff, hospital beds and intensive care unit facilities, and these actions significantly delay the provision of other medical care such as organ transplantation and reduce the number of transplant procedures that are performed, which negatively impacts the Company’s revenue and clinical trial activities.

The Company’s sales and clinical adoption team has been and may continue to be restricted in visiting many transplant centers in person.

In addition, the Company had temporarily reduced the manufacturing and distribution of its OCS products at its facility in Andover, Massachusetts.

Starting in May 2020, the Company resumed manufacturing and distribution operations to pre-COVID levels.

While the Company maintains an inventory of finished products and raw materials used in its OCS products, a prolonged pandemic could lead to shortages in the raw materials necessary to manufacture its products.

The COVID-19 pandemic also has impacted operations at the FDA and other health authorities, resulting in delays of reviews and approvals, including with respect to the Company’s OCS Heart Pre-Market Approval (“PMA”) application, and may affect other potential PMA applications.

While the COVID-19 pandemic did not significantly impact the Company’s business or results of operations during the three months ended March 31, 2020, OCS product sales have been negatively impacted by the COVID-19 pandemic since the second quarter of 2020 and the Company anticipates a negative impact to OCS product sales in 2021.

OCS product sales were negatively impacted by the COVID-19 pandemic from the second quarter of 2020 through the second quarter of 2021 and the Company anticipates a negative impact to OCS product sales to continue through 2021.

The extent of the future impact on the Company’s operations and financial condition will depend on the length and severity of the pandemic, its consequences, the effects of any variants as new strains evolve and containment and vaccination efforts.

While the FDA approved emergency use authorization of vaccines in December 2020, it is expected to take several months for widespread vaccinations to occur and it is not yet fully known how vaccination efforts will impact the COVID-19 pandemic .

While the FDA approved emergency use authorization of vaccines starting in December 2020 and vaccination efforts have been ongoing in the United States, it is not yet fully known how vaccination efforts will impact the COVID-19 pandemic, including with respect to the duration o f the efficacy of the vaccines , their effectiveness against the Delta variant or any other variants as new strains of the virus evolve .

The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

7 unchanged sentences

These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K filed with the SEC.

In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s financial position as of March 31, 2021 and results of operations for the three months ended March 31, 2021 and 2020 and cash flows for the three months ended in the same periods have been made.

The Company’s results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2021.

In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s financial position as of June 30, 2021 and results of operations for the three and six months ended June 30, 2021 and 2020 and cash flows for the six months ended June 30, 2021 and 2020 have been made.

The Company’s results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2021.

Use of Estimates

4 unchanged sentences

Changes in estimates are recorded in the period in which they become known.

The full extent to which the COVID-19 pandemic will directly or indirectly impact the Company’s business, results of operations and financial condition, including sales, expenses, reserves and allowances, manufacturing, clinical trials, research and development costs and employee-related amounts, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain it or treat COVID-19, as well as the economic impact on local, regional, national and international customers and markets.

The full extent to which the COVID-19 pandemic will directly or indirectly impact the Company’s business, results of operations and financial condition, including sales, expenses, reserves and allowances, manufacturing, clinical trials, research and development costs and employee-related amounts, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat COVID-19, as well as the economic impact on local, regional, national and international customers and markets.

The Company has made estimates of the impact of COVID-19 within its financial statements and there may be changes to those estimates in future periods.

5 unchanged sentences

Significant customers are those that accounted for 10 % or more of the Company’s net revenue or accounts receivable.

For the three months ended March 31, 2021, two customers accounted for 12% each of net revenue.

For the three months ended March 31, 2020, one customer accounted for 17% of net revenue.

As of March 31, 2021, two customers accounted for 23% and 16% of accounts receivable, respectively.

For the three months ended June 30, 2021, no customer accounted for 10 % or more of net revenue.

For the six months ended June 30, 2021, one customer accounted for 10% of net revenue.

For the three and six months ended June 30, 2020, one customer accounted for 17 % and 11 % of net revenue, respectively.

As of June 30, 2021, no customer accounted for 10 % or more of accounts receivable.

As of December 31, 2020, one customer accounted for 30 % of accounts receivable.

72 unchanged sentences

Reductions of revenue related to such payments made to customers for reimbursements are recognized when the Company recognizes the revenue for the sale of its OCS disposable sets.

The Company recorded the reimbursable clinical costs as a reduction of revenue of $0.6 million and $0.7 million for the three months ended March 31, 2021 and 2020, respectively, as presented below in disaggregated revenue.

The Company recorded reimbursable clinical costs as a reduction of revenue of $ 0.5 million and $ 1.1 million for the three and six months ended June 30, 2021, respectively, and $ 0.5 million and $ 1.2 million for the three and six months ended June 30, 2020, respectively, as presented below in disaggregated revenue.

The Company has also determined that payments made to customers to obtain information related to post-approval studies or existing standard-of-care protocols (i.e., unrelated to the Company’s OCS products) do meet the criteria to be classified as a cost because the Company receives a distinct good or service transferred by the customer separate from the customer’s purchase of the Company’s OCS products and the consideration paid represents the fair value of the distinct good or service received by the Company.

As a result, these payments made to the customers for information related to post-approval studies or standard-of-care protocols are recorded as operating expenses.

The Company recorded payments made to customers related to post-approval studies and for documentation related to existing standard-of-care protocols of $0.5 million and $0.4 million for the three months ended March 31, 2021 and 2020, respectively, as operating expenses.

The Company recorded payments made to customers related to post-approval studies and for documentation related to existing standard-of-care protocols of $ 0.7 million and $ 1.2 million for the three and six months ended June 30, 2021, respectively, and $ 0.4 million and $ 0.8 million for the three and six months ended June 30, 2020, respectively, as operating expenses.

Variable Consideration

1 unchanged sentence

The Company only includes estimated variable amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.

Revenue from reimbursements of out-of-pocket expenses, including travel, lodging, and meals, is accounted for as variable consideration and was insignificant during each of the three months ended March 31, 2021 and 2020.

The Company does not consider shipping to be a contract performance obligation.

6 unchanged sentences

Contract assets arise from unbilled amounts in customer arrangements when revenue recognized exceeds the amount billed to the customer and the Company’s right to payment is not just subject to the passage of time.

The Company had no contract assets as of March 31, 2021 and December 31, 2020.

The Company had no contract assets as of June 30, 2021 and December 31, 2020 .

Contract liabilities represent the Company’s obligation to transfer goods or services to a customer for which it has received consideration (or the amount is due) from the customer.

1 unchanged sentence

The Company generally satisfies performance obligations within one year of the contract inception date.

As of March 31, 2021, the Company’s wholly- or partially-unsatisfied performance obligations totaled $0.9 million and are expected to be completed within the next year.

As of June 30, 2021, the Company’s wholly- or partially-unsatisfied performance obligations totaled $ 1.3 million and are expected to be completed within the next year.

Disaggregated Revenue

1 unchanged sentence

The reconciliation of gross revenue to net revenue for these certain payments is shown below (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Gross revenue from sales to customers

2 unchanged sentences

The Company disaggregates revenue from contracts with customers by product type and geographical area as it believes this presentation best depicts how the nature, amount, timing and uncertainty of the Company’s revenue and cash flows are affected by economic factors, as shown below (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Net revenue by OCS product:

3 unchanged sentences

Total net revenue

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Net revenue by country(1):

28 unchanged sentences

For periods in which the Company reports a net loss, diluted net loss per common share is the same as basic net loss per common share, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.

The Company reported a net loss attributable to common stockholders for each of the three months ended and March 31, 2021 and 2020.

The Company reported a net loss attributable to common stockholders for each of the three and six months ended June 30, 2021 and 2020.

The Company’s potential dilutive securities have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share.

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 above because including them would have had an anti-dilutive effect:

As of March 31,

As of June 30,

Warrants to purchase common stock

2 unchanged sentences

Recently Issued Accounting Pronouncements

The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 and has elected not to “opt out” of the extended transition related to complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public and nonpublic companies, the Company will adopt the new or revised standard at the time nonpublic companies adopt the new or revised standard and will do so until such time that the Company either (i) irrevocably elects to “opt out” of such extended transition period or (ii) no longer qualifies as an emerging growth company.

The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 and elected not to “opt out” of the extended transition related to complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public and nonpublic companies, the Company will adopt the new or revised standard at the time nonpublic companies adopt the new or revised standard and will do so until such time that the Company either (i) irrevocably elects to “opt out” of such extended transition period or (ii) no longer qualifies as an emerging growth company.

Since the Company’s common stock held by non-affiliates exceeded $ 700.0 million as of June 30, 2021, the Company will cease to qualify as an emerging growth company as of December 31, 2021 and will instead be a “large accelerated filer”.

As a result, the Company will be subject to certain requirements that apply to other public companies but did not previously apply to the Company due to its status as an emerging growth company, including the provisions of Section 404 of the Sarbanes-Oxley Act, which requires that the Company’s independent registered public accounting firm provide an attestation report on the effectiveness of the Company’s internal control over financial reporting in the Company’s Annual Report on Form 10-K for the year ending December 31, 2021.

In February 2016, the FASB issued ASU No.

13 unchanged sentences

2020-05, which grants a one-year effective-date delay for nonpublic entities to annual reporting periods beginning after December 15, 2021 and to interim periods within years beginning after December 15, 2022.

The Company is currently planning to adopt this guidance on January 1, 2022 in accordance with the nonpublic company requirements and is evaluating the method of adoption and the impact that the adoption of ASU 2016-02 will have on its consolidated financial statements.

Since the Company will cease to be an emerging growth company as of December 31, 2021, the Company is required to adopt the standard during the fourth quarter of 2021.

The Company plans to adopt ASU 2016-02 using the modified retrospective approach transition method as of the date of adoption such that prior periods will not be restated.

The Company is currently assessing the impact of adoption of this guidance on its consolidated financial statements.

In June 2016, the FASB issued ASU No.

9 unchanged sentences

Early application continues to be allowed.

The Company is currently assessing the date of adoption and the impact of the adoption of this guidance on its consolidated financial statements.

Since the Company will cease to be an emerging growth company as of December 31, 2021, the Company is required to adopt the standard during the fourth quarter of 2021.

The Company is currently assessing the impact of the adoption of this guidance on its consolidated financial statements.

In December 2019, the FASB issued ASU No.

5 unchanged sentences

Depending on the amendment, adoption may be applied on the retrospective, modified retrospective or prospective basis.

The Company is currently assessing the date of adoption and the impact of the adoption of this guidance on its consolidated financial statements.

Since the Company will cease to be an emerging growth company as of December 31, 2021, the Company is required to adopt the standard during the fourth quarter of 2021.

The Company is currently assessing the impact of the adoption of this guidance on its consolidated financial statements.

Marketable Securities

Marketable securities by security type consisted of the following (in thousands):

March 31, 2021

June 30, 2021

Treasury securities (due within one year)

5 unchanged sentences

The following tables present the Company’s fair value hierarchy for its assets and liabilities that are measured at fair value on a recurring basis (in thousands):

Fair Value Measurements at March 31, 2021 Using:

Fair Value Measurements at June 30, 2021 Using:

Cash equivalents:

12 unchanged sentences

government agency bonds were valued by the Company using quoted prices in active markets for similar securities, which represent a Level 2 measurement within the fair value hierarchy.

During the three months ended March 31, 2021 and 2020, there were no transfers between Level 1, Level 2, and Level 3.

During the three and six months ended June 30, 2021 and 2020, there were no transfers between Level 1, Level 2, and Level 3.

Inventory consisted of the following (in thousands):

March 31, 2021

June 30, 2021

December 31, 2020

2 unchanged sentences

Finished goods

During the three months ended March 31, 2021 and 2020, the Company made non-cash transfers of OCS Consoles from inventory to property and equipment (OCS Consoles loaned to customers) of $0.4 million and $0.1 million, respectively.

During the six months ended June 30, 2021 and 2020, the Company made non-cash transfers of OCS Consoles from inventory to property and equipment (OCS Consoles loaned to customers) of $ 0.8 million and $ 0.1 million, respectively.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

March 31, 2021

June 30, 2021

December 31, 2020

6 unchanged sentences

Long-term debt consisted of the following (in thousands):

March 31, 2021

June 30, 2021

December 31, 2020

9 unchanged sentences

Borrowings under the Credit Agreement are repayable in quarterly interest-only payments until the maturity date, at which time all principal and accrued interest is due and payable.

At its option, the Company may prepay outstanding borrowings under the Credit Agreement, subject to a prepayment premium that decreases annually.

The current prepayment premium is 4.5% and will decrease to zero in June 2021.

At its option, the Company may prepay outstanding borrowings under the Credit Agreement, subject to a prepayment premium that decreased to zero in June 2021.

The Company is also required to make a final payment in an amount equal to 3.0 % of the principal amount of any prepayment or repayment.

11 unchanged sentences

and engaging in certain other business transactions.

As of March 31, 2021 , the Company was in compliance with the financial covenants under the Credit Agreement.

As of June 30, 2021, the Company was in compliance with the financial covenants under the Credit Agreement.

The obligations under the Credit Agreement are subject to acceleration upon the occurrence of specified events of default, including payment default, change in control, bankruptcy, insolvency, certain defaults under other material debt, certain events with respect to governmental approvals (if such events could cause a material adverse change in the Company’s business), failure to comply with certain covenants, including the minimum liquidity and unqualified audit opinion covenants, and a material adverse change in the Company’s business, operations or other financial condition.

3 unchanged sentences

In addition, the Company may be required to prepay outstanding borrowings, subject to certain exceptions, with portions of net cash proceeds of certain asset sales and certain casualty and condemnation events.

As of March 31, 2021, the interest rate applicable to borrowings under the Credit Agreement was 9.5%.

During the three months ended March 31, 2021, the weighted average effective interest rate on outstanding borrowings under the Credit Agreement was approximately 11.2%.

As of June 30, 2021, the interest rate applicable to borrowings under the Credit Agreement was 9.5 %.

During the six months ended June 30, 2021, the weighted average effective interest rate on outstanding borrowings under the Credit Agreement was approximately 11.22 %.

Preferred Stock

As of March 31, 2021, the Company’s articles of organization authorized the Company to issue up to 25,000,000 shares of preferred stock, no par value per share, all of which is undesignated .

As of March 31, 2021, the Company’s articles of organization authorized the Company to issue up to 150,000,000 shares of common stock, no par value per share.

As of June 30, 2021, the Company’s articles of organization authorized the Company to issue up to 25,000,000 shares of preferred stock, no par value per share, all of which is undesignated .

As of June 30, 2021, the Company’s articles of organization authorized the Company to issue up to 150,000,000 shares of common stock, no par value per share.

Each share of common stock is entitled to one vote on all matters submitted to a vote of the Company’s shareholders.

The holders of common stock are entitled to receive dividends, if any, as may be declared by the board of directors.

Through March 31, 2021, no dividends had been declared or paid.

As of March 31, 2021 , the Company has outstanding warrants to purchase 50,000 shares of common stock at an exercise price of $8.75 per share with an expiration date of November 7, 2022 and warrants to purchase 14,440 shares of common stock at an exercise price of $17.47 per share with an expiration date of May 6, 2024.

Through June 30, 2021, no dividends had been declared or paid.

As of June 30, 2021, the Company has outstanding warrants to purchase 50,000 shares of common stock at an exercise price of $ 8.75 per share with an expiration date of November 7, 2022 and warrants to purchase 14,440 shares of common stock at an exercise price of $ 17.47 per share with an expiration date of May 6, 2024 .

Stock-Based Compensation

5 unchanged sentences

In addition, the number of shares available for issuance under the 2019 Plan (i) will not be increased by any shares delivered under the 2019 Plan that are subsequently repurchased using proceeds directly attributable to stock option exercises and (ii) will not be reduced by any awards that are settled in cash or that expire, become unexercisable, terminate or are forfeited to or repurchased by TransMedics Group without the issuance of stock under the 2019 Plan.

As of March 31, 2021, 1,656,055 shares of common stock were available for issuance under the 2019 Plan.

During the three months ended March 31, 2021, the Company granted options to its employees and directors with service-based vesting for the purchase of an aggregate of 793,975 shares of common stock with a weighted average grant-date fair value of $20.47 per share.

As of June 30, 2021, 1,543,355 shares of common stock were available for issuance under the 2019 Plan.

During the six months ended June 30, 2021, the Company granted options to its employees and directors with service-based vesting for the purchase of an aggregate of 910,675 shares of common stock with a weighted average grant-date fair value of $ 19.65 per share.

2019 Employee Stock Purchase Plan

1 unchanged sentence

The 2019 ESPP permits participants to purchase common stock using funds contributed through payroll deductions, subject to the limitations set forth in the Internal Revenue Code, at a purchase price of 85 % of the lower of the closing price of the Company’s common stock on the first trading day of the offering period or the closing price on the applicable purchase date, which is the final trading day of the applicable offering period.

total of 371,142 shares of common stock of TransMedics Group are reserved for issuance under the 2019 ESPP.

During the three months ended March 31, 2021 , 14,951 shares of common stock were issued under the 2019 ESPP and as of March 31, 2021 , 333,494 shares of common stock remained available for issuance.

A total of 371,142 shares of the Company’s common stock are reserved for issuance under the 2019 ESPP.

During the six months ended June 30, 2021, 14,951 shares of common stock were issued under the 2019 ESPP and as of June 30, 2021, 333,494 shares of common stock remained available for issuance.

Stock-Based Compensation

The Company recorded stock-based compensation expense in the following expense categories of its consolidated statements of operations (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Cost of revenue

1 unchanged sentence

Selling, general and administrative expenses

As of March 31, 2021, total unrecognized compensation cost related to unvested share-based awards was $21.1 million, which is expected to be recognized over a weighted average period of 3.1 years.

As of June 30, 2021, total unrecognized compensation cost related to unvested share-based awards was $ 20.9 million, which is expected to be recognized over a weighted average period of 3.0 years.

Commitments and Contingencies

4 unchanged sentences

The Company’s lease agreements, as amended, include payment escalations, rent holidays, and other lease incentives, which are accrued or deferred as appropriate such that rent expense for each lease is recognized on a straight-line basis over the respective lease terms, recording deferred rent for rent expense incurred but not yet paid.

The Company recorded rent expense of $0.5 million in each of the three months ended March 31, 2021 and 2020.

The Company recorded rent expense of $ 0.4 million and $ 0.5 million in the three months ended June 30, 2021 and 2020, respectively.

The Company recorded rent expense of $ 0.9 million and $ 1.0 million in the six months ended June 30, 2021 and 2020, respectively.

Under the amended operating leases, the landlord will contribute up to $ 3.4 million towards the Company’s leasehold improvements.

Costs incurred by the Company for tenant improvements but not yet reimbursed by the landlord are presented on the accompanying consolidated balance sheets as a tenant receivable within prepaid expenses and other current assets.

As of March 31, 2021, the Company did not have a tenant receivable.

Future minimum lease payments under operating leases as of March 31, 2021 are as follows (in thousands):

As of June 30, 2021, the Company did no t have a tenant receivable.

Future minimum lease payments under operating leases as of June 30, 2021 are as follows (in thousands):

December 31, 2021 (remaining 6 months)

12 unchanged sentences

The Company has not received final approval of the patent extension beyond the interim patent term extension already granted.

The maximum extension granted would be through May 2022;

The maximum extension requested would be through May 2022;

however, the length of the patent term extension will be determined by the United States Patent and Trademark Office (“USPTO”) based on input from the FDA.

13 unchanged sentences

Company contributions to the plan may be made at the discretion of the board of directors.

As of March 31, 2021 and December 31, 2020, the Company had not made any contributions to the plan.

As of June 30, 2021 and December 31, 2020, the Company had no t made any contributions to the plan.

Indemnification Agreements

6 unchanged sentences

To date, the Company has not incurred any material costs as a result of such indemnifications.

The Company is not currently aware of any indemnification claims and had not accrued any liabilities related to such obligations in its consolidated financial statements as of March 31, 2021 and December 31, 2020.

The Company is not currently aware of any indemnification claims and had not accrued any liabilities related to such obligations in its consolidated financial statements as of June 30, 2021 and December 31, 2020 .

Unconditional Purchase Commitment

8 unchanged sentences

Long-lived assets by geographical area are summarized as follows (in thousands):

March 31, 2021

June 30, 2021

December 31, 2020

10 unchanged sentences

The Company paid Dr.

Amira Hassanein $0.1 million and less than $0.1 million in total compensation for the three months ended March 31, 2021 and 2020, respectively, for her services as an employee.

Amira Hassanein $ 0.1 million and $ 0.2 million in total compensation for the three and six months ended June 30, 2021, respectively, and $ 0.1 million and $ 0.2 million in total compensation for the three and six months ended June 30, 2020, respectively for her services as an employee.

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