☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
2023
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 45-2902923 | ||||
(State or other jurisdiction of
| (I.R.S. Employer | ||||
| 92618 | ||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading
| Name of each exchange on which registered | ||||||||||||
Common stock, $0.001 par value per share | NARI | The Nasdaq Global Select Market |
Large accelerated filer | ☒ | Accelerated filer | ☐ | |||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||||||||||
Emerging growth company | ☐ |
Table of Contents
.
Because forward-lookingreview of, all potentially available relevant information. These statements are inherently subjectuncertain and investors are cautioned not to risks and uncertainties, some of which cannot be predicted or quantified, you should notunduly rely upon these statements. You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits to this Quarterly Report on Form 10-Q with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. These forward-looking statements speak only as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, performance, or achievements.date of this Quarterly Report on Form 10-Q. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise. We intend the forward-looking statements contained in this Quarterly Report to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A
Inari Medical, Inc.
|
| September 30, |
|
| December 31, |
| ||
Assets |
|
|
|
|
|
| ||
Current assets |
|
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 83,528 |
|
| $ | 92,752 |
|
Short-term investments in debt securities |
|
| 235,705 |
|
|
| 83,348 |
|
Accounts receivable, net |
|
| 54,059 |
|
|
| 42,351 |
|
Inventories, net |
|
| 29,670 |
|
|
| 21,053 |
|
Prepaid expenses and other current assets |
|
| 7,609 |
|
|
| 5,694 |
|
Total current assets |
|
| 410,571 |
|
|
| 245,198 |
|
Property and equipment, net |
|
| 21,191 |
|
|
| 16,471 |
|
Operating lease right-of-use assets |
|
| 49,951 |
|
|
| 44,909 |
|
Deposits and other assets |
|
| 6,106 |
|
|
| 981 |
|
Long-term investments in debt securities |
|
| — |
|
|
| 3,983 |
|
Total assets |
| $ | 487,819 |
|
| $ | 311,542 |
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
| ||
Current liabilities |
|
|
|
|
|
| ||
Accounts payable |
| $ | 6,035 |
|
| $ | 6,541 |
|
Payroll-related accruals |
|
| 28,052 |
|
|
| 24,433 |
|
Accrued expenses and other current liabilities |
|
| 7,668 |
|
|
| 10,737 |
|
Operating lease liabilities, current portion |
|
| 588 |
|
|
| 802 |
|
Total current liabilities |
|
| 42,343 |
|
|
| 42,513 |
|
Operating lease liabilities, noncurrent portion |
|
| 30,377 |
|
|
| 28,404 |
|
Other long-term liability |
|
| — |
|
|
| 1,416 |
|
Total liabilities |
|
| 72,720 |
|
|
| 72,333 |
|
Commitments and contingencies (Note 7) |
|
|
|
|
|
| ||
Stockholders' equity |
|
|
|
|
|
| ||
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares |
|
| — |
|
|
| — |
|
Common stock, $0.001 par value, 300,000,000 shares |
|
| 53 |
|
|
| 50 |
|
Additional paid in capital |
|
| 457,043 |
|
|
| 257,144 |
|
Accumulated other comprehensive loss |
|
| (945 | ) |
|
| (402 | ) |
Accumulated deficit |
|
| (41,052 | ) |
|
| (17,583 | ) |
Total stockholders' equity |
|
| 415,099 |
|
|
| 239,209 |
|
Total liabilities and stockholders' equity |
| $ | 487,819 |
|
| $ | 311,542 |
|
September 30, 2023 | December 31, 2022 | ||||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 89,182 | $ | 60,222 | |||||||
Short-term investments in debt securities | 262,113 | 266,179 | |||||||||
Accounts receivable, net | 69,595 | 58,611 | |||||||||
Inventories, net | 40,227 | 32,581 | |||||||||
Prepaid expenses and other current assets | 7,944 | 5,312 | |||||||||
Total current assets | 469,061 | 422,905 | |||||||||
Property and equipment, net | 21,243 | 21,655 | |||||||||
Operating lease right-of-use assets | 49,065 | 50,703 | |||||||||
Deposits and other assets | 9,466 | 8,889 | |||||||||
Total assets | $ | 548,835 | $ | 504,152 | |||||||
Liabilities and Stockholders' Equity | |||||||||||
Current liabilities | |||||||||||
Accounts payable | $ | 10,091 | $ | 7,659 | |||||||
Payroll-related accruals | 41,305 | 38,955 | |||||||||
Accrued expenses and other current liabilities | 13,040 | 8,249 | |||||||||
Operating lease liabilities, current portion | 1,630 | 1,311 | |||||||||
Total current liabilities | 66,066 | 56,174 | |||||||||
Operating lease liabilities, noncurrent portion | 30,627 | 30,976 | |||||||||
Total liabilities | 96,693 | 87,150 | |||||||||
Commitments and contingencies (Note 7) | |||||||||||
Stockholders' equity | |||||||||||
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of September 30, 2023 and December 31, 2022 | — | — | |||||||||
Common stock, $0.001 par value, 300,000,000 shares authorized as of September 30, 2023 and December 31, 2022; 57,506,462 and 54,021,656 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | 58 | 54 | |||||||||
Additional paid in capital | 497,063 | 462,949 | |||||||||
Accumulated other comprehensive (loss) income | (1,158) | 849 | |||||||||
Accumulated deficit | (43,821) | (46,850) | |||||||||
Total stockholders' equity | 452,142 | 417,002 | |||||||||
Total liabilities and stockholders' equity | $ | 548,835 | $ | 504,152 |
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
| ||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Revenue |
| $ | 96,204 |
|
| $ | 72,916 |
|
| $ | 275,700 |
|
| $ | 193,766 |
|
Cost of goods sold |
|
| 11,064 |
|
|
| 7,040 |
|
|
| 31,378 |
|
|
| 16,477 |
|
Gross profit |
|
| 85,140 |
|
|
| 65,876 |
|
|
| 244,322 |
|
|
| 177,289 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Research and development |
|
| 19,105 |
|
|
| 12,499 |
|
|
| 53,809 |
|
|
| 32,292 |
|
Selling, general and administrative |
|
| 75,833 |
|
|
| 56,104 |
|
|
| 212,721 |
|
|
| 135,899 |
|
Total operating expenses |
|
| 94,938 |
|
|
| 68,603 |
|
|
| 266,530 |
|
|
| 168,191 |
|
(Loss) income from operations |
|
| (9,798 | ) |
|
| (2,727 | ) |
|
| (22,208 | ) |
|
| 9,098 |
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Interest income |
|
| 618 |
|
|
| 27 |
|
|
| 882 |
|
|
| 130 |
|
Interest expense |
|
| (74 | ) |
|
| (73 | ) |
|
| (220 | ) |
|
| (220 | ) |
Other income (expense) |
|
| (59 | ) |
|
| 30 |
|
|
| 169 |
|
|
| (4 | ) |
Total other income (expenses) |
|
| 485 |
|
|
| (16 | ) |
|
| 831 |
|
|
| (94 | ) |
(Loss) income before income taxes |
|
| (9,313 | ) |
|
| (2,743 | ) |
|
| (21,377 | ) |
|
| 9,004 |
|
Provision for income taxes |
|
| 840 |
|
|
| 61 |
|
|
| 2,092 |
|
|
| 271 |
|
Net (loss) income |
| $ | (10,153 | ) |
| $ | (2,804 | ) |
| $ | (23,469 | ) |
| $ | 8,733 |
|
Other comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Foreign currency translation adjustments |
|
| (406 | ) |
|
| (146 | ) |
|
| (814 | ) |
|
| (269 | ) |
Unrealized gain on available-for-sale debt securities |
|
| 644 |
|
|
| 7 |
|
|
| 271 |
|
|
| 19 |
|
Total other comprehensive income (loss) |
|
| 238 |
|
|
| (139 | ) |
|
| (543 | ) |
|
| (250 | ) |
Comprehensive (loss) income |
| $ | (9,915 | ) |
| $ | (2,943 | ) |
| $ | (24,012 | ) |
| $ | 8,483 |
|
Net (loss) income per share |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Basic |
| $ | (0.19 | ) |
| $ | (0.06 | ) |
| $ | (0.45 | ) |
| $ | 0.18 |
|
Diluted |
| $ | (0.19 | ) |
| $ | (0.06 | ) |
| $ | (0.45 | ) |
| $ | 0.16 |
|
Weighted average common shares used to compute net (loss) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Basic |
|
| 53,491,625 |
|
|
| 50,001,996 |
|
|
| 52,552,662 |
|
|
| 49,664,037 |
|
Diluted |
|
| 53,491,625 |
|
|
| 50,001,996 |
|
|
| 52,552,662 |
|
|
| 55,511,061 |
|
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Revenue | $ | 126,366 | $ | 96,204 | $ | 361,538 | $ | 275,700 | |||||||||||||||
Cost of goods sold | 14,477 | 11,064 | 42,062 | 31,378 | |||||||||||||||||||
Gross profit | 111,889 | 85,140 | 319,476 | 244,322 | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Research and development | 21,492 | 19,105 | 64,641 | 53,809 | |||||||||||||||||||
Selling, general and administrative | 88,284 | 75,833 | 259,570 | 212,721 | |||||||||||||||||||
Total operating expenses | 109,776 | 94,938 | 324,211 | 266,530 | |||||||||||||||||||
Income (loss) from operations | 2,113 | (9,798) | (4,735) | (22,208) | |||||||||||||||||||
Other income (expense) | |||||||||||||||||||||||
Interest income | 4,202 | 618 | 12,899 | 882 | |||||||||||||||||||
Interest expense | (43) | (74) | (127) | (220) | |||||||||||||||||||
Other (expense) income | (682) | (59) | (617) | 169 | |||||||||||||||||||
Total other income | 3,477 | 485 | 12,155 | 831 | |||||||||||||||||||
Income (loss) before income taxes | 5,590 | (9,313) | 7,420 | (21,377) | |||||||||||||||||||
Provision for income taxes | 2,428 | 840 | 4,391 | 2,092 | |||||||||||||||||||
Net income (loss) | $ | 3,162 | $ | (10,153) | $ | 3,029 | $ | (23,469) | |||||||||||||||
Other comprehensive income (loss) | |||||||||||||||||||||||
Foreign currency translation adjustments | (68) | (406) | (138) | (814) | |||||||||||||||||||
Unrealized gain (loss) on available-for-sale debt securities | 91 | 644 | (1,869) | 271 | |||||||||||||||||||
Total other comprehensive income (loss) | 23 | 238 | (2,007) | (543) | |||||||||||||||||||
Comprehensive income (loss) | $ | 3,185 | $ | (9,915) | $ | 1,022 | $ | (24,012) | |||||||||||||||
Net income (loss) per share | |||||||||||||||||||||||
Basic | $ | 0.06 | $ | (0.19) | $ | 0.05 | $ | (0.45) | |||||||||||||||
Diluted | $ | 0.05 | $ | (0.19) | $ | 0.05 | $ | (0.45) | |||||||||||||||
Weighted average common shares used to compute net income (loss) per share | |||||||||||||||||||||||
Basic | 57,384,884 | 53,491,625 | 56,478,317 | 52,552,662 | |||||||||||||||||||
Diluted | 58,588,452 | 53,491,625 | 58,495,921 | 52,552,662 |
|
| Common Stock |
|
| Additional Paid In |
|
| Accumulated Other Comprehensive |
|
| Accumulated |
|
| Total |
| |||||||||
|
| Shares |
|
| Amount |
|
| Capital |
|
| Income (Loss) |
|
| Deficit |
|
| Equity |
| ||||||
Balance, December 31, 2021 |
|
| 50,313,452 |
|
| $ | 50 |
|
| $ | 257,144 |
|
| $ | (402 | ) |
| $ | (17,583 | ) |
| $ | 239,209 |
|
Options exercised for |
|
| 322,882 |
|
|
| 1 |
|
|
| 344 |
|
|
| — |
|
|
| — |
|
|
| 345 |
|
Shares issued under Employee |
|
| 54,808 |
|
|
| — |
|
|
| 3,427 |
|
|
| — |
|
|
| — |
|
|
| 3,427 |
|
Issuance of common stock upon |
|
| 31,763 |
|
|
| — |
|
|
| (1,624 | ) |
|
| — |
|
|
| — |
|
|
| (1,624 | ) |
Issuance of common stock in |
|
| 2,300,000 |
|
|
| 2 |
|
|
| 174,392 |
|
|
| — |
|
|
| — |
|
|
| 174,394 |
|
Share-based compensation |
|
| — |
|
|
| — |
|
|
| 6,555 |
|
|
| — |
|
|
| — |
|
|
| 6,555 |
|
Other comprehensive loss |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (365 | ) |
|
| — |
|
|
| (365 | ) |
Net loss |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (3,129 | ) |
|
| (3,129 | ) |
Balance, March 31, 2022 |
|
| 53,022,905 |
|
|
| 53 |
|
|
| 440,238 |
|
|
| (767 | ) |
|
| (20,712 | ) |
|
| 418,812 |
|
Options exercised for |
|
| 228,313 |
|
|
| — |
|
|
| 156 |
|
|
| — |
|
|
| — |
|
|
| 156 |
|
Issuance of common stock upon |
|
| 54,607 |
|
|
| — |
|
|
| (1,751 | ) |
|
| — |
|
|
| — |
|
|
| (1,751 | ) |
Share-based compensation |
|
| — |
|
|
| — |
|
|
| 7,164 |
|
|
| — |
|
|
| — |
|
|
| 7,164 |
|
Other comprehensive loss |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (416 | ) |
|
| — |
|
|
| (416 | ) |
Net loss |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (10,187 | ) |
|
| (10,187 | ) |
Balance, June 30, 2022 |
|
| 53,305,825 |
|
|
| 53 |
|
|
| 445,807 |
|
|
| (1,183 | ) |
|
| (30,899 | ) |
|
| 413,778 |
|
Options exercised for common stock |
|
| 167,102 |
|
|
| — |
|
|
| 109 |
|
|
| — |
|
|
| — |
|
|
| 109 |
|
Issuance of common stock upon |
|
| 43,643 |
|
|
| — |
|
|
| (1,224 | ) |
|
| — |
|
|
| — |
|
|
| (1,224 | ) |
Shares issued under Employee |
|
| 78,707 |
|
|
| — |
|
|
| 4,995 |
|
|
| — |
|
|
| — |
|
|
| 4,995 |
|
Share-based compensation expense |
|
| — |
|
|
| — |
|
|
| 7,356 |
|
|
| — |
|
|
| — |
|
|
| 7,356 |
|
Other comprehensive income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 238 |
|
|
| — |
|
|
| 238 |
|
Net loss |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (10,153 | ) |
|
| (10,153 | ) |
Balance, September 30, 2022 |
|
| 53,595,277 |
|
| $ | 53 |
|
| $ | 457,043 |
|
| $ | (945 | ) |
| $ | (41,052 | ) |
| $ | 415,099 |
|
Common Stock | Additional Paid In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total Stockholders' Equity | |||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||
Balance, December 31, 2022 | 54,021,656 | $ | 54 | $ | 462,949 | $ | 849 | $ | (46,850) | $ | 417,002 | ||||||||||||||||||||||||
Options exercised for common stock | 209,966 | — | 226 | — | — | 226 | |||||||||||||||||||||||||||||
Shares issued under Employee Stock Purchase Plan | 86,051 | — | 4,172 | — | — | 4,172 | |||||||||||||||||||||||||||||
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for taxes | 2,766,043 | 3 | (1,932) | — | — | (1,929) | |||||||||||||||||||||||||||||
Share-based compensation expense | — | — | 10,339 | — | — | 10,339 | |||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | (856) | — | (856) | |||||||||||||||||||||||||||||
Net loss | — | — | — | — | (2,218) | (2,218) | |||||||||||||||||||||||||||||
Balance, March 31, 2023 | 57,083,716 | 57 | 475,754 | (7) | (49,068) | 426,736 | |||||||||||||||||||||||||||||
Options exercised for common stock | 81,712 | — | 214 | — | — | 214 | |||||||||||||||||||||||||||||
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for taxes | 101,027 | — | (2,569) | — | — | (2,569) | |||||||||||||||||||||||||||||
Share-based compensation expense | — | — | 10,353 | — | — | 10,353 | |||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | (1,174) | — | (1,174) | |||||||||||||||||||||||||||||
Net income | — | — | — | — | 2,085 | 2,085 | |||||||||||||||||||||||||||||
Balance, June 30, 2023 | 57,266,455 | 57 | 483,752 | (1,181) | (46,983) | 435,645 | |||||||||||||||||||||||||||||
Options exercised for common stock | 43,547 | — | 107 | — | — | 107 | |||||||||||||||||||||||||||||
Shares issued under Employee Stock Purchase Plan | 118,494 | 1 | 5,748 | — | — | 5,749 | |||||||||||||||||||||||||||||
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for taxes | 77,966 | — | (2,388) | — | — | (2,388) | |||||||||||||||||||||||||||||
Share-based compensation expense | — | — | 9,844 | — | — | 9,844 | |||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | 23 | — | 23 | |||||||||||||||||||||||||||||
Net income | — | — | — | — | 3,162 | 3,162 | |||||||||||||||||||||||||||||
Balance, September 30, 2023 | 57,506,462 | $ | 58 | $ | 497,063 | $ | (1,158) | $ | (43,821) | $ | 452,142 |
|
| Common Stock |
|
| Additional Paid In |
|
| Accumulated Other Comprehensive |
|
| Accumulated |
|
| Total |
| |||||||||
|
| Shares |
|
| Amount |
|
| Capital |
|
| Income (Loss) |
|
| Deficit |
|
| Equity |
| ||||||
Balance, December 31, 2020 |
|
| 49,251,614 |
|
| $ | 49 |
|
| $ | 227,624 |
|
| $ | 4 |
|
| $ | (27,423 | ) |
| $ | 200,254 |
|
Options exercised for |
|
| 296,019 |
|
|
| 1 |
|
|
| 380 |
|
|
| — |
|
|
| — |
|
|
| 381 |
|
Shares issued under Employee |
|
| 36,881 |
|
|
| — |
|
|
| 1,882 |
|
|
| — |
|
|
| — |
|
|
| 1,882 |
|
Issuance of common stock upon |
|
| 901 |
|
|
| — |
|
|
| (49 | ) |
|
| — |
|
|
| — |
|
|
| (49 | ) |
Share-based compensation |
|
| — |
|
|
| — |
|
|
| 3,836 |
|
|
| — |
|
|
| — |
|
|
| 3,836 |
|
Other comprehensive loss |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (162 | ) |
|
| — |
|
|
| (162 | ) |
Net income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 7,469 |
|
|
| 7,469 |
|
Balance, March 31, 2021 |
|
| 49,585,415 |
|
|
| 50 |
|
|
| 233,673 |
|
|
| (158 | ) |
|
| (19,954 | ) |
|
| 213,611 |
|
Options exercised for common stock |
|
| 213,605 |
|
|
| — |
|
|
| 193 |
|
|
| — |
|
|
| — |
|
|
| 193 |
|
Issuance of common stock upon |
|
| 29,809 |
|
|
| — |
|
|
| (706 | ) |
|
| — |
|
|
| — |
|
|
| (706 | ) |
Share-based compensation expense |
|
| — |
|
|
| — |
|
|
| 4,604 |
|
|
| - |
|
|
| — |
|
|
| 4,604 |
|
Other comprehensive income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 51 |
|
|
| — |
|
|
| 51 |
|
Net income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 4,068 |
|
|
| 4,068 |
|
Balance, June 30, 2021 |
|
| 49,828,829 |
|
|
| 50 |
|
|
| 237,764 |
|
|
| (107 | ) |
|
| (15,886 | ) |
|
| 221,821 |
|
Options exercised for common stock |
|
| 150,662 |
|
|
| — |
|
|
| 159 |
|
|
| — |
|
|
| — |
|
|
| 159 |
|
Shares issued under Employee |
|
| 48,168 |
|
|
| — |
|
|
| 3,676 |
|
|
| — |
|
|
| — |
|
|
| 3,676 |
|
Issuance of common stock upon |
|
| 116,931 |
|
|
| — |
|
|
| (842 | ) |
|
| — |
|
|
| — |
|
|
| (842 | ) |
Share-based compensation expense |
|
| — |
|
|
| — |
|
|
| 12,499 |
|
|
| — |
|
|
| — |
|
|
| 12,499 |
|
Other comprehensive income (loss) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (139 | ) |
|
| — |
|
|
| (139 | ) |
Net loss |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (2,804 | ) |
|
| (2,804 | ) |
Balance, September 30, 2021 |
|
| 50,144,590 |
|
| $ | 50 |
|
| $ | 253,256 |
|
| $ | (246 | ) |
| $ | (18,690 | ) |
| $ | 234,370 |
|
Common Stock | Additional Paid In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total Stockholders' Equity | |||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 | 50,313,452 | $ | 50 | $ | 257,144 | $ | (402) | $ | (17,583) | $ | 239,209 | ||||||||||||||||||||||||
Options exercised for common stock | 322,882 | 1 | 344 | — | — | 345 | |||||||||||||||||||||||||||||
Shares issued under Employee Stock Purchase Plan | 54,808 | — | 3,427 | — | — | 3,427 | |||||||||||||||||||||||||||||
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for taxes | 31,763 | — | (1,624) | — | — | (1,624) | |||||||||||||||||||||||||||||
Issuance of common stock in public offering, net of issuance costs of $11.9 million | 2,300,000 | 2 | 174,392 | 174,394 | |||||||||||||||||||||||||||||||
Share-based compensation expense | — | — | 6,555 | — | — | 6,555 | |||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | (365) | — | (365) | |||||||||||||||||||||||||||||
Net loss | — | — | — | — | (3,129) | (3,129) | |||||||||||||||||||||||||||||
Balance, March 31, 2022 | 53,022,905 | 53 | 440,238 | (767) | (20,712) | 418,812 | |||||||||||||||||||||||||||||
Options exercised for common stock | 228,313 | — | 156 | — | — | 156 | |||||||||||||||||||||||||||||
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for taxes | 54,607 | — | (1,751) | — | — | (1,751) | |||||||||||||||||||||||||||||
Share-based compensation expense | — | — | 7,164 | — | — | 7,164 | |||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | (416) | — | (416) | |||||||||||||||||||||||||||||
Net loss | — | — | — | — | (10,187) | (10,187) | |||||||||||||||||||||||||||||
Balance, June 30, 2022 | 53,305,825 | 53 | 445,807 | (1,183) | (30,899) | 413,778 | |||||||||||||||||||||||||||||
Options exercised for common stock | 167,102 | — | 109 | — | — | 109 | |||||||||||||||||||||||||||||
Shares issued under Employee Stock Purchase Plan | 78,707 | — | 4,995 | — | — | 4,995 | |||||||||||||||||||||||||||||
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for taxes | 43,643 | — | (1,224) | — | — | (1,224) | |||||||||||||||||||||||||||||
Share-based compensation expense | — | — | 7,356 | — | — | 7,356 | |||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | 238 | — | 238 | |||||||||||||||||||||||||||||
Net loss | — | — | — | — | (10,153) | (10,153) | |||||||||||||||||||||||||||||
Balance, September 30, 2022 | 53,595,277 | $ | 53 | $ | 457,043 | $ | (945) | $ | (41,052) | $ | 415,099 |
|
| Nine Months Ended September 30, |
| |||||
|
| 2022 |
|
| 2021 |
| ||
Cash flows from operating activities |
|
|
|
|
|
| ||
Net (loss) income |
| $ | (23,469 | ) |
| $ | 8,733 |
|
Adjustments to reconcile net (loss) income to net cash (used in) provided by |
|
|
|
|
|
| ||
Depreciation |
|
| 3,430 |
|
|
| 2,108 |
|
Amortization of deferred financing costs |
|
| 108 |
|
|
| 108 |
|
Amortization of right-of-use assets |
|
| 1,799 |
|
|
| 537 |
|
Share-based compensation expense |
|
| 21,075 |
|
|
| 20,939 |
|
Allowance for credit losses, net |
|
| 341 |
|
|
| (22 | ) |
Loss on disposal of fixed assets |
|
| 23 |
|
|
| — |
|
Changes in: |
|
|
|
|
|
| ||
Accounts receivable |
|
| (12,220 | ) |
|
| (10,898 | ) |
Inventories |
|
| (8,706 | ) |
|
| (8,924 | ) |
Prepaid expenses, deposits and other assets |
|
| (1,537 | ) |
|
| (4,525 | ) |
Accounts payable |
|
| (441 | ) |
|
| 2,042 |
|
Payroll-related accruals, accrued expenses and other liabilities |
|
| (562 | ) |
|
| 12,919 |
|
Operating lease liabilities |
|
| (565 | ) |
|
| (574 | ) |
Lease prepayments for lessor's owned leasehold improvements |
|
| (4,503 | ) |
|
| (11,964 | ) |
Net cash (used in) provided by operating activities |
|
| (25,227 | ) |
|
| 10,479 |
|
Cash flows from investing activities |
|
|
|
|
|
| ||
Purchases of property and equipment |
|
| (8,173 | ) |
|
| (10,927 | ) |
Purchases of marketable securities |
|
| (332,103 | ) |
|
| (105,438 | ) |
Maturities of marketable securities |
|
| 184,000 |
|
|
| 68,000 |
|
Purchases of other investments |
|
| (5,693 | ) |
|
| — |
|
Net cash used in investing activities |
|
| (161,969 | ) |
|
| (48,365 | ) |
Cash flows from financing activities |
|
|
|
|
|
| ||
Proceeds from issuance of common stock in public offering, net of |
|
| 174,394 |
|
|
| — |
|
Proceeds from issuance of common stock under employee stock purchase plan |
|
| 8,422 |
|
|
| 5,558 |
|
Proceeds from exercise of stock options |
|
| 610 |
|
|
| 732 |
|
Payment of taxes related to vested restricted stock units |
|
| (4,599 | ) |
|
| (1,597 | ) |
Net cash provided by financing activities |
|
| 178,827 |
|
|
| 4,693 |
|
Effect of foreign exchange rate on cash and cash equivalents |
|
| (855 | ) |
|
| (266 | ) |
Net decrease in cash |
|
| (9,224 | ) |
|
| (33,459 | ) |
Cash and cash equivalents beginning of period |
|
| 92,752 |
|
|
| 114,617 |
|
Cash and cash equivalents end of period |
| $ | 83,528 |
|
| $ | 81,158 |
|
|
|
|
|
|
|
| ||
Supplemental disclosures of cash flow information: |
|
|
|
|
|
| ||
Cash paid for income taxes |
| $ | 3,085 |
|
| $ | 271 |
|
Cash paid for interest |
| $ | 112 |
|
| $ | 113 |
|
Noncash investing and financing: |
|
|
|
|
|
| ||
Lease liabilities arising from obtaining new right-of-use assets |
| $ | 2,334 |
|
| $ | 28,648 |
|
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Cash flows from operating activities | |||||||||||
Net income (loss) | $ | 3,029 | $ | (23,469) | |||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||
Depreciation | 4,186 | 3,430 | |||||||||
Amortization of deferred financing costs | 30 | 108 | |||||||||
Amortization of right-of-use assets | 3,099 | 1,799 | |||||||||
Share-based compensation expense | 30,536 | 21,075 | |||||||||
Impairment loss on strategic investment | 565 | — | |||||||||
Allowance for credit losses, net | 526 | 341 | |||||||||
Loss on disposal of fixed assets | 26 | 23 | |||||||||
Amortization of premium and discount on marketable securities | (11,407) | — | |||||||||
Changes in: | |||||||||||
Accounts receivable | (11,566) | (12,220) | |||||||||
Inventories | (7,797) | (8,706) | |||||||||
Prepaid expenses, deposits and other assets | 4,294 | (1,537) | |||||||||
Accounts payable | 2,436 | (441) | |||||||||
Payroll-related accruals, accrued expenses and other liabilities | 7,218 | (562) | |||||||||
Operating lease liabilities | (1,031) | (565) | |||||||||
Lease prepayments for lessor's owned leasehold improvements | (458) | (4,503) | |||||||||
Net cash provided by (used in) operating activities | 23,686 | (25,227) | |||||||||
Cash flows from investing activities | |||||||||||
Purchases of property and equipment | (3,801) | (8,173) | |||||||||
Purchases of marketable securities | (394,496) | (332,103) | |||||||||
Maturities of marketable securities | 400,560 | 184,000 | |||||||||
Purchases of other investments | (565) | (5,693) | |||||||||
Net cash provided by (used in) investing activities | 1,698 | (161,969) | |||||||||
Cash flows from financing activities | |||||||||||
Proceeds from issuance of common stock in public offering, net of issuance costs of $11.9 million | — | 174,394 | |||||||||
Proceeds from issuance of common stock under employee stock purchase plan | 9,920 | 8,422 | |||||||||
Proceeds from exercise of stock options | 547 | 610 | |||||||||
Payment of taxes related to vested restricted stock units | (6,886) | (4,599) | |||||||||
Net cash provided by financing activities | 3,581 | 178,827 | |||||||||
Effect of foreign exchange rate changes on cash and cash equivalents | (5) | (855) | |||||||||
Net increase (decrease) in cash and cash equivalents | 28,960 | (9,224) | |||||||||
Cash and cash equivalents beginning of period | 60,222 | 92,752 | |||||||||
Cash and cash equivalents end of period | $ | 89,182 | $ | 83,528 | |||||||
ORGANIZATION
COVID-19
The global healthcare system continues to face an unprecedented challenge as a result of the novel coronavirus, or COVID-19, situation and its impact. COVID-19 may continue to have an adverse impact on significant aspects of the Company and the business, including the demand for products, business operations, and the ability to research and develop and bring to market new products and services. To the extent individuals and hospital systems de-prioritize, delay or cancel deferrable medical procedures as a result of COVID-19, staffing or resource issues, or otherwise, the Company’s business, cash flows, financial condition and results of operations may continue to be negatively affected.
The Company continues to focus its efforts on the health and safety of patients, healthcare providers and employees, while executing its mission of transforming lives of venous thromboembolism ("VTE") patients. However, the COVID-19 pandemic may continue to negatively impact the Company's 2022 performance.
and include the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Principles of Consolidation
The condensed consolidated financial statements include the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Management Estimates
8
Inari Medical, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
Revenue Recognition
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
| ||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
ClotTriever |
|
| 31 | % |
|
| 30 | % |
|
| 32 | % |
|
| 33 | % |
FlowTriever |
|
| 69 | % |
|
| 70 | % |
|
| 68 | % |
|
| 67 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
ClotTriever and other systems | 32 | % | 31 | % | 34 | % | 32 | % | |||||||||||||||
FlowTriever system | 68 | % | 69 | % | 66 | % | 68 | % |
The following tables summarize the Company’s financial assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy as of September 30, September 30, 2022 Level 1 Level 2 Level 3 Aggregate Fair Value Financial Assets Cash and cash equivalents: Money market mutual funds $ 21,283 $ — $ — $ 21,283 U.S. Treasury securities 3,979 — — 3,979 Corporate debt securities and commercial paper — 15,973 — 15,973 Total included in cash and cash equivalents 25,262 15,973 — 41,235 Investments: U.S. Treasury securities 178,462 — — 178,462 U.S. Government agencies — 26,184 — 26,184 Corporate debt securities and commercial paper — 31,059 — 31,059 Total included in short-term investments 178,462 57,243 — 235,705 Total assets $ 203,724 $ 73,216 $ — $ 276,940 December 31, 2021 Level 1 Level 2 Level 3 Aggregate Fair Value Financial Assets Cash and cash equivalents: Money market mutual funds $ 48,595 $ — $ — $ 48,595 Total included in cash and cash equivalents 48,595 — — 48,595 Investments: U.S. Treasury securities 44,322 — — 44,322 Corporate debt securities and commercial paper — 39,026 — 39,026 Total included in short-term investments 44,322 39,026 — 83,348 U.S. Treasury securities included in 3,983 — — 3,983 Total assets $ 96,900 $ 39,026 $ — $ 135,926 4. September 30, 2022 Amortized Cost Basis Unrealized Gain Unrealized Loss Fair Value Financial Assets Cash and cash equivalents: Money market mutual funds $ 21,283 $ — $ — $ 21,283 U.S. Treasury securities 3,979 — — 3,979 Corporate debt securities and commercial paper 15,936 37 — 15,973 Total included in cash and cash equivalents 41,198 37 — 41,235 Investments: U.S. Treasury securities 178,353 363 (254 ) 178,462 U.S. Government agencies 26,139 45 — 26,184 Corporate debt securities and commercial paper 31,002 84 (27 ) 31,059 Total included in short-term investments 235,494 492 (281 ) 235,705 Total assets $ 276,692 $ 529 $ (281 ) $ 276,940 December 31, 2021 Amortized Cost Basis Unrealized Gain Unrealized Loss Fair Value Financial Assets Cash and cash equivalents: Money market mutual funds $ 48,595 $ — $ — $ 48,595 Total included in cash and cash equivalents 48,595 — — 48,595 Investments: U.S. Treasury securities 44,349 — (27 ) 44,322 Corporate debt securities and commercial paper 39,012 14 — 39,026 Total included in short-term investments 83,361 14 (27 ) 83,348 U.S. Treasury securities included in 3,993 — (10 ) 3,983 Total assets $ 135,949 $ 14 $ (37 ) $ 135,926 Inventories, net of reserves, September 30, December 31, Raw materials $ 11,700 $ 5,763 Work-in-process 2,691 1,490 Finished goods 15,279 13,800 $ 29,670 $ 21,053 6. September 30, December 31, Manufacturing equipment $ 12,146 $ 7,408 Leasehold improvements 4,932 4,712 Assets in progress 3,446 3,124 Furniture and fixtures 3,998 3,044 Computer hardware 4,592 2,864 Computer software 100 100 Total property and equipment, gross 29,214 21,252 Accumulated depreciation (8,023 ) (4,781 ) Total property and equipment, net $ 21,191 $ 16,471 COMMITMENTS AND CONTINGENCIES 17.1 years. Total lease Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Operating lease cost $ 1,039 $ 331 $ 3,139 $ 702 Short-term lease cost 147 69 192 142 Variable lease cost 181 116 477 200 Total lease costs $ 1,367 $ 516 $ 3,808 $ 1,044 Year ending December 31: Amount Remainder of 2022 $ 609 2023 2,471 2024 2,550 2025 2,619 2026 2,693 Thereafter 41,478 Total lease payments 52,420 Less imputed interest (21,455 ) Total lease liabilities 30,965 Less: lease liabilities - current portion (588 ) Lease liabilities - noncurrent portion $ 30,377 Year ending December 31: Amount Remainder of 2022 $ 145 2023 758 2024 584 Total lease payments $ 1,487 CONCENTRATIONS In early 2023, certain U.S. banks failed and the regulators appointed the Federal Deposit Insurance Corporation (“FDIC”) to act as receiver, which created significant market disruption and uncertainty with respect to the financial condition of the banking institutions in the U.S. While the Company does not have any direct exposure to these banks, the Company does maintain its cash and cash equivalents at multiple financial institutions in excess of the current FDIC insurance limits. CREDIT FACILITY Accumulated Other Comprehensive Income (Loss) EQUITY INCENTIVE PLANS 2023. Number of Weighted Weighted Weighted Intrinsic Outstanding, December 31, 2021 2,574,354 $ 1.43 $ 1.02 7.07 $ 231,286 Exercised (718,297 ) $ 0.85 $ 0.07 $ 54,856 Cancelled (17,495 ) $ 2.34 $ 1.41 $ 1,342 Outstanding, September 30, 2022 1,838,562 $ 1.64 $ 1.15 6.38 $ 130,529 Vested and exercisable at September 30, 2022 1,449,196 $ 1.32 $ 0.96 6.26 $ 103,352 Vested and expected to vest at September 30, 2022 1,826,633 $ 1.63 $ 1.14 6.38 $ 129,708 Restricted Stock Units Number of Weighted Outstanding, December 31, 2021 611,205 $ 88.34 Granted 602,831 73.94 Vested (189,006 ) 84.52 Cancelled (42,774 ) 84.77 Outstanding, September 30, 2022 982,256 $ 80.39 Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Cost of goods sold $ 386 $ 218 $ 1,126 $ 597 Research and development 1,051 580 3,143 1,601 Selling, general and administrative 5,919 11,701 16,806 18,741 $ 7,356 $ 12,499 $ 21,075 $ 20,939 The fair value of the ESPP shares is estimated using the Black-Scholes option pricing model with the following assumptions: Nine Months Ended September 30, 2022 2021 Expected term (in years) 0.5 0.5 Expected volatility 56.09% 51.91% Dividend yield 0.00% 0.00% Risk free interest rate 0.48% 0.08% Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (Loss) income before income taxes $ (9,313 ) $ (2,743 ) $ (21,377 ) $ 9,004 Provision for income taxes 840 61 2,092 271 Net (loss) income $ (10,153 ) $ (2,804 ) $ (23,469 ) $ 8,733 Provision for income taxes as a percentage 9.0 % 2.2 % 9.8 % 3.0 % 2023. RETIREMENT PLAN Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Numerator: Net (loss) income (in thousands) $ (10,153 ) $ (2,804 ) $ (23,469 ) $ 8,733 Denominator: Weighted average number of common shares 53,491,625 50,001,996 52,552,662 49,664,037 Common stock equivalents from outstanding — — — 2,927,569 Common stock equivalents from unvested RSUs — — — 2,917,867 Common stock equivalents from ESPP — — — 847 Common stock equivalents from restricted stock — — — 741 Weighted average number of common shares 53,491,625 50,001,996 52,552,662 55,511,061 Net (loss) income per share: Basic $ (0.19 ) $ (0.06 ) $ (0.45 ) $ 0.18 Diluted $ (0.19 ) $ (0.06 ) $ (0.45 ) $ 0.16 The following outstanding potentially dilutive common stock equivalents have been excluded from the calculation of diluted net Three and Nine Months Ended September 30, 2022 Three Months Ended September 30, 2021 Common stock options 1,838,562 2,732,986 RSUs 3,694,930 2,778,176 Restricted stock subject to future vesting — 741 5,533,492 5,511,903 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 2022. Please also see the section titled “Cautionary Note Regarding Forward-Looking Statements.” efficient clot removal with minimal blood loss. 2022. Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 ClotTriever 31 % 30 % 32 % 33 % FlowTriever 69 % 70 % 68 % 67 % 2022 Three Months Ended September 30, 2022 % 2021 % Change $ Revenue $ 96,204 100.0 % $ 72,916 100.0 % $ 23,288 Cost of goods sold 11,064 11.5 % 7,040 9.7 % 4,024 Gross profit 85,140 88.5 % 65,876 90.3 % 19,264 Operating expenses: Research and development 19,105 19.9 % 12,499 17.1 % 6,606 Selling, general and administrative 75,833 78.8 % 56,104 76.9 % 19,729 Total operating expenses 94,938 98.7 % 68,603 94.0 % 26,335 Income (loss) from operations (9,798 ) (10.2 %) (2,727 ) (3.7 %) (7,071 ) Other income (expense) Interest income 618 0.6 % 27 0.0 % 591 Interest expense (74 ) (0.1 %) (73 ) (0.1 %) (1 ) Other income (expense) (59 ) (0.1 %) 30 0.0 % (89 ) Total other expenses, net 485 0.4 % (16 ) (0.1 %) 501 Income (loss) before income taxes $ (9,313 ) (9.8 %) $ (2,743 ) (3.8 %) $ (6,570 ) 2022 Nine Months Ended September 30, 2022 % 2021 % Change $ Revenue $ 275,700 100.0 % $ 193,766 100.0 % $ 81,934 Cost of goods sold 31,378 11.4 % 16,477 8.5 % 14,901 Gross profit 244,322 88.6 % 177,289 91.5 % 67,033 Operating expenses: Research and development 53,809 19.5 % 32,292 16.7 % 21,517 Selling, general and administrative 212,721 77.2 % 135,899 70.1 % 76,822 Total operating expenses 266,530 96.7 % 168,191 86.8 % 98,339 Income from operations (22,208 ) (8.1 %) 9,098 4.7 % (31,306 ) Other income (expense) Interest income 882 0.3 % 130 0.1 % 752 Interest expense (220 ) (0.1 %) (220 ) (0.1 %) — Other income (expense) 169 0.1 % (4 ) 0.0 % 173 Total other expenses, net 831 0.3 % (94 ) 0.0 % 925 Income (loss) before income taxes $ (21,377 ) (7.8 %) $ 9,004 4.7 % $ (30,381 ) 10. Credit Facility to our condensed consolidated financial statements, which is included in “Part I, Item 1. Condensed Consolidated Financial Statements (Unaudited)” of this report. On November 1, 2023, we amended our credit facility to, among other things, increase the amount available for borrowing to up to a maximum principal amount of $75.0 million. We also amended the LC Facility to increase the limit to up to $18.8 million. support of commercialization efforts to expand our sales force along with expanding into new markets, and developing products to enhance performance and address unmet market needs; In addition, market conditions impacting financial institutions could impact our ability to access some or all of our cash and cash equivalents, and we may be unable to obtain alternative funding when and as needed on acceptable terms, if at all. Nine Months Ended September 30, 2022 2021 Net cash provided by (used in): Operating activities $ (25,227 ) $ 10,479 Investing activities (161,969 ) (48,365 ) Financing activities 178,827 4,693 Effect of foreign exchange rate on cash and cash equivalents (855 ) (266 ) Net decrease in cash and cash equivalents $ (9,224 ) $ (33,459 ) operating activities for the nine months ended September 30, 2023 was $23.7 million, consisting primarily of net income of $3.0 million and non-cash charges of $27.6 million, offset by a net change in our net operating assets and liabilities of $6.9 million. The non-cash charges primarily consisted of stock-based compensation expense of $30.5 million, depreciation of $4.2 million, and amortization of the right-of-use assets of $3.1 million, partially offset by amortization of premium and discount on marketable securities of $11.4 million. The change in our net operating assets and liabilities was primarily due to increases in accounts receivable of $11.6 million, inventories of $7.8 million, payroll-related accruals, accrued expenses and other liabilities of $7.2 million, and accounts payable of $2.4 million, in addition to a decrease in prepaid expenses, deposits and other assets of $4.3 million and operating lease liabilities of $1.0 million. tax payments related to vested RSUs. recorded, processed, summarized and reported, allow timely decisions regarding required disclosures. In designing and evaluating our disclosure controls and procedures, management recognizes that any control and procedure, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that LEGAL PROCEEDINGS RISK FACTORS 2022. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES DEFAULTS UPON SENIOR SECURITIES MINE SAFETY DISCLOSURES Incorporated by reference Exhibit Number Description Form File Number Exhibit Filing Date 3.1 8-K 001-39293 3.1 5/28/2020 3.2 8-K 001-39293 3.2 5/28/2020 31.1 31.2 32.1† 32.2† 101.INS Inline XBRL Instance Document - The instance document does not appear in the interactive data file because its EBRL tags are embedded within the inline XBRL document. 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page with Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101). EXHIBITS Inari Medical, Inc. Date: November By: /s/ Andrew Hykes Chief Executive Officer and President Date: November By: /s/ Mitchell Hill Mitchell Hill Chief Financial OfficerThree Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 United States $ 119,825 $ 93,597 $ 345,473 $ 269,584 International 6,541 2,607 16,065 6,116 Total revenue $ 126,366 $ 96,204 $ 361,538 $ 275,700 ("(“SG&A"&A”) expenses. The Company applies the practical expedient and recognizes commissions as an expense when incurred because the amortization period is less than one year.OtherIn March 2022, themadehas strategic investments in certain privately heldprivately-held companies, with no readily determinable fair value. The Company measures these investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investments.investment. The Company will monitor the information that becomes available from time to time and adjust the carrying values of these investments if there are identified events or changes in circumstances that have a significant adverse effect on the fair values. Impairment loss, which is generally the difference between the carrying value and the fair value of the investment, is recorded in other income (expense) in the Statements of Operations and Comprehensive Income. As of September 30, 2023 and December 31, 2022, total otherthe Company’s equity investments of $5.7were $8.3 million wasand were included in deposits and other assets on the condensed consolidated balance sheets withsheets. Additionally, during the three and nine months ended September 30, 2023, the Company recorded an impairment loss of $0.6 million in other income (expense) in the Statement of Operations and Comprehensive Income. There was no impairment identified.loss recorded during the three and nine months ended September 30, 2022.Nine Months Ended September 30, 2023 2022 Supplemental disclosures of cash flow information: Cash paid for income taxes $ 3,562 $ 3,085 Cash paid for interest $ 98 $ 112 Noncash investing and financing: Lease liabilities arising from obtaining new right-of-use assets $ 1,030 $ 2,334 3. Fair Value Measurements20222023 and December 31, 20212022 (in thousands):
long-term investmentsSeptember 30, 2023 Level 1 Level 2 Level 3 Aggregate Fair Value Financial Assets Cash and cash equivalents: Money market mutual funds $ 41,561 $ — $ — $ 41,561 Corporate debt securities and commercial paper — 3,489 — 3,489 Total included in cash and cash equivalents 41,561 3,489 — 45,050 Investments: U.S. Treasury securities 173,687 — — 173,687 U.S. Government agencies — 46,284 — 46,284 Corporate debt securities and commercial paper — 42,142 — 42,142 Total included in short-term investments 173,687 88,426 — 262,113 Total financial assets $ 215,248 $ 91,915 $ — $ 307,163 December 31, 2022 Level 1 Level 2 Level 3 Aggregate Fair Value Financial Assets Cash and cash equivalents: Money market mutual funds $ 20,329 $ — $ — $ 20,329 Total included in cash and cash equivalents 20,329 — — 20,329 Investments: U.S. Treasury securities 172,088 — — 172,088 U.S. Government agencies — 47,131 — 47,131 Corporate debt securities and commercial paper — 46,960 — 46,960 Total included in short-term investments 172,088 94,091 — 266,179 Total financial assets $ 192,417 $ 94,091 $ — $ 286,508 10Inari Medical, Inc.Cash Equivalents and Investments20222023 and December 31, 20212022 (in thousands):
long-term investmentsSeptember 30, 2023 Amortized Cost Basis Unrealized Gain Unrealized Loss Fair Value Financial Assets Cash and cash equivalents: Money market mutual funds $ 41,561 $ — $ — $ 41,561 Corporate debt securities and commercial paper 3,490 — (1) 3,489 Total included in cash and cash equivalents 45,051 — (1) 45,050 Investments: U.S. Treasury securities 173,690 9 (12) 173,687 U.S. Government agencies 46,309 7 (32) 46,284 Corporate debt securities and commercial paper 42,162 — (20) 42,142 Total included in short-term investments 262,161 16 (64) 262,113 Total financial assets $ 307,212 $ 16 $ (65) $ 307,163 December 31, 2022 Amortized Cost Basis Unrealized Gain Unrealized Loss Fair Value Financial Assets Cash and cash equivalents: Money market mutual funds $ 20,329 $ — $ — $ 20,329 Total included in cash and cash equivalents 20,329 — — 20,329 Investments: U.S. Treasury securities 171,006 1,120 (38) 172,088 U.S. Government agencies 46,777 354 — 47,131 Corporate debt securities and commercial paper 46,576 397 (13) 46,960 Total included in short-term investments 264,359 1,871 (51) 266,179 Total financial assets $ 284,688 $ 1,871 $ (51) $ 286,508 Inventories, netINVENTORIES, NET as of September 30, 2022 and December 31, 2021 totaling $626,000 and $285,000, respectively, consist of the following (in thousands):
2022
2021September 30,
2023December 31,
2022Raw materials $ 14,278 $ 13,943 Work-in-process 4,117 3,396 Finished goods 21,832 15,242 Total inventories, net $ 40,227 $ 32,581 Property and Equipment, net
2022
2021September 30,
2023December 31,
2022Manufacturing equipment $ 15,827 $ 13,585 Computer hardware 5,522 5,123 Leasehold improvements 5,248 5,040 Furniture and fixtures 4,380 4,119 Assets in progress 2,041 2,516 Capitalized software 881 — Computer software — 100 Total property and equipment, gross 33,899 30,483 Accumulated depreciation (12,656) (8,828) Total property and equipment, net $ 21,243 $ 21,655 $947,000$1,141,000 and $648,000$947,000 was included in SG&Aoperating expenses and $223,000$291,000 and $172,000$223,000 was included in cost of goods sold for the three months ended September 30, 20222023 and 2021,2022, respectively. Depreciation expense of $2,774,000$3,367,000 and $1,633,000$2,774,000 was included in SG&Aoperating expenses and $656,000$819,000 and $475,000$656,000 was included in cost of goods sold for the nine months ended September 30, 2023 and 2022, and 2021, respectively.Commitments and ContingenciesIn March 2019, The operating leases for facilities expire at various dates through July 2041 and some contain renewal options, the Company executed a five-year lease for a facility in Irvine, California, where substantially all operationslongest of the Company had been located from September 2019 to September 2021. This five-year lease was originally set to expire in September 2024 and contained two optional extension periods of five years each. Concurrent with the execution of a new ten-year lease in October 2020 (see below), the Company entered into a termination agreement (as amended) that released the Company from the obligations under the five-year lease effective July 2022 and contained options to extend the lease term for up to three periods of an additional 30 days each, which the Company has exercised as of September 30, 2022. In October 2022, the Company amended the lease agreement to cancel the termination agreement and update the lease termination date to September 2024.In October 2020, the Company entered into a ten-year lease for a facility located in Irvine, California (the “Oak Canyon lease”) with two option extension periods of five years each, which the Company has determined that it is reasonably certain to exercise. The Oak Canyon lease requires the Company to make variable lease payments, which are not included in the lease liability due to the amounts not being fixed, for property taxes, insurance, maintenance, repair costs, and certain improvements deemed to be assets of the lessor. The Oak Canyon lease includes scheduled payment escalation clauses over the lease term. The Oak Canyon lease also requires the Company to maintain a letter of credit for the benefit of the landlord in the amount of $1.5 million, which is secured by the Company’s Credit Agreement.for five years. The Company has moved in and taken control of the facility and has determined the lease commencement date to be September 30, 2021. On the commencement date, the Company recorded approximately $42.2 million and $28.6 million of ROU asset and lease liability respectively. The ROU asset includes approximately $13.5 million, net of $3.7 million tenant allowance, relatedrenewal options if the Company is reasonably certain to prepaid lease payments for the lessor’s owned leasehold improvements which were reclassified from assets in progress and deposits and other assets. The operating ROU asset also includes $7.3 million of additional prepaid lease payments for the lessor's owned leasehold improvements paid subsequent to the commencement date. exercise such renewal options.liability related to the Oak Canyon leaseliabilities were $47.6$50.7 million and $28.4$32.3 million, respectively, with the weighted average remaining lease term of 226 months.The Company's wholly owned subsidiary, Inari Medical Europe GmbH, entered into a five-year commercial lease agreement for office space located in Basel, Switzerland (the "Basel lease"). The lease commenced on July 1, 2022, with an option to extend for a period of five years, which the Company has determined that it is reasonably certain to exercise and is, therefore, included in the calculation of the ROU asset and lease liability. The lease payment is also indexed to the national consumer price index, which may be adjusted once per calendar year. The Basel lease also requires the Company to maintain a bank guarantee for the benefit of the landlord in the amount of approximately $0.2 million, which is secured by two letters of credit issued under the Company’s Credit Agreement. The Basel lease has a remaining lease term of 117 months as of September 30, 2022.12Inari Medical, Inc.Notes to Unaudited Condensed Consolidated Financial Statements2022,2023, the weighted average incremental borrowing rate used to measure operating lease liabilities was 6.1%6.05%. Cash paid for amounts included in the measurement of operating lease liabilities was $705,000$866,000 and $186,000$705,000 for the three months ended September 30, 2023 and 2022, respectively, and 2021$2,564,000 and $2,030,000 and $557,000$2,030,000 for the nine months ended September 30, 2023 and 2022, and 2021, respectively.cost for the three and nine months ended September 30, 2022,costs are as follows (in thousands):Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Operating lease cost $ 1,137 $ 1,039 $ 3,456 $ 3,139 Short-term lease cost 22 147 85 192 Variable lease cost 402 181 809 477 Total lease costs $ 1,561 $ 1,367 $ 4,350 $ 3,808 20222023 are as follows (in thousands):Year ending December 31: Amount Remainder of 2023 $ 877 2024 3,546 2025 3,032 2026 2,911 2027 2,978 Thereafter 38,507 Total lease payments 51,851 Less imputed interest (19,594) Total lease liabilities 32,257 Less: lease liabilities - current portion (1,630) Lease liabilities - noncurrent portion $ 30,627 following are future minimumCompany signed a ten-year lease for real estate in October 2023, with total undiscounted contractual payments for the three year term of the lease amendment discussed above,of $7.2 million, which has not yet commenced and is not includedare expected to commence in ROU assets and operating lease liabilities as of September 30, 2022 (in thousands):October 2024.13Inari Medical, Inc.Notes to Unaudited Condensed Consolidated Financial Statementsofwith Inceptus Medical, LLC (“Inceptus”), pursuant to which Inceptus granted to the Company a non-transferable, worldwide, exclusive sublicense to its licensed intellectual property rights related to the tubular braiding for the non-surgical removal of clots and treatment of embolism and thrombosis in human vasculature other than carotid arteries, coronary vasculature and cerebral vasculature.iswas required to pay an ongoing quarterly administration fee, which amounted to $29,000nil and $29,000 for the three months ended September 30, 2023 and 2022 respectively, and 2021$59,000 and $87,000$87,000 for the nine months ended September 30, 2023 and 2022 and 2021.respectively. Additionally, the Company iswas obligated to pay an ongoing royalty ranging from 1%1.0% to 1.5%1.5% of the net sales of products utilizing the licensed intellectual property, subject to a minimum royalty quarterly fee of $1,500. $1,500. In June 2023, the sublicense agreement was terminated and the Company is no longer required to pay any ongoing administration or royalty fees following the termination.of $1,500 and $201,000for both the three months ended September 30, 2023 and 2022, and 2021, respectively,recorded $5,000 and $215,000 and $586,000$215,000 for the nine months ended September 30, 2023 and 2022, and 2021, respectively.Licensed TechnologyIn December 2021,entered into an exclusive, perpetual, royalty free, technology license agreement (the “Licensed Technology”) for use inimplemented a particular researchself-insurance program to cover employees and development project that requires total paymentstheir dependent health benefits, including medical, dental and vision. As part of approximately $4.2 million payable in three installments due in 2022 and 2023.the program, the Company also has stop-loss coverage from a third party which limits the exposure to large claims. The Company accounted forrecords a liability associated with these benefits that includes an estimate of both claims filed and losses incurred but not yet reported based on historical claims experience. In estimating this accrual, the purchase asCompany utilizes an independent third-party broker to estimate a researchrange of expected losses, which are based on analyses of historical data. The assumptions are closely monitored and developmentadjusted when necessary by changing circumstances. If the liability generated from incurred claims exceeds the expense in December 2021 as it was determined to have no future alternative uses.recorded, the Company may record an additional expense. As of September 30, 2022,2023, the outstanding balanceCompany's self-insurance liability, inclusive of administrative fees, was approximately $1.2$2.1 million, which wasis included in accrued expenses and other current liabilities on the condensed consolidated balance sheets.Concentrations20222023 and 2021,2022, there were no customers thatwhich accounted for more than 10%10% of the Company’s revenue. As of September 30, 20222023 and December 31, 2021,2022, there were no customers that accounted for more than 10%10% of the Company’s accounts receivable.10%10% of the Company’s purchases for the three and nine months ended September 30, 20222023 and 2021.2022. There were no vendors that accounted for more than 10%10% of the Company’s accounts payable as of September 30, 20222023 and December 31, 2021.2022.Related PartyRELATED PARTY$70,000$67,000 and $38,000$70,000 for the three months ended September 30, 2023 and 2022, respectively, and 2021$147,000 and $262,000 and $301,000$262,000 for the nine months ended September 30, 20222023 and 2021,2022, respectively, which was included in operatingSG&A expenses on the condensed consolidated statements of operations and comprehensive income (loss). As of September 30, 20222023 and December 31, 2021,2022, there was no balance payable to MRI.DebtIn September 2020,entered into aamended its senior secured revolving credit facility with Bank of America (the “Credit“Amended Credit Agreement”), as amended, under which to, among other things, increase the Company may borrow loansamount available for borrowing to up to a maximum principal amount of $30$40.0 million and increase the optional accordion to $120.0 million. The Amended Credit Agreement matures on December 16, 2027. The amount available to borrow under the Amended Credit Agreement as of September 30, 2023 is approximately $37.6 million, comprised ofof: a) 85%90% of eligible accounts receivable, plus b) pledged cash (up to $10$10.0 million). There was no principal amount outstanding and no cash was pledged under the Credit Agreement as of September 30, 2022 and December 31, 2021, and the amount available to borrow under the Credit Agreement was approximately $28.0 million.0.50%0.50%, or (iii) the LIBORBloomberg Short-Term Bank Yield Index (“BSBY”) rate based upon an interest period of 30 daysone month plus 1.00%1.00%, in any case has a floor of 0%. The Margin ranges, depending on average daily availability, from 0.50% to 1.00% in the case of Prime Rate and the Federal funds rate loans, and from 1.50% to 2.00% in the case of BSBY Rate loans.1.00%As a condition to 1.50% based onentering into the Company’s applicable fixed charge coverage ratio. Advances under theAmended Credit Agreement, designated as “LIBOR Loans” will bear interest atthe Company was obligated to pay a rate per14Inari Medical, Inc.Notes to Unaudited Condensed Consolidated Financial Statementsannum equal to the LIBOR rate plus the applicable Margin ranging from 2.00% to 2.50% based on the Company’s applicable fixed charge coverage ratio. Interest on loans outstanding under the Credit Agreement is payable monthly. Loan principal balances outstanding under the Credit Agreement are due at maturity in September 2023. The Company may prepay any loans under the Credit Agreement at any time without any penalty or premium.nonrefundable fee of $10,000. The Company is also required to pay an unused line fee at an annual rate ranging from 0.25% to 0.375%of 0.25% per annum of the average daily unused portion of the aggregate revolving credit commitments under the Amended Credit Agreement.$5$5.0 million. In February 2023, the Company amended the LC Facility to increase the limit to up to $10.0 million. The aggregate stated amount outstanding of letterletters of creditscredit reduces the total borrowing base available under the Amended Credit Agreement. The Company is required to pay the following fees under the LC Facility are as follows:Facility: (a) a fee equal to the applicable margin in effect for LIBORBSBY loans (currently 2.25%2.25%) times the average daily stated amount of outstanding letterletters of credits;credit; and (b) a fronting fee equal to 0.125%0.125% per annum on the stated amount of each letter of credit outstanding. As of September 30, 2022 ,2023, the Company had four letters of credit in the aggregated amount of $2.0$2.4 million outstanding under the LC Facility. As of December 31, 2021, the Company had two letters of credit in the aggregated amount of $1.8 million outstanding under the LC Facility.Therequirements as of September 30, 2022.requirement. Obligations under the Credit Agreement are secured by substantially all of the Company’s assets, excluding intellectual property.Stockholder’s EquitySTOCKHOLDER'S EQUITY$81.00$81.00 per share. The Company received net proceeds of approximately $174.4$174.4 million, after deducting underwriters’ discounts and commissions of $11.2$11.2 million and offering costs of $0.7$0.7 million.Equity Incentive Plansdirectors, consultants and advisors.directors. The Board has the authority to determine to whom awards will be granted, the number of shares, the term and the exercise price.IPO.Company’s initial public offering in May 2020 (“IPO”). As a result, the Company may not grant any additional awards under the 2011 Plan. The 2011 Plan will continue to govern outstanding equity awards granted thereunder. The Company has initially reserved 3,468,048 shares of common stock for the issuance of a variety of awards under the 2020 Plan, including stock options, stock appreciation rights, awards of restricted stock and awards of restricted stock units. In addition, the number of shares of common stock reserved for issuance under the 2020 Plan will automatically increase on the first day of January for a period of up to ten years,, commencing on January 1, 2021, in an amount equal to 3%3% of the total number of shares of the Company’s capital stock outstanding on the last day of the preceding year, or a lesser number of shares determined by the Company’s board of directors. As of September 30, 2022,2023, there were 5,696,3046,523,570 shares available for issuance under the 2020 Plan, including 1,509,4041,620,650 additional shares reserved effective January 1, 2022.Stock OptionsA summary of stock option activities under the 2011 Plan for the nine months ended September 30, 2022 is as follows (intrinsic value in thousands):
Awards
Average
Exercise
Price
Average
Fair Value
Average
Remaining
Contractual
Life (in years)
Value15Inari Medical, Inc.Notes to Unaudited Condensed Consolidated Financial StatementsThe aggregate intrinsic values of options outstanding, vested and exercisable, and vested and expected to vest were calculated as the difference between the exercise price of the options and the estimated fair value of the Company’s common stock.condition. The performance-based condition is a liquidity event requirement that was satisfied on the effective date of the IPO of the Company’s common stock. The RSUs arewere subject to four-year cliff vesting and vested in full in March 2023. The vesting was also subject to a four-year cliff vesting and will vest in March 2023. Ifmarket-based condition related to the RSUs vest, the actual number of RSUs that will vest will be dependent on the per share value of the Company’s common stock which is a market-based condition, determined based on the average closing priceas of the Company’svesting date. As a result of exceeding the value of the Company's common stock foras set forth in the three-month period immediately precedinggrant agreement, the satisfactionmaximum amount of the service condition.There was no activity related to RSUs under the 2011 Planwere earned and vested during the three and nine months ended September 30, 2022. As2023. outstanding balance of RSUs under 2011 Plan is set forth below:Number of
AwardsWeighted
Average
Fair ValueOutstanding, December 31, 2022 2,712,674 $ 0.17 Vested (2,712,674) (a) Outstanding, September 30, 2023 — $ — 2,712,674distributed in the quarter ended March 31, 2023 with a weighted average fair value atof $64.34. The second installment was distributed in the timequarter ended June 30, 2023 with a weighted average fair value of grant$71.17. The third installment was distributed in the quarter ended September 30, 2023 with a weighted average fair value of $$68.33. The remaining shares will be distributed within the quarter ended December 31, 2023.0.17 per RSU.Number of
AwardsWeighted
Average
Exercise
PriceWeighted
Average
Remaining
Contractual
Life (in years)Intrinsic
ValueOutstanding, December 31, 2022 1,456,328 $ 1.93 6.20 $ 89,749 Exercised (334,351) $ 1.48 $ 20,583 Cancelled (3,324) $ 5.02 Outstanding, September 30, 2023 1,118,653 $ 2.06 5.40 $ 70,857 Vested and exercisable at September 30, 2023 1,091,976 $ 1.95 5.40 $ 69,283 Vested and expected to vest at September 30, 2023 1,118,415 $ 2.06 5.40 $ 70,843 andin equal amounts on a 25%quarterly basis or a 25% one-year cliff orvesting with remaining RSUs vest over a three-year period in equal amounts on a quarterly basis, provided the employee remains continuously employed with the Company. The fair value of the RSUs is equal to the closing price of the Company’s common stock on the grant date.activitiesactivity under the 2020 Plan is set forth below:
Awards
Average
Fair ValueNumber of
AwardsWeighted
Average
Fair ValueOutstanding, December 31, 2022 999,215 $ 79.16 Granted 778,398 58.56 Vested (343,689) 74.28 Cancelled (103,667) 73.67 Outstanding, September 30, 2023 1,330,257 $ 68.79 both the 2011 Plan and 2020 Plan was $4.5$6.9 million and $11.4$4.5 million for the three months ended September 30, 2023 and 2022, respectively, and 2021, and $15.3$21.0 million and $15.1$15.3 million for the nine months ended September 30, 2023 and 2022, and 2021, respectively.Stock-based Compensation ExpenseTotal compensation cost for all share-based payment arrangements recognized,including $780,000 and $546,000 forStock optionsthreenine months ended September 30, 20222023, the Company granted non-qualified stock options to certain employees with vesting over a four-year period on a quarterly basis. The fair value of the stock options was calculated using the Black-Scholes option pricing model, which requires valuation assumptions of expected term, expected volatility, risk-free interest rate, and 2021 and $2.5 million and $1.9 millionexpected dividend yield. For the purposes of the Black-Scholes valuation model, the Company used the simplified method for determining the expected term of the granted options. The simplified method was used since the Company does not have adequate historical data to utilize in calculating the expected term of options. The fair value for options granted was calculated using the following weighted average assumptions:Nine Months Ended September 30, 2023 Expected term (in years) 4.56 Expected volatility 50.35% Dividend yield 0.00% Risk free interest rate 4.05% Weighted-average fair value of options granted $25.98 per share 2022 and 2021, respectively, related to the Employee Stock Purchase Plan, was2023 is as follows (in(intrinsic value in thousands):Number of
AwardsWeighted
Average
Exercise
PriceWeighted
Average
Remaining
Contractual
Life (in years)Intrinsic
ValueOutstanding, December 31, 2022 — $ — — $ — Granted 181,870 $ 56.00 Exercised (916) $ 56.00 $ 9 Cancelled (9,428) $ 56.00 Outstanding, September 30, 2023 171,526 $ 56.00 6.40 $ 1,612 Vested and exercisable at September 30, 2023 21,429 $ 56.00 6.20 $ 201 Vested and expected to vest at September 30, 2023 158,495 $ 56.00 6.40 $ 1,490 16Inari Medical, Inc.Total compensation costs as of September 30, 2022 related to all non-vested awards to be recognized in future periods was $67.0 million and is expected to be recognized over the remaining weighted average period of 2.9 years.became effective onwas amended and restated in October 2020 by the date the ESPP was adopted byCompensation Committee of the Company’s board of directors. Each offering to the employees to purchase stock under the ESPP will begin on each August 1 and February 1 and will end on the following January 31 and July 31, respectively. The first offering period began on August 1, 2020.2020. On each purchase date, which falls on the last date of each offering period, ESPP participants will purchase shares of common stock at a price per share equal to 85%85% of the lesser of (1) the fair market value per share of the common stock on the offering date or (2) the fair market value of the common stock on the purchase date. The occurrence and duration of offering periods under the ESPP are subject to the determinations of the Company’s Compensation Committee, in its sole discretion. The number of shares available for issuance under the ESPP increases automatically on January 1 of each calendar year of the Company beginning in 2021 and ending in 2030, in an amount equal to the lesser of (i) 1% of the aggregate number of outstanding shares of the Company’s common stock on the final day of the immediately preceding calendar year and (ii) such smaller number of shares determined by the Company’s board of directors.Nine Months Ended September 30, 2023 2022 Expected term (in years) 0.5 0.5 Expected volatility 42.08% - 49.89% 56.09% - 72.78% Dividend yield 0.00 % 0.00 % Risk free interest rate 4.79% - 5.54% 0.48% - 2.96% 2022,2023, a total of 218,564(i) 423,109 shares of common stock, including 78,707118,494 shares purchased in July 2022,2023 and 86,051 shares purchased in January 2023, have been purchased under the ESPP, and a total of 1,767,957(ii) 2,103,629 shares of common stock are reserved under the ESPP for future purchases, including 503,135540,217 additional shares, effectivewhich were automatically added to the reserve on January 1, 2023 pursuant to the terms of the ESPP.are reservedrespectively, and $2.9 million and $2.5 million for nine months ended September 30, 2023 and 2022, respectively, of stock-based compensation expense related to the ESPP, was as follows (in thousands):Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Cost of goods sold $ 393 $ 386 $ 1,232 $ 1,126 Research and development 1,587 1,051 4,981 3,143 Selling, general and administrative 7,864 5,919 24,323 16,806 $ 9,844 $ 7,356 $ 30,536 $ 21,075 purchases.periods was $78.9 million and is expected to be recognized over the remaining weighted average period of 2.7 years.Income TaxesINCOME TAXES
of (loss) income before income taxesThree Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Income (loss) before income taxes $ 5,590 $ (9,313) $ 7,420 $ (21,377) Provision for income taxes 2,428 840 4,391 2,092 Net income (loss) $ 3,162 $ (10,153) $ 3,029 $ (23,469) Provision for income taxes as a percentage of income (loss) before income taxes 43.4% (9.0%) 59.2 % (9.8 %) historically been calculated by applying an estimate of the annual effective income tax rate for the full year to "ordinary"“ordinary” income (loss) for the interim reporting period,period. In addition, the tax effects of certain significant or unusual items are recognized discretely in the quarter in which isthey occur. For the nine months ended September 30, 2023, the Company calculated as pre-taxthe income (loss) excluding unusual and infrequently occurring discrete items.tax provision using this methodology. For the nine months ended September 30, 2022, we calculated the income tax provision using a discrete effective income tax rate method was used as if the interim year to date period was an annual period. We determined that since normal changes in estimated "ordinary" income (loss) would result in disproportionate changes in the estimated annual effective income tax rate, the Company's historical method of calculating its income tax provision for interim reporting periods would not provide a reliable estimate for the nine months ended September 30, 2022.2022.17Inari Medical, Inc.Notes to Unaudited Condensed Consolidated Financial Statements2021,2022, the Company maintained a full valuation allowance of $17.9$30.3 million against the Company's net deferred tax assets. As of September 30, 2022,2023, the Company believes that the deferred tax assets are currently not considered more likely than not to be realized and, accordingly, has maintained a full valuation allowance against its deferred tax assets. The Company will continue to assess its position on the realizability of its deferred tax assets, until such time as sufficient positive evidence may become available to allow the Company to reach a conclusion that a significant portion of the valuation allowance will no longer be needed. Any release of the valuation allowance may result in a material benefit recognized in the quarter of release.20162019, December 31, 2018, and December 31, 2017 are open for federal and state, and federalforeign tax purposes, respectively.Retirement Plan$1.00$1.00 match for every $1.00$1.00 contributed by a participating employee up to the greater of $3,000$3,000 or 4%4% of eligible compensation under the plan, with such Company's contributions becoming fully vested immediately. Matching contribution expense was $1.7$2.0 million and $0.8$1.7 million for the three months ended September 30, 2023 and 2022, respectively, and 2021, and $6.2$6.9 million and $2.6$6.2 million for the nine months ended September 30, 2023 and 2022, respectively.2021, respectively. The Company recorded an out-of-period adjustment in the second quarter of 2022 resulting in additional matching contribution expense of $0.8 millionpotentially dilutive securities outstanding for the nine months ended September 30, 2022. period. For purposes of the diluted net income (loss) per share calculation, shares from common stock options, RSUs and ESPP are potentially dilutive securities. For the periods the Company is in a net loss position, basic net loss per share is the same as diluted net loss per share as the inclusion of all potential dilutive common shares would have been anti-dilutive.out-of-period adjustment was not considered material to the fiscal 2021 or fiscal 2022 annual consolidated financial statements.components of net income (loss) per share are as follows (in thousands, except per share amounts):Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Numerator: Net income (loss) $ 3,162 $ (10,153) $ 3,029 $ (23,469) Denominator: Weighted average number of common shares outstanding - basic 57,384,884 53,491,625 56,478,317 52,552,662 Common stock equivalents from outstanding options 1,102,642 — 1,173,190 — Common stock equivalents from unvested RSUs 94,531 — 832,873 — Common stock equivalents from ESPP 6,395 — 11,541 — Weighted average number of common shares outstanding - diluted 58,588,452 53,491,625 58,495,921 52,552,662 Net income (loss) per share: Basic $ 0.06 $ (0.19) $ 0.05 $ (0.45) Diluted $ 0.05 $ (0.19) $ 0.05 $ (0.45) 18Inari Medical, Inc.15. Net Income (Loss) Per ShareThe components of net income per share are as follows:
outstanding - basic
common stock options
outstanding - dilutedlossincome (loss) per share for the three and nine months ended September 30, 2022 and the three months ended September 30, 2021 due to their anti-dilutive effect:Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Common stock options 171,526 1,838,562 1,290,179 1,838,562 RSUs 555,468 3,694,930 1,332,500 3,694,930 726,994 5,533,492 2,622,679 5,533,492 Management’s Discussion and Analysis of Financial Condition and Results of Operations.2021,2022, included in our Annual Report on Form 10-K for the year ended December 31, 2021.2022. In addition to historical financial information, the following discussion contains forward-looking statements that are based upon current plans, expectations and beliefs that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021.Overviewa medical device company with acommitted to improving lives in extraordinary ways by creating innovative solutions for both unmet and underserved health needs. In addition to our purpose-built solutions, we leverage our capabilities in education, clinical research, and program development to improve patient outcomes. We are passionate about our mission to treatestablish our treatments as the standard of care for venous thromboembolism and transform the lives of patients suffering from venous and other diseases. beyond. We are just getting started.current product offeringssolutions (“products”) primarily consist of two minimally-invasive,our ClotTriever and FlowTriever systems, which are minimally invasive, novel, catheter-based mechanical thrombectomy systems whichthat are purpose-built for the specific characteristic of the venous system and the treatment of the two distinct manifestations of venous thromboembolism, or VTE - deep vein thrombosis, or DVT, and pulmonary embolism, or PE. Our ClotTriever productsystem is FDA-cleared for the treatment of DVT. OurDVT, and our FlowTriever productsystem is the first thrombectomy system FDA-cleared for the treatment of PE and is also FDA-cleared for clot in transit in the right atrium.We believe Our solutions also consist of our InThrill system, which is FDA-cleared for the best way to treat VTEremoval of thrombus from the peripheral vasculature and improvedesigned for smaller vessels, and our ProTrieve sheath, which is FDA-cleared for removal of thrombus from the qualityperipheral vasculature through aspiration. During the nine months ended September 30, 2023, we released the RevCore thrombectomy catheter, which is an FDA-cleared mechanical thrombectomy device for venous stent thrombosis, Triever 16 Curve catheter, which is FDA-cleared for PE and venous thrombus removal, and ClotTriever Bold catheter, which is FDA-cleared for DVT and the removal of life of patients suffering from this disease is to safelyacute and effectively removechronic clots in the blood clot. With that in mind,peripheral vasculature. In addition, we designed and purpose-built ourreleased ClotTriever and FlowTriever systems. The ClotTrieverXL, which is a mechanical thrombectomy system designed to core, capture and remove large clots from large vessels and is used to treat DVT. The FlowTriever is a large bore catheter-based aspiration and mechanical thrombectomy system designed to remove large clots from large vessels to treat PE. Both systems are designed to eliminate the needpurpose-built FDA-cleared catheter for thrombolytic drugs.We believe our mission-focused and highly-trained commercial organization provides a significant competitive advantage. Our most important relationships are between our sales representatives and our treating physicians, which include interventional cardiologists, interventional radiologists and vascular surgeons. We recruit sales representatives who have substantial and applicable medical device and/or sales experience. Our front-line sales representatives typically attend procedures, which puts us at the intersection of the patients, products and physicians. We have developed systems and processes to harness the information gained from these relationships and we leverage this information to rapidly iterate products, introduce and execute physician education and training programs and scale our sales organization. We market and sell our products to hospitals, which are reimbursed by various third-party payors.2022,2023, we had cash, cash equivalents, and short-term investments of $319.2$351.3 million, no long-term debt outstanding and an accumulated deficit of $41.1$43.8 million.2022, the Company2023, we generated $96.2$126.4 million in revenues with a gross margin of 88.5% and net income of $3.2 million, as compared to revenues of $96.2 million with a gross margin of 88.5% and net loss of $10.2 million as compared to revenues of $72.9 million with a gross margin of 90.3% and net loss of $2.8 million for the three months ended September 30, 2021.2022, the Company2023, we generated $275.7$361.5 million in revenues with a gross margin of 88.4% and net income of $3.0 million, as compared to revenues of $275.7 million with a gross margin of 88.6% and net loss of $23.5 million as compared to revenues of $193.8 million with a gross margin of 91.5% and net income of $8.7 million for the nine months ended September 30, 2021.2022.COVID-19The global healthcare system continues to face an unprecedented challenge as a resultTable of the COVID-19 situation and its impact. COVID-19 may continue to have an adverse impact on aspects of our business, including the demand for our products, operations, and ability to research and develop and bring new products and services to market.ContentsIn response to the impact of COVID-19, we implemented a variety of measures to help manage through the impact and position us to keep operations running efficiently. However, with hospitals facing staff or other resource constraints, to the extent individuals and hospital systems de-prioritize, delay or cancel deferrable medical procedures, our business, cash flows, financial condition and results of operations may continue to be negatively affected.The actual and perceived impact of COVID-19 is still evolving and cannot be predicted. As a result, we cannot assure you that our recent procedure volumes are indicative of future results or that we will not experience additional negative impacts associated with COVID-19 or staffing shortages, which could be significant.continue to focus our efforts on the health and safety of patients, healthcare providers and employees, while executing our mission of transforming lives of patients. While the COVID-19 pandemic20may continue to negatively impact our 2022 performance, we believe the long-term fundamentals remain strong and we will continue to effectively manage through these challenges.RevenueWe currently derivederived substantially all our revenue from the sale of our ClotTriever and FlowTriever systems directly to hospitals primarily located in the United States. Our customers typically purchase our products through an initial stocking order, of our products and then reorder replenishment inventory as procedures are performed. No single customer accounted for 10% or more of our revenue during the three and nine months ended September 30, 2023 and 2022. We expect our revenue to increase in absolute dollars as we expand our offerings globally, grow our sales organization and sales territories, add customers, expand the base of physicians that are trained to use our products, expand awareness of our products with new and existing customers and as physicians perform more procedures using our products.forfrom ClotTriever and other systems and FlowTriever systemssystem as a percentage of total revenue is as follows:Critical Accounting Policies and EstimatesOther than the accounting policy changes discussed in "Note 2 - Summary of Significant Accounting Policies" to our condensed consolidated financial statements, which is included in "Part I, Item 1. Condensed Consolidated Financial Statements (Unaudited)", there have been no significant changes in our critical accounting policies during the nine months ended September 30, 2022, as compared to the critical accounting policies disclosed in Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 23, 2022.Results of OperationsThree Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 ClotTriever and other systems 32 % 31 % 34 % 32 % FlowTriever system 68 % 69 % 66 % 68 % 20222023 and 2021Three Months Ended September 30, Change $ 2023 % 2022 % Revenue $ 126,366 100.0 % $ 96,204 100.0 % $ 30,162 Cost of goods sold 14,477 11.5 % 11,064 11.5 % 3,413 Gross profit 111,889 88.5 % 85,140 88.5 % 26,749 Operating expenses Research and development 21,492 17.0 % 19,105 19.9 % 2,387 Selling, general and administrative 88,284 69.9 % 75,833 78.8 % 12,451 Total operating expenses 109,776 86.9 % 94,938 98.7 % 14,838 Income (loss) from operations 2,113 1.6 % (9,798) (10.2) % 11,911 Other income (expense) Interest income 4,202 3.3 % 618 0.6 % 3,584 Interest expense (43) — % (74) (0.1) % 31 Other expense (682) (0.5) % (59) (0.1) % (623) Total other income 3,477 2.8 % 485 0.4 % 2,992 Income (loss) before income taxes 5,590 4.4 % (9,313) (9.8) % 14,903 Provision for income taxes 2,428 1.9 % 840 0.9 % 1,588 Net income (loss) $ 3,162 2.5 % $ (10,153) (10.7) % $ 13,315 $23.3$30.2 million, or 31.9%31.4%, to $126.4 million during the three months ended September 30, 2023, compared to $96.2 million during the three months ended September 30, 2022, compared to $72.9 million during the three months ended September 30, 2021.2022. The increase in revenue was primarily due primarily to an increase in the number of product offerings and the number of unitsproducts sold as we expanded our sales territories, opened new accounts and achieved deeper penetration of our products into existing accounts.accounts, and introduced new products.$4.0$3.4 million, or 57.2%30.8%, to $14.5 million during the three months ended September 30, 2023, compared to $11.1 million during the three months ended September 30, 2022, compared to $7.0 million during the three months ended September 30, 2021.2022. This increase was primarily due to the increase in the number of products sold and additional manufacturing overhead costs incurred as we invested significantly in our new facility and operational infrastructure to support ouranticipated future growth.21decreasedremained flat at 88.5%.88.5%, compared to 90.3% for$21.5 million during the three months ended September 30, 2021, primarily due to the costs associated with the addition of new products to our FlowTriever per procedure pricing model.Research and Development Expenses. R&D expenses increased $6.6 million, or 52.9%,2023, compared to $19.1 million during the three months ended September 30, 2022, compared to $12.5 million during the three months ended September 30, 2021.2022. The increase in R&D expenses was primarily due to increases of $5.1$1.5 million of material and supplies related expenses and $0.8 million of personnel-related expenses, $0.9 million in materials and supplies, and $0.5 million of clinical and regulatory expenses, in support of our growth drivers to develop new products and build the clinical evidence base.expenses.$19.7$12.5 million, or 35.2%16.4%, to $88.3 million during the three months ended September 30, 2023, compared to $75.8 million during the three months ended September 30, 2022, compared to $56.1 million during the three months ended September 30, 2021.2022. The increase in SG&A costsexpenses was primarily due to increases of $12.5$9.7 million in personnel-related expenses as a result of increased headcount across our organization and increased commissions due to higher revenue, $2.1$3.0 million of expenses related to professional fees, $0.6 million of material and supplies related expenses, and $0.3 million of facilities-related expenses, partially offset by decreases of $0.8 million in travelsales and marketing related expenses, $1.5and $0.4 million in marketingof expenses $1.5 million in professional fees, and $1.1 million in facility related expenses, particularly related to our new facility.insurance costs.by$3.6 million to $4.2 million during the three months ended September 30, 2023, compared to $0.6 million during the three months ended September 30, 2022, compared to the three months ended September 30, 2021.2022. The increase in interest income was primarily due to higheran increase in interest rate and higherrates as well as an increase in the average cash, cash equivalent andbalance of our short-term investments balances during the three months ended September 30, 20222023 compared to the three months ended September 30, 2021.2022.was consistent withdecreased to $43,000 during the three months ended September 30, 2023, compared to $74,000 during the three months ended September 30, 2022.comparedrespectively. The increase in other expense was primarily due to $73,000an impairment loss related to our strategic investment of $0.6 million, and foreign currency transaction losses.2021.Other Income (Expense). Other expense of $59,0002023, compared to $0.8 million during the three months ended September 30, 2022. The increase in income taxes primarily relates to an increase in the current year U.S. federal and state income taxes due to an increase in the U.S. pre-tax book income for the three months ended September 30, 2022 consisted primarily2023.20222023 and 2021Nine Months Ended September 30, Change $ 2023 % 2022 % Revenue $ 361,538 100.0 % $ 275,700 100.0 % $ 85,838 Cost of goods sold 42,062 11.6 % 31,378 11.4 % 10,684 Gross profit 319,476 88.4 % 244,322 88.6 % 75,154 Operating expenses Research and development 64,641 17.9 % 53,809 19.5 % 10,832 Selling, general and administrative 259,570 71.8 % 212,721 77.2 % 46,849 Total operating expenses 324,211 89.7 % 266,530 96.7 % 57,681 Loss from operations (4,735) (1.3 %) (22,208) (8.1 %) 17,473 Other income (expense) Interest income 12,899 3.6 % 882 0.3 % 12,017 Interest expense (127) — % (220) (0.1 %) 93 Other (expense) income (617) (0.2 %) 169 0.1 % (786) Total other income 12,155 3.4 % 831 0.3 % 11,324 Income (loss) before income taxes 7,420 2.1 % (21,377) (7.8 %) 28,797 Provision for income taxes 4,391 1.2 % 2,092 0.8 % 2,299 Net income (loss) $ 3,029 0.9 % $ (23,469) (8.6 %) $ 26,498 $81.9$85.8 million, or 42.3%31.1%, to $361.5 million during the nine months ended September 30, 2023, compared to $275.7 million during the nine months ended September 30, 2022, compared to $193.8 million during the nine months ended September 30, 2021.2022. The increase in revenue was due primarily to an increase in the number of product offerings and the number of unitsproducts sold as we expanded our sales territories, opened new accounts and achieved deeper penetration of our products into existing accounts.accounts, and introduced new products.$14.9$10.7 million, or 90.4%34.0%, to $42.1 million during the nine months ended September 30, 2023, compared to $31.4 million during the nine months ended September 30, 2022, compared to $16.5 million during the nine months ended September 30, 2021.2022. This increase was primarily due to the increase in the number of products sold and additional manufacturing overhead costs incurred as we invested significantly in our new facility and operational infrastructure to support ouranticipated future growth.20222023 decreased to 88.6%88.4%, compared to 91.5%88.6% for the nine months ended September 30, 2021,2022, primarily due to the increase in costs associated with the addition of new products tocomponents offered under our FlowTriever per procedure pricing model.system price, partially offset by manufacturing efficiencies.22$21.5$10.8 million, or 66.6%20.1%, to $64.6 million during the nine months ended September 30, 2023, compared to $53.8 million during the nine months ended September 30, 2022, compared to $32.3 million during the nine months ended September 30, 2021.2022. The increase in R&D expenses was primarily due to increases of $15.0$6.4 million of personnel-related expenses, $3.7$4.0 million in materialsof material and supplies $1.2related expenses, $0.9 million of clinical and regulatory expenses, and $0.9$0.3 million in software costs and depreciation expenses in support of our growth drivers to develop new products and build the clinical evidence base.base, partially offset by a decrease of $1.1 million of expenses related to professional fees.$76.8$46.8 million, or 56.5%22.0%, to $259.6 million during the nine months ended September 30, 2023, compared to $212.7 million during the nine months ended September 30, 2022, compared to $135.9 million during the nine months ended September 30, 2021.2022. The increase in SG&A costsexpenses was primarily due to increases of $51.3$42.2 million in personnel-related expenses as a result of increased headcount across our organization and increased commissions due to higher revenue, $6.9$2.8 million of expenses related to professional fees, $1.9 million in travel and related expenses, $6.3$1.6 million in marketing expenses, $5.4of materials and supplies, $0.7 million in professional fees, $3.4 million in facility related expenses, particularly related to our new facility,facilities-related expenses, and $2.3$0.6 million in ofby $0.8$12.0 million or 578.5%to $12.9 million during the nine months ended September 30, 2023, compared to $0.9 million during the nine months ended September 30, 2022, compared to $0.1 million during the nine months ended September 30, 2021.2022. The increase in interest income was primarily due to higheran increase in interest rate and higherrates as well as an increase in the average cash, cash equivalent andbalance of our short-term investments balances during the nine months ended September 30, 20222023 compared to the nine months ended September 30, 2021.2022.was consistent withdecreased to $127,000 during the nine months ended September 30, 2023, compared to $220,000 during the nine months ended September 30, 2022 and the nine months ended September 30, 2021.2022.income (Expenses)(Expense) Income. Other expense was $0.6 million and other income of $169,000was $0.2 million for the nine months ended September 30, 2023 and September 30, 2022, consistedrespectively. The change in other (expense) income was primarily due to an impairment loss related to our strategic investment of $0.6 million, and foreign currency transaction gains.losses.LiquidityIncome Taxes. Income taxes increased $2.3 million to $4.4 million for the nine months ended September 30, 2023, compared to $2.1 million during the nine months ended September 30, 2022. The increase in the income taxes primarily relates to an increase in the current year U.S. federal and Capital Resourcesstate income taxes due to an increase in the U.S. pre-tax book income for the nine months ended September 30, 2023.On May 27, 2020, we completed our IPO and sold 9,432,949 shares of our common stock at $19.00 per share. Upon completion of our IPO, we received net proceeds of approximately $163.0 million, after deducting underwriting discounts and commissions and offering expenses. In March 2022, we completed a Follow-On Offering and sold 2,300,000 shares of our common stock at $81.00 per share, for net proceeds of approximately $174.4 million, after deducting underwriting discounts and commissions and offering expenses. In September 2020, we entered into a revolving Credit Agreement with Bank of America which provides for loans up to a maximum of $30.0 million. As of September 30, 2022,2023, we had cash and cash equivalents of $83.5$89.2 million and short-term investments in debt securities of $235.7$262.1 million. We maintain cash and cash equivalents with financial institutions in excess of insured limits.an accumulated deficit of $41.1increase the optional accordion to $120.0 million. As of September 30, 2022,2023, we had no principal outstanding under the Amended Credit Agreement and the amount available to borrow was approximately $28.0$37.6 million. The Amended Credit Agreement also includes a LC Facility of up to $5.0 million. In February 2023, we amended the LC Facility to increase the limit to up to $10.0 million. The aggregate stated amount outstanding of letters of credit reduces the total borrowing base available under the Amended Credit Agreement and is subject to certain fees. As of September 30, 2023, we had four letters of credit in the aggregated amount of $2.4 million outstanding under the LC Facility. For additional information about the Amended Credit Agreement, see note expectanticipate that our cash and cash equivalents, short-term investments and available borrowings along with cash flow from operations,under our Amended Credit Agreement will be adequate ussufficient to fund these cash requirements and our operating expenses for at least the next 12 months. Our primary short-term needs for capital for our current planned operations, which are subject to change, include:Cash Flows23Nine Months Ended September 30, 2023 2022 Net cash provided by (used in): Operating activities $ 23,686 $ (25,227) Investing activities 1,698 (161,969) Financing activities 3,581 178,827 Effect of foreign exchange rate changes on cash and cash equivalents (5) (855) Net increase (decrease) in cash and cash equivalents $ 28,960 $ (9,224) Cash (Used in) Providedcash used in operating activitiesOperating Activitiesdecreasenet change in our net operating assets and liabilities of $28.5 million, offset by non-cash charges of $26.8 million. The decreasechange in our net operating assets and liabilities was primarily due to decreases in accounts payable and accrued liabilities of $1.0 million due to timing of payments and growth of our operations, lease prepayments for lessor's owned leasehold improvements of $4.5 million and a decrease in operating lease liabilities of $0.6 million, coupled with increases in accounts receivable of $12.2 million, inventories of $8.7 million, and prepaid and other assets of $1.5 million, in addition to a decrease in lease prepayments for lessor’s owned leaseholdoperatinginvesting activities for the nine months ended September 30, 20212023 was $10.5$1.7 million, consisting primarily of net incomepurchases of $8.7$394.5 million of short-term investments, $3.8 million of property and non-cash chargesequipment, and $0.6 million of $23.7 million,other investments, offset by an increase in net operating assetsmaturities of $21.9short-term investments of $400.6 million. The increase in net operating assets was primarily due to increases in accounts receivable of $10.9 million and inventories of $8.9 million to support the growth of our operations, an increase in prepaid and other assets of $4.5 million primarily from prepaid insurance, which were partially offset by increases in accounts payable of $2.0 million and accrued liabilities of $12.9 million due to timing of payments and growth of our operations, lease prepayments for lessor's owned leasehold improvements of $12.0 million and a decrease in operating lease liabilities of $0.6 million. The non-cash charges primarily consisted of $20.9 million in stock-based compensation expense, $2.1 million in depreciation, and $0.5 million in amortization of the right-of-use assets.Net Cash Used in Investing Activities purchases of short-term investments, $5.7 million purchases of other investments, and $8.2 million purchases of property and equipment, offset by maturities of short-term investments of $184.0 million.usedprovided by financing activities investing activities for the nine months ended September 30, 20212023 was $48.4$3.6 million, consisting of $105.4$9.9 million purchases of marketable securities coupled with $10.9proceeds from the issuance of common stock under our employee stock purchase plan and $0.5 million purchases of property and equipment,proceeds from the exercise of stock options, offset by maturities$6.9 million of short-term investments of $68.0 million.Net Cash Provided by Financing ActivitiesNet cash provided by financing activities to our condensed consolidated financial statements, which is included in “Part I, Item 1. Condensed Consolidated Financial Statements (Unaudited)”, there have been no significant changes in our critical accounting policies during the nine months ended September 30, 2021 was $4.7 million, consisting of proceeds of $5.6 million in proceeds from2023, as compared to the issuance of common stock under our employee stock purchase plan and $0.7 million of proceeds from exercise of stock options, offset by $1.6 million of tax payments related to vested RSUs.Off-Balance Sheet ArrangementsWe do not have any off-balance sheet arrangements, as defined by applicable regulations of the U.S. Securities and Exchange Commission, that are reasonably likely to have a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.Contractual Obligations and CommitmentsThere have been no material changes to our quantitative and qualitative disclosures about market risk from thosecritical accounting policies disclosed in “Part II, Item 7. QuantitativeManagement's Discussion and Qualitative Disclosures about Market Risk”Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2021.2022, filed with the SEC on February 27, 2023.2021,2022, filed with the SEC on February 23, 202227, 2023 under “Part II, Item 7. Quantitative and Qualitative Disclosures about Market Risk.”2022.2023. Based on such evaluation, our Principal Executive OfficeOfficer and Principal Financial Officer concluded that, as of September 30, 2022,2023, these disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act, is24withwithin the time periodperiods specified in the SEC rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management.Changes in internal control over financial reportingDuring the three months ended September 30, 2022, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act), that have materially affected, or are reasonably likelymanagement as appropriate to materially affect, our internal control over financial reporting.Inherent limitations on effectiveness of controls and proceduresII—II — OTHER INFORMATIONLegal Proceedings.Risk Factors."Part“Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021.2022. As of the date of this Report, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.Unregistered Sales of Equity Securities and Use of Proceeds.Defaults Upon Senior Securities.Mine Safety Disclosures.Other Information.OTHER INFORMATIONExhibits.Exhibit Number Description Incorporated by reference Form File Number Exhibit Filing Date 3.1 8-K 001-39293 3.1 5/28/2020 3.2 8-K 001-39293 3.2 5/28/2020 10.1# 8-K 001-39293 10.1 9/22/2023 10.2# 8-K 001-39293 10.2 9/22/2023 10.3# 8-K 001-39293 10.3 9/22/2023 31.1 31.2 32.1† 32.2† 101.INS Inline XBRL Instance Document - The instance document does not appear in the interactive data file because its EBRL tags are embedded within the inline XBRL document. 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page with Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101). 2, 2022William HoffmanAndrew HykesWilliam Hoffman
(Principal Executive Officer)2, 2022
(Principal Financial Officer and
Principal Accounting Officer)28