UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2023~~2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________to ___________

Commission File Number: 001-39293

Inari Medical, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware			45-2902923
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

6001 Oak Canyon, Suite 100 Irvine, California			92618
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (877) 923-4747

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
Symbol(s)

Name of each exchange on which registered

Common stock, $0.001 par value per share

NARI

The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April ~~28, 2023,~~26, 2024, the registrant had ~~57,172,042~~58,138,159 shares of common stock, $0.001 par value per share, outstanding.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)	4
	Condensed Consolidated Statements of Stockholders’ Equity	5
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2227
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2632
Item 4.	Controls and Procedures	2632
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	2833
Item 1A.	Risk Factors	2833
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2833
Item 3.	Defaults Upon Senior Securities	2833
Item 4.	Mine Safety Disclosures	2833
Item 5.	Other Information	2833
Item 6.	Exhibits	2934
Signatures		3035

Table of Contents

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to substantial risks and uncertainties.We intend such forward-looking statements contained in this Quarterly Report to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical facts contained in this Quarterly Report are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “would,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,”“may”, “will”, “would”, “should”, “expects”, “plans”, “anticipates”, “could”, “intends”, “targets”, “projects”, “contemplates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words. ~~All~~Forward-looking statements ~~other than statements of historical fact~~ contained in this Quarterly Report ~~including without limitation~~include, but are not limited to statements regarding our ~~business model~~future results of operations and ~~strategic~~financial position, plans for our products, ~~technologies~~expectations regarding our recent acquisition of LimFlow S.A., the impact of macroeconomic conditions, industry and business ~~including our implementation thereof, the impact on our business, financial condition and results of operations from macroeconomic conditions, the timing of~~trends, and our ~~ability to obtain~~expectations regarding stock compensation, business strategy, plans, market growth, regulatory climate, competitive landscape and ~~maintain regulatory approvals,~~ our commercialization, marketing and manufacturing capabilities and strategy, our expectations about the commercial success and market acceptance of our products, the sufficiency of our cash, cash equivalents and short-term investments, and the plans and objectives ~~of management~~ for future operations ~~and capital expenditures are forward-looking statements.~~.

The forward-looking statements in this Quarterly Report are only ~~predictions and are~~predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of ~~operations, business strategy, short-term~~operations. Forward-looking statements involve known and ~~long-term business operations~~unknown risks and ~~objectives, and financial needs. These forward-looking statements speak only as of the date of this Quarterly Report~~uncertainties, and are subject to ~~a number of known and unknown risks, uncertainties, and assumptions,~~other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, those ~~described under the sections~~factors discussed in ~~this Quarterly Report entitled~~Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, as such risks and ~~“Management’s Discussion~~uncertainties may be amended, supplemented or superseded from time to time by our subsequent reports on Forms 10-Q and ~~Analysis~~10-K we file with the United States Securities and Exchange Commission. We qualify all of ~~Financial Condition and Results of Operations” and elsewhere in this Quarterly Report.~~our forward-looking statements by these cautionary statements. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. ~~In light of these risks, uncertainties, and assumptions, the future events and trends discussed~~

The forward-looking statements in this Quarterly Report on Form 10-Q are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not ~~occur and actual results could differ materially and adversely from those anticipated~~be read to indicate that we have conducted an exhaustive inquiry into, or ~~implied in the forward-looking statements.~~

~~Because forward-looking~~review of, all potentially available relevant information. These statements are inherently ~~subject~~uncertain and investors are cautioned not to ~~risks and uncertainties, some of which cannot be predicted or quantified, you should not~~unduly 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 of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (Unaudited).

INARI MEDICAL, INC.

Condensed Consolidated Balance Sheets

(in thousands, except share data and par value)

(unaudited)


		March 31, 2023		December 31, 2022
	March 31, 2024						March 31, 2024	December 31, 2023
Assets	Assets
Current assets	Current assets
Current assets
Current assets
Cash and cash equivalents	Cash and cash equivalents	$	56,562	$	60,222
Cash and cash equivalents
Cash and cash equivalents
Restricted cash
Short-term investments in debt securities	Short-term investments in debt securities	271,884		266,179
Accounts receivable, net	Accounts receivable, net	55,719		58,611
Inventories, net	Inventories, net	36,499		32,581
Prepaid expenses and other current assets	Prepaid expenses and other current assets	4,942		5,312
Total current assets	Total current assets	425,606		422,905
Property and equipment, net	Property and equipment, net	21,245		21,655
Operating lease right-of-use assets	Operating lease right-of-use assets	50,599		50,703
Goodwill
Intangible assets
Deposits and other assets	Deposits and other assets	9,084		8,889

Total assets	Total assets	$	506,534	$	504,152
Total assets
Total assets
Liabilities and Stockholders' Equity	Liabilities and Stockholders' Equity
Current liabilities	Current liabilities
Current liabilities
Current liabilities
Accounts payable
Accounts payable
Accounts payable	Accounts payable	$	7,352	$	7,659
Payroll-related accruals	Payroll-related accruals	28,443		38,955
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	11,018		8,249
Operating lease liabilities, current portion	Operating lease liabilities, current portion	1,527		1,311
Total current liabilities	Total current liabilities	48,340		56,174
Operating lease liabilities, noncurrent portion	Operating lease liabilities, noncurrent portion	31,458		30,976

Deferred tax liability
Other long-term liability
Total liabilities	Total liabilities	79,798		87,150
Commitments and contingencies (Note 7)
Commitments and contingencies (Note 9)						Commitments and contingencies (Note 9)
Stockholders' equity	Stockholders' equity
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of March 31, 2023 and December 31, 2022		—		—
Common stock, $0.001 par value, 300,000,000 shares authorized as of March 31, 2023 and December 31, 2022; 57,083,716 and 54,021,656 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively		57		54
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of March 31, 2024 and December 31, 2023
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of March 31, 2024 and December 31, 2023
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of March 31, 2024 and December 31, 2023
Common stock, $0.001 par value, 300,000,000 shares authorized as of March 31, 2024 and December 31, 2023; 58,001,145 and 57,762,414 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively
Additional paid in capital	Additional paid in capital	475,754		462,949
Accumulated other comprehensive (loss) income		(7)		849
Accumulated other comprehensive income
Accumulated deficit	Accumulated deficit	(49,068)		(46,850)
Total stockholders' equity	Total stockholders' equity	426,736		417,002
Total liabilities and stockholders' equity	Total liabilities and stockholders' equity	$	506,534	$	504,152

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

Table of Contents

INARI MEDICAL, INC.

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(in thousands, except share and per share data)

(unaudited)

Three Months Ended March 31,

2023

2022

Three Months Ended March 31,

2024

Revenue

116,167

86,752

Cost of goods sold

13,741

9,967

Cost of goods sold

Gross profit

102,426

76,785

Operating expenses

Research and development

22,064

16,135

Selling, general and administrative

85,700

63,732

Selling, general and administrative

Change in fair value of contingent consideration

Amortization of intangible asset

Acquisition-related expenses

Total operating expenses

107,764

79,867

Loss from operations

(5,338)

(3,082)

Loss from operations

Other income (expense)

Interest income

4,145

Interest income

Interest expense

(40)

(73)

Other income (expense)

(24)

Total other income (expense)

4,144

(47)

Interest expense

Other (expense) income

Total other income

Loss before income taxes

(1,194)

(3,129)

Provision for income taxes

1,024

—

Provision for income taxes

Net loss

(2,218)

(3,129)

Other comprehensive income (loss)

Foreign currency translation adjustments

(117)

Unrealized loss on available-for-sale debt securities

(865)

(248)

Unrealized loss on available-for-sale debt securities

Total other comprehensive loss

(856)

(365)

Comprehensive loss

(3,074)

(3,494)

Comprehensive loss

Net loss per share

Basic

(0.04)

(0.06)

Basic

Diluted

(0.04)

(0.06)

Weighted average common shares used to compute net loss per share

Basic

54,756,024

50,954,715

Diluted

54,756,024

50,954,715

Diluted

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

Table of Contents

INARI MEDICAL, INC.

Condensed Consolidated Statements Stockholders’ Equity

(in thousands, except share data)

(unaudited)


		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
	Common Stock																Common Stock	Additional Paid In Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit	Total Stockholders' Equity
	Shares
Balance, December 31, 2023
Balance, December 31, 2023
Balance, December 31, 2023
Options exercised for common stock	Options exercised for common stock	209,966	—		226				—		—		226
Shares issued under Employee Stock Purchase Plan	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)

Issuance of common stock upon vesting of equity awards, net of shares withheld for taxes
Share-based compensation expense	Share-based compensation expense	—	—		10,339				—		—		10,339
Other comprehensive loss	Other comprehensive loss	—	—		—				(856)		—		(856)
Net loss	Net loss	—	—		—				—		(2,218)		(2,218)
Balance, March 31, 2023		57,083,716	$	57	$	475,754			$	(7)	$	(49,068)	$	426,736
Balance, March 31, 2024

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

Table of Contents

INARI MEDICAL, INC.

Condensed Consolidated Statements Stockholders’ Equity

(in thousands, except share data)

(unaudited)


		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
	Common Stock																Common Stock	Additional Paid In Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit	Total Stockholders' Equity
	Shares
Balance, December 31, 2022
Balance, December 31, 2022
Balance, December 31, 2022
Options exercised for common stock	Options exercised for common stock	322,882	1		344				—		—		345
Shares issued under Employee Stock Purchase Plan	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
Issuance of common stock upon vesting of equity awards, net of shares withheld for taxes

Share-based compensation expense
Share-based compensation expense
Share-based compensation expense	Share-based compensation expense	—	—		6,555				—		—		6,555
Other comprehensive loss	Other comprehensive loss	—	—		—				(365)		—		(365)
Net loss	Net loss	—	—		—				—		(3,129)		(3,129)
Balance, March 31, 2022		53,022,905	$	53	$	440,238			$	(767)	$	(20,712)	$	418,812
Balance, March 31, 2023

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

Table of Contents

INARI MEDICAL, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


		Three Months Ended March 31,
		2023		2022
	Three Months Ended March 31,						Three Months Ended March 31,
	2024					2024		2023
Cash flows from operating activities	Cash flows from operating activities
Net loss	Net loss	$	(2,218)	$	(3,129)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation		1,348		1,063
Net loss
Net loss
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
Depreciation and amortization
Depreciation and amortization
Amortization of deferred financing costs	Amortization of deferred financing costs	8		36
Amortization of right-of-use assets	Amortization of right-of-use assets	1,625		604

Share-based compensation expense	Share-based compensation expense	10,339		6,555
Share-based compensation expense
Share-based compensation expense

Allowance for credit losses, net
Allowance for credit losses, net
Allowance for credit losses, net	Allowance for credit losses, net	91		79
Loss on disposal of fixed assets	Loss on disposal of fixed assets	26		—
Amortization of premium and discount on marketable securities	Amortization of premium and discount on marketable securities	(3,810)		—
Change in fair value of contingent consideration liability

Changes in:	Changes in:
Changes in:
Changes in:
Accounts receivable
Accounts receivable
Accounts receivable	Accounts receivable	2,827		(2,695)
Inventories	Inventories	(3,825)		(2,788)
Prepaid expenses, deposits and other assets	Prepaid expenses, deposits and other assets	504		261
Accounts payable	Accounts payable	(317)		(467)
Payroll-related accruals, accrued expenses and other liabilities	Payroll-related accruals, accrued expenses and other liabilities	(7,787)		(6,247)
Operating lease liabilities	Operating lease liabilities	(366)		(2,097)
Lease prepayments for lessor's owned leasehold improvements	Lease prepayments for lessor's owned leasehold improvements	(458)		(275)
Net cash used in operating activities	Net cash used in operating activities	(2,013)		(9,100)
Cash flows from investing activities	Cash flows from investing activities
Purchases of property and equipment	Purchases of property and equipment	(964)		(2,745)
Purchases of property and equipment
Purchases of property and equipment
Purchases of marketable securities	Purchases of marketable securities	(122,054)		(112,073)
Maturities of marketable securities	Maturities of marketable securities	119,300		47,000
Purchases of other investments	Purchases of other investments	(325)		(5,693)
Net cash used in investing activities		(4,043)		(73,511)

Capitalized software development costs
Capitalized software development costs
Capitalized software development costs
Net cash provided by (used in) investing activities
Cash flows from financing activities	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
Proceeds from issuance of common stock under employee stock purchase plan
Proceeds from issuance of common stock under employee stock purchase plan	Proceeds from issuance of common stock under employee stock purchase plan	4,172		3,427
Proceeds from exercise of stock options	Proceeds from exercise of stock options	226		345
Payment of taxes related to vested restricted stock units		(1,932)		(1,624)
Payment of taxes related to vested equity awards
Net cash provided by financing activities	Net cash provided by financing activities	2,466		176,542
Effect of foreign exchange rate on cash and cash equivalents		(70)		(127)
Net (decrease) increase in cash and cash equivalents		(3,660)		93,804
Cash and cash equivalents beginning of period		60,222		92,752
Cash and cash equivalents end of period		$	56,562	$	186,556
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash
Net increase (decrease) in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash beginning of period
Cash, cash equivalents and restricted cash end of period

Supplemental disclosures of cash flow information:
Cash paid for income taxes		$	104	$	89
Cash paid for interest		$	32	$	37
Noncash investing and financing:
Lease liabilities arising from obtaining new right-of-use assets		$	1,030	$	—

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

Table of Contents

INARI MEDICAL, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

1. ORGANIZATION

Description of Business

Inari Medical, Inc. (the “Company”) was incorporated in Delaware in July 2011 and is headquartered in Irvine, California. The Company purpose builds and markets a variety of medical products, including minimally invasive, novel, catheter-based mechanical thrombectomy systems for the unique characteristics of specific disease states.

On November 15, 2023, the Company acquired LimFlow S.A. (“LimFlow”), a medical device company focused in limb salvage for patients with chronic limb-threatening ischemia (CLTI). LimFlow focuses on transforming the treatment of CLTI, an advanced stage of peripheral artery disease that is associated with increased mortality, risk of amputation and impaired quality of life.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and include the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

The interim condensed consolidated balance sheet as of March 31, ~~2023,~~2024 and the condensed consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for the three months ended March 31, ~~2023~~2024 and ~~2022~~2023 are unaudited. The consolidated balance sheet as of December 31, 2023 included herein was derived from the audited consolidated financial statements as of that date. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for the fair presentation of the Company’s condensed consolidated financial position as of March 31, ~~2023~~2024 and its consolidated results of operations and cash flows for the three months ended March 31, ~~2023~~2024 and ~~2022.~~2023. The financial data and the other financial information disclosed in the notes to the condensed consolidated financial statements related to the three months ended March 31, ~~2023~~2024 and ~~2022~~2023 are also unaudited. The condensed consolidated results of operations for any interim period are not necessarily indicative of the results to be expected for the full year or for any other future annual or interim period. ~~The consolidated balance sheet as of December 31, 2022 included herein was derived from the audited consolidated financial statements as of that date.~~ These interim condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2022 filed on February 27,~~ 2023.

Management Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates and assumptions made in the accompanying condensed consolidated financial statements may include, but are not limited to, contingent consideration liability, collectability of receivables, recoverability of long-lived assets, valuation of inventory, operating lease right-of-use (“ROU”) assets and liabilities, other investments, fair value of stock options, recoverability of net deferred tax assets and related valuation allowance, and certain accruals. Estimates are based on historical experience and on various assumptions that the Company believes are reasonable under current circumstances. Actual results could differ materially from those estimates. Management periodically evaluates such estimates and assumptions, and they are adjusted prospectively based upon such periodic evaluation.

Table of Contents

INARI MEDICAL, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to

~~Table of Contents~~

~~INARI MEDICAL, INC.~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation.

The Company sells its products primarily to hospitals in the United States ~~utilizing the Company’s~~through its direct sales ~~force.~~force and also sells its products directly and through distributors in select international markets. The Company recognizes revenue for arrangements where the Company has satisfied its performance obligation of shipping or delivering the product. For sales where the Company’s sales ~~representative~~representatives hand-deliver products directly to the hospitals, control of the products transfers to the customers upon such ~~hand delivery.~~hand-delivery. For sales where products are shipped, control of the products transfers either upon shipment or delivery of the products to the customer, depending on the shipping terms and conditions. Revenue from product sales is comprised of product revenue, net of product returns, discounts, administrative fees and sales rebates. The Company has elected to account for shipping and handling activities that occur after the customer has obtained control as a fulfillment activity, and not a separate performance obligation.

Performance Obligation—The Company has revenue arrangements that consist of a single performance obligation, the shipping or delivery of the Company’s products. The satisfaction of this performance obligation occurs with the transfer of control of the Company’s product to its customers, either upon shipment or delivery of the product.

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods. The amount of revenue recognized is based on the transaction price, which represents the invoiced amount, net of discounts, administrative fees and sales rebates, where applicable. The Company provides a standard 30-day unconditional right of return period. The Company establishes estimated provisions for returns at the time of sale based on historical experience. Historically, the actual product returns have been immaterial to the Company’s condensed consolidated financial statements.

As of March 31, ~~2023~~2024 and December 31, ~~2022,~~2023, the Company recorded ~~$876,000~~$1.0 million and ~~$1,218,000,~~$1.2 million, respectively, of unbilled receivables, which are included in accounts receivable, net, in the accompanying condensed consolidated balance sheets.

The Company disaggregates revenue ~~by product. Revenue for~~between Venous Thromboembolism (“VTE”) and Emerging Therapies. VTE comprises revenue from the sale of the Company’s ClotTriever and ~~other systems~~FlowTriever systems. Emerging Therapies comprises revenues from the sale of the Company’s solutions addressing chronic venous disease, CLTI, small vessel thrombosis and ~~FlowTriever system as a percentage of total revenue~~arterial thromboembolism. Revenue from VTE and Emerging Therapies is as ~~follow:~~follows (in thousands):

Three Months Ended March 31,
2023 2022
ClotTriever and other systems 34 % 32 %
FlowTriever system 66 % 68 %


	Three Months Ended March 31,
	2024		2023
VTE	$	137,193	$	114,058
Emerging Therapies	6,001		2,109
Total Revenue	$	143,194	$	116,167

Table of Contents

INARI MEDICAL, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Revenue from the Company's products by geographic area, based on the location where title transfers, is as follows (in thousands):


		Three Months Ended March 31,
		2023		2022
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		2024
		2024
		2024
United States
United States
United States	United States	$	111,846	$	85,054
International	International	4,321		1,698
International
International
Total revenue	Total revenue	$	116,167	$	86,752
Total revenue
Total revenue

The Company offers payment terms to its customers of less than three months and these terms do not include a significant financing component. The Company excludes taxes assessed by governmental authorities on revenue-producing transactions from the measurement of the transaction price.

The Company offers its standard warranty to all customers. The Company does not sell any warranties on a standalone basis. The Company’s warranty provides that its products are free of material defects and conform to specifications, and includes an offer to repair, replace or refund the purchase price of defective products. This assurance does not constitute a service and is not considered a separate performance obligation. The Company estimates warranty liabilities at the time of revenue recognition and records it as a charge to cost of goods sold. The warranty liability as of March 31, 2023 and December 31, 2022 were not significant. The warranty expense recognized during the three months ended March 31, 2023 and 2022 were $409,000 and $113,000, respectively.

~~Table of Contents~~

~~INARI MEDICAL, INC.~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

Costs associated with product sales include commissions and are recorded in selling, general and administrative (“SG&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.

Equity Investments

The Company has strategic investments in certain privately held companies, with no readily determinable fair value. The Company elected the measurement alternative under which it 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. 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.~~values or if there are observable changes in fair value. 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 consolidated statements of operations and comprehensive income (loss). As of March 31, ~~2023~~2024 and December 31, ~~2022, total other~~2023, the Company’s equity investments ~~of $8.6~~were $1.5 million and ~~$8.3 million, respectively,~~ were included in deposits and other assets on the condensed consolidated balance ~~sheets with~~sheets. There was no impairment ~~identified.~~loss recorded during the three months ended March 31, 2024 and 2023.

Significant Accounting Policies

As of March 31, 2024, there were no changes to the Company’s significant accounting policies as described in its Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Recently Issued Not Yet Adopted Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting, Topic 280, which requires enhanced disclosures primarily around segment expenses for all public entities, including public entities with a single reportable segment. On an annual and interim basis, entities are required to disclose significant segment expenses that are regularly provided to the CODM. The ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of the new standard on its consolidated financial statements and related disclosures.

Table of Contents

INARI MEDICAL, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

In December 2023, FASB issued ASU 2023-09, Income Tax, Topic 740, which requires public companies to disclose specific categories in the rate reconciliation, disaggregate information related to income taxes paid, income or loss from operations before income tax expense or benefit, and income tax expense or benefit from operations. The ASU is effective for annual fiscal years beginning after December 15, 2024, with early adoption permitted. Amendments are applicable on a prospective basis with retrospective application permitted. The Company is currently evaluating the impact of the new standard on its consolidated financial statements and related disclosures.

Supplemental Cash Flow Information

Supplemental cash flow information includes the following (in thousands):


	Three Months Ended March 31,
	2024		2023
Supplemental disclosures of cash flow information:
Cash paid for income taxes	$	245	$	104
Cash paid for interest	$	57	$	32

Noncash investing and financing:
Lease liabilities arising from obtaining new right-of-use assets	$	—	$	1,030

Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	66,707	$	56,562
Restricted cash	500		—
Total cash, cash equivalents and restricted cash as shown in the statement of cash flows	$	67,207	$	56,562

3. BUSINESS COMBINATION

Acquisition of LimFlow S.A.

On November 15, 2023, the Company completed its acquisition of LimFlow, a medical device company focused on limb salvage for patients with CLTI. As a result of the acquisition, LimFlow’s stockholders received as consideration (i) cash, and (ii) contingent consideration related to certain commercial and reimbursement milestones. The results of operations of LimFlow have been included in the condensed consolidated financial statements from the date of the acquisition.

Purchase Price

The total purchase price as of the date of the acquisition consisted of the following (in thousands):


	As of November 15, 2023
Cash	$	242,001
Fair value of previously held investment	10,235
Fair value of contingent consideration	65,931
Total purchase price	$	318,167

Table of Contents

INARI MEDICAL, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Contingent Consideration

The LimFlow stockholders can achieve up to $165.0 million of additional contingent consideration if certain commercial and reimbursement milestones are achieved, as outlined under the Contingent Payments section of the share purchase agreement with LimFlow. Such payments include (i) up to $140.0 million based on net revenue generated from the sale of the LimFlow System for the year 2024 through 2026 and (ii) up to $25.0 million based on the achievement of certain reimbursement milestones related to the LimFlow System.

The acquisition-date fair value of the contingent consideration was measured using a Monte Carlo simulation which represents Level 3 measurements because they are supported by little or no market activity and reflect the Company’s assumptions in measuring fair value. Estimates and assumptions used in the fair value assessment included forecasted revenues for LimFlow, revenue risk premium, revenue volatility, operational leverage ratio, counterparty credit spread, and weighted average cost of capital. The Company has determined that the range of the potential payments on such contingencies is $65.9 million to $165.0 million. The fair value of the contingent consideration was $65.9 million as of the acquisition date.

Previously Held Investment

Prior to the acquisition, the Company held an investment in LimFlow, which represented approximately 3.7% of LimFlow's outstanding equity, and was recorded at cost minus impairment. Authoritative guidance on accounting for business combinations requires that an acquirer remeasure its previously held equity investment in the acquiree at its acquisition-date fair value and recognize the resulting gain or loss in earnings. In connection with acquiring the remaining 96.3% equity interest of LimFlow, the Company remeasured its previously held equity investment to its fair value, as of the date of acquisition, based on the fair value of total consideration transferred. Estimates and assumptions used in the remeasurement represent a Level 3 measurement because they are supported by little or no market activity and reflect the Company’s assumptions in measuring the fair value. As a result of the remeasurement, the Company valued its previously held equity investment in LimFlow at $10.2 million and recognized a gain of $3.5 million, included in other income (expense) in the consolidated statements of operations and comprehensive income (loss) during the year ended December 31, 2023.

Transaction Costs

The transaction costs associated with the acquisition of LimFlow consisted primarily of legal and financial advisory fees of approximately $8.7 million in addition to $1.7 million of severance and integration related costs, which were expensed as incurred as SG&A expense during the year ended December 31, 2023.

Net Assets Acquired and Liabilities Assumed

The preliminary fair values of assets acquired and liabilities assumed were (in thousands):


	As of November 15, 2023
Cash and cash equivalents	$	1,582
Accounts receivable	919
Inventories	2,635
Property and equipment	266
Goodwill	207,800
Intangible asset	146,000
Other current and noncurrent assets	2,155
Accounts payable	(2,509)
Deferred tax liability	(36,500)
Other current and noncurrent liabilities	(4,181)
Total net assets acquired	$	318,167

Table of Contents

INARI MEDICAL, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

The Company is in the process of finalizing the allocation of the purchase price. As a result, the fair value estimates assigned to intangible asset, goodwill and the related tax impacts of the acquisition, among other items, are subject to change as additional information is received to complete the analysis, including final adjustments to net working capital. The Company expects to finalize the valuation as soon as practicable, but no later than one year after the acquisition date.

The preliminary fair value assigned to the intangible asset acquired was as following (in thousands, except for estimated useful life which is in years):


	Fair value		Useful life
Developed technology	$	146,000	15 years

The preliminary fair value assigned to identifiable intangible asset, the developed technology, acquired as part of the LimFlow acquisition, was estimated using the multi-period excess earnings method. Under this method, an intangible asset’s fair value is equal to the present value of future economic benefits to be derived from ownership of the asset. The estimated fair value was developed by discounting future net cash flows to their present value at market-based rates of return. Such assumptions included forecasted revenues, cost of sales and operating expenses, technology obsolescence, and weighted average cost of capital. The useful life of the developed technology for amortization purposes was determined by considering the period of expected cash flows used to measure the fair values of the intangible asset adjusted as appropriate for entity-specific factors including competitive, economic and other factors that may limit the useful life. The developed technology asset will be amortized on a straight-line basis over its estimated useful life.

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information summarizes the combined results of operations of the Company and LimFlow as if the companies had been combined as of the beginning of the fiscal year 2023 (in thousands):


	Three Months Ended March 31,
	2023
Revenue	$	116,646
Net Loss	$	(13,730)

The unaudited pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved had the acquisition been completed at the beginning of the fiscal year 2023. In addition, the unaudited pro forma financial information is not a projection of future results of operations of the combined company nor does it reflect the expected realization of any synergies or cost savings associated with the acquisition. The unaudited pro forma financial information includes adjustments to reflect the elimination of intercompany transactions, incremental amortization of the identifiable intangible asset and elimination of the remeasurement the Company’s previously held investment in LimFlow.

4. FAIR VALUE MEASUREMENTS

Investments in debt securities have been classified as available-for-sale and are carried at estimated fair value as determined based upon quoted market prices or pricing models for similar securities. As of March 31, ~~2023,~~2024, all of the Company's investments in debt securities had maturities of less than 12 months and were classified as short-term investments on the condensed consolidated balance sheets.

Table of Contents

INARI MEDICAL, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

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 March 31, ~~2023~~2024 and December 31, ~~2022~~2023 (in thousands):


		March 31, 2023
		Level 1		Level 2		Level 3		Aggregate Fair Value
	March 31, 2024											March 31, 2024
	Level 1									Level 1	Level 2	Level 3	Aggregate Fair Value
Financial Assets	Financial Assets
Cash and cash equivalents:	Cash and cash equivalents:
Cash and cash equivalents:
Cash and cash equivalents:
Money market mutual funds	Money market mutual funds	$	13,863	$	—	$	—	$	13,863
Money market mutual funds
Money market mutual funds
U.S. Treasury securities

Total included in cash and cash equivalents
Total included in cash and cash equivalents
Total included in cash and cash equivalents	Total included in cash and cash equivalents	13,863		—		—		13,863
Investments:	Investments:
U.S. Treasury securities	U.S. Treasury securities	166,730		—		—		166,730
U.S. Government agencies		—		57,624		—		57,624
U.S. Treasury securities
U.S. Treasury securities

Corporate debt securities and commercial paper
Corporate debt securities and commercial paper
Corporate debt securities and commercial paper	Corporate debt securities and commercial paper	—		47,530		—		47,530
Total included in short-term investments	Total included in short-term investments	166,730		105,154		—		271,884
Total assets		$	180,593	$	105,154	$	—	$	285,747
Total financial assets
Financial Liability
Contingent consideration
Contingent consideration
Contingent consideration
Total financial liabilities


	December 31, 2023
	Level 1		Level 2		Level 3		Aggregate Fair Value
Financial Assets
Cash and cash equivalents:
Money market mutual funds	$	2,753	$	—	$	—	$	2,753

Total included in cash and cash equivalents	2,753		—		—		2,753
Investments:
U.S. Treasury securities	41,685		—		—		41,685
U.S. Government agencies	—		26,238		—		26,238
Corporate debt securities and commercial paper	—		8,932		—		8,932
Total included in short-term investments	41,685		35,170		—		76,855
Total financial assets	$	44,438	$	35,170	$	—	$	79,608
Financial Liability
Contingent consideration	$	—	$	—	$	65,931	$	65,931
Total financial liabilities	$	—	$	—	$	65,931	$	65,931

There were no transfers between Levels 1, 2 or 3 for the periods presented.

Contingent payments are related to the acquisition of LimFlow and consist of commercial and reimbursement milestones, which were valued using a Monte Carlo simulation and probability weighted discounted cash flow analysis, respectively, and represent Level 3 measurements because they are based upon significant unobservable inputs such as forecasted revenues of LimFlow, revenue risk premium, revenue volatility, operational leverage ratio, credit risk, weighted average cost of capital, and probability assumptions in achieving certain milestones.

1014

Table of Contents

INARI MEDICAL, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

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 assets $ 192,417 $ 94,091 $ — $ 286,508
The following table summarizes the changes in the estimated fair value of the Company’s contingent consideration liabilities (in thousands):

~~There were no transfers between Levels 1, 2 or 3 for~~


	Contingent Consideration Fair Value
Balance as of December 31, 2023	$	65,931

Change in estimated fair value	6,303
Balance as of March 31, 2024	$	72,234

The fair value of the ~~periods presented.~~contingent consideration was $65.9 million as of December 31, 2023, recorded within other long-term liabilities, and $72.2 million as of March 31, 2024, of which $9.3 million was recorded within accrued expenses and other current liabilities and $62.9 million was recorded within other long-term liabilities. The change in estimated fair value of contingent consideration was recorded in operating expenses within the condensed consolidated statements of operations and comprehensive income (loss).

4.5. CASH EQUIVALENTS AND INVESTMENTS

The following is a summary of the Company’s cash equivalents and investments in debt securities as of March 31, ~~2023~~2024 and December 31, ~~2022~~2023 (in thousands):


		March 31, 2023
		Amortized Cost Basis		Unrealized Gain		Unrealized Loss		Fair Value
	March 31, 2024											March 31, 2024
	Amortized Cost Basis									Amortized Cost Basis	Unrealized Gain	Unrealized Loss	Fair Value
Financial Assets	Financial Assets
Cash and cash equivalents:	Cash and cash equivalents:
Cash and cash equivalents:
Cash and cash equivalents:
Money market mutual funds	Money market mutual funds	$	13,863	$	—	$	—	$	13,863

Money market mutual funds
Money market mutual funds
U.S. Treasury securities
Total included in cash and cash equivalents	Total included in cash and cash equivalents	13,863		—		—		13,863
Investments:	Investments:
U.S. Treasury securities	U.S. Treasury securities	166,564		180		(14)		166,730
U.S. Government agencies		57,552		87		(15)		57,624
U.S. Treasury securities
U.S. Treasury securities

Corporate debt securities and commercial paper
Corporate debt securities and commercial paper
Corporate debt securities and commercial paper	Corporate debt securities and commercial paper	47,502		41		(13)		47,530
Total included in short-term investments	Total included in short-term investments	271,618		308		(42)		271,884
Total assets		$	285,481	$	308	$	(42)	$	285,747
Total financial assets


	December 31, 2023
	Amortized Cost Basis		Unrealized Gain		Unrealized Loss		Fair Value
Financial Assets
Cash and cash equivalents:
Money market mutual funds	$	2,753	$	—	$	—	$	2,753

Total included in cash and cash equivalents	2,753		—		—		2,753
Investments:
U.S. Treasury securities	41,672		13		—		41,685
U.S. Government agencies	26,248		—		(10)		26,238
Corporate debt securities and commercial paper	8,935		—		(3)		8,932
Total included in short-term investments	76,855		13		(13)		76,855
Total financial assets	$	79,608	$	13	$	(13)	$	79,608

1115

Table of Contents

INARI MEDICAL, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

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 assets $ 284,688 $ 1,871 $ (51) $ 286,508

The Company regularly reviews ~~the~~any changes to the rating of its debt securities and reasonably monitors the surrounding economic conditions to assess the risk of expected credit losses. As of March 31, ~~2023,~~2024, the risk of expected credit losses was not significant.

5.6. INVENTORIES, NET

Inventories, net of reserves, consist of the following (in thousands):


		March 31, 2023		December 31, 2022
	March 31, 2024					March 31, 2024	December 31, 2023
Raw materials	Raw materials	$	14,139	$	13,943
Work-in-process	Work-in-process	4,062		3,396
Finished goods	Finished goods	18,298		15,242
Total inventories, net	Total inventories, net	$	36,499	$	32,581

6.7. PROPERTY AND EQUIPMENT, NET

Property and equipment consist of the following (in thousands):


		March 31, 2023		December 31, 2022
	March 31, 2024					March 31, 2024	December 31, 2023
Manufacturing equipment	Manufacturing equipment	$	14,365	$	13,585
Computer hardware	Computer hardware	5,233		5,123
Leasehold improvements	Leasehold improvements	5,210		5,040
Furniture and fixtures	Furniture and fixtures	4,124		4,119
Assets in progress	Assets in progress	2,366		2,516
Computer software		100		100

Total property and equipment, gross
Total property and equipment, gross
Total property and equipment, gross	Total property and equipment, gross	31,398		30,483
Accumulated depreciation	Accumulated depreciation	(10,153)		(8,828)
Total property and equipment, net	Total property and equipment, net	$	21,245	$	21,655

Depreciation expense of ~~$1,094,000 and $857,000~~$1.1 million was included in operating expenses and ~~$254,000 and $206,000~~$0.3 million was included in cost of goods sold for both the three months ended March 31, ~~2023~~2024 and ~~2022,~~2023, respectively.

8. GOODWILL AND INTANGIBLE ASSETS

Goodwill

The changes in carrying amount of goodwill were as follows (in thousands):


	March 31, 2024
Balance as of December 31, 2023	$	214,335

Foreign currency translation adjustments	(4,693)
Balance as of March 31, 2024	$	209,642

Table of Contents

INARI MEDICAL, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

7.Intangible Assets

The intangible assets consist of the following (in thousands):


	March 31, 2024
	Gross Carrying Amount		Accumulated Amortization		Intangible Assets, Net
Developed technology	$	147,306	$	(3,683)	$	143,623
Capitalized software(a)	2,151		—		2,151
Total intangible assets, net	$	149,457	$	(3,683)	$	145,774


	December 31, 2023
	Gross Carrying Amount		Accumulated Amortization		Intangible Assets, Net
Developed technology	$	150,649	$	(1,256)	$	149,393
Capitalized software(a)	1,491		—		1,491
Total intangible assets, net	$	152,140	$	(1,256)	$	150,884

_____________

(a) The useful life of the capitalized software will be determined once the asset is put into service. No amortization expense has been recorded related to the capitalized software during the three months ended March 31, 2024 and 2023.

The gross carrying amount and the accumulated amortization of the developed technology asset is subject to foreign currency translation effects. During the three months ended March 31, 2024, $2.5 million of amortization expense was recorded in operating expenses within the condensed consolidated statements of operations and comprehensive income (loss) related to the developed technology asset. There were no intangible assets and no amortization recorded for the three months ended March 31, 2023.

The estimated future annual amortization of the intangible assets in service is the following (in thousands):


Year ending December 31:	Amount
Remainder of 2024	$	7,365
2025	9,820
2026	9,820
2027	9,820
2028	9,820
Thereafter	96,978
Total	$	143,623

9. COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company has operating leases for facilities and certain equipment. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet. Lease expense for operating leases is recognized on a straight-line basis over the lease term. For lease agreements, other than long-term real estate leases, the Company combines lease and non-lease components. The variable lease payments primarily relate to common area maintenance, property taxes, and insurance. The operating leases for facilities expire at various dates through July 2041 and some contain renewal options, the longest of which is for five years. The ~~right-of-use~~ROU asset and lease liability includes renewal options if the Company is reasonably certain to exercise such renewal options.

AsThe interest rate implicit in lease agreements is typically not readily determinable, and as such the Company used the incremental borrowing rate based on the information available at commencement date in determining the present value of ~~March 31, 2023,~~future payments. The incremental borrowing rate is defined as the ~~aggregate operating~~interest rate the Company would incur to borrow on a collateralized basis, considering factors such as length of lease ~~ROU assets and lease liabilities were $50.6 million and $33.0 million, respectively, with~~term.

Table of Contents

INARI MEDICAL, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

The following table presents the weighted average remaining lease term ~~of 18.9 years. As of December 31, 2022, the aggregate operating lease ROU asset~~ and ~~lease liabilities were $50.7 million and $32.3 million, respectively, with the weighted average remaining lease term of 17.1 years.~~discount rate:

~~As of March 31, 2023, the weighted average incremental borrowing rate used to measure operating lease liabilities was 6.05%.~~


	March 31,
	2024		2023
Weighted average remaining term	17.4 years		18.9 years
Weighted average discount rate	6.1	%	6.1	%

Cash paid for amounts included in the measurement of operating ~~lease liabilities was $846,000 and $714,000 for the three months ended March 31, 2023 and 2022, respectively.~~leases were as follows (in thousands):


	Three Months Ended March 31,
	2024		2023
Cash paid for amounts included in the measurement of operating lease liabilities	$	882	$	846

Total lease costs are as follows (in thousands):


		Three Months Ended March 31,
		2023		2022
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		2024
		2024
		2024
Operating lease cost
Operating lease cost
Operating lease cost	Operating lease cost	$	1,180	$	1,043
Short-term lease cost	Short-term lease cost	22		15
Short-term lease cost
Short-term lease cost
Variable lease cost
Variable lease cost
Variable lease cost	Variable lease cost	166		139
Total lease costs	Total lease costs	$	1,368	$	1,197
Total lease costs
Total lease costs

Future minimum lease payments under operating leases liabilities as of March 31, ~~2023~~2024 are as follows (in thousands):


Year ending December 31:	Year ending December 31:	Amount		Year ending December 31:	Amount
Remainder of 2023		$	2,602
2024		3,558
Remainder of 2024
2025	2025	3,044
2026	2026	2,923
2027	2027	2,989
2028
Thereafter	Thereafter	38,553
Total lease payments	Total lease payments	53,669
Less imputed interest	Less imputed interest	(20,684)
Total lease liabilities	Total lease liabilities	32,985
Less: lease liabilities - current portion	Less: lease liabilities - current portion	(1,527)
Lease liabilities - noncurrent portion	Lease liabilities - noncurrent portion	$	31,458

The Company signed a ten-year lease for real estate in October 2023, with total undiscounted contractual payments of the lease of approximately $7.2 million, which is expected to commence in the fourth quarter of 2024.

Indemnification

In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and may provide for general indemnifications. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future but have not yet been made. To date, the Company has not been subject to any claims or required to defend any action related to its indemnification obligations.

1318

Table of Contents

INARI MEDICAL, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

The Company’s amended and restated certificate of incorporation contains provisions limiting the liability of directors, and its amended and restated bylaws provide that the Company will indemnify each of its directors to the fullest extent permitted under Delaware law. The Company’s amended and restated certificate of incorporation and amended and restated bylaws also provide its board of directors with discretion to indemnify its officers and employees when determined appropriate by the board. In addition, the Company has entered and expects to continue to enter into agreements to indemnify its directors and executive officers.

Legal Proceedings

From time to time, the Company ~~may become~~is involved in ~~legal~~various claims and proceedings arising ~~out of~~in the ordinary course of its business. Management ~~is currently~~does not ~~aware of~~believe that any ~~matters that~~existing claims and proceedings, including potential losses relating to such contingencies, will have a material adverse effect on ~~the~~its consolidated financial position, results of operations or cash ~~flows of the Company.~~

~~Licensed Technology~~flows.

In December 2021, the Company entered into an exclusive, perpetual, royalty free, technology license agreement for use in a particular research and development project that requires total payments of approximately $4.2 million payable in three installments due in 2022 and 2023. The Company accounted for the purchase as a research and development expense as it was determined to have no future alternative uses. As of March 31, 2023 and December 31, 2022, the outstanding balance was approximately $1.4 million and $1.3 million, respectively, which was included in accrued expenses and other current liabilities on the condensed consolidated balance sheets.

~~Sublicense Agreement~~

In August 2019, the Company entered into a sublicense agreement with 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.

Under the sublicense agreement, the Company is required to pay an ongoing quarterly administration fee, which amounted to $29,000 for the three months ended March 31, 2023 and 2022. Additionally, the Company is obligated to pay an ongoing royalty ranging from 1% to 1.50% of the net sales of products utilizing the licensed intellectual property, subject to a minimum royalty quarterly fee of $1,500. The Company recorded royalty expense to cost of goods sold of $1,500 and $212,000 for the three months ended March 31, 2023 and 2022, respectively.

~~Self-Insured Health Plan~~

~~As of January 1,~~ 2023, the Company ~~implemented~~received a ~~self-insurance program~~civil investigative demand (“CID”) from the U.S. Department of Justice, Civil Division, in connection with an investigation under the federal Anti-Kickback Statute and Civil False Claims Act (the “Investigation”). The CID requests information and documents primarily relating to ~~cover employees~~meals and ~~their dependent~~consulting service payments provided to health ~~benefits, including medical, dental and vision. As part~~care professionals. The Company is cooperating with the Investigation. The Company is unable to express a view at this time regarding the likely duration, or ultimate outcome, of the ~~program,~~Investigation or estimate the ~~Company also has stop-loss coverage from a third party which limits the exposure to large claims. The Company records a liability associated with these benefits that includes an estimate~~possibility of, ~~both claims filed and losses incurred but not yet reported based on historical claims experience. In estimating this accrual, the Company utilizes an independent third-party broker to estimate a~~or amount or range of, expected losses, which are based on analyses of historical data. The assumptions are closely monitored and adjusted when necessary by changing circumstances. If the liability generated from incurred claims exceeds the expense recorded, the Company may record an additional expense. As of March 31, 2023, the Company's self-insurance liability, inclusive of administrative fees, was $1.5 million, which is included in accrued expenses and other current liabilitiesany possible financial impact. Depending on the ~~condensed consolidated balance sheets.~~outcome of the Investigation, there may be a material impact on the Company’s business, results of operations, or financial condition.

~~Table of Contents~~

~~INARI MEDICAL, INC.~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

8.10. CONCENTRATIONS

The Company’s revenue is derived primarily from the sale of catheter-based therapeutic devices in the United States. For the three months ended March 31, ~~2023~~2024 and ~~2022,~~2023, there were no customers which accounted for more than 10% of the Company’s revenue. As of March 31, ~~2023~~2024 and December 31, ~~2022,~~2023, there were no customers that accounted for more than 10% of the Company’s accounts receivable.

No vendor accounted for more than 10% of the Company’s purchases for the three months ended March 31, ~~2023~~2024 and ~~2022. There was one vendor that accounted for 10.7% of the Company's accounts payable as of March 31,~~ 2023. There were no vendors that accounted for more than 10% of the Company’s accounts payable as of March 31, 2024 and December 31, ~~2022.~~

In early 2023, a few U.S. banks were closed 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 we do not have any direct exposure to these banks, we do maintain our cash and cash equivalents at multiple financial institutions, which exceed the current FDIC insurance limits. We will continue to monitor our cash and cash equivalents and take steps to identify any potential impact on our business.2023.

9.11. RELATED PARTY

The Company utilizes MRI The Hoffman Group (“MRI”), a recruiting services company owned by the brother of the former Chief Executive Officer and President and current member of the board of directors of the Company. The Company paid for recruiting services provided by MRI amounting to ~~$30,000~~$10,000 and ~~$74,000~~$30,000 for the three months ended March 31, ~~2023~~2024 and ~~2022,~~2023, respectively, which was ~~included~~recorded in SG&A expenses onwithin the condensed consolidated statements of operations and comprehensive income (loss). As of March 31, ~~2023~~2024 and December 31, ~~2022,~~2023, there was no balance payable to MRI.

~~10.~~12. CREDIT FACILITY

Bank of America Credit Facility

On December 16, 2022, the Company amended its senior secured revolving credit facility with Bank of America (the ~~“Amended~~“Previously Amended Credit Agreement”) under which the Company may borrow loans up to a maximum principal amount of $40.0 million and ~~increases~~increase the optional accordion to $120.0 million. ~~The Amended Credit Agreement matures on December 16, 2027. The amount available~~

Table of Contents

INARI MEDICAL, INC.

Notes to ~~borrow~~Unaudited Condensed Consolidated Financial Statements

Advances under the ~~Amended Credit Agreement as of March 31, 2023 is approximately $38.0 million, comprised of: a) 90% of eligible accounts receivable, plus b) pledged cash (up to $10 million).~~

~~Advances under the~~Previously Amended Credit Agreement will bear interest at a base rate per annum ~~(the “Base~~(“the Base Rate”) plus an applicable margin (the “Margin”). The Base Rate equals the greater of (i) the Prime Rate, (ii) the Federal funds rate plus 0.50%, or (iii) the Bloomberg Short-Term Bank Yield Index ~~("BSBY"~~(“the BSBY”) rate based upon an interest period of one month plus 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 1.50% to 2.00% in the case of BSBY Rate ~~loans depending on average daily availability, in each case with a floor of 0%.~~ loans.As a condition to entering into the Previously Amended Credit Agreement, the Company was obligated to pay a nonrefundable fee of $10,000. The Company is also required to pay an unused line fee at an annual rate of 0.25% per annum of the average daily unused portion of the aggregate revolving credit commitments under the Previously Amended Credit Agreement.

The Previously Amended Credit Agreement also includes a Letter of Credit subline facility (the “LC Facility”) of up to $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 letter of credits 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 BSBY loans (currently 2.25%) times the average daily stated amount of outstanding ~~letter~~letters of ~~credits;~~credit; and (b) a fronting fee equal to 0.125% per annum on the stated

~~Table of Contents~~

~~INARI MEDICAL, INC.~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

amount of each letter of credit outstanding. ~~As of March 31,~~

On November 1, 2023, the Company ~~had three letters~~further amended its credit facility (the “Amended Credit Agreement”) to, among other things, increase the amount available for borrowing to up to a maximum principal amount of $75.0 million. Additionally, advances under the amended credit agreement will bear interest at the Base Rate or the BSBY rate, plus the Margin. The Margin ranges from 0.60% to 1.10% in the ~~aggregated amount~~case of ~~$2.0 million outstanding under~~the Base Rate loans and 1.60% to 2.10% in the case of the BSBY rate loans depending on average daily availability, in each case with a floor of 0%. As a condition of entering into the amended credit agreement, the Company was obligated to pay a nonrefundable fee of $88,000. Lastly, the Company amended the LC ~~Facility.~~Facility to increase the limit up to $18.8 million. This amendment was accounted for as a debt modification in accordance ASC 470, Debt.

The Amended Credit Agreement contains certain customary covenants subject to certain exceptions, including, among others, the following: a fixed charge coverage ratio covenant, and limitations of indebtedness, liens, investments, asset sales, mergers, consolidations, liquidations, dispositions, restricted payments, transactions with affiliates and prepayments of certain debt. The Amended Credit Agreement also contains certain events of default subject to certain customary grace periods, including, among others, payment defaults, breaches of any representation, warranty or covenants, judgment defaults, cross defaults to certain other contracts, bankruptcy and insolvency defaults, material judgment defaults and a change of control default.

As of March 31, ~~2023,~~2024, the amount available to borrow under the Amended Credit Agreement is approximately $59.8 million, and the Company had four letters of credit in the aggregated amount of $2.4 million outstanding under the LC Facility and as a result, the Company had $16.4 million of unused letter of credit. The aggregate stated amount outstanding of letter of credits reduces the total borrowing base available under the Amended Credit Agreement.

As of March 31, 2024, there was no principal amount outstanding, and no cash was pledged under the Amended Credit Agreement, and the Company was in compliance with its covenant requirement. Obligations under the Amended Credit Agreement are secured by substantially all of the Company’s assets, excluding intellectual property. The Amended Credit Agreement matures on December 16, 2027.

Deferred Financing Costs

As of March 31, 2024 and December 31, 2023, costs incurred directly related to debt are presented in other assets and are being amortized over the five-year life of the Credit Agreement on the straight-line basis as follows (in thousands):


	March 31, 2024		December 31, 2023
Deferred financing costs	$	1,454	$	1,454
Accumulated amortization	(404)		(382)
Unamortized deferred financing costs	$	1,050	$	1,072

~~11. STOCKHOLDER'S~~Table of Contents

INARI MEDICAL, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

13. STOCKHOLDERS’ EQUITY

~~Common Stock~~Accumulated Other Comprehensive Income (Loss)

InThe following is a summary of the changes in accumulated balances of other comprehensive income (loss) for the three months ended March 2022, the Company completed an underwritten public offering (“Follow-On Offering”) of 2,300,000 shares of its common stock, including 300,000 shares sold pursuant to the underwriters’ exercise of their option to purchase additional shares, at a public offering price of $81.00 per share. The Company received net proceeds of approximately $174.4 million, after deducting underwriters’ discounts31, 2024 and ~~commissions of $11.2 million and offering costs of $0.7 million.~~2023 (in thousands):


	Unrealized Loss on Investments		Foreign Currency Translation		Accumulated Other Comprehensive Income (Loss)
Balance, December 31, 2023	$	(9)	$	8,894	$	8,885
Other comprehensive loss	(4)		(7,359)		(7,363)
Balance, March 31, 2024	$	(13)	$	1,535	$	1,522


	Unrealized Gain (Loss) on Investments		Foreign Currency Translation		Accumulated Other Comprehensive Income (Loss)
Balance, December 31, 2022	$	1,820	$	(971)	$	849
Other comprehensive (loss) income	(865)		9		(856)
Balance, March 31, 2023	$	955	$	(962)	$	(7)

~~12.~~14. EQUITY INCENTIVE PLANS

In 2011, the Company adopted the 2011 Equity Incentive Plan (the “2011 Plan”) to permit the grant of share-based awards, such as stock grants and incentives and non-qualified stock options to employees and directors. The Board has the authority to determine to whom awards will be granted, the number of shares, the term and the exercise price.

In March 2020, the Company adopted the 2020 Incentive Award Plan (the “2020 Plan”), which became effective in connection with the ~~IPO.~~Company’s initial public offering in May 2020. 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. 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% 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 March 31, ~~2023,~~2024, there were ~~6,523,422~~7,361,592 shares available for issuance under the 2020 Plan, including ~~1,620,650~~1,732,872 additional shares reserved effective January 1, ~~2023.~~

~~2011 Equity Incentive Plan~~

~~Restricted Stock Units~~

In March 2019, the Company granted, under the 2011 Plan, restricted stock unit awards (“RSUs”) to certain employees that vest only upon the satisfaction of both a time-based service condition and a performance-based condition that was satisfied on the effective date of the IPO of the Company’s common stock. The RSUs were subject to four-year cliff vesting and vested in full in March 2023. The vesting was also subject to a market-based condition related to the value of the Company’s common stock as of the vesting date. As a result of exceeding the value of the Company's common stock as set forth in the grant agreement, the maximum amount of RSUs were earned and vested.2024.

1621

Table of Contents

INARI MEDICAL, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

~~RSU activities under the~~ 2011 Equity Incentive Plan ~~is set forth below:~~

Number of
Awards Weighted
Average
Fair Value
Outstanding, December 31, 2022 2,712,674 $ 0.17
Vested (2,712,674) (a)
Outstanding, March 31, 2023 — $ —

~~_____________~~

~~(a)~~The vested RSUs will be distributed to the employees in installments. The first installment was distributed in the quarter ended March 31, 2023 with a weighted average fair value of $64.34. The remaining shares will be distributed within the quarters ended June 30, 2023, September 30, 2023, and December 31, 2023.

~~The total fair value of RSUs vested under the 2011 Plan was $170.6 million and nil for the three months ended March 31, 2023 and 2022, respectively.~~

Stock Options

A summary of stock option ~~activities~~activity under the 2011 Plan for the three months ended March 31, ~~2023~~2024 is as follows (intrinsic ~~value~~values in thousands):

Number of
Awards Weighted
Average
Exercise
Price Weighted
Average
Remaining
Contractual
Life (in years) Intrinsic
Value
Outstanding, December 31, 2022 1,456,328 $ 1.93 6.20 $ 89,749
Exercised (209,966) $ 1.11 $ 12,688
Cancelled (938) $ 3.27
Outstanding, March 31, 2023 1,245,424 $ 2.07 6.00 $ 74,313
Vested and exercisable at March 31, 2023 1,114,127 $ 1.77 5.90 $ 66,811
Vested and expected to vest at March 31, 2023 1,242,625 $ 2.06 6.00 $ 74,155


	Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)	Intrinsic Value
Outstanding, December 31, 2023	937,696	$	2.24��	5.20	$	58,778
Exercised	(81,686)	$	1.59		$	4,420
Cancelled	(29)	$	9.05
Outstanding, March 31, 2024	855,981	$	2.30	5.00	$	39,102
Vested and exercisable at March 31, 2024	855,981	$	2.30	5.00	$	39,102
Vested and expected to vest at March 31, 2024	855,981	$	2.30	5.00	$	39,102

The 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 market value of the Company’s common stock.

2020 Incentive Award Plan

Restricted Stock Units

~~RSUs~~Restricted stock units (“RSUs”) are share awards that entitle the holder to receive freely tradable shares of the Company’s common stock upon vesting. The RSUs cannot be transferred and the awards are subject to forfeiture if the holder’s employment terminates prior to the release of the vesting restrictions. The RSUs generally vest ~~either~~ over a four-year period with straight-line vesting ~~in equal amounts on a quarterly basis or~~and a 25% one-year cliff ~~vesting with remaining RSUs vest~~or 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.

RSU activity under the 2020 Plan is set forth below:


	Number of Awards	Weighted Average Fair Value
Outstanding, December 31, 2023	1,307,998	$	67.91
Granted	619,143	48.19
Vested	(123,878)	72.49
Cancelled	(22,093)	64.11
Outstanding, March 31, 2024	1,781,170	$	60.78

The total fair value of RSUs vested under the 2020 Plan was $8.0 million and $5.2 million for the three months ended March 31, 2024 and 2023, respectively.

Table of Contents

INARI MEDICAL, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

~~RSU activities~~Performance Stock Units

During the three months ended March 31, 2024, the Company granted performance stock units (“PSUs”) to certain employees that will vest three years from the award date, based on achieving certain revenue based performance targets. The number of shares that may be earned can range from 0% to 200% of the target amount. The fair value of PSUs are determined by the closing stock price of the Company’s common stock on the awards’ grant date. The stock-based compensation expense associated with PSUs is recognized on a straight-line basis based on the estimated number of awards that are expected to vest. At each reporting period, the Company monitors the probability of achieving the performance targets and adjusts the stock-based compensation expense associated with PSUs accordingly.

PSU activity under the 2020 Plan is set forth below:


	Number of Awards	Weighted Average Fair Value
Outstanding, December 31, 2023	—	$	—
Granted	90,488	55.48


Outstanding, March 31, 2024	90,488	$	55.48

Number of
Awards Weighted
Average
Fair Value
Outstanding, December 31, 2022 999,215 $ 79.16
Granted 593,855 57.35
Vested (82,511) 83.11
Cancelled (13,217) 82.55
Outstanding, March 31, 2023 1,497,342 $ 70.26
Stock Options

The ~~total fair value of RSUs vested under the 2020 Plan was $5.2 million and $4.5 million for the three months ended March 31, 2023 and 2022, respectively.~~

~~Stock options~~

~~During the three months ended March 31, 2023, the~~ Company ~~granted~~grants 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 expected dividend yield. For the purposes of the 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.model. The fair value for options granted was calculated using the following weighted average assumptions:



			~~Three Months Ended March 31, 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~~

Three Months Ended March 31,

2024

2023

Expected term (in years)

4.48 years to 4.5 years

4.56 years

Expected volatility

48.7% to 48.9%

50.4%

Dividend yield

0.0%

Risk free interest rate

4.2% to 4.3%

4.1%

Weighted-average fair value of options granted

$24.89 per share

$25.98 per share

A summary of stock option activities under the 2020 Plan for the three months ended March 31, ~~2023~~2024 is as follows (intrinsic ~~value~~values in thousands):

Number of
Awards Weighted
Average
Exercise
Price Weighted
Average
Fair Value Weighted
Average
Remaining
Contractual
Life (in years) Intrinsic
Value
Outstanding, December 31, 2022 — $ — $ — $ —
Granted 181,870 $ 56.00 $ 25.98 — $ —
Outstanding, March 31, 2023 181,870 $ 56.00 $ 25.98 6.90 $ 1,044
Vested and exercisable at March 31, 2023 — $ — $ — — $ —
Vested and expected to vest at March 31, 2023 163,812 $ 56.00 $ 25.98 6.90 $ 940


	Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)	Intrinsic Value
Outstanding, December 31, 2023	166,203	$	56.00	6.10	$	1,483
Granted	210,188	$	54.83
Exercised	(270)	$	56.00		$	—
Cancelled	(541)	$	56.00
Outstanding, March 31, 2024	375,580	$	55.35	6.40	$	209
Vested and exercisable at March 31, 2024	39,985	$	56.00	5.90	$	—
Vested and expected to vest at March 31, 2024	341,226	$	55.37	6.40	$	184

1823

Table of Contents

INARI MEDICAL, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Employee Stock Purchase Plan

In May 2020, the Company adopted the 2020 Employee Stock Purchase Plan (“ESPP”), which became effective on the date the ESPP was adopted by 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. 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% 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.

The fair value of the ESPP shares is estimated using the Black-Scholes option pricing model with the following assumptions:


		Three Months Ended March 31,
		2023		2022
	Three Months Ended March 31,									Three Months Ended March 31,
	2024							2024			2023
Expected term (in years)	Expected term (in years)	0.5		0.5		Expected term (in years)	0.50		0.50
Expected volatility	Expected volatility	49.89	%	56.09	%	Expected volatility	60.8%		49.9%
Dividend yield	Dividend yield	0.00	%	0.00	%	Dividend yield	0.0%		0.0%
Risk free interest rate	Risk free interest rate	4.79	%	0.48	%	Risk free interest rate	5.2%		4.8%

As of March 31, ~~2023,~~2024, a total of ~~304,615~~(i) 505,925 shares of common stock, including ~~86,051~~82,816 shares purchased in January ~~2023,~~2024, have been purchased under the ESPP, and ~~a total of 2,222,123~~(ii) 2,598,437 shares of common stock are reserved under the ESPP for future purchases, including ~~540,217~~577,624 additional shares, ~~effective~~which were automatically added to the reserve on January 1, ~~2023, are reserved for future purchases.~~2024 pursuant to the terms of the ESPP.

Stock-based Compensation Expense

Total compensation cost for all share-based payment arrangements recognized, including $1.0 million for both the three months ended March 31, 2024 and ~~$0.8 million~~2023, respectively, of stock-based compensation expense related to the ESPP, ~~for the three months ended March 31, 2023 and 2022, respectively,~~ was as follows (in thousands):


		Three Months Ended March 31,
		2023		2022
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		2024
		2024
		2024
Cost of goods sold
Cost of goods sold
Cost of goods sold	Cost of goods sold	$	525	$	364
Research and development	Research and development	1,590		978
Research and development
Research and development
Selling, general and administrative	Selling, general and administrative	8,224		5,213
		$	10,339	$	6,555
Selling, general and administrative
Selling, general and administrative
Total stock-based compensation expense
Total stock-based compensation expense
Total stock-based compensation expense

Total compensation costs as of March 31, ~~2023~~2024 related to all non-vested awards to be recognized in future periods was ~~$91.2~~$99.9 million and is expected to be recognized over the remaining weighted average period of ~~3.0~~2.8 years.

~~13.~~

Table of Contents

INARI MEDICAL, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

15. INCOME TAXES

The following table reflects the Company’s provision for income taxes for the periods indicated (in thousands):

Three Months Ended March 31,
2023 2022
Loss before income taxes $ (1,194) $ (3,129)
Provision for income taxes 1,024 —
Net loss $ (2,218) $ (3,129)
Provision for income taxes as a percentage of loss before income taxes (85.8%) —%

~~Table of Contents~~

~~INARI MEDICAL, INC.~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~


	Three Months Ended March 31,
	2024		2023
Loss before income taxes	$	(16,087)	$	(1,194)
Provision for income taxes	8,115		1,024
Net loss	$	(24,202)	$	(2,218)
Provision for income taxes as a percentage of income (loss) before income taxes	(50.4%)		(85.8%)

The effective tax rate for all periods is driven by pre-tax income/(loss), business credits, equity compensation, state taxes, and the change in valuation allowance. The Company's income tax provision for interim reporting periods historically has ~~historically~~ been calculated by applying an estimate of the annual effective income tax rate for the full year to “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 three months ended March 31, 2024, the Company calculated ~~as pre-tax~~the income ~~(loss) excluding unusual and infrequently occurring discrete items.~~tax provision using this methodology. For the three months ended March 31, 2023, ~~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 three months ended March 31, 2023.

For tax years beginning after December 31, 2021, certain research and development costs are required to be capitalized and amortized over a five year period under the Tax Cuts and Jobs Act, which was signed into law December 22, 2017. The Company has reviewed and incorporated this change, which will impact the expected U.S. federal and state tax expense and cash taxes to be paid for the tax year ending December 31, 2023.

Valuation Allowance

ASC 740,Income Taxes requires that the tax benefit of net operating losses, or NOLs, temporary differences and credit carryforwards be recorded as an asset to the extent that management assesses that realization is “more likely than ~~not.”~~not”. Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carryback or carryforward periods. As of December 31, ~~2022,~~2023, the Company ~~maintained~~was in a ~~full~~net deferred tax liability position due to the LimFlow acquisition. However, a valuation allowance ~~of $30.3 million~~was maintained against ~~the Company's net~~certain deferred tax assets. As of March 31, ~~2023,~~2024, the Company believes that the net deferred tax assets are currently not considered more likely than not to be realized and, accordingly, ~~has maintained~~maintains a ~~full~~ valuation allowance against ~~its~~certain 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~~will result in a material benefit recognized in the quarter of release.

Uncertain Tax Positions

The Company has recorded uncertain tax positions related to its federal and California research and development credit carryforwards. No interest or penalties have been recorded related to the uncertain tax positions due to credit carryforwards that are available to offset the uncertain tax positions. It is not expected that there will be a significant change in the uncertain tax position in the next ~~twelve~~12 months. The Company is subject to U.S. federal and state income tax as well as to income tax in various foreign jurisdictions. In the normal course of business, the Company is subject to examination by tax authorities. As of the date of the financial statements, there are no income tax examinations in progress. The statute of limitations for tax years ended after December 31, ~~2019,~~2020, December 31, ~~2018,~~2019, and December 31, ~~2017~~2020 are open for federal, ~~and~~ state, and foreign tax purposes, respectively.

~~14.~~

Table of Contents

INARI MEDICAL, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

16. RETIREMENT PLAN

In December 2017, the Company adopted the Inari Medical, Inc. 401(k) Plan which allows eligible employees after one month of service to contribute pre-tax and Roth contributions to the plan, as allowed by law. The plan assets are held by Vanguard and the plan administrator is Ascensus Trust Company. Beginning in January 2021, the Company ~~contributes~~contributed a $1.00 match for every $1.00 contributed by a participating employee up to the greater of $3,000 or 4% of eligible compensation under the plan, with such Company's contributions becoming fully vested immediately. On January 1, 2024, the plan was amended to provide that the Company contributes a $1.00 match for every $1.00 contributed by a participating employee for up to 5% of eligible compensation. The plan also includes a limit of $15,000 per individual of employer match, with such Company’s contributions becoming fully vested immediately. Matching contribution expense was ~~$2.7~~$4.0 million and ~~$1.7~~$2.7 million for the three months ended March 31, 2024 and 2023, ~~and 2022,~~ respectively.

~~Table of Contents~~

~~INARI MEDICAL, INC.~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

~~15.~~17. NET INCOME (LOSS) PER SHARE

Basic net income (loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period, without consideration for potential dilutive common shares. Diluted net income (loss) per share is computed using the treasury stock method by dividing the net income (loss) attributable to common stockholders by the weighted average number of shares of common stock and potentially dilutive securities outstanding for the period. For purposes of the diluted net income (loss) per share calculation, shares from common stock options ~~RSUs~~ and ~~ESPP~~equity awards 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.

The following outstanding potentially dilutive common stock equivalents have been excluded from the calculation of diluted net loss per share ~~for the three months ended March 31, 2023 and 2022~~ due to their anti-dilutive effect:

Three Months Ended March 31,
2023 2022
Common stock options 1,427,294 2,241,630
RSUs 1,497,342 3,649,255
Restricted stock subject to future vesting — 10,404
2,924,636 5,901,289


	Three Months Ended March 31,
	2024	2023
Stock options	1,231,561	1,427,294
Equity awards	1,871,658	1,497,342

Total potentially dilutive common stock equivalents excluded from calculation due to anti-dilutive effect	3,103,219	2,924,636

2126

Table of Contents

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited financial statements and related notes thereto for the year ended December 31, ~~2022,~~2023, included in our Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023. 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, ~~2022.~~2023. Please also see the section titled “Cautionary Note Regarding Forward-Looking ~~Statements.”~~Statements” herein.

OVERVIEW

Patients first. No small plans. Take care of each other. These are the guiding principles that form the ethos of Inari Medical. We are committed 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 establish our treatments as the standard of care for venous disease, including venous thromboembolism (VTE), and ~~beyond.~~four other disease states. We are just getting started.

~~Our solutions (“products”) primarily consist~~We purpose build a variety of ~~our ClotTriever and FlowTriever systems, which are~~products, including minimally invasive, novel, catheter-based mechanical thrombectomy ~~systems~~devices and their accessories to address the unique characteristics of specific disease states. In addition, in November 2023, we acquired LimFlow, a medical device company focused on limb salvage for patients with chronic limb-threatening ischemia (CLTI). CLTI is an advanced stage of peripheral artery disease that ~~are purpose-built for~~is associated with increased mortality, risk of amputation and impaired quality of life. The LimFlow system utilizes transcatheter arterialization of deep veins (TADV) to bypass blocked arteries in the ~~specific characteristic~~leg and deliver oxygenated blood back into the foot via the veins in CLTI patients. The results of operations of LimFlow have been included in our condensed consolidated financial statements from the date of the ~~venous system~~acquisition.

Together, our devices and systems provide solutions to address the ~~treatment of the two distinct manifestations of venous thromboembolism, or VTE -~~following disease states: deep vein thrombosis, ~~or DVT, and~~ pulmonary embolism, ~~or PE.~~chronic venous disease, CLTI, acute limb ischemia (ALI) and dialysis access management.

We believe our mission-focused and highly-trained commercial organization provides a significant competitive advantage. Our ~~ClotTriever system is FDA-cleared for the treatment of DVT,~~most important relationships are between our sales representatives and our ~~FlowTriever system is~~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 ~~first thrombectomy system FDA-cleared for~~intersection of the ~~treatment of PE~~patients and ~~is also FDA-cleared for clot in transit in~~physicians. We have developed systems and processes to harness the ~~right atrium. Our~~information gained from these relationships and we leverage this information to rapidly iterate our solutions, ~~also consist of~~introduce and execute physician education and training programs and scale our ~~InThrill system,~~sales organization. We market and sell our solutions to hospitals, which is FDA-cleared for the removal of thrombus from the peripheral vasculature and designed for smaller vessels, and our ProTrieve sheath, which is FDA-cleared for removal of thrombus from the peripheral vasculature through aspiration.

In March 2022, we completed an underwritten public offering, or the Follow-On Offering, of 2,300,000 shares of common stock, at a price of $81.00 per share. We received net proceeds of approximately $174.4 million, after deducting underwriters’ discounts and commissions and offering costs.are reimbursed by various third-party payors.

As of March 31, ~~2023,~~2024, we had cash, cash equivalents, restricted cash and short-term investments of ~~$328.4~~$101.8 million, no long-term debt outstanding and an accumulated deficit of ~~$49.1~~$72.7 million.

For the three months ended March 31, ~~2023, the Company~~2024, we generated ~~$116.2~~$143.2 million in revenues with a gross margin of 86.8% and net loss of $24.2 million, as compared to revenues of $116.2 million with a gross margin of 88.2% and net loss of $2.2 million ~~as compared to revenues of $86.8 million with a gross margin of 88.5% and net loss of $3.1 million~~ for the three months ended March 31, ~~2022.~~2023.

Table of Contents

Revenue

We derived substantially all our revenue from the sale of our ~~ClotTriever and FlowTriever systems~~VTE products directly to ~~hospitals primarily located in the United States.~~hospitals. Our customers typically purchase our products through an initial stocking order, and then reorder replenishment inventory as procedures are performed. No single customer accounted for 10% or more of our revenue during the three months ended March 31, ~~2023~~2024 and ~~2022.~~2023. We expect our revenue to increase in absolute dollars as we expand our offerings, grow the sales organization and sales territories, add customers, expand the base of physicians ~~that are trained to use~~who gain experience with using our products, expand awareness of our products with new and existing customers and as physicians perform more procedures using our products.

~~Table~~We disaggregate revenue between VTE and Emerging Therapies markets. VTE comprises revenue from the sale of ~~Contents~~

our ClotTriever and FlowTriever systems. Emerging Therapies comprises revenues from the sale of our solutions addressing chronic venous disease, CLTI, small vessel thrombosis and arterial thromboembolism. Revenue from ~~ClotTriever~~VTE and ~~other systems and FlowTriever system~~Emerging Therapies are as ~~a percentage of total revenue is as follows:~~follows (in thousands):

Three Months Ended March 31,
2023 2022
ClotTriever and other systems 34 % 32 %
FlowTriever system 66 % 68 %


	Three Months Ended March 31,
	2024		2023
VTE	$	137,193	$	114,058
Emerging Therapies	6,001		2,109
Total Revenue	$	143,194	$	116,167

RESULTS OF OPERATIONS

Comparison of the three months ended March 31, ~~2023~~2024 and ~~2022~~2023

The following table sets forth ~~the components of~~ our ~~unaudited condensed consolidated statements~~results of operations in dollars and as percentage of revenue for the periods presented (dollars in thousands):


		Three Months Ended March 31,								Change $
		2023		%		2022		%
	Three Months Ended March 31,											Three Months Ended March 31,	Change $
	2024
Revenue
Revenue
Revenue	Revenue	$	116,167	100.0	%	$	86,752	100.0	%	$	29,415
Cost of goods sold	Cost of goods sold	13,741		11.8	%	9,967		11.5	%	3,774
Gross profit	Gross profit	102,426		88.2	%	76,785		88.5	%	25,641
Operating expenses	Operating expenses
Research and development	Research and development	22,064		19.0	%	16,135		18.6	%	5,929
Research and development
Research and development
Selling, general and administrative	Selling, general and administrative	85,700		73.8	%	63,732		73.5	%	21,968
Change in fair value of contingent consideration
Amortization of intangible asset
Acquisition-related expenses
Total operating expenses	Total operating expenses	107,764		92.8	%	79,867		92.1	%	27,897
Loss from operations	Loss from operations	(5,338)		(4.6)	%	(3,082)		(3.6)	%	(2,256)
Other income (expense)	Other income (expense)
Interest income	Interest income	4,145		3.6	%	50		0.1	%	4,095
Interest income
Interest income
Interest expense	Interest expense	(40)		—	%	(73)		(0.1)	%	33
Other income (expense)		39		—	%	(24)		—	%	63
Total other income (expense)		4,144		3.6	%	(47)		(0.1)	%	4,191
Other expense
Total other income
Loss before income taxes	Loss before income taxes	(1,194)		(1.0)	%	(3,129)		(3.6)	%	1,935
Provision for income taxes	Provision for income taxes	1,024		0.9	%	—		—	%	1,024
Net loss	Net loss	$	(2,218)	(1.9)	%	$	(3,129)	(3.6)	%	$	911

Table of Contents

Revenue. Revenue increased ~~$29.4~~$27.0 million, or ~~33.9%~~23.3%, to $143.2 million during the three months ended March 31, 2024, compared to $116.2 million during the three months ended March 31, ~~2023, compared to $86.8 million during the three months ended March 31, 2022.~~2023. The increase in revenue was primarily due ~~primarily~~ to an increase in the number of products sold as we expanded our sales territories, opened new accounts and achieved deeper penetration of our products into existing accounts, and introduced new products.

Cost of Goods Sold. Cost of goods sold increased ~~$3.8~~$5.2 million, or ~~37.9%~~37.5%, to $18.9 million during the three months ended March 31, 2024, compared to $13.7 million during the three months ended March 31, ~~2023, compared to $10.0 million during the three months ended March 31, 2022.~~2023. This increase was primarily due to the increase in the number of products sold and additional manufacturing overhead costs to support anticipated future growth.

Gross Margin. Gross margin for the three months ended March 31, ~~2023~~2024 decreased ~~slightly~~ to ~~88.2%~~86.8%, compared to ~~88.5%~~88.2% for the three months ended March 31, ~~2022,~~2023, primarily due to increasing internationalization of the ~~increase in~~business, ramp up costs associated with ~~the addition of~~ new ~~components offered under our FlowTriever system price partially offset by manufacturing efficiencies.~~products, and product mix.

~~Table of Contents~~

Research and Development Expenses (“R&D”). R&D expenses increased ~~$5.9~~$4.8 million, or ~~36.7%~~21.8%, to $26.9 million during the three months ended March 31, 2024, compared to $22.1 million during the three months ended March 31, ~~2023, compared to $16.1 million during the three months ended March 31, 2022.~~2023. The increase in R&D expenses was primarily due to increases of ~~$3.9 million of personnel-related expenses, $1.3~~$1.5 million of material and supplies related expenses, ~~$0.7~~$1.3 million of clinical and regulatory expenses, $0.8 million in professional fees, $0.6 million in personnel-related expenses, and ~~$0.2~~$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, partially offset by a decrease of $0.4 million of expenses related to professional fees.~~base.

Selling, General and Administrative Expenses (“SG&A”). SG&A expenses increased ~~$22.0~~$17.4 million, or ~~34.5%~~20.3%, to $103.1 million during the three months ended March 31, 2024, compared to $85.7 million during the three months ended March 31, ~~2023, compared to $63.7 million during the three months ended March 31, 2022.~~2023. The increase in SG&A ~~costs~~expenses was primarily due to increases of ~~$19.0~~$13.1 million in personnel-related expenses as a result of increased headcount and increased commissions due to higher revenue, ~~$1.5 million in travel and related expenses, $0.4 million in sales and marketing related expenses, $0.4 million of material and supplies related expenses, and $0.3~~$2.7 million of expenses related to professional fees, ~~partially offset by $0.3~~and $1.5 million of ~~insurance~~travel related ~~expenses.~~costs.

~~Interest Income.~~Other Operating Expenses. Other operating expenses increased by $6.3 million due to the change in fair value adjustment of our contingent consideration liability, $2.5 million due to amortization expense related to the acquired intangible asset, and $2.8 million due to the acquisition-related expenses, which include integration and retention costs, during the three months ended March 31, 2024.

Other income (expense). Other income (expense) consists primarily of interest income, interest expense and foreign currency transaction gains and losses. Interest income ~~increased~~decreased by $3.0 million to $1.2 million during the three months ended March 31, 2024, compared to $4.1 million during the three months ended March 31, ~~2023,~~2023. The decrease in interest income was primarily due to lower cash balances invested in short-term investments in debt securities during the three months ended March 31, 2024 compared to the three months ended March 31, 2022. The increase in interest income was primarily due to an increase in the average balance of our short-term investments as well as increased interest rates during the three months ended March 31, 2023 compared to the three months ended March 31, 2022.

~~Interest Expense.~~ ~~Interest expense decreased to $40,000 during the three months ended March 31, 2023, compared to $73,000 during the three months ended March 31, 2022.~~

~~Other Income (Expense).~~ Other income of $39,000 for the three months ended March 31, 2023 consisted primarily of foreign currency transaction gains. Other expense of $24,000 for the three months ended March 31, 2022 consisted primarily of foreign currency transaction losses.2023.

Income Taxes. Income taxes increased $7.1 million to $8.1 million during the three months ended March 31, 2024, compared to $1.0 million ~~for~~during the three months ended March 31, 2023. The increase in ~~the~~ income taxes was primarily ~~relates to an increase in the current year U.S. federal and state income taxes~~ due to the ~~use of~~Company calculating the ~~interim~~income tax ~~expense on a discrete basis~~provision by applying an estimated annual effective tax rate for the three months ended March 31, 2024, whereas the discrete effective tax rate method was used for the three months ended March 31, 2023. Beginning in 2024, many countries are implementing some or all of the Organisation for Economic Co-operation and Development’s Base Erosion and Profit Shifting Two-Pillar in response to tax challenges arising from the digitalization of the global economy. While we continue to evaluate those countries’ implementations, we do not expect those implementations to have a material impact on our consolidated financial statements in 2024.

LIQUIDITY AND CAPITAL RESOURCES

To date, our primary sources of capital have been the net proceeds we received through private placements of preferred stock, debt financing agreements, the sale of common stock in our IPO completed on May 27, 2020 and follow-on offering completed in March 2022, and revenue from the sale of our ~~products.~~products and existing cash and cash equivalent balances. As of March 31, ~~2023,~~2024, we had cash and cash equivalents of ~~$56.6~~$66.7 million, restricted cash of $0.5 million and short-term investments in debt securities of ~~$271.9~~$34.6 million. We maintain cash and cash equivalents with financial institutions in excess of insured limits.

Table of Contents

As of March 31, 2024, the fair value of contingent consideration related to our acquisition of LimFlow was $72.2 million, of which $9.3 million was recorded within accrued expenses and other current liabilities and $62.9 million was recorded within other long-term liabilities in the condensed consolidated balance sheets. The contingent payments related to certain commercial and reimbursement milestones can be up to $165.0 million which includes (i) up to $140.0 million based on net revenue generated from the sale of the LimFlow system for the years 2024 through 2026 and (ii) up to $25.0 million based on the achievement of certain reimbursement milestones related to the LimFlow System. Revenue-based milestone payments are expected to be due in the first quarter of each of 2025, 2026 and 2027. The timing of reimbursement-based milestone payments is dependent on the achievement of such milestones and other conditions set forth in the share purchase agreement with LimFlow. As of March 31, 2024, we have not made any payments related to the contingent consideration. For additional information about the acquisition, see Note 3. Business Combination, which is included in “Part I, Item 1. Condensed Consolidated Financial Statements (Unaudited)”.

In December 2022, we amended our revolving Credit Agreement with Bank of America (as amended, the “Previously Amended Credit Agreement”) which provides for loans up to a maximum of $40.0 million and increases the optional accordion to $120.0 million. ~~As of March 31, 2023, we had no principal outstanding under the Amended Credit Agreement and the amount available to borrow was approximately $38.0 million.~~ The Previously Amended Credit Agreement also ~~includes~~included a Letter of Credit subline facility ~~(“LC~~(the “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. In November 2023, we further amended the Amended Credit Agreement, as defined in Note 12. 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. As of March 31, 2024, we had no principal outstanding under the Amended Credit Agreement and the amount available to borrow was approximately $59.8 million. As of March 31, 2024, we had four letters of credit in the aggregated amount of $2.4 million outstanding under the LC Facility and as a result, we had $16.4 million of unused letter of credit. The aggregate stated amount outstanding of letter of credits reduces the total borrowing base available under the Amended Credit Agreement and is subject to certain fees. ~~As of March 31, 2023, we had 3 letters of credit in the aggregated amount of $2.0 million outstanding under the LC Facility.~~ For additional information about the Amended Credit Agreement, see ~~note~~ ~~10.~~Note 12. Credit Facility, which is included in “Part I, Item 1. Condensed Consolidated Financial Statements (Unaudited)”.

In October 2023, we signed a ten-year lease for real estate with total undiscounted contractual payments of the lease of approximately $7.2 million, which are expected to commence in the fourth quarter of 2024.

Our other short-term and long-term material cash requirements, from known contractual obligations as of March 31, ~~2023,~~2024, include contingent consideration liability, operating lease liabilities and uncertain tax positions, ~~and royalty obligations from license and sublicense agreements,~~ as discussed in ~~the~~N ote 3. Business C ombination, N ote 4. Fair V alue Measurements, N ote 9. Commitments and Contingencies and N ote 15 . Income Taxes to our condensed consolidated financial statements section of this report, which are included in “Part I, Item 1. Condensed Consolidated Financial Statements ~~section~~(Unaudited)” of this report.

~~Table of Contents~~

Based on our current planned operations, we anticipate that our cash and cash equivalents, short-term investments and available borrowings under our Amended Credit Agreement will be sufficient 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:

•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;

•the continued advancement of research and development including clinical study activities; and

•potential expansion needs of our facilities.

If our available cash balances and anticipated cash flow from operations are insufficient to satisfy our liquidity requirements, we may seek to sell additional common or preferred equity or convertible debt securities, enter into an additional credit facility or another form of third-party funding or seek other debt financing. The sale of equity and convertible debt securities may result in dilution to our stockholders and, in the case of preferred equity securities or convertible debt, those securities could provide for rights, preferences or privileges senior to those of our common stock. The terms of debt securities issued or borrowings pursuant to a credit agreement could impose significant restrictions on our operations. If we raise funds through collaborations and licensing arrangements, we might be required to relinquish significant rights to our platform technologies or products or grant licenses on terms that are not favorable to us. Additional capital may not be available on reasonable terms, or at all. ~~In addition, market conditions impacting financial institutions could impact our ability to access some or all~~

Table 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.~~Contents

CASH FLOWS

The following table summarizes our cash flows for each of the periods indicated (in thousands):


		Three Months Ended March 31,
		2023		2022
	Three Months Ended March 31,						Three Months Ended March 31,
	2024					2024		2023
Net cash provided by (used in):	Net cash provided by (used in):
Operating activities
Operating activities
Operating activities	Operating activities	$	(2,013)	$	(9,100)
Investing activities	Investing activities	(4,043)		(73,511)
Financing activities	Financing activities	2,466		176,542
Effect of foreign exchange rate on cash and cash equivalents		(70)		(127)
Net (decrease) increase in cash and cash equivalents		$	(3,660)	$	93,804
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash
Net increase (decrease) in cash, cash equivalents, and restricted cash

Net cash used in operating activities

Net cash used in operating activities for the three months ended March 31, 2024 was $12.3 million, consisting primarily of a net loss of $24.2 million and non-cash charges of $23.3 million, offset by a net change in our net operating assets and liabilities of $11.4 million. The non-cash charges primarily consisted of stock-based compensation expense of $12.9 million, change in fair value of contingent consideration liability of $6.3 million, depreciation and amortization of $3.9 million, and amortization of the right-of-use assets of $0.8 million, partially offset by amortization of premium and discount on marketable securities of $0.6 million. The change in our net operating assets and liabilities was primarily due to increases in accounts receivable of $8.7 million, inventories of $2.1 million, and accounts payable of $1.5 million, in addition to a decrease in payroll-related accruals, accrued expenses and other liabilities of $1.0 million.

Net cash used in operating activities for the three months ended March 31, 2023 was $2.0 million, consisting primarily of net loss of $2.2 million and a decrease in net operating assets of $9.4 million, offset by non-cash charges of $9.6 million. The decrease in net operating assets was primarily due to decreases in accrued liabilities and accounts payable of $7.8 million and $0.3 million, respectively, due to the timing of payments and growth of our operations, a decrease in lease prepayments for lessor's owned leasehold improvements of $0.5 million and a decrease in operating lease liabilities of $0.4 million, coupled with an increase in inventories of $3.8 million, offset by decreases in accounts receivable of $2.8 million and prepaid and other assets of $0.5 million. The non-cash charges primarily consisted of stock-based compensation expense of $10.3 million, amortization of the right-of-use assets of $1.6 million and depreciation of $1.3 million, partially offset by amortization of premium and discount on marketable securities of $3.8 million.

Net cash used in ~~operating~~investing activities

Net cash provided by investing activities for the three months ended March 31, ~~2022~~2024 was ~~$9.1~~$39.2 million, consisting ~~primarily~~ of ~~net loss~~purchases of ~~$3.1~~$21.5 million of short-term investments, $1.3 million of purchases of property and ~~a decrease in net operating assets of $14.3 million,~~equipment, offset by ~~non-cash charges~~maturities of ~~$8.3~~short-term investments of $62.6 million. The decrease in net operating assets was primarily due to decreases in accounts payable and accrued liabilities of $6.7 million due to the timing of payments and growth of our operations, lease prepayments for lessor's owned leasehold improvements of $2.1 million and a decrease in operating lease liabilities of $0.3 million, coupled with increases in inventories of $2.8 million and accounts receivable of $2.7 million, offset by a decrease in prepaid and other assets of $0.3 million. The non-cash charges primarily

~~Table of Contents~~

~~consisted of $6.6 million in stock-based compensation expense, $1.1 million in depreciation, and $0.6 million in amortization of the right-of-use assets.~~

~~Net cash used in investing activities~~

Net cash used in investing activities for the three months ended March 31, 2023 was $4.0 million, consisting of $122.1 million purchases of short-term investments, $1.0 million of purchases of property and equipment, and $0.3 million of purchases of other investments, offset by maturities of short-term investments of $119.3 million.

Net cash ~~used~~provided by financing activities

Net cash provided by financing activities in ~~investing activities for~~ the three months ended March 31, ~~2022~~2024 was ~~$73.5~~$1.0 million, consisting of ~~$112.1~~$4.0 million ~~purchases~~ of ~~short-term investments, $5.7 million purchases~~proceeds from the issuance of ~~other investments, and $2.7 million purchases of property and equipment,~~common stock under our employee stock purchase plan, offset by ~~maturities~~$3.1 million of ~~short-term investments of $47.0 million.~~

~~Net cash provided by financing activities~~tax payments related to vested equity awards.

Net cash provided by financing activities in the three months ended March 31, 2023 was $2.5 million, consisting of $4.2 million proceeds from the issuance of common stock under our employee stock purchase plan and $0.2 million of proceeds from exercise of stock options, offset by $1.9 million of tax payments related to vested ~~RSUs.~~equity awards.

~~Net cash provided by financing activities in the three months ended March~~

31 ~~2022 was $176.5 million, consisting~~

Table of $174.4 million net proceeds from the issuance of common stock in the public offering, net of issuance costs of $11.9 million, $3.4 million proceeds from the issuance of common stock under our employee stock purchase plan and $0.3 million of proceeds from exercise of stock options, offset by $1.6 million of tax payments related to vested RSUs.Contents

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

~~Other 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~~There have been no significant changes in our critical accounting policies during the three months ended March 31, ~~2023,~~2024, as compared to the critical accounting policies disclosed inunder “Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of ~~Operations~~Operations” included in our Annual Report on Form 10-K for the year ended December 31, ~~2022,~~2023, filed with the SEC on February ~~27, 2023.~~29, 2024.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

There have been no material changes to our quantitative and qualitative disclosures about market risk as compared to the quantitative and qualitative disclosures about market risk described in our Annual Report on Form 10-K for the year ended December 31, ~~2022,~~2023, filed with the SEC on February ~~27, 2023~~29, 2024 under “Part II, Item 7.7A. Quantitative and Qualitative Disclosures about Market ~~Risk.”~~Risk”.

Item 4. Controls and Procedures.

Evaluation of disclosure controls and procedures

Our management, with the participation of our Principal Executive Officer and our Principal Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act), as of March 31, ~~2023.~~2024. Based on such evaluation, our Principal Executive ~~Office~~Officer and Principal Financial Officer concluded that, as of March 31, ~~2023,~~2024, 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, is recorded, processed, summarized and reported, ~~with~~within the time ~~period~~periods 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.~~

~~Table of Contents~~

~~Changes in internal control over financial reporting~~

During the three months ended March 31, 2023, 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 procedures~~

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 management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Changes in internal control over financial reporting

During the quarter ended March 31, 2024, 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 likely to materially affect, our internal control over financial reporting.

Table of Contents

PART II — OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

~~We are not subject to any~~See Note 9. Commitments and Contingencies, which is included in "Part I, Item 1. Condensed Consolidated Financial Statements (Unaudited)” for information regarding material legal proceedings.

Item 1A. RISK FACTORS

For a discussion of risk factors that may affect our ~~potential risks~~business and ~~uncertainties,~~financial results, see the information in ~~Part I,~~ “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023, filed with the SEC on February 29, 2024. 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, ~~2022.~~2023.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

Item 3. DEFAULTS UPON SENIOR SECURITIES

None.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

Item 5. OTHER INFORMATION

None.

2833

Table of Contents

Item 6. EXHIBITS

Exhibit Number Description Incorporated by reference
Form File Number Exhibit Filing Date
3.1
Amended and Restated Certificate of Incorporation
8-K 001-39293 3.1 5/28/2020
3.2
Amended and Restated Bylaws
8-K 001-39293 3.2 5/28/2020
10.1^
Lease Agreement, dated February 14, 2023, by and between Inari Medical Inc. and Oak Canyon Creek LLC
10.2*
Amended and Restated Non-Employee Director Compensation Program
31.1
Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1†
Certifications of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2†
Certifications of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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).

Exhibit Number

Description

Incorporated by reference

Form

File Number

Exhibit

Filing Date

3.1

Amended and Restated Certificate of Incorporation

8-K

001-39293

3.1

5/28/2020

3.2

Amended and Restated Bylaws

8-K

001-39293

3.2

5/28/2020

31.1

Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1†

Certifications of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2†

Certifications of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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).

_____________________________

† The certifications attached as Exhibit 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q are deemed furnished and not filed with the U.S. Securities and Exchange Commission and are not to be incorporated by reference into any filing of Inari Medical, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.

~~^ Portions of this exhibit have been omitted pursuant to Rule 601(b)(10) of Regulation S-K. The omitted information is not material and is the type that the Company treats as private or confidential.~~

* Indicates management contract or compensatory plan.

2934

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	Inari Medical, Inc.

Date: ~~May 3, 2023~~April 30, 2024	By:	/s/ Andrew Hykes
		Andrew Hykes
		Chief Executive Officer and President (Principal Executive Officer)

Date: ~~May 3, 2023~~April 30, 2024	By:	/s/ Mitchell Hill
		Mitchell Hill
		Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

3035


	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 assets	$	192,417	$	94,091	$	—	$	286,508


	Number of Awards	Weighted Average Fair Value
Outstanding, December 31, 2022	2,712,674	$	0.17

Vested	(2,712,674)	(a)

Outstanding, March 31, 2023	—	$	—