☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
March 31, 2022
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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Delaware | 42-1777485 | |||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||
2 Thermo Fisher Way Oakwood Village, OH | 44146 | |||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Common Stock, par value $0.01 | VRAY | The Nasdaq Global Market |
Large accelerated filer | ☒ |
| Accelerated filer | ☐ | Non-accelerated filer | ☐ | |||||||||||||
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| Smaller reporting company | ☐ |
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Emerging growth company | ☐ |
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•delays in business operations and installation caused by the concerns in connection with the COVID-19 |
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•disruptions in the supply or changes in the costs of raw materials, labor, product components, or transportation services as a result of inflation; |
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•the effect or impact of market consolidation; |
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•market acceptance of magnetic resonance imaging (“MRI”) guided radiation therapy; |
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•the benefits of MR Image-Guided radiation therapy; |
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•our ability to obtain and maintain regulatory approval in targeted markets for MRIdian; |
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•our ability to successfully sell and market MRIdian® in our existing and expanded geographies; |
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•the performance of MRIdian in clinical settings; |
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•competition from existing technologies or products or new technologies and products that may emerge; |
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•the pricing and reimbursement of MR Image-Guided radiation therapy; |
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•the implementation of our business model and strategic plans for our business and MRIdian; |
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•the scope of protection we are able to establish and maintain for intellectual property rights covering MRIdian; |
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•estimates of our future revenue, expenses, capital requirements and our need for additional financing; |
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•our financial performance; |
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3
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| June 30, 2021 |
|
| December 31, 2020 |
| March 31, 2022 | December 31, 2021 | |||||||||||
ASSETS |
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| ASSETS | ||||||||||
Current assets: |
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|
|
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|
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| Current assets: | ||||||||||
Cash and cash equivalents |
| $ | 166,925 |
|
| $ | 156,720 |
| Cash and cash equivalents | $ | 180,061 | $ | 218,348 | ||||||
Accounts receivable |
|
| 15,416 |
|
|
| 11,769 |
| Accounts receivable | 28,002 | 21,659 | ||||||||
Inventory, net of allowance of $2,181 and $2,286, respectively |
|
| 41,878 |
|
|
| 46,641 |
| |||||||||||
Inventory, net of allowance of $1,676 and $3,071, respectively | Inventory, net of allowance of $1,676 and $3,071, respectively | 26,080 | 29,617 | ||||||||||||||||
Deposits on purchased inventory |
|
| 3,679 |
|
|
| 2,084 |
| Deposits on purchased inventory | 7,153 | 4,778 | ||||||||
Deferred cost of revenue |
|
| 1,199 |
|
|
| 1,954 |
| Deferred cost of revenue | 5,439 | 3,342 | ||||||||
Prepaid expenses and other current assets |
|
| 5,101 |
|
|
| 5,257 |
| Prepaid expenses and other current assets | 5,285 | 5,803 | ||||||||
Total current assets |
|
| 234,198 |
|
|
| 224,425 |
| Total current assets | 252,020 | 283,547 | ||||||||
Property and equipment, net |
|
| 21,754 |
|
|
| 24,062 |
| Property and equipment, net | 20,357 | 20,242 | ||||||||
Restricted cash |
|
| 1,460 |
|
|
| 1,460 |
| Restricted cash | 4,596 | 1,460 | ||||||||
Intangible assets, net |
|
| 47 |
|
|
| 50 |
| Intangible assets, net | 43 | 44 | ||||||||
Right-of-use assets |
|
| 9,018 |
|
|
| 10,129 |
| Right-of-use assets | 9,080 | 9,661 | ||||||||
Other assets |
|
| 7,392 |
|
|
| 1,426 |
| Other assets | 11,991 | 6,853 | ||||||||
TOTAL ASSETS |
| $ | 273,869 |
|
| $ | 261,552 |
| TOTAL ASSETS | $ | 298,087 | $ | 321,807 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
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| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
Current liabilities: |
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| Current liabilities: | ||||||||||
Accounts payable |
| $ | 7,525 |
|
| $ | 9,984 |
| Accounts payable | $ | 9,252 | $ | 9,199 | ||||||
Accrued liabilities |
|
| 18,304 |
|
|
| 19,281 |
| Accrued liabilities | 18,427 | 26,555 | ||||||||
Customer deposits |
|
| 14,183 |
|
|
| 15,463 |
| Customer deposits | 27,377 | 20,784 | ||||||||
Operating lease liability, current |
|
| 1,938 |
|
|
| 2,089 |
| Operating lease liability, current | 2,633 | 2,561 | ||||||||
Current portion of long-term debt | Current portion of long-term debt | 8,056 | 3,222 | ||||||||||||||||
Deferred revenue, current |
|
| 11,041 |
|
|
| 10,094 |
| Deferred revenue, current | 13,879 | 13,920 | ||||||||
Total current liabilities |
|
| 52,991 |
|
|
| 56,911 |
| Total current liabilities | 79,624 | 76,241 | ||||||||
Deferred revenue, net of current portion |
|
| 4,962 |
|
|
| 2,572 |
| Deferred revenue, net of current portion | 7,507 | 4,232 | ||||||||
Long-term debt |
|
| 57,101 |
|
|
| 56,940 |
| Long-term debt | 49,282 | 54,031 | ||||||||
Warrant liabilities |
|
| 9,212 |
|
|
| 4,864 |
| Warrant liabilities | 3,965 | 6,795 | ||||||||
Operating lease liability, noncurrent |
|
| 8,039 |
|
|
| 9,043 |
| Operating lease liability, noncurrent | 7,373 | 8,066 | ||||||||
Other long-term liabilities |
|
| 2,513 |
|
|
| 956 |
| Other long-term liabilities | 2,831 | 2,647 | ||||||||
TOTAL LIABILITIES |
|
| 134,818 |
|
|
| 131,286 |
| TOTAL LIABILITIES | 150,582 | 152,012 | ||||||||
Commitments and contingencies (Note 6) |
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|
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| Commitments and contingencies (Note 6) | 0 | 0 | ||||||||
Stockholders’ equity: |
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| Stockholders’ equity: | ||||||||||
Preferred stock, par value of $0.01 per share; 10,000,000 shares authorized at June 30, 2021 and December 31, 2020; 0 shares issued and outstanding at June 30, 2021 and December 31, 2020 |
|
| 0 |
|
|
| 0 |
| |||||||||||
Common stock, par value of $0.01 per share; 300,000,000 shares authorized at June 30, 2021 and December 31, 2020; 163,590,744 and 148,615,351 shares issued and outstanding at June 30, 2021 and December 31, 2020 |
|
| 1,624 |
|
|
| 1,476 |
| |||||||||||
Preferred stock, par value of $0.01 per share; 10,000,000 shares authorized at March 31, 2022 and December 31, 2021; no shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively | Preferred stock, par value of $0.01 per share; 10,000,000 shares authorized at March 31, 2022 and December 31, 2021; no shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively | — | — | ||||||||||||||||
Common stock, par value of $0.01 per share; 300,000,000 shares authorized at March 31, 2022 and December 31, 2021; 180,442,026 and 179,206,456 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively | Common stock, par value of $0.01 per share; 300,000,000 shares authorized at March 31, 2022 and December 31, 2021; 180,442,026 and 179,206,456 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively | 1,794 | 1,782 | ||||||||||||||||
Additional paid-in capital |
|
| 822,230 |
|
|
| 755,874 |
| Additional paid-in capital | 908,617 | 905,145 | ||||||||
Accumulated deficit |
|
| (684,803 | ) |
|
| (627,084 | ) | Accumulated deficit | (762,906) | (737,132) | ||||||||
TOTAL STOCKHOLDERS’ EQUITY |
|
| 139,051 |
|
|
| 130,266 |
| TOTAL STOCKHOLDERS’ EQUITY | 147,505 | 169,795 | ||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
| $ | 273,869 |
|
| $ | 261,552 |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 298,087 | $ | 321,807 |
4
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| Three Months Ended June 30, |
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| Six Months Ended June 30, |
| Three Months Ended March 31, | ||||||||||||||||||||
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| 2021 |
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| 2020 |
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| 2021 |
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| 2020 |
| 2022 | 2021 | |||||||||||||
Revenue: |
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| Revenue: | ||||||||||
Product |
| $ | 10,917 |
|
| $ | 10,615 |
|
| $ | 22,296 |
|
| $ | 22,085 |
| Product | $ | 13,426 | $ | 11,379 | ||||||
Service |
|
| 3,994 |
|
|
| 3,490 |
|
|
| 8,021 |
|
|
| 6,151 |
| Service | 5,331 | 4,027 | ||||||||
Distribution rights |
|
| 119 |
|
|
| 119 |
|
|
| 238 |
|
|
| 238 |
| Distribution rights | 119 | 119 | ||||||||
Total revenue |
|
| 15,030 |
|
|
| 14,224 |
|
|
| 30,555 |
|
|
| 28,474 |
| Total revenue | 18,876 | 15,525 | ||||||||
Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cost of revenue: | ||||||||||
Product |
|
| 12,180 |
|
|
| 12,714 |
|
|
| 22,865 |
|
|
| 25,843 |
| Product | 13,766 | 10,685 | ||||||||
Service |
|
| 4,522 |
|
|
| 2,552 |
|
|
| 9,040 |
|
|
| 5,780 |
| Service | 5,016 | 4,518 | ||||||||
Total cost of revenue |
|
| 16,702 |
|
|
| 15,266 |
|
|
| 31,905 |
|
|
| 31,623 |
| Total cost of revenue | 18,782 | 15,203 | ||||||||
Gross profit |
|
| (1,672 | ) |
|
| (1,042 | ) |
|
| (1,350 | ) |
|
| (3,149 | ) | Gross profit | 94 | 322 | ||||||||
Operating expenses: |
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|
|
|
|
|
|
|
|
|
|
|
|
|
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| Operating expenses: | ||||||||||
Research and development |
|
| 7,903 |
|
|
| 6,211 |
|
|
| 14,413 |
|
|
| 12,548 |
| Research and development | 7,870 | 6,510 | ||||||||
Selling and marketing |
|
| 3,052 |
|
|
| 3,093 |
|
|
| 5,900 |
|
|
| 8,916 |
| Selling and marketing | 6,884 | 2,848 | ||||||||
General and administrative |
|
| 13,858 |
|
|
| 15,227 |
|
|
| 29,497 |
|
|
| 31,015 |
| General and administrative | 12,814 | 15,639 | ||||||||
Total operating expenses |
|
| 24,813 |
|
|
| 24,531 |
|
|
| 49,810 |
|
|
| 52,479 |
| Total operating expenses | 27,568 | 24,997 | ||||||||
Loss from operations |
|
| (26,485 | ) |
|
| (25,573 | ) |
|
| (51,160 | ) |
|
| (55,628 | ) | Loss from operations | (27,474) | (24,675) | ||||||||
Interest income |
|
| 3 |
|
|
| 87 |
|
|
| 5 |
|
|
| 782 |
| Interest income | 5 | 2 | ||||||||
Interest expense |
|
| (1,060 | ) |
|
| (1,071 | ) |
|
| (2,118 | ) |
|
| (2,109 | ) | Interest expense | (1,064) | (1,058) | ||||||||
Other (expense) income, net |
|
| (3,434 | ) |
|
| 405 |
|
|
| (4,446 | ) |
|
| 3,271 |
| Other (expense) income, net | 2,759 | (1,012) | ||||||||
Loss before provision for income taxes |
| $ | (30,976 | ) |
| $ | (26,152 | ) |
| $ | (57,719 | ) |
| $ | (53,684 | ) | Loss before provision for income taxes | $ | (25,774) | $ | (26,743) | ||||||
Provision for income taxes |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
| Provision for income taxes | — | — | ||||||||
Net loss and comprehensive loss |
| $ | (30,976 | ) |
| $ | (26,152 | ) |
| $ | (57,719 | ) |
| $ | (53,684 | ) | Net loss and comprehensive loss | $ | (25,774) | $ | (26,743) | ||||||
Net loss per share, basic and diluted |
| $ | (0.19 | ) |
| $ | (0.18 | ) |
| $ | (0.36 | ) |
| $ | (0.36 | ) | Net loss per share, basic and diluted | $ | (0.14) | $ | (0.17) | ||||||
Weighted-average common shares used to compute net loss per share attributable to common stockholders, basic and diluted |
|
| 162,283,348 |
|
|
| 147,563,278 |
|
|
| 161,217,083 |
|
|
| 147,506,244 |
| Weighted-average common shares used to compute net loss per share attributable to common stockholders, basic and diluted | 179,740,732 | 160,138,327 |
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| Common Stock |
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||
|
| Shares |
|
| Amount |
|
| Additional Paid-in Capital |
|
| Accumulated Deficit |
|
| Total Stockholders’ Equity |
| Common Stock | |||||||||||||||||||||||||||||||||
Balance at December 31, 2020 |
|
| 148,615,351 |
|
| $ | 1,476 |
|
| $ | 755,874 |
|
| $ | (627,084 | ) |
| $ | 130,266 |
| |||||||||||||||||||||||||||||
Shares | Amount | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | Balance at December 31, 2021 | 179,206,456 | $ | 1,782 | $ | 905,145 | $ | (737,132) | $ | 169,795 | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock from option exercises |
|
| 6,021 |
|
|
| — |
|
|
| 19 |
|
|
| — |
|
|
| 19 |
| Issuance of common stock from option exercises | 19,292 | — | 56 | — | 56 | |||||||||||||||||||||||
Stock-based compensation |
|
| — |
|
|
| — |
|
|
| 8,494 |
|
|
| — |
|
|
| 8,494 |
| Stock-based compensation | — | — | 5,032 | — | 5,032 | |||||||||||||||||||||||
Issuance of common stock from releases of restricted stock units |
|
| 1,209,870 |
|
|
| 12 |
|
|
| (12 | ) |
|
| — |
|
|
| — |
| Issuance of common stock from releases of restricted stock units | 1,216,278 | 12 | (12) | — | — | |||||||||||||||||||||||
Tax withholding paid on behalf of employees for stock-based awards |
|
| — |
|
|
| — |
|
|
| (1,473 | ) |
|
| — |
|
|
| (1,473 | ) | Tax withholding paid on behalf of employees for stock-based awards | — | — | (1,604) | — | (1,604) | |||||||||||||||||||||||
Issuance of common stock upon public offering (net of offering cost of $3,991) |
|
| 11,856,500 |
|
|
| 119 |
|
|
| 53,394 |
|
|
| — |
|
|
| 53,513 |
| |||||||||||||||||||||||||||||
Issuance of common stock from warrant exercises |
|
| 42,621 |
|
|
| — |
|
|
| 2 |
|
|
| — |
|
|
| 2 |
| |||||||||||||||||||||||||||||
Reclassification of warrant liability to additional paid-in capital upon warrant exercises |
|
| — |
|
|
| — |
|
|
| 327 |
|
|
| — |
|
|
| 327 |
| |||||||||||||||||||||||||||||
Net loss |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (26,743 | ) |
|
| (26,743 | ) | Net loss | — | — | — | (25,774) | (25,774) | |||||||||||||||||||||||
Balance at March 31, 2021 |
|
| 161,730,363 |
|
| $ | 1,607 |
|
| $ | 816,625 |
|
| $ | (653,827 | ) |
| $ | 164,405 |
| |||||||||||||||||||||||||||||
Issuance of common stock from option exercises |
|
| 37,630 |
|
|
| — |
|
|
| 165 |
|
|
| — |
|
|
| 165 |
| |||||||||||||||||||||||||||||
Stock-based compensation |
|
| — |
|
|
| — |
|
|
| 6,455 |
|
|
| — |
|
|
| 6,455 |
| |||||||||||||||||||||||||||||
Issuance of common stock from releases of restricted stock units |
|
| 1,738,516 |
|
|
| 17 |
|
|
| (17 | ) |
|
| — |
|
|
| — |
| |||||||||||||||||||||||||||||
Tax withholding paid on behalf of employees for stock-based awards |
|
| — |
|
|
| — |
|
|
| (1,286 | ) |
|
| — |
|
|
| (1,286 | ) | |||||||||||||||||||||||||||||
Issuance of common stock from warrant exercises |
|
| 2,431 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
| |||||||||||||||||||||||||||||
Reclassification of warrant liability to additional paid-in capital upon warrant exercises |
|
| — |
|
|
| — |
|
|
| 24 |
|
|
| — |
|
|
| 24 |
| |||||||||||||||||||||||||||||
Issuance of common stock from employee stock purchase plan |
|
| 81,804 |
|
|
| — |
|
|
| 264 |
|
|
| — |
|
|
| 264 |
| |||||||||||||||||||||||||||||
Net loss |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (30,976 | ) |
|
| (30,976 | ) | |||||||||||||||||||||||||||||
Balance at June 30, 2021 |
|
| 163,590,744 |
|
| $ | 1,624 |
|
| $ | 822,230 |
|
| $ | (684,803 | ) |
| $ | 139,051 |
| |||||||||||||||||||||||||||||
Balance at March 31, 2022 | Balance at March 31, 2022 | 180,442,026 | $ | 1,794 | $ | 908,617 | $ | (762,906) | $ | 147,505 |
|
| Common Stock |
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||
|
| Shares |
|
| Amount |
|
| Additional Paid-in Capital |
|
| Accumulated Deficit |
|
| Total Stockholders’ Equity |
| Common Stock | |||||||||||||||||||||||||||||||||
Balance at December 31, 2019 |
|
| 147,191,695 |
|
| $ | 1,462 |
|
| $ | 733,888 |
|
| $ | (519,176 | ) |
| $ | 216,174 |
| |||||||||||||||||||||||||||||
Shares | Amount | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | Balance at December 31, 2020 | 148,615,351 | $ | 1,476 | $ | 755,874 | $ | (627,084) | $ | 130,266 | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock from option exercises |
|
| 2,870 |
|
|
| — |
|
|
| 2 |
|
|
| — |
|
|
| 2 |
| Issuance of common stock from option exercises | 6,021 | — | 19 | — | 19 | |||||||||||||||||||||||
Stock-based compensation |
|
| — |
|
|
| — |
|
|
| 5,501 |
|
|
| — |
|
|
| 5,501 |
| Stock-based compensation | — | — | 8,494 | — | 8,494 | |||||||||||||||||||||||
Issuance of common stock from releases of restricted stock units |
|
| 202,420 |
|
|
| 2 |
|
|
| (2 | ) |
|
| — |
|
|
| — |
| Issuance of common stock from releases of restricted stock units | 1,209,870 | 12 | (12) | — | — | |||||||||||||||||||||||
Tax withholding paid on behalf of employees for stock-based awards |
|
| — |
|
|
| — |
|
|
| (131 | ) |
|
| — |
|
|
| (131 | ) | Tax withholding paid on behalf of employees for stock-based awards | — | — | (1,473) | — | (1,473) | |||||||||||||||||||||||
Issuance of common stock upon public offering (net of offering cost of $3,991) | Issuance of common stock upon public offering (net of offering cost of $3,991) | 11,856,500 | 119 | 53,394 | — | 53,513 | |||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock from warrant exercises | Issuance of common stock from warrant exercises | 42,621 | — | 2 | — | 2 | |||||||||||||||||||||||||||||||||||||||||||
Reclassification of warrant liability to additional paid-in capital upon warrant exercises | Reclassification of warrant liability to additional paid-in capital upon warrant exercises | — | — | 327 | — | 327 | |||||||||||||||||||||||||||||||||||||||||||
Net loss |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (27,532 | ) |
|
| (27,532 | ) | Net loss | — | — | — | (26,743) | (26,743) | |||||||||||||||||||||||
Balance at March 31, 2020 |
|
| 147,396,985 |
|
| $ | 1,464 |
|
| $ | 739,258 |
|
| $ | (546,708 | ) |
| $ | 194,014 |
| |||||||||||||||||||||||||||||
Issuance of common stock from option exercises |
|
| 17,709 |
|
|
| — |
|
|
| 13 |
|
|
| — |
|
|
| 13 |
| |||||||||||||||||||||||||||||
Stock-based compensation |
|
| — |
|
|
| — |
|
|
| 5,802 |
|
|
| — |
|
|
| 5,802 |
| |||||||||||||||||||||||||||||
Issuance of common stock from releases of restricted stock units |
|
| 119,447 |
|
|
| 1 |
|
|
| (1 | ) |
|
| — |
|
|
| — |
| |||||||||||||||||||||||||||||
Issuance of common stock from employee stock purchase plan |
|
| 82,232 |
|
|
| 1 |
|
|
| 155 |
|
|
| — |
|
|
| 156 |
| |||||||||||||||||||||||||||||
Write-down of offering costs related to previous issuance of common stock upon public offering |
|
| — |
|
|
| — |
|
|
| 191 |
|
|
| — |
|
|
| 191 |
| |||||||||||||||||||||||||||||
Net loss |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (26,152 | ) |
|
| (26,152 | ) | |||||||||||||||||||||||||||||
Balance at June 30, 2020 |
|
| 147,616,373 |
|
| $ | 1,466 |
|
| $ | 745,418 |
|
| $ | (572,860 | ) |
| $ | 174,024 |
| |||||||||||||||||||||||||||||
Balance at March 31, 2021 | Balance at March 31, 2021 | 161,730,363 | $ | 1,607 | $ | 816,625 | $ | (653,827) | $ | 164,405 |
|
| Six Months Ended June 30, |
| Three Months Ended March 31, | |||||||||||||||
|
| 2021 |
|
| 2020 |
| 2022 | 2021 | |||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||
Net loss |
| $ | (57,719 | ) |
| $ | (53,684 | ) | Net loss | $ | (25,774) | $ | (26,743) | ||||||
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||
Depreciation and amortization |
|
| 3,171 |
|
|
| 2,957 |
| Depreciation and amortization | 1,244 | 1,648 | ||||||||
Stock-based compensation |
|
| 14,949 |
|
|
| 11,304 |
| Stock-based compensation | 5,032 | 8,494 | ||||||||
Accretion on asset retirement obligation |
|
| 61 |
|
|
| 41 |
| Accretion on asset retirement obligation | 23 | 33 | ||||||||
Change in fair value of warrant liabilities |
|
| 4,701 |
|
|
| (3,301 | ) | Change in fair value of warrant liabilities | (2,830) | 947 | ||||||||
Loss on disposal of property and equipment |
|
| 0 |
|
|
| 12 |
| |||||||||||
Inventory lower of cost or net realizable value adjustment |
|
| 0 |
|
|
| 150 |
| |||||||||||
Amortization of debt discount and interest accrual |
|
| 471 |
|
|
| 357 |
| Amortization of debt discount and interest accrual | 246 | 239 | ||||||||
Product upgrade reserve |
|
| 1,000 |
|
|
| (1,260 | ) | Product upgrade reserve | — | 600 | ||||||||
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
| Changes in operating assets and liabilities: | ||||||||||
Accounts receivable |
|
| (3,647 | ) |
|
| (5,272 | ) | Accounts receivable | (6,343) | (4,800) | ||||||||
Inventory |
|
| 4,763 |
|
|
| 6,684 |
| Inventory | 3,640 | 2,783 | ||||||||
Deposits on purchased inventory |
|
| (1,595 | ) |
|
| 1,814 |
| Deposits on purchased inventory | (2,375) | (466) | ||||||||
Deferred cost of revenue |
|
| 755 |
|
|
| (4,390 | ) | Deferred cost of revenue | (2,097) | (356) | ||||||||
Prepaid expenses and other assets |
|
| (5,397 | ) |
|
| (2,327 | ) | Prepaid expenses and other assets | (4,739) | 420 | ||||||||
Accounts payable |
|
| (2,508 | ) |
|
| (8,470 | ) | Accounts payable | 8 | (2,391) | ||||||||
Accrued expenses and other long-term liabilities |
|
| (1,374 | ) |
|
| (1,865 | ) | Accrued expenses and other long-term liabilities | (8,247) | (6,130) | ||||||||
Customer deposits and deferred revenue |
|
| 2,057 |
|
|
| 12,232 |
| Customer deposits and deferred revenue | 9,827 | (585) | ||||||||
Net cash used in operating activities |
|
| (40,312 | ) |
|
| (45,018 | ) | Net cash used in operating activities | (32,385) | (26,307) | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||
Purchases of property and equipment |
|
| (568 | ) |
|
| (1,295 | ) | Purchases of property and equipment | (1,218) | (336) | ||||||||
Net cash used in investing activities |
|
| (568 | ) |
|
| (1,295 | ) | Net cash used in investing activities | (1,218) | (336) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||
Proceeds from common stock public offering, gross |
|
| 57,385 |
|
|
| 0 |
| Proceeds from common stock public offering, gross | — | 57,385 | ||||||||
Payment of offering costs related to common stock public offering |
|
| (3,991 | ) |
|
| (539 | ) | Payment of offering costs related to common stock public offering | — | (3,991) | ||||||||
Proceeds from the exercise of stock options |
|
| 184 |
|
|
| 15 |
| Proceeds from the exercise of stock options | 56 | 19 | ||||||||
Proceeds from the exercise of warrants |
|
| 2 |
|
|
| 0 |
| Proceeds from the exercise of warrants | — | 2 | ||||||||
Proceeds from employee stock purchase plan |
|
| 264 |
|
|
| 156 |
| |||||||||||
Payments for taxes related to net share settlement of equity awards |
|
| (2,759 | ) |
|
| (132 | ) | Payments for taxes related to net share settlement of equity awards | (1,604) | (1,473) | ||||||||
Net cash provided by (used in) financing activities |
|
| 51,085 |
|
|
| (500 | ) | |||||||||||
NET INCREASE (DECREASE) IN CASH DURING THE PERIOD |
|
| 10,205 |
|
|
| (46,813 | ) | |||||||||||
Net cash (used in) provided by financing activities | Net cash (used in) provided by financing activities | (1,548) | 51,942 | ||||||||||||||||
NET (DECREASE) INCREASE CASH DURING THE PERIOD | NET (DECREASE) INCREASE CASH DURING THE PERIOD | (35,151) | 25,299 | ||||||||||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — BEGINNING OF PERIOD |
|
| 158,180 |
|
|
| 228,187 |
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH — BEGINNING OF PERIOD | 219,808 | 158,180 | ||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — END OF PERIOD |
| $ | 168,385 |
|
| $ | 181,374 |
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH — END OF PERIOD | $ | 184,657 | $ | 183,479 | ||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||||
Cash paid for interest |
| $ | 1,648 |
|
| $ | 2,140 |
| Cash paid for interest | $ | 819 | $ | 819 | ||||||
Cash paid for income taxes |
| $ | 0 |
|
| $ | 28 |
| Cash paid for income taxes | $ | — | $ | — | ||||||
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
| SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||||
Fair value of common stock warrants reclassified from liability to additional paid-in capital upon exercise |
| $ | 351 |
|
| $ | 0 |
| Fair value of common stock warrants reclassified from liability to additional paid-in capital upon exercise | $ | — | $ | 327 | ||||||
Right-of-use assets obtained in exchange for new operating lease liabilities |
| $ | 0 |
|
| $ | 0 |
| Right-of-use assets obtained in exchange for new operating lease liabilities | $ | — | $ | — | ||||||
Transfer of property and equipment from inventory and deferred cost of revenue |
| $ | 0 |
|
| $ | 1,583 |
| Transfer of property and equipment from inventory and deferred cost of revenue | $ | (103) | $ | — | ||||||
Purchases of property and equipment in accounts payable and accrued liabilities |
| $ | 351 |
|
| $ | 65 |
| Purchases of property and equipment in accounts payable and accrued liabilities | $ | 161 | $ | 129 |
|
|
In December 2021, the Company received 510(k) clearance from the FDA on its recent submission for new MRIdian features (MRIdian A3i) focused on enhancing on-table adaptive workflow efficiency and expanding clinical utility.
| NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
2021.
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326), MeasurementTable of Credit Losses on Financial Instruments (“ASU 2016-13”). This ASU changes the methodology for measuring credit losses on financial instruments and the timing of when such losses are recorded. For smaller reporting companies, as defined by the SEC, ASU 2016-13 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2022. The standard is effective for the Company on January 1, 2023. The Company is currently assessing the impact of ASU 2016-13 on its consolidated financial statements.Contents
8
In August 2020, the FASB issued ASU 2020-06, an update to ASC Topic 470, Subtopic - 20, Debt - Debt with Conversion and Other Options, and ASC Topic 815, Subtopic – 40, Derivatives and Hedging - Contracts in Entity's Own Equity. The ASU simplifies the guidance for certain financial instruments with characteristics of liability and equity, including convertible instruments and contracts on an entity’s own equity by reducing the number of accounting models for convertible instruments and amends guidance in ASC Topic 260, Earnings Per Share, relating to the computation of earnings per share for convertible instruments and contracts on an entity’s own equity. The ASU is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2021, with early adoption permitted for fiscal years that begin after December 15, 2020. The Company is currently evaluating the impact this guidance may have on its consolidated financial statements and related disclosures.
Recently Adopted Accounting Pronouncements
In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The ASU is intended to provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. This guidance is effective beginning on March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2022. No significant changes were made to our condensed consolidated financial statements and related notes in order to comply with ASU 2020-04.
| NOTE 3. BALANCE SHEET COMPONENTS |
|
| June 30, 2021 |
|
| December 31, 2020 |
| March 31, 2022 | December 31, 2021 | |||||||||||
Prototype |
| $ | 17,730 |
|
| $ | 17,711 |
| Prototype | $ | 17,730 | $ | 17,730 | ||||||
Machinery and equipment |
|
| 17,822 |
|
|
| 17,486 |
| Machinery and equipment | 17,701 | 17,701 | ||||||||
Leasehold improvements |
|
| 14,031 |
|
|
| 14,196 |
| Leasehold improvements | 14,088 | 14,088 | ||||||||
Furniture and fixtures |
|
| 1,295 |
|
|
| 1,295 |
| Furniture and fixtures | 1,295 | 1,295 | ||||||||
Software |
|
| 1,389 |
|
|
| 1,389 |
| Software | 1,389 | 1,389 | ||||||||
Construction in progress |
|
| 982 |
|
|
| 486 |
| Construction in progress | 2,755 | 1,397 | ||||||||
Property and equipment, gross |
|
| 53,249 |
|
|
| 52,563 |
| Property and equipment, gross | 54,958 | 53,600 | ||||||||
Less: accumulated depreciation and amortization |
|
| (31,495 | ) |
|
| (28,501 | ) | Less: accumulated depreciation and amortization | (34,601) | (33,358) | ||||||||
Property and equipment, net |
| $ | 21,754 |
|
| $ | 24,062 |
| Property and equipment, net | $ | 20,357 | $ | 20,242 |
|
| June 30, 2021 |
|
| December 31, 2020 |
| March 31, 2022 | December 31, 2021 | |||||||||||
Accrued payroll and related benefits |
| $ | 8,963 |
|
| $ | 12,810 |
| Accrued payroll and related benefits | $ | 7,760 | $ | 17,080 | ||||||
Accrued accounts payable |
|
| 3,964 |
|
|
| 2,810 |
| Accrued accounts payable | 4,420 | 3,740 | ||||||||
Payroll withholding tax, sales and other tax payable |
|
| 1,332 |
|
|
| 1,398 |
| Payroll withholding tax, sales and other tax payable | 1,044 | 1,094 | ||||||||
Accrued legal, accounting and professional fees |
|
| 212 |
|
|
| 305 |
| Accrued legal, accounting and professional fees | 1,354 | 230 | ||||||||
Product upgrade reserve |
|
| 2,500 |
|
|
| 1,500 |
| Product upgrade reserve | 2,500 | 2,500 | ||||||||
Other |
|
| 1,333 |
|
|
| 458 |
| Other | 1,349 | 1,911 | ||||||||
Total accrued liabilities |
| $ | 18,304 |
|
| $ | 19,281 |
| Total accrued liabilities | $ | 18,427 | $ | 26,555 |
|
| June 30, 2021 |
|
| December 31, 2020 |
| March 31, 2022 | December 31, 2021 | |||||||||||
Deferred revenue: |
|
|
|
|
|
|
|
| Deferred revenue: | ||||||||||
Product |
| $ | 343 |
|
| $ | 1,888 |
| Product | $ | 1,721 | $ | 1,322 | ||||||
Service |
|
| 13,977 |
|
|
| 8,857 |
| Service | 18,338 | 15,385 | ||||||||
Distribution rights |
|
| 1,683 |
|
|
| 1,921 |
| Distribution rights | 1,327 | 1,445 | ||||||||
Total deferred revenue |
|
| 16,003 |
|
|
| 12,666 |
| Total deferred revenue | 21,386 | 18,152 | ||||||||
Less: current portion of deferred revenue |
|
| (11,041 | ) |
|
| (10,094 | ) | Less: current portion of deferred revenue | (13,879) | (13,920) | ||||||||
Noncurrent portion of deferred revenue |
| $ | 4,962 |
|
| $ | 2,572 |
| Noncurrent portion of deferred revenue | $ | 7,507 | $ | 4,232 |
|
| June 30, 2021 |
|
| December 31, 2020 |
| March 31, 2022 | December 31, 2021 | |||||||||||
Accrued interest, noncurrent portion |
| $ | 408 |
|
| $ | 99 |
| Accrued interest, noncurrent portion | $ | 865 | $ | 704 | ||||||
Asset retirement obligation |
|
| 918 |
|
|
| 857 |
| Asset retirement obligation | 985 | 962 | ||||||||
Other accrued costs |
|
| 1,187 |
|
|
| 0 |
| Other accrued costs | 981 | 981 | ||||||||
Total other-long term liabilities |
| $ | 2,513 |
|
| $ | 956 |
| Total other-long term liabilities | $ | 2,831 | $ | 2,647 |
| NOTE 4. FAIR VALUE OF FINANCIAL INSTRUMENTS |
|
| At June 30, 2021 |
| At March 31, 2022 | |||||||||||||||||||||||||||||||||||
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total |
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
2017 Placement Warrants Liability |
| $ | 0 |
|
| $ | 0 |
|
| $ | 6,807 |
|
| $ | 6,807 |
| 2017 Placement Warrants Liability | $ | — | $ | — | $ | 2,957 | $ | 2,957 | ||||||||||||||
2016 Placement Warrants Liability |
|
| 0 |
|
|
| 0 |
|
|
| 2,405 |
|
|
| 2,405 |
| 2016 Placement Warrants Liability | — | — | 1,008 | 1,008 | ||||||||||||||||||
Total |
| $ | 0 |
|
| $ | 0 |
|
| $ | 9,212 |
|
| $ | 9,212 |
| Total | $ | — | $ | — | $ | 3,965 | $ | 3,965 |
|
| At December 31, 2020 |
| |||||||||||||
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total |
| ||||
2017 Placement Warrants Liability |
| $ | 0 |
|
| $ | 0 |
|
| $ | 3,675 |
|
| $ | 3,675 |
|
2016 Placement Warrants Liability |
|
| 0 |
|
|
| 0 |
|
|
| 1,189 |
|
|
| 1,189 |
|
Total |
| $ | 0 |
|
| $ | 0 |
|
| $ | 4,864 |
|
| $ | 4,864 |
|
At December 31, 2021 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
2017 Placement Warrants Liability | $ | — | $ | — | $ | 5,030 | $ | 5,030 | |||||||||||||||
2016 Placement Warrants Liability | — | — | 1,765 | 1,765 | |||||||||||||||||||
Total | $ | — | $ | — | $ | 6,795 | $ | 6,795 |
|
| Six Months Ended June 30, |
| Three Months Ended March 31, | |||||||||||||||
|
| 2021 |
|
| 2020 |
| 2022 | 2021 | |||||||||||
Fair value, beginning of period |
| $ | 4,864 |
|
| $ | 5,373 |
| Fair value, beginning of period | $ | 6,795 | $ | 4,864 | ||||||
Change in fair value of Level 3 financial liabilities |
|
| 4,701 |
|
|
| (3,301 | ) | Change in fair value of Level 3 financial liabilities | (2,830) | 947 | ||||||||
Fair value of 2016 Placement Warrants at exercise |
|
| (2 | ) |
|
| 0 |
| Fair value of 2016 Placement Warrants at exercise | — | (2) | ||||||||
Fair value of 2017 Placement Warrants at exercise |
|
| (351 | ) |
|
| 0 |
| Fair value of 2017 Placement Warrants at exercise | — | (325) | ||||||||
Fair value, end of period |
| $ | 9,212 |
|
| $ | 2,072 |
| Fair value, end of period | $ | 3,965 | $ | 5,484 |
|
|
The Company used the proceeds of the SVB Term Loan and cash on hand to repay in full its outstanding obligations under its then outstanding term loan (the “CRG Term Loan”) and to pay fees and expenses related thereto. The Company accounted for the termination of the CRG Term Loan as a debt extinguishment and recorded a debt extinguishment loss of $2.4 million from the difference between the net carrying amount of debt and the amount paid. The debt extinguishment loss includes $0.3 million in write-offs of unamortized debt discount and debt issuance costs associated with the CRG Term Loan.
The Company received net proceeds of $55.4 million after related legal and consulting fees totaling $0.6 million. Such fees are accounted for as debt discount and issuance costs and presented as a direct deduction from the carrying amount of debt on the Company’s consolidated balance sheets. Debt discount, issuance costs and the final payment are amortized or accreted as interest expense over the term of the loan using the effective interest method.
On December 31, 2019, the Company entered into the First Amendment (the “First Amendment”) to the SVB Term Loan. The First Amendment, among other things, amended the SVB Term Loan to (i) suspend testing of the minimum revenue financial covenant for the fiscal quarter ended December 31, 2019, (ii) provide for the minimum trailing twelve-month revenue thresholds under the minimum revenue financial covenant for periods ending on the last day of fiscal quarters in fiscal years subsequent to 2020 to be determined annually at the greater of (a) a 25% cushion to revenue forecasts provided by the Company to SVB and (b) 10% year-over-year annual growth, unless otherwise agreed, (iii) increase the minimum liquidity ratio financial covenant from 1.50:1.00 to 1.75:1.00 and (iv) increase the prepayment premium from 1.00% to 2.00% for amounts prepaid under the SVB Term Loan prior to the maturity date thereof, subject to certain exceptions.
On October 30, 2020, the Company entered into the Second Amendment (the “Second Amendment”) to the SVB Term Loan. The SecondOn October 29, 2021, the Company entered into the Third Amendment among other things, amendedto the SVB Term Loan to (i) increaseLoan.
SVB Term Loan is October 1, 2025.
11
Year Ended December 31, |
|
|
|
| Year Ended December 31, | |||||||
The remainder of 2021 |
| $ | 0 |
| ||||||||
2022 |
|
| 3,222 |
| ||||||||
The remainder of 2022 | The remainder of 2022 | $ | 3,222 | |||||||||
2023 |
|
| 19,333 |
| 2023 | 19,333 | ||||||
2024 |
|
| 19,333 |
| 2024 | 19,333 | ||||||
2025 |
|
| 16,112 |
| 2025 | 16,112 | ||||||
Total future principal payments |
|
| 58,000 |
| Total future principal payments | 58,000 | ||||||
Less: unamortized debt discount |
|
| (899 | ) | Less: unamortized debt discount | (662) | ||||||
Carrying value of long-term debt |
|
| 57,101 |
| Carrying value of long-term debt | 57,338 | ||||||
Less: current portion |
|
| 0 |
| Less: current portion | (8,056) | ||||||
Long-term portion |
| $ | 57,101 |
| Long-term portion | $ | 49,282 |
| NOTE 6. COMMITMENTS AND CONTINGENCIES |
Operating Leases
The Company entered into agreements to lease office space in Oakwood Village, Ohio, Mountain View, California and Denver, Colorado under noncancelable operating lease agreements. The Company leases and occupies approximately 19,800 square feet of office space in Oakwood Village, Ohio, which expires in October 2026. The Company entered into an office lease agreement to lease approximately 25,500 square feet of office space located in Mountain View, California, with an expiration date of July 2025. Additionally, the Company entered into a lease agreement to lease additional office space in Mountain View, California of approximately 24,600 square feet, which will expire in December 2025. The Company has the option to extend the term of the lease for a period of up to five years. The Company also entered into a sub-lease agreement to lease approximately 19,800 square feet of office space located in Denver, Colorado which commenced in June 2019 and expired in June 2021. Beginning in July 2021, the Company is under a month-to-month tenancy for this office space. On March 3, 2021, the Company entered into a sub-lease agreement to lease approximately 12,800 square feet of office space in Denver, Colorado. This sub-lease will commence on September 1, 2021 and will expire October 31, 2024.
In recognition of the right-of-use assets and the related lease liabilities, the options to extend the lease term have not been included as the Company is not reasonably certain that it will exercise any such option. At June 30, 2021, the weighted-average remaining lease term in years is 4.3 years and the weighted-average discount rate used is 7.7%.
The Company recognized the following lease costs arising from lease transactions (in thousands):
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
Operating lease cost |
| $ | 729 |
|
| $ | 781 |
|
| $ | 1,509 |
|
| $ | 1,562 |
|
The Company recognized the following cash flow transactions arising from lease transactions (in thousands):
|
| Six Months Ended June 30, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
Cash paid for amounts included in the measurement of lease liabilities |
| $ | 1,554 |
|
| $ | 1,567 |
|
Right-of-use assets obtained in exchange for new operating lease liabilities |
|
| 0 |
|
|
| 0 |
|
At June 30, 2021, the future payments and interest expense for the operating leases are as follows (in thousands):
Year Ending December 31, |
| Future Payments |
| |
The remainder of 2021 |
| $ | 1,293 |
|
2022 |
|
| 2,659 |
|
2023 |
|
| 2,738 |
|
2024 |
|
| 2,774 |
|
2025 |
|
| 2,096 |
|
2026 |
|
| 147 |
|
Total undiscounted cash flows |
| $ | 11,707 |
|
Less: imputed interest |
|
| (1,730 | ) |
Present value of lease liabilities |
| $ | 9,977 |
|
Legal Proceedings
Patent Litigation
On September 10, 2019, a complaint for patent infringement was filed by Varian Medical Systems, Inc., in U.S. District Court for the Northern District of California (the “District Court”) against the Company. Captioned Varian Medical Systems, Inc., v. ViewRay, Inc., the complaint alleges that the Company infringes 2 related patents, U.S. Patent Nos. 8,637,841 and 9,082,520 and seeks injunctive relief and monetary damages. The Company filed its answer on November 1, 2019.
On July 7, 2020 and July 31, 2020, the Company filed petitions with the Patent Trial & Appeal Board of the United States Patent and Trademark Office (“PTAB”), requesting institution of inter partes review (“IPR”) and cancellation of claims 1-3, 5-8, 10, 13, 14 of Varian’s U.S. Patent No. 9,082,520. On August 13, 2020, the Company filed a separate petition with the PTAB, requesting an IPR and cancellation of claims 1-4 and 20-22 of Varian’s U.S. Patent No. 8,637,841.
In August 2020, Varian announced that it had entered into a definitive agreement to combine with Siemens Healthineers AG. The merger closed effective April 15, 2021, within 60 days of which, Siemens agreed to dismiss Varian’s lawsuit and release ViewRay from all claims brought by Varian. The Company and Varian entered into an agreement to settle the lawsuit effective as of June 7, 2021 (the “Settlement Agreement”). Under the Settlement Agreement, neither party admitted fault. In addition, the parties agreed to file a Stipulation and Proposed Order of Dismissal with the District Court to dismiss the case with prejudice, as well a Joint Motion to Terminate/Joint Motion to Dismiss the IPRs with the PTAB.
On June 15, 2021, the District Court granted the Stipulation and Order of Dismissal. On July 1, 2021, the PTAB ordered that the Joint Motions be granted, and the IPRs dismissed and terminated the proceedings. The Company considers the matter closed.
13
complaint and those in the putative securities class action complaint, this lawsuit is presently stayed, until August 30, 2021, pending a decision on the motion to dismissappeal by the second amended complaint in the securities action.
Sixth Circuit Court of Appeals.
|
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
| Three Months Ended March 31, | ||||||||||||||||||||
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| 2022 | 2021 | |||||||||||||
U.S. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| U.S. | ||||||||||
Product | $ | 10,140 |
|
| $ | 5,685 |
|
| $ | 15,207 |
|
| $ | 7,303 |
| Product | $ | 432 | $ | 5,067 | ||||||
Service |
| 2,335 |
|
|
| 2,029 |
|
|
| 4,702 |
|
|
| 3,495 |
| Service | 3,099 | 2,367 | ||||||||
Total U.S. revenue | $ | 12,475 |
|
| $ | 7,714 |
|
| $ | 19,909 |
|
| $ | 10,798 |
| Total U.S. revenue | $ | 3,531 | $ | 7,434 | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Outside of U.S. ("OUS") |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Outside of U.S. ("OUS") | ||||||||||
Product | $ | 777 |
|
| $ | 4,930 |
|
| $ | 7,089 |
|
| $ | 14,782 |
| Product | $ | 12,994 | $ | 6,312 | ||||||
Service |
| 1,659 |
|
|
| 1,461 |
|
|
| 3,319 |
|
|
| 2,656 |
| Service | 2,232 | 1,660 | ||||||||
Distribution rights |
| 119 |
|
|
| 119 |
|
|
| 238 |
|
|
| 238 |
| Distribution rights | 119 | 119 | ||||||||
Total OUS revenue | $ | 2,555 |
|
| $ | 6,510 |
|
| $ | 10,646 |
|
| $ | 17,676 |
| Total OUS revenue | $ | 15,345 | $ | 8,091 | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total | ||||||||||
Product | $ | 10,917 |
|
| $ | 10,615 |
|
| $ | 22,296 |
|
| $ | 22,085 |
| Product | $ | 13,426 | $ | 11,379 | ||||||
Service |
| 3,994 |
|
|
| 3,490 |
|
|
| 8,021 |
|
|
| 6,151 |
| Service | 5,331 | 4,027 | ||||||||
Distribution rights |
| 119 |
|
|
| 119 |
|
|
| 238 |
|
|
| 238 |
| Distribution rights | 119 | 119 | ||||||||
Total revenue | $ | 15,030 |
|
| $ | 14,224 |
|
| $ | 30,555 |
|
| $ | 28,474 |
| Total revenue | $ | 18,876 | $ | 15,525 |
14
systems for which the Company is not responsible for installation, revenue recognition generally occurs when the entire system is shipped, which is when the control of the system is transferred to the customer.
2021.
| NOTE 8. EQUITY FINANCING |
At-The-Market Offering of Common Stock
In January 2019,
|
|
In connection with the merger of the Company and ViewRay Technologies, Inc. in July 2015 (the “Merger”), in July and August 2015, the Company conducted a private placement offering as part of which the Company issued warrants (the “2015 Placement Warrants”), that provide the warrant holder the right to purchase 198,760 shares of common stock at an exercise price of $5.00 per share. The 2015 Placement Warrants are exercisable at any time at the option of the holder untilthe five-year anniversary of its date of issuance. During the year ended December 31, 2018, the Company issued 92,487 shares of its common stock upon the net exercise of 159,010 shares of the 2015 Placement Warrants. The remaining 39,750 shares of the 2015 Placement Warrants expired in July and August 2020 and 0 warrants remained outstanding at June 30, 2021.
March 31, 2022.
| ||||||||
Upon Issuance | ||||||||
Common Stock Warrants: | ||||||||
Expected term (in years) | 7.0 | |||||||
Expected volatility (%) | 62.5% | |||||||
Risk-free interest rate (%) | 2.8% | |||||||
Expected dividend yield (%) | 0% |
paid-in-capital. Issuance Date Term Exercise Price Per Share Warrants Exercised during the six months ended June 30, 2021 Warrants Outstanding at June 30, 2021 2017 Placement Warrants January 2017 7 years $ 3.17 118,868 1,500,022 2016 Placement Warrants August and September 2016 7 years $ 2.95 552 536,711 Total 119,420 2,036,733 2017 Placement Warrants 2016 Placement Warrants June 30, 2021 December 31, 2020 June 30, 2021 December 31, 2020 Expected term (in years) 2.6 3.0 2.1 2.6 Expected volatility 88.7 % 86.9 % 88.0 % 86.3 % Risk-free interest rate 0.3 % 0.2 % 0.2 % 0.2 % Expected dividend yield 0.0 % 0.0 % 0.0 % 0.0 % Subsequently, in April 2022, the Company's board of directors determined that the 2018 Plan was no longer required under ViewRay’s compensation program and terminated the 2018 Plan. No further awards will be granted under this plan and no such awards have been granted since August 16, 2021. As a result, all 1.5 million shares previously available for issuance under the 2018 Plan have been restored to the Company’s general authorized but unissued share reserve and are no longer set aside for grants under the 2018 Plan. Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Cost of revenue $ 397 $ 270 $ 632 $ 508 Research and development 675 636 1,311 1,156 Selling and marketing 454 343 748 559 General and administrative 4,929 4,554 12,258 9,081 Total stock-based compensation expense $ 6,455 $ 5,803 $ 14,949 $ 11,304 The Company’s stock-based compensation expense is based on the value of the portion of share-based payment awards that are ultimately expected to vest, assuming estimated forfeitures at the time of grant. Stock-based compensation relating to stock-based awards granted to consultants was insignificant for the 2021. The DSUs granted to board members are either fully vested upon issuance or vest over a period of time from the grant date and will be released and settled upon termination of the board member’s services, the occurrence of a change in control event, or the tenth anniversary of the grant date. The RSUs continuing service to the Company over that period. is between threshold and target or between target and maximum, payouts will be linearly interpolated. ISUs Number of Shares Weighted Average Grant Date Fair Value Unvested at December 31, 2020 8,046,399 $ 3.41 ISUs granted 3,178,689 $ 4.78 ISUs vested (3,509,497 ) $ 4.82 ISUs forfeited (178,503 ) $ 3.34 Unvested at June 30, 2021 7,537,088 $ 3.99 Vested and unreleased 172,692 Outstanding at June 30, 2021 7,709,780 Number of Stock Options Outstanding Weighted-Average Exercise Price Weighted- Average Remaining Contractual Life (Years) Aggregate Intrinsic Value (In thousands) Options outstanding at December 31, 2020 8,142,348 $ 7.14 7.3 $ 2,638 Options granted 0 0 Options exercised (43,651 ) $ 4.26 Options cancelled or forfeited (680,493 ) $ 9.20 Options outstanding at June 30, 2021 7,418,204 $ 6.97 6.7 $ 7,905 Options exercisable at June 30, 2021 5,452,385 $ 6.94 6.3 $ 5,559 Options vested and expected to vest at June 30, 2021 7,260,596 $ 7.00 6.6 $ 7,573 2021. Employee Stock Purchase Plan For the three and six months ended June 30, 2021 2020 Stock options outstanding 7,418,204 9,716,529 Warrants to purchase common stock - liability classified 2,036,733 2,156,153 Warrants to purchase common stock - equity classified 1,418,116 1,457,856 Unvested restricted stock units 7,537,088 9,391,556 Total 18,410,141 22,722,094 for patients suffering from cancer. •In June 2017, we received 510(k) marketing clearance to market RayZR™, our high-resolution beam-shaping multi-leaf collimator, or MLC. We also received MRIdian Linac regulatory approval in Taiwan and Canada in August 2017, and in Israel in November 2017. In March 2018, we received regulatory approval from the Japanese Ministry of Health, Labor and Welfare to market MRIdian Linac in Japan. • •In December 2021, the newest version of MRIdian, MRIdian A3i, received 510(k) marketing clearance from the FDA. approximately 21,000 patients on MRIdian systems to date. •navigate our business activities through the impacts of the COVID-19 pandemic; •continue our research and development efforts; •seek regulatory approval for MRIdian in certain foreign countries; and systems. COVID-19 Pandemic Distribution Rights Revenue. In December 2014, we entered into a distribution agreement with Itochu Corporation (“Itochu”) pursuant to which we appointed Itochu as our exclusive distributor for the promotion, sale and delivery of MRIdian products within Japan. As consideration for the exclusive distribution rights granted, we received $4.0 million, which was recorded as deferred revenue and since August 2016, distribution rights revenue has been recognized ratably over the remaining term of the distribution agreement, which expires in December 2024. A time-elapsed method is used to measure progress because the control is transferred evenly over the contractual period. Loan. Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (in thousands) Revenue: Product $ 10,917 $ 10,615 $ 22,296 $ 22,085 Service 3,994 3,490 8,021 6,151 Distribution rights 119 119 238 238 Total revenue 15,030 14,224 30,555 28,474 Cost of revenue: Product 12,180 12,714 22,865 25,843 Service 4,522 2,552 9,040 5,780 Total cost of revenue 16,702 15,266 31,905 31,623 Gross margin (1,672 ) (1,042 ) (1,350 ) (3,149 ) Operating expenses: Research and development 7,903 6,211 14,413 12,548 Selling and marketing 3,052 3,093 5,900 8,916 General and administrative 13,858 15,227 29,497 31,015 Total operating expenses: 24,813 24,531 49,810 52,479 Loss from operations (26,485 ) (25,573 ) (51,160 ) (55,628 ) Interest income 3 87 5 782 Interest expense (1,060 ) (1,071 ) (2,118 ) (2,109 ) Other (expense) income, net (3,434 ) 405 (4,446 ) 3,271 Loss before provision for income taxes (30,976 ) (26,152 ) (57,719 ) (53,684 ) Provision for income taxes — — — — Net loss $ (30,976 ) $ (26,152 ) $ (57,719 ) $ (53,684 ) Three Months Ended June 30, 2021 2020 Change (in thousands) Product $ 10,917 $ 10,615 $ 302 Service 3,994 3,490 504 Distribution rights 119 119 — Total revenue $ 15,030 $ 14,224 $ 806 2021. Three Months Ended June 30, 2021 2020 Change (in thousands) Product $ 12,180 $ 12,714 $ (534 ) Service 4,522 2,552 1,970 Total cost of revenue $ 16,702 $ 15,266 $ 1,436 Operating Expenses Three Months Ended June 30, 2021 2020 Change (in thousands) Research and development $ 7,903 $ 6,211 $ 1,692 Selling and marketing 3,052 3,093 (41 ) General and administrative 13,858 15,227 (1,369 ) Total operating expenses $ 24,813 $ 24,531 $ 282 Three Months Ended June 30, 2021 2020 Change (in thousands) Interest income $ 3 $ 87 $ (84 ) 2021. Three Months Ended June 30, 2021 2020 Change (in thousands) Interest expense $ (1,060 ) $ (1,071 ) $ 11 2021. Three Months Ended June 30, 2021 2020 Change (in thousands) Other (expense) income, net $ (3,434 ) $ 405 $ (3,839 ) Six Months Ended June 30, 2021 2020 Change (in thousands) Product $ 22,296 $ 22,085 $ 211 Service 8,021 6,151 1,870 Distribution rights 238 238 — Total revenue $ 30,555 $ 28,474 $ 2,081 Six Months Ended June 30, 2021 2020 Change (in thousands) Product $ 22,865 $ 25,843 $ (2,978 ) Service 9,040 5,780 3,260 Total cost of revenue $ 31,905 $ 31,623 $ 282 Six Months Ended June 30, 2021 2020 Change (in thousands) Research and development $ 14,413 $ 12,548 $ 1,865 Selling and marketing 5,900 8,916 (3,016 ) General and administrative 29,497 31,015 (1,518 ) Total operating expenses $ 49,810 $ 52,479 $ (2,669 ) Six Months Ended June 30, 2021 2020 Change (in thousands) Interest income $ 5 $ 782 $ (777 ) Six Months Ended June 30, 2021 2020 Change (in thousands) Interest expense $ (2,118 ) $ (2,109 ) $ (9 ) Six Months Ended June 30, 2021 2020 Change (in thousands) Other (expense) income, net $ (4,446 ) $ 3,271 $ (7,717 ) be determined. Six Months Ended June 30, 2021 2020 Cash used in operating activities $ (40,312 ) $ (45,018 ) Cash used in investing activities $ (568 ) $ (1,295 ) Cash provided by (used in) financing activities $ 51,085 $ (500 ) expenditures. awards. Exhibit Incorporated by Reference Filed Number Description Form Exhibit Date Filed Herewith 2.1 S-1/A 2.1 12/16/2015 3.1 S-1/A 3.1 12/16/2015 3.2 8-K 3.1 6/11/2021 3.3 8-K 3.2 6/11/2021 31.1 X 31.2 X 32.1 X 101.INS Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. X 101.SCH Inline XBRL Taxonomy Extension Schema Document X 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document X 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document X 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document X 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document X 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) X 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 hereunto duly authorized. By: /s/ Scott Drake Name: Scott Drake Title: Chief Executive Officer (Principal Executive Officer) Dated: By: /s/ Zachary Stassen Name: Zachary Stassen Title: Chief Financial Officer (Principal Financial Officer)paid-in-capital.Issuance Date Term Exercise Price
Per Share2017 Placement Warrants January 2017 7 years $ 3.17 — 1,500,022 2016 Placement Warrants August and September 2016 7 years $ 2.95 — 536,711 Total — 2,036,733 sixthree months ended June 30,March 31, 2022 and 2021, and 2020, the Company recorded a lossgain of $4.7$2.8 million and a gainloss of $3.3$0.9 million, respectively, related to the change in fair value of the 2017 and 2016 Placement Warrants. The fair value of the 2017 and 2016 Placement Warrants at June 30, 2021March 31, 2022 and December 31, 2020,2021, respectively, was estimated using the Black-Scholes option-pricing model and the following weighted-average assumptions:2017 Placement Warrants 2016 Placement Warrants March 31, 2022 December 31, 2021 March 31, 2022 December 31, 2021 Expected term (in years) 1.8 2.0 1.4 1.6 Expected volatility 85.0 % 86.0 % 84.6 % 85.5 % Risk-free interest rate 2.2 % 0.4 % 1.9 % 0.3 % Expected dividend yield — % — % — % — % NOTE 10.June 30, 2021,March 31, 2022, the Company had an active stock-based incentive compensation plan, an employee stock purchase plan and an equity inducement plan: the 2015 Equity Incentive Award Plan (as amended and restated, the “2015 Plan”), the 2015 Employee Stock Purchase Plan (as amended and restated, the “ESPP”), and the 2018 Equity Inducement Award Program (the “2018 Plan”), respectively. All new equity compensation grants are issued under these three3 plans; however, outstanding awards previously issued under inactive plans will continue to vest and remain exercisable in accordance with the terms of the respective plans.June 30, 2021,March 31, 2022, there were 5.62.6 million shares available for grant under the 2015 Plan and 2018 Plan.Three Months Ended
March 31,2022 2021 Cost of revenue $ 176 $ 236 Research and development 724 637 Selling and marketing 693 295 General and administrative 3,439 7,326 Total stock-based compensation expense $ 5,032 $ 8,494 sixthree months ended June 30, 2021March 31, 2022 and 2020.(“RSUs”("RSUs"), are granted to itsthe Company's board of directors and employees for their services. Additionally, the Company grants Deferred Stock Units (“DSUs”("DSUs"), are granted to itsthe Company's board of directors at their election in lieu of retainer and committee service fees.are generallyand DSUs granted with a grant date fair value equal to the market price of our stock on the date of grant and generallyemployees and/or board members vest in equal annual or monthly installments over either two orone to three years from the grant date and are subject to the participants17The weighted-average grant date fair value of RSUs granted six months ended June 30, 2021 and 2020 was $4.78 per share, and $2.78 per share, respectively.In March 2021, the Company introduced a performance share plan (the “2021 PSU Plan”) as a component of its equity grants for 2021. The 2021 PSU Plan provides for the award of performancewill be awardedvest based on the achievement of performance targets set by the Company based on a three-year performance period.over a three-year period.RSUs and DSUs PSUs Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Unvested at December 31, 2021 Unvested at December 31, 2021 5,536,925 $ 4.04 707,088 $ 4.66 ISUs granted 1,847,172 $ 4.21 1,600,549 (1) $ 4.25 ISUs vested (1,573,992) $ 4.05 — $ — ISUs forfeited (117,372) $ 4.01 (4,756) $ 4.66 Unvested at March 31, 2022 Unvested at March 31, 2022 5,692,733 $ 4.07 2,302,881 $ 4.38 Vested and unreleased 198,856 — Outstanding at March 31, 2022 Outstanding at March 31, 2022 5,891,589 2,302,881 $15.1$12.9 million and $16.4$13.5 million for the sixthree months ended June 30,March 31, 2022 and 2021, and 2020, respectively. The total fair value of ISUs vested was $18.3$6.9 million, and $1.2$5.5 million during the sixthree months ended June 30,March 31, 2022 and 2021, and 2020, respectively.June 30, 2021,March 31, 2022, total unrecognized stock-based compensation cost related to ISUs, net of estimated forfeitures, was $19.1$23.4 million, which is expected to be recognized over a weighted-average period of 1.92.1 years. As of June 30, 2021, 7.0March 31, 2022, 6.9 million shares of ISUs are expected to vest.Weighted-
Average Exercise
PriceOptions outstanding at December 31, 2021 7,156,776 $ 6.97 6.1 $ 5,203 Options granted — — Options exercised (19,292) $ 2.91 Options cancelled or forfeited (133,995) $ 8.18 Options outstanding at March 31, 2022 7,003,489 $ 6.96 5.9 $ 2,651 Options exercisable at March 31, 2022 6,117,485 $ 7.06 5.7 $ 2,038 Options vested and expected to vest at March 31, 2022 6,938,310 $ 6.99 5.8 $ 2,560 0no options granted to employees for the sixthree months ended June 30,March 31, 2022 and 2021.The weighted-average grant date fair value of options granted to employees was $1.20 per share for the six months ended June 30, 2020.sixthree months ended June 30, 2021March 31, 2022 and 2020.June 30, 2021,March 31, 2022, total unrecognized stock-based compensation cost related to stock options granted to employees, net of estimated forfeitures, was $7.2$2.9 million, which is expected to be recognized over a weighted-average period of 1.61.2 years.18During the fourth quarter of 2020, the Company began to determine volatility by solely using the Company’s own historical volatility measurements, since more than four years of historical data became available in the public market. Prior to the fourth quarter of 2020,the Company determined the volatility for stock options granted based on the average historical price volatility for the Company and industry peers over a period equivalent to the expected term of the stock option grants.The fair value of employee stock options was estimated at the date of grant using a Black-Scholes option-pricing model with the following weighted-average assumptions:Six Months Ended June 30,2020Expected term (in years)6.0Expected volatility68.8%Risk-free interest rate0.7%Expected dividend yield0.0%2021,2022, the first offering period provided to eligible employees is January 1, 20212022 through June 30, 2021.2022. The purchase price of common stock purchased under the ESPP is currently equal to 85% of the lesser of the fair market value of a share of common stock on: (1) the first trading day of an offering period and (2) the last trading of each offering period. At June 30, 2021,March 31, 2022, 3.5 million shares were reserved for issuance under the ESPP. No more than 3.5 million shares of common stock may be issued under the ESPP. As of June 30, 2021,March 31, 2022, 0.3 million shares have been issued under the ESPP and 3.2 million shares remained available for future issuance under the ESPP. Purchase rights granted under the ESPP are valued using the Black-Scholes pricing model.NOTE 11.INCOME TAX0zero income tax expense during the sixthree months ended June 30,March 31, 2022 and 2021, and 2020, respectively. During these periods, the Company’s activities were limited to U.S. federal and state tax jurisdictions, as it does not have any significant foreign operations.June 30, 2021.March 31, 2022. The Company expects to continue to maintain a full valuation allowance until there is sufficient evidence to support recoverability of its deferred tax assets.$3.0$3.5 million and $2.7$3.4 million at June 30, 2021March 31, 2022 and December 31, 2020,2021, respectively. The reversal of the uncertain tax benefits would not affect the effective tax rate to the extent that the Company continues to maintain a full valuation allowance against its deferred tax assets. Unrecognized tax benefits may change during the next 12 months for items that arise in the ordinary course of business. June 30, 2021March 31, 2022 and December 31, 2020,2021, there were 0no accrued interest and penalties related to uncertain tax positions.On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was signed into law. The CARES Act includes provisions relating to refundable payroll tax credits, deferment of the employer portion of certain payroll taxes, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. The enactment of the CARES Act did not result in any material adjustments to our income tax provision for the six months ended June 30, 2021 and 2020.19NOTE12.NET LOSS PER SHAREJune 30,March 31, 2022 and 2021 and 2020 excluded common stock equivalents because the effect of their inclusion would be anti-dilutive or would decrease the reported loss per share. The following table sets forth securities outstanding that could potentially dilute the calculation of diluted earnings per share:2022 2021 Stock options outstanding 7,003,489 8,096,905 Warrants to purchase common stock - liability classified 2,036,733 2,042,992 Warrants to purchase common stock - equity classified 1,418,116 1,418,116 Unvested restricted stock units 7,995,614 9,217,496 Total 18,453,952 20,775,509 NOTE13.RELATED PARTY TRANSACTIONS$0.1 millionnominal and $0.2$0.1 million during the three months ended June 30,March 31, 2022 and 2021, and 2020, respectively, and were recorded as product cost of revenue. Royalty expenses based on 1% of net sales were $0.2 million and $0.3 million during the six months ended June 30, 2021 and 2020, respectively, and were recorded as product cost of revenue.installmentinstallments of this payment as of June 30, 2021.March 31, 2022.NOTE 14.SUBSEQUENT EVENTSThe Company has evaluated the period subsequent to June 30, 2021 for material events that did not exist at the balance sheet date but arose after that date and determined that no additional subsequent events arose that should be disclosed in order to keep the financial statements from being misleading.Table of Contents202020,2021, and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, contained in the Annual Report filed with the SEC on March 5, 2021.February 25, 2022. In addition to historical information, this discussion and analysis contains forward-looking statements within the meaning of 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”). These forward-looking statements are subject to risks and uncertainties, including those under “Risk Factors” in this Quarterly Report and the Annual Report that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements.As a result of the merger of the Company and ViewRay Technologies, Inc. in July 2015 (the “Merger”), and the change in business and operations of the Company, a discussion of the past financial results of the Company is not pertinent, and under applicable accounting principles the historical financial results of ViewRay Technologies, Inc., the accounting acquirer, prior to the Merger are considered the historical financial results of the Company.We design, manufacturemarketmarkets the ViewRay MRIdian®. MRI-Guided Radiation Therapy System. MRIdian is built upon a proprietary high-definition magnetic resonance (“MR”) imaging system designed from the ground up to address the unique challenges and clinical workflow for advanced radiation oncology. Unlike MR systems used in diagnostic radiology, MRIdian's high-definition MR was purpose-built to address specific challenges, including beam distortion, skin toxicity, and other concerns that may arise when high magnetic fields interact with radiation beams. The MRIdian is an innovative system thatMR-Guided Radiation Therapy System integrates high qualitydiagnostic-quality MR imaging with radiation therapy delivery to enable on-table adaptive treatments with simultaneous magnetic resonance imaging (“MRI”).real-time tissue tracking and automatic beam gating. MRIdian supports the delivery of ablative radiation doses in five or fewer fractions, without implantable markers resulting in lower toxicities in hard-to-treat cancers. There are two generations of the MRIdian: the first generation MRIdian with Cobalt-60 based radiation beams and the second generation MRIdian Linac, with more advanced linear accelerator or ‘linac’ based radiation beams.The MRIdian combines MRI andwith Cobalt-60 is no longer commercially available.simultaneously imageprovide real-time imaging that clearly defines the targeted tumor from the surrounding soft tissue and treat cancer patients. MRI is a broadly used imaging tool that has the ability to clearly differentiate between types of soft tissue. In contrast, X-ray or computed tomography (“CT”), the most commonly used imaging technologies inother critical organs, both before and during radiation therapy today, are often unable to distinguish soft tissues such as the tumor and critical organs. MRIdian integrates MRI technology, radiation delivery and our proprietary software to clearly See the soft tissues, Shape the dose to accommodate for changes in anatomy and Strike the target precisely using real-time targeting throughout the treatment. The MRIdian system is Sized to fit into standard radiation therapy vaults without having to remove ceiling or walls. These capabilities allow MRIdian to deliver radiation to the tumor accurately, while reducing the radiation amount delivered to nearby healthy tissue, as compared to other radiation therapy treatments currently available.treatment delivery. We believe this combination of enhanced anatomical visualization and accurate dose calculation and delivery will leadimprove the safety and efficacy of radiation therapy, leading to improved patientbetter outcomes and reduced treatment-related side effects.FDAU.S. Food and Drug Administration, (“FDA”) and permission to affix the Conformité Européene, (“CE”) mark.mark. mark for the MRIdian Linac (with a linear accelerator as the radiation source) in the European Economic Area ("EEA").•We received initial 510(k) marketing clearance from the FDA for our treatment planning and delivery software in January 2011.•We received 510(k) marketing clearance for MRIdian, with Cobalt-60 as the radiation source, in May 2012. We received permission to affix the CE mark to MRIdian with Cobalt-60 in November 2014, allowing MRIdian with Cobalt-60 to be sold within the European Economic Area (“EEA”•In February 2017, we received 510(k) marketing clearance from the FDA to market MRIdian Linac in the United States (“U.S.”).•In August 2016, we received regulatory approval from the Japanese Ministry of Health, Labor and Welfare to market MRIdian with Cobalt-60 in Japan as well as from the China Food and Drug Administration to market MRIdian with Cobalt-60 in China. •In September 2016, we received the CE mark for the MRIdian Linac (with a linear accelerator as the radiation source) in the EEA.
22•In February 2017, we received 510(k) clearance from the FDA to market MRIdian Linac in the United States.In June 2017, we received 510(k) clearance to market RayZR™, our high-resolution beam-shaping multi-leaf collimator. We also received MRIdian Linac regulatory approval in Taiwan and Canada in August 2017, and in Israel in November 2017. In March 2018, we received regulatory approval from the Japanese Ministry of Health, Labor and Welfare to market MRIdian Linac in Japan.21•In February 2019, we received 510(k) clearance for advancements in MRI, 8 frames per second cine, and Functional imaging (T1/T2/DWI) and High-Speed MLC.In February 2019, we received 510(k) marketing clearance for advancements in MRI, 8 frames per second cine, Functional imaging (T1/T2/DWI) and High-Speed MLC. In December 2019, we received the CE mark for these advancements in the EEA.•We are also seeking required MRIdian Linac approvals in other countries.During the second quarter of 2021, weOur customers have surpassed a significant milestone by treating more than 12,500 patients.June 30, 2021,March 31, 2022, a total of 4550 MRIdian systems, two2 MRIdian with Cobalt-60 systems and 4348 MRIdian Linac systems, are in operation with 4347 customers worldwide (18(22 in the United States and 25 outside the United States). In addition, six10 MRIdian Linacs have been delivered to customers that are in varying stages of deployment.7560 days for us to install MRIdian and perform on-site testing of the system, including the completion of acceptance test procedures.$15.0$18.9 million and $14.2$15.5 million and had net losses of $31.0$25.8 million and $26.2$26.7 million, during the three months ended June 30,March 31, 2022 and 2021, and 2020, respectively. During the six months ended June 30, 2021 and 2020 we generated total revenue of $30.6 million and $28.5 million and had net losses of $57.7 million and $53.7 million, respectively.•navigate our business activities through the impacts of the coronavirus pandemic;•continue our research and development efforts;•seek regulatory approval for MRIdian in certain foreign countries; and•operate as a public company.systems.Coronavirus DiseasecoronavirusCOVID-19 pandemic the resulting global recession and its follow-on effects have impacted and will continue to impact business activity across industries worldwide, including ViewRay.coronavirus,COVID-19, we have experienced delays in installation of systems in the United States, Asia and Europe. Similarly, our ability to conduct commercial efforts with our customers has been and is likely to continue to be disrupted as customers have in most cases suspendedare reintroducing in-person sales callscalls. If the economic effects and turned their focus to dealing with the impacttravel restrictions of the coronavirus on their operations. Should the global recessionCOVID-19 pandemic persist, as a result of the impact of coronavirus, our ability to conductmakesmake up the majority of our revenue, may take longer than other areas of the economy in a recovery, which may have a material impact on our business. The coronavirusCOVID-19 pandemic continues to develop rapidly,evolve and its continued global economic impact may negatively impact our operations in areas that we are not aware of currently.22quarterthree months ended June 30, 2021,March 31, 2022, we received seven new orders for MRIdian systems, totaling $37.9$40.9 million. At June 30, 2021,March 31, 2022, we had total backlog of $278.4$331.0 million.7560 days to complete the installation and on-site testing of the system, including the completion of customer test procedures. On-site training can take up to multiple weeks and can be conducted concurrently with installation and acceptance testing. Order contracts generally include customer deposits upon execution of the agreement, and in certain cases, additional amounts due at shipment or commencement of installation, and final payment due generally upon customer acceptance.providedprovided..23 There was no LCNRV charge for the three and six months ended June 30, 2021. We recorded LCNRV charges of $0.2 million for the three and six months ended June 30, 2020.Loan.24Three Months Ended March 31, 2022 2021 (in thousands) Revenue: Product $ 13,426 $ 11,379 Service 5,331 4,027 Distribution rights 119 119 Total revenue 18,876 15,525 Cost of revenue: Product 13,766 10,685 Service 5,016 4,518 Total cost of revenue 18,782 15,203 Gross profit (loss) 94 322 Operating expenses: Research and development 7,870 6,510 Selling and marketing 6,884 2,848 General and administrative 12,814 15,639 Total operating expenses 27,568 24,997 Loss from operations (27,474) (24,675) Interest income 5 2 Interest expense (1,064) (1,058) Other (expense) income, net 2,759 (1,012) Loss before provision for income taxes $ (25,774) $ (26,743) Provision for income taxes — — Net loss $ (25,774) $ (26,743) Three Months Ended June 30,three months ended March 31, 2022 and 2021 and 2020Three Months Ended March 31, 2022 2021 Change (in thousands) Product $ 13,426 $ 11,379 $ 2,047 Service 5,331 4,027 1,304 Distribution rights 119 119 — Total revenue $ 18,876 $ 15,525 $ 3,351 June 30, 2021March 31, 2022 increased by $0.8$3.4 million compared to the same period in 2020.2021. The increase was due to a $0.5$1.3 million increase in service revenue and a $0.3$2.0 million increase in product revenue during the three months ended June 30, 2021March 31, 2022 compared to the same period in 2020.$0.3$2.0 million for the three months ended June 30, 2021March 31, 2022 compared to the same period in 2020.2021. The Company recognized revenue for three MRIdian Linac systems in the three months ended March 31, 2022 as compared to two MRIdian Linac systems during the same period in each of2021.June 30,March 31, 2022 compared to the same period in 2021 and 2020.primarily due to the increase in installed base.Three Months Ended March 31, 2022 2021 Change (in thousands) Product $ 13,766 $ 10,685 $ 3,081 Service 5,016 4,518 498 Total cost of revenue $ 18,782 $ 15,203 $ 3,579 June 30, 2021March 31, 2022 compared to the same period in 20202021, primarily due to the increase in installed base.Cost of RevenueProduct Cost of Revenue. Product cost of revenue decreased slightly by $0.5 million during the three months ended June 30, 2021 compared to the same period in 2020.Service Cost of Revenue. Service cost of revenue increased by $2.0 million during the three months ended June 30, 2021 compared to the same period in 2020, primarily due to the increase in installed base and freight expenses. Additionally, during the three months ended June 30, 2020, there was a decrease in cost of service-related inventory parts and coronavirus related travel and payroll reductions for our service personnel.Three Months Ended March 31, 2022 2021 Change (in thousands) Research and development $ 7,870 $ 6,510 $ 1,360 Selling and marketing 6,884 2,848 4,036 General and administrative 12,814 15,639 (2,825) Total operating expenses $ 27,568 $ 24,997 $ 2,571 June 30, 2021March 31, 2022 increased by $1.7$1.4 million compared to the same period in 2020.2021. The increase was primarily attributable to an increase inincreased personnel and consulting expenses related to clinical studies and research grants.expenses.June 30, 2021 remained flat whenMarch 31, 2022 increased by $4.0 million compared to the same period in 2020.2021. The increase was primarily attributable to an increase in personnel expenses, as well as travel and marketing related expenses for in person events during the three months ended March 31, 2022.June 30, 2021March 31, 2022 decreased by $1.4$2.8 million when compared to the same period in 2020.2021. During the three months ended June 30, 2021,March 31, 2022, there was a $1.5 million and $0.9$4.2 million decrease in personnel, and legal expenses, respectively, partially offset by an increase in officelegal expenses as ourwell as office spaces began to reopen after the coronavirus shutdowns.expenses.Three Months Ended March 31, 2022 2021 Change (in thousands) Interest income $ 5 $ 2 $ 3 decreased by $0.1 millionremained flat during the three months ended June 30, 2021March 31, 2022 compared to the same period in 2020, primarily due to an overall decrease in interest rates.Three Months Ended March 31, 2022 2021 Change (in thousands) Interest expense $ (1,064) $ (1,058) $ (6) June 30, 2021March 31, 2022 compared to the same period in 2020. Three Months Ended March 31, 2022 2021 Change (in thousands) Other (expense) income, net $ 2,759 $ (1,012) $ 3,771 June 30, 2021March 31, 2022 consisted primarily of a $3.8$2.8 million increasedecrease in the fair value of warrant liabilities related to the 2017 and 2016 Placement Warrants as a result of the increasedecrease in the Company’s stock price. Other (expense) income, net during the three months ended June 30, 2020 consisted primarily of a $0.4 million decrease in the fair value of warrant liabilities related to the 2017 and 2016 Placement Warrants.Comparison of the six months ended June 30, 2021 and 2020RevenueTotal revenue during the six months ended June 30, 2021 increased by $2.1 million compared to the same period in 2020. The increase was primarily due to a $1.9 million increase in service revenue and a $0.2 million increase in product revenue.Product Revenue. Product revenue increased by $0.2 million during the six months ended June 30, 2021 compared to the same period in 2020. The Company recognized revenue for four MRIdian Linac systems during the six months ended June 30, 2021, as compared to four MRIdian Linac systems and one upgrade during the same period in 2020.Service Revenue. Service revenue increased by $1.9 million during the six months ended June 30, 2021 compared to the same period in 2020 due to the increase in installed base.Cost of RevenueProduct Cost of Revenue. Product cost of revenue decreased by $3.0 million during the six months ended June 30, 2021 compared to the same period in 2020. Product cost of revenue in the six months ended June 30, 2021 was impacted because we performed no upgrades and recognized no upgrade cost during the period.Service Cost of Revenue. Service cost of revenue increased by $3.3 million during the six months ended June 30, 2021 compared to the same period in 2020, primarily due to the increase in installed base and freight expenses. Additionally, during the six months ended June 30, 2020, there was a decrease in cost of service-related inventory parts and coronavirus related travel and payroll reductions for our service personnel. Operating ExpensesResearch and Development. Research and development expenses during the six months ended June 30, 2021 increased by $1.9 million compared to the same period in 2020. The increase was primarily attributable to an increase in consulting expenses related to clinical studies and research grants.Selling and Marketing. Selling and marketing expenses during the six months ended June 30, 2021 decreased by $3.0 million compared to the same period in 2020. This decrease was primarily attributable to a $2.0 million decrease in personnel expense in the form of sales related compensation and a $0.7 million decrease in marketing and travel expense primarily driven by the postponement or cancellation of clinical conferences.General and Administrative. General and administrative expenses during the six months ended June 30, 2021 decreased by $1.5 million compared to the same period in 2020. This decrease was primarily driven by a $2.3 million decrease in legal and professional service expenses, partially offset by an increase in office expenses as our office spaces began to reopen after the coronavirus shutdowns.Interest IncomeInterest income decreased by $0.8 million during the six months ended June 30, 2021 compared to the same period in 2020, primarily due an overall decrease in interest rates.Interest ExpenseInterest expense related to the SVB Term Loan remained flat during the six months ended June 30, 2021 and 2020.Other Income (Expense), NetOther income (expense), net during the six months ended June 30,March 31, 2021 consisted primarily of a $4.7$0.9 million increase in the fair value of warrant liabilities related to the 2017 and 2016 Placement Warrants. Other income (expense), net during the six months ended June 30, 2020 consisted primarily of a $3.3 million decrease in the fair value of warrant liabilities related to the 2017 and 2016 Placement Warrants.sixthree months ended June 30,March 31, 2022 and 2021, and 2020, we had net losses of $57.7$25.8 million and $53.7$26.7 million, respectively. At June 30, 2021,March 31, 2022, we had an accumulated deficit of $684.8$762.9 million.June 30, 2021,March 31, 2022, we had cash and cash equivalents of $166.9$180.1 million. To date, we have financed our operations principally through offerings of our capital stock, issuances of warrants, issuances of convertible promissory notes, use of term loans and receipts of customer deposits for new orders and payments from customers for systems installed and delivered. We may, from time to time, seek to raise capital through a variety of sources, including the public equity market, private equity financing, and public or private debt. In January 2021, we raised aggregate gross proceeds of $57.4 million via a public offering, in which we sold approximately 11.9 million shares of our common stock at a price of $4.85 per share. We expect that our existing cash and cash equivalents, together with proceeds from the sales of MRIdian systems, will enable us to conduct our planned operations for at least the next 12 months.January 2019,November 2021 we filed aan automatically effective registration statement with the SEC whichthat covers the offering, issuance and sale of up to a maximum aggregate offering price of $250.0 million of our common stock, preferred stock, debt securities, warrants, purchase contracts and/or units including upin amounts to $100.0 million of our common shares pursuant to an at-the-market offering program with FBR Capital Markets & Co., now known as B. Riley Securities. There were no sales of our common stock pursuant to our at-the-market offering program during fiscal year 2019, fiscal year 2020 or the six months ended June 30, 2021. The consummation of the January 2021 public offering of common stock effectively reduced the common shares available for issuance under the at-the-market offering program to approximately $42.9 million as of June 30, 2021.20202021 and in Part II, Item 1A of this report.28presented (in thousands):presented:Three Months Ended March 31, 2022 2021 (in thousands) Cash used in operating activities $ (32,385) $ (26,307) Cash used in investing activities (1,218) (336) Cash (used in) provided by financing activities Cash (used in) provided by financing activities (1,548) 51,942 expenditures.fromused in operating activities for the sixthree months ended June 30, 2021March 31, 2022 was $40.3$32.4 million, as compared to $45.0$26.3 million for the same period in 2020.2021. The decrease in net cash flows used in operating activities as compared to the same period in 2020 is primarily driven by the increasechanges in the stock compensation expense and by the change in the fair valueworking capital.sixthree months ended June 30,March 31, 2022 and 2021 and 2020 of $0.6$1.2 million and $1.3$0.3 million, respectively, resulted from capital expenditures to purchase property and equipment.sixthree months ended June 30, 2021,March 31, 2022, financing activities provided $51.1used $1.5 million in cash, as compared to net cash used of $0.5provided by $51.9 million for the same period in 2020.2021. The increasedecrease in net cash flows from financing activities as compared to the same period in 20202021 is primarily a result of the January 2021 public offering, partially offset by the cash used to pay taxes related to net share settlement of equity awards.June 30, 2021March 31, 2022 and December 31, 2020.2021. Additionally, there were no material changes to our contractual obligations described in our Annual Report on Form 10-K filed with the SEC on March 5, 2021February 25, 2022.and six months ended June 30, 2021,March 31, 2022, as compared to the critical accounting policies described in our Annual Report on Form 10-K filed with the SEC on March 5, 2021.February 25, 2022. We believe that the accounting policies discussed in that Annual Report are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.Not applicablesmaller reporting companies.the impact of interest rate changes on our SVB Term Loan. See our risk factors disclosed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for our fiscal year ended December 31, 2021.June 30, 2021,March 31, 2022, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC, and that such required information is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosures.secondfirst quarter of 20212022 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.The2020.2021. If any of the risks discussed in our Annual Report on Form 10-K are realized, our business, financial condition, results of operations and prospects could be materially and adversely affected.Incorporated by Reference Filed
HerewithDescription Form Exhibit Date Filed 2.1 S-1/A 2.1 12/16/2015 3.1 S-1/A 3.1 12/16/2015 3.2 8-K 3.1 06/11/2021 3.3 8-K 3.2 06/11/2021 10.1 10-Q 10.1 11/5/2021 10.2 8-K 10.1 03/09/2022 10.3+ X 31.1 X 31.2 X 32.1 X 101.INS Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. X 101.SCH Inline XBRL Taxonomy Extension Schema Document X 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document X 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document X 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document X 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document X 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) X SIGNATURESSIGNATURESVIEWRAY, INC.VIEWRAY, INC. Dated: AugustMay 6, 20212022AugustMay 6, 2021