Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Feb. 28, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-37474 | ||
Entity Registrant Name | Conformis, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 56-2463152 | ||
Entity Address, Address Line One | 600 Technology Park Drive | ||
Entity Address, City or Town | Billerica | ||
Entity Address, State or Province | MA | ||
Entity Address, Postal Zip Code | 01821 | ||
City Area Code | 781 | ||
Local Phone Number | 345-9001 | ||
Title of 12(b) Security | Common Stock, $0.00001 par value | ||
Trading Symbol | CFMS | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 206,627,638 | ||
Entity Common Stock, Shares Outstanding | 185,559,112 | ||
Documents Incorporated by Reference | The registrant intends to file a definitive proxy statement pursuant to Regulation 14A within 120 days of the end of the fiscal year ended December 31, 2021. Portions of such definitive proxy statement are incorporated by reference into Part III of this Annual Report on Form 10-K. | ||
Entity Central Index Key | 0001305773 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Auditor Information [Abstract] | |
Auditor Name | GRANT THORNTON LLP |
Auditor Location | Boston, Massachusetts |
Auditor Firm ID | 248 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current Assets | ||
Cash and cash equivalents | $ 100,556 | $ 28,673 |
Accounts receivable, net | 9,079 | 8,515 |
Royalty and licensing receivable | 280 | 1,256 |
Inventories | 15,204 | 12,585 |
Prepaid expenses and other current assets | 1,764 | 2,315 |
Total current assets | 126,883 | 53,344 |
Property and equipment, net | 10,268 | 12,240 |
Operating right-of-use assets | 7,536 | 5,215 |
Other Assets | ||
Restricted cash | 562 | 462 |
Other long-term assets | 92 | 239 |
Total assets | 145,341 | 71,500 |
Current liabilities | ||
Accounts payable | 6,557 | 4,918 |
Accrued expenses | 9,576 | 7,213 |
Operating lease liabilities | 1,830 | 1,620 |
Advance on research and development | 0 | 3,168 |
Contract liability | 0 | 14,000 |
Total current liabilities | 17,963 | 30,919 |
Long-term debt, less debt issuance costs | 20,355 | 25,003 |
Operating lease liabilities | 6,471 | 4,206 |
Total liabilities | 44,789 | 60,128 |
Commitments and contingencies (Note H) | ||
Stockholders’ equity | ||
Preferred stock, $0.00001 par value: Authorized: 5,000,000 shares authorized at December 31, 2021 and December 31, 2020; no shares issued and outstanding as of December 31, 2021 and December 31, 2020 | 0 | 0 |
Common stock, $0.00001 par value: Authorized: 300,000,000 and 200,000,000 shares authorized at December 31, 2021 and December 31, 2020, respectively; 186,042,390 and 95,546,577 shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively | 2 | 1 |
Additional paid-in capital | 632,513 | 543,809 |
Accumulated deficit | (530,851) | (528,438) |
Accumulated other comprehensive loss | (1,112) | (4,000) |
Total stockholders’ equity | 100,552 | 11,372 |
Total liabilities and stockholders’ equity | $ 145,341 | $ 71,500 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 300,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 186,042,390 | 95,546,577 |
Common stock, shares outstanding (in shares) | 186,042,390 | 95,546,577 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue | $ 99,860 | $ 68,761 |
Cost of revenue | 34,179 | 35,046 |
Gross profit | 65,681 | 33,715 |
Operating expenses | ||
Sales and marketing | 24,904 | 22,646 |
Research and development | 14,791 | 11,939 |
General and administrative | 28,994 | 24,244 |
Total operating expenses | 68,689 | 58,829 |
Loss from operations | (3,008) | (25,114) |
Other income and expenses | ||
Interest income | 97 | 76 |
Interest expense | (3,496) | (2,373) |
Foreign currency exchange transaction (loss) income | (3,167) | 3,160 |
Other income | 7,252 | 0 |
Total other income | 686 | 863 |
Loss before income taxes | (2,322) | (24,251) |
Income tax provision | 91 | 42 |
Net loss | $ (2,413) | $ (24,293) |
Net loss per share - basic (in usd per share) | $ (0.01) | $ (0.34) |
Net loss per share - diluted (in usd per share) | $ (0.01) | $ (0.34) |
Weighted average common shares outstanding - basic (in shares) | 166,713,261 | 71,699,615 |
Weighted average common shares outstanding - diluted (in shares) | 166,713,261 | 71,699,615 |
Product | ||
Revenue | $ 58,318 | $ 58,540 |
Royalty and licensing | ||
Revenue | $ 41,542 | $ 10,221 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (2,413) | $ (24,293) |
Other comprehensive income (loss) | ||
Foreign currency translation adjustments | 2,888 | (3,135) |
Comprehensive income (loss) | $ 475 | $ (27,428) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholder's Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Restricted stock awards | Restricted stock awardsCommon Stock | Restricted stock awardsAdditional Paid-In Capital | LPC Offering | LPC OfferingCommon Stock | LPC OfferingAdditional Paid-In Capital | At The Market Offering | At The Market OfferingCommon Stock | At The Market OfferingAdditional Paid-In Capital |
Beginning balance (in shares) at Dec. 31, 2019 | 70,427,400 | |||||||||||||
Beginning balance at Dec. 31, 2019 | $ 16,347 | $ 1 | $ 521,356 | $ (504,145) | $ (865) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Stock issued during period, shares, new issues (in shares) | 3,721,205 | 2,600,000 | 792,931 | |||||||||||
Stock issued during period, value, new issues | $ 2 | $ 2 | $ 2,403 | $ 2,403 | $ 746 | $ 746 | ||||||||
Issuance of common stock and pre-funded warrants under registered direct offering, less issuance costs (in shares) | 8,512,088 | |||||||||||||
Issuance of common stock and pre-funded warrants under registered direct offering, less issuance costs | 15,895 | 15,895 | ||||||||||||
Issuance of common stock upon exercise of pre-funded warrants (in shares) | 9,492,953 | |||||||||||||
Issuance of common stock upon exercise of pre-funded warrants | 1 | 1 | ||||||||||||
Compensation expense related to issued stock options and restricted stock awards | 3,406 | 3,406 | ||||||||||||
Net loss | (24,293) | (24,293) | ||||||||||||
Other comprehensive income | $ (3,135) | (3,135) | ||||||||||||
Ending balance (in shares) at Dec. 31, 2020 | 95,546,577 | 95,546,577 | ||||||||||||
Ending balance at Dec. 31, 2020 | $ 11,372 | $ 1 | 543,809 | (528,438) | (4,000) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Stock issued during period, shares, new issues (in shares) | 3,538,391 | |||||||||||||
Issuance of common stock at public offering, less issuance costs (in shares) | 80,952,381 | |||||||||||||
Issuance of common stock at public offering, less issuance costs | 79,637 | $ 1 | 79,636 | |||||||||||
Issuance of common stock upon exercise of common stock warrants (in shares) | 6,005,041 | |||||||||||||
Issuance of common stock upon exercise of common stock warrants | 5,253 | 5,253 | ||||||||||||
Compensation expense related to issued stock options and restricted stock awards | 3,815 | 3,815 | ||||||||||||
Net loss | (2,413) | (2,413) | ||||||||||||
Other comprehensive income | $ 2,888 | 2,888 | ||||||||||||
Ending balance (in shares) at Dec. 31, 2021 | 186,042,390 | 186,042,390 | ||||||||||||
Ending balance at Dec. 31, 2021 | $ 100,552 | $ 2 | $ 632,513 | $ (530,851) | $ (1,112) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities | ||
Net loss | $ (2,413) | $ (24,293) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization expense | 4,273 | 4,366 |
Stock-based compensation expense | 3,815 | 3,406 |
Unrealized foreign exchange (income) loss | 3,009 | (3,214) |
Non-cash lease expense | 1,443 | 1,180 |
Provision for bad debts on trade receivables | 48 | 50 |
Gain on forgiveness of PPP loan | (4,772) | 0 |
Loss on extinguishment of debt | 1,068 | 0 |
Non-cash interest expense | 738 | 712 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (612) | 2,501 |
Royalty and licensing receivable | 976 | (1,091) |
Inventories | (2,619) | (512) |
Prepaid expenses and other assets | 546 | 430 |
Accounts payable, accrued expenses, and other liabilities | 3,269 | (3,182) |
Contract liability | (14,000) | 2,000 |
Advance on research and development | (3,168) | (663) |
Net cash used in operating activities | (8,399) | (18,310) |
Cash flows from investing activities: | ||
Acquisition of property and equipment | (2,300) | (3,249) |
Net cash (used in) provided by investing activities | (2,300) | (3,249) |
Cash flows from financing activities: | ||
Proceeds from exercise of common stock warrants | 5,253 | 0 |
Proceeds from exercise of pre-funded warrants | 0 | 1 |
Debt issuance costs | (659) | (10) |
Loss on extinguishment of debt | (1,216) | 0 |
Proceeds from issuance of debt | 21,000 | 4,720 |
Payments on long-term debt | (21,212) | 0 |
Net proceeds from issuance of common stock | 79,637 | 3,151 |
Issuance of common stock and pre-funded warrants under registered direct offering, net | 0 | 15,895 |
Net cash provided by financing activities | 82,803 | 23,757 |
Foreign exchange effect on cash and cash equivalents | (121) | 81 |
Increase in cash, cash equivalents, and restricted cash | 71,983 | 2,279 |
Cash, cash equivalents, and restricted cash beginning of period | 29,135 | 26,856 |
Cash, cash equivalents, and restricted cash end of period | 101,118 | 29,135 |
Supplemental information: | ||
Cash paid for interest | 1,463 | 1,413 |
Non-cash investing and financing activities | ||
Operating leases right-of-use assets obtained in exchange for lease obligations | $ 3,763 | $ 543 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholder's Equity (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Stockholders' Equity [Abstract] | ||
Issuance of common stock and pre-funded warrants under registered direct offering, issuance costs | $ 5.4 | $ 1.4 |
Organization and Basis of Prese
Organization and Basis of Presentation | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Conformis, Inc. (together with its subsidiaries, collectively, the “Company”) is a medical technology company that uses its proprietary iFit Image-to-Implant technology platform to develop, manufacture and sell joint replacement implants that are individually sized and shaped, which the Company refers to as personalized, individualized, or sometimes as customized, to fit and conform to each patient’s unique anatomy. The Company also offers Identity Imprint, a new line of total knee replacement products that utilizes a proprietary algorithm to select the implant size that most closely meets the geometric and anatomic requirements of the patient’s knee. Conformis’ sterile, just-in-time, Surgery-in-a-Box delivery system is available with all of its implants and personalized, single-use instruments. The Company’s proprietary iFit technology platform is potentially applicable to all major joints. The Company was incorporated in Delaware and commenced operations in 2004. The Company introduced its iUni and iDuo in 2007, its iTotal CR in 2011, its iTotal PS in 2015, its Conformis hip system in 2018, and its Identity Imprint in 2021. The Company has its corporate offices in Billerica, Massachusetts. These consolidated financial statements and related notes have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. Liquidity and operations Since the Company’s inception in June 2004, it has financed its operations primarily through private placements of preferred stock, its initial public offering in July 2015, other equity financings, debt and convertible debt financings, equipment purchase loans, patent licensing, and product revenue beginning in 2007. At December 31, 2021, the Company had an accumulated deficit of $530.9 million and cash and cash equivalents of $100.6 million, and $0.6 million in restricted cash allocated to a lease deposit. The Company expects that its existing cash and cash equivalents as of December 31, 2021, funds from potential exercises of its common stock warrants, and anticipated revenue from operations, will enable the Company to fund its operations, capital expenditure requirements and debt service for at least the next 12 months from the date of filing. In order for the Company to meet its long-term operating plan, the Company expects that revenue growth, margin improvements and leveraging operating expenses will be necessary. It cannot be assured that the Company will be successful. On June 25, 2019, the Company entered into a Loan and Security Agreement (the "2019 Secured Loan Agreement") with Innovatus Life Sciences Lending Fund I, LP ("Innovatus"), as collateral agent and lender, East West Bank and the other lenders party thereto from time to time (collectively, the "Lenders"), pursuant to which the Lenders agreed to make term loans and revolving credit facility to the Company to repay existing indebtedness, for working capital and general business purposes, in a principal amount of up to $30 million. On November 22, 2021, the Company entered into a Credit and Security Agreement (the “New Credit Agreement”) with MidCap Financial Services, LLC (“MidCap Financial Services”), as servicer for MidCap Financial Trust to refinance the Company's existing senior secured indebtedness. The New Credit Agreement provides for a five-year, $21 million secured term loan facility (the “Term Facility”), and replaces the Company’s existing credit facility under the 2019 Secured Loan Agreement, with Innovatus, as collateral agent and lender, East West Bank and other lenders party thereto (collectively, the "Lenders"). The Company used the proceeds from the debt financings to pay off its existing credit facility under the 2019 Secured Loan Agreement with the Lenders. For further information regarding the 2019 Secured Loan Agreement and the Amendments, and the New Credit Agreement see “Note I —Debt and Notes Payable ”. On February 17, 2021, the Company closed an offering of its common stock under the Company's shelf registration statement on Form S-3, pursuant to which the Company issued and sold 80,952,381 shares of its common stock at a public offering price of $1.05 per share, for aggregate net proceeds of approximately $79.6 million. For further information regarding this public offering, see " Note J— Stockholders' Equity". In December 2019, a human infection originating in China was traced to a novel strain of coronavirus. The virus subsequently spread to other parts of the world, including the United States and Europe, and caused unprecedented disruptions in the global economy as efforts to contain the spread of the virus intensified. In March 2020, the World Health Organization declared this coronavirus outbreak ("COVID-19") to be a pandemic. The future progression of the pandemic, including the scope, severity and duration of the pandemic, potential resurgences, the speed and effectiveness of vaccine and treatment developments, and the direct and indirect economic effects of the pandemic and containment measures, and its effects on the Company's business and operations remain uncertain. The Company has experienced significantly decreased demand for its products during the pandemic as healthcare providers and individuals have de-prioritized and deferred medical procedures deemed to be elective, such as joint replacement procedures, which has had, and is expected to continue to have a significant negative effect on the Company's revenue. Such negative effects were most pronounced during the second quarter of 2020, when a significant number of hospitals were either closed for elective procedures or otherwise operating at significantly reduced volumes. Generally, the Company saw an increase in procedure volumes from these levels during the summer of 2020, as many regions were able to reopen for elective procedures, with an existing patient backlog. However, in the United States and Germany, which are the Company's major sales markets, estimated case counts increased in the fourth quarter of 2020 and peaked in January 2021. While worldwide case counts declined since January, the Company saw a decline in elective procedures during the first quarter of 2021. In Germany, case counts declined after January 2021 but then increased again in the second quarter. Germany case counts began to decline mid-way through the second quarter but the Company saw a decline in Germany elective procedures during the second quarter of 2021. In the United States, elective procedures have improved sequentially second quarter of 2021 over first quarter of 2021 consistent with the market. However, in the third and fourth quarters of 2021, the Company experienced higher levels of deferred and rescheduled knee and hip procedures as a result of the surge in COVID-19 cases associated with the Delta and Omicron variants. The Company expects that these negative effects will continue in the near term until infection rates decline further from their current level, and more of the population is vaccinated. The future progression of the pandemic remains uncertain, including with respect to new or potential variants. To the extent that individuals in these markets continue to de-prioritize or delay deferrable procedures as a result of the COVID-19 pandemic or otherwise, our business, cash flows, financial condition and results of operations could continue to be negatively affected. Basis of presentation and use of estimates The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States ("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 consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. The most significant estimates used in these consolidated financial statements include revenue recognition, accounts receivable valuation, inventory reserves, impairment assessments, income tax reserves and related allowances, and the lives of property and equipment. Actual results may differ from those estimates. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note B—Summary of Significant Accounting Policies Concentrations of credit risk and other risks and uncertainties Financial instruments that subject the Company to credit risk primarily consist of cash, cash equivalents and accounts receivable. The Company maintains the majority of its cash with accredited financial institutions which mitigates potential risks related to concentration. The Company had $0.6 million as of December 31, 2021 and $1.0 million as of December 31, 2020 held in foreign bank accounts, that are not federally insured. The Company and its contract manufacturers rely on sole source suppliers and service providers for certain components. There can be no assurance that a shortage or stoppage of shipments of the materials or components that the Company purchases will not result in a delay in production or adversely affect the Company’s business. On an ongoing basis, the Company validates alternate suppliers relative to certain key components as needed. For the year ended December 31, 2021, Stryker Corporation (“Stryker”), Wright Medical Technology, Inc. (“Wright Medical”), and Tornier, Inc. (“Tornier,” and collectively with Stryker and Wright Medical, the "Stryker Parties") represented 40% of total revenue. For the year ended December 31, 2020, Zimmer Biomet, Zimmer US, Inc. and Biomet Manufacturing, LLC (collectively, “Zimmer Biomet”) represented 14% of total revenue. As of December 31, 2021, there were no customers that represented greater than 10% of total net receivable balance. As of December 31, 2020, payments due from Zimmer Biomet represented 13% of our total net receivable balance. Principles of consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries including ImaTx, Inc., or ImaTx, ConforMIS Europe GmbH, ConforMIS UK Limited, ConforMIS Hong Kong Limited, Conformis India LLP; and Conformis Cares LLC. All intercompany balances and transactions have been eliminated in consolidation. Cash, cash equivalents and restricted cash The Company considers all highly liquid investment instruments with original maturities of 90 days or less when purchased to be cash equivalents. The Company’s cash equivalents consist of demand deposits and money market accounts. Demand deposits and money market accounts are carried at cost which approximates their fair value. The Company has recorded restricted cash of $0.6 million as of December 31, 2021, and $0.5 million as of December 31, 2020. Restricted cash consisted of security provided for lease obligations. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows. December 31, 2021 December 31, 2020 Cash and cash equivalents $ 100,556 $ 28,673 Restricted cash 562 462 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 101,118 $ 29,135 Fair value of financial instruments Certain of the Company’s financial instruments, including cash and cash equivalents (excluding money market funds), accounts receivable, accounts payable, accrued expenses and other current liabilities are carried at cost, which approximates their fair value because of the short-term maturity. The carrying value of the debt approximates fair value because the interest rate under the obligation approximates market rates of interest available to the Company for similar instruments. Accounts receivable and allowance for doubtful accounts Accounts receivable consist of billed and unbilled amounts due from medical facilities or independent distributors (the "Customer"). Upon completion of a procedure, revenue is recognized and an unbilled receivable is recorded. Under Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC 606"), an enforceable contract is met either at or prior to the procedure being performed. Upon receipt of a purchase order from the Customer, the billed receivable is recorded and the unbilled receivable is reversed. As a result, the unbilled receivable balance fluctuates based on the timing of the Company's receipt of purchase orders from the medical facilities. In estimating whether accounts receivable can be collected, the Company performs evaluations of customers and continuously monitors collections and payments and estimates an allowance for doubtful accounts based on the aging of the underlying invoices, collections experience to date and any specific collection issues that have been identified. The allowance for doubtful accounts is recorded in the period in which revenue is recorded or when collection risk is identified. Inventories Inventories consist of raw materials, work-in-process components and finished goods. Inventories are stated at the lower of cost, determined using the first-in first-out method, or net realizable value. The Company regularly reviews its inventory quantities on hand and related cost and records a provision for any excess or obsolete inventory based on its estimated forecast of product demand and existing product configurations. The Company also reviews its inventory value to determine if it reflects the lower of cost or market based on net realizable value. Appropriate consideration is given to inventory items sold at negative gross margin, purchase commitments and other factors in evaluating net realizable value. During the years ended December 31, 2021 and 2020, the Company recognized provisions of $2.6 million and $2.7 million, respectively, to adjust its inventory value to the lower of cost or net realizable value for estimated unused product related to known and potential cancelled cases, which is included in cost of revenue. Property and equipment Property and equipment is stated at cost less accumulated depreciation and is depreciated using the straight-line method over the estimated useful lives of the respective assets. Leasehold improvements are amortized over their useful life or the life of the lease, whichever is shorter. Assets capitalized under capital leases are amortized in accordance with the respective class of assets and the amortization is included with depreciation expense. Maintenance and repair costs are expensed as incurred. Long-lived assets The Company tests impairment of long-lived assets when events or changes in circumstances indicate that the assets might be impaired. If changes in circumstances lead the Company to believe that any of its long-lived assets may be impaired, the Company will test the asset group for recoverability, by evaluating whether the estimated undiscounted cash flows, including estimated residual value, generated from the asset group are sufficient to support the carrying value of the assets. During the quarters ended March 31, 2021, June 30, 2021 and September 30, 2021, there were no changes in circumstances that led the Company to believe that its long-lived assets may be impaired. During the quarter ended December 31, 2021, the Company had experienced a significant decrease in its stock price and incurred current-period operating losses associated with its asset group, and as such, an assessment for recoverability was performed. The Company evaluated whether the estimated undiscounted cash flows, including estimated terminal value, generated from the asset group were sufficient to support the carrying value of the assets. If the cash flow estimates or the significant operating assumptions upon which they are based change in the future, the Company may be required to record impairment charges. During the years ended December 31, 2021 and 2020, no such impairment charges were recognized. Leases The Company has elected not to separate non-lease components from all classes of leases. Non-lease components have been accounted for as part of the single lease component to which they are related. Leases with an anticipated term, inclusive of renewals of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company has elected the hindsight practical expedient to determine the lease term for existing leases. This practical expedient enables an entity to use hindsight in determining the lease term when considering options to extend and terminate leases as well as purchase the underlying assets. The operating lease right-of-use assets are subsequently assessed for impairment in accordance with the Company's accounting policy for long-lived assets. Revenue recognition Product Revenue Recognition Revenue is recognized when, or as, obligations under the terms of a contract are satisfied, which occurs when control of the promised products or services is transferred to customers. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or services to a customer (“transaction price”). When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before or significantly after performance, resulting in a significant financing component. Applying the practical expedient in paragraph 606-10-32-18, the Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations under the contract and when the customer pays is one year or less. None of the Company’s contracts contained a significant financing component as of December 31, 2021. Payment is typically due between 30 - 60 days from invoice. To the extent that the transaction price includes variable consideration, such as prompt-pay discounts or rebates, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the expected value to which the Company expects to be entitled. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Actual amounts of consideration ultimately received may differ from the Company's estimates. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information (historical, current and forecasted) that is reasonably available. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on observable prices or a cost-plus margin approach when one is not available. Revenue is recognized at the time the related performance obligation is satisfied by transferring control of a promised good or service to a customer. The Company's performance obligations are satisfied at the same time, typically upon surgery, therefore, product revenue is recognized at a point in time upon completion of the surgery. Since the Company does not have contracts that extend beyond a duration of one year, there is no transaction price related to performance obligations that have not been satisfied. Certain customer contracts include terms that allow the Company to bill for orders that are cancelled after the product is manufactured and could result in revenue recognition over time. However, the impact of applying over time revenue recognition was deemed immaterial. Under the long-term Distribution Agreement with Stryker, the Company supplies patient specific instrumentation to Stryker and revenue is recognized at a point in time, that is, when Stryker obtains control of the products. Unconditional rights to consideration are reported as receivables. Incidental items that are immaterial in the context of the contract are recognized as expense. At December 31, 2021 and 2020, the Company did not have contract assets or liabilities recorded on the Consolidated Balance Sheets derived from contract with customers. Royalty and Licensing Revenue Recognition The Company receives ongoing sales-based royalties under its license agreement (the "MicroPort License Agreement") with MicroPort Orthopedics Inc., a wholly owned subsidiary of MicroPort Scientific Corporation, (collectively, "MicroPort"). Royalty revenue is recorded at the expected value of the royalty revenue. On September 30, 2019 the Company entered into an Asset Purchase Agreement with Howmedica Osteonics Corp., a wholly-owned subsidiary of Stryker. In connection with entering into the Asset Purchase Agreement, the Company also entered into a Development Agreement, a License Agreement, and other ancillary agreements contemplated by the Asset Purchase Agreement with Stryker (the "Stryker Agreements"). The Company determined that the Asset Purchase Agreement and the License Agreement, are within the scope of ASC 606. Under the Asset Purchase Agreement and License Agreement, the Company is required to provide certain assets and the right to use the license for a specific purpose. The assets and the right to use the license are highly interdependent and considered one performance obligation. The Company bifurcated the total transaction price of $30.0 million into two components; $5.0 million related to cost reimbursement for other services (development) and $25.0 million allocated to royalty revenue determined using the residual approach of deducting the cost reimbursement component from the total transaction price. The arrangement does not contain a significant financing component. The Company records a contract liability when there is an obligation to transfer goods or services to a customer for which the Company has received consideration from the customer. The Company has concluded that Stryker meets the definition of a customer for a portion of the obligations under the Stryker Agreements. The contract liability balances as of January 1, 2021 and 2020, were $14.0 million and $12.0 million, respectively, which were related to consideration received from the customer under the Asset Purchase Agreement and Development Agreement. The Company concluded the license rights under the License Agreement were functional and would be recognized at the point in time when 510(k) clearance was received from the FDA as required under Milestone 3 in the License Agreement, or upon termination by Stryker and Stryker's election to purchase the license rights. On April 19, 2021, the Company achieved the third of three milestones under the License Agreement when it received 510(k) clearance from the FDA and received $11.0 million from Stryker. In connection with the 510(k) clearance, the Company recognized as royalty and license revenue the $14.0 million that was previously deferred as contract liability, plus the $11.0 million payment received, for a total aggregate of $25.0 million during the quarter ended June 30, 2021. There are no amounts recorded as contract liability as of December 31, 2021. In addition, during the quarter ended June 30, 2021, the Company recorded $2.5 million in other income for the remaining portion of the advance on research and development, that was not used to offset against research and development expenses. On May 22, 2020 the Company entered into a Settlement and License Agreement with Zimmer Biomet, pursuant to which both parties have agreed to terms for resolving all of their existing patent disputes. In consideration of the licenses, releases, covenants and other immunities granted by the Company to Zimmer Biomet, Zimmer Biomet was required to pay the Company $3.5 million promptly after execution of the Settlement and License Agreement, which it has, and additional payments on specified dates through January 15, 2021, for a total amount payable of $9.6 million. The agreement provides for the grant of the licenses, covenants-not-to-sue, releases, and other significant deliverables upon execution of the contract. These individual rights are not accounted for as separate performance obligations as (i) the nature of the promise, within the context of the agreement, is to transfer combined items to which the promised rights are inputs and (ii) the Company's promise to transfer each individual right described above to Zimmer Biomet is not separately identifiable from other promises in the agreement. As a result, the Company accounts for the promises in the agreement as a single performance obligation. Zimmer Biomet legally obtained control of the license and other rights upon execution of the contract. As such, the earnings process is complete and revenue was recognized upon the execution of the contract, when collectability became probable and all other revenue recognition criteria had been met within the scope of ASC 606. In connection with the Settlement and License Agreement, the Company recognized revenue of $9.6 million during the year ended December 31, 2020. See “Note H —Commitments and Contingencies, Legal proceedings” for further discussion of the Zimmer Biomet settlement. On April 8, 2021, the Company entered into a license agreement (the “License Agreement”) with Paragon 28, Inc. ("Paragon 28"), granting Paragon 28 a non-exclusive license under a subset of the Company's U.S. patents for the use of patient-specific instruments with off-the-shelf implants in Paragon 28’s APEX 3D Total Ankle Replacement System. In consideration for the license, the Company received $0.5 million upon execution of the License Agreement, another $0.5 million in October 2021, and may receive an additional $0.5 million from Paragon 28 before April 8, 2022. In connection with this License Agreement, the Company recognized revenue of $1.0 million during the quarter ended June 30, 2021. The remaining $0.5 million was excluded from the transaction price given it is contingent on a future event that was not probable as of December 31, 2021. On June 30, 2021 the Company entered into a settlement and license agreement (the “Settlement and License Agreement”) with the Stryker Parties, pursuant to which the parties have agreed to terms for resolving all of their existing patent disputes. In consideration of the licenses, releases, covenants and other immunities granted by the Company to the Stryker Parties, the Stryker Parties are required to make a one-time payment to the Company of $15.0 million no later than October 15, 2021. The agreement provides for the grant of the licenses, covenants-not-to-sue, releases, and other deliverables upon execution of the contract. These individual rights are not accounted for as separate performance obligations as (i) the nature of the promise, within the context of the agreement, is to transfer combined items to which the promised rights are inputs and (ii) the Company's promise to transfer each individual right described above to the Stryker Parties is not separately identifiable from other promises in the agreement. As a result, the Company accounts for the promises in the Settlement and License Agreement as a single performance obligation. The Stryker Parties legally obtained control of the license and other rights upon execution of the contract. As such, the earnings process is complete and revenue was recognized upon the execution of the contract, when collectability became probable and all other revenue recognition criteria had been met within the scope of ASC 606. In connection with the Settlement and License Agreement, the Company recognized revenue of $15.0 million during the quarter ended June 30, 2021 and payment in the same amount was received from the Stryker Parties on October 15, 2021. See “Note H—Commitments and Contingencies, Legal proceedings” for further discussion of the Stryker Parties settlement. Disaggregation of Revenue See "Note L—Segment and Geographic Data" for disaggregated product revenue by geography. Variable Consideration Revenues from product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established and which result from rebates that are offered within contracts between the Company and some of its customers. The amount of variable consideration which is included in the transaction price may be constrained, and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. The following table summarizes activity for rebate allowance reserve for the years ended December 31, 2021 and 2020 (in thousands): Years Ended December 31, 2021 2020 Beginning Balance $ 81 $ 127 Provision related to current period sales 107 146 Adjustment related to prior period sales — (55) Payments or credits issued to customer (109) (137) Ending Balance $ 79 $ 81 Costs to Obtain and Fulfill a Contract The Company currently expenses commissions paid for obtaining product sales. Sales commissions are paid following the manufacture and implementation of the implant. Due to the period being less than one year, the Company will apply the practical expedient, whereby the Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs are included in sales and marketing expense. Further, the Company incurs costs to buy, build, replenish, restock, sterilize and replace the reusable instrumentation trays associated with the sale of its products and services. The reusable instrument trays are not contract specific and are used for multiple contracts and customers, therefore does not meet the criteria to capitalize under ASC 606. Shipping and handling costs Shipping and handling activities prior to the transfer of control to the customer (e.g., when control transfers after delivery) are considered fulfillment activities, and not performance obligations. Amounts invoiced to customers for shipping and handling are classified as revenue. Shipping and handling costs incurred are included in general and administrative expense. Shipping and handling expense was $3.1 million and $1.7 million for the years ended December 31, 2021 and 2020, respectively. Taxes Collected From Customers and Remitted to Government Authorities The Company’s policy is to present taxes collected from customers and remitted to government authorities on a net basis and not to include tax amounts in revenue. Collaborative arrangements The Company analyzes its collaboration arrangements to assess whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities and therefore within the scope of ASC Topic 808, Collaborative Arrangements (ASC 808). For elements of collaboration arrangements that are accounted for pursuant to ASC 808, an appropriate recognition method is determined and applied consistently. Amounts that are received from collaboration are recognized as an offset to Research and development expense when incurred. Under the Development Agreement with Stryker, the Company has three milestone deliverables in which the Company must deliver the first prototype of the patient-specific instrumentation ("PSI") to be used with Stryker's off-the-shelf knee implant, design freeze of the PSI, and FDA 510(k) clearance of the developed product. As of December 31, 2021, the Company completed all three milestones under the Development Agreement. The Company recognized $0.7 million and $1.7 million in Research and development expense for the years ended December 31, 2021 and 2020 respectively, which was offset by a portion of the advance on research and development received upon execution of the agreements and additional payments received for the achievement of all three milestones. During the quarter ended June 30, 2021, the Company recorded $2.5 million in other income for the remaining portion of the advance on research and development, that was not used to offset against research and development expenses. Research and development expense The Company’s research and development costs consists primarily of personnel costs, including salary, employee benefits and stock-based compensation for personnel employed in research and development, regulatory and clinical areas. Research and development expense also includes cost associated with product design, product refinement and improvement efforts before and after receipt of regulatory clearance, development of prototypes, testing, clinical study programs and regulatory activities, contractors and consultants, and equipment and software to support our development. As our revenue increases, we will also incur additional expense for revenue share payments to our past and present scientific advisory board members, including one of our past directors. Research and development costs are expensed as incurred. Advertising expense Advertising costs are expensed as incurred, which are included in sales and marketing. Advertising expense was $0.2 million and $0.5 million for the years ended December 31, 2021 and 2020, respectively. Segment reporting Operating segments are defined as components of an enterprise about which separate financial information is available and is evaluated on a regular basis by the chief operating decision-maker, or decision-making group, in deciding how to allocate resources to an individual segment and in assessing performance of the segment. The Company’s chief operating decision-maker is its chief executive officer. The Company’s chief executive officer reviews financial information presented on an aggregate basis for purposes of allocating resources and evaluating financial performance. The Company has one business segment and there are no segment managers who are held accountable for operations, operating results and plans for products or components below the aggregate Company level. Accordingly, in light of the Company’s current product offerings, management has determined that the primary form of internal reporting is aligned with the offering of the Conformis personalized joint replacement products and that the Company operates as one segment. See “Note L—Segment and Geographic Data.” Foreign currency translation and transactions The assets and liabilities of the Company’s foreign operations are translated into U.S. dollars at current exchange rates at the balance sheet date, and income and expense items are translated at average rates of exchange prevailing during the quarter. Net translation gains and losses are recorded in Accumulated other comprehensive loss. Gains and losses from foreign currency transactions denominated in foreign currencies, including intercompany balances not of a long-term investment nature, are included in the Consolidated Statements of Operations. Income taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases, operating losses and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income in the period that includes the enactment date. In evaluating the need for a valuation allowance, the Company considers all reasonably available positive and negative evidence, including recent earnings, expectations of future taxable income and the character of that income. In estimating future taxable income, the Company relies upon assumptions and estimates of future activity including the reversal of temporary differences. Presently, the Company believes that a full valuation allowance is required to reduce deferred tax assets to the amount expected to be realized. The tax benefit from an uncertain tax position is only recognized if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from these positions are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. The Company reviews its tax positions on an annual basis and more frequently as facts surrounding tax positions change. Based on these future events, the Company may recognize uncertain tax positions or reverse current uncertain tax positions, the impact of which would affect the consolidated financial statements. The Company has operations in Germany, the United Kingdom, and India. The operating results of these operations will be permanently reinvested in those jurisdictions. As a result, the Company has only provided for income taxes at local rates when required. On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") which included modifications to the limitation on business interest expense, net operating loss provisions, and other various U.S. tax law updates. The Company analyzed these aspects of the CARES Act and it had no material impact on its consolidated financial statements. On December 27, 2020, the U.S government enacted the Consolidated Appropriations Act, 2021 (the "Appropriations Act"), which included various tax extenders, an update to meals and entertainment expensing, and the deductibility of expenses related to the Paycheck Protection Program (“PPP”) loan proceeds. The Company applied the Appropriations Act in regards to expenses related to the PPP loan proceeds, which previously would have been non-deductible. Stock-based compensation The Company accounts for stock-based compensation in accordance with ASC 718, Stock Based Compensation ("ASC 718"). ASC 718 requires all stock-based payments to employees and consultants, including grants of stock options, to be recognized in the consolidated statements of operations based on their fair values. The Company uses the Black-Scholes option pricing model to determine the weighted-average fair value of options granted and recognizes the compensation expense of stock-based awards on a straight-line basis over the vesting period of the award. The determination of the fair value of stock-based payment awards utilizing the Black-Scholes option pricing model is affected by the stock price, exercise price, and a number of assumptions, including expected volatility of the stock, expected life of the option, risk-free interest rate and expected dividends on the stock. The fair value for restricted stock awards and performance awards is the grant date close price of the Company's Common Stock as reported by Nasdaq. The Company evaluates the assumptions used to value the awards at each grant date and if factors change and different assumptions are utilized, stock-based compensation expense may differ significantly from what has been recorded in the past. If there are any modifications or cancellations of the underlying unvested securities, the Company may be required to accelerate, increase or cancel any remaining unearned stock-based compensation expense. Forfeitures are accounted for as they occur. Net loss per share The Company calculates net loss per share in accordance with ASC 260, "Earnings per Share." Basic earnings per share (“EPS”) is calculated by dividing the net income or loss for the period by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted EPS is computed by dividing the net income or loss for the period by the weighted average number of common shares outstanding for the period and the weighted average number of dilutive common stock equivalents outstanding for the period determined using the treasury stock method. The following table sets forth the computation of basic and dilute |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2021 | |
Accounts Receivable, after Allowance for Credit Loss, Current [Abstract] | |
Accounts Receivable | Accounts Receivable Accounts receivable consisted of the following (in thousands): December 31, December 31, Total receivables $ 9,336 $ 8,805 Allowance for doubtful accounts and returns (257) (290) Accounts receivable, net $ 9,079 $ 8,515 The beginning accounts receivable balance as of January 1, 2021 and 2020, was $8.5 million and $11.1 million, respectively. All activity within accounts receivables relate to normal operational activity from the period. Accounts receivable included unbilled receivable of $1.1 million and $1.0 million for the years ended December 31, 2021 and 2020. Write-offs related to accounts receivable were approximately $78,000 and $75,000, for the years ended December 31, 2021 and 2020, respectively. Summary of allowance for doubtful accounts and returns activity was as follows (in thousands): December 31, 2021 December 31, 2020 Beginning balance $ (290) $ (335) Provision for bad debts on trade receivables (48) (50) Other allowances 3 20 Accounts receivable write-offs 78 75 Ending balance $ (257) $ (290) |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following (in thousands): December 31, December 31, Raw Material $ 6,109 $ 5,513 Work in process 3,187 1,833 Finished goods 5,908 5,239 Total Inventories $ 15,204 $ 12,585 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consisted of the following (in thousands): Estimated Useful Life December 31, December 31, Equipment 5-7 $ 20,091 $ 19,461 Furniture and fixtures 5-7 873 864 Computer and software 3 10,540 9,873 Leasehold improvements 3-7 2,243 2,068 Reusable instruments 5 6,272 5,739 Molding and Tooling 5 379 91 Total property and equipment 40,398 38,096 Accumulated depreciation (30,130) (25,856) Property and equipment, net $ 10,268 $ 12,240 |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2021 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses consisted of the following (in thousands): December 31, 2021 December 31, 2020 Accrued employee compensation $ 4,701 $ 3,365 Accrued legal expense 2,140 952 Accrued consulting expense — 21 Accrued vendor charges 462 766 Accrued revenue share expense 824 697 Accrued clinical trial expense 335 306 Accrued other 1,114 1,106 $ 9,576 $ 7,213 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Leases | Leases The Company maintains its corporate headquarters in a leased building located in Billerica, Massachusetts. The Company maintains its design and manufacturing facilities in leased buildings located in Wilmington, Massachusetts, Wallingford, Connecticut, and Hyderabad, India. The Company's leases have remaining lease terms of approximately one On May 11, 2021, the Company executed an amendment to extend the term of the Wilmington lease through September 30, 2027. The Company’s existing leases are not subject to any restrictions or covenants which preclude its ability to pay dividends, obtain financing, or enter into additional leases. As of December 31, 2021, the Company has not entered into any leases which have not yet commenced which would entitle the Company to significant rights or create additional obligations. The Company uses either its incremental borrowing rate or the implicit rate in the lease agreement as the basis to calculate the present value of future lease payments at lease commencement. The incremental borrowing rate represents the rate the Company would have to pay to borrow funds on a collateralized basis over a similar term and in a similar economic environment. Cash paid for amounts included in lease liability were $1.7 million and $1.6 million for the years ended December 31, 2021 and 2020, respectively. The components of lease expense and related cash flows were as follows (in thousands): December 31, 2021 December 31, 2020 Rent expense $ 1,863 $ 1,536 Variable lease cost (1) 426 350 $ 2,289 $ 1,886 (1) Variable operating lease expenses consist primarily common area maintenance and real estate taxes for the years ended December 31, 2021 and 2020. As of December 31, 2021, the remaining weighted-average lease term of the operating leases was 4.78 years and the weighted-average discount rate was 6.0%. The future minimum rental payments under these agreements as of December 31, 2021 were as follows (in thousands): Year Minimum Lease Payments 2022 1,814 2023 2,067 2024 2,125 2025 1,885 2026 971 2027 740 Total lease payments $ 9,602 Present value adjustment (1,301) Present value of lease liabilities $ 8,301 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note H—Commitments and Contingencies License and revenue share agreements Revenue share agreements The Company is party to revenue share agreements with certain past and present members of its scientific advisory board under which these advisors agreed to participate on its scientific advisory board and to assist with the development of the Company’s personalized implant products and related intellectual property. These agreements provide that the Company will pay the advisor a specified percentage of the Company’s net revenue, ranging from 0.10%% to 1.33%%, with respect to the Company’s products on which the advisor made a technical contribution or, in some cases, which the Company covered by a claim of one of its patents on which the advisor is a named inventor. The specific percentage is determined by reference to product classifications set forth in the agreement and may be tiered based on the level of net revenue collected by the Company on such product sales. The Company’s payment obligations under these agreements typically expire a fixed number of years after expiration or termination of the agreement, but in some cases expire on a product-by-product basis or expiration of the last to expire of the Company’s patents where the advisor is a named inventor that has claims covering the applicable product. The Company incurred aggregate revenue share expense including all amounts payable under the Company’s scientific advisory board revenue share agreements of $2.2 million during the year ended December 31, 2021, representing 3.7% of product revenue and $1.6 million during the year ended December 31, 2020, representing 2.7% of product revenue. Revenue share expense is included in research and development. Other obligations In the ordinary course of business, the Company is a party to certain non-cancellable contractual obligations typically related to product royalty and research and development. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. There have been no contingent liabilities requiring accrual at December 31, 2021 or December 31, 2020. Legal proceedings In the ordinary course of the Company's business, the Company is subject to routine risk of litigation, claims and administrative proceedings on a variety of matters, including patent infringement, product liability, securities-related claims, and other claims in the United States and in other countries where the Company sells its products. On August 15, 2019, the Company filed a lawsuit against Zimmer Biomet, in the United States District Court for the District of Delaware seeking damages for Zimmer Biomet's infringement of certain of the Company’s patents related to patient-specific instrument and implant systems. The complaint alleged that Zimmer Biomet’s multiple lines of PSI, as well as the implant components used in conjunction with them, infringed four of the Company’s patents. The accused product lines included Zimmer Biomet's patient-specific instrument and implant systems for knee, shoulder, and hip replacement procedures. On November 5, 2019, Zimmer Biomet filed a lawsuit against the Company in the United States District Court for the District of Delaware, alleging that the Company infringed five patents owned by Zimmer Biomet. Zimmer Biomet alleged that the Company’s iTotal CR and iTotal PS products infringed all five asserted patents, that the Company’s iDuo product infringed three of the asserted patents, and that the Company’s iUni product infringed two of the asserted patents. On January 13, 2020, Zimmer Biomet filed a motion to dismiss the Company’s complaint, and the Company filed its answer to Zimmer Biomet’s complaint, denying that the Company’s products infringed Zimmer Biomet’s asserted patents. The Company’s answer also alleged that Zimmer Biomet’s asserted patents were invalid. On May 22, 2020, the Company entered into a settlement and license Agreement (the “Zimmer Settlement and License Agreement”) with Zimmer Biomet, Zimmer US, Inc. and Biomet Manufacturing, LLC, pursuant to which the parties agreed to terms for resolving the patent disputes described in the preceding two paragraphs. Under the Zimmer Settlement and License Agreement, the Company and Zimmer Biomet agreed to dismiss both outstanding patent infringement lawsuits between the parties, the Company granted to Zimmer Biomet a royalty-free, non-exclusive, worldwide license to certain of the Company's patents for Zimmer Biomet’s patient-specific instrumentation used with off-the-shelf knee, hip, and shoulder implants, and Zimmer Biomet granted to the Company a fully paid-up, royalty-free, non-exclusive, worldwide license to certain Zimmer Biomet patents for the Company's implants and PSI for the knee. Under the agreement, Zimmer Biomet was required to pay the Company a total of $9.6 million in installments through January 15, 2021, and all such payments were made and received by such date. No payment was due from the Company to Zimmer Biomet under the agreement. On August 29, 2019, the Company filed a lawsuit against Medacta USA, Inc. in the United States District Court for the District of Delaware. The Company amended its complaint on December 23, 2019, and again on October 14, 2020, adding Medacta International SA (Medacta USA, Inc.’s parent company) as a defendant (Medacta USA, Inc. and Medacta International SA are referred to, together, as “Medacta”). The Company is seeking damages for Medacta’s infringement of certain of the Company’s patents related to patient-specific instrument and implant systems, alleging that Medacta’s multiple lines of PSI, as well as the implant components used in conjunction with them, infringe four of the Company’s patents. The accused product lines include Medacta patient-specific instrument and implant systems for knee and shoulder replacement procedures. On January 6, 2020, Medacta filed its answer to the Company's complaint, denying that its patient-specific instrument and implant systems infringe the patents asserted by the Company. Medacta’s answer also alleges the affirmative defense that the Company's asserted patents are invalid. On January 21, 2021, Medacta International SA filed a partial motion to dismiss; on February 16, 2021, the Company filed its opposition to the motion; and on March 2, 2021, Medacta International SA filed its reply. On March 4, 2021, the court issued its opinion on claim construction, ruling in the Company’s favor on the construction of all of the disputed terms. Discovery in the lawsuit is ongoing. On October 20, 2021, we filed a lawsuit against Medacta Germany GmbH and Medacta International SA (together, “Medacta Europe”) in the Regional Court of Düsseldorf. We are seeking damages for Medacta Europe’s infringement of one of our German patents related to patient-specific instrument and implant systems through Medacta Europe’s sales of multiple lines of PSI, as well as the implant components used in conjunction with them, in Germany. The accused product lines include Medacta Europe’s patient-specific instrument and implant systems for knee, hip, and shoulder replacement procedures. Medacta Europe has not yet filed its statement of defense. On March 20, 2020, Osteoplastics LLC ("Osteoplastics"), filed a lawsuit against the Company in the United States District Court for the District of Delaware, and Osteoplastics amended its complaint on April 2, 2020. Osteoplastics alleges that the Company’s proprietary software, including the Company’s iFit software platform, and the Company’s use of its proprietary software for designing and manufacturing medical devices, including implants, infringes seven patents owned by Osteoplastics. On June 15, 2020, the Company filed a motion to dismiss Osteoplastics’ complaint, and on October 21, 2020, the court denied the motion. On November 2, 2020, the Company filed its answer to the amended complaint, denying that it infringes the patents asserted by Osteoplastics. The Company’s answer also alleges the affirmative defense that Osteoplastics’ asserted patents are invalid. Discovery in the lawsuit is ongoing. On April 24, 2020, the Company filed a lawsuit against Wright Medical Technology, Inc. and Tornier, Inc. (together, “Wright Medical”) in the United States District Court for the District of Delaware seeking damages for Wright Medical’s infringement of certain of the Company's patents related to patient-specific instrument and implant systems. The complaint alleged that Wright Medical’s multiple lines of patient-specific shoulder instruments, as well as the implant components used in conjunction with them, infringed four of the Company’s patents. The accused product lines included Wright Medical’s Tornier Blueprint 3D Planning + PSI shoulder replacement systems. On December 14, 2020, Wright Medical filed its answer to the amended complaint, denying that its patient-specific instrument and implant systems infringed the patents asserted by the Company. Wright Medical’s answer also alleged the affirmative defense that the Company’s asserted patents are invalid. On June 30, 2021, the Company reached a settlement and license agreement (the "Settlement and License Agreement") with Stryker Corporation ("Stryker") and Wright Medical (collectively, the "Stryker Parties"), pursuant to which the parties agreed to terms for resolving the outstanding patent infringement lawsuit described in the preceding paragraph. Wright Medical was acquired by Stryker in November 2020, subsequent to the Company's commencement of the lawsuit. In consideration of the non-exclusive license to certain of the Company's patents, releases, covenants and other immunities granted by the Company to the Stryker Parties, the Stryker Parties were required to make a one-time payment to the Company of $15.0 million no later than October 15, 2021. The Company recognized revenue of $15.0 million during the quarter ended June 30, 2021 and payment in the same amount was received from the Stryker Parties on October 15, 2021. On April 30, 2021, the Company filed a lawsuit against DePuy Synthes, Inc., DePuy Synthes Products, Inc., and DePuy Synthes Sales, Inc. (collectively, “DePuy”) in the United States District Court for the District of Delaware, seeking damages for DePuy’s infringement of certain of the Company's patents related to patient-specific instrument and implant systems. The complaint alleges that DePuy’s multiple lines of PSI, as well as the implant components used in conjunction with them, infringe seven of the Company's patents. The accused product lines include DePuy’s patient-specific instrument and implant systems for knee and shoulder replacement procedures. On October 25, 2021, DePuy filed a partial motion to dismiss. On November 15, 2021, we filed an amended complaint. On December 6, 2021, DePuy filed a second partial motion to dismiss. We opposed the partial motion to dismiss on December 20, 2021, and DePuy filed a reply in support of its partial motion to dismiss on December 27, 2021. On June 3, 2021, the Company filed a lawsuit against Exactech, Inc. (“Exactech”) in the United States District Court for the Middle District of Florida seeking damages for Exactech’s infringement of certain of the Company's patents related to patient-specific instrument and implant systems. The complaint alleges that Exactech’s line of PSI for use with its ankle implant systems, as well as the ankle implant components used in conjunction with them, infringe five of the Company's patents. Discovery in the lawsuit is ongoing. On June 3, 2021, the Company filed a lawsuit against Bodycad Laboratories, Inc., Bodycad USA Corp. (together, “Bodycad”), and Exactech (collectively, “Defendants”), in the United States District Court for the Middle District of Florida seeking damages for Defendants’ infringement of certain of the Company's patents related to patient-specific instrument and implant systems. The complaint alleges that Defendants’ line of patient-specific surgical systems for unicondylar knee replacement surgery and Bodycad’s line of patient-specific surgical systems for knee osteotomy surgery infringe six of the Company's patents. On August 2, 2021, Exactech filed its answer to the complaint, denying that it infringed our asserted patents and also alleging that our asserted patents are invalid. On August 20, 2021, Bodycad filed a motion to dismiss and for a more definite statement. On September 10, 2021, we filed an amended complaint that continued to accuse the same products of infringing six of our patents. On September 24, 2021, Defendants filed a motion to dismiss, and we opposed the motion to dismiss on October 15, 2021. On May 8, 2020, the Company and an individual plaintiff filed a lawsuit against Aetna, Inc. and Aetna Life Insurance Company (together, “Aetna”) in the United States District Court for the District of Massachusetts seeking damages for Aetna’s improper denial of coverage for personalized knee implants under its health plans and the ones it administers. The Company amended its complaint on August 13, 2020, alleging that Aetna violated its duties under state and federal law, including the Employee Retirement Income Security Act. On March 31, 2021, the court dismissed the Company’s claims against Aetna, but allowed the individual plaintiff’s claims to survive. The individual plaintiff settled his claims against Aetna in October 2021 and the Company subsequently filed a notice of appeal. Adverse outcomes of these lawsuits could have a material adverse effect on the Company's business, financial condition or results of operations. The Company is presently unable to predict the outcome of these lawsuits or to reasonably estimate a range of potential losses, if any, related to the lawsuits. Legal costs associated with legal proceedings are accrued as incurred. Indemnifications In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and 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 paid any claims or been required to defend any action related to its indemnification obligations. However, the Company may record charges in the future as a result of these indemnification obligations. In accordance with its bylaws, the Company has indemnification obligations to its officers and directors for certain events or occurrences, subject to certain limits, while they are serving at the Company’s request in such capacity. There have been no claims to date and the Company has a director and officer insurance policy that enables it to recover a portion of any amounts paid for future claims. |
Debt and Notes Payable
Debt and Notes Payable | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt and Notes Payable | Debt and Notes Payable Long-term debt consisted of the following (in thousands): December 31, 2021 December 31, 2020 PPP "Term Loan" — 4,720 Innovatus, Term Loan — 20,000 Innovatus, Term Loan accrued payment-in-kind interest — 775 MidCap, Term Loan 21,000 — Less unamortized debt issuance costs (645) (492) Long-term debt, less debt issuance costs $ 20,355 $ 25,003 Principal payments due as of December 31, 2021 consisted of the following (in thousands): Principal 2022 $ — 2023 — 2024 1,750 2025 10,500 2026 8,750 Total $ 21,000 2019 Secured Loan Agreement On June 25, 2019, the Company entered into the 2019 Secured Loan Agreement with Innovatus, as collateral agent and lender, East West Bank and the Lenders, pursuant to which the Lenders agreed to make term loans and to provide a revolving credit facility to the Company to repay existing indebtedness, for working capital and general business purposes, in a principal amount of up to $30 million. The term loan facility established under the 2019 Secured Loan Agreement is secured by substantially all of the Company's and its U.S. subsidiaries' properties, rights and assets. The 2019 Secured Loan Agreement includes a trailing six months' revenue test, a liquidity covenant and an additional liquidity covenant that is applicable if there are borrowings under the revolving credit facility. The 2019 Secured Loan Agreement also includes customary representations, affirmative and negative covenants. Additionally, the 2019 Secured Loan Agreement includes events of default, the occurrence and continuation of which could cause interest to be charged at the rate that is otherwise applicable plus 5.0% and would provide Innovatus, as collateral agent, with the right to accelerate all obligations under the 2019 Secured Loan Agreement and to exercise remedies against the Company and the collateral securing the credit facility, including foreclosure against assets securing the credit facilities, including the Company's cash. These events of default include, among other things, the Company’s failure to pay any amounts due under the credit facility, a breach of covenants under the credit facility, the Company’s insolvency, a material adverse change, the occurrence of any default under certain other indebtedness in an amount greater than $250,000, one or more judgments against the Company in an amount greater than $500,000, changes with respect to governmental approvals and FDA actions. On July 1, 2020, the Company entered into a third amendment to its 2019 Secured Loan Agreement, which, among other things, waived the trailing six-month revenue covenant milestones that applied to the quarters ended June 30, September 30 and December 31, 2020 under the agreement, reduced the revenue covenant milestones that apply thereafter, and delays until June 25, 2021 the Company’s option to prepay all, but not less than all, of the term loans advanced under the 2019 Secured Loan Agreement. On August 20, 2020, the Company entered into a fourth amendment to the 2019 Secured Loan Agreement, which, among other things, waived certain provisions of the 2019 Secured Loan Agreement that apply to Conformis India LLP. As of December 31, 2021, the Company was not in breach of covenants under the 2019 Secured Loan Agreement. On March 1, 2021, the Company entered into a fifth amendment to the 2019 Secured Loan Agreement, which, among other things, waives the trailing six-month revenue covenant milestones that apply to the quarters ending March 31, June 30, September 30 and December 31, 2021 and reduces the revenue covenant milestones that apply in 2022. The revenue covenant milestones remain unchanged for 2023 and 2024. The amendment also increases the Company’s minimum cash covenant to $5 million until December 31, 2021. Term Loan - Innovatus The term loan under the 2019 Secured Loan Agreement bears interest at a floating annual rate calculated at the greater of the variable rate of interest as most recently announced by East West Bank as prime or 5.50%, plus 3.75% ("Term Loan Basic Interest Rate"), bearing an effective interest rate of 9.25% at December 31, 2021. The Company is required to make interest only payments in arrears on the term loan for four years; provided that the Company has elected to pay 2.50% per annum as such Term Loan Basic Interest Rate in-kind by adding an amount equal to 2.50% per annum of the outstanding principal amount to the then outstanding principal balance on a monthly basis until the third anniversary of the 2019 Secured Loan Agreement. Commencing July 1, 2023 and continuing on the payment date of each month thereafter, the Company is required to make consecutive equal monthly payments of principal of the term loan, together with accrued interest, in arrears, to the Lenders. All unpaid principal, accrued and unpaid interest with respect to the term loan, and a final fee in the amount of 5.0% of the term loan commitment, is due and payable in full on the term loan maturity date on June 1, 2024. At the Company’s option, and except as noted above, the Company may prepay all, but not less than all, of the term loans advanced by the Lenders under the term loan facility after the first year, subject to a prepayment fee and an amount equal to the sum of all outstanding principal of the term loans plus accrued and unpaid interest thereon through the prepayment date, a final fee, plus all other amounts that are due and payable, including the Lenders' expenses and interest at the default rate with respect to any past due amounts. Revolving Credit Facility - East West Bank Under the 2019 Secured Loan Agreement, East West Bank will make loans of up to $10 million from time to time outstanding, subject to availability based on a borrowing base equal to (i) 85.00% of eligible customer accounts, subject to a maximum of 2.50% dilution based upon collections, minus (ii) the Company’s foreign accounts receivable credit insurance’s outstanding co-payment and minimum annual deductible (that has not been used at the applicable time). Advances under the revolving credit facility bear interest at a rate of 0.50% above the greater of East West Bank’s prime rate or 5.50%. Interest on the revolving advances is payable monthly in arrears. The revolving credit facility terminates and the principal and all amounts are due in full on June 25, 2024, provided that if an optional or mandatory prepayment (other than regularly scheduled payments) is made under the term loan, the Company must satisfy in full the obligations under the revolving credit line. The revolving credit facility requires a lockbox arrangement, which provides for all receipts to be swept daily to reduce the borrowings outstanding under the revolving credit facility. MidCap Term Loan On November 22, 2021, the Company entered into a New Credit Agreement with MidCap Financial Services, as servicer for MidCap Financial Trust to refinance the Company's existing senior secured indebtedness. The New Credit Agreement provides for a five-year, $21 million secured Term Facility, and replaces the Company’s existing credit facility under the 2019 Secured Loan Agreement, with the Lenders. The existing credit facility was repaid in full and the existing revolving credit facility was terminated in connection with the entry of the New Credit Agreement. The full amount of the $21 million Term Facility was borrowed on the date of entering into the New Credit Agreement. Proceeds of the Term Facility were used for the repayment of the debt owing under the 2019 Secured Loan Agreement with the Lenders. The New Credit Agreement has a maturity date of November 1, 2026 and requires interest only payments through October 31, 2024, and thereafter, 24 monthly payments of principal and interest resulting in the Term Facility being fully paid by the maturity date. Interest is payable monthly in arrears at a rate of 5.7% per annum plus one month LIBOR subject to a LIBOR floor of 1%. In addition to the interest charged on the Term Facility, the Company is also obligated to pay certain fees, including an origination fee of 0.5% of the term loan due at closing and a final payment fee of 4.0% of the term loan at the time of final payment. The obligation of the Company with respect to the New Credit Agreement are secured by a security interest over substantially all of the personal property assets of the Company, including accounts receivable, deposit accounts, intellectual property, investment property, inventory, equipment and equity interests in its subsidiaries.The New Credit Agreement contains customary affirmative and negative covenants, including limitations on our ability to incur additional debt, grant or permit additional liens, make investments and acquisitions, merge or consolidate with others, dispose of assets, pay dividends and distributions, pay subordinated indebtedness and enter into affiliate transactions. In addition, the New Credit Agreement contains a minimum liquidity covenant requiring the Company to maintain unrestricted cash and cash equivalents in excess of $4.0 million. The New Credit Agreement also includes events of default customary for facilities of this type and upon the occurrence of such events of default, subject to customary cure rights, all outstanding loans under the Term Facility may be accelerated. As of December 31, 2021, the Company was not in breach of covenants under the New Credit Agreement. The prepayment of the debt was accounted for as a debt extinguishment and the Company incurred a loss on the extinguishment of $1.1 million. This amount consisted of final payment fee, prepayment penalty and the write-off of unamortized debt issuance costs. The loss on extinguishment of debt was recognized as interest expense within the consolidated statement of operations during the year ended December 31, 2021. PPP Loan - East West Bank On April 17, 2020, the Company entered into an approximately $4.7 million promissory note (the “PPP Note”) with East West Bank under the Paycheck Protection Program (“PPP”) offered by the U.S. Small Business Administration (the "SBA") to mitigate the negative financial and operational impacts of the COVID-19 pandemic. The interest rate on the PPP Note is a fixed rate of 1% per annum. The Company is required to make one payment of all outstanding principal plus all accrued unpaid interest on April 9, 2022 (the “Maturity Date”). The Company was required to pay regular monthly payments in an amount equal to one month’s accrued interest commencing on August 2, 2021, with all subsequent interest payments to be due on the same day of each month after that. All interest which accrues during the deferral period will be payable on the Maturity Date. According to the terms of the PPP, all or a portion of the loan as well as any accrued interest may be fully forgiven if the funds are used for payroll costs (and at least 60% of the forgiven amount must have been used for payroll), interest on certain other outstanding debt, rent, and utilities. In accordance with the CARES Act, the Company used the proceeds of the loan primarily for payroll costs. The Company accounted for the PPP Note as a debt instrument in accordance with ASC 470-50-40-2, with the proceeds from the loan recognized as a long-term liability, less any debt issuance costs, within the consolidated balance sheet. Interest is accrued at the stated rate on a monthly basis by applying the interest method under ASC 835. The Company submitted the loan forgiveness application to the lender on December 11, 2020. On June 30, 2021, the Company received notification through its lender that the SBA had rendered a final decision regarding its review of the PPP loan forgiveness application, fully approving the loan forgiveness application as of June 28, 2021. The Company accounted for the forgiveness of the PPP Note in accordance with ASC 405-20-40-1 and ASC 470-50-40-2, where the liability was derecognized from the balance sheet upon formal forgiveness of the loan. The resulting gain on forgiveness was measured based on the net carrying value of the PPP Note, which includes accrued interest and deferred financing costs. The Company recorded a gain on forgiveness of PPP loan of $4.8 million within Other income and expenses on the consolidated statement of operations during the year ended December 31, 2021. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Stockholders’ Equity Common stock Common stockholders are entitled to dividends as and when declared by the board of directors, subject to the rights of holders of all classes of stock outstanding having priority rights as to dividends. There have been no dividends declared to date. On March 30, 2021, the Company's board of directors adopted a resolution approving a Certificate of Amendment to the Company's Restated Certificate of Incorporation to increase the Company's number of authorized shares of Common Stock from 200,000,000 to 300,000,000 (the “Certificate of Amendment”). The Company's stockholders approved the Certificate of Amendment at the 2021 Annual Meeting. On May 25, 2021, the Certificate of Amendment was filed with the Secretary of State for the State of Delaware. Preferred stock The Company’s Restated Certificate of Incorporation authorizes the Company to issue 5,000,000 shares of preferred stock, $0.00001 par value, all of which is undesignated. No shares were issued and outstanding at December 31, 2021 and December 31, 2020. Demand registration rights In conjunction with the Private Placement, on June 25, 2019, the Company entered into a registration rights agreement (the "2019 Registration Rights Agreement"), with the Innovatus Investors, pursuant to which the Company agreed to register for resale the Shares held by the Investors under certain circumstances. Under the Registration Rights Agreement, in the event that the Company receives a written request from the Innovatus Investors that the Company file with the U.S. Securities and Exchange Commission (the “SEC”) a registration statement covering the resale of all of the Shares, the Company shall promptly but no later than 120 days after the date of such request prepare and file with the SEC such registration statement. The Innovatus Investors have agreed to use best efforts not to make such a request, including by effecting any planned sales of Shares under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”). The Company has agreed to use commercially reasonable efforts to cause such registration statement to become effective and to keep such registration statement effective until the date the Shares covered by such registration statement have been sold or may be resold pursuant to Rule 144 without restriction. The Company has agreed to be responsible for all fees and expenses incurred in connection with the registration of the Shares. The Company has granted the Innovatus Investors customary indemnification rights in connection with the registration statement. The Innovatus Investors have also granted the Company customary indemnification rights in connection with the registration statement. Incidental registration rights If, the Company proposes to file a registration statement in connection with a public offering of its common stock, subject to certain exceptions, the holders of registrable shares are entitled to notice of registration and, subject to specified exceptions, including market conditions, the Company will be required, upon the holder’s request, to register their then held registrable shares. "At-the-market” program In January 2017, the Company filed a shelf registration statement on Form S-3, which was declared effective by the SEC on May 9, 2017 (the "Shelf Registration Statement"). The Shelf Registration Statement allowed the Company to sell from time to time up to $200 million of common stock, preferred stock, debt securities, warrants, or units comprised of any combination of these securities, for its own account in one or more offerings. On May 10, 2017, the Company filed with the SEC a prospectus supplement (the “Prospectus Supplement”) for the sale and issuance of up to $50 million of its common stock and entered into an Equity Distribution Agreement (“Distribution Agreement”) with Canaccord Genuity LLC (formerly, Canaccord Genuity Inc.) ("Canaccord") pursuant to which Canaccord agreed to sell shares of the Company's common stock from time to time, as its agent, in an “at-the-market” ("ATM") offering as defined in Rule 415 promulgated under the U.S. Securities Act of 1933, as amended (the "Securities Act"). The Company was not obligated to sell any shares under the Distribution Agreement. On August 4, 2020, the Company and Canaccord mutually agreed to terminate the Distribution Agreement and, as of that date, the Company had sold 2,663,000 shares under the Distribution Agreement resulting in net proceeds of $4.4 million. On March 23, 2020, the Company filed a new shelf registration statement on Form S-3 (the "New Shelf Registration Statement"), which was declared effective by the SEC on August 5, 2020. Under the New Shelf Registration Statement, the Company is permitted to sell from time to time up to $200 million of common stock, preferred stock, debt securities, warrants, or units comprised of any combination of these securities, for its own account in one or more offerings. On August 5, 2020, the Company filed with the SEC a prospectus supplement, for the sale and issuance of up to $25 million of its common stock and entered into a sales agreement (the “Sales Agreement”) with Cowen and Company, LLC (“Cowen”) pursuant to which the Company may offer and sell shares of the Company’s common stock to or through Cowen, acting as agent and/or principal, from time to time, in an “at-the-market” offering as defined in Rule 415 promulgated under the Securities Act, including without limitation sales made by means of ordinary brokers’ transactions on the Nasdaq Capital Market or otherwise at market prices prevailing at the time of sale, in block transactions, or as otherwise directed by the Company. Cowen will use commercially reasonable efforts to sell the Common Stock from time to time, based upon instructions from the Company (including any price, time or size limits or other customary parameters or conditions the Company may impose). The Company will pay Cowen a commission of up to 3.0% of the gross sales proceeds of any Common Stock sold through Cowen under the Sales Agreement, and we also provided Cowen with customary indemnification rights. The shares of Common Stock being offered pursuant to the Sales Agreement will be offered and sold pursuant to the New Shelf Registration Statement. The Company is not obligated to make any sales of Common Stock under the Sales Agreement. The offering of shares of Common Stock pursuant to the Sales Agreement will terminate upon the earlier of (i) the sale of all Common Stock subject to the Sales Agreement or (ii) termination of the Sales Agreement in accordance with its terms. As of December 31, 2021, the Company had not sold any shares under the Sales Agreement. Stock purchase agreement On December 17, 2018, the Company entered into a stock purchase agreement (the "Stock Purchase Agreement") with Lincoln Park Capital ("LPC"). Upon entering into the Stock Purchase Agreement, the Company sold 1,921,968 shares of common stock for $1.0 million to LPC, representing a premium of 110% to the previous day's closing price. As consideration for LPC’s commitment to purchase shares of common stock under the Stock Purchase Agreement, the Company issued 354,430 shares to LPC. The Company has the right at its sole discretion to sell to LPC up to $20.0 million worth of shares over a 36-month period subject to the terms of the Stock Purchase Agreement. The Company controls the timing of any sales to LPC and LPC will be obligated to make purchases of the Company's common stock upon receipt of requests from the Company in accordance with the terms of the Stock Purchase Agreement. There are no upper limits to the price per share LPC may pay to purchase up to $20.0 million worth of common stock subject to the Stock Purchase Agreement, and the purchase price of the shares will be based on the then prevailing market prices of the Company's shares at the time of each sale to LPC as described in the Stock Purchase Agreement, provided that LPC will not be obligated to make purchases of the Company's common stock pursuant to receipt of a request from the Company on any business day on which the last closing trade price of the Company's common stock on the Nasdaq Capital Market (or alternative national exchange in accordance with the Stock Purchase Agreement) is below a floor price of $0.25 per share. No warrants, derivatives, financial or business covenants are associated with the Stock Purchase Agreement and LPC has agreed not to cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of shares of the Company's common stock. The Stock Purchase Agreement may be terminated by the Company at any time, at the Company's sole discretion, without any cost or penalty. On August 5, 2020, the Company filed with the SEC a prospectus supplement, for the sale and issuance of up to $17.6 million of its common stock pursuant to the Stock Purchase Agreement dated December 17, 2018. As of December 31, 2021, the Company had sold 4,521,968 shares under the Stock Purchase Agreement resulting in proceeds of $3.4 million. 2021 common stock offering On February 17, 2021, the Company closed an offering of its common stock under the New Shelf Registration Statement and issued and sold 80,952,381 shares of its common stock at a public offering price of $1.05 per share, for aggregate net proceeds of approximately $79.6 million. The Company intends to use the net proceeds of the offering of the shares for general corporate purposes. Registered direct offering On September 23, 2020, the Company and a healthcare-focused institutional investor entered into a subscription agreement, pursuant to which the Company sold (i) 8,512,088 shares of its common stock and accompanying warrants to purchase up to 8,512,088 shares of common stock and (ii) pre-funded warrants to purchase up to 9,492,953 shares of common stock and accompanying warrants to purchase up to 9,492,953 shares of common stock in a registered direct offering for gross proceeds of approximately $17.3 million. The common stock (or pre-funded warrants in lieu thereof) and accompanying warrants were sold as units, each consisting of one share (or one pre-funded warrant to purchase one share of common stock in lieu thereof) and one warrant to purchase one share of common stock, at an offering price of $0.9581 per unit. The pre-funded warrants became exercisable immediately upon issuance, have an exercise price of $0.0001 per share and were exercisable until all of the pre-funded warrants were exercised in full. As of March 31, 2021, all pre-funded warrants were exercised. The warrants became exercisable immediately upon issuance, have an exercise price of $0.8748 per share, and will expire five years from the date of issuance. The pre-funded warrants and the warrants each prohibit the holder from exercising any portion thereof to the extent that the holder would own more than 9.99% of the number of shares of common stock outstanding immediately after exercise. The number of shares issuable upon exercise of the warrants and pre-funded warrants and the exercise price of the warrants and pre-funded warrants is adjustable in the event of stock splits, stock dividends, combinations of shares and similar recapitalization transactions. The net proceeds to the Company from the offering, after deducting the placement agent's fees and other estimated offering expenses payable by the Company, was approximately $15.9 million. Warrants The Company has issued warrants to certain investors and consultants to purchase shares of the Company’s common stock. Based on the Company’s assessment of the warrants granted in 2013 and 2014 relative to ASC 480, Distinguishing Liabilities from Equity , such warrants are classified as equity. According to ASC 480, an entity shall classify as a liability any financial instrument, other than an outstanding share, that, at inception, both a) embodies an obligation to repurchase the issuer’s equity shares, or is indexed to such obligation and b) requires or may require the issuer to settle the obligation by transferring assets. The warrants do not contain any provision that requires the Company to repurchase the shares and are not indexed to such an obligation. The warrants also do not require the Company to settle by transferring assets. All warrants were exercisable immediately upon issuance. In connection with the September 23, 2020 registered direct offering, the Company issued 9,492,953 pre-funded common stock warrants with an exercise price of $0.0001 per share and an additional 18,005,041 common stock warrants with an exercise price of $0.8748 per share. All of the warrants are exercisable for one share of common stock and are exercisable immediately. As of December 31, 2021, approximately 6.0 million of the common stock warrants have been exercised. The pre-funded warrants are exercisable indefinitely, while the additional warrants are exercisable for 5 years from the date of issuance. As of December 31, 2020, all pre-funded warrants were exercised. Based on the Company’s assessment of the warrants granted relative to ASC 480, Distinguishing Liabilities from Equity and ASC 815-40, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, these warrants are classified as equity instruments. The fair value of the common stock warrants of approximately $10.2 million at the date of issuance was estimated using the Black-Scholes model which used the following inputs: term of 5 years, risk free rate of 0.28%, 0% dividend yield, volatility of 90.15%, an exercise price of $0.875 and share price of $0.833 per share based on the trading price of the Company’s common stock. Warrants to purchase 12,020,926 shares of common stock were outstanding as of December 31, 2021 and warrants to purchase 18,025,967 shares were outstanding as of December 31, 2020. Outstanding common stock warrants are currently exercisable with varying exercise expiration dates from 2024 through 2025. At December 31, 2021 and December 31, 2020, the weighted average warrant exercise price per share for common stock and the weighted average contractual life was as follows: Number of Common Stock Weighted Weighted Average Remaining Contractual Life Number of Weighted Average Price Per Share Outstanding December 31, 2020 18,025,967 $ 0.89 4.73 18,025,967 $ 0.89 Granted — $ — — — $ — Exercised (6,005,041) — — (6,005,041) — Cancelled/expired — — — — — Outstanding December 31, 2021 12,020,926 $ 0.89 3.73 12,020,926 $ 0.89 Stock option plans In June 2004, the Company authorized the adoption of the 2004 Stock Option and Incentive Plan (the “2004 Plan”). Under the 2004 Plan, options were granted to persons who were, at the time of grant, employees, officers, or directors of, or consultants or advisors to, the Company. The 2004 Plan provided for the granting of non-statutory options, incentive options, stock bonuses, and rights to acquire restricted stock. The option price at the date of grant was determined by the Board of Directors and, in the case of incentive options, could not be less than the fair market value of the common stock at the date of grant, as determined by the Board of Directors. Options granted under the 2004 Plan generally vest over a period of four years and are set to expire ten years from the date of grant. In February 2011, the Company terminated the 2004 Plan and all options outstanding under it were transferred to the 2011 Stock Option/Stock Issuance Plan (the “2011 Plan”). In February 2011, the Company authorized the adoption of the 2011 Plan. The 2011 Plan is divided into two separate equity programs, Option Grant Program and Stock Issuance Program. Per the 2011 Plan, options can be granted to persons who are, at the time, employees, officers, or directors of, or consultants or advisors to, the Company. The 2011 Plan provides for the granting of non-statutory options, incentive options and common stock. The price at the date of grant is determined by the Board of Directors and, in the case of incentive options and common stock, cannot be less than the fair market value of the common stock at the date of grant, as determined by the Board of Directors. Options granted under the 2011 Plan generally vest over a period of four years and expire ten years from the date of grant. In June 2015, the Company terminated the 2011 Plan and all options outstanding under it were transferred to the 2015 Stock Incentive Plan (the “2015 Plan”). The 2015 Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock units and other stock-based awards. The number of shares of our common stock that will be reserved for issuance under the 2015 Plan is the sum of: (1) 2,000,000; plus (2) the number of shares equal to the sum of the number of shares of our common stock then available for issuance under the 2011 Plan and the number of shares of our common stock subject to outstanding awards under the 2011 Plan or under the 2004 Plan that expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased by us at their original issuance price pursuant to a contractual repurchase right; plus (3) an annual increase, to be added on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2016 and continuing until, and including, the fiscal year ending December 31, 2025, equal to the least of (a) 3,000,000 shares of our common stock, (b) 3% of the number of shares of our common stock outstanding on the first day of such fiscal year and (c) an amount determined by the Board. Our employees, officers, directors, consultants and advisors will be eligible to receive awards under the 2015 Plan. Incentive stock options, however, may only be granted to our employees. Options and restricted stock awards granted under the 2015 Plan generally vest over a period of four years and expire ten years from the date of grant. Effective January 1, 2021, an additional 2,866,390 shares of the Company's common stock were added to the 2015 Plan under the terms of this provision, and at the 2021 Annual Meeting of Stockholders on May 24, 2021, the Company' Stockholders approved a First Amendment to the 2015 Plan to increase by 6,000,000, the maximum number of shares of common stock available for issuance under the 2015 Plan ("Plan Amendment"), the Plan, as amended by the Plan Amendment, was filed as Exhibit 10.1 to the Current Report on Form 8-K filed on May 27, 2021. As of December 31, 2021, 4,829,894 shares of common stock were available for future issuance under the 2015 Plan. On April 29, 2019, the stockholders approved the Conformis, Inc. 2019 Sales Team Performance-Based Equity Incentive Plan ("2019 Sales Team Plan") for up to 3,000,000 shares of common stock available to grant to certain sales representatives or independent sales agents. The 2019 Sales Team Plan provides for the grant of performance-based equity, including incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock units and other stock-based awards. Shares covered by awards under the 2019 Sales Team Plan that expire or are terminated, surrendered, or cancelled without having been fully exercised or are forfeited in whole or in part (including as the result of shares subject to such award being repurchased by us at the original issuance price pursuant to a contractual repurchase right) or that result in any shares not being issued, will again be available for the grant of awards under the 2019 Sales Team Plan. Equity granted under the 2019 Sales Team Plan will expire ten years from the date of the grant. As of December 31, 2021, 2,241,430 shares of common stock were available for future issuance under the 2019 Sales Team Plan. Stock option activity under all stock plans was as follows: Number of Weighted Average Aggregate Intrinsic Value (In Thousands) Outstanding December 31, 2019 1,802,463 $ 6.75 $ 3 Granted 452,129 0.82 Exercised — — Expired (474,580) 7.14 Cancelled/Forfeited (12,433) 1.39 Outstanding December 31, 2020 1,767,579 $ 5.16 $ — Granted 239,964 1.00 Exercised — — Expired (214,599) 5.26 Cancelled/Forfeited (114,964) 1.32 Outstanding December 31, 2021 1,677,980 $ 4.82 $ 23 Total vested and exercisable 1,389,776 $ 5.63 $ 15 The total fair value of stock options that vested during the year ended December 31, 2021 was $0.3 million. The weighted average remaining contractual term for the total stock options outstanding was 5.39 years at December 31, 2021. The weighted average remaining contractual term for the total stock options vested and exercisable was 4.64 years at December 31, 2021. Restricted common stock award activity under the plans was as follows: Number of Shares Weighted Average Fair Value Unvested December 31, 2019 4,436,928 $ 1.54 Granted 4,351,758 0.95 Vested (1,882,094) 1.56 Forfeited (630,553) 1.01 Unvested December 31, 2020 6,276,039 $ 1.18 Granted 4,121,269 0.93 Vested (2,590,298) 1.17 Forfeited (673,215) 0.96 Unvested December 31, 2021 7,133,795 $ 1.06 The total fair value of restricted common stock awards that vested during the year ended December 31, 2021 was $3.0 million. Inducement Awards In February 2020, the Company granted inducement awards outside of the 2015 Plan and 2019 Sales Team Plan (i) to the Company's Chief Financial Officer in the form of an option to purchase 125,000 shares of the Company's common stock with an exercise price per share equal to $0.98 and 125,000 restricted stock units and (ii) to the Company's Senior Vice President, Operations in the form of an option to purchase 66,667 shares of the Company's common stock with an exercise price per share equal to $0.98 and 61,350 restricted stock units. The option and restricted stock unit awards were granted as inducements material to their commencement of employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4). In August 2020, the Company granted inducement awards outside of the 2015 Plan and 2019 Sales Team Plan to the Company's Vice President, US Marketing in the form of an option to purchase 100,000 shares of the Company's common stock with an exercise price per share equal to $0.7427 and 100,000 restricted stock units. The option and restricted stock unit awards were granted as inducements material to his commencement of employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4). In November 2020, the Company granted inducement awards outside of the 2015 Plan and 2019 Sales Team Plan to the Company's Vice President, International Sales and Marketing in the form of 75,000 restricted stock units. The restricted stock unit awards were granted as inducements material to his commencement of employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4). In November 2021, the Company granted inducement awards outside of the 2015 Plan and 2019 Sales Team Plan to the Company's Vice President, Marketing in the form of 150,000 restricted stock units. The restricted stock unit awards were granted as inducements material to his commencement of employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4). Stock-based compensation The Company uses the Black-Scholes option pricing model to determine the fair value of stock options. The determination of the fair value of stock-based payment awards on the date of grant using a pricing model is affected by the value of the Company’s common stock as well as assumptions regarding a number of complex and subjective variables. The fair value for restricted stock awards and performance awards is the grant date close price of the Company's Common Stock as reported by Nasdaq. The weighted average fair value of options granted was $0.50 and $0.47 for the year ended December 31, 2021 and 2020, respectively. The fair value of options at date of grant was estimated using the Black-Scholes option pricing model, based on the following assumptions: Years Ended December 31, 2021 2020 Risk-free interest rate 1.30% 1.14% Expected term (in years) 5.50 6.16 Dividend yield —% —% Expected volatility 87.41% 54.89% Risk-free interest rate . The risk-free interest rate is based on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term on the options. Expected term. The expected term of stock options represents the period the stock options are expected to remain outstanding and is based on the “SEC Shortcut Approach” as defined in “Share-Based Payment” (SAB 107) ASC 718-10-S99, “Compensation-Stock Compensation-Overall-SEC Materials,” which is the midpoint between the vesting date and the end of the contractual term. With certain stock option grants, the exercise price may exceed the fair value of the common stock. In these instances, the Company adjusts the expected term accordingly. Dividend yield. The Company has never declared or paid any cash dividends and does not plan to pay cash dividends in the foreseeable future, and, therefore, used an expected dividend yield of zero in the valuation model. Expected volatility. Expected volatility measures the amount that a stock price has fluctuated or is expected to fluctuate during a period. Prior to July 1, 2021, the Company estimated volatility using the historical volatilities of similar public entities. Beginning July 1, 2021, the Company estimates volatility based on the historical volatility of the Company's stock. Forfeitures. The Company recognizes forfeitures as they occur. Stock-based compensation expense was $3.8 million and $3.4 million for the years ended December 31, 2021 and 2020, respectively. Stock-based compensation expense was recognized ratably over the period with forfeitures accounted for in the period in which they occurred. To date, the amount of stock-based compensation capitalized as part of inventory was not material. The following is a summary of stock-based compensation expense (in thousands): Years Ended December 31, 2021 2020 Cost of revenue $ 75 $ 72 Sales and marketing 708 446 Research and development 582 648 General and administrative 2,450 2,240 $ 3,815 $ 3,406 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company files U.S. federal and state tax returns as well as foreign income tax returns. The Company has accumulated significant losses since its inception. For financial reporting purposes, loss before income taxes for the years ended December 31, 2021 and 2020 includes the following components (in thousands): Years ended December 31, 2021 2020 Loss before income taxes: U.S. $ (219) $ (21,968) Non‑U.S. (2,103) (2,283) $ (2,322) $ (24,251) Significant components of the provision for income taxes for the years ended December 31, 2021 and 2020 were as follows (in thousands): Years ended December 31, 2021 2020 Current: Federal $ — $ — State 33 9 Foreign 58 33 91 42 Deferred: Federal — — State — — Foreign — — — — Total $ 91 $ 42 The Company accounts for income taxes under FASB ASC 740 Accounting for Income Taxes . Deferred tax assets and liabilities are determined based upon differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A reconciliation of the income tax benefit at the statutory federal income tax rate as reflected in the financial statements was as follows: Years ended December 31, 2021 2020 Tax at U.S. statutory rate 21.00 % 21.00 % State taxes, net of federal benefits 51.39 3.68 Permanent items 155.29 (1.07) Tax credit (14.94) 0.37 Change in valuation allowance (251.92) (25.37) Foreign rate differential 4.79 0.76 Rate change (7.90) (0.69) Uncertain tax positions 23.08 4.22 NQ Stock option expirations & forfeitures (1.54) (0.09) Prior period true ups 19.46 0.85 Other (2.63) (3.83) (3.92) % (0.17) % Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes Significant components of the Company’s deferred tax assets (liabilities) consisted of the following (in thousands): Years ended December 31, 2021 2020 Deferred tax assets: Federal and state net operating loss carryforwards $ 25,101 $ 23,124 Foreign net operating loss carryforwards 7,458 6,312 Accrued expenses 444 380 Credits 7,776 7,429 Intangibles 1,203 1,278 Stock compensation expense 1,075 988 Lease liability 1,957 1,327 Other 4,906 3,568 Total deferred tax assets 49,920 44,406 Valuation allowance (47,354) (41,507) Net deferred tax assets 2,566 2,899 Deferred tax liabilities: Fixed assets (751) (914) Right of use asset (1,774) (1,175) Other (41) (810) Net deferred tax liabilities (2,566) (2,899) Net deferred tax liabilities $ — $ — A valuation allowance is required to reduce the deferred tax assets reported if, based on weight of evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. After consideration of all of the evidence, both positive and negative, the Company determined that a $47.4 million valuation allowance at December 31, 2021 was necessary to reduce the deferred tax assets to the amount that will more likely than not be realized. The change in the valuation allowance for the current year was $5.8 million. The Company provided a valuation allowance for the full amount of its net deferred tax asset for all periods because realization of any future tax benefit cannot be sufficiently assured as the Company does not expect income in the near term. At December 31, 2021, the Company had approximately $445.5 million of federal net operating loss carryforwards of which $378.8 million if not utilized, a portion will begin to expire in 2022 for federal tax purposes, while $66.7 million of the total will not expire, and approximately $248.9 million of state net operating loss carryforwards that if not utilized, will continue to expire at various dates starting in 2022 for state tax purposes, while $9.1 million of the total will not expire. The Company also has federal and state tax credits of $5.7 million and $2.6 million, which begin to expire in 2022 for federal tax purposes and continue to expire at various dates starting for state tax purposes. The utilization of such net operating loss carryforwards and realization of tax benefits in future years depends predominantly upon having taxable income. The limitations under Section 382 for Federal and State are $345.8 million and $255.9 million as of December 31, 2021. The limitations may reduce the amount of federal and state NOLs and credits of $445.5 million and $248.9 million, respectively, that can be utilized to offset future taxable income and tax. Utilization of the NOLs and credits may be subject to a substantial annual limitation due to ownership change limitations that have occurred or that could occur in the future, as required by Section 382 and Section 383 of the Code. In general, an “ownership change” as defined by Section 382 of the Code results from a transaction or series of transactions over a three‑year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders. The Company underwent an ownership change in January 2018 and as a result the Company is subject to an annual limitation of approximately $1.4 million. The Company also had foreign net operating losses of approximately $35.5 million as of December 31, 2021, which may be available to offset future income recognized in the Federal Republic of Germany, India and the United Kingdom. The net operating losses in Germany and the United Kingdom have indefinite carryforward periods. The Company has adopted the accounting guidance related to uncertainty in income taxes. The total liability for unrecognized income tax benefits was approximately $3.6 million and $4.1 million as of December 31, 2021 and 2020, respectively. Of the total liability at December 31, 2021 and 2020, $3.1 million and $3.7 million, respectively, were netted against deferred tax assets. The Company recognizes interest accrued and penalties, if applicable, related to unrecognized tax benefits in income tax expense. The Company believes that it is reasonably possible a decrease of up to $0.2 million in unrecognized tax benefits, as a result of a lapse of the statute of limitations in Germany, will occur within the coming 12 months. The reconciliation below summarizes the Company's unrecognized tax benefits for the respective periods. These amounts primarily relate to transactions between the Company and its foreign subsidiaries, including accrued interest. Years ended December 31, 2021 2020 Unrecognized tax benefits beginning of year $ 4,094 $ 5,118 Gross change for current year positions 633 722 Increase for prior period positions 23 29 Decrease for prior period positions — (495) Decrease due to statute limitations (1,192) (1,280) Unrecognized tax benefits end of the year $ 3,558 $ 4,094 As of December 31, 2021, the Company was open to examination in the U.S. federal and certain state jurisdictions for all of the Company’s tax years since the net operating losses may potentially be utilized in future years to reduce taxable income. The Company has been audited in Germany through 2015. The net operating loss carryforward from periods prior to 2015 may be utilized against taxable income in future periods and the net operating loss carryforward cannot be challenged by the German Tax Authorities. At December 31, 2021, foreign earnings, which were not significant, have been retained indefinitely by foreign subsidiary companies for reinvestment; therefore, no provision has been made for income taxes that would be payable upon the distribution of such earnings, and it would not be practicable to determine the amount of the |
Segment and Geographic Data
Segment and Geographic Data | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment and Geographic Data | Note L—Segment and Geographic Data The Company operates as one reportable segment as described in "Note B—Summary of Significant Accounting Policies" to the Consolidated Financial Statements. The countries in which the Company has local revenue generating operations have been combined into the following geographic areas: the United States (including Puerto Rico), Germany and the rest of the world, which consists of Europe predominately (including the United Kingdom) and other foreign countries. Sales are attributable to a geographic area based upon the customer’s country of domicile and distributors managed by that respective country. Net property and equipment are based upon physical location of the assets. Geographic information consisted of the following (in thousands): Years Ended December 31, 2021 2020 Product Revenue United States $ 50,990 $ 50,736 Germany 5,422 6,526 Rest of World 1,906 1,278 $ 58,318 $ 58,540 December 31, 2021 2020 Property and equipment, net United States $ 10,131 $ 12,195 Germany 43 45 Rest of World $ 94 $ — $ 10,268 $ 12,240 |
Employee Savings Plan
Employee Savings Plan | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
Employee Savings Plan | Employee Savings Plan We have established an employee savings plan pursuant to Section 401(k) of the Internal Revenue Code. The plan allows participating employees to deposit into tax deferred investment accounts up to 100% of eligible earnings, subject to annual limits. We make contributions to the plan in an amount equal to 50% of elective deferrals on up to 5% of the participant’s eligible earnings. We contributed approximately $0.5 million to the plan during each of the years ended December 31, 2021 and 2020. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of presentation and use of estimates | Basis of presentation and use of estimates The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States ("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 consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. The most significant estimates used in these consolidated financial statements include revenue recognition, accounts receivable valuation, inventory reserves, impairment assessments, income tax reserves and related allowances, and the lives of property and equipment. Actual results may differ from those estimates. |
Concentrations of credit risk and other risks and uncertainties | Concentrations of credit risk and other risks and uncertainties Financial instruments that subject the Company to credit risk primarily consist of cash, cash equivalents and accounts receivable. The Company maintains the majority of its cash with accredited financial institutions which mitigates potential risks related to concentration. The Company had $0.6 million as of December 31, 2021 and $1.0 million as of December 31, 2020 held in foreign bank accounts, that are not federally insured. The Company and its contract manufacturers rely on sole source suppliers and service providers for certain components. There can be no assurance that a shortage or stoppage of shipments of the materials or components that the Company purchases will not result in a delay in production or adversely affect the Company’s business. On an ongoing basis, the Company validates alternate suppliers relative to certain key components as needed. |
Principles of consolidation | Principles of consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries including ImaTx, Inc., or ImaTx, ConforMIS Europe GmbH, ConforMIS UK Limited, ConforMIS Hong Kong Limited, Conformis India LLP; and Conformis Cares LLC. All intercompany balances and transactions have been eliminated in consolidation. |
Cash and cash equivalents | Cash, cash equivalents and restricted cash The Company considers all highly liquid investment instruments with original maturities of 90 days or less when purchased to be cash equivalents. The Company’s cash equivalents consist of demand deposits and |
Fair value of financial instruments | Fair value of financial instruments |
Accounts receivable and allowance for doubtful accounts | Accounts receivable and allowance for doubtful accounts Accounts receivable consist of billed and unbilled amounts due from medical facilities or independent distributors (the "Customer"). Upon completion of a procedure, revenue is recognized and an unbilled receivable is recorded. Under Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC 606"), an enforceable contract is met either at or prior to the procedure being performed. Upon receipt of a purchase order from the Customer, the billed receivable is recorded and the unbilled receivable is reversed. As a result, the unbilled receivable balance fluctuates based on the timing of the Company's receipt of purchase orders from the medical facilities. In estimating whether accounts receivable can be collected, the Company performs evaluations of customers and continuously monitors collections and payments and estimates an allowance for doubtful accounts based on the aging of the underlying invoices, collections experience to date and any specific collection issues that have been identified. The allowance for doubtful accounts is recorded in the period in which revenue is recorded or when collection risk is identified. |
Inventories | Inventories Inventories consist of raw materials, work-in-process components and finished goods. Inventories are stated at the lower of cost, determined using the first-in first-out method, or net realizable value. The Company regularly reviews its inventory quantities on hand and related cost and records a provision for any excess or obsolete inventory based on its estimated forecast of product demand and existing product configurations. The Company also reviews its inventory value to determine if it reflects the lower of cost or market based on net realizable value. Appropriate consideration is given to inventory items sold at negative gross margin, purchase |
Property and equipment | Property and equipment Property and equipment is stated at cost less accumulated depreciation and is depreciated using the straight-line method over the estimated useful lives of the respective assets. Leasehold improvements are amortized over their useful life or the life of the lease, whichever is shorter. Assets capitalized under capital leases are amortized in accordance with the respective class of assets and the amortization is included with depreciation expense. Maintenance and repair costs are expensed as incurred. |
Long-lived assets | Long-lived assets |
Leases | Leases The Company has elected not to separate non-lease components from all classes of leases. Non-lease components have been accounted for as part of the single lease component to which they are related. Leases with an anticipated term, inclusive of renewals of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company has elected the hindsight practical expedient to determine the lease term for existing leases. This practical expedient enables an entity to use hindsight in determining the lease term when considering options to extend and terminate leases as well as purchase the underlying assets. The operating lease right-of-use assets are subsequently assessed for impairment in accordance with the Company's accounting policy for long-lived assets. |
Revenue recognition | Revenue recognition Product Revenue Recognition Revenue is recognized when, or as, obligations under the terms of a contract are satisfied, which occurs when control of the promised products or services is transferred to customers. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or services to a customer (“transaction price”). When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before or significantly after performance, resulting in a significant financing component. Applying the practical expedient in paragraph 606-10-32-18, the Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations under the contract and when the customer pays is one year or less. None of the Company’s contracts contained a significant financing component as of December 31, 2021. Payment is typically due between 30 - 60 days from invoice. To the extent that the transaction price includes variable consideration, such as prompt-pay discounts or rebates, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the expected value to which the Company expects to be entitled. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Actual amounts of consideration ultimately received may differ from the Company's estimates. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information (historical, current and forecasted) that is reasonably available. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on observable prices or a cost-plus margin approach when one is not available. Revenue is recognized at the time the related performance obligation is satisfied by transferring control of a promised good or service to a customer. The Company's performance obligations are satisfied at the same time, typically upon surgery, therefore, product revenue is recognized at a point in time upon completion of the surgery. Since the Company does not have contracts that extend beyond a duration of one year, there is no transaction price related to performance obligations that have not been satisfied. Certain customer contracts include terms that allow the Company to bill for orders that are cancelled after the product is manufactured and could result in revenue recognition over time. However, the impact of applying over time revenue recognition was deemed immaterial. Under the long-term Distribution Agreement with Stryker, the Company supplies patient specific instrumentation to Stryker and revenue is recognized at a point in time, that is, when Stryker obtains control of the products. Unconditional rights to consideration are reported as receivables. Incidental items that are immaterial in the context of the contract are recognized as expense. At December 31, 2021 and 2020, the Company did not have contract assets or liabilities recorded on the Consolidated Balance Sheets derived from contract with customers. Royalty and Licensing Revenue Recognition The Company receives ongoing sales-based royalties under its license agreement (the "MicroPort License Agreement") with MicroPort Orthopedics Inc., a wholly owned subsidiary of MicroPort Scientific Corporation, (collectively, "MicroPort"). Royalty revenue is recorded at the expected value of the royalty revenue. On September 30, 2019 the Company entered into an Asset Purchase Agreement with Howmedica Osteonics Corp., a wholly-owned subsidiary of Stryker. In connection with entering into the Asset Purchase Agreement, the Company also entered into a Development Agreement, a License Agreement, and other ancillary agreements contemplated by the Asset Purchase Agreement with Stryker (the "Stryker Agreements"). The Company determined that the Asset Purchase Agreement and the License Agreement, are within the scope of ASC 606. Under the Asset Purchase Agreement and License Agreement, the Company is required to provide certain assets and the right to use the license for a specific purpose. The assets and the right to use the license are highly interdependent and considered one performance obligation. The Company bifurcated the total transaction price of $30.0 million into two components; $5.0 million related to cost reimbursement for other services (development) and $25.0 million allocated to royalty revenue determined using the residual approach of deducting the cost reimbursement component from the total transaction price. The arrangement does not contain a significant financing component. The Company records a contract liability when there is an obligation to transfer goods or services to a customer for which the Company has received consideration from the customer. The Company has concluded that Stryker meets the definition of a customer for a portion of the obligations under the Stryker Agreements. The contract liability balances as of January 1, 2021 and 2020, were $14.0 million and $12.0 million, respectively, which were related to consideration received from the customer under the Asset Purchase Agreement and Development Agreement. The Company concluded the license rights under the License Agreement were functional and would be recognized at the point in time when 510(k) clearance was received from the FDA as required under Milestone 3 in the License Agreement, or upon termination by Stryker and Stryker's election to purchase the license rights. On April 19, 2021, the Company achieved the third of three milestones under the License Agreement when it received 510(k) clearance from the FDA and received $11.0 million from Stryker. In connection with the 510(k) clearance, the Company recognized as royalty and license revenue the $14.0 million that was previously deferred as contract liability, plus the $11.0 million payment received, for a total aggregate of $25.0 million during the quarter ended June 30, 2021. There are no amounts recorded as contract liability as of December 31, 2021. In addition, during the quarter ended June 30, 2021, the Company recorded $2.5 million in other income for the remaining portion of the advance on research and development, that was not used to offset against research and development expenses. On May 22, 2020 the Company entered into a Settlement and License Agreement with Zimmer Biomet, pursuant to which both parties have agreed to terms for resolving all of their existing patent disputes. In consideration of the licenses, releases, covenants and other immunities granted by the Company to Zimmer Biomet, Zimmer Biomet was required to pay the Company $3.5 million promptly after execution of the Settlement and License Agreement, which it has, and additional payments on specified dates through January 15, 2021, for a total amount payable of $9.6 million. The agreement provides for the grant of the licenses, covenants-not-to-sue, releases, and other significant deliverables upon execution of the contract. These individual rights are not accounted for as separate performance obligations as (i) the nature of the promise, within the context of the agreement, is to transfer combined items to which the promised rights are inputs and (ii) the Company's promise to transfer each individual right described above to Zimmer Biomet is not separately identifiable from other promises in the agreement. As a result, the Company accounts for the promises in the agreement as a single performance obligation. Zimmer Biomet legally obtained control of the license and other rights upon execution of the contract. As such, the earnings process is complete and revenue was recognized upon the execution of the contract, when collectability became probable and all other revenue recognition criteria had been met within the scope of ASC 606. In connection with the Settlement and License Agreement, the Company recognized revenue of $9.6 million during the year ended December 31, 2020. See “Note H —Commitments and Contingencies, Legal proceedings” for further discussion of the Zimmer Biomet settlement. On April 8, 2021, the Company entered into a license agreement (the “License Agreement”) with Paragon 28, Inc. ("Paragon 28"), granting Paragon 28 a non-exclusive license under a subset of the Company's U.S. patents for the use of patient-specific instruments with off-the-shelf implants in Paragon 28’s APEX 3D Total Ankle Replacement System. In consideration for the license, the Company received $0.5 million upon execution of the License Agreement, another $0.5 million in October 2021, and may receive an additional $0.5 million from Paragon 28 before April 8, 2022. In connection with this License Agreement, the Company recognized revenue of $1.0 million during the quarter ended June 30, 2021. The remaining $0.5 million was excluded from the transaction price given it is contingent on a future event that was not probable as of December 31, 2021. On June 30, 2021 the Company entered into a settlement and license agreement (the “Settlement and License Agreement”) with the Stryker Parties, pursuant to which the parties have agreed to terms for resolving all of their existing patent disputes. In consideration of the licenses, releases, covenants and other immunities granted by the Company to the Stryker Parties, the Stryker Parties are required to make a one-time payment to the Company of $15.0 million no later than October 15, 2021. The agreement provides for the grant of the licenses, covenants-not-to-sue, releases, and other deliverables upon execution of the contract. These individual rights are not accounted for as separate performance obligations as (i) the nature of the promise, within the context of the agreement, is to transfer combined items to which the promised rights are inputs and (ii) the Company's promise to transfer each individual right described above to the Stryker Parties is not separately identifiable from other promises in the agreement. As a result, the Company accounts for the promises in the Settlement and License Agreement as a single performance obligation. The Stryker Parties legally obtained control of the license and other rights upon execution of the contract. As such, the earnings process is complete and revenue was recognized upon the execution of the contract, when collectability became probable and all other revenue recognition criteria had been met within the scope of ASC 606. In connection with the Settlement and License Agreement, the Company recognized revenue of $15.0 million during the quarter ended June 30, 2021 and payment in the same amount was received from the Stryker Parties on October 15, 2021. See “Note H—Commitments and Contingencies, Legal proceedings” for further discussion of the Stryker Parties settlement. Disaggregation of Revenue See "Note L—Segment and Geographic Data" for disaggregated product revenue by geography. Variable Consideration Revenues from product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established and which result from rebates that are offered within contracts between the Company and some of its customers. The amount of variable consideration which is included in the transaction price may be constrained, and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. The following table summarizes activity for rebate allowance reserve for the years ended December 31, 2021 and 2020 (in thousands): Years Ended December 31, 2021 2020 Beginning Balance $ 81 $ 127 Provision related to current period sales 107 146 Adjustment related to prior period sales — (55) Payments or credits issued to customer (109) (137) Ending Balance $ 79 $ 81 Costs to Obtain and Fulfill a Contract The Company currently expenses commissions paid for obtaining product sales. Sales commissions are paid following the manufacture and implementation of the implant. Due to the period being less than one year, the Company will apply the practical expedient, whereby the Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs are included in sales and marketing expense. Further, the Company incurs costs to buy, build, replenish, restock, sterilize and replace the reusable instrumentation trays associated with the sale of its products and services. The reusable instrument trays are not contract specific and are used for multiple contracts and customers, therefore does not meet the criteria to capitalize under ASC 606. Shipping and handling costs Shipping and handling activities prior to the transfer of control to the customer (e.g., when control transfers after delivery) are considered fulfillment activities, and not performance obligations. Amounts invoiced to customers for shipping and handling are classified as revenue. Shipping and handling costs incurred are included in general and administrative expense. Shipping and handling expense was $3.1 million and $1.7 million for the years ended December 31, 2021 and 2020, respectively. Taxes Collected From Customers and Remitted to Government Authorities The Company’s policy is to present taxes collected from customers and remitted to government authorities on a net basis and not to include tax amounts in revenue. |
Research and development expense | Research and development expense The Company’s research and development costs consists primarily of personnel costs, including salary, employee benefits and stock-based compensation for personnel employed in research and development, regulatory and clinical areas. Research and development expense also includes cost associated with product design, product refinement and improvement efforts before and after receipt of regulatory clearance, development of prototypes, testing, clinical study programs and regulatory activities, contractors and consultants, and equipment and software to support our development. As our revenue increases, we will also incur additional expense for revenue share payments to our past and present scientific advisory board members, including one of our past directors. Research and development costs are expensed as incurred. |
Advertising expense | Advertising expense |
Segment reporting | Segment reporting Operating segments are defined as components of an enterprise about which separate financial information is available and is evaluated on a regular basis by the chief operating decision-maker, or decision-making group, in deciding how to allocate resources to an individual segment and in assessing performance of the segment. The Company’s chief operating decision-maker is its chief executive officer. The Company’s chief executive officer reviews financial information presented on an aggregate basis for purposes of allocating resources and evaluating financial performance. The Company has one business segment and there are no segment managers who are held accountable for operations, operating results and plans for products or components below the aggregate Company level. Accordingly, in light of the Company’s current product offerings, management has determined that the primary form of internal reporting is aligned with the offering of the Conformis personalized joint replacement products and that the Company operates as one segment. See “Note L—Segment and Geographic Data.” |
Foreign currency translation and transactions | Foreign currency translation and transactions The assets and liabilities of the Company’s foreign operations are translated into U.S. dollars at current exchange rates at the balance sheet date, and income and expense items are translated at average rates of exchange prevailing during the quarter. Net translation gains and losses are recorded in Accumulated other comprehensive loss. Gains and losses from foreign currency transactions denominated in foreign currencies, including intercompany balances not of a long-term investment nature, are included in the Consolidated Statements of Operations. |
Income taxes | Income taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases, operating losses and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income in the period that includes the enactment date. In evaluating the need for a valuation allowance, the Company considers all reasonably available positive and negative evidence, including recent earnings, expectations of future taxable income and the character of that income. In estimating future taxable income, the Company relies upon assumptions and estimates of future activity including the reversal of temporary differences. Presently, the Company believes that a full valuation allowance is required to reduce deferred tax assets to the amount expected to be realized. The tax benefit from an uncertain tax position is only recognized if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from these positions are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. The Company reviews its tax positions on an annual basis and more frequently as facts surrounding tax positions change. Based on these future events, the Company may recognize uncertain tax positions or reverse current uncertain tax positions, the impact of which would affect the consolidated financial statements. The Company has operations in Germany, the United Kingdom, and India. The operating results of these operations will be permanently reinvested in those jurisdictions. As a result, the Company has only provided for income taxes at local rates when required. On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") which included modifications to the limitation on business interest expense, net operating loss provisions, and other various U.S. tax law updates. The Company analyzed these aspects of the CARES Act and it had no material impact on its consolidated financial statements. On December 27, 2020, the U.S government enacted the Consolidated Appropriations Act, 2021 (the "Appropriations Act"), which included various tax extenders, an update to meals and entertainment expensing, and the deductibility of expenses related to the Paycheck Protection Program (“PPP”) loan proceeds. The Company applied the Appropriations Act in regards to expenses related to the PPP loan proceeds, which previously would have been non-deductible. |
Stock-based compensation | Stock-based compensation The Company accounts for stock-based compensation in accordance with ASC 718, Stock Based Compensation ("ASC 718"). ASC 718 requires all stock-based payments to employees and consultants, including grants of stock options, to be recognized in the consolidated statements of operations based on their fair values. The Company uses the Black-Scholes option pricing model to determine the weighted-average fair value of options granted and recognizes the compensation expense of stock-based awards on a straight-line basis over the vesting period of the award. |
Net loss per share | Net loss per share The Company calculates net loss per share in accordance with ASC 260, "Earnings per Share." Basic earnings per share (“EPS”) is calculated by dividing the net income or loss for the period by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted EPS is computed by dividing the net income or loss for the period by the weighted average number of common shares outstanding for the period and the weighted average number of dilutive common stock equivalents outstanding for the period determined using the treasury stock method. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows. December 31, 2021 December 31, 2020 Cash and cash equivalents $ 100,556 $ 28,673 Restricted cash 562 462 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 101,118 $ 29,135 |
Restrictions on Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows. December 31, 2021 December 31, 2020 Cash and cash equivalents $ 100,556 $ 28,673 Restricted cash 562 462 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 101,118 $ 29,135 |
Contract with Customer, Asset and Liability | The following table summarizes activity for rebate allowance reserve for the years ended December 31, 2021 and 2020 (in thousands): Years Ended December 31, 2021 2020 Beginning Balance $ 81 $ 127 Provision related to current period sales 107 146 Adjustment related to prior period sales — (55) Payments or credits issued to customer (109) (137) Ending Balance $ 79 $ 81 |
Schedule of Computation of Basic and Diluted Earnings Per Share Attributable to Stockholders | The following table sets forth the computation of basic and diluted earnings per share attributable to stockholders (in thousands, except share and per share data): Years Ended December 31, (in thousands, except share and per share data) 2021 2020 Numerator: Numerator for basic and diluted loss per share: Net loss $ (2,413) $ (24,293) Denominator: Denominator for basic loss per share: Weighted average shares 166,713,261 71,699,615 Basic loss per share attributable to Conformis, Inc. stockholders $ (0.01) $ (0.34) Diluted loss per share attributable to Conformis, Inc. stockholders $ (0.01) $ (0.34) |
Schedule of Potential Shares of Common Stock Equivalents that are Antidilutive and Not Included in the Calculation of Diluted Net Loss Per Share | The following table sets forth potential shares of common stock equivalents that are not included in the calculation of diluted net loss per share because to do so would be anti-dilutive as of the end of each period presented: Years Ended December 31, 2021 2020 Common stock warrants 2,591,143 — Stock options, restricted stock awards, performance awards 2,443,557 970,257 Total 5,034,700 970,257 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounts Receivable, after Allowance for Credit Loss, Current [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable consisted of the following (in thousands): December 31, December 31, Total receivables $ 9,336 $ 8,805 Allowance for doubtful accounts and returns (257) (290) Accounts receivable, net $ 9,079 $ 8,515 December 31, 2021 December 31, 2020 Beginning balance $ (290) $ (335) Provision for bad debts on trade receivables (48) (50) Other allowances 3 20 Accounts receivable write-offs 78 75 Ending balance $ (257) $ (290) |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventories consisted of the following (in thousands): December 31, December 31, Raw Material $ 6,109 $ 5,513 Work in process 3,187 1,833 Finished goods 5,908 5,239 Total Inventories $ 15,204 $ 12,585 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following (in thousands): Estimated Useful Life December 31, December 31, Equipment 5-7 $ 20,091 $ 19,461 Furniture and fixtures 5-7 873 864 Computer and software 3 10,540 9,873 Leasehold improvements 3-7 2,243 2,068 Reusable instruments 5 6,272 5,739 Molding and Tooling 5 379 91 Total property and equipment 40,398 38,096 Accumulated depreciation (30,130) (25,856) Property and equipment, net $ 10,268 $ 12,240 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following (in thousands): December 31, 2021 December 31, 2020 Accrued employee compensation $ 4,701 $ 3,365 Accrued legal expense 2,140 952 Accrued consulting expense — 21 Accrued vendor charges 462 766 Accrued revenue share expense 824 697 Accrued clinical trial expense 335 306 Accrued other 1,114 1,106 $ 9,576 $ 7,213 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Lease, Cost | The components of lease expense and related cash flows were as follows (in thousands): December 31, 2021 December 31, 2020 Rent expense $ 1,863 $ 1,536 Variable lease cost (1) 426 350 $ 2,289 $ 1,886 |
Lessee, Operating Lease, Liability, Maturity | The future minimum rental payments under these agreements as of December 31, 2021 were as follows (in thousands): Year Minimum Lease Payments 2022 1,814 2023 2,067 2024 2,125 2025 1,885 2026 971 2027 740 Total lease payments $ 9,602 Present value adjustment (1,301) Present value of lease liabilities $ 8,301 |
Debt and Notes Payable (Tables)
Debt and Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long Term Debt | Long-term debt consisted of the following (in thousands): December 31, 2021 December 31, 2020 PPP "Term Loan" — 4,720 Innovatus, Term Loan — 20,000 Innovatus, Term Loan accrued payment-in-kind interest — 775 MidCap, Term Loan 21,000 — Less unamortized debt issuance costs (645) (492) Long-term debt, less debt issuance costs $ 20,355 $ 25,003 |
Schedule of Maturities of Long-Term Debt | Principal payments due as of December 31, 2021 consisted of the following (in thousands): Principal 2022 $ — 2023 — 2024 1,750 2025 10,500 2026 8,750 Total $ 21,000 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Range of Warrant Prices per Share for Shares Under Warrants and the Weighted Average Contractual Life | Number of Common Stock Weighted Weighted Average Remaining Contractual Life Number of Weighted Average Price Per Share Outstanding December 31, 2020 18,025,967 $ 0.89 4.73 18,025,967 $ 0.89 Granted — $ — — — $ — Exercised (6,005,041) — — (6,005,041) — Cancelled/expired — — — — — Outstanding December 31, 2021 12,020,926 $ 0.89 3.73 12,020,926 $ 0.89 |
Schedule of Activity Under All Stock Option Plans | Stock option activity under all stock plans was as follows: Number of Weighted Average Aggregate Intrinsic Value (In Thousands) Outstanding December 31, 2019 1,802,463 $ 6.75 $ 3 Granted 452,129 0.82 Exercised — — Expired (474,580) 7.14 Cancelled/Forfeited (12,433) 1.39 Outstanding December 31, 2020 1,767,579 $ 5.16 $ — Granted 239,964 1.00 Exercised — — Expired (214,599) 5.26 Cancelled/Forfeited (114,964) 1.32 Outstanding December 31, 2021 1,677,980 $ 4.82 $ 23 Total vested and exercisable 1,389,776 $ 5.63 $ 15 |
Schedule of Restricted Stock Award Activity Under the Plan | Restricted common stock award activity under the plans was as follows: Number of Shares Weighted Average Fair Value Unvested December 31, 2019 4,436,928 $ 1.54 Granted 4,351,758 0.95 Vested (1,882,094) 1.56 Forfeited (630,553) 1.01 Unvested December 31, 2020 6,276,039 $ 1.18 Granted 4,121,269 0.93 Vested (2,590,298) 1.17 Forfeited (673,215) 0.96 Unvested December 31, 2021 7,133,795 $ 1.06 |
Assumptions Used to Estimate the Fair Value of Options at Date of Grant | The fair value of options at date of grant was estimated using the Black-Scholes option pricing model, based on the following assumptions: Years Ended December 31, 2021 2020 Risk-free interest rate 1.30% 1.14% Expected term (in years) 5.50 6.16 Dividend yield —% —% Expected volatility 87.41% 54.89% |
Summary of Stock-Based Compensation Expense | The following is a summary of stock-based compensation expense (in thousands): Years Ended December 31, 2021 2020 Cost of revenue $ 75 $ 72 Sales and marketing 708 446 Research and development 582 648 General and administrative 2,450 2,240 $ 3,815 $ 3,406 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Before Income Tax, Domestic and Foreign | For financial reporting purposes, loss before income taxes for the years ended December 31, 2021 and 2020 includes the following components (in thousands): Years ended December 31, 2021 2020 Loss before income taxes: U.S. $ (219) $ (21,968) Non‑U.S. (2,103) (2,283) $ (2,322) $ (24,251) |
Schedule of Components of Income Tax Expense (Benefit) | Significant components of the provision for income taxes for the years ended December 31, 2021 and 2020 were as follows (in thousands): Years ended December 31, 2021 2020 Current: Federal $ — $ — State 33 9 Foreign 58 33 91 42 Deferred: Federal — — State — — Foreign — — — — Total $ 91 $ 42 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the income tax benefit at the statutory federal income tax rate as reflected in the financial statements was as follows: Years ended December 31, 2021 2020 Tax at U.S. statutory rate 21.00 % 21.00 % State taxes, net of federal benefits 51.39 3.68 Permanent items 155.29 (1.07) Tax credit (14.94) 0.37 Change in valuation allowance (251.92) (25.37) Foreign rate differential 4.79 0.76 Rate change (7.90) (0.69) Uncertain tax positions 23.08 4.22 NQ Stock option expirations & forfeitures (1.54) (0.09) Prior period true ups 19.46 0.85 Other (2.63) (3.83) (3.92) % (0.17) % |
Schedule of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets (liabilities) consisted of the following (in thousands): Years ended December 31, 2021 2020 Deferred tax assets: Federal and state net operating loss carryforwards $ 25,101 $ 23,124 Foreign net operating loss carryforwards 7,458 6,312 Accrued expenses 444 380 Credits 7,776 7,429 Intangibles 1,203 1,278 Stock compensation expense 1,075 988 Lease liability 1,957 1,327 Other 4,906 3,568 Total deferred tax assets 49,920 44,406 Valuation allowance (47,354) (41,507) Net deferred tax assets 2,566 2,899 Deferred tax liabilities: Fixed assets (751) (914) Right of use asset (1,774) (1,175) Other (41) (810) Net deferred tax liabilities (2,566) (2,899) Net deferred tax liabilities $ — $ — |
Schedule of Unrecognized Tax Benefits | Years ended December 31, 2021 2020 Unrecognized tax benefits beginning of year $ 4,094 $ 5,118 Gross change for current year positions 633 722 Increase for prior period positions 23 29 Decrease for prior period positions — (495) Decrease due to statute limitations (1,192) (1,280) Unrecognized tax benefits end of the year $ 3,558 $ 4,094 |
Segment and Geographic Data (Ta
Segment and Geographic Data (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Geographic Information | Geographic information consisted of the following (in thousands): Years Ended December 31, 2021 2020 Product Revenue United States $ 50,990 $ 50,736 Germany 5,422 6,526 Rest of World 1,906 1,278 $ 58,318 $ 58,540 |
Schedule of Property, Plant and Equipment by Geographic Information | December 31, 2021 2020 Property and equipment, net United States $ 10,131 $ 12,195 Germany 43 45 Rest of World $ 94 $ — $ 10,268 $ 12,240 |
Organization and Basis of Pre_2
Organization and Basis of Presentation - Liquidity and Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 17, 2021 | Sep. 23, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 25, 2019 |
Liquidity and operations | |||||
Accumulated deficit | $ (530,851) | $ (528,438) | |||
Cash and cash equivalents | 100,556 | 28,673 | |||
Restricted cash | $ 562 | $ 462 | |||
Number of shares issued (in shares) | 9,492,953 | ||||
Shelf Registration Statement | |||||
Liquidity and operations | |||||
Number of shares issued (in shares) | 80,952,381 | ||||
Sale of stock (in dollars per share) | $ 1.05 | ||||
Sale of stock net proceeds | $ 79,600 | ||||
Term loan | |||||
Liquidity and operations | |||||
Maximum amount committed by the lenders under the loan and security agreement | $ 30,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands | Apr. 19, 2021USD ($) | Apr. 08, 2021USD ($) | May 22, 2020USD ($) | Sep. 30, 2019USD ($) | Oct. 31, 2021USD ($) | Oct. 15, 2021USD ($) | Jun. 30, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Cash held in foreign bank accounts | $ 600 | $ 600 | $ 1,000 | ||||||||
Restricted cash | 562 | 562 | 462 | ||||||||
Inventory adjustments | 2,600 | 2,600 | 2,700 | ||||||||
Consideration | 25,000 | ||||||||||
Contract liability | 0 | 0 | 14,000 | ||||||||
Remaining portion of research and development | 2,500 | ||||||||||
Revenue | 99,860 | 68,761 | |||||||||
Research and development | 14,791 | 11,939 | |||||||||
Advertising expense | $ 200 | 500 | |||||||||
Number of operating segments | segment | 1 | ||||||||||
Collaborative Arrangement | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Research and development | $ 700 | 1,700 | |||||||||
Positive Outcome of Litigation | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Proceeds from legal settlements | $ 3,500 | ||||||||||
Total amount awarded | $ 9,600 | ||||||||||
Royalty and licensing | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Revenue | 41,542 | 10,221 | |||||||||
Shipping and Handling | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Shipping and handling expense | 3,100 | $ 1,700 | |||||||||
Howmedica Osteonics Corp | Instrumentation Technology | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Consideration | $ 30,000 | ||||||||||
Howmedica Osteonics Corp | Cost Reimbursement | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Contract with customer asset | 5,000 | 5,000 | |||||||||
Howmedica Osteonics Corp | Royalty and licensing | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Contract with customer asset | 25,000 | 25,000 | |||||||||
Paragon 28, Inc | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Revenue recognized | $ 1,000 | ||||||||||
Milestone payment | $ 500 | $ 500 | |||||||||
Potential milestone payment | $ 500 | ||||||||||
Milestone payment not yet recognized | 500 | ||||||||||
Minimum | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Contract with customer payment period | 30 days | ||||||||||
Maximum | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Contract with customer payment period | 60 days | ||||||||||
Stryker Corporation, Wright Medical Technology, Inc, And Tornier, Inc | Revenue Benchmark | Customer Concentration Risk | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Concentration risk percentage | 40.00% | ||||||||||
Zimmer Biomet | Revenue Benchmark | Customer Concentration Risk | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Concentration risk percentage | 14.00% | ||||||||||
Zimmer Biomet | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Revenue | $ 9,600 | ||||||||||
Zimmer Biomet | Accounts Receivable | Customer Concentration Risk | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Concentration risk percentage | 13.00% | ||||||||||
Stryker Corporation | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Contract liability | $ 0 | $ 0 | $ 14,000 | $ 12,000 | |||||||
Installment payment | $ 11,000 | $ 15,000 | $ 11,000 | ||||||||
Revenue recognized | $ 14,000 | $ 15,000 | $ 15,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | |||
Cash and cash equivalents | $ 100,556 | $ 28,673 | |
Restricted cash | 562 | 462 | |
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | $ 101,118 | $ 29,135 | $ 26,856 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Contract Liability (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Change in Contract with Customer, Liability [Abstract] | ||
Beginning Balance | $ 81 | $ 127 |
Provision related to current period sales | 107 | 146 |
Adjustment related to prior period sales | 0 | (55) |
Payments or credits issued to customer | (109) | (137) |
Ending Balance | $ 79 | $ 81 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Expenses and Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
Net income (loss) | $ (2,413) | $ (24,293) |
Weighted average common shares outstanding - basic (in shares) | 166,713,261 | 71,699,615 |
Weighted average common shares outstanding - diluted (in shares) | 166,713,261 | 71,699,615 |
Net loss per share - basic (in usd per share) | $ (0.01) | $ (0.34) |
Net loss per share - diluted (in usd per share) | $ (0.01) | $ (0.34) |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Anti-dilutive shares not included in the calculation of diluted net loss per share | 5,034,700 | 970,257 |
Common stock warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Anti-dilutive shares not included in the calculation of diluted net loss per share | 2,591,143 | 0 |
Stock options, restricted stock awards, performance awards | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Anti-dilutive shares not included in the calculation of diluted net loss per share | 2,443,557 | 970,257 |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Accounts Receivable, after Allowance for Credit Loss, Current [Abstract] | |||
Total receivables | $ 9,336 | $ 8,805 | |
Allowance for doubtful accounts and returns | (257) | (290) | |
Accounts receivable, net | $ 9,079 | $ 8,515 | $ 11,100 |
Accounts Receivable - Narrative
Accounts Receivable - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Receivables [Abstract] | |||
Accounts receivable, net | $ 9,079 | $ 8,515 | $ 11,100 |
Unbilled receivable | 1,100 | 1,000 | |
Accounts receivable write-offs | $ 78 | $ 75 |
Accounts Receivable - Allowance
Accounts Receivable - Allowance for Doubtful Accounts and Returns (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ (290) | $ (335) |
Accounts receivable write-offs | 78 | 75 |
Ending balance | (257) | (290) |
Trade Accounts Receivable | ||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Provision for bad debts on trade receivables | (48) | (50) |
Other Receivable | ||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Other allowances | $ 3 | $ 20 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw Material | $ 6,109 | $ 5,513 |
Work in process | 3,187 | 1,833 |
Finished goods | 5,908 | 5,239 |
Total Inventories | $ 15,204 | $ 12,585 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property and equipment | ||
Total property and equipment | $ 40,398 | $ 38,096 |
Accumulated depreciation | (30,130) | (25,856) |
Property and equipment, net | 10,268 | 12,240 |
Equipment | ||
Property and equipment | ||
Total property and equipment | $ 20,091 | 19,461 |
Equipment | Minimum | ||
Property and equipment | ||
Estimated useful life | 5 years | |
Equipment | Maximum | ||
Property and equipment | ||
Estimated useful life | 7 years | |
Furniture and fixtures | ||
Property and equipment | ||
Total property and equipment | $ 873 | 864 |
Furniture and fixtures | Minimum | ||
Property and equipment | ||
Estimated useful life | 5 years | |
Furniture and fixtures | Maximum | ||
Property and equipment | ||
Estimated useful life | 7 years | |
Computer and software | ||
Property and equipment | ||
Estimated useful life | 3 years | |
Total property and equipment | $ 10,540 | 9,873 |
Leasehold improvements | ||
Property and equipment | ||
Total property and equipment | $ 2,243 | 2,068 |
Leasehold improvements | Minimum | ||
Property and equipment | ||
Estimated useful life | 3 years | |
Leasehold improvements | Maximum | ||
Property and equipment | ||
Estimated useful life | 7 years | |
Reusable instruments | ||
Property and equipment | ||
Estimated useful life | 5 years | |
Total property and equipment | $ 6,272 | 5,739 |
Molding and Tooling | ||
Property and equipment | ||
Estimated useful life | 5 years | |
Total property and equipment | $ 379 | $ 91 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 4,300 | $ 4,400 |
Impairment of long-term assets | $ 0 | $ 0 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Accrued Liabilities and Other Liabilities [Abstract] | ||
Accrued employee compensation | $ 4,701 | $ 3,365 |
Accrued legal expense | 2,140 | 952 |
Accrued consulting expense | 0 | 21 |
Accrued vendor charges | 462 | 766 |
Accrued revenue share expense | 824 | 697 |
Accrued clinical trial expense | 335 | 306 |
Accrued other | 1,114 | 1,106 |
Total | $ 9,576 | $ 7,213 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2021USD ($)extension | Dec. 31, 2020USD ($) | |
Lessee, Lease, Description [Line Items] | ||
Number of renewal options | extension | 1 | |
Renewal term | 5 years | |
Cash paid lease liability | $ | $ 1.7 | $ 1.6 |
Weighted average remaining lease term | 4 years 9 months 10 days | |
Weighted average discount rate | 6.00% | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease term | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease term | 6 years |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | ||
Rent expense | $ 1,863 | $ 1,536 |
Variable lease cost | 426 | 350 |
Total lease cost | $ 2,289 | $ 1,886 |
Leases - Schedule of Lease Matu
Leases - Schedule of Lease Maturities (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Leases [Abstract] | |
2022 | $ 1,814 |
2023 | 2,067 |
2024 | 2,125 |
2025 | 1,885 |
2026 | 971 |
2027 | 740 |
Total lease payments | 9,602 |
Present value adjustment | (1,301) |
Present value of lease liabilities | $ 8,301 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Thousands | Apr. 19, 2021USD ($) | May 22, 2020USD ($) | Apr. 24, 2020patent | Mar. 20, 2020patent | Nov. 05, 2019patent | Aug. 15, 2019patent | Oct. 15, 2021USD ($) | Jun. 30, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) |
Stryker Corporation | ||||||||||
License and revenue share agreements | ||||||||||
Installment payment | $ | $ 11,000 | $ 15,000 | $ 11,000 | |||||||
Revenue recognized | $ | $ 14,000 | $ 15,000 | $ 15,000 | |||||||
Conformis v Zimmer Biomet | ||||||||||
License and revenue share agreements | ||||||||||
Gain contingency, patents allegedly infringed | 4 | |||||||||
Total amount awarded | $ | $ 9,600 | |||||||||
Zimmer Biomet v Conformis | ||||||||||
License and revenue share agreements | ||||||||||
Loss contingency, patents allegedly infringed | 5 | |||||||||
Zimmer Biomet v Conformis | IDuo | ||||||||||
License and revenue share agreements | ||||||||||
Loss contingency, patents allegedly infringed | 3 | |||||||||
Zimmer Biomet v Conformis | IUni | ||||||||||
License and revenue share agreements | ||||||||||
Loss contingency, patents allegedly infringed | 2 | |||||||||
Osteoplastics V Conformis | ||||||||||
License and revenue share agreements | ||||||||||
Loss contingency, patents allegedly infringed | 7 | |||||||||
Conformis V Wright Medical | ||||||||||
License and revenue share agreements | ||||||||||
Gain contingency, patents allegedly infringed | 4 | |||||||||
Revenue share agreements | ||||||||||
License and revenue share agreements | ||||||||||
Revenue share expense | $ | $ 2,200 | $ 1,600 | ||||||||
Revenue share expense as a percentage of product revenues | 3.70% | 2.70% | ||||||||
Members of scientific advisory board | Revenue share agreements | Minimum | ||||||||||
License and revenue share agreements | ||||||||||
Required payment to related party from net revenues of current and planned products (as a percent) | 0.10% | |||||||||
Members of scientific advisory board | Revenue share agreements | Maximum | ||||||||||
License and revenue share agreements | ||||||||||
Required payment to related party from net revenues of current and planned products (as a percent) | 1.33% |
Debt and Notes Payable - Schedu
Debt and Notes Payable - Schedule of Long Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Debt and Notes Payable | ||
Innovatus, Term Loan accrued payment-in-kind interest | $ 0 | $ 775 |
Less unamortized debt issuance costs | (645) | (492) |
Long-term debt, less debt issuance costs | 20,355 | 25,003 |
Payment Protection Plan Term Loan | ||
Debt and Notes Payable | ||
Long-term debt gross | 0 | 4,720 |
Innovatus | Term loan | ||
Debt and Notes Payable | ||
Long-term debt gross | 0 | 20,000 |
MidCap Financial Services | Term loan | ||
Debt and Notes Payable | ||
Long-term debt gross | $ 21,000 | $ 0 |
Debt and Notes Payable - Maturi
Debt and Notes Payable - Maturities of Long Term Debt (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Debt Disclosure [Abstract] | |
2022 | $ 0 |
2023 | 0 |
2024 | 1,750 |
2025 | 10,500 |
2026 | 8,750 |
Total | $ 21,000 |
Debt and Notes Payable - Narrat
Debt and Notes Payable - Narrative (Details) - USD ($) | Nov. 22, 2021 | Oct. 31, 2021 | Jun. 25, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Mar. 01, 2021 | Apr. 17, 2020 |
Debt and Notes Payable | |||||||
Loss on extinguishment of debt | $ 1,068,000 | $ 0 | |||||
Paycheck Protection Program Note | |||||||
Debt and Notes Payable | |||||||
Stated interest rate | 1.00% | ||||||
Debt instrument principal | $ 4,700,000 | ||||||
Gain on forgiveness of PPP loan | $ 4,800,000 | ||||||
Term loan | |||||||
Debt and Notes Payable | |||||||
Maximum amount committed by the lenders under the loan and security agreement | $ 30,000,000 | ||||||
2017 Secured Loan Agreement | Term loan | |||||||
Debt and Notes Payable | |||||||
Events of default, additional interest rate | 5.00% | ||||||
Final payment, percent of amount of loans advanced | 5.00% | ||||||
2019 Secured Loan Agreement | |||||||
Debt and Notes Payable | |||||||
Effective interest rate | 9.25% | ||||||
2019 Secured Loan Agreement | Term loan | |||||||
Debt and Notes Payable | |||||||
Maximum amount committed by the lenders under the loan and security agreement | $ 30,000,000 | ||||||
Events of default, threshold amount | $ 500,000 | ||||||
Minimum cash on hand | $ 5,000,000 | ||||||
Margin rate (as a percent) | 3.75% | ||||||
Credit facility term | 4 years | ||||||
Stated interest rate | 2.50% | ||||||
2019 Secured Loan Agreement | Revolving Credit Facility | |||||||
Debt and Notes Payable | |||||||
Maximum amount committed by the lenders under the loan and security agreement | $ 10,000,000 | ||||||
Margin rate (as a percent) | 0.50% | ||||||
Eligible accounts subject to maximum 2.50% dilution | 85.00% | ||||||
MidCap Financial Services | Term loan | |||||||
Debt and Notes Payable | |||||||
Minimum liquidity covenant | $ 4,000,000 | ||||||
Loss on extinguishment of debt | $ 1,100,000 | ||||||
MidCap Financial Services | Term loan | MidCap Financial Services, LLC Term Loan | |||||||
Debt and Notes Payable | |||||||
Credit facility term | 5 years | ||||||
Debt instrument principal | $ 21,000,000 | ||||||
Origination fee | 0.50% | ||||||
Final payment fee | 4.00% | ||||||
Prime Rate | 2019 Secured Loan Agreement | Term loan | |||||||
Debt and Notes Payable | |||||||
Margin rate (as a percent) | 5.50% | ||||||
Prime Rate | 2019 Secured Loan Agreement | Revolving Credit Facility | |||||||
Debt and Notes Payable | |||||||
Margin rate (as a percent) | 5.50% | ||||||
LIBOR | MidCap Financial Services | Term loan | MidCap Financial Services, LLC Term Loan | |||||||
Debt and Notes Payable | |||||||
Margin rate (as a percent) | 5.70% | ||||||
Minimum | 2019 Secured Loan Agreement | Term loan | |||||||
Debt and Notes Payable | |||||||
Events of default, threshold amount | $ 250,000 | ||||||
Minimum | LIBOR | MidCap Financial Services | Term loan | MidCap Financial Services, LLC Term Loan | |||||||
Debt and Notes Payable | |||||||
Variable rate floor | 1.00% |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | Dec. 31, 2021 | Nov. 22, 2021 | Mar. 30, 2021 | Dec. 31, 2020 | Jul. 07, 2015 |
Common stock | |||||
Common stock dividends declared to date | $ 0 | ||||
Common stock, shares authorized (in shares) | 300,000,000 | 200,000,000 | 300,000,000 | 200,000,000 | |
Preferred stock | |||||
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 | 5,000,000 | ||
Preferred stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | |||
Preferred stock, shares issued (in shares) | 0 | 0 | |||
Preferred stock, shares outstanding (in shares) | 0 | 0 | |||
Common Stock | |||||
Preferred stock | |||||
Preferred stock, par value (in dollars per share) | $ 0.00001 |
Stockholders' Equity - Demand R
Stockholders' Equity - Demand Registration Rights (Details) | Jun. 25, 2019 |
2019 Rights Agreement | |
Demand registration rights | |
Maximum days to register for resale shares held by investors | 120 days |
Stockholders' Equity - At-the-M
Stockholders' Equity - At-the-Market Program (Details) - USD ($) $ in Thousands | Aug. 05, 2020 | Mar. 23, 2020 | May 10, 2017 | Jan. 31, 2017 | Dec. 31, 2021 | Dec. 31, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Amount of equity able to raise | $ 200,000 | $ 200,000 | ||||
Maximum offering price | $ 50,000 | |||||
Net proceeds from issuance of common stock | $ 79,637 | $ 3,151 | ||||
Equity Distribution Agreement | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock issued during period, shares, new issues (in shares) | 2,663,000 | |||||
Net proceeds from issuance of common stock | $ 4,400 | |||||
Cowen Sales Agreement | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Amount of equity able to raise | $ 25,000 | |||||
Broker commissions | 3.00% |
Stockholders' Equity - Stock Pu
Stockholders' Equity - Stock Purchase Agreement (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 23, 2020 | Aug. 05, 2020 | Mar. 23, 2020 | Dec. 17, 2018 | Jan. 31, 2017 | Dec. 31, 2021 | Dec. 31, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares issued (in shares) | 9,492,953 | ||||||
Amount of equity able to raise | $ 200,000 | $ 200,000 | |||||
Net proceeds from issuance of common stock | $ 79,637 | $ 3,151 | |||||
LPC Agreements | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares issued (in shares) | 1,921,968 | ||||||
Sale of stock net proceeds | $ 1,000 | ||||||
Premium on previous day's closing price | 110.00% | ||||||
Purchase period | 36 months | ||||||
Amount of equity able to raise | $ 17,600 | ||||||
Stock issued during period, shares, new issues (in shares) | 4,521,968 | ||||||
Net proceeds from issuance of common stock | $ 3,400 | ||||||
LPC Agreements | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Value of stock to be sold | $ 20,000 | ||||||
LPC Agreements | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Sale of stock (in dollars per share) | $ 0.25 | ||||||
LPC Agreements Consideration for Commitment to Purchase Shares | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares issued (in shares) | 354,430 |
Stockholders' Equity - 2021 Com
Stockholders' Equity - 2021 Common Stock Offering (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 17, 2021 | Sep. 23, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares issued (in shares) | 9,492,953 | |
Shelf Registration Statement | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares issued (in shares) | 80,952,381 | |
Sale of stock (in dollars per share) | $ 1.05 | |
Sale of stock net proceeds | $ 79,600 |
Stockholders' Equity - Register
Stockholders' Equity - Registered Direct Offering (Details) - USD ($) $ / shares in Units, $ in Millions | Sep. 23, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares issued (in shares) | 9,492,953 | ||
Weighted average exercise price, outstanding (in dollars per share) | $ 0.0001 | ||
Common stock warrants | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares issued (in shares) | 8,512,088 | ||
Weighted average exercise price, outstanding (in dollars per share) | $ 0.89 | $ 0.89 | |
Pre Funded Warrants | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares issued (in shares) | 9,492,953 | ||
Registered Direct Offering | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock shares and warrants per unit (in shares) | 1 | ||
Sale of stock (in dollars per share) | $ 0.9581 | ||
Maximum percentage of common stock owned after exercise | 9.99% | ||
Sale of stock net proceeds | $ 15.9 | ||
Registered Direct Offering | Common stock warrants | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares issued (in shares) | 8,512,088 | ||
Weighted average exercise price, outstanding (in dollars per share) | $ 0.8748 | $ 0.8748 | |
Registered Direct Offering | Pre Funded Warrants | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares issued (in shares) | 9,492,953 | ||
Gross proceeds | $ 17.3 | ||
Common stock shares and warrants per unit (in shares) | 1 | ||
Weighted average exercise price, outstanding (in dollars per share) | $ 0.0001 |
Stockholders' Equity - Warrant
Stockholders' Equity - Warrant (Details) $ / shares in Units, $ in Millions | Mar. 03, 2021shares | Sep. 23, 2020$ / sharesshares | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020$ / sharesshares |
Stock warrant activity | ||||
Number of shares issued (in shares) | 9,492,953 | |||
Weighted average exercise price, outstanding (in dollars per share) | $ / shares | $ 0.0001 | |||
Common stock warrants | ||||
Stock warrant activity | ||||
Number of shares issued (in shares) | 8,512,088 | |||
Weighted average exercise price, outstanding (in dollars per share) | $ / shares | $ 0.89 | $ 0.89 | ||
Warrant granted during period (in shares) | 18,005,041 | 0 | ||
Common stock warrants exercised (in shares) | 6,000,000 | 6,005,041 | ||
Number of warrants, outstanding (in shares) | 12,020,926 | 18,025,967 | ||
Common stock warrants | Registered Direct Offering | ||||
Stock warrant activity | ||||
Number of shares issued (in shares) | 8,512,088 | |||
Weighted average exercise price, outstanding (in dollars per share) | $ / shares | $ 0.8748 | $ 0.8748 | ||
Pre Funded Warrants | ||||
Stock warrant activity | ||||
Number of shares issued (in shares) | 9,492,953 | |||
Warrants and rights outstanding, term | 5 years | |||
Fair value of the common stock warrants | $ | $ 10.2 | |||
Pre Funded Warrants | Measurement Input Expected Term | ||||
Stock warrant activity | ||||
Warrants, measurement input term | 5 years | |||
Pre Funded Warrants | Measurement Input, Risk Free Interest Rate | ||||
Stock warrant activity | ||||
Warrants, measurement input | 0.0028 | |||
Pre Funded Warrants | Measurement Input Dividend Yield | ||||
Stock warrant activity | ||||
Warrants, measurement input | 0 | |||
Pre Funded Warrants | Measurement Input, Price Volatility | ||||
Stock warrant activity | ||||
Warrants, measurement input | 0.9015 | |||
Pre Funded Warrants | Measurement Input, Exercise Price | ||||
Stock warrant activity | ||||
Warrants, measurement input | 0.875 | |||
Pre Funded Warrants | Measurement Input, Share Price | ||||
Stock warrant activity | ||||
Warrants, measurement input | 0.833 | |||
Pre Funded Warrants | Registered Direct Offering | ||||
Stock warrant activity | ||||
Number of shares issued (in shares) | 9,492,953 | |||
Weighted average exercise price, outstanding (in dollars per share) | $ / shares | $ 0.0001 |
Stockholders' Equity - Warrants
Stockholders' Equity - Warrants and Common Stock Warrants (Details) - $ / shares | Mar. 03, 2021 | Sep. 23, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Weighted Average Exercise Price Per Share | ||||
Outstanding at ending of period (in dollars per share) | $ 0.0001 | |||
Weighted Average Remaining Contractual Life | ||||
Weighted average remaining contractual life, granted, beginning balance (in years) | 3 years 8 months 23 days | 4 years 8 months 23 days | ||
Weighted average remaining contractual life, granted, ending balance (in years) | 3 years 8 months 23 days | 4 years 8 months 23 days | ||
Common stock warrants | ||||
Number of Warrants | ||||
Outstanding at beginning of period (in shares) | 18,025,967 | |||
Granted (in shares) | 0 | |||
Exercised (in shares) | (6,005,041) | |||
Cancelled/expired (in shares) | 0 | |||
Outstanding at ending of period (in shares) | 12,020,926 | 18,025,967 | ||
Weighted Average Exercise Price Per Share | ||||
Outstanding at beginning of period (in dollars per share) | $ 0.89 | |||
Granted (in dollars per share) | 0 | |||
Exercised (in dollars per share) | 0 | |||
Cancelled/expired (in dollars per share) | 0 | |||
Outstanding at ending of period (in dollars per share) | $ 0.89 | $ 0.89 | ||
Number of Warrants Exercisable | ||||
Outstanding at beginning of period (in shares) | 18,025,967 | |||
Granted (in shares) | 18,005,041 | 0 | ||
Exercised (in shares) | (6,000,000) | (6,005,041) | ||
Cancelled/expired (in shares) | 0 | |||
Outstanding at end of period (in shares) | 12,020,926 | 18,025,967 | ||
Weighted Average Price Per Share | ||||
Outstanding at beginning of period (in dollars per share) | $ 0.89 | |||
Granted (in dollars per share) | 0 | |||
Exercised (in dollars per share) | 0 | |||
Cancelled/expired (in dollars per share) | 0 | |||
Outstanding at ending of period (in dollars per share) | $ 0.89 | $ 0.89 |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Option Plans (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Feb. 28, 2011program | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | May 24, 2021shares | Jan. 01, 2021shares | Apr. 29, 2019shares | |
Aggregate Intrinsic Value | ||||||
Balance outstanding at the beginning of the period | $ | $ 0 | $ 3 | ||||
Exercised | $ | 0 | 0 | ||||
Balance outstanding at the end of the period | $ | 23 | $ 0 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract] | ||||||
Weighted average grant date fair value, vested | $ | $ 300 | |||||
Weighted average remaining contractual term, outstanding | 5 years 4 months 20 days | |||||
Weighted average remaining contractual term, vested and exercisable | 4 years 7 months 20 days | |||||
Stock options | ||||||
Number of Options | ||||||
Balance outstanding at the beginning of the period (in shares) | 1,767,579 | 1,802,463 | ||||
Granted (in shares) | 239,964 | 452,129 | ||||
Exercised (in shares) | 0 | 0 | ||||
Expired (in shares) | (214,599) | (474,580) | ||||
Cancelled/Forfeited (in shares) | (114,964) | (12,433) | ||||
Balance outstanding at the end of the period (in shares) | 1,677,980 | 1,767,579 | ||||
Total vested and exercisable (in shares) | 1,389,776 | |||||
Weighted Average Exercise Price per Share | ||||||
Balance at the beginning of the period (in dollars per share) | $ / shares | $ 5.16 | $ 6.75 | ||||
Granted (in dollars per share) | $ / shares | 1 | 0.82 | ||||
Exercised (in dollars per share) | $ / shares | ||||||
Expired (in dollars per share) | $ / shares | 5.26 | 7.14 | ||||
Cancelled/Forfeited (in dollars per share) | $ / shares | 1.32 | 1.39 | ||||
Balance at the end of the period (in dollars per share) | $ / shares | 4.82 | $ 5.16 | ||||
Total vested and exercisable (in dollars per share) | $ / shares | $ 5.63 | |||||
2004 Plan | Stock options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 4 years | |||||
Expiration period | 10 years | |||||
2011 Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of equity programs | program | 2 | |||||
2011 Plan | Stock options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 4 years | |||||
Expiration period | 10 years | |||||
2015 Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock reserved for issuance, before transfers and annual increases (in shares) | 2,000,000 | |||||
Maximum annual increase in common stock available for issuance (in shares) | 3,000,000 | 6,000,000 | 2,866,390 | |||
Maximum annual increase in common stock available for issuance (as a percent) | 3.00% | |||||
Common stock available for future issuance (in shares) | 4,829,894 | |||||
2015 Plan | Stock options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 4 years | |||||
Expiration period | 10 years | |||||
2019 Sales Team Plan | Common Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock reserved for issuance, before transfers and annual increases (in shares) | 3,000,000 | |||||
Common stock available for future issuance (in shares) | 2,241,430 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Restricted Common Stock Award Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Weighted Average Fair Value | ||
Weighted average grant date fair value, vested | $ 0.3 | |
Restricted stock awards | ||
Number of Shares | ||
Unvested beginning of period (in shares) | 6,276,039 | 4,436,928 |
Granted (in shares) | 4,121,269 | 4,351,758 |
Vested (in shares) | (2,590,298) | (1,882,094) |
Forfeited (in shares) | (673,215) | (630,553) |
Unvested end of period (in shares) | 7,133,795 | 6,276,039 |
Weighted Average Fair Value | ||
Unvested beginning of period (in dollars per share) | $ 1.18 | $ 1.54 |
Granted (in dollars per share) | 0.93 | 0.95 |
Vested (in dollars per share) | 1.17 | 1.56 |
Forfeited (in dollars per share) | 0.96 | 1.01 |
Unvested end of period (in dollars per share) | $ 1.06 | $ 1.18 |
Weighted average grant date fair value, vested | $ 3 |
Stockholders' Equity - Induceme
Stockholders' Equity - Inducement Awards (Details) - $ / shares | 1 Months Ended | 12 Months Ended | ||||
Nov. 30, 2021 | Nov. 30, 2020 | Aug. 31, 2020 | Feb. 29, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Restricted stock awards | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares grated (in shares) | 4,121,269 | 4,351,758 | ||||
Chief Financial Officer | Inducement Award | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of options granted (in shares) | 125,000 | |||||
Common stock grated (in dollars per share) | $ 0.98 | |||||
Chief Financial Officer | Restricted stock awards | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares grated (in shares) | 125,000 | |||||
Senior Vice President Operations | Inducement Award | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of options granted (in shares) | 66,667 | |||||
Common stock grated (in dollars per share) | $ 0.98 | |||||
Senior Vice President Operations | Restricted stock awards | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares grated (in shares) | 61,350 | |||||
Vice President US Marketing | Inducement Award | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of options granted (in shares) | 100,000 | |||||
Common stock grated (in dollars per share) | $ 0.7427 | |||||
Vice President US Marketing | Restricted stock awards | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares grated (in shares) | 100,000 | |||||
Vice President, International Sales and Marketing | Restricted stock awards | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares grated (in shares) | 150,000 | 75,000 |
Stockholders' Equity - Fair Val
Stockholders' Equity - Fair Value of Options at Date of Grant (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Assumptions used to estimate the fair value of options at date of grant | ||
Risk-free interest rate | 1.30% | 1.14% |
Expected term (in years) | 5 years 6 months | 6 years 1 month 28 days |
Dividend yield | 0.00% | 0.00% |
Expected volatility | 87.41% | 54.89% |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average fair value of options granted (in usd per share) | $ 0.50 | $ 0.47 |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based compensation | ||
Stock-based compensation expense | $ 3,815 | $ 3,406 |
Unrecognized compensation expense | $ 100 | |
Period for unrecognized compensation expense to be recognized | 1 year 5 months 4 days | |
Cost of revenue | ||
Share-based compensation | ||
Stock-based compensation expense | $ 75 | 72 |
Sales and marketing | ||
Share-based compensation | ||
Stock-based compensation expense | 708 | 446 |
Research and development | ||
Share-based compensation | ||
Stock-based compensation expense | 582 | 648 |
General and administrative | ||
Share-based compensation | ||
Stock-based compensation expense | 2,450 | $ 2,240 |
Restricted stock awards | ||
Share-based compensation | ||
Unrecognized compensation expense | $ 7,800 | |
Period for unrecognized compensation expense to be recognized | 2 years 3 months 14 days |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Before Income Tax, Domestic and Foreign (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Loss before income taxes: | ||
U.S. | $ (219) | $ (21,968) |
Non‑U.S. | (2,103) | (2,283) |
Loss before income taxes | $ (2,322) | $ (24,251) |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | ||
Federal | $ 0 | $ 0 |
State | 33 | 9 |
Foreign | 58 | 33 |
Total current tax expense (benefit) | 91 | 42 |
Deferred: | ||
Federal | 0 | 0 |
State | 0 | 0 |
Foreign | 0 | 0 |
Total deferred tax expense (benefit) | 0 | 0 |
Total | $ 91 | $ 42 |
Tax at U.S. statutory rate | 21.00% | 21.00% |
State taxes, net of federal benefits | 51.39% | 3.68% |
Permanent items | 155.29% | (1.07%) |
Tax credit | (14.94%) | 0.37% |
Change in valuation allowance | (251.92%) | (25.37%) |
Foreign rate differential | 4.79% | 0.76% |
Rate change | (7.90%) | (0.69%) |
Uncertain tax positions | 23.08% | 4.22% |
NQ Stock option expirations & forfeitures | (1.54%) | (0.09%) |
Prior period true ups | 19.46% | 0.85% |
Other | (2.63%) | (3.83%) |
Effective income tax rate | (3.92%) | (0.17%) |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Federal and state net operating loss carryforwards | $ 25,101 | $ 23,124 |
Foreign net operating loss carryforwards | 7,458 | 6,312 |
Accrued expenses | 444 | 380 |
Credits | 7,776 | 7,429 |
Intangibles | 1,203 | 1,278 |
Stock compensation expense | 1,075 | 988 |
Lease liability | 1,957 | 1,327 |
Other | 4,906 | 3,568 |
Total deferred tax assets | 49,920 | 44,406 |
Valuation allowance | (47,354) | (41,507) |
Net deferred tax assets | 2,566 | 2,899 |
Deferred tax liabilities: | ||
Fixed assets | (751) | (914) |
Right of use asset | (1,774) | (1,175) |
Other | (41) | (810) |
Net deferred tax liabilities | (2,566) | (2,899) |
Net deferred tax liabilities | $ 0 | $ 0 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Loss Carryforwards [Line Items] | |||
Valuation allowance | $ 47,354 | $ 41,507 | |
Decrease in valuation allowance | (5,800) | ||
Operating loss carryforwards subject to expiration | 378,800 | ||
Operating loss carryforwards annual limitation | 1,400 | ||
Unrecognized tax benefits | 3,558 | 4,094 | $ 5,118 |
Unrecognized tax benefits, amount netted against deferred tax assets | 3,100 | 3,700 | |
Unrecognized tax benefits from lapse of statute of limitations | 1,192 | $ 1,280 | |
Domestic Tax Authority | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 445,500 | ||
Operating loss carryforwards with no expiration | 66,700 | ||
Federal and state tax credits | 5,700 | ||
Operating loss carryforwards section 382 limitation | 345,800 | ||
State and Local Jurisdiction | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 248,900 | ||
Operating loss carryforwards with no expiration | 9,100 | ||
Federal and state tax credits | 2,600 | ||
Operating loss carryforwards section 382 limitation | 255,900 | ||
Germany | |||
Operating Loss Carryforwards [Line Items] | |||
Unrecognized tax benefits from lapse of statute of limitations | 200 | ||
Germany | Foreign Tax Authority | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | $ 35,500 |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized tax benefits beginning of year | $ 4,094 | $ 5,118 |
Gross change for current year positions | 633 | 722 |
Increase for prior period positions | 23 | 29 |
Decrease for prior period positions | 0 | (495) |
Decrease due to statute limitations | (1,192) | (1,280) |
Unrecognized tax benefits end of the year | $ 3,558 | $ 4,094 |
Segment and Geographic Data - N
Segment and Geographic Data - Narrative (Details) | 12 Months Ended |
Dec. 31, 2021segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
Segment and Geographic Data - G
Segment and Geographic Data - Geographical Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Geographic information for Product Revenue and Property and equipment, net | ||
Revenue | $ 99,860 | $ 68,761 |
Property and equipment, net | 10,268 | 12,240 |
United States | ||
Geographic information for Product Revenue and Property and equipment, net | ||
Property and equipment, net | 10,131 | 12,195 |
Germany | ||
Geographic information for Product Revenue and Property and equipment, net | ||
Property and equipment, net | 43 | 45 |
Rest of World | ||
Geographic information for Product Revenue and Property and equipment, net | ||
Property and equipment, net | 94 | 0 |
Product | ||
Geographic information for Product Revenue and Property and equipment, net | ||
Revenue | 58,318 | 58,540 |
Product | United States | ||
Geographic information for Product Revenue and Property and equipment, net | ||
Revenue | 50,990 | 50,736 |
Product | Germany | ||
Geographic information for Product Revenue and Property and equipment, net | ||
Revenue | 5,422 | 6,526 |
Product | Rest of World | ||
Geographic information for Product Revenue and Property and equipment, net | ||
Revenue | $ 1,906 | $ 1,278 |
Employee Savings Plan - Narrati
Employee Savings Plan - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Retirement Benefits [Abstract] | ||
Maximum annual contributions per employee, percent | 100.00% | |
Employer matching contribution, percent of match | 50.00% | |
Employer matching contribution, percent of employees' gross pay | 5.00% | |
Employer discretionary contribution amount | $ 500 | $ 500 |