Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Dec. 01, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | Sonendo, Inc. | |
Entity Central Index Key | 0001407973 | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Current Fiscal Year End Date | --12-31 | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Small Business | true | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 26,334,216 | |
Entity File Number | 001-40988 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-5041718 | |
Entity Address, Address Line One | 26061 Merit Circle | |
Entity Address, Address Line Two | Suite 102 | |
Entity Address, City or Town | Laguna Hills | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92653 | |
City Area Code | 949 | |
Local Phone Number | 766-3636 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Title of 12(b) Security | Common stock, par value $0.001 per share | |
Trading Symbol | SONX | |
Security Exchange Name | NYSE | |
Entity Bankruptcy Proceedings, Reporting Current | true |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | |
Current assets: | |||
Cash and cash equivalents | $ 13,748 | $ 51,722 | |
Accounts receivable, net | 1,914 | 1,934 | |
Inventory | 7,236 | 4,338 | |
Prepaid expenses and other current assets | 3,357 | 901 | |
Total current assets | 26,255 | 58,895 | |
Property and equipment, net | 2,527 | 3,153 | |
Operating lease right-of-use assets | 2,943 | 3,308 | |
Intangible assets, net | 3,122 | 2,208 | |
Goodwill | 8,454 | 8,454 | |
Other assets | 115 | 123 | |
Total assets | 43,416 | 76,141 | |
Current liabilities: | |||
Accounts payable | 1,987 | 1,930 | |
Accrued expenses | 4,476 | 3,247 | |
Accrued compensation | 3,391 | 3,714 | |
Operating lease liabilities | 935 | 802 | |
Term loan | 28,352 | ||
Other current liabilities | 2,009 | 2,756 | |
Total current liabilities | 12,798 | 40,801 | |
Warrant liabilities | 4,225 | 1,914 | |
Operating lease liabilities, net of current | 1,964 | 2,449 | |
Term loan, net of current | 26,374 | ||
Forward obligation | 3,300 | 2,750 | |
Other liabilities | 469 | 776 | |
Total liabilities | 49,130 | 48,690 | |
Commitments and contingencies (Note 8) | |||
Convertible preferred stock, par value $0.0001 17,528,207 shares authorized as of September 30, 2021 and December 31, 2020; 17,031,887 shares issued and outstanding as of September 30, 2021 and December 31, 2020; aggregate liquidation preference of $282,198 as of September 30, 2021 and December 31, 2020 | [1] | 281,342 | 281,342 |
Stockholders' deficit: | |||
Common stock, par value $0.001; 21,643,836 shares authorized; 1,305,634 and 1,247,024 shares issued as of September 30, 2021 and December 31, 2020, respectively; 1,258,945 and 1,200,335 shares outstanding as of September 30, 2021 and December 31, 2020, respectively | 2 | 2 | |
Additional paid-in-capital | 11,326 | 9,703 | |
Accumulated deficit | (298,333) | (263,545) | |
Stockholders' deficit before treasury stock | (287,005) | (253,840) | |
Less: Treasury stock | (51) | (51) | |
Total stockholders’ deficit | (287,056) | (253,891) | |
Total liabilities, convertible preferred stock and stockholders’ deficit | $ 43,416 | $ 76,141 | |
[1] | The carrying value reflects the gross proceeds received from the sale of the preferred stock less issuance costs and the fair value at issuance of preferred stock warrants classified as a liability. |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Statement Of Financial Position [Abstract] | ||
Convertible preferred stock, par value | $ 0.0001 | $ 0.0001 |
Convertible preferred stock, shares authorized | 17,528,207 | 17,528,207 |
Convertible preferred stock, shares issued | 17,031,887 | 17,031,887 |
Convertible preferred stock, shares outstanding | 17,031,887 | 17,031,887 |
Convertible preferred stock, liquidation preference | $ 282,198 | $ 282,198 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 21,643,836 | 21,643,836 |
Common stock, shares issued | 1,305,634 | 1,247,024 |
Common stock, shares outstanding | 1,258,945 | 1,200,335 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Total revenue | $ 7,887 | $ 6,132 | $ 23,306 | $ 14,680 |
Cost of sales | 5,838 | 4,931 | 17,422 | 12,550 |
Gross profit | 2,049 | 1,201 | 5,884 | 2,130 |
Operating expenses: | ||||
Selling, general and administrative | 8,495 | 5,802 | 22,400 | 19,423 |
Research and development | 4,633 | 4,920 | 14,310 | 14,551 |
Change in fair value of contingent earnout | 19 | 30 | 12 | (478) |
Total operating expenses | 13,147 | 10,752 | 36,722 | 33,496 |
Loss from operations | (11,098) | (9,551) | (30,838) | (31,366) |
Interest and financing cost, net | (1,076) | (1,080) | (3,224) | (2,877) |
Change in fair value of warrant liabilities | (159) | 38 | (176) | 105 |
Change in fair value of forward obligation | (400) | (550) | 478 | |
Loss before income tax benefit | (12,733) | (10,593) | (34,788) | (34,138) |
Net loss and comprehensive loss | $ (12,733) | $ (10,593) | $ (34,788) | $ (34,138) |
Net loss per share attributable to common stock - basic and diluted | $ (10.33) | $ (8.84) | $ (28.54) | $ (28.58) |
Weighted-average shares used in computing net loss per share attributable to common stock - basic and diluted | 1,232,921 | 1,197,919 | 1,218,815 | 1,194,562 |
Product | ||||
Total revenue | $ 6,186 | $ 4,675 | $ 18,166 | $ 10,690 |
Cost of sales | 5,260 | 4,404 | 15,668 | 10,973 |
Gross profit | 926 | 271 | 2,498 | (283) |
Operating expenses: | ||||
Selling, general and administrative | 7,961 | 5,363 | 20,893 | 18,044 |
Research and development | 4,214 | 4,560 | 13,075 | 13,463 |
Change in fair value of contingent earnout | 19 | 30 | 12 | (478) |
Total operating expenses | 12,194 | 9,953 | 33,980 | 31,029 |
Loss from operations | (11,268) | (9,682) | (31,482) | (31,312) |
Software | ||||
Total revenue | $ 1,701 | $ 1,457 | $ 5,140 | $ 3,990 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT (unaudited) - USD ($) $ in Thousands | Total | Convertible Preferred Stock | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Deficit | |
Convertible Preferred Stock Beginning balance, Shares at Dec. 31, 2019 | 17,031,887 | ||||||
Convertible Preferred Stock Beginning balance at Dec. 31, 2019 | $ 281,342 | ||||||
Beginning balance, Shares at Dec. 31, 2019 | 1,188,815 | ||||||
Beginning balance at Dec. 31, 2019 | $ (208,914) | $ 2 | $ (51) | $ 8,015 | $ (216,880) | ||
Exercise of stock options | 13 | 13 | |||||
Exercise of stock options, Shares | 2,637 | ||||||
Stock-based compensation | 268 | 268 | |||||
Net loss | (13,001) | (13,001) | |||||
Convertible Preferred Stock Ending balance, Shares at Mar. 31, 2020 | 17,031,887 | ||||||
Convertible Preferred Stock Ending balance at Mar. 31, 2020 | $ 281,342 | ||||||
Ending balance, Shares at Mar. 31, 2020 | 1,191,452 | ||||||
Ending balance at Mar. 31, 2020 | (221,634) | $ 2 | (51) | 8,296 | (229,881) | ||
Convertible Preferred Stock Beginning balance, Shares at Dec. 31, 2019 | 17,031,887 | ||||||
Convertible Preferred Stock Beginning balance at Dec. 31, 2019 | $ 281,342 | ||||||
Beginning balance, Shares at Dec. 31, 2019 | 1,188,815 | ||||||
Beginning balance at Dec. 31, 2019 | (208,914) | $ 2 | (51) | 8,015 | (216,880) | ||
Net loss | (34,138) | ||||||
Convertible Preferred Stock Ending balance, Shares at Sep. 30, 2020 | 17,031,887 | ||||||
Convertible Preferred Stock Ending balance at Sep. 30, 2020 | $ 281,342 | ||||||
Ending balance, Shares at Sep. 30, 2020 | 1,199,723 | ||||||
Ending balance at Sep. 30, 2020 | (241,836) | $ 2 | (51) | 9,231 | (251,018) | ||
Convertible Preferred Stock Beginning balance, Shares at Mar. 31, 2020 | 17,031,887 | ||||||
Convertible Preferred Stock Beginning balance at Mar. 31, 2020 | $ 281,342 | ||||||
Beginning balance, Shares at Mar. 31, 2020 | 1,191,452 | ||||||
Beginning balance at Mar. 31, 2020 | (221,634) | $ 2 | (51) | 8,296 | (229,881) | ||
Exercise of stock options | 15 | 15 | |||||
Exercise of stock options, Shares | 5,298 | ||||||
Stock-based compensation | 442 | 442 | |||||
Net loss | (10,544) | (10,544) | |||||
Convertible Preferred Stock Ending balance, Shares at Jun. 30, 2020 | 17,031,887 | ||||||
Convertible Preferred Stock Ending balance at Jun. 30, 2020 | $ 281,342 | ||||||
Ending balance, Shares at Jun. 30, 2020 | 1,196,750 | ||||||
Ending balance at Jun. 30, 2020 | (231,721) | $ 2 | (51) | 8,753 | (240,425) | ||
Exercise of stock options | 13 | 13 | |||||
Exercise of stock options, Shares | 2,973 | ||||||
Stock-based compensation | 465 | 465 | |||||
Net loss | (10,593) | (10,593) | |||||
Convertible Preferred Stock Ending balance, Shares at Sep. 30, 2020 | 17,031,887 | ||||||
Convertible Preferred Stock Ending balance at Sep. 30, 2020 | $ 281,342 | ||||||
Ending balance, Shares at Sep. 30, 2020 | 1,199,723 | ||||||
Ending balance at Sep. 30, 2020 | $ (241,836) | $ 2 | (51) | 9,231 | (251,018) | ||
Convertible Preferred Stock Beginning balance, Shares at Dec. 31, 2020 | 17,031,887 | 17,031,887 | |||||
Convertible Preferred Stock Beginning balance at Dec. 31, 2020 | $ 281,342 | [1] | $ 281,342 | ||||
Beginning balance, Shares at Dec. 31, 2020 | 1,200,335 | ||||||
Beginning balance at Dec. 31, 2020 | (253,891) | $ 2 | (51) | 9,703 | (263,545) | ||
Exercise of stock options | 33 | 33 | |||||
Exercise of stock options, Shares | 12,797 | ||||||
Stock-based compensation | 494 | 494 | |||||
Net loss | (10,906) | (10,906) | |||||
Convertible Preferred Stock Ending balance, Shares at Mar. 31, 2021 | 17,031,887 | ||||||
Convertible Preferred Stock Ending balance at Mar. 31, 2021 | $ 281,342 | ||||||
Ending balance, Shares at Mar. 31, 2021 | 1,213,132 | ||||||
Ending balance at Mar. 31, 2021 | $ (264,270) | $ 2 | (51) | 10,230 | (274,451) | ||
Convertible Preferred Stock Beginning balance, Shares at Dec. 31, 2020 | 17,031,887 | 17,031,887 | |||||
Convertible Preferred Stock Beginning balance at Dec. 31, 2020 | $ 281,342 | [1] | $ 281,342 | ||||
Beginning balance, Shares at Dec. 31, 2020 | 1,200,335 | ||||||
Beginning balance at Dec. 31, 2020 | $ (253,891) | $ 2 | (51) | 9,703 | (263,545) | ||
Exercise of stock options, Shares | 58,290 | ||||||
Net loss | $ (34,788) | ||||||
Convertible Preferred Stock Ending balance, Shares at Sep. 30, 2021 | 17,031,887 | 17,031,887 | |||||
Convertible Preferred Stock Ending balance at Sep. 30, 2021 | $ 281,342 | [1] | $ 281,342 | ||||
Ending balance, Shares at Sep. 30, 2021 | 1,258,945 | ||||||
Ending balance at Sep. 30, 2021 | (287,056) | $ 2 | (51) | 11,326 | (298,333) | ||
Convertible Preferred Stock Beginning balance, Shares at Mar. 31, 2021 | 17,031,887 | ||||||
Convertible Preferred Stock Beginning balance at Mar. 31, 2021 | $ 281,342 | ||||||
Beginning balance, Shares at Mar. 31, 2021 | 1,213,132 | ||||||
Beginning balance at Mar. 31, 2021 | (264,270) | $ 2 | (51) | 10,230 | (274,451) | ||
Exercise of stock options | 56 | 56 | |||||
Exercise of stock options, Shares | 10,214 | ||||||
Stock-based compensation | 413 | 413 | |||||
Net loss | (11,149) | (11,149) | |||||
Convertible Preferred Stock Ending balance, Shares at Jun. 30, 2021 | 17,031,887 | ||||||
Convertible Preferred Stock Ending balance at Jun. 30, 2021 | $ 281,342 | ||||||
Ending balance, Shares at Jun. 30, 2021 | 1,223,346 | ||||||
Ending balance at Jun. 30, 2021 | (274,950) | $ 2 | (51) | 10,699 | (285,600) | ||
Exercise of stock options | 86 | 86 | |||||
Exercise of stock options, Shares | 35,599 | ||||||
Stock-based compensation | 541 | 541 | |||||
Net loss | $ (12,733) | (12,733) | |||||
Convertible Preferred Stock Ending balance, Shares at Sep. 30, 2021 | 17,031,887 | 17,031,887 | |||||
Convertible Preferred Stock Ending balance at Sep. 30, 2021 | $ 281,342 | [1] | $ 281,342 | ||||
Ending balance, Shares at Sep. 30, 2021 | 1,258,945 | ||||||
Ending balance at Sep. 30, 2021 | $ (287,056) | $ 2 | $ (51) | $ 11,326 | $ (298,333) | ||
[1] | The carrying value reflects the gross proceeds received from the sale of the preferred stock less issuance costs and the fair value at issuance of preferred stock warrants classified as a liability. |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Operating activities: | ||
Net loss | $ (34,788) | $ (34,138) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 1,109 | 1,620 |
Amortization intangible assets | 420 | 398 |
Amortization of right-of-use lease assets | 726 | 714 |
Stock-based compensation | 1,448 | 1,175 |
Provision for excess and obsolete inventory | 113 | 294 |
Change in fair value of warrant liabilities | 176 | (105) |
Amortization of debt issuance costs | 655 | 593 |
Loss on disposal of assets | 2 | 64 |
Change in fair value of forward obligation | 550 | (478) |
Change in fair value of contingent earnout | 12 | (478) |
Provision for bad debt | 8 | |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 20 | 1,360 |
Inventory | (3,011) | 344 |
Prepaid expenses and other assets | (575) | 258 |
Accounts payable | 20 | (1,472) |
Accrued expenses and other liabilities | (276) | (2,216) |
Deferred revenue | (158) | |
Accrued compensation | (323) | 709 |
Net cash used in operating activities | (33,880) | (30,872) |
Investing activities: | ||
Purchases of property and equipment | (485) | (824) |
Acquisition of intangible assets | (1,297) | |
Net cash used in investing activities | (1,782) | (824) |
Financing activities: | ||
Proceeds from exercise of common stock options | 175 | 41 |
Deferred financing costs | (450) | |
Payment of contingent consideration | (667) | (987) |
Borrowing on Small Business Administration loan | 5,138 | |
Repayment on Small Business Administration loan | (5,138) | |
Principal repayments on finance lease | (35) | (30) |
Payment of deferred offering costs | (1,335) | |
Net cash used in financing activities | (2,312) | (976) |
Net decrease in cash and cash equivalents | (37,974) | (32,672) |
Cash and cash equivalents at beginning of period | 51,722 | 92,165 |
Cash and cash equivalents at end of period | 13,748 | 59,493 |
Cash paid during the period for: | ||
Interest | 2,577 | 2,577 |
Supplemental schedule of non-cash investing and financing activities: | ||
Operating lease right-of-use assets obtained in exchange for lease liabilities | 362 | 2,790 |
Lease liabilities recorded for operating lease right-of-use assets | (362) | (2,790) |
Fair value of preferred stock warrants issued | 2,134 | |
Unpaid property and equipment purchases | $ 67 | |
Deferred offering costs included in accrued expenses | 538 | |
Unpaid deferred financing costs | $ 50 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Basis of Presentation | 1. Organization and Basis of Presentation Description of Business Sonendo, Inc. (“Sonendo” or the “Company”) was incorporated in June 2006 pursuant to the laws of the State of Delaware under the name Dentatek Corporation. In March 2011, the Company changed its name to Sonendo, Inc. The Company is a medical technology company that has developed and is commercializing the GentleWave System to treat tooth decay. The Company’s principal market is the United States. The Company’s products include the GentleWave System, which is cleared by the United States (“U.S.”) Food and Drug Administration (“FDA”) for sale in the U.S., along with the system’s sterilized, single-use procedure instruments. In addition, the Company offers practice management software to enable an integrated digital office for dental practitioners. The accompanying condensed consolidated financial statements include the accounts of Sonendo and its wholly-owned subsidiaries, Pipstek, LLC and TDO Software, Inc. (“TDO”). All significant inter-company balances and transactions among the consolidated entities have been eliminated in consolidation. Basis of Presentation The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”) on a consistent basis with the Company’s annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, considered necessary for a fair statement of the Company’s financial information. Accordingly, the accompanying unaudited condensed consolidated financial statements do not include all of the information and notes required by GAAP for complete financial statements. The condensed consolidated balance sheet as of December 31, 2020 included herein was derived from the audited financial statements as of that date. The results of operations included in these condensed consolidated financial statements are not necessarily indicative of the results of operations to be expected for the year, any other interim period, or for any other future annual or interim period. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed, consolidated, or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s final prospectus for its Initial Public Offering (“IPO”), filed pursuant to Rule 424(b) under the Securities Exchange Act of 1933, as amended, with the SEC on November 1, 2021 (the “Prospectus”). Initial Public Offering and Reverse Stock Split On October 20, 2021, the Company’s Board of Directors approved an amendment to the Company’s Articles of Incorporation to effect a reverse split of shares of the Company’s common stock and convertible preferred stock on a 1 -for-1.825 basis (the “Reverse Stock Split”). The par values of the common stock and convertible preferred stock were not adjusted as a result of the Reverse Stock Split. All references to common stock, options to purchase common stock, convertible preferred stock, warrants and forward obligation issued for preferred stock, share data, per share data and related information contained in the condensed consolidated financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented. Outstanding stock options were proportionately reduced and the respective exercise prices, if applicable, were proportionately increased. The Reverse Stock Split was effected on October 22, 2021. On November 2, 2021, the Company completed its initial public offering (“IPO”) of 7.8 million shares of its common stock at a public offering price of $ 12.00 per share. The aggregate net proceeds from the offering, after deducting underwriting discounts and commissions and other offering expenses, were approximately $ 84.0 million. On November 2, 2021, the Company amended and restated its articles of incorporation and bylaws which provide for, among other things, the Company’s authorized capital stock to consist of 500,000,000 shares of common stock, par value $ 0.001 per share, and 10,000,000 shares of preferred stock, par value $ 0.001 per share. In addition, upon the closing of the IPO, all 17,031,887 outstanding shares of the Company’s convertible preferred stock as of September 30, 2021 were converted into an equal number of shares of common stock, 224,842 shares of common stock were issued in connection with the settlement of the outstanding forward obligation, and all of the warrants to purchase shares of convertible preferred stock outstanding were converted into warrants to purchase shares of common stock. The restated articles define the voting rights, dividends, liquidation, rights and preferences of each class of stock. Liquidity and Management’s Plans As of September 30, 2021, the Company had cash and cash equivalents of $ 13.7 million. The Company has a limited operating history, and the revenue and income potential of the Company’s business and market are unproven. The Company has experienced net losses and negative cash flows from operations since its inception and as of September 30, 2021 had an accumulated deficit of $ 298.3 million. During the nine months ended September 30, 2021, the Company incurred net losses of $ 34.8 million and used $ 33.9 million of cash and cash equivalents in operations. The Company will continue to incur significant costs and expenses related to its ongoing operations until it gains market acceptance of products and achieves a level of revenues adequate to support the Company’s operations. The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. Based on its current operating plan, the Company expects that its existing cash and cash equivalents, including the net proceeds from the IPO, together with anticipated revenue and available debt financing arrangements will be sufficient to fund its operating expenses and capital expenditure requirements 12 months from the date of issuance of the accompanying unaudited condensed consolidated financial statements. COVID-19 In December 2019, a novel strain of coronavirus, SARS-CoV-2, was reported to have surfaced in Wuhan, China. Since then, SARS-CoV-2, and the resulting disease COVID-19, has spread to most countries, and all 50 states within the United States. The COVID-19 outbreak has negatively impacted and may continue to negatively impact the Company’s operations, revenue, and overall financial condition. In response to the pandemic, numerous state and local jurisdictions imposed, and others in the future may impose, “shelter-in-place” orders, quarantines, executive orders, and similar government orders and restrictions for their residents to control the spread of COVID-19. Starting in mid-March 2020, the governor of California, where the Company’s headquarters are located, issued “shelter-in-place” or “stay at home” orders restricting non-essential activities, travel, and business operations, subject to certain exceptions for necessary activities. Such orders or restrictions have resulted in closing of the Company’s headquarters, slowdowns and delays, travel restrictions, and cancellation of training and other events, among other effects, thereby negatively impacting the Company’s operations. Additionally, in the United States, governmental authorities have recommended, and in certain cases required, that elective, specialty and other procedures and appointments be suspended or canceled to avoid non-essential patient exposure to medical environments and potential infection with COVID-19 and to focus limited resources and personnel capacity toward the treatment of COVID-19. Even after the “shelter-in-place” orders, quarantines, executive orders and similar government orders and restrictions for their residents to control the spread of COVID-19 were significantly reduced in the second quarter of 2021, the Company continues to experience disruptions to its business, including customers continuing to be cautious in restarting procedures in light of the continued risk posed by the virus. The Company continues to monitor the effects of this global situation on its financial condition, liquidity, operations, suppliers, industry, and workforce and took actions to mitigate the negative impact on its business including among other things, a reduction in force in April 2020, temporary reductions in pay and furloughs of certain positions along with spending reduction programs. The cumulative effect of these disruptions have had, and may continue to have, an adverse impact on the Company’s business and its results of operations. The COVID-19 pandemic continues to evolve and its impact on the Company’s business will depend on several factors that are highly uncertain and unpredictable, including, the efficacy and adoption of vaccines, future resurgences of the virus and its variants, the speed at which government restrictions are lifted, hospitals and healthcare systems patient capacity, and the willingness and ability of patients to seek care and treatment due to safety concerns or financial hardship. Given the continued uncertainty of the duration of the COVID-19 outbreak and the global responses to curb its spread, the Company is unable to estimate the impact that the COVID-19 outbreak will have on its results of operations, financial condition, or liquidity for fiscal year 2021. Operating Segments The Company operates two operating and reportable segments: Product and Software. Operating segments are defined as components of an enterprise for which discrete financial information is available and evaluated regularly by the chief operating decision maker, who is the Company’s chief executive officer (“CEO”), for the purpose of allocating resources and assessing performance. Description of the activities within these segments is included in Note 12. Emerging growth company status The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to avail itself of this exemption and, therefore, for new or revised accounting standards applicable to public companies, the Company will be subject to an extended transition period until those standards would otherwise apply to private companies. |
Summary of Accounting Policies
Summary of Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of Accounting Policies | 2. Summary of Accounting Policies Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make informed estimates, judgements and assumptions that affect the reported amounts in the consolidated financial statements and disclosures in the accompanying notes, including estimates of probable losses and expenses, as of the date of the accompanying consolidated financial statements. Management considers many factors in selecting appropriate financial accounting policies and in developing the estimates and assumptions that are used in the preparation of these consolidated financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including the expected business and operational changes, the sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates. Actual results could differ materially from the estimates and assumptions used in the preparation of the accompanying consolidated financial statements under different assumptions or conditions. Cash Equivalents The Company considers liquid investments with an original or remaining maturity of three months or less at the date of purchase that can be liquidated without prior notice or penalty to be cash equivalents. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash, cash equivalents and accounts receivable. The Company’s policy is to mitigate such potential risks by maintaining the Company’s cash balances with entities that management believes possess high credit quality to limit the amount of credit exposure. Substantially all of the Company’s cash and cash equivalents are maintained at one financial institution domiciled in the United States. Cash and cash equivalents can exceed amounts insured by the Federal Deposit Insurance Corporation of up to $ 250,000 . The Company has not experienced any losses in their accounts and management believes it is not exposed to any significant credit risk on cash and cash equivalents. The primary objectives of the Company’s investment portfolio are the preservation of capital and maintenance of liquidity. The Company believes any concentration of credit risk in its accounts receivable is mitigated by its credit evaluation process, relatively short collection terms and the level of credit worthiness of its customers. One customer accounted for approximately 14 % of accounts receivable as of September 30, 2021. The Company sources materials and services through several vendors. Certain materials are sourced from a single vendor. The loss of certain vendors could result in a temporary disruption of the Company’s commercialization efforts. The Company’s products require clearance from the FDA and foreign regulatory agencies before commercial sales can commence. There can be no assurance that the Company’s products in development will receive any of these required clearances. The denial or delay of such clearances may have a material adverse impact on the Company’s business in the future. In addition, after the clearance by the FDA, there is still an ongoing risk of adverse events that did not appear during the device clearance process. The Company is subject to risks common to companies in the medical device industry, including, but not limited to, new technological innovations, clinical development risk, establishment of appropriate commercial partnerships, protection of proprietary technology, compliance with government and environmental regulations, uncertainty of market acceptance of its products, product liability and the need to obtain additional financing. Accounts Receivable, Net Accounts receivable pertain to contracts with customers who are granted credit by the Company in the ordinary course of business and are recorded at the invoiced amount. Accounts receivable do not bear interest. Accounts receivable presented on the accompanying condensed consolidated balance sheets are adjusted for any write-offs and net of allowance for credit losses. The Company’s allowance for credit losses is developed by using relevant available information including historical collection and loss experience, current economic conditions, prevailing economic conditions, supportable forecasted economic conditions and evaluations of customer balances. Once a receivable is deemed uncollectible after collection efforts have been exhausted, it is written off against the allowance for doubtful accounts. The Company closely monitors the credit quality of its customers and does not generally require collateral or other security on receivables. The allowance for credit losses is measured on a collective basis when similar risk characteristics exist. The Company’s estimate of current expected credit losses was immaterial as of September 30, 2021 and there were no write-offs. Inventory Inventory consists of finished products, work-in-process and raw materials and is valued at the lower of cost or net realizable value. Cost may include materials, labor and manufacturing overhead. Cost is determined by the first in first out inventory method. The carrying value of inventory is reviewed for potential impairment whenever indicators suggest that the cost of inventory exceeds the carrying value and management adjusts the inventory to its net realizable value. The Company also periodically evaluates inventory for estimated losses from excess quantities and obsolescence and writes down the cost of inventory to net realizable value at the time such determinations are made. Net realizable value is determined using the estimated selling price, in the ordinary course of business, less estimated costs to complete and dispose. Goodwill and Intangible Assets Goodwill represents the excess of cost over fair value of identified assets acquired and liabilities assumed by the Company in an acquisition of a business. The determination of the value of goodwill and intangible assets arising from a business combination requires extensive use of accounting estimates and judgments to allocate the purchase price to the fair value of the net tangible and intangible assets acquired. The Company recorded $ 8.5 million of goodwill in conjunction with the acquisition of TDO. The Company performs its goodwill impairment analysis at the reporting unit level, which aligns with the Company’s reporting structure and availability of discrete financial information. The Company performs its annual impairment analysis by either comparing a reporting unit’s estimated fair value to its carrying amount or doing a qualitative assessment of a reporting unit’s fair value from the last quantitative assessment to determine if there is potential impairment. The Company may do a qualitative assessment when the results of the previous quantitative test indicated the reporting unit’s estimated fair value was significantly in excess of the carrying value of its net assets and it does not believe there have been significant changes in the reporting unit’s operations that would significantly decrease its estimated fair value or significantly increase its net assets. If a quantitative assessment is performed the evaluation includes management estimates of cash flow projections based on internal future projections and/or use of a market approach by looking at market values of comparable companies. Key assumptions for these projections include revenue growth, future gross and operating margin growth, and its weighted cost of capital and terminal growth rates. The revenue and margin growth is based on increased sales of new and existing products as the Company maintains investments in research and development. Additional assumed value creators may include increased efficiencies from capital spending. The resulting cash flows are discounted using a weighted average cost of capital. Operating mechanisms and requirements to ensure that growth and efficiency assumptions will ultimately be realized are also considered in the evaluation. The Company’s annual evaluation for impairment of goodwill consists of the TDO reporting unit from which the goodwill originated. In accordance with the Company’s policy, the Company completed its most recent annual evaluation for impairment as of December 31, 2020 using a quantitative assessment and determined that no impairment existed. The Company did not identify any relevant events or circumstances which qualitatively indicate it is more likely than not that the fair value of any reporting unit is less than its carrying amount as of September 30, 2021. The assumptions used in the estimate of fair value are generally consistent with the past performance of the Company and are also consistent with the projections and assumptions that are used in current operating plans. The assumptions are subject to change as a result of changing economic and competitive conditions. Intangible assets with a finite life, consist mainly of developed technology, customer relationships, and tradenames acquired in conjunction with the acquisition of TDO. The Company acquired certain patents supporting various apparatuses for endodontic treatment in June 2021 for $ 1.3 million. The investment was accounted for as an asset acquisition of defensive intangible assets and will be amortized over ten years , the period it is expected to contribute indirectly to the Company’s future cash flows. Definite-lived intangible assets are recorded at cost, net of accumulated amortization, and are amortized on a straight-line basis over their estimated useful life, which range from five to ten years . In determining the useful lives of intangible assets, the Company considers the expected use of the assets and the effects of obsolescence, demand, competition, anticipated technological advances, market influences and other economic factors. Trademarks and trade names that are related to products are assigned lives consistent with the period in which the products bearing each brand are expected to be sold. The Company evaluates its intangible assets with finite lives for indications of impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors that could trigger an impairment review include significant under-performance relative to expected historical or projected future operating results, significant changes in the manner of the Company’s use of the acquired assets or the strategy for the Company’s overall business or significant negative industry or economic trends. If this evaluation indicates that the value of the intangible asset may be impaired, the Company makes an assessment of the recoverability of the net carrying value of the asset over its remaining useful life. If this assessment indicates that the intangible asset is not recoverable, based on the estimated undiscounted future cash flows of the technology over the remaining amortization period, the Company reduces the net carrying value of the related intangible asset to fair value and may adjust the remaining amortization period. An impairment analysis is subjective and assumptions regarding future growth rates and operating expense levels can have a significant impact on the expected future cash flows and impairment analysis. No impairment was recorded during the three and nine months ended September 31, 2021 and 2020. Fair Value of Financial Instruments The Company applies fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The Company’s financial instruments consist principally of cash, cash equivalents, accounts receivable, accounts payable, operating lease liabilities, warrant liabilities, forward obligation, contingent earnout, and a note payable. Fair value is measured as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. Valuation techniques that are consistent with the market, income or cost approach are used to measure fair value. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels: Level 1 —Observable inputs such as unadjusted quoted prices in active markets that are accessible at the measurement date for identical unrestricted assets or liabilities the Company has the ability to access. Level 2 —Inputs (other than quoted prices included within Level 1) that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3 —Unobservable inputs that are significant to the fair value measurement and reflect the reporting entity’s use of significant management judgment and assumptions when there is little or no market data. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques and significant management judgment or estimation. These include the Black-Scholes option-pricing model which uses inputs such as expected volatility, risk-free interest rate and expected term to determine fair market valuation. Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. The Company reviews the fair value hierarchy classification at each reporting date. Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain assets or liabilities within the fair value hierarchy. The Company did no t have any transfers of assets and liabilities between the levels of the fair value measurement hierarchy during the years presented. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and certain accrued expenses approximate fair value due to the short-term nature of these items. Accordingly, the Company estimates that the recorded amounts approximate fair market value. The fair values of term loan and operating lease liabilities at September 30, 2021 approximated their carrying values, based on the borrowing rates that were available for loans with similar terms as of that date. Non-financial assets and liabilities measured on a nonrecurring basis Certain non-financial assets and liabilities are measured at fair value, usually with Level 3 inputs including the discounted cash flow method or cost method, on a no nrecurring basis in accordance with authoritative guidance. These include items such as non-financial assets and liabilities initially measured at fair value in a business combination and non-financial long-lived assets measured at fair value for an impairment assessment. In general, non-financial assets, including goodwill, right-of-use assets, intangible assets and property and equipment, are measured at fair value when there is an indication of impairment and are recorded at fair value only when any impairment is recognized. Warrant Liabilities The Company recognizes freestanding warrants to purchase shares of its convertible preferred stock as a liability recognized at fair value as these warrant instruments are embedded in contracts that may be cash settled. The redeemable convertible preferred stock warrants were issued for no cash consideration as detachable freestanding instruments but can be converted to convertible preferred stock at the holder’s option based on the exercise price of the warrant. However, the deemed liquidation provisions of the convertible preferred stock are considered contingent redemption provisions that are not solely within the control of the Company. Therefore, the convertible preferred stock is classified in temporary equity on the accompanying condensed consolidated balance sheets, and the warrants to purchase the convertible preferred stock are classified as liabilities. The warrants are recorded on the accompanying condensed consolidated balance sheets at their fair value on the date of issuance and subject to re-measurement at each balance sheet date until settlement. Changes in fair value for warrants classified as liabilities are recognized as a component of other income (expense), net on the accompanying condensed consolidated statements of operations and comprehensive loss. The Company estimates the fair value of these liabilities using option pricing models and assumptions that are based on the individual characteristics of the warrants or instruments on the valuation date, as well as assumptions for expected volatility, expected life, yield, and risk-free interest rate. The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of the warrants, the completion of a deemed liquidation event, the conversion of convertible preferred stock into common stock, or until the holders of the convertible preferred stock can no longer trigger a deemed liquidation event. Pursuant to the terms of these warrants, upon the conversion of the class of preferred stock underlying the warrant, the warrants automatically become exercisable for shares of the Company’s common stock based upon the conversion ratio of the underlying class of preferred stock. All classes of the Company’s preferred stock were converted into common stock upon the consummation of an initial public offering. Upon such conversion of the underlying classes of preferred stock, the warrants were classified as a component of equity and will no longer be subject to re-measurement. Deferred Offering Costs The Company capitalized deferred offering costs consisting of all direct and incremental legal, professional, accounting and other third-party fees incurred in connection with the Company’s initial public offering. As of September 30, 2021, total deferred offering costs of $ 1.9 million were included in prepaid expenses and other current assets on the accompanying condensed consolidated balance sheet. Upon the completion of the IPO on November 2, 2021, the total deferred offering costs of $ 1.9 million incurred as of September 30, 2021 were reclassified to additional paid-in capital. Revenue Recognition Contracts with Customers The Company recognizes revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods and services. Specifically, the Company applies the following five core principles to recognize revenue: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when, or as, the Company satisfies a performance obligation. Product revenue is generated from sales of the GentleWave System and related procedure instruments and accessories. Software revenue is generated from sales of TDO’s The Digital Office endodontist practice management software licenses. The Company’s products are sold primarily in the United States directly to customers through its field sales force. Performance Obligations The Company’s performance obligations primarily arise from the manufacture and delivery of the GentleWave System, related procedure instruments and accessories, and the delivery or license of TDO software and related ancillary services. Payment terms are typically on open credit terms consistent with industry practice and do not have significant financing components. Consideration may be variable based on volume. The Company considers the individual deliverables in its product offering as separate performance obligations and assesses whether each promised good or service is distinct. The total contract transaction price is determined based on the consideration expected to be received, based on the stated value in contractual arrangements or the estimated cash to be collected in no-contracted arrangements, and is allocated to the identified performance obligations based upon the relative standalone selling prices of the performance obligations. The stand-alone selling price is based on an observable price offered to other comparable customers. The Company estimates the standalone selling price using the market assessment approach considering market conditions and entity-specific factors including, but not limited to, features and functionality of the products and services, geographies, type of customer and market conditions. The Company regularly reviews and updates standalone selling prices as necessary. The consideration the Company receives in exchange for its goods or services is only recognized when it is probable that a significant reversal will not occur. The consideration to which the Company expects to be entitled includes a stated list price, less various forms of variable consideration. The Company estimates related variable consideration at the point of sale, including discounts, product returns, refunds, and other similar obligations. Revenue is recognized over time when the customer simultaneously receives and consumes the benefits provided by the Company’s performance. Revenue is recognized at a point in time if the criteria for recognizing revenue over time are not met, and the Company has transferred control of the goods to the customer. Product revenue is recognized at a point in time when the Company has transferred control to the customer, which is generally when title of the goods transfers to the customer. Software is licensed via delivery to the customer or via a service arrangement under which cloud-based access is provided on a subscription basis (software-as-a-service). When a fixed up-front license fee is received in exchange for the delivery of software, revenue is recognized at the point in time when the delivery of the software has occurred. When software is licensed on a subscription basis, revenue is recognized over the respective license period. The Company also sells extended service contracts on its GentleWave Systems. Sales of extended service contracts are recorded as deferred revenue until such time as the standard warranty expires, which is generally up to two years from the date of sale. Service contract revenue is recognized on a straight-line basis over time consistent with the life of the related service contract in proportion to the costs incurred in fulfilling performance obligations under the service contract. Revenue for technical support and other services is recognized ratably over the performance obligation period. The Company generally does not experience returns. If necessary, a provision is recorded for estimated sales returns and allowances and is deducted from gross product revenue to arrive at net product revenue in the period the related revenue is recorded. These estimates are based on historical sales returns and allowances and other known factors. Actual returns and claims in any future period are inherently uncertain and thus may differ from these estimates. If actual or expected future returns and claims are significantly greater or lower than the reserves established, a reduction or increase to revenue will be recorded in the period in which such a determination is made. All non-income government-assessed taxes (sales and use taxes) collected from the Company’s customers and remitted to governmental agencies are recorded in accrued expenses and other current liabilities until they are remitted to the government agency. The Company has adopted the practical expedient permitting the direct expensing of costs incurred to obtain contracts where the amortization of such costs would occur over one year or less, and it applied to substantially all the Company’s contracts. Contract liabilities The Company recognizes a contract liability when a customer pays for good or services for which the Company has not yet transferred control. The balances of the Company’s contract liabilities are as follows (in thousands): As of September 30, 2021 As of December 31, 2020 Extended service contracts $ 223 $ 271 Subscription software licenses 462 572 Total contract liabilities 685 843 Less: long-term portion 1 5 Contract liabilities – current $ 684 $ 838 Contract liabilities are included within other current liabilities and other long-term liabilities in the accompanying condensed consolidated balance sheets. Revenue recognized during the nine months ended September 30, 2021 and 2020 that was included in the contract liability balance as of December 31, 2020 and 2019 was $ 0.9 million and $ 0.5 million, respectively. Disaggregation of revenue The Company disaggregates revenue from contracts with customers by segment and by the timing of when goods and services are transferred which depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected. The following table provides information regarding revenues disaggregated by segment and the timing of when goods and services are transferred (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Product revenue recognized at a point in $ 5,992 $ 4,549 $ 17,565 $ 10,369 Product revenue recognized over time 194 126 601 321 Software revenue recognized at a point in 150 163 668 322 Software revenue recognized over time 1,551 1,294 4,472 3,668 Total $ 7,887 $ 6,132 $ 23,306 $ 14,680 Warranty Reserve The Company provides a standard warranty on its GentleWave Systems for a specified period of time. For the nine months ended September 30, 2021 and 2020, GentleWave Systems sold were covered by the warranty for a period of up to two years from the date of sale. Estimated warranty costs are recorded as a liability at the time of delivery with a corresponding provision to cost of sales. Warranty expenses expected to be incurred within 12 months from the date of sale are classified as other short-term liabilities while those expected to be incurred after 12 months from the date of sale are classified as other long-term liabilities in the accompanying condensed consolidated balance sheets. Warranty accruals are estimated based on the current product costs, the Company’s historical experience, management’s expectations of future conditions and standard maintenance schedules. The Company evaluates this reserve on a regular basis and makes adjustments as necessary. The following table provides a reconciliation of the change in estimated warranty (in thousands): For Nine Months Ended Balance at beginning of period $ 1,584 Provision for warranties issued 958 Warranty costs incurred ( 1,163 ) Balance at end of period $ 1,379 Current portion $ 996 Non-current portion 383 Total $ 1,379 The warranty liability, current and non-current, are included in other current liabilities and other liabilities, respectively, on the condensed consolidated balance sheets. Research and Development Research and development (“R&D”) expenses consist of costs incurred for proprietary R&D programs, and are recorded to operating expenses when incurred. Research and development expenses primarily include (1) personnel-related costs, including compensation and benefits and stock-based compensation associated with R&D personnel, (2) costs related to clinical and pre-clinical testing of the Company’s technologies under development, and (3) other R&D expenses. Costs to acquire technologies to be used in R&D that have not reached technological feasibility and have no alternative future use are also expensed as incurred. Stock-Based Compensation The Company periodically grants equity-based payment awards in the form of stock options to employees, directors and non-employees and records stock-based compensation expenses for awards of stock-based payments based on their estimated fair value at the grant date. The Company recognizes stock-based compensation expense for all equity-based payments, including stock options. Stock-based compensation costs are calculated based on the estimated fair value of the underlying option using the Black-Scholes option-pricing model on the date of grant for stock options and recognized as expense in the accompanying condensed consolidated statement of comprehensive loss on a straight-line basis over the requisite service period, which is the vesting period. Determining the appropriate fair value model and related input assumptions requires judgment, including estimating the fair value of the Company’s common stock, stock price volatility, and expected term: Given the absence of a public trading market prior to the Company’s IPO on November 2, 2021, the fair value of the Company’s common stock is determined by the Company’s Board of Directors (the “Board”) at the time of each option grant by considering a number of objective and subjective factors. These factors include the valuation of a select group of public peer group companies within the medical device industry that focus on technological advances and development that the Board believes is comparable to the Company’s operations; operating and financial performance; the lack of liquidity of the common stock and trends in the broader economy and medical device industry also impact the determination of the fair value of the common stock. In addition, the Company regularly engages a third-party valuation specialist to assist with estimates related to the valuation of the Company’s common stock; The risk-free interest rate used is based on the published U.S. Department of Treasury interest rates in effect at the time of stock option grant for zero coupon U.S. Treasury notes with maturities approximating each grant’s expected term; The dividend yield is zero as the Company has not paid dividends and does not anticipate paying a cash dividend in the foreseeable future; The expected term for options granted is calculated using the “simplified method” and represents the average time that options are expected to be outstanding based on the mid-point between the vesting date and the end of the contractual term of the award; Expected volatility is derived from the historical volatilities of a select group of comparable peer companies, for a look-back period commensurate with the expected term of the stock options, as the Company has no trading history of common stock. No compensation cost is recognized for awards with performance conditions until that condition is probable of being met. Forfeitures of unvested stock option awards are recognized as reductions of expense as they occur. Net Loss Per Share Basic and diluted net loss per share attributable to common stockholders is computed in conformity with the two-class method required for participating securities. The Company considers all series of its convertible preferred stock to be participating securities as the holders of such stock have the right to receive dividends on a pari passu basis in the event that a dividend is paid on common stock. Under the two-class method, the net loss attributable to common stockholders is not allocated to the convertible preferred stock as the preferred stockholders do not have a contractual obligation to share in the Company’s losses. Basic net loss per share is calculated by dividing net loss attributable to Company’s stockholders by the weighted average number of common stock outstanding for the period. Diluted net loss per share is computed by giving effect to all potentially dilutive common stock equivalents to the extent they are dilutive. For purposes of this calculation, convertible preferred stock, stock options, forward obligation, and warrants are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is anti-dilutive for all periods presented. Diluted net loss per share is the same as basi |
Balance Sheet Components
Balance Sheet Components | 9 Months Ended |
Sep. 30, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Components | 3. Balance Sheet Components Inventory Inventory consisted of the following (in thousands): September 30, 2021 December 31, 2020 Raw materials $ 4,663 $ 2,114 Work in process 351 308 Finished goods 2,222 1,916 Total $ 7,236 $ 4,338 The Company recorded a reserve for excess and obsolete inventory of $ 1.1 million and $ 1.3 million at September 30, 2021 and December 31, 2020, respectively. Intangible assets, net Intangible assets, net were comprised of the following at September 30, 2021 and December 31, 2020 (in thousands): Gross Accumulated Net Developed Technology ( 5 - 10 years ) $ 2,445 $ 679 $ 1,766 Customer relationships ( 7 years ) 1,910 807 1,103 Tradenames ( 10 years ) 360 107 253 September 30, 2021 $ 4,715 $ 1,593 $ 3,122 Gross Accumulated Net Developed Technology ( 5 years ) $ 1,110 $ 490 $ 620 Customer relationships ( 7 years ) 1,910 603 1,307 Tradenames ( 10 years ) 360 79 281 December 31, 2020 $ 3,380 $ 1,172 $ 2,208 For the three months ended September 30, 2021 and 2020, amortization expense related to the above finite-lived intangible assets was $ 0.1 million recorded in cost of sales and $ 0.1 million recorded in selling, general and administrative expenses in the unaudited condensed consolidated statements of operations and comprehensive loss. For the nine months ended September 30, 2021 and 2020, amortization expense related to the above finite-lived intangible assets was $ 0.2 million recorded in cost of sales and $ 0.2 million recorded in selling, general and administrative expenses in the unaudited condensed consolidated statements of operations and comprehensive loss. Estimated future annual amortization expense related to intangible assets, net at September 30, 2021 was as follows (in thousands): 2021 (remaining three months) $ 166 2022 664 2023 618 2024 442 2025 386 Thereafter 846 Total amortizable intangible assets $ 3,122 The weighted average amortization period as of September 30, 2021 of the Company’s intangible assets is 7.6 y ears. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 4. Fair Value of Financial Instruments The following table provides the assets and liabilities measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such value at September 30, 2021 and December 31, 2020 (in thousands): September 30, 2021 Fair Value Quoted Prices Significant Significant Assets: Money market funds $ 13,103 $ 13,103 $ — $ — Liabilities: Warrants $ 4,225 $ — $ — $ 4,225 Forward obligation $ 3,300 $ — $ — $ 3,300 Contingent earnout $ 275 $ — $ — $ 275 December 31, 2020 Fair Value Quoted Prices Significant Significant Assets: Money market funds $ 50,897 $ 50,897 $ — $ — Liabilities: Warrants $ 1,914 $ — $ — $ 1,914 Forward obligation $ 2,750 $ — $ — $ 2,750 Contingent earnout $ 930 $ — $ — $ 930 Recurring liabilities included in Level 3 consist of preferred stock warrants, a forward obligation to transfer shares of Series D preferred stock, and a contingent earnout. The following table is a rollforward of the estimated fair values for instruments classified by the Company within Level 3 of the fair value hierarchy defined above, measured using significant unobservable inputs (in thousands): Warrant Forward Contingent Total December 31, 2019 $ 2,260 $ 2,500 $ 2,390 $ 7,150 Payout of contingent earnout — — ( 987 ) ( 987 ) Change in fair value ( 105 ) — ( 478 ) ( 583 ) September 30, 2020 $ 2,155 $ 2,500 $ 925 $ 5,580 Warrant Forward Contingent Total December 31, 2020 $ 1,914 $ 2,750 $ 930 $ 5,594 Payout of contingent earnout — — ( 667 ) ( 667 ) Addition 2,135 — — 2,135 Change in fair value 176 550 12 738 September 30, 2021 $ 4,225 $ 3,300 $ 275 $ 7,800 There were no transfers in or out of level 3 during the nine months ended September 30, 2021 and 2020. Warrants In December 2013, the Company entered into a $ 10.0 million term loan facility with Oxford Finance LLC. The term loan was repaid in full in June 2017 . In connection with the term loan, the Company issued immediately exercisable warrants to the lender for the purchase of 27,397 shares of the Company’s Series C-1 preferred stock equal to three percent of the aggregate amount funded. In June 2017, the Company entered into a term loan facility with Perceptive Credit Holdings, LP which was subsequently amended in October 2018 and again in October 2019 (see Note 9). Upon funding of the initial loan, and each initial tranche of the amended loans, the Company issued immediately exercisable warrants to the lender for the purchase of 54,793 shares of the Company’s Series D preferred stock and 49,315 shares of the Company’s Series E preferred stock, respectively. In August 2021, the Company amended its term loan with Perceptive Credit Holdings, LP and issued immediately exercisable warrants to the lender for the purchase of 150,684 shares of the Company’s Series E preferred stock. The fair value at issuance of the Series E preferred stock warrants related to the August 2021 amendment was $ 2.1 million. The Company recognized the fair value of warrants to purchase shares of convertible preferred stock issued in connection with certain debt as liabilities. The fair value of warrants are based on significant inputs not observable in the market, which represent a Level 3 measurement within the fair value hierarchy. Subsequent to September 30, 2021, the Company continued to adjust the liability for changes in fair value of these warrants until the completion of the Company’s IPO on November 2, 2021, upon which all of the outstanding warrants to purchase shares of convertible preferred stock were converted into warrants to purchase share of common stock and the warrants liability was reclassified into shareholders’ equity. Warrants at September 30, 2021 and December 31, 2020 included the following (in thousands, except share data): Warrants outstanding Fair value Warrants Number of Purchase December 31, September 30, December 31, September 30, Series C-1 27,397 10.95 27,397 27,397 $ 225 $ 240 Series D 54,793 17.80 54,793 54,793 500 557 Series E 49,315 20.08 49,315 49,315 575 615 Series E 49,314 20.08 49,314 49,314 614 636 Series E 150,684 20.08 — 150,684 — 2,177 331,503 180,819 331,503 $ 1,914 $ 4,225 As of September 30, 2021 and 2020, warrants fully vested and outstanding had estimated fair values ranging between $ 8.13 to $ 14.45 and $ 5.99 to $ 16.39 , respectively. Fair values were determined using the Black-Scholes option-pricing model with the following input assumptions as of September 30, 2021 and 2020: Nine Months Ended Nine Months Ended Expected volatility 78.60 % to 84.81 % ( 82.78 %) 78.35 % to 87.57 % ( 82.22 %) Dividend yield 0.00 % 0.00 % Risk-free interest rates 0.34 % to 1.51 % ( 1.35 %) 0.17 % to 0.62 % ( 0.52 %) Expected term 2.25 years to 9.89 years ( 8.25 years) 3.25 years to 9.02 years ( 7.80 years) Assumptions were weighted by the relative fair value of the instruments. An increase in the expected volatility, risk-free interest rates, and expected term would result in an increase to the estimated value of the warrants while an increase in the dividend yield would result in a decrease to the estimated value of the warrants. These warrants expire between December 2023 and August 2031 . Forward obligation In connection with a December 2016 asset acquisition, a portion of the transaction consideration included the issuance of a maximum of 224,842 shares of Sonendo Series D Preferred Stock, issued, paid and deliverable upon the earliest to occur of (i) an extraordinary event, as defined in the purchase agreement; (ii) a public offering of any securities of the Company, in which the shares of the Series D preferred stock of the Company are converted in accordance with the then effective certificate of incorporation of the Company, or in connection with which the holders of the Series D preferred stock agree to convert their shares of series D preferred stock into conversion shares, as defined in the purchase agreement; or (iii) the 7th anniversary after the closing of the transaction. The Company measured the estimated value of the shares of Series D Preferred Stock as of the acquisition date based on the estimated fair value of the Series D preferred stock reflecting a discount for marketability. The fair value of the forward obligation was estimated by the Board with input from a third party valuation specialist, based on management estimates and assumptions reflecting the anticipated timing of delivery of the underlying preferred stock and utilizing the probability tree valuation method. This approach calculates estimated fair value by future cash flows attributable to the forward obligation using significant unobservable inputs, including the probabilities of multiple scenarios with individual probabilities ranging from 10 % to 70 %, and estimates of the timing of the achievement of various liquidity event scenarios. Changes in the fair value of the Series D preferred stock shares would affect the ultimate fair value of the shares transferred upon settlement. As of September 30, 2021 and December 31, 2020, no shares of Series D preferred stock were issued in connection with the Forward Obligation. Upon the completion of the Company's IPO, all of the 224,842 shares of common stock were issued in connection with the settlement of the outstanding forward obligation. Significant increases or decreases in any of the probabilities and other inputs could result in a significantly higher or lower fair value measurement, respectively. Contingent earnout In connection with the acquisition of TDO, the Company is required to record a liability related to certain contingent earnout provisions, which are based on annual sales of licenses and units, as defined in the stock purchase agreement, for each of the years ending December 31, 2019, 2020, and 2021. The Company paid $ 1.0 million in 2020 related to the total earnout for the year ended December 31, 2019. The Company paid $ 0.7 million in 2021 related to the total earnout for the year ended December 31, 2020. The contingent earnout provisions could require the Company to pay $ 0.7 million for license sales and $ 0.5 million for unit sales for the year ending December 31, 2021. The fair value of the contingent earnout is estimated by the Board with input from a third party valuation specialist, using certain significant unobservable inputs which include forecasted sales projections and discount rate, 7.6 % as of September 30, 2021 and December 31, 2020. An increase in the forecasted sales projections would generally result in an increase to the value of the contingent earnout while an increase in the discount rate would result in a decrease to the value of the contingent earnout. |
Convertible Preferred Stock and
Convertible Preferred Stock and Common Stock | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Convertible Preferred Stock and Common Stock | 5. Convertible Preferred Stock and Common Stock Authorized Shares The Company’s Amended and Restated Articles of Incorporation authorize the issuance of two classes of stock designated as common and preferred stock, each having a par value of $ 0.001 per share. The number of shares authorized at September 30, 2021 is 39,172,043 , consisting of 21,643,836 shares of common stock and 17,528,207 shares of preferred stock, designated as Series A-1, Series B, Series C, Series C-1, Series D, and Series E preferred stock in the amounts included in the table below. Convertible Preferred Stock The Company classifies convertible preferred stock as temporary equity on the accompanying condensed consolidated balance sheets, as all such preferred stock is redeemable either at the option of the holder or upon an event outside the control of the Company. The requirements of a deemed liquidation event, as defined within its amended and restated certificate of incorporation filed in 2019 are not entirely within the Company’s control. In the event of such a deemed liquidation event, the proceeds from the event are distributed in accordance with the liquidation preferences, provided that the holders of preferred stock have not converted their shares into common stock. The Company records the issuance of preferred stock at the issuance price less related issuance costs. The Company has not adjusted the carrying value of outstanding preferred stock to its liquidation preference because a deemed liquidation event is not probable of occurring as of the end of the reporting period. The following table summarizes information related to issuance of the Company’s preferred stock at September 30, 2021 and December 31, 2020 (in thousands, except share data): Preferred Number of Shares Carrying (1) Conversion Number of Liquidation Series A-1 730,591 730,591 $ 500 $ 0.6800 730,591 $ 500 Series B 955,573 955,573 6,999 7.2600 955,573 6,941 Series C 917,554 917,554 9,073 10.0400 917,554 9,210 Series C-1 1,671,229 1,643,832 17,941 10.9500 1,643,832 18,000 Series D 4,261,994 3,982,359 70,686 17.7900 3,982,359 70,847 Series E 8,991,266 8,801,978 176,143 20.0800 8,801,978 176,700 17,528,207 17,031,887 $ 281,342 17,031,887 $ 282,198 (1) The carrying value reflects the gross proceeds received from the sale of the preferred stock less issuance costs and the fair value at issuance of preferred stock warrants classified as a liability. Upon the closing of the IPO, all 17,031,887 of the Company’s outstanding shares of the convertible preferred stock as of September 30, 2021 were converted into an equal number of shares of common stock. Common Stock Each share of common stock is entitled to one vote. Common stock reserved for future issuance consisted of the following: As of September 30, 2021 As of December 30, 2020 Conversion of preferred stock 17,031,887 17,031,887 Preferred stock warrants 331,503 180,819 Forward obligation 224,842 224,842 Stock options issued and outstanding under the 2007 and 2,532,210 2,247,136 Common shares available for future grant under the 353,255 696,660 |
Stock Based Compensation Expens
Stock Based Compensation Expense | 9 Months Ended |
Sep. 30, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Based Compensation Expense | 6. Stock Based Compensation Expense During 2017, the Company adopted a stock option plan (the “2017 Plan”) which replaced the Company’s 2007 stock option plan (the “2007 Plan”). Following the adoption of the 2017 Plan, no stock options were granted under the 2007 Plan. As of September 30, 2021, the Company reserved an aggregate of 2,294,383 shares of common stock for issuance under the 2017 Plan. The exercise price of options granted under the 2017 Plan are set at fair market value at the date of the grant as estimated by the Company’s Board with an exercise price of no less than 100 % of estimated fair market value on the date of grant. Time based awards generally vest over four years , and are exercisable for up to ten years from the date of grant. Certain options are exercisable immediately, and are subject to a repurchase right by the Company, which lapses over the original vesting period of the options. The fair value of each stock option is measured as of the date of grant, and compensation expense is recognized over the period during which the recipient renders the required services to the Company. Stock-based compensation included in the Company’s condensed consolidated statements of operations and comprehensive loss is allocated as follows (in thousands) : Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Cost of sales $ 50 $ 48 $ 157 $ 117 Selling, general and administrative 368 291 909 744 Research and development 123 126 382 314 Total stock-based compensation expense $ 541 $ 465 $ 1,448 $ 1,175 The Company’s calculations of estimated fair value of the stock option awards were made using the Black- Scholes option-pricing model with the following input assumptions: Nine Months Ended Range Weighted Average Expected volatility 80.49 % to 83.14 % 81.91 % Dividend yield 0.00 % 0.00 % Risk-free interest rates 0.87 % to 1.29 % 1.06 % Expected term 5.49 years to 6.64 years 6.05 years A summary of stock option activities is as follows: Number Weighted Outstanding, December 31, 2020 2,247,136 Granted 500,877 $ 12.08 Forfeited ( 154,227 ) $ 6.56 Exercised ( 58,290 ) $ 2.96 Expired ( 3,286 ) $ 0.73 Outstanding, September 30, 2021 2,532,210 The weighted-average grant-date fair value of the options granted during the nine months ended September 30, 2021 was $ 8.41 per share. Certain stock option grants under the 2017 Plan allow the recipient to exercise the options prior to the options becoming fully vested. Under the 2017 Plan, the Company retains the right to repurchase common shares that have been issued upon early exercise of options at the original issue price. During the three and nine months ended September 30, 2021, the Company did not repurchase shares. T here was no material amount of shares of common stock subject to repurchase as of September 30, 2021. Cash received for the early exercise of unvested stock options is initially recorded as a liability and are released to equity over the vesting period. During the nine months ended September 30, 2021, 308 early exercised stock options vested and were released to equity. A summary of non-vested options is as follows: Number of Weighted- Non-vested as of September 30, 2021 1,133,123 $ 6.10 Early exercised unvested as of September 30, 2021 205 $ 3.31 The weighted-average fair value of shares vested during the nine months ended September 30, 2021 w as $ 3.93 per sha re. Information regarding the weighted-average remaining contractual life and weighted-average exercise price of options outstanding and options vested and exercisable as of September 30, 2021 is as follows: Number of Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (Years) Outstanding at September 30, 2021 2,532,210 $ 6.47 7.255 Vested and exercisable at September 30, 2021 1,399,015 $ 4.51 5.946 The aggregate intrinsic value of stock options outstanding, and vested and exercisable, is $ 17.8 million and $ 12.6 million, respectively, based on the Company’s estimate of the fair value of the common stock as of September 30, 2021 of $ 13.49 per share. At September 30, 2021, there was $ 5.8 million of unamortized compensation expense for stock options to be recognized over a weighted average period of 3.09 years. As of September 30, 2021, the total number of outstanding options vested, or expected to vest, is 2,390,577 , with a weighted-average exercise price of $ 6.33 per share. The average remaining life of these options is 7.16 years and the aggregate intrinsic value is $ 17.1 million. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Leases | 7. Leases The Company leases office space under operating leases with expirations ranging from April 2021 to March 2025, some of which include rent escalations or an option to extend the lease for up to three years per renewal. The Company determines whether a contract is or contains a lease at the inception of the contract. A contract will be deemed to be or contain a lease if the contract conveys the right to control and direct the use of identified property, plant, or equipment for a period of time in exchange for consideration. The Company generally must also have the right to obtain substantially all of the economic benefits from the use of the property, plant, and equipment. Cash paid for amounts included in the lease liability were $ 0.3 million for both the three months ended September 30, 2021 and 2020, respectively and $ 0.9 million and $ 0.8 million for the nine months ended September 30, 2021 and 2020, respectively. Variable operating lease expenses consist primarily real estate taxes and insurance. The components of lease expense and related cash flows were as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Rent expense $ 303 $ 308 $ 892 $ 819 Short-term lease costs - 54 - 143 Variable lease costs 25 25 72 65 Total $ 328 $ 387 $ 964 $ 1,027 Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Cost of Sales $ 55 $ 66 $ 162 $ 175 Selling, general and administrative 273 321 802 852 Total $ 328 $ 387 $ 964 $ 1,027 Supplemental unaudited condensed consolidated balance sheet information related to leases were as follows (in thousands): September 30, 2021 December 31, 2020 Operating Leases Operating lease right-of-use assets $ 2,943 $ 3,308 Operating lease liabilities $ 935 $ 802 Operating lease liabilities, net of current 1,964 2,449 Total operating lease liabilities $ 2,899 $ 3,251 As of September 30, 2021, the remaining weighted-average lease term of the operating leases was 2.95 years and the weighted-average discount rate was 7.58 %. As of December 31, 2020, the remaining weighted-average lease term of the operating leases was 3.69 years and the weighted-average discount rate was 7.55 %. Future minimum lease payments under these leases are as follows (in thousands): 2021(remaining three months) $ 303 2022 1,202 2023 1,049 2024 617 Thereafter 156 Total undiscounted lease payments 3,327 Less present value discount ( 428 ) Operating lease liabilities $ 2,899 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. Commitments and Contingencies Contingencies The Company is subject to claims and assessments from time to time in the ordinary course of business, including without limitation, actions with respect to intellectual property, employment, regulatory, product liability and contractual matters. In connection with these proceedings or matters, the Company regularly assesses the probability and amount (or range) of possible issues based on the developments in these proceedings or matters. A liability is recorded in the condensed consolidated financial statements if it is determined that it is probable that a loss has been incurred, and that the amount (or range) of the loss can be reasonably estimated. The Company’s management does not believe that any such matters, individually or in the aggregate, will have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows. |
Term Loan
Term Loan | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Term Loan | 9. Term Loan Perceptive loan On June 23, 2017, the Company entered into an aggregate $ 20.0 million delayed-draw term loan with Perceptive Credit Holdings, LP (the “Perceptive Loan”). The initial loan of $ 10.0 million was made in a single borrowing on June 23, 2017. The interest rate for the loan is the greater of the 1-month LIBOR and 2.00 % plus the applicable margin of 9.25 % ( 11.25 % at June 23, 2017 and September 30, 2021). In connection with the Perceptive Loan, the Company issued 54,793 warrants on its Series D Preferred shares (see Note 5). On October 16, 2018, the Company amended the terms of the Perceptive Loan (the “Amended Perceptive Loan”), providing an additional tranche consisting of two borrowings; an initial draw in the amount of $ 10.0 million with an initial delayed draw date that was extended from December 22, 2017 to October 31, 2018 and a delayed-draw term loan in the amount of $ 10.0 million that was required to be initiated on or before December 31, 2019. The initial draw was exercised on October 16, 2018 and required a loan origination fee of 1.50 % of the principal amount borrowed. In addition, the Company issued 49,315 warrants on its Series E Preferred shares upon the initial borrowing on the Amended Perceptive Loan (see Note 5). The Company evaluated the amendment as a modification. The subsequent delayed-draw term loan under the Amended Perceptive Loan was exercised on October 7, 2019 and included warrants of 49,314 Series E Preferred shares. In conjunction with the borrowing, the Company paid an origination fee equal to 1.50 % of the principal amount borrowed as well as lender’s legal fees and expenses. On October 7, 2019, the Company entered into a second amendment to the Perceptive Loan (the “Second Amended Perceptive Loan”), providing two additional tranches of delayed-draw term loans of $ 10.0 million each, for an aggregate amount of $ 20.0 million. The additional tranches were required to be initiated on or before December 31, 2020 and each included warrants of 32,876 shares of Series E Preferred shares. The second of these additional delayed-draw term loans included a revenue milestone requiring the achievement of a minimum level of trailing twelve month revenues prior to exercising the delayed-draw loan. The Second Amended Perceptive Loan also modified the repayment of all outstanding principal to be due at maturity on June 23, 2022 . The Company evaluated the amendment as a modification. The additional tranches were not exercised prior to their expiration. On May 15, 2020, the Company entered into a third amendment to the Perceptive Loan, which allowed the Company to waive the defaults that occurred with the initial grant and subsequent repayment of the PPP loan. The Company evaluated the amendment as a modification. On October 13, 2020, the Company entered into a fourth amendment to the Perceptive Loan, which amended the Perceptive Loan to remove the required revenue covenant calculation dates of September 30, 2020 and December 31, 2020. The Company evaluated the amendment as a modification. On August 23, 2021, the Company entered into a fifth amendment to the Perceptive Loan (the “Fifth Amended Perceptive Loan”) which transferred the loan to Perceptive Credit Holdings III, LP and provides two additional tranches of delayed-draw term loans of $ 10.0 million each, for an aggregate amount of $ 20.0 million. The two additional tranches are required to be initiated on or before December 31, 2021 and March 31, 2022, respectively, and included warrants to purchase 150,684 shares of Series E Preferred shares at $ 11.00 per share. The Fifth Amended Perceptive Loan also modified the repayment of all outstanding principal to be due at maturity on August 23, 2026 . In conjunction with the amendment, the Company paid a closing fee equal to $ 0.5 million as well as lender’s legal fees and expenses. The Company evaluated the amendment as a modification. For the nine months ended September 30, 2021, the effective interest rate was 14.59 %. respectively. Future principal repayments on the Perceptive Loan, as amended, as of September 30, 2021, are as follows (in thousands): Principal 2026 $ 30,000 Total $ 30,000 The amended and restated credit agreement also includes financial covenants that require the Company to (i) maintain, at all times, a minimum aggregate balance of $ 3.0 million in cash in one or more controlled accounts, and (ii) satisfy certain minimum revenue thresholds, measured for the twelve consecutive month period on each calendar quarter-end until June 30, 2026. These thresholds increase over time and range from $ 26.4 million for the twelve month period ended September 30, 2021 to $ 95.3 million for the twelve month period ended June 30, 2026. Failure to satisfy these financial covenants would constitute an event of default under the agreement. During the nine months ended September 30, 2021, the Company was in compliance with all financial covenants and conditions required by the outstanding Perceptive Loan. Small Business Administration Paycheck Protection Program Loan (“PPP Loan”) On April 22, 2020, the Company was granted a loan in the aggregate amount of $ 5.1 million, pursuant to the Paycheck Protection Program (the “PPP loan”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The receipt of this loan triggered an event of default under the Perceptive Loan, which was subsequently waived by the lender through the third amendment on May 15, 2020 discussed above. On May 7, 2020, the PPP Loan was repaid in full. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes The Company maintains a full valuation allowance against its net deferred tax assets as of September 30, 2021 based on the current assessment that it is not more likely than not these future benefits will be realized before expiration. No material income tax expense or benefit has been recorded given the valuation allowance position and projected taxable losses in the jurisdictions where the Company files income tax returns. The Company has not experienced any significant increases or decreases to its unrecognized tax benefits since December 31, 2020 and does not expect any within the next 12 months. The Company monitors changes to the tax laws in the states it conducts business and files corporate income tax returns. Utilization of the net operating loss carryforwards may be subject to substantial annual limitation due to ownership change limitations that may have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), as well as similar state provisions. These ownership changes may limit the amount of net operating loss carryforwards that can be utilized annually to offset future taxable income and tax, respectively. 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 or public groups. The Company has not completed an analysis regarding the limitation of net operating loss and R&D credit carryforwards as of September 30, 2021. The Company is subject to U.S. federal and various states income taxes. The federal returns for tax years 2017 through 2020 remain open to examination and the state returns remain subject to examination for tax years 2016 through 2020 . Carryforward attributes that were generated in years where the statute of limitations is closed may still be adjusted upon examination by the Internal Revenue Service or other respective tax authorities. All other state jurisdictions remain open to examination. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 11. Related Party Transactions During the nine months ended September 30, 2021 and 2020, the Company incurred $ 0.04 million and $ 0.1 million, respectively, for facility space, finance and accounting services and other general and administrative support services to a company owned and operated by a member of the Company’s Board and stockholder. The transactions are recorded as selling, general and administrative expenses on the condensed consolidated statements of comprehensive loss. Amounts payable as of September 30, 2021 were immaterial. During each of the nine months ended September 30, 2021 and 2020, the Company paid $ 0.1 million for facility space and other general and administrative support services to a company owned and operated by the former owner of TDO who is now an employee of the Company. The transactions were recorded as selling, general and administrative expenses in the accompanying condensed consolidated statements of comprehensive loss. Amounts payable as of September 30, 2021 were immaterial. Additionally, $ 0.5 million and $ 0.7 million of the of the contingent earnout paid during the nine months ended September 30, 2021 and 2020, respectively, was paid to the former owner of TDO. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | 12. Segment Information The Company’s segment information as of and for the nine months ended September 30, 2021 and 2020 is as follows (in thousands): Three Months Ended Nine Months Ended September 30, 2021 September 30, 2021 Product Software Total Product Software Total Revenue $ 6,186 $ 1,701 $ 7,887 $ 18,166 $ 5,140 $ 23,306 Cost of sales 5,260 578 5,838 15,668 1,754 17,422 Gross profit 926 1,123 2,049 2,498 3,386 5,884 Gross margin 15 % 66 % 26 % 14 % 66 % 25 % Operating expenses: Selling, general and administrative 7,961 534 8,495 20,893 1,507 22,400 Research and development 4,214 419 4,633 13,075 1,235 14,310 Change in fair value of contingent earnout 19 — 19 12 — 12 Total operating expenses 12,194 953 13,147 33,980 2,742 36,722 Income (loss) from operations $ ( 11,268 ) $ 170 $ ( 11,098 ) $ ( 31,482 ) $ 644 $ ( 30,838 ) Three Months Ended Nine Months Ended September 30, 2020 September 30, 2020 Product Software Total Product Software Total Revenue $ 4,675 $ 1,457 $ 6,132 $ 10,690 $ 3,990 $ 14,680 Cost of sales 4,404 527 4,931 10,973 1,577 12,550 Gross profit 271 930 1,201 ( 283 ) 2,413 2,130 Gross margin 6 % 64 % 20 % ( 3 )% 60 % 15 % Operating expenses: Selling, general and administrative 5,363 439 5,802 18,044 1,379 19,423 Research and development 4,560 360 4,920 13,463 1,088 14,551 Change in fair value of contingent earnout 30 — 30 ( 478 ) — ( 478 ) Total operating expenses 9,953 799 10,752 31,029 2,467 33,496 Income (loss) from operations $ ( 9,682 ) $ 131 $ ( 9,551 ) $ ( 31,312 ) $ ( 54 ) $ ( 31,366 ) Segment Assets: As of September 30, 2021 As of December 31, 2020 Product $ 32,133 $ 64,021 Software 11,283 12,120 Total $ 43,416 $ 76,141 |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 13. Net Loss Per Share The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders for the periods presented (in thousands, except share and per share data): Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Numerator: Net loss attributable to common stock holders $ ( 12,733 ) $ ( 10,593 ) $ ( 34,788 ) $ ( 34,138 ) Denominator: Weighted-average shares outstanding used in computing 1,232,921 1,197,919 1,218,815 1,194,562 Net loss per share attributable to common stockholders $ ( 10.33 ) $ ( 8.84 ) $ ( 28.54 ) $ ( 28.58 ) The following potentially dilutive securities were excluded from the computation of diluted net loss per share calculations for the periods presented because the impact of including them would be anti-dilutive: September 30, 2021 2020 Convertible preferred stock 17,031,887 17,031,887 Stock options 2,532,210 2,245,047 Warrants 331,503 180,819 Forward obligation 224,842 224,842 Total 20,120,442 19,682,595 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. Subsequent Events On October 20, 2021, the Company’s Board of Directors approved the Company’s 2021 Equity Incentive Plan (the “2021 Plan”) which became effective as of the day prior to the Company’s public trading date on October 29, 2021 (the “2021 Plan Effective Date”). The 2021 Plan allows the Company to make equity-based awards to its officers, employees, directors and other key persons, including consultants. The 2021 Plan provides for the grant of stock options, including incentive stock options and nonqualified stock options, restricted stock, dividend equivalents, RSUs, stock appreciation rights, and other stock or cash awards. The 2021 Plan provides that the aggregate number of shares available for issuance pursuant to awards thereunder shall be the sum of: (i) 13 % of the shares outstanding as of the closing of the initial public offering; (ii) any shares which, as of the 2021 Plan Effective Date, are subject to the 2007 Plan and 2017 Plan prior plan awards which, on or following the 2021 Plan effective date, become available for issuance under the 2021 Plan; and (iii) an annual increase on the first day of each calendar year beginning on and including January 1, 2022 and ending on and including January 1, 2031, equal to the lesser of (a) 5 % of the aggregate number of shares outstanding on the last day of the immediately preceding calendar year and (b) such smaller number of shares as is determined by the Board. Following the 2021 Plan Effective Date, the Company will not make any further grants under the 2017 Plan. However, the 2017 Plan will continue to govern the terms and conditions of the outstanding awards granted under it and the applicable award agreement. On October 20, 2021, the Company’s Board of Directors approved the 2021 Employee Share purchase Plan (the “ESPP”), which became effective as of the day prior to the Company’s public trading date on October 29, 2021. The ESPP provides that the aggregate number of shares of common stock available for issuance pursuant to awards under the ESPP is equal to the sum of: (i) 2 % of the shares outstanding as of the closing of the Company initial public offering and (ii) an annual increase on the first day of each calendar year beginning January 1, 2022 and ending on and including January 1, 2031, equal to the lesser of (A) 1 % of the shares outstanding on the final day of the immediately preceding calendar year, and (B) such smaller number of shares as is determined by the Board; provided, however, that the number of shares that may be issued or transferred pursuant to the rights granted under the ESPP shall not exceed 10,000,000 shares. In connection with the Company’s IPO on November 2, 2021, the Company issued 572,437 stock option awards and 338,149 restricted stock units to newly-appointed non-employee directors and executive officers. The awards will vest over three to four years of service. |
Summary of Accounting Policies
Summary of Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make informed estimates, judgements and assumptions that affect the reported amounts in the consolidated financial statements and disclosures in the accompanying notes, including estimates of probable losses and expenses, as of the date of the accompanying consolidated financial statements. Management considers many factors in selecting appropriate financial accounting policies and in developing the estimates and assumptions that are used in the preparation of these consolidated financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including the expected business and operational changes, the sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates. Actual results could differ materially from the estimates and assumptions used in the preparation of the accompanying consolidated financial statements under different assumptions or conditions. |
Cash Equivalents | Cash Equivalents The Company considers liquid investments with an original or remaining maturity of three months or less at the date of purchase that can be liquidated without prior notice or penalty to be cash equivalents. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash, cash equivalents and accounts receivable. The Company’s policy is to mitigate such potential risks by maintaining the Company’s cash balances with entities that management believes possess high credit quality to limit the amount of credit exposure. Substantially all of the Company’s cash and cash equivalents are maintained at one financial institution domiciled in the United States. Cash and cash equivalents can exceed amounts insured by the Federal Deposit Insurance Corporation of up to $ 250,000 . The Company has not experienced any losses in their accounts and management believes it is not exposed to any significant credit risk on cash and cash equivalents. The primary objectives of the Company’s investment portfolio are the preservation of capital and maintenance of liquidity. The Company believes any concentration of credit risk in its accounts receivable is mitigated by its credit evaluation process, relatively short collection terms and the level of credit worthiness of its customers. One customer accounted for approximately 14 % of accounts receivable as of September 30, 2021. The Company sources materials and services through several vendors. Certain materials are sourced from a single vendor. The loss of certain vendors could result in a temporary disruption of the Company’s commercialization efforts. The Company’s products require clearance from the FDA and foreign regulatory agencies before commercial sales can commence. There can be no assurance that the Company’s products in development will receive any of these required clearances. The denial or delay of such clearances may have a material adverse impact on the Company’s business in the future. In addition, after the clearance by the FDA, there is still an ongoing risk of adverse events that did not appear during the device clearance process. The Company is subject to risks common to companies in the medical device industry, including, but not limited to, new technological innovations, clinical development risk, establishment of appropriate commercial partnerships, protection of proprietary technology, compliance with government and environmental regulations, uncertainty of market acceptance of its products, product liability and the need to obtain additional financing. |
Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable pertain to contracts with customers who are granted credit by the Company in the ordinary course of business and are recorded at the invoiced amount. Accounts receivable do not bear interest. Accounts receivable presented on the accompanying condensed consolidated balance sheets are adjusted for any write-offs and net of allowance for credit losses. The Company’s allowance for credit losses is developed by using relevant available information including historical collection and loss experience, current economic conditions, prevailing economic conditions, supportable forecasted economic conditions and evaluations of customer balances. Once a receivable is deemed uncollectible after collection efforts have been exhausted, it is written off against the allowance for doubtful accounts. The Company closely monitors the credit quality of its customers and does not generally require collateral or other security on receivables. The allowance for credit losses is measured on a collective basis when similar risk characteristics exist. The Company’s estimate of current expected credit losses was immaterial as of September 30, 2021 and there were no write-offs. |
Inventory | Inventory Inventory consists of finished products, work-in-process and raw materials and is valued at the lower of cost or net realizable value. Cost may include materials, labor and manufacturing overhead. Cost is determined by the first in first out inventory method. The carrying value of inventory is reviewed for potential impairment whenever indicators suggest that the cost of inventory exceeds the carrying value and management adjusts the inventory to its net realizable value. The Company also periodically evaluates inventory for estimated losses from excess quantities and obsolescence and writes down the cost of inventory to net realizable value at the time such determinations are made. Net realizable value is determined using the estimated selling price, in the ordinary course of business, less estimated costs to complete and dispose. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the excess of cost over fair value of identified assets acquired and liabilities assumed by the Company in an acquisition of a business. The determination of the value of goodwill and intangible assets arising from a business combination requires extensive use of accounting estimates and judgments to allocate the purchase price to the fair value of the net tangible and intangible assets acquired. The Company recorded $ 8.5 million of goodwill in conjunction with the acquisition of TDO. The Company performs its goodwill impairment analysis at the reporting unit level, which aligns with the Company’s reporting structure and availability of discrete financial information. The Company performs its annual impairment analysis by either comparing a reporting unit’s estimated fair value to its carrying amount or doing a qualitative assessment of a reporting unit’s fair value from the last quantitative assessment to determine if there is potential impairment. The Company may do a qualitative assessment when the results of the previous quantitative test indicated the reporting unit’s estimated fair value was significantly in excess of the carrying value of its net assets and it does not believe there have been significant changes in the reporting unit’s operations that would significantly decrease its estimated fair value or significantly increase its net assets. If a quantitative assessment is performed the evaluation includes management estimates of cash flow projections based on internal future projections and/or use of a market approach by looking at market values of comparable companies. Key assumptions for these projections include revenue growth, future gross and operating margin growth, and its weighted cost of capital and terminal growth rates. The revenue and margin growth is based on increased sales of new and existing products as the Company maintains investments in research and development. Additional assumed value creators may include increased efficiencies from capital spending. The resulting cash flows are discounted using a weighted average cost of capital. Operating mechanisms and requirements to ensure that growth and efficiency assumptions will ultimately be realized are also considered in the evaluation. The Company’s annual evaluation for impairment of goodwill consists of the TDO reporting unit from which the goodwill originated. In accordance with the Company’s policy, the Company completed its most recent annual evaluation for impairment as of December 31, 2020 using a quantitative assessment and determined that no impairment existed. The Company did not identify any relevant events or circumstances which qualitatively indicate it is more likely than not that the fair value of any reporting unit is less than its carrying amount as of September 30, 2021. The assumptions used in the estimate of fair value are generally consistent with the past performance of the Company and are also consistent with the projections and assumptions that are used in current operating plans. The assumptions are subject to change as a result of changing economic and competitive conditions. Intangible assets with a finite life, consist mainly of developed technology, customer relationships, and tradenames acquired in conjunction with the acquisition of TDO. The Company acquired certain patents supporting various apparatuses for endodontic treatment in June 2021 for $ 1.3 million. The investment was accounted for as an asset acquisition of defensive intangible assets and will be amortized over ten years , the period it is expected to contribute indirectly to the Company’s future cash flows. Definite-lived intangible assets are recorded at cost, net of accumulated amortization, and are amortized on a straight-line basis over their estimated useful life, which range from five to ten years . In determining the useful lives of intangible assets, the Company considers the expected use of the assets and the effects of obsolescence, demand, competition, anticipated technological advances, market influences and other economic factors. Trademarks and trade names that are related to products are assigned lives consistent with the period in which the products bearing each brand are expected to be sold. The Company evaluates its intangible assets with finite lives for indications of impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors that could trigger an impairment review include significant under-performance relative to expected historical or projected future operating results, significant changes in the manner of the Company’s use of the acquired assets or the strategy for the Company’s overall business or significant negative industry or economic trends. If this evaluation indicates that the value of the intangible asset may be impaired, the Company makes an assessment of the recoverability of the net carrying value of the asset over its remaining useful life. If this assessment indicates that the intangible asset is not recoverable, based on the estimated undiscounted future cash flows of the technology over the remaining amortization period, the Company reduces the net carrying value of the related intangible asset to fair value and may adjust the remaining amortization period. An impairment analysis is subjective and assumptions regarding future growth rates and operating expense levels can have a significant impact on the expected future cash flows and impairment analysis. No impairment was recorded during the three and nine months ended September 31, 2021 and 2020. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company applies fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The Company’s financial instruments consist principally of cash, cash equivalents, accounts receivable, accounts payable, operating lease liabilities, warrant liabilities, forward obligation, contingent earnout, and a note payable. Fair value is measured as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. Valuation techniques that are consistent with the market, income or cost approach are used to measure fair value. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels: Level 1 —Observable inputs such as unadjusted quoted prices in active markets that are accessible at the measurement date for identical unrestricted assets or liabilities the Company has the ability to access. Level 2 —Inputs (other than quoted prices included within Level 1) that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3 —Unobservable inputs that are significant to the fair value measurement and reflect the reporting entity’s use of significant management judgment and assumptions when there is little or no market data. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques and significant management judgment or estimation. These include the Black-Scholes option-pricing model which uses inputs such as expected volatility, risk-free interest rate and expected term to determine fair market valuation. Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. The Company reviews the fair value hierarchy classification at each reporting date. Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain assets or liabilities within the fair value hierarchy. The Company did no t have any transfers of assets and liabilities between the levels of the fair value measurement hierarchy during the years presented. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and certain accrued expenses approximate fair value due to the short-term nature of these items. Accordingly, the Company estimates that the recorded amounts approximate fair market value. The fair values of term loan and operating lease liabilities at September 30, 2021 approximated their carrying values, based on the borrowing rates that were available for loans with similar terms as of that date. |
Non-financial Assets and Liabilities Measured on a Nonrecurring Basis | Non-financial assets and liabilities measured on a nonrecurring basis Certain non-financial assets and liabilities are measured at fair value, usually with Level 3 inputs including the discounted cash flow method or cost method, on a no nrecurring basis in accordance with authoritative guidance. These include items such as non-financial assets and liabilities initially measured at fair value in a business combination and non-financial long-lived assets measured at fair value for an impairment assessment. In general, non-financial assets, including goodwill, right-of-use assets, intangible assets and property and equipment, are measured at fair value when there is an indication of impairment and are recorded at fair value only when any impairment is recognized. |
Warrant Liabilities | Warrant Liabilities The Company recognizes freestanding warrants to purchase shares of its convertible preferred stock as a liability recognized at fair value as these warrant instruments are embedded in contracts that may be cash settled. The redeemable convertible preferred stock warrants were issued for no cash consideration as detachable freestanding instruments but can be converted to convertible preferred stock at the holder’s option based on the exercise price of the warrant. However, the deemed liquidation provisions of the convertible preferred stock are considered contingent redemption provisions that are not solely within the control of the Company. Therefore, the convertible preferred stock is classified in temporary equity on the accompanying condensed consolidated balance sheets, and the warrants to purchase the convertible preferred stock are classified as liabilities. The warrants are recorded on the accompanying condensed consolidated balance sheets at their fair value on the date of issuance and subject to re-measurement at each balance sheet date until settlement. Changes in fair value for warrants classified as liabilities are recognized as a component of other income (expense), net on the accompanying condensed consolidated statements of operations and comprehensive loss. The Company estimates the fair value of these liabilities using option pricing models and assumptions that are based on the individual characteristics of the warrants or instruments on the valuation date, as well as assumptions for expected volatility, expected life, yield, and risk-free interest rate. The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of the warrants, the completion of a deemed liquidation event, the conversion of convertible preferred stock into common stock, or until the holders of the convertible preferred stock can no longer trigger a deemed liquidation event. Pursuant to the terms of these warrants, upon the conversion of the class of preferred stock underlying the warrant, the warrants automatically become exercisable for shares of the Company’s common stock based upon the conversion ratio of the underlying class of preferred stock. All classes of the Company’s preferred stock were converted into common stock upon the consummation of an initial public offering. Upon such conversion of the underlying classes of preferred stock, the warrants were classified as a component of equity and will no longer be subject to re-measurement. |
Deferred Offering Costs | Deferred Offering Costs The Company capitalized deferred offering costs consisting of all direct and incremental legal, professional, accounting and other third-party fees incurred in connection with the Company’s initial public offering. As of September 30, 2021, total deferred offering costs of $ 1.9 million were included in prepaid expenses and other current assets on the accompanying condensed consolidated balance sheet. Upon the completion of the IPO on November 2, 2021, the total deferred offering costs of $ 1.9 million incurred as of September 30, 2021 were reclassified to additional paid-in capital. |
Revenue Recognition | Revenue Recognition Contracts with Customers The Company recognizes revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods and services. Specifically, the Company applies the following five core principles to recognize revenue: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when, or as, the Company satisfies a performance obligation. Product revenue is generated from sales of the GentleWave System and related procedure instruments and accessories. Software revenue is generated from sales of TDO’s The Digital Office endodontist practice management software licenses. The Company’s products are sold primarily in the United States directly to customers through its field sales force. Performance Obligations The Company’s performance obligations primarily arise from the manufacture and delivery of the GentleWave System, related procedure instruments and accessories, and the delivery or license of TDO software and related ancillary services. Payment terms are typically on open credit terms consistent with industry practice and do not have significant financing components. Consideration may be variable based on volume. The Company considers the individual deliverables in its product offering as separate performance obligations and assesses whether each promised good or service is distinct. The total contract transaction price is determined based on the consideration expected to be received, based on the stated value in contractual arrangements or the estimated cash to be collected in no-contracted arrangements, and is allocated to the identified performance obligations based upon the relative standalone selling prices of the performance obligations. The stand-alone selling price is based on an observable price offered to other comparable customers. The Company estimates the standalone selling price using the market assessment approach considering market conditions and entity-specific factors including, but not limited to, features and functionality of the products and services, geographies, type of customer and market conditions. The Company regularly reviews and updates standalone selling prices as necessary. The consideration the Company receives in exchange for its goods or services is only recognized when it is probable that a significant reversal will not occur. The consideration to which the Company expects to be entitled includes a stated list price, less various forms of variable consideration. The Company estimates related variable consideration at the point of sale, including discounts, product returns, refunds, and other similar obligations. Revenue is recognized over time when the customer simultaneously receives and consumes the benefits provided by the Company’s performance. Revenue is recognized at a point in time if the criteria for recognizing revenue over time are not met, and the Company has transferred control of the goods to the customer. Product revenue is recognized at a point in time when the Company has transferred control to the customer, which is generally when title of the goods transfers to the customer. Software is licensed via delivery to the customer or via a service arrangement under which cloud-based access is provided on a subscription basis (software-as-a-service). When a fixed up-front license fee is received in exchange for the delivery of software, revenue is recognized at the point in time when the delivery of the software has occurred. When software is licensed on a subscription basis, revenue is recognized over the respective license period. The Company also sells extended service contracts on its GentleWave Systems. Sales of extended service contracts are recorded as deferred revenue until such time as the standard warranty expires, which is generally up to two years from the date of sale. Service contract revenue is recognized on a straight-line basis over time consistent with the life of the related service contract in proportion to the costs incurred in fulfilling performance obligations under the service contract. Revenue for technical support and other services is recognized ratably over the performance obligation period. The Company generally does not experience returns. If necessary, a provision is recorded for estimated sales returns and allowances and is deducted from gross product revenue to arrive at net product revenue in the period the related revenue is recorded. These estimates are based on historical sales returns and allowances and other known factors. Actual returns and claims in any future period are inherently uncertain and thus may differ from these estimates. If actual or expected future returns and claims are significantly greater or lower than the reserves established, a reduction or increase to revenue will be recorded in the period in which such a determination is made. All non-income government-assessed taxes (sales and use taxes) collected from the Company’s customers and remitted to governmental agencies are recorded in accrued expenses and other current liabilities until they are remitted to the government agency. The Company has adopted the practical expedient permitting the direct expensing of costs incurred to obtain contracts where the amortization of such costs would occur over one year or less, and it applied to substantially all the Company’s contracts. Contract liabilities The Company recognizes a contract liability when a customer pays for good or services for which the Company has not yet transferred control. The balances of the Company’s contract liabilities are as follows (in thousands): As of September 30, 2021 As of December 31, 2020 Extended service contracts $ 223 $ 271 Subscription software licenses 462 572 Total contract liabilities 685 843 Less: long-term portion 1 5 Contract liabilities – current $ 684 $ 838 Contract liabilities are included within other current liabilities and other long-term liabilities in the accompanying condensed consolidated balance sheets. Revenue recognized during the nine months ended September 30, 2021 and 2020 that was included in the contract liability balance as of December 31, 2020 and 2019 was $ 0.9 million and $ 0.5 million, respectively. Disaggregation of revenue The Company disaggregates revenue from contracts with customers by segment and by the timing of when goods and services are transferred which depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected. The following table provides information regarding revenues disaggregated by segment and the timing of when goods and services are transferred (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Product revenue recognized at a point in $ 5,992 $ 4,549 $ 17,565 $ 10,369 Product revenue recognized over time 194 126 601 321 Software revenue recognized at a point in 150 163 668 322 Software revenue recognized over time 1,551 1,294 4,472 3,668 Total $ 7,887 $ 6,132 $ 23,306 $ 14,680 |
Warranty Reserve | Warranty Reserve The Company provides a standard warranty on its GentleWave Systems for a specified period of time. For the nine months ended September 30, 2021 and 2020, GentleWave Systems sold were covered by the warranty for a period of up to two years from the date of sale. Estimated warranty costs are recorded as a liability at the time of delivery with a corresponding provision to cost of sales. Warranty expenses expected to be incurred within 12 months from the date of sale are classified as other short-term liabilities while those expected to be incurred after 12 months from the date of sale are classified as other long-term liabilities in the accompanying condensed consolidated balance sheets. Warranty accruals are estimated based on the current product costs, the Company’s historical experience, management’s expectations of future conditions and standard maintenance schedules. The Company evaluates this reserve on a regular basis and makes adjustments as necessary. The following table provides a reconciliation of the change in estimated warranty (in thousands): For Nine Months Ended Balance at beginning of period $ 1,584 Provision for warranties issued 958 Warranty costs incurred ( 1,163 ) Balance at end of period $ 1,379 Current portion $ 996 Non-current portion 383 Total $ 1,379 The warranty liability, current and non-current, are included in other current liabilities and other liabilities, respectively, on the condensed consolidated balance sheets. |
Research and Development | Research and Development Research and development (“R&D”) expenses consist of costs incurred for proprietary R&D programs, and are recorded to operating expenses when incurred. Research and development expenses primarily include (1) personnel-related costs, including compensation and benefits and stock-based compensation associated with R&D personnel, (2) costs related to clinical and pre-clinical testing of the Company’s technologies under development, and (3) other R&D expenses. Costs to acquire technologies to be used in R&D that have not reached technological feasibility and have no alternative future use are also expensed as incurred. |
Stock-Based Compensation | Stock-Based Compensation The Company periodically grants equity-based payment awards in the form of stock options to employees, directors and non-employees and records stock-based compensation expenses for awards of stock-based payments based on their estimated fair value at the grant date. The Company recognizes stock-based compensation expense for all equity-based payments, including stock options. Stock-based compensation costs are calculated based on the estimated fair value of the underlying option using the Black-Scholes option-pricing model on the date of grant for stock options and recognized as expense in the accompanying condensed consolidated statement of comprehensive loss on a straight-line basis over the requisite service period, which is the vesting period. Determining the appropriate fair value model and related input assumptions requires judgment, including estimating the fair value of the Company’s common stock, stock price volatility, and expected term: Given the absence of a public trading market prior to the Company’s IPO on November 2, 2021, the fair value of the Company’s common stock is determined by the Company’s Board of Directors (the “Board”) at the time of each option grant by considering a number of objective and subjective factors. These factors include the valuation of a select group of public peer group companies within the medical device industry that focus on technological advances and development that the Board believes is comparable to the Company’s operations; operating and financial performance; the lack of liquidity of the common stock and trends in the broader economy and medical device industry also impact the determination of the fair value of the common stock. In addition, the Company regularly engages a third-party valuation specialist to assist with estimates related to the valuation of the Company’s common stock; The risk-free interest rate used is based on the published U.S. Department of Treasury interest rates in effect at the time of stock option grant for zero coupon U.S. Treasury notes with maturities approximating each grant’s expected term; The dividend yield is zero as the Company has not paid dividends and does not anticipate paying a cash dividend in the foreseeable future; The expected term for options granted is calculated using the “simplified method” and represents the average time that options are expected to be outstanding based on the mid-point between the vesting date and the end of the contractual term of the award; Expected volatility is derived from the historical volatilities of a select group of comparable peer companies, for a look-back period commensurate with the expected term of the stock options, as the Company has no trading history of common stock. No compensation cost is recognized for awards with performance conditions until that condition is probable of being met. Forfeitures of unvested stock option awards are recognized as reductions of expense as they occur. |
Net Loss Per Share | Net Loss Per Share Basic and diluted net loss per share attributable to common stockholders is computed in conformity with the two-class method required for participating securities. The Company considers all series of its convertible preferred stock to be participating securities as the holders of such stock have the right to receive dividends on a pari passu basis in the event that a dividend is paid on common stock. Under the two-class method, the net loss attributable to common stockholders is not allocated to the convertible preferred stock as the preferred stockholders do not have a contractual obligation to share in the Company’s losses. Basic net loss per share is calculated by dividing net loss attributable to Company’s stockholders by the weighted average number of common stock outstanding for the period. Diluted net loss per share is computed by giving effect to all potentially dilutive common stock equivalents to the extent they are dilutive. For purposes of this calculation, convertible preferred stock, stock options, forward obligation, and warrants are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is anti-dilutive for all periods presented. Diluted net loss per share is the same as basic net loss per share in periods when the effects of potentially dilutive securities are anti-dilutive. |
Recent Accounting Updates | Recent Accounting Updates Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASU”). ASU’s not listed below were assessed and determined not to be applicable or are expected to have minimal impact on the Company’s consolidated financial statements. Recent Accounting Updates Not Yet Effective In December 2019, the FASB issued ASU 2019-12, “ Simplifying the Accounting for Income Taxes. ” This guidance, among other provisions, eliminates certain exceptions to existing guidance related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. This guidance also requires an entity to reflect the effect of an enacted change in tax laws or rates in its effective income tax rate in the first interim period that includes the enactment date of the new legislation, aligning the timing of recognition of the effects from enacted tax law changes on the effective income tax rate with the effects on deferred income tax assets and liabilities. Under existing guidance, an entity recognizes the effects of the enacted tax law change on the effective income tax rate in the period that includes the effective date of the tax law. ASU 2019-12 is effective for interim and annual periods beginning after December 15, 2021, with early adoption permitted. The Company is currently evaluating the impact of this guidance on the condensed consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, “ Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity,” which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. This will be effective for public companies, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, and only if adopted as of the beginning of such fiscal year. The Company is currently assessing the impact of the adoption of this standard on its financial statements as well as whether to early adopt the new standard. In May 2021, the FASB issued ASU 2021-04, “ Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)” , which to clarifies and reduces diversity in an issuer’s accounting for a modification or an exchange of a freestanding equity-classified written call option that remains equity being classified after modification or exchange as (1) an adjustment to equity and, if so, the related earnings per share (EPS) effects, if any, or (2) an expense and, if so, the manner and pattern of recognition. This will be effective for fiscal years beginning after December 15, 2021, and interim periods within those years. Early application is permitted, including application in an interim period as of the beginning of the fiscal year that includes that interim period. The ASU should be applied prospectively. The Company is currently assessing the impact of the adoption of this standard on its financial statements. |
Summary of Accounting Policie_2
Summary of Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of Balances of Contract Liabilities | The Company recognizes a contract liability when a customer pays for good or services for which the Company has not yet transferred control. The balances of the Company’s contract liabilities are as follows (in thousands): As of September 30, 2021 As of December 31, 2020 Extended service contracts $ 223 $ 271 Subscription software licenses 462 572 Total contract liabilities 685 843 Less: long-term portion 1 5 Contract liabilities – current $ 684 $ 838 |
Schedule of Revenues Disaggregated by Segment and Timing of Goods and Services Transferred | The following table provides information regarding revenues disaggregated by segment and the timing of when goods and services are transferred (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Product revenue recognized at a point in $ 5,992 $ 4,549 $ 17,565 $ 10,369 Product revenue recognized over time 194 126 601 321 Software revenue recognized at a point in 150 163 668 322 Software revenue recognized over time 1,551 1,294 4,472 3,668 Total $ 7,887 $ 6,132 $ 23,306 $ 14,680 |
Schedule of Reconciliation of Change in Estimated Warranty | The following table provides a reconciliation of the change in estimated warranty (in thousands): For Nine Months Ended Balance at beginning of period $ 1,584 Provision for warranties issued 958 Warranty costs incurred ( 1,163 ) Balance at end of period $ 1,379 Current portion $ 996 Non-current portion 383 Total $ 1,379 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Inventory | Inventory consisted of the following (in thousands): September 30, 2021 December 31, 2020 Raw materials $ 4,663 $ 2,114 Work in process 351 308 Finished goods 2,222 1,916 Total $ 7,236 $ 4,338 |
Schedule of Intangible Assets, Net | Intangible assets, net were comprised of the following at September 30, 2021 and December 31, 2020 (in thousands): Gross Accumulated Net Developed Technology ( 5 - 10 years ) $ 2,445 $ 679 $ 1,766 Customer relationships ( 7 years ) 1,910 807 1,103 Tradenames ( 10 years ) 360 107 253 September 30, 2021 $ 4,715 $ 1,593 $ 3,122 Gross Accumulated Net Developed Technology ( 5 years ) $ 1,110 $ 490 $ 620 Customer relationships ( 7 years ) 1,910 603 1,307 Tradenames ( 10 years ) 360 79 281 December 31, 2020 $ 3,380 $ 1,172 $ 2,208 |
Schedule of Estimated Future Annual Amortization Expense Related to Intangible Assets | Estimated future annual amortization expense related to intangible assets, net at September 30, 2021 was as follows (in thousands): 2021 (remaining three months) $ 166 2022 664 2023 618 2024 442 2025 386 Thereafter 846 Total amortizable intangible assets $ 3,122 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table provides the assets and liabilities measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such value at September 30, 2021 and December 31, 2020 (in thousands): September 30, 2021 Fair Value Quoted Prices Significant Significant Assets: Money market funds $ 13,103 $ 13,103 $ — $ — Liabilities: Warrants $ 4,225 $ — $ — $ 4,225 Forward obligation $ 3,300 $ — $ — $ 3,300 Contingent earnout $ 275 $ — $ — $ 275 December 31, 2020 Fair Value Quoted Prices Significant Significant Assets: Money market funds $ 50,897 $ 50,897 $ — $ — Liabilities: Warrants $ 1,914 $ — $ — $ 1,914 Forward obligation $ 2,750 $ — $ — $ 2,750 Contingent earnout $ 930 $ — $ — $ 930 |
Schedule of Rollforward of the Estimate Fair Values for Instruments | The following table is a rollforward of the estimated fair values for instruments classified by the Company within Level 3 of the fair value hierarchy defined above, measured using significant unobservable inputs (in thousands): Warrant Forward Contingent Total December 31, 2019 $ 2,260 $ 2,500 $ 2,390 $ 7,150 Payout of contingent earnout — — ( 987 ) ( 987 ) Change in fair value ( 105 ) — ( 478 ) ( 583 ) September 30, 2020 $ 2,155 $ 2,500 $ 925 $ 5,580 Warrant Forward Contingent Total December 31, 2020 $ 1,914 $ 2,750 $ 930 $ 5,594 Payout of contingent earnout — — ( 667 ) ( 667 ) Addition 2,135 — — 2,135 Change in fair value 176 550 12 738 September 30, 2021 $ 4,225 $ 3,300 $ 275 $ 7,800 |
Summary of Warrants | Warrants at September 30, 2021 and December 31, 2020 included the following (in thousands, except share data): Warrants outstanding Fair value Warrants Number of Purchase December 31, September 30, December 31, September 30, Series C-1 27,397 10.95 27,397 27,397 $ 225 $ 240 Series D 54,793 17.80 54,793 54,793 500 557 Series E 49,315 20.08 49,315 49,315 575 615 Series E 49,314 20.08 49,314 49,314 614 636 Series E 150,684 20.08 — 150,684 — 2,177 331,503 180,819 331,503 $ 1,914 $ 4,225 |
Summary of Fair Values Determined Using Black-Scholes Option-Pricing Model | As of September 30, 2021 and 2020, warrants fully vested and outstanding had estimated fair values ranging between $ 8.13 to $ 14.45 and $ 5.99 to $ 16.39 , respectively. Fair values were determined using the Black-Scholes option-pricing model with the following input assumptions as of September 30, 2021 and 2020: Nine Months Ended Nine Months Ended Expected volatility 78.60 % to 84.81 % ( 82.78 %) 78.35 % to 87.57 % ( 82.22 %) Dividend yield 0.00 % 0.00 % Risk-free interest rates 0.34 % to 1.51 % ( 1.35 %) 0.17 % to 0.62 % ( 0.52 %) Expected term 2.25 years to 9.89 years ( 8.25 years) 3.25 years to 9.02 years ( 7.80 years) |
Convertible Preferred Stock a_2
Convertible Preferred Stock and Common Stock (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Summary of Information Related to Issuance of Company's Preferred Stock | The following table summarizes information related to issuance of the Company’s preferred stock at September 30, 2021 and December 31, 2020 (in thousands, except share data): Preferred Number of Shares Carrying (1) Conversion Number of Liquidation Series A-1 730,591 730,591 $ 500 $ 0.6800 730,591 $ 500 Series B 955,573 955,573 6,999 7.2600 955,573 6,941 Series C 917,554 917,554 9,073 10.0400 917,554 9,210 Series C-1 1,671,229 1,643,832 17,941 10.9500 1,643,832 18,000 Series D 4,261,994 3,982,359 70,686 17.7900 3,982,359 70,847 Series E 8,991,266 8,801,978 176,143 20.0800 8,801,978 176,700 17,528,207 17,031,887 $ 281,342 17,031,887 $ 282,198 (1) The carrying value reflects the gross proceeds received from the sale of the preferred stock less issuance costs and the fair value at issuance of preferred stock warrants classified as a liability. |
Common Stock Reserved for Future Issuance | Common stock reserved for future issuance consisted of the following: As of September 30, 2021 As of December 30, 2020 Conversion of preferred stock 17,031,887 17,031,887 Preferred stock warrants 331,503 180,819 Forward obligation 224,842 224,842 Stock options issued and outstanding under the 2007 and 2,532,210 2,247,136 Common shares available for future grant under the 353,255 696,660 |
Stock Based Compensation Expe_2
Stock Based Compensation Expense (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Schedule of Stock-Based Compensation Expense | Stock-based compensation included in the Company’s condensed consolidated statements of operations and comprehensive loss is allocated as follows (in thousands) : Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Cost of sales $ 50 $ 48 $ 157 $ 117 Selling, general and administrative 368 291 909 744 Research and development 123 126 382 314 Total stock-based compensation expense $ 541 $ 465 $ 1,448 $ 1,175 |
Summary of Assumptions Used to Calculate Estimated Fair Value of Stock Option Awards | The Company’s calculations of estimated fair value of the stock option awards were made using the Black- Scholes option-pricing model with the following input assumptions: Nine Months Ended Range Weighted Average Expected volatility 80.49 % to 83.14 % 81.91 % Dividend yield 0.00 % 0.00 % Risk-free interest rates 0.87 % to 1.29 % 1.06 % Expected term 5.49 years to 6.64 years 6.05 years |
Summary of Stock Option Activities | A summary of stock option activities is as follows: Number Weighted Outstanding, December 31, 2020 2,247,136 Granted 500,877 $ 12.08 Forfeited ( 154,227 ) $ 6.56 Exercised ( 58,290 ) $ 2.96 Expired ( 3,286 ) $ 0.73 Outstanding, September 30, 2021 2,532,210 Information regarding the weighted-average remaining contractual life and weighted-average exercise price of options outstanding and options vested and exercisable as of September 30, 2021 is as follows: Number of Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (Years) Outstanding at September 30, 2021 2,532,210 $ 6.47 7.255 Vested and exercisable at September 30, 2021 1,399,015 $ 4.51 5.946 |
Summary of Non Vested Options | A summary of non-vested options is as follows: Number of Weighted- Non-vested as of September 30, 2021 1,133,123 $ 6.10 Early exercised unvested as of September 30, 2021 205 $ 3.31 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Components of Lease Expense and Related Cash Flows | The components of lease expense and related cash flows were as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Rent expense $ 303 $ 308 $ 892 $ 819 Short-term lease costs - 54 - 143 Variable lease costs 25 25 72 65 Total $ 328 $ 387 $ 964 $ 1,027 Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Cost of Sales $ 55 $ 66 $ 162 $ 175 Selling, general and administrative 273 321 802 852 Total $ 328 $ 387 $ 964 $ 1,027 |
Supplemental Unaudited Condensed Consolidated Balance Sheet Information Related to Leases | Supplemental unaudited condensed consolidated balance sheet information related to leases were as follows (in thousands): September 30, 2021 December 31, 2020 Operating Leases Operating lease right-of-use assets $ 2,943 $ 3,308 Operating lease liabilities $ 935 $ 802 Operating lease liabilities, net of current 1,964 2,449 Total operating lease liabilities $ 2,899 $ 3,251 |
Summary of Future Minimum Lease Payments | Future minimum lease payments under these leases are as follows (in thousands): 2021(remaining three months) $ 303 2022 1,202 2023 1,049 2024 617 Thereafter 156 Total undiscounted lease payments 3,327 Less present value discount ( 428 ) Operating lease liabilities $ 2,899 |
Term Loan (Tables)
Term Loan (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Future Principal Repayments of Term Loan | Future principal repayments on the Perceptive Loan, as amended, as of September 30, 2021, are as follows (in thousands): Principal 2026 $ 30,000 Total $ 30,000 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | The Company’s segment information as of and for the nine months ended September 30, 2021 and 2020 is as follows (in thousands): Three Months Ended Nine Months Ended September 30, 2021 September 30, 2021 Product Software Total Product Software Total Revenue $ 6,186 $ 1,701 $ 7,887 $ 18,166 $ 5,140 $ 23,306 Cost of sales 5,260 578 5,838 15,668 1,754 17,422 Gross profit 926 1,123 2,049 2,498 3,386 5,884 Gross margin 15 % 66 % 26 % 14 % 66 % 25 % Operating expenses: Selling, general and administrative 7,961 534 8,495 20,893 1,507 22,400 Research and development 4,214 419 4,633 13,075 1,235 14,310 Change in fair value of contingent earnout 19 — 19 12 — 12 Total operating expenses 12,194 953 13,147 33,980 2,742 36,722 Income (loss) from operations $ ( 11,268 ) $ 170 $ ( 11,098 ) $ ( 31,482 ) $ 644 $ ( 30,838 ) Three Months Ended Nine Months Ended September 30, 2020 September 30, 2020 Product Software Total Product Software Total Revenue $ 4,675 $ 1,457 $ 6,132 $ 10,690 $ 3,990 $ 14,680 Cost of sales 4,404 527 4,931 10,973 1,577 12,550 Gross profit 271 930 1,201 ( 283 ) 2,413 2,130 Gross margin 6 % 64 % 20 % ( 3 )% 60 % 15 % Operating expenses: Selling, general and administrative 5,363 439 5,802 18,044 1,379 19,423 Research and development 4,560 360 4,920 13,463 1,088 14,551 Change in fair value of contingent earnout 30 — 30 ( 478 ) — ( 478 ) Total operating expenses 9,953 799 10,752 31,029 2,467 33,496 Income (loss) from operations $ ( 9,682 ) $ 131 $ ( 9,551 ) $ ( 31,312 ) $ ( 54 ) $ ( 31,366 ) |
Segment Assets | Segment Assets: As of September 30, 2021 As of December 31, 2020 Product $ 32,133 $ 64,021 Software 11,283 12,120 Total $ 43,416 $ 76,141 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders | The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders for the periods presented (in thousands, except share and per share data): Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Numerator: Net loss attributable to common stock holders $ ( 12,733 ) $ ( 10,593 ) $ ( 34,788 ) $ ( 34,138 ) Denominator: Weighted-average shares outstanding used in computing 1,232,921 1,197,919 1,218,815 1,194,562 Net loss per share attributable to common stockholders $ ( 10.33 ) $ ( 8.84 ) $ ( 28.54 ) $ ( 28.58 ) |
Summary of Potentially Dilutive Securities Excluded from the Computation of Diluted Net Loss Per Share | The following potentially dilutive securities were excluded from the computation of diluted net loss per share calculations for the periods presented because the impact of including them would be anti-dilutive: September 30, 2021 2020 Convertible preferred stock 17,031,887 17,031,887 Stock options 2,532,210 2,245,047 Warrants 331,503 180,819 Forward obligation 224,842 224,842 Total 20,120,442 19,682,595 |
Organization and Basis of Pre_2
Organization and Basis of Presentation - Additional Information (Details) $ / shares in Units, $ in Thousands | Nov. 02, 2021USD ($)$ / sharesshares | Oct. 20, 2021 | Sep. 30, 2021USD ($)$ / sharesshares | Jun. 30, 2021USD ($) | Mar. 31, 2021USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Sep. 30, 2021USD ($)Segment$ / sharesshares | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($)$ / sharesshares |
Organization And Basis Of Presentation [Line Items] | |||||||||||
Reverse stock split | On October 20, 2021, the Company’s Board of Directors approved an amendment to the Company’s Articles of Incorporation to effect a reverse split of shares of the Company’s common stock and convertible preferred stock on a 1-for-1.825 basis (the “Reverse Stock Split”). The par values of the common stock and convertible preferred stock were not adjusted as a result of the Reverse Stock Split. | ||||||||||
Common stock, shares authorized | 21,643,836 | 21,643,836 | 21,643,836 | ||||||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||
Convertible preferred stock, shares authorized | 17,528,207 | 17,528,207 | 17,528,207 | ||||||||
Convertible preferred stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||
Cash and cash equivalents | $ | $ 13,748 | $ 13,748 | $ 51,722 | ||||||||
Accumulated deficit | $ | (298,333) | (298,333) | $ (263,545) | ||||||||
Net loss | $ | $ 12,733 | $ 11,149 | $ 10,906 | $ 10,593 | $ 10,544 | $ 13,001 | 34,788 | $ 34,138 | |||
Cash and cash equivalents used in operations | $ | $ 33,880 | $ 30,872 | |||||||||
Operating and Reportable segments | Segment | 2 | ||||||||||
Common stock, shares issued | 1,305,634 | 1,305,634 | 1,247,024 | ||||||||
Subsequent Event | |||||||||||
Organization And Basis Of Presentation [Line Items] | |||||||||||
Stock split, Conversion ratio | 0.5479 | ||||||||||
Common stock, shares authorized | 500,000,000 | ||||||||||
Common stock, par value | $ / shares | $ 0.001 | ||||||||||
Preferred stock, shares authorized | 10,000,000 | ||||||||||
Preferred stock, par value | $ / shares | $ 0.001 | ||||||||||
Subsequent Event | Forward Obligation | |||||||||||
Organization And Basis Of Presentation [Line Items] | |||||||||||
Common stock, shares issued | 224,842 | ||||||||||
Subsequent Event | IPO | |||||||||||
Organization And Basis Of Presentation [Line Items] | |||||||||||
Shares of common stock issued | 7,800,000 | ||||||||||
Public offering price per share | $ / shares | $ 12 | ||||||||||
Proceeds from issuance of common stock net of underwriting discounts and commissions and other offering expenses | $ | $ 84,000 | ||||||||||
Subsequent Event | IPO | Common Stock | |||||||||||
Organization And Basis Of Presentation [Line Items] | |||||||||||
Conversion of convertible preferred stock into number of common stock | 17,031,887 |
Summary of Accounting Policie_3
Summary of Accounting Policies - Additional Information (Details) | Nov. 02, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)Customer | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | Jun. 30, 2021USD ($) |
Summary Of Accounting Policies [Line Items] | |||||||
Accounts receivable, allowance for credit loss, write-offs | $ 0 | ||||||
Goodwill | $ 8,454,000 | 8,454,000 | $ 8,454,000 | ||||
Impairment of finite lived intangible assets | 0 | $ 0 | 0 | $ 0 | |||
Fair value, assets, level 1 to level 2 transfers, amount | 0 | 0 | |||||
Fair value, assets, level 2 to level 1 transfers, amount | 0 | 0 | |||||
Fair value, liabilities, level 1 to level 2 transfers, amount | 0 | 0 | |||||
Fair value, liabilities, level 2 to level 1 transfers, amount | 0 | 0 | |||||
Fair value, measurement with unobservable inputs reconciliation, asset, transfers into level 3 | 0 | ||||||
Fair value, measurement with unobservable inputs reconciliation, asset, transfers out of level 3 | 0 | ||||||
Fair value, measurement with unobservable inputs reconciliation, liability, transfers into level 3 | 0 | 0 | |||||
Fair value, measurement with unobservable inputs reconciliation, liability, transfers out of level 3 | $ 0 | 0 | |||||
Revenue, practical expedient, incremental cost of obtaining contract [true false] | true | ||||||
Revenue recognized | $ 900,000 | $ 500,000 | |||||
Dividend yield | 0.00% | ||||||
Maximum | |||||||
Summary Of Accounting Policies [Line Items] | |||||||
Cash and cash equivalents, FDIC insured amount | 250,000 | $ 250,000 | |||||
Finite-lived intangible assets, estimated useful life | 10 years | ||||||
Minimum | |||||||
Summary Of Accounting Policies [Line Items] | |||||||
Finite-lived intangible assets, estimated useful life | 5 years | ||||||
Customer Concentration Risk | Accounts Receivable | |||||||
Summary Of Accounting Policies [Line Items] | |||||||
Number of customer accounted for accounts receivable | Customer | 1 | ||||||
Customer Concentration Risk | Accounts Receivable | One Customer | |||||||
Summary Of Accounting Policies [Line Items] | |||||||
Concentration risk, percentage | 14.00% | ||||||
GentleWave Systems | Maximum | |||||||
Summary Of Accounting Policies [Line Items] | |||||||
Standard product warranty period | 2 years | 2 years | |||||
TDO Software, Inc. | |||||||
Summary Of Accounting Policies [Line Items] | |||||||
Goodwill | 8,500,000 | $ 8,500,000 | |||||
Goodwill impairment | $ 0 | ||||||
TDO Software, Inc. | Endodontic Treatment | Patents | |||||||
Summary Of Accounting Policies [Line Items] | |||||||
Finite-lived intangible assets acquired | $ 1,300,000 | ||||||
Finite-lived intangible assets, estimated useful life | 10 years | ||||||
Prepaid Expenses and Other Current Assets | |||||||
Summary Of Accounting Policies [Line Items] | |||||||
Deferred offering costs | $ 1,900,000 | $ 1,900,000 | |||||
Subsequent Event | |||||||
Summary Of Accounting Policies [Line Items] | |||||||
Deferred offering costs reclassified to additional paid-in capital | $ 1,900,000 |
Summary of Accounting Policie_4
Summary of Accounting Policies - Summary of Balances of Contract Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Summary Of Accounting Policies [Line Items] | ||
Total contract liabilities | $ 685 | $ 843 |
Less: long-term portion | 1 | 5 |
Contract liabilities – current | 684 | 838 |
Extended Service Contracts | ||
Summary Of Accounting Policies [Line Items] | ||
Total contract liabilities | 223 | 271 |
Subscription Software Licenses | ||
Summary Of Accounting Policies [Line Items] | ||
Total contract liabilities | $ 462 | $ 572 |
Summary of Accounting Policie_5
Summary of Accounting Policies - Schedule of Revenues Disaggregated by Segment and Timing of Goods and Services Transferred (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Summary Of Accounting Policies [Line Items] | ||||
Total revenue | $ 7,887 | $ 6,132 | $ 23,306 | $ 14,680 |
Product | ||||
Summary Of Accounting Policies [Line Items] | ||||
Total revenue | 6,186 | 4,675 | 18,166 | 10,690 |
Product | Point in Time | ||||
Summary Of Accounting Policies [Line Items] | ||||
Total revenue | 5,992 | 4,549 | 17,565 | 10,369 |
Product | Over Time | ||||
Summary Of Accounting Policies [Line Items] | ||||
Total revenue | 194 | 126 | 601 | 321 |
Software | Point in Time | ||||
Summary Of Accounting Policies [Line Items] | ||||
Total revenue | 150 | 163 | 668 | 322 |
Software | Over Time | ||||
Summary Of Accounting Policies [Line Items] | ||||
Total revenue | $ 1,551 | $ 1,294 | $ 4,472 | $ 3,668 |
Summary of Accounting Policie_6
Summary of Accounting Policies - Schedule of Reconciliation of Change in Estimated Warranty (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Accounting Policies [Abstract] | |
Balance at beginning of period | $ 1,584 |
Provision for warranties issued | 958 |
Warranty costs incurred | (1,163) |
Balance at end of period | 1,379 |
Current portion | 996 |
Non-current portion | 383 |
Total | $ 1,379 |
Balance Sheet Components - Sche
Balance Sheet Components - Schedule of Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Balance Sheet Related Disclosures [Abstract] | ||
Raw materials | $ 4,663 | $ 2,114 |
Work in process | 351 | 308 |
Finished goods | 2,222 | 1,916 |
Total | $ 7,236 | $ 4,338 |
Balance Sheet Components - Addi
Balance Sheet Components - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Reserve for excess and obsolete inventory | $ 1,100 | $ 1,100 | $ 1,300 | ||
Amortization intangible assets | $ 420 | $ 398 | |||
Weighted average amortization period of intangible assets | 7 years 7 months 6 days | ||||
Cost of Sales | |||||
Amortization intangible assets | $ 100 | $ 200 | |||
Selling, General and Administrative Expenses | |||||
Amortization intangible assets | $ 100 | $ 200 |
Balance Sheet Components - Sc_2
Balance Sheet Components - Schedule of Intangible Assets Net (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Finite Lived Intangible Assets [Line Items] | ||
Gross | $ 4,715 | $ 3,380 |
Accumulated Amortization | 1,593 | 1,172 |
Net | 3,122 | 2,208 |
Developed Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross | 2,445 | 1,110 |
Accumulated Amortization | 679 | 490 |
Net | 1,766 | 620 |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross | 1,910 | 1,910 |
Accumulated Amortization | 807 | 603 |
Net | 1,103 | 1,307 |
Tradenames | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross | 360 | 360 |
Accumulated Amortization | 107 | 79 |
Net | $ 253 | $ 281 |
Balance Sheet Components - Sc_3
Balance Sheet Components - Schedule of Intangible Assets Net (Parenthetical) (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Minimum | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated useful life | 5 years | |
Maximum | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated useful life | 10 years | |
Developed Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated useful life | 5 years | |
Developed Technology | Minimum | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated useful life | 5 years | |
Developed Technology | Maximum | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated useful life | 10 years | |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated useful life | 7 years | 7 years |
Tradenames | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated useful life | 10 years | 10 years |
Balance Sheet Components - Sc_4
Balance Sheet Components - Schedule of Estimated Future Annual Amortization Expense Related to Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Balance Sheet Related Disclosures [Abstract] | ||
2021 (remaining three months) | $ 166 | |
2022 | 664 | |
2023 | 618 | |
2024 | 442 | |
2025 | 386 | |
Thereafter | 846 | |
Net | $ 3,122 | $ 2,208 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair Value Measurements Recurring Basis - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Warrants | ||
Liabilities: | ||
Liabilities | $ 4,225 | $ 1,914 |
Forward Obligation | ||
Liabilities: | ||
Liabilities | 3,300 | 2,750 |
Contingent Earnout | ||
Liabilities: | ||
Liabilities | 275 | 930 |
Significant Unobservable Inputs (Level 3) | Warrants | ||
Liabilities: | ||
Liabilities | 4,225 | 1,914 |
Significant Unobservable Inputs (Level 3) | Forward Obligation | ||
Liabilities: | ||
Liabilities | 3,300 | 2,750 |
Significant Unobservable Inputs (Level 3) | Contingent Earnout | ||
Liabilities: | ||
Liabilities | 275 | 930 |
Money Market Funds | ||
Assets: | ||
Assets | 13,103 | 50,897 |
Money Market Funds | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Assets | $ 13,103 | $ 50,897 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Schedule of Rollforward of the Estimate Fair Values for Instruments (Details) - Fair Value Measurements Recurring Basis - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | $ 5,594 | $ 7,150 |
Payout of contingent earnout | (667) | (987) |
Addition | 2,135 | |
Change in fair value | 738 | (583) |
Ending Balance | 7,800 | 5,580 |
Warrant Liabilities | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | 1,914 | 2,260 |
Addition | 2,135 | |
Change in fair value | 176 | (105) |
Ending Balance | 4,225 | 2,155 |
Forward Obligation | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | 2,750 | 2,500 |
Change in fair value | 550 | |
Ending Balance | 3,300 | 2,500 |
Contingent Earnout | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | 930 | 2,390 |
Payout of contingent earnout | (667) | (987) |
Change in fair value | 12 | (478) |
Ending Balance | $ 275 | $ 925 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Additional Information (Details) | 1 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Dec. 31, 2013USD ($)shares | Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2020USD ($)$ / shares | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($)shares | Nov. 02, 2021shares | Aug. 31, 2021USD ($)shares | Jun. 30, 2017shares | |
Fair Value Option Quantitative Disclosures [Line Items] | ||||||||
Fair value, measurement with unobservable inputs reconciliation, liability, transfers into level 3 | $ | $ 0 | $ 0 | ||||||
Fair value, measurement with unobservable inputs reconciliation, liability, transfers out of level 3 | $ | $ 0 | $ 0 | ||||||
Warrants issued to purchase preferred stock | 331,503 | |||||||
Fair value of warrants | $ | $ 4,225,000 | $ 1,914,000 | ||||||
Convertible preferred stock, shares issued | 17,031,887 | 17,031,887 | ||||||
Common stock, shares issued | 1,305,634 | 1,247,024 | ||||||
TDO Software, Inc. | ||||||||
Fair Value Option Quantitative Disclosures [Line Items] | ||||||||
Contingent consideration earnout paid | $ | $ 700,000 | $ 1,000,000 | ||||||
Forecast | License | TDO Software, Inc. | ||||||||
Fair Value Option Quantitative Disclosures [Line Items] | ||||||||
Contingent earnout required to be paid | $ | $ 700,000 | |||||||
Forecast | Unit | TDO Software, Inc. | ||||||||
Fair Value Option Quantitative Disclosures [Line Items] | ||||||||
Contingent earnout required to be paid | $ | $ 500,000 | |||||||
Forward Obligation | IPO Closing | Subsequent Event | ||||||||
Fair Value Option Quantitative Disclosures [Line Items] | ||||||||
Common stock, shares issued | 224,842,000 | |||||||
Minimum | ||||||||
Fair Value Option Quantitative Disclosures [Line Items] | ||||||||
Warrants expiration date | 2023-12 | |||||||
Maximum | ||||||||
Fair Value Option Quantitative Disclosures [Line Items] | ||||||||
Warrants expiration date | 2031-08 | |||||||
Fair Values | Minimum | ||||||||
Fair Value Option Quantitative Disclosures [Line Items] | ||||||||
Warrants and Rights Outstanding, Measurement Input | $ / shares | 8.13 | 5.99 | ||||||
Fair Values | Maximum | ||||||||
Fair Value Option Quantitative Disclosures [Line Items] | ||||||||
Warrants and Rights Outstanding, Measurement Input | $ / shares | 14.45 | 16.39 | ||||||
Sales Projections | TDO Software, Inc. | ||||||||
Fair Value Option Quantitative Disclosures [Line Items] | ||||||||
Contingent earnout measurement input | 7.6 | 7.6 | ||||||
Discount Rate | TDO Software, Inc. | ||||||||
Fair Value Option Quantitative Disclosures [Line Items] | ||||||||
Contingent earnout measurement input | 7.6 | 7.6 | ||||||
Series C-1 | ||||||||
Fair Value Option Quantitative Disclosures [Line Items] | ||||||||
Convertible preferred stock, shares issued | 1,643,832 | 1,643,832 | ||||||
Series E | ||||||||
Fair Value Option Quantitative Disclosures [Line Items] | ||||||||
Convertible preferred stock, shares issued | 8,801,978 | 8,801,978 | ||||||
Series D | ||||||||
Fair Value Option Quantitative Disclosures [Line Items] | ||||||||
Convertible preferred stock, shares issued | 3,982,359 | 3,982,359 | ||||||
Series D | Forward Obligation | ||||||||
Fair Value Option Quantitative Disclosures [Line Items] | ||||||||
Convertible preferred stock, shares issued | 0 | 0 | ||||||
Series D | Minimum | ||||||||
Fair Value Option Quantitative Disclosures [Line Items] | ||||||||
Estimated fair value by future cash flows attributable to forward obligation probable percentage | 10.00% | |||||||
Series D | Maximum | ||||||||
Fair Value Option Quantitative Disclosures [Line Items] | ||||||||
Preferred stock issuance | $ | $ 224,842,000 | |||||||
Estimated fair value by future cash flows attributable to forward obligation probable percentage | 70.00% | |||||||
Term Loan | Oxford Finance LLC | ||||||||
Fair Value Option Quantitative Disclosures [Line Items] | ||||||||
Term loan facility amount | $ | $ 10,000,000 | |||||||
Debt repayment month and year | 2017-06 | |||||||
Percentage of aggregate amount funded to purchase preferred stock | 3.00% | |||||||
Term Loan | Oxford Finance LLC | Series C-1 | ||||||||
Fair Value Option Quantitative Disclosures [Line Items] | ||||||||
Warrants issued to purchase preferred stock | 27,397 | |||||||
Term Loan | Perceptive Credit Holdings L P | Series E | ||||||||
Fair Value Option Quantitative Disclosures [Line Items] | ||||||||
Warrants issued to purchase preferred stock | 150,684 | 49,315 | ||||||
Fair value of warrants | $ | $ 2,100,000 | |||||||
Term Loan | Perceptive Credit Holdings L P | Series D | ||||||||
Fair Value Option Quantitative Disclosures [Line Items] | ||||||||
Warrants issued to purchase preferred stock | 54,793 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Summary of Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Class Of Warrant Or Right [Line Items] | ||
Number of warrants issued | 331,503 | |
Warrants outstanding | 331,503 | 180,819 |
Fair value of warrants | $ 4,225 | $ 1,914 |
Series C-1 | ||
Class Of Warrant Or Right [Line Items] | ||
Number of warrants issued | 27,397 | |
Purchase Price Per Share | $ 10.95 | |
Warrants outstanding | 27,397 | 27,397 |
Fair value of warrants | $ 240 | $ 225 |
Series D | ||
Class Of Warrant Or Right [Line Items] | ||
Number of warrants issued | 54,793 | |
Purchase Price Per Share | $ 17.80 | |
Warrants outstanding | 54,793 | 54,793 |
Fair value of warrants | $ 557 | $ 500 |
Series E | ||
Class Of Warrant Or Right [Line Items] | ||
Number of warrants issued | 49,315 | |
Purchase Price Per Share | $ 20.08 | |
Warrants outstanding | 49,315 | 49,315 |
Fair value of warrants | $ 615 | $ 575 |
Series E | ||
Class Of Warrant Or Right [Line Items] | ||
Number of warrants issued | 49,314 | |
Purchase Price Per Share | $ 20.08 | |
Warrants outstanding | 49,314 | 49,314 |
Fair value of warrants | $ 636 | $ 614 |
Series E | ||
Class Of Warrant Or Right [Line Items] | ||
Number of warrants issued | 150,684 | |
Purchase Price Per Share | $ 20.08 | |
Warrants outstanding | 150,684 | |
Fair value of warrants | $ 2,177 |
Fair Value of Financial Instr_7
Fair Value of Financial Instruments - Summary of Fair Values Determined Using Black-Scholes Option-Pricing Model (Details) | Sep. 30, 2021 | Sep. 30, 2020 |
Expected Volatility | Minimum | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 78.60 | 78.35 |
Expected Volatility | Maximum | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 84.81 | 87.57 |
Expected Volatility | Weighted Average | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 82.78 | 82.22 |
Dividend Yield | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 0 | 0 |
Risk-Free Interest Rates | Minimum | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 0.34 | 0.17 |
Risk-Free Interest Rates | Maximum | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 1.51 | 0.62 |
Risk-Free Interest Rates | Weighted Average | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 1.35 | 0.52 |
Expected Term | Minimum | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Warrants and rights outstanding, term | 2 years 3 months | 3 years 3 months |
Expected Term | Maximum | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Warrants and rights outstanding, term | 9 years 10 months 20 days | 9 years 7 days |
Expected Term | Weighted Average | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Warrants and rights outstanding, term | 8 years 3 months | 7 years 9 months 18 days |
Convertible Preferred Stock a_3
Convertible Preferred Stock and Common Stock - Additional Information (Details) | 9 Months Ended | |
Sep. 30, 2021USD ($)Classofstock$ / sharesshares | Dec. 31, 2020$ / sharesshares | |
Class Of Stock [Line Items] | ||
Number of classes of stock | Classofstock | 2 | |
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 |
Convertible preferred stock, par value | $ / shares | $ 0.0001 | $ 0.0001 |
Number of shares authorized | 39,172,043 | |
Common stock, shares authorized | 21,643,836 | 21,643,836 |
Convertible preferred stock, shares authorized | 17,528,207 | 17,528,207 |
Common stock, voting rights | Each share of common stock is entitled to one vote. | |
Common Stock | ||
Class Of Stock [Line Items] | ||
Convertible preferred stock converted into equal number of shares of common stock | $ | $ 17,031,887 |
Convertible Preferred Stock a_4
Convertible Preferred Stock and Common Stock - Summary of Information Related to Issuance of Company's Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | |
Class Of Stock [Line Items] | |||
Number of Shares Authorized | 17,528,207 | 17,528,207 | |
Shares Issued | 17,031,887 | 17,031,887 | |
Shares Outstanding | 17,031,887 | 17,031,887 | |
Carrying Value | [1] | $ 281,342 | $ 281,342 |
Number of Common Stock Equivalent Shares | 17,031,887 | 17,031,887 | |
Liquidation Preference | $ 282,198 | $ 282,198 | |
Series A-1 | |||
Class Of Stock [Line Items] | |||
Number of Shares Authorized | 730,591 | 730,591 | |
Shares Issued | 730,591 | 730,591 | |
Shares Outstanding | 730,591 | 730,591 | |
Carrying Value | [1] | $ 500 | $ 500 |
Conversion Price Per Share | $ 0.6800 | $ 0.6800 | |
Number of Common Stock Equivalent Shares | 730,591 | 730,591 | |
Liquidation Preference | $ 500 | $ 500 | |
Series B | |||
Class Of Stock [Line Items] | |||
Number of Shares Authorized | 955,573 | 955,573 | |
Shares Issued | 955,573 | 955,573 | |
Shares Outstanding | 955,573 | 955,573 | |
Carrying Value | [1] | $ 6,999 | $ 6,999 |
Conversion Price Per Share | $ 7.2600 | $ 7.2600 | |
Number of Common Stock Equivalent Shares | 955,573 | 955,573 | |
Liquidation Preference | $ 6,941 | $ 6,941 | |
Series C | |||
Class Of Stock [Line Items] | |||
Number of Shares Authorized | 917,554 | 917,554 | |
Shares Issued | 917,554 | 917,554 | |
Shares Outstanding | 917,554 | 917,554 | |
Carrying Value | [1] | $ 9,073 | $ 9,073 |
Conversion Price Per Share | $ 10.0400 | $ 10.0400 | |
Number of Common Stock Equivalent Shares | 917,554 | 917,554 | |
Liquidation Preference | $ 9,210 | $ 9,210 | |
Series C-1 | |||
Class Of Stock [Line Items] | |||
Number of Shares Authorized | 1,671,229 | 1,671,229 | |
Shares Issued | 1,643,832 | 1,643,832 | |
Shares Outstanding | 1,643,832 | 1,643,832 | |
Carrying Value | [1] | $ 17,941 | $ 17,941 |
Conversion Price Per Share | $ 10.9500 | $ 10.9500 | |
Number of Common Stock Equivalent Shares | 1,643,832 | 1,643,832 | |
Liquidation Preference | $ 18,000 | $ 18,000 | |
Series D | |||
Class Of Stock [Line Items] | |||
Number of Shares Authorized | 4,261,994 | 4,261,994 | |
Shares Issued | 3,982,359 | 3,982,359 | |
Shares Outstanding | 3,982,359 | 3,982,359 | |
Carrying Value | [1] | $ 70,686 | $ 70,686 |
Conversion Price Per Share | $ 17.7900 | $ 17.7900 | |
Number of Common Stock Equivalent Shares | 3,982,359 | 3,982,359 | |
Liquidation Preference | $ 70,847 | $ 70,847 | |
Series E | |||
Class Of Stock [Line Items] | |||
Number of Shares Authorized | 8,991,266 | 8,991,266 | |
Shares Issued | 8,801,978 | 8,801,978 | |
Shares Outstanding | 8,801,978 | 8,801,978 | |
Carrying Value | [1] | $ 176,143 | $ 176,143 |
Conversion Price Per Share | $ 20.0800 | $ 20.0800 | |
Number of Common Stock Equivalent Shares | 8,801,978 | 8,801,978 | |
Liquidation Preference | $ 176,700 | $ 176,700 | |
[1] | The carrying value reflects the gross proceeds received from the sale of the preferred stock less issuance costs and the fair value at issuance of preferred stock warrants classified as a liability. |
Convertible Preferred Stock a_5
Convertible Preferred Stock and Common Stock - Common Stock Reserved for Future Issuance (Details) - shares | Sep. 30, 2021 | Dec. 31, 2020 |
Conversion of Preferred Stock | ||
Class Of Stock [Line Items] | ||
Common stock reserved for future issuance | 17,031,887 | 17,031,887 |
Preferred Stock Warrants | ||
Class Of Stock [Line Items] | ||
Common stock reserved for future issuance | 331,503 | 180,819 |
Forward Obligation | ||
Class Of Stock [Line Items] | ||
Common stock reserved for future issuance | 224,842 | 224,842 |
Stock Options Issued and Outstanding under the 2007 and 2017 Plan | ||
Class Of Stock [Line Items] | ||
Common stock reserved for future issuance | 2,532,210 | 2,247,136 |
Common Shares Available for Future Grant under the 2017 Plan | ||
Class Of Stock [Line Items] | ||
Common stock reserved for future issuance | 353,255 | 696,660 |
Stock-Based Compensation Expens
Stock-Based Compensation Expense - Additional Information (Details) $ / shares in Units, $ in Millions | 9 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |
Weighted-average grant-date fair value of options granted | $ / shares | $ 8.41 |
Weighted-average fair value of shares vested | $ / shares | $ 3.93 |
Aggregate intrinsic value of stock options outstanding | $ | $ 17.8 |
Aggregate intrinsic value vested and exercisable | $ | $ 12.6 |
Fair value of common stock per share | $ / shares | $ 13.49 |
Number of outstanding options vested, or expected to vest | shares | 2,390,577 |
Number of outstanding options vested, or expected to vest , weighted-average exercise price | $ / shares | $ 6.33 |
Number of outstanding options vested, or expected to vest , average remaining life | 7 years 1 month 28 days |
Number of outstanding options vested, or expected to vest aggregate intrinsic value | $ | $ 17.1 |
Stock Options | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |
Unamortized compensation expense | $ | $ 5.8 |
Weighted average period to be recognized | 3 years 1 month 2 days |
2017 Plan | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |
Number of shares, options granted (shares) | shares | 0 |
Aggregate shares of common stock reserved for issuance | shares | 2,294,383 |
Vesting period | 4 years |
Term of plan | 10 years |
Exercised stock options vested | shares | 308 |
2017 Plan | Minimum | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |
Exercise price percentage | 100.00% |
Stock Based Compensation Expe_3
Stock Based Compensation Expense - Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 541 | $ 465 | $ 1,448 | $ 1,175 |
Cost of Sales | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 50 | 48 | 157 | 117 |
Selling, General and Administrative | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 368 | 291 | 909 | 744 |
Research and Development | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 123 | $ 126 | $ 382 | $ 314 |
Stock Based Compensation Expe_4
Stock Based Compensation Expense - Summary of Assumptions Used to Calculate Estimated Fair Value of Stock Option Awards (Details) | 9 Months Ended |
Sep. 30, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Dividend yield | 0.00% |
Stock Options | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Expected volatility, Minimum | 80.49% |
Expected volatility, Maximum | 83.14% |
Expected volatility, Weighted Average | 81.91% |
Dividend yield | 0.00% |
Dividend yield, Weighted Average | 0.00% |
Risk-free interest rates, Minimum | 0.87% |
Risk-free interest rates, Maximum | 1.29% |
Risk-free interest rates, Weighted Average | 1.06% |
Expected term, Weighted Average | 6 years 18 days |
Minimum | Stock Options | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Expected term | 5 years 5 months 26 days |
Maximum | Stock Options | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Expected term | 6 years 7 months 20 days |
Stock Based Compensation Expe_5
Stock Based Compensation Expense - Summary of Stock Option Activities (Details) - $ / shares | 9 Months Ended |
Sep. 30, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Number of Options Outstanding, Beginning Balance | 2,247,136 |
Number of Options, Granted | 500,877 |
Number of Options, Forfeited | (154,227) |
Number of Options, Exercised | (58,290) |
Number of Options, Expired | (3,286) |
Number of Options Outstanding, Ending Balance | 2,532,210 |
Weighted Average Exercise Price Per Share, Granted | $ 12.08 |
Weighted Average Exercise Price Per Share, Forfeited | 6.56 |
Weighted Average Exercise Price Per Share, Exercised | 2.96 |
Weighted Average Exercise Price Per Share, Expired | $ 0.73 |
Number of Options Vested and exercisable at September 30, 2021 | 1,399,015 |
Stock Based Compensation Expe_6
Stock Based Compensation Expense - Summary of Non Vested Options (Details) | Sep. 30, 2021$ / sharesshares |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Number of Options Non-vested as of September 30, 2021 | shares | 1,133,123 |
Number of Options Early exercised unvested as of September 30, 2021 | shares | 205 |
Weighted- Average Fair Value Non-vested as of September 30, 2021 | $ / shares | $ 6.10 |
Weighted- Average Fair Value Early exercised unvested as of September 30, 2021 | $ / shares | $ 3.31 |
Stock Based Compensation Expe_7
Stock Based Compensation Expense - Summary of Weighted-average Remaining Contractual Life and Weighted-average Exercise Price of Options Outstanding and Options Vested and Exercisable (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Number of Options Outstanding | 2,532,210 | 2,247,136 |
Number of Options Vested and exercisable at September 30, 2021 | 1,399,015 | |
Weighted-Average Exercise Price, Outstanding | $ 6.47 | |
Weighted- Average Exercise Price Vested and exercisable at September 30, 2021 | $ 4.51 | |
Weighted- Average Remaining Contractual Life (Years) Outstanding at September 30, 2021 | 7 years 3 months 1 day | |
Weighted- Average Remaining Contractual Life (Years) Vested and exercisable at September 30, 2021 | 5 years 11 months 10 days |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Leases [Abstract] | |||||
Operating lease description | The Company leases office space under operating leases with expirations ranging from April 2021 to March 2025, some of which include rent escalations or an option to extend the lease for up to three years per renewal. | ||||
Operating lease renewal term | 3 years | 3 years | |||
Lessee, Operating Lease, Existence of Option to Extend [true false] | true | ||||
Cash paid for amounts included in the lease liability | $ 0.3 | $ 0.3 | $ 0.9 | $ 0.8 | |
Weighted-average lease term of operating leases | 2 years 11 months 12 days | 2 years 11 months 12 days | 3 years 8 months 8 days | ||
Weighted-average discount rate of operating leases | 7.58% | 7.58% | 7.55% |
Leases - Components of Lease Ex
Leases - Components of Lease Expense and Related Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Lessee, Lease, Description [Line Items] | ||||
Rent expense | $ 303 | $ 308 | $ 892 | $ 819 |
Short-term lease costs | 54 | 143 | ||
Variable lease costs | 25 | 25 | 72 | 65 |
Lease costs | 328 | 387 | 964 | 1,027 |
Cost of Sales | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease costs | 55 | 66 | 162 | 175 |
Selling, General and Administrative | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease costs | $ 273 | $ 321 | $ 802 | $ 852 |
Leases - Supplemental Unaudited
Leases - Supplemental Unaudited Condensed Consolidated Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 2,943 | $ 3,308 |
Operating lease liabilities | 935 | 802 |
Operating lease liabilities, net of current | 1,964 | 2,449 |
Total operating lease liabilities | $ 2,899 | $ 3,251 |
Leases - Summary of Future Mini
Leases - Summary of Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
2021(remaining three months) | $ 303 | |
2022 | 1,202 | |
2023 | 1,049 | |
2024 | 617 | |
Thereafter | 156 | |
Total undiscounted lease payments | 3,327 | |
Less present value discount | (428) | |
Operating lease liabilities | $ 2,899 | $ 3,251 |
Term Loan - Additional Informat
Term Loan - Additional Information (Details) $ / shares in Units, $ in Millions | Aug. 23, 2021USD ($)$ / sharesshares | Oct. 07, 2019USD ($)shares | Oct. 16, 2018USD ($)Borrowingshares | Jun. 23, 2017USD ($)shares | Sep. 30, 2021USD ($)shares | Jun. 30, 2026USD ($) | Sep. 30, 2021USD ($)shares | Apr. 22, 2020USD ($) |
Debt Instrument [Line Items] | ||||||||
Number of warrants issued | shares | 331,503 | 331,503 | ||||||
Amended and Restated Credit Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate minimum cash balance | $ 3 | $ 3 | ||||||
Debt instrument covenant description | The amended and restated credit agreement also includes financial covenants that require the Company to (i) maintain, at all times, a minimum aggregate balance of $3.0 million in cash in one or more controlled accounts, and (ii) satisfy certain minimum revenue thresholds, measured for the twelve consecutive month period on each calendar quarter-end until June 30, 2026. These thresholds increase over time and range from $26.4 million for the twelve month period ended September 30, 2021 to $95.3 million for the twelve month period ended June 30, 2026. Failure to satisfy these financial covenants would constitute an event of default under the agreement. During the nine months ended September 30, 2021, the Company was in compliance with all financial covenants and conditions required by the outstanding Perceptive Loan. | |||||||
Paycheck Protection Program Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate of loan amount granted | $ 5.1 | |||||||
Minimum | Amended and Restated Credit Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Revenue thresholds increase over time | $ 26.4 | |||||||
Maximum | Amended and Restated Credit Agreement | Forecast | ||||||||
Debt Instrument [Line Items] | ||||||||
Revenue thresholds increase over time | $ 95.3 | |||||||
Perceptive Credit Holdings L P | ||||||||
Debt Instrument [Line Items] | ||||||||
Delayed draw term loan | $ 10 | $ 20 | ||||||
Initial term loan | $ 10 | $ 10 | ||||||
Number of borrowings | Borrowing | 2 | |||||||
initial delayed draw date | Oct. 31, 2018 | Dec. 22, 2017 | ||||||
Loan origination fee percentage | 1.50% | 1.50% | ||||||
Aggregate delayed draw term loan | $ 20 | |||||||
Maturity date | Jun. 23, 2022 | |||||||
Perceptive Credit Holdings L P | LIBOR Plus 2% | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate margin on borrowings | 11.25% | 11.25% | ||||||
Perceptive Credit Holdings L P | LIBOR Plus 2% | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate margin on borrowings | 9.25% | |||||||
Additional interest rate on borrowing | 2.00% | |||||||
Perceptive Credit Holdings L P | Series D Preferred Shares | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of warrants issued | shares | 54,793 | |||||||
Perceptive Credit Holdings L P | Series E Preferred Shares | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of warrants issued | shares | 49,314 | 49,315 | ||||||
Perceptive Credit Holdings L P | Tranche One | ||||||||
Debt Instrument [Line Items] | ||||||||
Delayed draw term loan | $ 10 | |||||||
Perceptive Credit Holdings L P | Tranche One | Series E Preferred Shares | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of warrants issued | shares | 32,876 | |||||||
Perceptive Credit Holdings L P | Tranche Two | ||||||||
Debt Instrument [Line Items] | ||||||||
Delayed draw term loan | $ 10 | |||||||
Perceptive Credit Holdings L P | Tranche Two | Series E Preferred Shares | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of warrants issued | shares | 32,876 | |||||||
Perceptive Credit Holdings III, LP | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate delayed draw term loan | $ 20 | |||||||
Maturity date | Aug. 23, 2026 | |||||||
Term loan, closing fee | $ 0.5 | |||||||
Effective interest rate percentage | 14.59% | 14.59% | ||||||
Perceptive Credit Holdings III, LP | Tranche One | ||||||||
Debt Instrument [Line Items] | ||||||||
Delayed draw term loan | $ 10 | |||||||
Perceptive Credit Holdings III, LP | Tranche One | Series E Preferred Shares | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of warrants issued | shares | 150,684 | |||||||
Purchase price per share of warrant | $ / shares | $ 11 | |||||||
Perceptive Credit Holdings III, LP | Tranche Two | ||||||||
Debt Instrument [Line Items] | ||||||||
Delayed draw term loan | $ 10 | |||||||
Perceptive Credit Holdings III, LP | Tranche Two | Series E Preferred Shares | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of warrants issued | shares | 150,684 | |||||||
Purchase price per share of warrant | $ / shares | $ 11 |
Term Loan - Schedule of Future
Term Loan - Schedule of Future Principal Repayments of Term Loan (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Debt Disclosure [Abstract] | |
2026 | $ 30,000 |
Total | $ 30,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Contingency [Line Items] | |
Ownership change percentage | 50.00% |
Federal | |
Income Tax Contingency [Line Items] | |
Open Tax Year | 2017 2018 2019 2020 |
State | |
Income Tax Contingency [Line Items] | |
Open Tax Year | 2016 2017 2018 2019 2020 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Member of Board and Stockholder | Facility space, finance and accounting services | Selling, General and Administrative | ||
Related Party Transaction [Line Items] | ||
Expenses incurred | $ 40 | $ 100 |
Former Owner of TDO | ||
Related Party Transaction [Line Items] | ||
Contingent earnout paid | 500 | 700 |
Former Owner of TDO | Facility space, finance and accounting services | Selling, General and Administrative | ||
Related Party Transaction [Line Items] | ||
Payments to related party | $ 100 | $ 100 |
Segment Information - Summary o
Segment Information - Summary of Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 7,887 | $ 6,132 | $ 23,306 | $ 14,680 |
Cost of sales | 5,838 | 4,931 | 17,422 | 12,550 |
Gross profit | $ 2,049 | $ 1,201 | $ 5,884 | $ 2,130 |
Gross margin | 26.00% | 20.00% | 25.00% | 15.00% |
Operating expenses | ||||
Selling, general and administrative | $ 8,495 | $ 5,802 | $ 22,400 | $ 19,423 |
Research and development | 4,633 | 4,920 | 14,310 | 14,551 |
Change in fair value of contingent earnout | 19 | 30 | 12 | (478) |
Total operating expenses | 13,147 | 10,752 | 36,722 | 33,496 |
Income (loss) from operations | (11,098) | (9,551) | (30,838) | (31,366) |
Product | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 6,186 | 4,675 | 18,166 | 10,690 |
Cost of sales | 5,260 | 4,404 | 15,668 | 10,973 |
Gross profit | $ 926 | $ 271 | $ 2,498 | $ (283) |
Gross margin | 15.00% | 6.00% | 14.00% | (3.00%) |
Operating expenses | ||||
Selling, general and administrative | $ 7,961 | $ 5,363 | $ 20,893 | $ 18,044 |
Research and development | 4,214 | 4,560 | 13,075 | 13,463 |
Change in fair value of contingent earnout | 19 | 30 | 12 | (478) |
Total operating expenses | 12,194 | 9,953 | 33,980 | 31,029 |
Income (loss) from operations | (11,268) | (9,682) | (31,482) | (31,312) |
Software | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 1,701 | 1,457 | 5,140 | 3,990 |
Cost of sales | 578 | 527 | 1,754 | 1,577 |
Gross profit | $ 1,123 | $ 930 | $ 3,386 | $ 2,413 |
Gross margin | 66.00% | 64.00% | 66.00% | 60.00% |
Operating expenses | ||||
Selling, general and administrative | $ 534 | $ 439 | $ 1,507 | $ 1,379 |
Research and development | 419 | 360 | 1,235 | 1,088 |
Total operating expenses | 953 | 799 | 2,742 | 2,467 |
Income (loss) from operations | $ 170 | $ 131 | $ 644 | $ (54) |
Segment Information - Segment A
Segment Information - Segment Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Segment Reporting Asset Reconciling Item [Line Items] | ||
Total assets | $ 43,416 | $ 76,141 |
Product | ||
Segment Reporting Asset Reconciling Item [Line Items] | ||
Total assets | 32,133 | 64,021 |
Software | ||
Segment Reporting Asset Reconciling Item [Line Items] | ||
Total assets | $ 11,283 | $ 12,120 |
Net Loss Per Share - Computatio
Net Loss Per Share - Computation of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Numerator: | ||||||||
Net loss attributable to common stock holders | $ (12,733) | $ (11,149) | $ (10,906) | $ (10,593) | $ (10,544) | $ (13,001) | $ (34,788) | $ (34,138) |
Denominator: | ||||||||
Weighted-average shares used in computing net loss per share attributable to common stock - basic and diluted | 1,232,921 | 1,197,919 | 1,218,815 | 1,194,562 | ||||
Net loss per share attributable to common stockholders - basic and diluted | $ (10.33) | $ (8.84) | $ (28.54) | $ (28.58) |
Net Loss Per Share - Summary of
Net Loss Per Share - Summary of Potentially Dilutive Securities Excluded from the Computation of Diluted Net Loss Per Share (Details) - shares | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 20,120,442 | 19,682,595 |
Convertible Preferred Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 17,031,887 | 17,031,887 |
Stock Options | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 2,532,210 | 2,245,047 |
Warrants | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 331,503 | 180,819 |
Forward Obligation | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 224,842 | 224,842 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - Subsequent Event - shares | Nov. 02, 2021 | Oct. 20, 2021 |
IPO | Stock Option Awards | Non-employee Directors and Executive Officers | ||
Subsequent Event [Line Items] | ||
Shares issued | 572,437 | |
IPO | Restricted Stock Units | Non-employee Directors and Executive Officers | ||
Subsequent Event [Line Items] | ||
Shares issued | 338,149 | |
IPO | Stock Option Awards and Restricted Stock Units | Maximum | ||
Subsequent Event [Line Items] | ||
Vesting period | 4 years | |
IPO | Stock Option Awards and Restricted Stock Units | Minimum | ||
Subsequent Event [Line Items] | ||
Vesting period | 3 years | |
2021 Equity Incentive Plan | ||
Subsequent Event [Line Items] | ||
Percentage of shares outstanding as of closing of initial public offering for issuance under stock awards | 13.00% | |
Percentage of shares outstanding on final day of immediately preceding calendar year for issuance under stock awards | 5.00% | |
2021 Employee Share Purchase Plan | ||
Subsequent Event [Line Items] | ||
Percentage of shares outstanding as of closing of initial public offering for issuance under stock awards | 2.00% | |
Percentage of shares outstanding on final day of immediately preceding calendar year for issuance under stock awards | 1.00% | |
Maximum number of shares issued or transferred pursuant to rights granted | 10,000,000 |