Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | May 09, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-40337 | |
Entity Registrant Name | NEUROPACE, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 22-3550230 | |
Entity Address, Address Line One | 455 N. Bernardo Avenue | |
Entity Address, City or Town | Mountain View | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94043 | |
City Area Code | 650 | |
Local Phone Number | 237-2700 | |
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Trading Symbol | NPCE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 24,605,333 | |
Amendment Flag | false | |
Entity Central Index Key | 0001528287 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 7,489 | $ 19,187 |
Short-term investments | 95,686 | 96,397 |
Accounts receivable | 9,061 | 7,091 |
Inventory | 8,103 | 7,822 |
Prepaid expenses and other current assets | 2,081 | 2,319 |
Total current assets | 122,420 | 132,816 |
Property and equipment, net | 860 | 603 |
Operating lease right-of-use asset | 5,559 | 0 |
Restricted cash | 122 | 122 |
Other assets | 21 | 21 |
Total assets | 128,982 | 133,562 |
Current liabilities | ||
Accounts payable | 2,228 | 1,378 |
Accrued liabilities | 6,961 | 7,923 |
Operating lease liability | 2,868 | 0 |
Total current liabilities | 12,057 | 9,301 |
Deferred rent, noncurrent | 0 | 911 |
Long-term debt | 50,115 | 49,847 |
Operating lease liability, net of current portion | 3,987 | 0 |
Total liabilities | 66,159 | 60,059 |
Commitments and contingencies (Note 5) | ||
Stockholders’ equity | ||
Preferred stock, $0.001 par value, 10,000,000 shares authorized and no shares issued and outstanding as of March 31, 2022 and December 31, 2021 | 0 | 0 |
Common stock, $0.001 par value, 200,000,000 shares authorized as of March 31, 2022 and December 31, 2021; 24,477,180 and 24,452,999 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively | 24 | 24 |
Additional paid-in capital | 499,013 | 497,522 |
Accumulated other comprehensive loss | (982) | (272) |
Accumulated deficit | (435,232) | (423,771) |
Total stockholders’ equity | 62,823 | 73,503 |
Total liabilities and stockholders’ equity | $ 128,982 | $ 133,562 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock issued (in shares) | 0 | 0 |
Preferred stock outstanding (in shares) | 0 | 0 |
Common stock par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock authorized (in shares) | 200,000,000 | |
Common stock issued (in shares) | 24,477,180 | 24,452,999 |
Common stock outstanding (in shares) | 24,477,180 | 24,452,999 |
Condensed Statements of Operati
Condensed Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 11,374 | $ 11,217 |
Cost of goods sold | 3,115 | 2,724 |
Gross profit | 8,259 | 8,493 |
Operating expenses | ||
Research and development | 5,577 | 4,100 |
Selling, general and administrative | 12,444 | 8,267 |
Total operating expenses | 18,021 | 12,367 |
Loss from operations | (9,762) | (3,874) |
Interest income | 134 | 26 |
Interest expense | (1,830) | (1,849) |
Other income (expense), net | (3) | (3,113) |
Net loss | (11,461) | (8,810) |
Unrealized loss on available-for-sale debt securities | (710) | 0 |
Comprehensive loss | $ (12,171) | $ (8,810) |
Net loss per share attributable to common stockholders, basic (in dollars per share) | $ (0.47) | $ (32.73) |
Net loss per share attributable to common stockholders, diluted (in dollars per share) | $ (0.47) | $ (32.73) |
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic (in shares) | 24,307,485 | 269,178 |
Weighted-average shares used in computing net loss per share attributable to common stockholders, diluted (in shares) | 24,307,485 | 269,178 |
Condensed Statements of Redeema
Condensed Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) - USD ($) $ in Thousands | Total | Redeemable Convertible Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2020 | 16,614,178 | |||||
Beginning balance at Dec. 31, 2020 | $ 141,422 | |||||
Ending balance (in shares) at Mar. 31, 2021 | 16,614,178 | |||||
Ending balance at Mar. 31, 2021 | $ 141,422 | |||||
Beginning balance (in shares) at Dec. 31, 2020 | 314,096 | |||||
Beginning balance at Dec. 31, 2020 | $ (147,832) | $ 0 | $ 239,826 | $ 33 | $ (387,691) | |
Increase (Decrease) in Stockholders' Equity | ||||||
Net loss | (8,810) | (8,810) | ||||
Issuance of common stock pursuant to stock option exercises (in shares) | 156,538 | |||||
Issuance of common stock pursuant to stock option exercises | 4 | 4 | ||||
Stock-based compensation | 202 | 202 | ||||
Ending balance (in shares) at Mar. 31, 2021 | 470,634 | |||||
Ending balance at Mar. 31, 2021 | $ (156,436) | $ 0 | 240,032 | 33 | (396,501) | |
Beginning balance (in shares) at Dec. 31, 2021 | 0 | |||||
Ending balance (in shares) at Mar. 31, 2022 | 0 | |||||
Beginning balance (in shares) at Dec. 31, 2021 | 24,452,999 | 24,452,999 | ||||
Beginning balance at Dec. 31, 2021 | $ 73,503 | $ 24 | 497,522 | (272) | (423,771) | |
Increase (Decrease) in Stockholders' Equity | ||||||
Net loss | (11,461) | (11,461) | ||||
Unrealized gain (loss) on available-for-sale debt securities | $ (710) | (710) | ||||
Issuance of common stock pursuant to stock option exercises (in shares) | 38,635 | 38,635 | ||||
Issuance of common stock pursuant to stock option exercises | $ 1 | 1 | ||||
Repurchase of common stock (in shares) | (14,454) | |||||
Change in early exercise liability | 2 | 2 | ||||
Stock-based compensation | $ 1,488 | 1,488 | ||||
Ending balance (in shares) at Mar. 31, 2022 | 24,477,180 | 24,477,180 | ||||
Ending balance at Mar. 31, 2022 | $ 62,823 | $ 24 | $ 499,013 | $ (982) | $ (435,232) |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities | ||
Net loss | $ (11,461) | $ (8,810) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Stock-based compensation expense | 1,488 | 202 |
Depreciation | 80 | 74 |
Amortization of debt discount and issuance costs | 67 | 69 |
Non-cash interest expense | 201 | 217 |
Amortization of right-of-use asset | 672 | 0 |
Inventory write-downs | 82 | 24 |
Change in fair value of redeemable convertible preferred stock warrant liability | 0 | 3,122 |
Changes in operating assets and liabilities | ||
Accounts receivable | (1,970) | 194 |
Inventory | (362) | (157) |
Prepaid expenses and other assets | 239 | (135) |
Accounts payable | 820 | 536 |
Accrued liabilities | (472) | (1,094) |
Operating lease liabilities | (777) | 0 |
Deferred rent | 0 | (178) |
Net cash (used in) operating activities | (11,393) | (5,936) |
Cash flows from investing activities | ||
Acquisition of property and equipment | (306) | (35) |
Purchase of short-term investments | 0 | (5,000) |
Net cash (used in) investing activities | (306) | (5,035) |
Cash flows from financing activities | ||
Issuance of common stock pursuant to stock option exercises | 1 | 4 |
Payment of deferred offering costs | 0 | (1,582) |
Net cash provided by (used in) financing activities | 1 | (1,578) |
Net decrease in cash and cash equivalents | (11,698) | (12,549) |
Cash, cash equivalents and restricted cash | ||
Beginning of the period | 19,309 | 26,756 |
End of the period | 7,611 | 14,207 |
Reconciliation of cash, cash equivalents and restricted cash to balance sheets: | ||
Cash and cash equivalents | 7,489 | 13,841 |
Restricted cash | 122 | 366 |
Cash, cash equivalents and restricted cash in balance sheets | 7,611 | 14,207 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 1,563 | 1,563 |
Supplemental disclosures of non-cash investing and financing information: | ||
Net change in accrued liabilities from early exercise of options | (2) | 0 |
Purchase of property and equipment included in accounts payable | 31 | 0 |
Unpaid deferred offering costs included in accounts payable and accrued liabilities | $ 0 | $ 578 |
The Company
The Company | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company | The Company NeuroPace, Inc., or the Company, was incorporated in the state of Delaware on November 19, 1997. The Company is a commercial-stage medical device company that has developed the RNS System, the only commercially available brain-responsive neuromodulation system designed for treating medically refractory focal epilepsy by delivering personalized, real-time treatment at the seizure source. The Company began commercializing its products in the United States in 2014. Initial Public Offering On April 21, 2021, the Company’s registration statement on Form S-1 (File No. 333-254663) relating to its initial public offering, or IPO, of common stock became effective. The IPO closed on April 26, 2021, at which time the Company issued 6,900,000 shares of its common stock at a price of $17.00 per share, which included the issuance of shares in connection with the exercise by the underwriters of their option to purchase up to 900,000 additional shares. The Company received an aggregate of $117.3 million in gross proceeds, before underwriting discounts and commissions and offering costs, and approximately $105.5 million in net proceeds after deducting $8.2 million in underwriting discounts and commissions and $3.6 million in offering costs. Upon the closing of the IPO, all outstanding shares of the Company’s redeemable convertible preferred stock converted into 16,614,178 shares of common stock, warrants to purchase 346,823 shares of Series B’ convertible preferred stock net exercised to 213,941 shares of Series B’ convertible preferred stock and subsequently converted into common stock on a one-to-one basis, and warrants to purchase 219 shares of common stock net exercised to 185 shares of common stock. In connection with the completion of its IPO, on April 26, 2021, the Company’s certificate of incorporation was amended and restated to provide for 200,000,000 authorized shares of common stock with a par value of $0.001 per share and 10,000,000 authorized shares of preferred stock with a par value of $0.001 per share. Liquidity and Capital Resources The Company has incurred operating losses and negative cash flows from operations since its inception and has an accumulated deficit of $435.2 million as of March 31, 2022. For the three months ended March 31, 2022 and 2021, the Company used $11.4 million and $5.9 million of cash, respectively, in its operating activities. As of March 31, 2022, the Company had cash, cash equivalents and short-term investments of $103.2 million. Historically, the Company has funded its operations principally through the sales of its products, issuance of redeemable convertible preferred stock and debt financing. On April 26, 2021, the Company completed its IPO and received approximately $105.5 million in net proceeds after deducting underwriting discounts, commissions and offering costs. The Company’s condensed financial statements have been prepared on the basis of the Company continuing as a going concern for the next 12 months. Management believes that the Company’s cash, cash equivalents and short-term investments will allow the Company to continue its planned operations for at least the next 12 months from the date of the issuance of these unaudited interim condensed financial statements. In connection with the Term Loan described in Note 6, the Company will need to be in compliance with a minimum annual net revenue covenant determined in accordance with generally accepted accounting principles of $43.0 million in the year ended December 31, 2022, and maintain a minimum cash and cash equivalents balance of $5.0 million . If the Company cannot generate sufficient revenue in the future, the Company may not be in compliance with the annual net revenue covenant and the lender may call the debt resulting in the Company immediately needing additional funds, and resulting in a going concern. As of March 31, 2022 , the Company was in compliance with all covenants of the Term Loan. The COVID-19 pandemic is affecting business conditions in the industry in which the Company operates. Beginning in March 2020, the Company’s net sales were negatively impacted by the COVID-19 pandemic as hospitals delayed or canceled elective procedures. In response to the pandemic, many state and local governments in the U.S. issued orders that temporarily precluded elective procedures in order to conserve scarce health system resources. The decrease in hospital admission rates and elective surgeries reduced both the number of patients being |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The unaudited interim condensed financial statements have been prepared in conformity with generally accepted accounting principles in the United States, or GAAP, as defined by the Financial Accounting Standards Board, or the FASB. Reverse Stock Split On April 9, 2021, the Company effected a 1-for-2.6 reverse stock split of its common stock and redeemable convertible preferred stock. The par value of the authorized stock was not adjusted as a result of the reverse stock split. All issued and outstanding shares of common stock and redeemable convertible preferred stock and related per share amounts contained in the accompanying financial statements have been retroactively revised to reflect the combined effect of all reverse stock splits for all periods presented. Unaudited Interim Financial Information The condensed balance sheet as of December 31, 2021 was derived from the Company’s audited financial statements, but does not include all disclosures required by GAAP. The accompanying unaudited condensed financial statements as of March 31, 2022 and for the three months ended March 31, 2022 and 2021, have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission, or the SEC, for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. Accordingly, these financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2021 and notes thereto, which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the SEC on March 10, 2022. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s condensed financial position as of March 31, 2022 and condensed results of operations and condensed cash flows for the three months ended March 31, 2022 and 2021 have been made. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2022. Use of Estimates The preparation of unaudited interim condensed financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the amounts and disclosures reported in the financial statements. The Company uses significant judgment when making estimates related to the valuation of its common stock prior to the IPO, and related stock-based compensation, the valuation of deferred tax assets and related valuation allowances, provision for excess and obsolete inventories, and the valuation of redeemable convertible preferred stock warrant liability. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions. Fair Value of Financial Instruments Carrying amounts of certain of the Company’s financial instruments, including cash equivalents, accounts receivable, accounts payable and accrued liabilities, approximate fair value because of the short-term nature of these instruments. Short-term investments comprise available-for-sale debt securities, which are carried at fair value. The Company believes that its borrowings bear interest at the prevailing market rates for instruments with similar characteristics; accordingly, the carrying value of this instrument approximates its fair value. The redeemable convertible preferred stock warrant liability is carried at fair value based on unobservable market inputs. The Company determines the fair value of financial and non-financial assets and liabilities using the fair value hierarchy which establishes three levels of inputs that may be used to measure fair value (see Note 3). Concentration of Credit Risk, and Other Risks and Uncertainties Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents, short-term investments and accounts receivable to the extent of the amounts recorded on the balance sheet. The Company’s cash is invested in one major financial institution in the United States. Deposits in this financial institution may exceed federally insured limits. The Company’s cash equivalents are invested in money market funds. The Company’s accounts receivable are due from a variety of health care organizations in the United States. For the three months ended March 31, 2022 and 2021, there were no customers that represented 10% or more of revenue. As of March 31, 2022 and December 31, 2021, no customer represented 10% or more of the Company’s accounts receivable. The Company is subject to certain risks, including that its devices may not be approved or cleared or continue to be approved or cleared for marketing by governmental authorities or be successfully marketed for expanded indications. There can be no assurance that the Company’s products will achieve widespread adoption in the marketplace, nor can there be any assurance that existing devices or any future devices can be developed or manufactured at an acceptable cost and speed and with appropriate performance characteristics. The Company is also subject to risks common to companies in the medical device industry, including, but not limited to, new technological innovations, dependence on healthcare providers to prescribe initial implants and replacements, dependence upon third-party payors to provide adequate coverage and reimbursement, dependence on key personnel, single-source suppliers and vendors in connection with the manufacture of its products, concentration of Level 4 CECs and epileptologists, obtaining, maintaining, protecting, enforcing, and defending intellectual property rights and proprietary technology, product liability claims, legal proceedings, and compliance with government regulations. The Company’s medical devices require approvals or clearances from the U.S. Food and Drug Administration, or the FDA, or international regulatory agencies. In addition, in order to continue the Company’s operations, compliance with various federal and state laws is required. If approvals or clearances were withdrawn by the FDA for the Company’s current products or if such approvals or clearances were denied or delayed for future products, product updates, or expanded indications for use, it would have a material adverse impact on the Company. Deferred Offering Costs The Company capitalizes, within other assets, certain legal, accounting and other third-party fees that are directly related to the Company’s in-process equity financings, including its IPO, until such financings are consummated. After consummation of the equity financing, these costs are recorded as a reduction of the proceeds received as a result of the offering. Should a planned equity financing be abandoned, terminated or significantly delayed, the deferred offering costs are immediately written off to operating expenses. Upon closing the IPO, all deferred offering costs were charged against the proceeds from the IPO and recorded in stockholders equity as a reduction of additional paid-in capital. As of March 31, 2022 and December 31, 2021, there were no deferred offering costs recorded on the condensed balance sheets. Leases The Company leases its facilities and meets the requirements to account for these leases as operating leases. For the three months ended March 31, 2021, for facility leases that contain rent escalations or rent concession provisions, the Company recorded its lease expense during the lease term on a straight-line basis over the term of the lease. As of December 31, 2021, the Company recorded differences between the rent paid and the straight-line rent as a deferred rent liability. Leasehold improvements funded by landlord incentives or allowances were recorded as leasehold improvement assets and a corresponding deferred rent liability. The leasehold improvement asset is amortized over the lesser of the term of the lease or life of the asset. Upon adoption of ASC 842, Leases , on January 1, 2022, the Company determined if an arrangement is a lease, or contains a lease, at inception. Operating leases are included in operating lease right-of-use, or ROU, assets, operating lease liability, and operating lease liability, net of current portion on the Company’s condensed balance sheets. ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term and in a similar economic environment at commencement date in determining the present value of future payments. The ROU asset also includes any lease payments made to the lessor at or before the commencement date, minus lease incentives received, and initial direct costs incurred. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company elected certain practical expedients under ASC 842 which are: (i) to not record leases with an initial term of twelve months or less on the balance sheet; (ii) to combine the lease and non-lease components in determining the lease liabilities and right-of-use assets, and (iii) to carry forward prior conclusions about lease identification and classification. Government Programs In May 2021, the Company was awarded a grant by the National Institutes of Health, or NIH, to support research of thalamocortical responsive neurostimulation for the treatment of Lennox-Gastaut Syndrome, a type of epilepsy. The award was issued for a five-year period and has a total budget of over $9.3 million. Funding is approved for the first year beginning June 1, 2021 and provides for reimbursement of qualified direct and indirect expenses in the amount of $0.8 million. Approval of funds for years two through five is subject to the completion of certain milestones. For funds received under the NIH funding agreement, the Company recognizes a reduction in research and development expenses in an amount equal to the qualifying expenses incurred in each period up to the amount awarded by the NIH. Qualifying expenses incurred by the Company in advance of funding by the NIH are recorded within prepaid expenses and other current assets on the balance sheets. Through March 31, 2022, $0.2 million of qualifying expenses have been incurred and funded by the NIH. Net Loss per Share Attributable to Common Stockholders Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, without consideration of potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, redeemable convertible preferred stock, stock options, common stock subject to repurchase related to early exercise of stock options, and restricted stock units are considered to be potentially dilutive securities. Basic and diluted net loss attributable to common stockholders per share is presented in conformity with the two-class method required for participating securities, as the redeemable convertible preferred stock is considered a participating security because it participates in dividends with common stock. The Company also considers the shares issued upon the early exercise of stock options subject to repurchase to be participating securities, because holders of such shares have non-forfeitable dividend rights in the event a dividend is paid on common stock. The holders of redeemable convertible preferred stock and the holders of the shares issued upon early exercise of stock options subject to repurchase do not have a contractual obligation to share in the Company’s losses. As such, the net loss was attributed entirely to common stockholders. Because the Company has reported a net loss for all periods presented, diluted net loss per common share is the same as basic net loss per common share for those periods. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02 (Topic 842), Leases . ASU 2016-02 requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a ROU asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. This ASU provides a lessee with an option to not account for leases with a term of 12 months or less as leases in the scope of this ASU. This ASU will also require new qualitative and quantitative disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. This ASU should be applied through a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements , which allows entities to elect an optional transition method where entities may continue to apply the existing lease guidance during the comparative periods and apply the new lease requirements through a cumulative effect adjustment in the period of adoption rather than in the earliest period presented. In June 2020, the FASB issued ASU 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities, which delays the adoption dates for ASU 2016-02 for non-public entities to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is allowed. The Company adopted Topic 842 effective January 1, 2022 using a modified retrospective method and did not restate comparative periods. The Company recognized ROU assets of $6.1 million and lease liabilities of $7.5 million for its operating leases as of January 1, 2022. In addition, the amount of the Company’s deferred rent as of December 31, 2021 of $1.4 million was removed upon adoption. The adoption of these ASUs did not have any impact on the condensed statements of operations and comprehensive loss and condensed statements of cash flows. See Note 5 for more information related to the Company’s lease obligations. Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments- Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which amends existing guidance on the impairment of financial assets and adds an impairment model that is based on expected losses rather than incurred losses and requires an entity to recognize as an allowance its estimate of expected credit losses for its financial assets. An entity will apply this guidance through a cumulative-effect adjustment to retained earnings upon adoption (a modified-retrospective approach) while a prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date. For public business entities that meet the definition of an SEC filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, adoption is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. For SEC filers that are eligible to be smaller reporting companies and for all other entities, this ASU is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its financial statements and related disclosures, and does not expect the standard will have a material impact on the Company’s financial statements and related disclosures. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value MeasurementsThe Company measures certain financial assets and liabilities at fair value on a recurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company utilizes the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The following table summarizes the Company’s financial assets (cash equivalents, marketable securities and liabilities) at fair value as of March 31, 2022 (in thousands): Fair Value as of March 31, 2022 Basis for Fair Value Measurements (Level 1) (Level 2) (Level 3) Assets: Money market funds, included in cash and cash equivalents $ 5,632 $ 5,632 $ — $ — Fixed income mutual funds, included in short-term investments 95,686 95,686 — — Total $ 101,318 $ 101,318 $ — $ — The following table summarizes the Company’s financial assets (cash equivalents, marketable securities and liabilities) at fair value as of December 31, 2021 (in thousands): Fair Value as of December 31, 2021 Basis for Fair Value Measurements (Level 1) (Level 2) (Level 3) Assets: Money market funds, included in cash and cash equivalents $ 16,498 $ 16,498 $ — $ — Fixed income mutual funds, included in short-term investments 96,397 96,397 — — Total $ 112,895 $ 112,895 $ — $ — There were no liabilities measured at fair value on a recurring and non-recurring basis as of March 31, 2022 and December 31, 2021. The money market funds are highly liquid and primarily invest in short-term fixed income securities issued by the U.S. government and U.S. government agencies. The Company’s available-for-sale investments comprise short-term investments in fixed income mutual funds, which primarily consist of debt securities issued by the U.S. government and U.S. government agencies and corporate bonds and notes. The following is a summary of the Company’s available-for-sale debt securities (in thousands): March 31, December 31, 2022 2021 Cost basis $ 96,668 $ 96,702 Unrealized loss (982) (305) Fair value $ 95,686 $ 96,397 In determining the fair value of the redeemable convertible preferred stock warrant liability, the Company used the Black-Scholes option pricing model to estimate the fair value using unobservable inputs including the expected term, expected volatility, risk-free interest rate and dividend yield (see Note 8). There were no warrants outstanding for the purchase of redeemable convertible preferred stock as of March 31, 2022, as all such warrants were net exercised to shares of common stock upon the closing of the IPO. The change in fair value of the redeemable convertible preferred stock warrant liability is summarized below (in thousands): Redeemable Convertible Preferred Stock Warrant Liability Fair value as of January 1, 2021 $ 369 Change in fair value included in other income (expense), net 3,122 Fair value as of March 31, 2021 $ 3,491 |
Balance Sheet Components
Balance Sheet Components | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Components | Balance Sheet Components Inventory Inventories consist of the following (in thousands): March 31, December 31, 2022 2021 Raw materials $ 2,297 $ 2,232 Work-in-process 1,210 879 Finished goods 4,596 4,711 Total $ 8,103 $ 7,822 Property and Equipment, net Property and equipment, net consists of the following (in thousands): March 31, December 31, 2022 2021 Machinery, equipment, furniture and fixtures $ 4,043 $ 3,742 Computer equipment and software 2,952 2,916 Leasehold improvements 2,402 2,402 9,397 9,060 Less: Accumulated depreciation (8,537) (8,457) Property and equipment, net $ 860 $ 603 Depreciation expense for the three months ended March 31, 2022 and 2021 was $0.1 million and $0.1 million, respectively. Accrued Liabilities Accrued liabilities consist of the following (in thousands): March 31, December 31, 2022 2021 Payroll and related expenses $ 5,575 $ 6,547 Inventory-raw materials 467 251 Professional fees 140 109 Deferred rent, current — 490 Other 779 526 Total accrued liabilities $ 6,961 $ 7,923 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Facility Lease In August 2011, the Company entered into a non-cancelable operating lease for combined office and manufacturing facilities in Mountain View, California. The lease was scheduled to expire in April 2019 and was amended in May 2018 to extend it through June 2024. The terms of the facility lease provide for rental payments on a graduated scale; however, rent expense is recognized on a straight-line basis over the lease term. The Company has an option to extend the lease for a period of five years, commencing on July 1, 2024 and expiring on June 30, 2029. In conjunction with the original lease agreement, the Company obtained a letter of credit for $0.9 million in lieu of a security deposit. In May 2019, the letter of credit was amended and reduced to $0.7 million. In June 2021, the letter of credit was amended and further reduced to $0.2 million. Rental payments range from $2.9 million to $3.3 million per year over the extended term of the lease. In April 2020, the Company amended the lease agreement to defer 50.0% of the rental payment for May and June 2020 of $0.3 million. The deferred rental payments accrued interest at an annual rate of 8.0% starting from October 1, 2020 and were paid in three equal monthly installments commencing on April 1, 2021. Rent expense for the three months ended March 31, 2021 was $0.7 million. As of December 31, 2021, $1.4 million was recorded as deferred rent expense. The Company’s future minimum lease payments under the non-cancellable operating lease as of December 31, 2021 were as follows (in thousands): December 31, 2022 $ 3,172 2023 3,267 2024 1,666 Total $ 8,105 The maturities of operating lease liabilities as of March 31, 2022 are as follows (in thousands): March 31, 2022 (remaining nine months) $ 2,394 2023 3,267 2024 1,666 Total undiscounted lease payments 7,327 Less: imputed interest 472 Total operating lease liability 6,855 Less: current portion 2,868 Operating lease liability, net of current portion $ 3,987 Operating lease cost was $0.7 million for the three months ended March 31, 2022. As of March 31, 2022, the remaining term for the operating lease in Mountain View, California was 2.3 years, and the discount rate used to measure the lease liability for such operating lease upon recognition was 6.3%. During the three months ended March 31, 2022, cash paid for amounts included in operating lease liabilities of $0.8 million was included in cash flows from operating activities on the condensed statements of cash flows. Indemnifications In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and may provide for indemnification of the counterparty. The Company’s exposure under these agreements is unknown because it involves claims that may be made against it in the future but have not yet been made. The Company may, from time to time, be subject to claims or be required to defend actions related to its indemnification obligations. The Company indemnifies each of its directors and officers for certain events or occurrences, subject to certain limits, while the director or officer is or was serving at the Company’s request in such capacity, as permitted under Delaware law and in accordance with its certificate of incorporation and bylaws. The term of the indemnification period lasts as long as the director or officer may be subject to any proceeding arising out of acts or omissions of such individual in such capacity. The maximum amount of potential future indemnification is unlimited. The Company believes that the fair value of these indemnification obligations is minimal. Accordingly, the Company has not recognized any liabilities relating to these obligations as of March 31, 2022 and December 31, 2021. Contingencies From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. The Company determined that no accrual related to contingencies was required as of March 31, 2022 and December 31, 2021. Legal Proceedings The Company is, and from time to time may become, involved in legal proceedings. The Company may also pursue litigation to assert its legal rights and such litigation may be costly and divert the efforts and attention of its management and technical personnel which could adversely affect its business. Due to the uncertainty of litigation and depending on the amount and the timing, an unfavorable resolution of some or all of such matters may materially affect our business, results of operations, financial position, or cash flows. The nature of the loss contingencies relating to claims that have been asserted against us are described below. On April 20, 2021, the Company received correspondence from the United States Department of Treasury regarding an inquiry into a matter that may fall under the jurisdiction of the Committee on Foreign Investment in the United States, or CFIUS. While the Company believes that its RNS System is not a critical technology for which CFIUS would have jurisdiction and does not pose a national security risk, the Company is cooperating fully with CFIUS on the matter. Additionally, on October 18, 2021, three stockholders of the Company, James Jacoby, George Vachtsevanos, and Javier Echauz, filed a complaint in the United States District Court for the Northern District of California, entitled James Jacoby et al. v. NeuroPace, Inc., et al. , Case No. 3:21-cv-8136, against the Company and its board of directors. The complaint alleges various claims related to the Company’s reverse stock splits and seeks, among other relief, damages and attorney’s fees. The complaint was amended on December 28, 2021 to name additional defendants. No estimates of possible losses or range of losses with respect to this action can be made at this time. The Company believes there is no merit to these allegations and intends to vigorously defend itself against this action. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt 2020 Term Loan In September 2020, the Company entered into a Term Loan Agreement with CRG Partners IV L.P. and its affiliates for total borrowings of up to $60.0 million, or the Term Loan, and borrowed $50.0 million. The remaining $10.0 million of the Term Loan was available to the Company for borrowing until March 31, 2022 if the Company achieved a revenue-based milestone in 2021. The revenue-based milestone was not achieved, and the remaining $10.0 million of the Term Loan expired without being drawn. The Term Loan bears interest at a rate of 12.5% per year. Payments under the Term Loan are made quarterly with payment dates fixed at the end of each calendar quarter. The Term Loan was interest-only through September 30, 2023, which could be extended through September 30, 2025 at the Company’s option if the Company completed its IPO on or prior September 30, 2023. In connection with closing the IPO, the Company extended the interest-only period to September 30, 2025. Following the interest-only period, principal payment is due in one installment on September 30, 2025. The Term Loan includes a fee upon repayment of the loan equal to 10% of the aggregate principal amount being prepaid or repaid, or the backend fee. As of March 31, 2022, the Term Loan had an annual effective interest rate of 15.66% per year. The Term Loan is collateralized by substantially all of the Company’s assets. The Term Loan Agreement contains customary representations and warranties, covenants, events of default and termination provisions. The financial covenants require that the Company achieve minimum annual revenue thresholds commencing in 2021 and maintain a minimum balance of cash and cash equivalents (see Note 1). In March 2022, the Term Loan was amended to reduce the minimum annual net revenue covenant to $43.0 million for the year ended December 31, 2022 The Company paid $1.0 million in fees to the lender and third parties which is reflected as a discount on the loan and is being accreted over the life of the loan using the effective interest method. Also, the Company issued warrants to the lender for a total of 346,823 shares of Series B’ redeemable convertible preferred stock. The warrants had a fair value of $0.6 million as of the issuance date, which was accounted for as debt issuance costs (see Note 8). During the three months ended March 31, 2022 and 2021, the Company recorded interest expense related to deferred financing and debt issuance costs of the Term Loan of $0.1 million and $0.1 million, respectively. Interest expense on the Term Loan was $1.8 million and $1.8 million during the three months ended March 31, 2022 and 2021, respectively. As of March 31, 2022, future minimum payments for the Term Loan are as follows (in thousands): Term Loan 2022 (remaining nine months) $ 4,774 2023 6,337 2024 6,354 2025 59,740 Total 77,205 Less: Unamortized debt discount and issuance cost (1,094) Less: Unaccreted backend fee (3,791) Less: Interest (22,205) Term Loan $ 50,115 Paycheck Protection Program In April 2020, the Company received $4.0 million from a federal Small Business Administration loan under the Paycheck Protection Program, or the PPP Loan. The note bore interest at 1.0% per year on the outstanding principal amount and had a maturity date 24 months from the date of the note. No payments were due for the six-month period beginning on the date of the note. Payments of principal and interest were due over the following 18 months. The Small Business Administration modified the PPP Loan such that monthly payments of principal and interest were due from September 2021 through April 2022. In April 2021, the Company repaid its entire obligation under the PPP Loan amounting to $4.1 million, including principal of $4.0 million and interest of less than $0.1 million, using the proceeds from its IPO. |
Redeemable Convertible Preferre
Redeemable Convertible Preferred Stock | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Redeemable Convertible Preferred Stock | Redeemable Convertible Preferred StockOn April 26, 2021, upon the closing of the Company’s IPO, all outstanding redeemable convertible preferred stock automatically converted into 16,614,178 shares of common stock. There was no issued and outstanding redeemable convertible preferred stock as of March 31, 2022 and December 31, 2021. |
Redeemable Convertible Prefer_2
Redeemable Convertible Preferred Stock Warrant Liability | 3 Months Ended |
Mar. 31, 2022 | |
Other Liabilities Disclosure [Abstract] | |
Redeemable Convertible Preferred Stock Warrant Liability | Redeemable Convertible Preferred Stock Warrant Liability On September 24, 2020, in connection with entering into the Term Loan Agreement, the Company issued CRG Partners IV L.P. and its affiliates warrants to purchase 346,823 shares of Series B’ redeemable convertible preferred stock at an exercise price of $6.51339 per share, or the Series B’ Warrants, which was accounted as debt issuance costs. The Series B’ Warrants would terminate at the earlier of the ten-year anniversary from the issuance date, the closing of the Company’s IPO or liquidation of the Company. These warrants had a net exercise provision under which their holders could, in lieu of payment of the exercise price in cash, surrender the warrant and receive a net amount of shares based on the fair market value of the Company’s stock at the time of exercise of the warrants after deduction of the aggregate exercise price. The Series B’ Warrants contained provisions for adjustment of the exercise price and number of shares issuable upon the exercise of warrants in the event of certain stock dividends, stock splits, reorganizations, reclassifications, and consolidations. The fair value of the Series B’ Warrants on the date of issuance of $0.6 million was recorded as a debt discount. Upon the closing of the IPO, the Series B’ Warrants were net exercised to 213,941 shares of Series B’ redeemable convertible preferred stock and subsequently converted into common stock on a one-to-one basis. Upon the closing of the IPO, the Company remeasured the Series B’ Warrants to fair value of $5.6 million, which was the intrinsic value of net exercised common stock, as according to the Series B’ Warrant agreements the Series B’ Warrants were to be automatically exercised upon the IPO and the expected term of the Series B’ Warrants was zero immediately before the closing of the IPO. Upon the closing of the IPO, the redeemable convertible preferred stock warrant liability was reclassified to additional paid-in capital. The change in fair value of $(3.1) million during the three months ended March 31, 2021 was recorded as a component of other income (expense), net in the condensed statements of operations and comprehensive loss. The redeemable convertible preferred stock warrant liability was valued using the following assumptions under the Black-Scholes option pricing model: March 31, 2021 Stock price $14.50 Expected term (in years) 9.5 Expected volatility 38.4% Weighted average risk-free interest rate 1.68% Dividend yield —% |
Common Stock
Common Stock | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Common Stock | Common Stock The Company’s Certificate of Incorporation authorizes the Company to issue 200,000,000 shares of $0.001 par value common stock. The holders of common stock are entitled to receive dividends whenever funds and assets are legally available and when declared by the Board of Directors. As of March 31, 2022 and December 31, 2021, no dividends had been declared. As of March 31, 2022 and December 31, 2021, the Company had reserved common stock for future issuance as follows: March 31, December 31, 2022 2021 Shares available for future grant under the 2021 Plan 1,559,459 2,132,750 Outstanding options under the 2021 Plan 3,543,716 3,038,970 Outstanding restricted stock units under the 2021 Plan 1,848,644 596,085 Common stock available for ESPP 714,698 470,169 Total 7,666,517 6,237,974 |
Stock-Based Incentive Compensat
Stock-Based Incentive Compensation Plans | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Incentive Compensation Plans | Stock-Based Incentive Compensation Plans A summary of shares available for grant under the Company’s 2021 Equity Incentive Plan, or the 2021 Plan, is as follows: Shares Available for Grant Shares available for grant as of January 1, 2022 2,132,750 Shares authorized 1,222,649 Granted/Awarded (1,863,948) Cancelled 68,008 Shares available for grant as of March 31, 2022 1,559,459 A summary of stock option activity for the three months ended March 31, 2022 is set forth below: Options Outstanding Number of Shares Weighted-Average Exercise Price Weighted Average Remaining Contractual Term (in Years) Balances as of January 1, 2022 3,038,970 $ 2.61 8.83 Granted 580,700 $ 8.12 Exercised (38,635) $ 0.03 Cancelled (37,319) $ 0.06 Balances at March 31, 2022 3,543,716 $ 3.56 8.78 Vested and exercisable at March 31, 2022 1,182,725 $ 0.84 8.34 Vested and expected to vest at March 31, 2022 3,543,716 $ 3.56 8.78 Early Exercise of Stock Options The terms of the Company’s 2020 Stock Plan, or the 2020 Plan, and the 2021 Plan, permit the exercise of options granted under the plans prior to vesting, subject to required approvals. The shares of common stock issued from the early exercise of unvested stock options are restricted and continue to vest over the original implied service period. The Company has the option to repurchase any unvested shares at the original purchase price upon any voluntary or involuntary termination. The shares purchased by the employees and non-employees pursuant to the early exercise of stock options are not deemed, for accounting purposes, to be outstanding until those shares vest. The cash received in exchange for exercised and unvested shares related to stock options granted is recorded as a liability for the early exercise of stock options in accrued liabilities on the accompanying balance sheet and will be transferred into common stock and additional paid-in capital as the shares vest. As of March 31, 2022 and December 31, 2021, there were 143,156 and 174,171 shares of common stock issued pursuant to early exercised options and subject to repurchase, respectively. Employee Stock Purchase Plan In April 2021, the Company adopted the 2021 Employee Stock Purchase Plan, or ESPP. The Company allows eligible employees to purchase shares of the Company's common stock through payroll deductions at a price equal to 85% of the lesser of the fair market value of the stock as of the first date or the ending date of each offering period, which is typically six months. There were 580,000 shares of common stock initially reserved for issuance under the ESPP. In January 2022, the number of shares of common stock available for issuance under the ESPP was increased by 244,529 shares as a result of the automatic evergreen increase provision in the ESPP. The ESPP offering periods and purchase periods are determined by the Company’s board of directors, or the Board. The first offering period was for 0.6 years beginning May 20, 2021 through December 6, 2021. The Company issued 109,831 shares under the ESPP for the year ended December 31, 2021. As of March 31, 2022, 714,698 shares under the ESPP remain available for purchase. The Board authorized a new offering period of six months, which began on December 7, 2021 and runs through June 6, 2022. Restricted Stock Units Activity with respect to restricted stock units was as follows: Number of Shares Underlying Outstanding Restricted Stock Units Weighted Average Grant Date Fair Value Unvested, January 1, 2022 596,085 $ 22.06 Granted 1,283,248 $ 8.30 Cancelled (30,689) $ 20.53 Unvested, March 31, 2022 1,848,644 $ 12.53 The Company recognized stock-based compensation as follows (in thousands): Three Months Ended March 31, 2022 2021 Cost of goods sold $ 110 $ 10 Research and development 440 37 Selling, general and administrative 938 155 Total stock-based compensation $ 1,488 $ 202 The above stock-based compensation expense related to the following equity-based awards (in thousands): Three Months Ended March 31, 2022 2021 Stock options and restricted stock units $ 1,352 $ 202 ESPP 136 — Total stock-based compensation $ 1,488 $ 202 As of March 31, 2022, the total unrecognized stock-based compensation expense related to unvested stock options and restricted stock units was $27.3 million, which will be amortized on a straight-line basis over a weighted average remaining period of 3.4 years. As of March 31, 2022, the Company had unrecognized stock-based compensation expense relating to the ESPP awards of approximately $0.1 million, which is expected to be recognized over a weighted-average period of 0.2 years. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company did not record a federal or state income tax provision or benefit for the three months ended March 31, 2022 and 2021 as it has incurred net losses since inception. In addition, the net deferred tax assets generated from net operating losses are fully offset by a valuation allowance as the Company believes it is not more likely than not that the benefit will be realized. The Company accounts for the uncertainty in income taxes by utilizing a comprehensive model for the recognition, measurement, presentation and disclosure in financial statements of any uncertain tax positions that have been taken or are expected to be taken on an income tax return. There had been no changes in the estimated uncertain tax benefits recorded as of December 31, 2021. |
Net Loss per Share Attributable
Net Loss per Share Attributable to Common Stockholders | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss per Share Attributable to Common Stockholders | 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 (in thousands, except for share and per share amounts): Three Months Ended March 31, 2022 2021 Numerator: Net loss attributable to common stockholders $ (11,461) $ (8,810) Denominator: Weighted-average common stock outstanding used to compute basic and diluted net loss per share 24,307,485 269,178 Net loss per share attributable to common stockholders, basic and diluted $ (0.47) $ (32.73) The following potentially dilutive securities outstanding have been excluded from the computation of diluted weighted average shares outstanding because such securities have an antidilutive impact due to the Company’s net loss, in common stock equivalent shares: As of March 31, 2022 2021 Redeemable convertible preferred shares — 16,614,178 Options to purchase common stock 3,543,716 2,829,317 Unvested early exercised common stock options 143,156 182,316 Shares committed under ESPP 108,681 — Unvested restricted stock units 1,848,644 — Redeemable convertible preferred stock warrants — 346,823 Total Shares 5,644,197 19,972,634 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Unaudited Interim Financial Information | Basis of Presentation The unaudited interim condensed financial statements have been prepared in conformity with generally accepted accounting principles in the United States, or GAAP, as defined by the Financial Accounting Standards Board, or the FASB. Unaudited Interim Financial Information The condensed balance sheet as of December 31, 2021 was derived from the Company’s audited financial statements, but does not include all disclosures required by GAAP. The accompanying unaudited condensed financial statements as of March 31, 2022 and for the three months ended March 31, 2022 and 2021, have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission, or the SEC, for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. Accordingly, these financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2021 and notes thereto, which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the SEC on March 10, 2022. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s condensed financial position as of March 31, 2022 and condensed results of operations and condensed cash flows for the three months ended March 31, 2022 and 2021 have been made. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2022. |
Reverse Stock Split | Reverse Stock Split On April 9, 2021, the Company effected a 1-for-2.6 reverse stock split of its common stock and redeemable convertible preferred stock. The par value of the authorized stock was not adjusted as a result of the reverse stock split. |
Use of Estimates | Use of Estimates The preparation of unaudited interim condensed financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the amounts and disclosures reported in the financial statements. The Company uses significant judgment when making estimates related to the valuation of its common stock prior to the IPO, and related stock-based compensation, the valuation of deferred tax assets and related valuation allowances, provision for excess and obsolete inventories, and the valuation of redeemable convertible preferred stock warrant liability. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. |
Fair Value of Financial Instruments and Fair Value Measurements | Fair Value of Financial Instruments Carrying amounts of certain of the Company’s financial instruments, including cash equivalents, accounts receivable, accounts payable and accrued liabilities, approximate fair value because of the short-term nature of these instruments. Short-term investments comprise available-for-sale debt securities, which are carried at fair value. The Company believes that its borrowings bear interest at the prevailing market rates for instruments with similar characteristics; accordingly, the carrying value of this instrument approximates its fair value. The redeemable convertible preferred stock warrant liability is carried at fair value based on unobservable market inputs. The Company determines the fair value of financial and non-financial assets and liabilities using the fair value hierarchy which establishes three levels of inputs that may be used to measure fair value (see Note 3). transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
Concentration of Credit Risk, and Other Risks and Uncertainties | Concentration of Credit Risk, and Other Risks and Uncertainties Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents, short-term investments and accounts receivable to the extent of the amounts recorded on the balance sheet. The Company’s cash is invested in one major financial institution in the United States. Deposits in this financial institution may exceed federally insured limits. The Company’s cash equivalents are invested in money market funds. The Company’s accounts receivable are due from a variety of health care organizations in the United States. For the three months ended March 31, 2022 and 2021, there were no customers that represented 10% or more of revenue. As of March 31, 2022 and December 31, 2021, no customer represented 10% or more of the Company’s accounts receivable. The Company is subject to certain risks, including that its devices may not be approved or cleared or continue to be approved or cleared for marketing by governmental authorities or be successfully marketed for expanded indications. There can be no assurance that the Company’s products will achieve widespread adoption in the marketplace, nor can there be any assurance that existing devices or any future devices can be developed or manufactured at an acceptable cost and speed and with appropriate performance characteristics. The Company is also subject to risks common to companies in the medical device industry, including, but not limited to, new technological innovations, dependence on healthcare providers to prescribe initial implants and replacements, dependence upon third-party payors to provide adequate coverage and reimbursement, dependence on key personnel, single-source suppliers and vendors in connection with the manufacture of its products, concentration of Level 4 CECs and epileptologists, obtaining, maintaining, protecting, enforcing, and defending intellectual property rights and proprietary technology, product liability claims, legal proceedings, and compliance with government regulations. The Company’s medical devices require approvals or clearances from the U.S. Food and Drug Administration, or the FDA, or international regulatory agencies. In addition, in order to continue the Company’s operations, compliance with various federal and state laws is required. If approvals or clearances were withdrawn by the FDA for the Company’s current products or if such approvals or clearances were denied or delayed for future products, product updates, or expanded indications for use, it would have a material adverse impact on the Company. |
Deferred Offering Costs | Deferred Offering CostsThe Company capitalizes, within other assets, certain legal, accounting and other third-party fees that are directly related to the Company’s in-process equity financings, including its IPO, until such financings are consummated. After consummation of the equity financing, these costs are recorded as a reduction of the proceeds received as a result of the offering. Should a planned equity financing be abandoned, terminated or significantly delayed, the deferred offering costs are immediately written off to operating expenses. Upon closing the IPO, all deferred offering costs were charged against the proceeds from the IPO and recorded in stockholders equity as a reduction of additional paid-in capital. |
Leases | Leases The Company leases its facilities and meets the requirements to account for these leases as operating leases. For the three months ended March 31, 2021, for facility leases that contain rent escalations or rent concession provisions, the Company recorded its lease expense during the lease term on a straight-line basis over the term of the lease. As of December 31, 2021, the Company recorded differences between the rent paid and the straight-line rent as a deferred rent liability. Leasehold improvements funded by landlord incentives or allowances were recorded as leasehold improvement assets and a corresponding deferred rent liability. The leasehold improvement asset is amortized over the lesser of the term of the lease or life of the asset. Upon adoption of ASC 842, Leases , on January 1, 2022, the Company determined if an arrangement is a lease, or contains a lease, at inception. Operating leases are included in operating lease right-of-use, or ROU, assets, operating lease liability, and operating lease liability, net of current portion on the Company’s condensed balance sheets. ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term and in a similar economic environment at commencement date in determining the present value of future payments. The ROU asset also includes any lease payments made to the lessor at or before the commencement date, minus lease incentives received, and initial direct costs incurred. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company elected certain practical expedients under ASC 842 which are: (i) to not record leases with an initial term of twelve months or less on the balance sheet; (ii) to combine the lease and non-lease components in determining the lease liabilities and right-of-use assets, and (iii) to carry forward prior conclusions about lease identification and classification. |
Government Programs | Government Programs In May 2021, the Company was awarded a grant by the National Institutes of Health, or NIH, to support research of thalamocortical responsive neurostimulation for the treatment of Lennox-Gastaut Syndrome, a type of epilepsy. The award was issued for a five-year period and has a total budget of over $9.3 million. Funding is approved for the first year beginning June 1, 2021 and provides for reimbursement of qualified direct and indirect expenses in the amount of $0.8 million. Approval of funds for years two through five is subject to the completion of certain milestones. For funds received under the NIH funding agreement, the Company recognizes a reduction in research and development expenses in an amount equal to the qualifying expenses incurred in each period up to the amount awarded by the NIH. Qualifying expenses incurred by the Company in advance of funding by the NIH are recorded within prepaid expenses and other current assets on the balance sheets. Through March 31, 2022, $0.2 million of qualifying expenses have been incurred and funded by the NIH. |
Net Loss per Share Attributable to Common Stockholders | Net Loss per Share Attributable to Common Stockholders Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, without consideration of potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, redeemable convertible preferred stock, stock options, common stock subject to repurchase related to early exercise of stock options, and restricted stock units are considered to be potentially dilutive securities. Basic and diluted net loss attributable to common stockholders per share is presented in conformity with the two-class method required for participating securities, as the redeemable convertible preferred stock is considered a participating security because it participates in dividends with common stock. The Company also considers the shares issued upon the early exercise of stock options subject to repurchase to be participating securities, because holders of such shares have non-forfeitable |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02 (Topic 842), Leases . ASU 2016-02 requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a ROU asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. This ASU provides a lessee with an option to not account for leases with a term of 12 months or less as leases in the scope of this ASU. This ASU will also require new qualitative and quantitative disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. This ASU should be applied through a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements , which allows entities to elect an optional transition method where entities may continue to apply the existing lease guidance during the comparative periods and apply the new lease requirements through a cumulative effect adjustment in the period of adoption rather than in the earliest period presented. In June 2020, the FASB issued ASU 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities, which delays the adoption dates for ASU 2016-02 for non-public entities to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is allowed. The Company adopted Topic 842 effective January 1, 2022 using a modified retrospective method and did not restate comparative periods. The Company recognized ROU assets of $6.1 million and lease liabilities of $7.5 million for its operating leases as of January 1, 2022. In addition, the amount of the Company’s deferred rent as of December 31, 2021 of $1.4 million was removed upon adoption. The adoption of these ASUs did not have any impact on the condensed statements of operations and comprehensive loss and condensed statements of cash flows. See Note 5 for more information related to the Company’s lease obligations. Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments- Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which amends existing guidance on the impairment of financial assets and adds an impairment model that is based on expected losses rather than incurred losses and requires an entity to recognize as an allowance its estimate of expected credit losses for its financial assets. An entity will apply this guidance through a cumulative-effect adjustment to retained earnings upon adoption (a modified-retrospective approach) while a prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date. For public business entities that meet the definition of an SEC filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, adoption is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. For SEC filers that are eligible to be smaller reporting companies and for all other entities, this ASU is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its financial statements and related disclosures, and does not expect the standard will have a material impact on the Company’s financial statements and related disclosures. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities, Measured at Fair Value | The following table summarizes the Company’s financial assets (cash equivalents, marketable securities and liabilities) at fair value as of March 31, 2022 (in thousands): Fair Value as of March 31, 2022 Basis for Fair Value Measurements (Level 1) (Level 2) (Level 3) Assets: Money market funds, included in cash and cash equivalents $ 5,632 $ 5,632 $ — $ — Fixed income mutual funds, included in short-term investments 95,686 95,686 — — Total $ 101,318 $ 101,318 $ — $ — The following table summarizes the Company’s financial assets (cash equivalents, marketable securities and liabilities) at fair value as of December 31, 2021 (in thousands): Fair Value as of December 31, 2021 Basis for Fair Value Measurements (Level 1) (Level 2) (Level 3) Assets: Money market funds, included in cash and cash equivalents $ 16,498 $ 16,498 $ — $ — Fixed income mutual funds, included in short-term investments 96,397 96,397 — — Total $ 112,895 $ 112,895 $ — $ — |
Schedule of Debt Securities, Available-for-sale | The following is a summary of the Company’s available-for-sale debt securities (in thousands): March 31, December 31, 2022 2021 Cost basis $ 96,668 $ 96,702 Unrealized loss (982) (305) Fair value $ 95,686 $ 96,397 |
Schedule of Fair Value Liabilities Measured at Level 3 | The change in fair value of the redeemable convertible preferred stock warrant liability is summarized below (in thousands): Redeemable Convertible Preferred Stock Warrant Liability Fair value as of January 1, 2021 $ 369 Change in fair value included in other income (expense), net 3,122 Fair value as of March 31, 2021 $ 3,491 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Inventory, Current | Inventories consist of the following (in thousands): March 31, December 31, 2022 2021 Raw materials $ 2,297 $ 2,232 Work-in-process 1,210 879 Finished goods 4,596 4,711 Total $ 8,103 $ 7,822 |
Property, Plant and Equipment | Property and equipment, net consists of the following (in thousands): March 31, December 31, 2022 2021 Machinery, equipment, furniture and fixtures $ 4,043 $ 3,742 Computer equipment and software 2,952 2,916 Leasehold improvements 2,402 2,402 9,397 9,060 Less: Accumulated depreciation (8,537) (8,457) Property and equipment, net $ 860 $ 603 |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following (in thousands): March 31, December 31, 2022 2021 Payroll and related expenses $ 5,575 $ 6,547 Inventory-raw materials 467 251 Professional fees 140 109 Deferred rent, current — 490 Other 779 526 Total accrued liabilities $ 6,961 $ 7,923 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Minimum Annual Lease Commitments | The Company’s future minimum lease payments under the non-cancellable operating lease as of December 31, 2021 were as follows (in thousands): December 31, 2022 $ 3,172 2023 3,267 2024 1,666 Total $ 8,105 |
Schedule of Maturities of Operating Lease Liabilities | The maturities of operating lease liabilities as of March 31, 2022 are as follows (in thousands): March 31, 2022 (remaining nine months) $ 2,394 2023 3,267 2024 1,666 Total undiscounted lease payments 7,327 Less: imputed interest 472 Total operating lease liability 6,855 Less: current portion 2,868 Operating lease liability, net of current portion $ 3,987 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Long-term Debt | As of March 31, 2022, future minimum payments for the Term Loan are as follows (in thousands): Term Loan 2022 (remaining nine months) $ 4,774 2023 6,337 2024 6,354 2025 59,740 Total 77,205 Less: Unamortized debt discount and issuance cost (1,094) Less: Unaccreted backend fee (3,791) Less: Interest (22,205) Term Loan $ 50,115 |
Redeemable Convertible Prefer_3
Redeemable Convertible Preferred Stock Warrant Liability (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Measurement Inputs | The redeemable convertible preferred stock warrant liability was valued using the following assumptions under the Black-Scholes option pricing model: March 31, 2021 Stock price $14.50 Expected term (in years) 9.5 Expected volatility 38.4% Weighted average risk-free interest rate 1.68% Dividend yield —% |
Common Stock (Tables)
Common Stock (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Schedule of Stock by Class | As of March 31, 2022 and December 31, 2021, the Company had reserved common stock for future issuance as follows: March 31, December 31, 2022 2021 Shares available for future grant under the 2021 Plan 1,559,459 2,132,750 Outstanding options under the 2021 Plan 3,543,716 3,038,970 Outstanding restricted stock units under the 2021 Plan 1,848,644 596,085 Common stock available for ESPP 714,698 470,169 Total 7,666,517 6,237,974 |
Stock-Based Incentive Compens_2
Stock-Based Incentive Compensation Plans (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Available for Grant | A summary of shares available for grant under the Company’s 2021 Equity Incentive Plan, or the 2021 Plan, is as follows: Shares Available for Grant Shares available for grant as of January 1, 2022 2,132,750 Shares authorized 1,222,649 Granted/Awarded (1,863,948) Cancelled 68,008 Shares available for grant as of March 31, 2022 1,559,459 |
Summary of Stock Option Activity | A summary of stock option activity for the three months ended March 31, 2022 is set forth below: Options Outstanding Number of Shares Weighted-Average Exercise Price Weighted Average Remaining Contractual Term (in Years) Balances as of January 1, 2022 3,038,970 $ 2.61 8.83 Granted 580,700 $ 8.12 Exercised (38,635) $ 0.03 Cancelled (37,319) $ 0.06 Balances at March 31, 2022 3,543,716 $ 3.56 8.78 Vested and exercisable at March 31, 2022 1,182,725 $ 0.84 8.34 Vested and expected to vest at March 31, 2022 3,543,716 $ 3.56 8.78 |
Schedule of Restricted Stock Units | Activity with respect to restricted stock units was as follows: Number of Shares Underlying Outstanding Restricted Stock Units Weighted Average Grant Date Fair Value Unvested, January 1, 2022 596,085 $ 22.06 Granted 1,283,248 $ 8.30 Cancelled (30,689) $ 20.53 Unvested, March 31, 2022 1,848,644 $ 12.53 |
Share-based Payment Arrangement, Expensed and Capitalized, Amount | The Company recognized stock-based compensation as follows (in thousands): Three Months Ended March 31, 2022 2021 Cost of goods sold $ 110 $ 10 Research and development 440 37 Selling, general and administrative 938 155 Total stock-based compensation $ 1,488 $ 202 The above stock-based compensation expense related to the following equity-based awards (in thousands): Three Months Ended March 31, 2022 2021 Stock options and restricted stock units $ 1,352 $ 202 ESPP 136 — Total stock-based compensation $ 1,488 $ 202 |
Net Loss per Share Attributab_2
Net Loss per Share Attributable to Common Stockholders (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders (in thousands, except for share and per share amounts): Three Months Ended March 31, 2022 2021 Numerator: Net loss attributable to common stockholders $ (11,461) $ (8,810) Denominator: Weighted-average common stock outstanding used to compute basic and diluted net loss per share 24,307,485 269,178 Net loss per share attributable to common stockholders, basic and diluted $ (0.47) $ (32.73) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following potentially dilutive securities outstanding have been excluded from the computation of diluted weighted average shares outstanding because such securities have an antidilutive impact due to the Company’s net loss, in common stock equivalent shares: As of March 31, 2022 2021 Redeemable convertible preferred shares — 16,614,178 Options to purchase common stock 3,543,716 2,829,317 Unvested early exercised common stock options 143,156 182,316 Shares committed under ESPP 108,681 — Unvested restricted stock units 1,848,644 — Redeemable convertible preferred stock warrants — 346,823 Total Shares 5,644,197 19,972,634 |
The Company (Details)
The Company (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 26, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | |||||
Common stock authorized (in shares) | 200,000,000 | 200,000,000 | |||
Common stock par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||
Shares authorized (in shares) | 10,000,000 | 10,000,000 | 10,000,000 | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||
Accumulated deficit | $ 435,232 | $ 423,771 | |||
Net cash used in operating activities | 11,393 | $ 5,936 | |||
Cash, cash equivalents, and short-term investments | $ 103,200 | ||||
Forecast | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Minimum annual net revenue | $ 43,000 | ||||
Minimum cash and cash equivalents required after completion of IPO | $ 5,000 | ||||
Redeemable Convertible Preferred Stock Converted Into Common Stock | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Conversion of stock, shares issued (in shares) | 16,614,178 | ||||
Redeemable Convertible Preferred Stock Converted Into Warrants To Purchase Series B' Convertible Preferred Stock | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Conversion of stock, shares issued (in shares) | 346,823 | ||||
Redeemable Convertible Preferred Stock Converted Into Warrants Exercised To Series B' Convertible Preferred Stock | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Conversion of stock, shares issued (in shares) | 213,941 | ||||
Redeemable Convertible Preferred Stock Converted Into Warrants To Purchase Common Stock | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Conversion of stock, shares issued (in shares) | 219 | ||||
Redeemable Convertible Preferred Stock Converted Into Warrants Exercised To Common Stock | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Conversion of stock, shares issued (in shares) | 185 | ||||
IPO | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Number of shares issued in transaction (in shares) | 6,900,000 | ||||
Sale of stock (in dollars per share) | $ 17 | ||||
Proceeds from issuance initial public offering | $ 117,300 | ||||
Consideration received on transaction | 105,500 | ||||
Sale of stock, underwriting discounts | 8,200 | ||||
Sale of stock, offering costs | $ 3,600 | ||||
Over-Allotment Option | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Number of shares issued in transaction (in shares) | 900,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | Apr. 09, 2021 | May 31, 2021USD ($) | Mar. 31, 2022USD ($) | Jan. 01, 2022USD ($) | Dec. 31, 2021USD ($) |
Accounting Policies [Abstract] | |||||
Reverse stock split, conversion ratio | 0.3846 | ||||
Deferred costs | $ 0 | $ 0 | |||
Grant period (in years) | 5 years | ||||
Research and development arrangement with federal government, total budget | $ 9,300,000 | ||||
Approved funding, first year | $ 800,000 | ||||
Compensation earned | 200,000 | ||||
Operating lease right-of-use asset | 5,559,000 | $ 6,100,000 | 0 | ||
Operating lease liabilities | $ 6,855,000 | $ 7,500,000 | |||
Deferred rent | $ 1,400,000 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value disclosure | $ 0 | $ 0 |
Redeemable Convertible Preferred Stock Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrants outstanding (in shares) | 0 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Assets: | ||
Money market funds, included in cash and cash equivalents | $ 5,632 | $ 16,498 |
Fixed income mutual funds, included in short-term investments | 95,686 | 96,397 |
Total | 101,318 | 112,895 |
Fair Value, Inputs, Level 1 | ||
Assets: | ||
Money market funds, included in cash and cash equivalents | 5,632 | 16,498 |
Fixed income mutual funds, included in short-term investments | 95,686 | 96,397 |
Total | 101,318 | 112,895 |
Fair Value, Inputs, Level 2 | ||
Assets: | ||
Money market funds, included in cash and cash equivalents | 0 | 0 |
Fixed income mutual funds, included in short-term investments | 0 | 0 |
Total | 0 | 0 |
Fair Value, Inputs, Level 3 | ||
Assets: | ||
Money market funds, included in cash and cash equivalents | 0 | 0 |
Fixed income mutual funds, included in short-term investments | 0 | 0 |
Total | $ 0 | $ 0 |
Fair Value Measurements - Avail
Fair Value Measurements - Available for Sale Debt Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value Disclosures [Abstract] | ||
Cost basis | $ 96,668 | $ 96,702 |
Unrealized loss | (982) | (305) |
Fair value | $ 95,686 | $ 96,397 |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in Fair Value of Level 3 Financial Instruments (Details) - Fair Value, Inputs, Level 3 - Derivative Financial Instruments, Liabilities $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at beginning of period | $ 369 |
Change in fair value included in other income (expense), net | 3,122 |
Balance at end of period | $ 3,491 |
Balance Sheet Components - Inve
Balance Sheet Components - Inventory (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 2,297 | $ 2,232 |
Work-in-process | 1,210 | 879 |
Finished goods | 4,596 | 4,711 |
Total | $ 8,103 | $ 7,822 |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 9,397 | $ 9,060 | |
Less: Accumulated depreciation | (8,537) | (8,457) | |
Property and equipment, net | 860 | 603 | |
Depreciation | 80 | $ 74 | |
Machinery, equipment, furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 4,043 | 3,742 | |
Computer equipment and software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 2,952 | 2,916 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 2,402 | $ 2,402 |
Balance Sheet Components - Accr
Balance Sheet Components - Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Payroll and related expenses | $ 5,575 | $ 6,547 | |
Inventory-raw materials | 467 | 251 | |
Professional fees | 140 | 109 | |
Deferred rent, current | 0 | 490 | $ 300 |
Other | 779 | 526 | |
Total accrued liabilities | $ 6,961 | $ 7,923 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | Oct. 18, 2021plaintiff | May 31, 2018USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2022USD ($) | Dec. 31, 2021USD ($) | Jun. 30, 2021USD ($) | Apr. 01, 2021installment | Oct. 01, 2020 | May 31, 2019USD ($) | Aug. 31, 2011USD ($) |
Loss Contingencies [Line Items] | ||||||||||
Renewal term | 5 years | |||||||||
Percent rental payment deferred | 50.00% | |||||||||
Deferred rent, current | $ 300,000 | $ 0 | $ 490,000 | |||||||
Deferred rent, interest rate, annual rate | 8.00% | |||||||||
Number of deferred rent installments | installment | 3 | |||||||||
Operating leases, rent expense | 700,000 | |||||||||
Deferred rent credit | $ 1,400,000 | |||||||||
Operating lease cost | $ 700,000 | |||||||||
Operating lease term | 2 years 3 months 18 days | |||||||||
Operating lease percent | 6.30% | |||||||||
Operating lease, payments | $ 800,000 | |||||||||
James Jacoby et al. v. NeuroPace, Inc., et al. [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Number of plaintiffs | plaintiff | 3 | |||||||||
Lease Facility | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Face amount | $ 200,000 | $ 700,000 | $ 900,000 | |||||||
Minimum | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Annual rental payments | $ 2,900,000 | |||||||||
Maximum | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Annual rental payments | $ 3,300,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2022 | $ 3,172 |
2023 | 3,267 |
2024 | 1,666 |
Total undiscounted lease payments | $ 8,105 |
Commitments and Contingencies_3
Commitments and Contingencies - Operating Lease Maturity (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | |||
2022 (remaining nine months) | $ 2,394 | ||
2023 | 3,267 | ||
2024 | 1,666 | ||
Total undiscounted lease payments | 7,327 | ||
Less: imputed interest | 472 | ||
Total operating lease liability | 6,855 | $ 7,500 | |
Less: current portion | 2,868 | $ 0 | |
Operating lease liability, net of current portion | $ 3,987 | $ 0 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 13 Months Ended | ||||||
Mar. 31, 2022 | Apr. 30, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Apr. 30, 2021 | Apr. 26, 2021 | Sep. 30, 2020 | Sep. 24, 2020 | Apr. 30, 2020 | |
2020 Term Loans | |||||||||
Debt Instrument [Line Items] | |||||||||
Face amount | $ 50,000,000 | ||||||||
Unused borrowing capacity | $ 10,000,000 | ||||||||
Interest rate | 12.50% | ||||||||
Redemption fee, percent | 10.00% | ||||||||
Effective percentage | 15.66% | 15.66% | |||||||
Minimum annual net revenue | $ 43,000,000 | ||||||||
Amortization of debt issuance costs | $ 100,000 | $ 100,000 | |||||||
Interest expense | $ 1,800,000 | $ 1,800,000 | |||||||
2020 Term Loans | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Face amount | $ 60,000,000 | ||||||||
2020 Term Loans | Series B Redeemable Convertible Preferred Stock | |||||||||
Debt Instrument [Line Items] | |||||||||
Backend fee | $ 1,000,000 | ||||||||
Warrants outstanding (in shares) | 346,823 | ||||||||
Warrant liability, noncurrent | $ 5,600,000 | $ 600,000 | |||||||
Paycheck Protection Program | |||||||||
Debt Instrument [Line Items] | |||||||||
Face amount | $ 4,000,000 | ||||||||
Interest rate | 1.00% | ||||||||
Extinguishment of debt | $ 4,100,000 | ||||||||
Repurchased face amount | $ 4,000,000 | $ 4,000,000 | |||||||
Interest payment | $ 100,000 |
Debt - Maturities of Debt (Deta
Debt - Maturities of Debt (Details) - Term Loan $ in Thousands | Mar. 31, 2022USD ($) |
Debt Instrument [Line Items] | |
2022 (remaining nine months) | $ 4,774 |
2023 | 6,337 |
2024 | 6,354 |
2025 | 59,740 |
Total | 77,205 |
Less: Unamortized debt discount and issuance cost | (1,094) |
Less: Unaccreted backend fee | (3,791) |
Less: Interest | (22,205) |
Term Loan | $ 50,115 |
Redeemable Convertible Prefer_4
Redeemable Convertible Preferred Stock - Additional Information (Details) - shares | Apr. 26, 2021 | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Redeemable Convertible Preferred Stock | |||||
Class of Stock [Line Items] | |||||
Redeemable convertible preferred stock, shares issued (in shares) | 0 | 0 | |||
Redeemable convertible preferred stock, shares outstanding (in shares) | 0 | 0 | 16,614,178 | 16,614,178 | |
Redeemable Convertible Preferred Stock Converted Into Common Stock | |||||
Class of Stock [Line Items] | |||||
Conversion of stock, shares issued (in shares) | 16,614,178 |
Redeemable Convertible Prefer_5
Redeemable Convertible Preferred Stock Warrant Liability - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 26, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Sep. 24, 2020 |
Class of Warrant or Right [Line Items] | ||||
Change in fair value | $ 0 | $ (3,122) | ||
Redeemable Convertible Preferred Stock Converted Into Warrants Exercised To Series B' Convertible Preferred Stock | ||||
Class of Warrant or Right [Line Items] | ||||
Conversion of stock, shares issued (in shares) | 213,941 | |||
Series B Redeemable Convertible Preferred Stock | 2020 Term Loans | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants outstanding (in shares) | 346,823 | |||
Exercise price of warrant (in dollars per share) | $ 6.51339 | |||
Warrants term | 10 years | |||
Warrant liability, noncurrent | $ 5,600 | $ 600 | ||
Change in fair value | $ (3,100) |
Redeemable Convertible Prefer_6
Redeemable Convertible Preferred Stock Warrant Liability - Schedule of Assumptions (Details) | Mar. 31, 2021$ / shares |
Stock price | |
Class of Warrant or Right [Line Items] | |
Measurement input | 14.50 |
Expected term | |
Class of Warrant or Right [Line Items] | |
Measurement input | 9.5 |
Expected volatility | |
Class of Warrant or Right [Line Items] | |
Measurement input | 0.384 |
Weighted average risk-free interest rate | |
Class of Warrant or Right [Line Items] | |
Measurement input | 0.0168 |
Dividend yield | |
Class of Warrant or Right [Line Items] | |
Measurement input | 0 |
Common Stock (Details)
Common Stock (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | Apr. 26, 2021 | |
Class of Stock [Line Items] | |||
Common stock authorized (in shares) | 200,000,000 | 200,000,000 | |
Common stock par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Dividends declared cash | $ 0 | $ 0 | |
Common stock reserved for future issuance (in shares) | 7,666,517 | 6,237,974 | |
Shares available for future grant under the 2021 Plan | |||
Class of Stock [Line Items] | |||
Common stock reserved for future issuance (in shares) | 1,559,459 | 2,132,750 | |
Outstanding options under the 2021 Plan | |||
Class of Stock [Line Items] | |||
Common stock reserved for future issuance (in shares) | 3,543,716 | 3,038,970 | |
Outstanding restricted stock units under the 2021 Plan | |||
Class of Stock [Line Items] | |||
Common stock reserved for future issuance (in shares) | 1,848,644 | 596,085 | |
Common stock available for ESPP | |||
Class of Stock [Line Items] | |||
Common stock reserved for future issuance (in shares) | 714,698 | 470,169 |
Stock-Based Incentive Compens_3
Stock-Based Incentive Compensation Plans - Available for Grant (Details) - 2021 Equity Incentive Plan | 3 Months Ended |
Mar. 31, 2022shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Available for Grant [Roll Forward] | |
Shares available for grant, beginning balance (in shares) | 2,132,750 |
Shares authorized (in shares) | 1,222,649 |
Granted/Awarded (in shares) | (1,863,948) |
Cancelled (in shares) | 68,008 |
Shares available for grant, ending balance (in shares) | 1,559,459 |
Stock-Based Incentive Compens_4
Stock-Based Incentive Compensation Plans - Summary of Stock Option Activity (Details) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Number of Shares | ||
Number of shares, beginning balance (in shares) | 3,038,970 | |
Options granted (in shares) | 580,700 | |
Options exercised (in shares) | (38,635) | |
Options cancelled (in shares) | (37,319) | |
Number of shares, ending balance (in shares) | 3,543,716 | 3,038,970 |
Vested and exercisable (in shares) | 1,182,725 | |
Vested and expected to vest (in shares) | 3,543,716 | |
Weighted-Average Exercise Price | ||
Beginning balance (in dollars per share) | $ 2.61 | |
Options granted (in dollar per share) | 8.12 | |
Options exercised (in dollar per share) | 0.03 | |
Options cancelled (in dollar per share) | 0.06 | |
Ending balance (in dollars per share) | 3.56 | $ 2.61 |
Vested and exercisable (in dollars per share) | 0.84 | |
Vested and expected to vest (in dollars per share) | $ 3.56 | |
Weighted Average Remaining Contractual Term (in Years) | ||
Balance | 8 years 9 months 10 days | 8 years 9 months 29 days |
Vested and exercisable | 8 years 4 months 2 days | |
Vested and expected to vest | 8 years 9 months 10 days |
Stock-Based Incentive Compens_5
Stock-Based Incentive Compensation Plans - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 19 Months Ended |
Apr. 30, 2021 | Mar. 31, 2022 | Jun. 06, 2022 | Dec. 31, 2021 | Dec. 06, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options, subject to repurchase (in shares) | 143,156 | 174,171 | |||
ESPP discount percent | 85.00% | ||||
Common stock reserved for future issuance (in shares) | 7,666,517 | 6,237,974 | |||
Unrecognized stock-based compensation expense | $ 27.3 | ||||
Period for recognition | 3 years 4 months 24 days | ||||
2021 Employee Stock Purchase Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock reserved for future issuance (in shares) | 580,000 | ||||
Shares authorized (in shares) | 244,529 | ||||
Offering period | 7 months 6 days | ||||
Issuance of shares pursuant to Employee Stock Purchase Plan (in shares) | 109,831 | ||||
Number of shares available for grant (in shares) | 714,698 | ||||
Period for recognition | 2 months 12 days | ||||
Cost not yet recognized, amount | $ 0.1 | ||||
2021 Employee Stock Purchase Plan | Forecast | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Offering period | 6 months |
Stock-Based Incentive Compens_6
Stock-Based Incentive Compensation Plans - Summary of Restricted Stock Units (Details) | 3 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Number of Shares Underlying Outstanding Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | shares | (30,689) |
Weighted Average Grant Date Fair Value | |
Cancelled (in dollars per share) | $ / shares | $ 20.53 |
Unvested restricted stock units | |
Number of Shares Underlying Outstanding Restricted Stock Units | |
Unvested, January 1, 2022 (in shares) | shares | 596,085 |
Granted (in shares) | shares | 1,283,248 |
Unvested, March 31, 2022 (in shares) | shares | 1,848,644 |
Weighted Average Grant Date Fair Value | |
Unvested, Weighted Average Grant Date Fair Value, beginning balance (in dollars per share) | $ / shares | $ 22.06 |
Granted, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares | 8.30 |
Unvested, Weighted Average Grant Date Fair Value, ending balance (in dollars per share) | $ / shares | $ 12.53 |
Stock-Based Incentive Compens_7
Stock-Based Incentive Compensation Plans - Summary of Recognized Stock-based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | $ 1,488 | $ 202 |
Stock options and restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | 1,352 | 202 |
ESPP | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | 136 | 0 |
Cost of goods sold | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | 110 | 10 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | 440 | 37 |
Selling, general and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | $ 938 | $ 155 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense (benefit) | $ 0 | $ 0 |
Net Loss per Share Attributab_3
Net Loss per Share Attributable to Common Stockholders - Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator: | ||
Net loss attributable to common stockholders | $ (11,461) | $ (8,810) |
Denominator: | ||
Weighted-average common stock outstanding used to compute basic net loss per share (in shares) | 24,307,485 | 269,178 |
Weighted-average common stock outstanding used to compute diluted net loss per share (in shares) | 24,307,485 | 269,178 |
Net loss per share attributable to common stockholders, basic (in dollars per share) | $ (0.47) | $ (32.73) |
Net loss per share attributable to common stockholders, diluted (in dollars per share) | $ (0.47) | $ (32.73) |
Net Loss per Share Attributab_4
Net Loss per Share Attributable to Common Stockholders - Schedule of Potentially Dilutive Securities Outstanding (Details) - shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total shares (in shares) | 5,644,197 | 19,972,634 |
Redeemable convertible preferred shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total shares (in shares) | 0 | 16,614,178 |
Options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total shares (in shares) | 3,543,716 | 2,829,317 |
Unvested early exercised common stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total shares (in shares) | 143,156 | 182,316 |
Shares committed under ESPP | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total shares (in shares) | 108,681 | 0 |
Unvested restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total shares (in shares) | 1,848,644 | 0 |
Redeemable convertible preferred stock warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total shares (in shares) | 0 | 346,823 |