Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 19, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | FNA | |
Entity Registrant Name | Paragon 28, Inc. | |
Entity Central Index Key | 0001531978 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Current Reporting Status | Yes | |
Entity Common Stock, Shares Outstanding | 76,374,880 | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity File Number | 001-40902 | |
Entity Tax Identification Number | 27-3170186 | |
Entity Address, Address Line One | 14445 Grasslands Drive | |
Entity Address, City or Town | Englewood | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80112 | |
City Area Code | 730 | |
Local Phone Number | 399-3400 | |
Title of 12(b) Security | Common Shares, $0.01 par value | |
Security Exchange Name | NYSE | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Bankruptcy Proceedings, Reporting Current | true |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Assets, Current [Abstract] | ||
Cash | $ 7,876 | $ 17,501 |
Trade receivables, less allowance for doubtful accounts of $802 and $1,296, respectively | 21,237 | 19,972 |
Inventories | 37,689 | 32,226 |
Income taxes receivable | 857 | 1,479 |
Other current assets | 4,565 | 617 |
Total current assets | 72,224 | 71,795 |
Property, plant and equipment-net | 26,471 | 22,363 |
Intangible assets, net | 15,445 | 3,325 |
Goodwill | 7,313 | 0 |
Deferred income taxes | 95 | 100 |
Total assets | 121,548 | 97,583 |
Liabilities, Current [Abstract] | ||
Accounts payable | 13,013 | 8,812 |
Accrued expenses | 13,021 | 10,052 |
Other current liabilities | 2,361 | 469 |
Current maturities of long-term debt | 173 | 2,231 |
Income taxes payable | 548 | 504 |
Total current liabilities | 29,116 | 22,068 |
Liabilities, Noncurrent [Abstract] | ||
Long-term debt net, less current maturities | 23,351 | 4,030 |
Other Liabilities, Noncurrent | 2,060 | |
Total liabilities | 54,527 | 26,098 |
Commitments And Contingencies | ||
Stockholders' equity: | ||
Common stock, $0.01 par value, 74,687,845 and 72,187,845 shares authorized; 47,952,737 and 47,567,010 shares issued, and 47,039,212 and 46,738,540 shares outstanding as of September 30, 2021 and December 31, 2020, respectively | 470 | 467 |
Additional paid in capital | 26,294 | 22,107 |
Retained earnings | 3,384 | 12,418 |
Accumulated other comprehensive income | 248 | 823 |
Treasury stock, at cost; 182,705 and 165,694 shares as of September 30, 2021 and December 31, 2020, respectively | (5,983) | (5,422) |
Total stockholders' equity | 24,413 | 30,393 |
Total liabilities, convertible preferred series equity & stockholders' equity | 121,548 | 97,583 |
Series A Convertible Preferred Stock | ||
Temporary Equity [Abstract] | ||
Convertible preferred stock | 4,250 | 4,250 |
Series B Convertible Preferred Stock | ||
Temporary Equity [Abstract] | ||
Convertible preferred stock | $ 38,358 | $ 36,842 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Allowance for doubtful accounts | $ 802 | $ 1,296 |
Common stock par value | $ 0.01 | $ 0.01 |
Common stock share authorized | 74,687,845 | 72,187,845 |
Common stock share issued | 47,952,733 | 47,567,010 |
Common stock shares, outstanding | 47,039,212 | 46,738,540 |
Treasury stock share issued | 913,521 | 828,472 |
Series A Convertible Preferred Stock | ||
Convertible preferred stock, par value | $ 0.01 | $ 0.01 |
Cumulative preferred dividends | $ 0 | $ 0 |
Convertible preferred stock, authorized | 13,812,500 | 13,812,500 |
Convertible preferred stock, issued | 13,812,500 | 13,812,500 |
Convertible preferred stock, outstanding | 13,812,500 | 13,812,500 |
Series B Convertible Preferred Stock | ||
Convertible preferred stock, par value | $ 0.01 | $ 0.01 |
Cumulative preferred dividends | $ 2,328 | $ 812 |
Convertible preferred stock, authorized | 6,608,700 | 6,608,700 |
Convertible preferred stock, issued | 6,608,700 | 6,608,700 |
Convertible preferred stock, outstanding | 6,608,700 | 6,608,700 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Net revenue | $ 35,851 | $ 30,268 | $ 104,689 | $ 75,924 |
Cost of goods sold | 7,096 | 7,049 | 20,209 | 15,386 |
Gross Profit | 28,755 | 23,219 | 84,480 | 60,538 |
Operating expenses | ||||
Research and development costs | 4,118 | 2,346 | 11,254 | 8,174 |
Selling, general, and administrative | 28,968 | 16,958 | 79,009 | 50,962 |
Total operating expenses | 33,086 | 19,304 | 90,263 | 59,136 |
Operating (loss) income | (4,331) | 3,915 | (5,783) | 1,402 |
Other expense | ||||
Other expense | (98) | (56) | (124) | (141) |
Interest expense | (573) | (70) | (1,174) | (532) |
Total other expense | (671) | (126) | (1,298) | (673) |
(Loss) income before income taxes | (5,002) | 3,789 | (7,081) | (729) |
Income tax expense (benefit) | 105 | (19) | 437 | 1,396 |
Net (loss) income | (5,107) | 3,808 | (7,518) | (667) |
Less: cumulative dividends on Series B convertible preferred stock | (574) | (333) | (1,516) | (333) |
Net (loss) income attributable to common stockholders | (5,681) | 3,475 | (9,034) | (1,000) |
Foreign currency translation adjustment | (121) | 366 | (575) | (76) |
Comprehensive (loss) income | $ (5,802) | $ 3,841 | $ (9,609) | $ (1,076) |
Weighted average number of common stocks outstanding: | ||||
Basic | 47,005,334 | 43,429,308 | 46,926,344 | 42,792,176 |
Diluted | 47,005,334 | 61,376,701 | 46,926,344 | 42,792,176 |
Net (loss) income per share attributable to common stockholders: | ||||
Basic | $ (0.12) | $ 0.08 | $ (0.19) | $ (0.02) |
Diluted | $ (0.12) | $ 0.06 | $ (0.19) | $ (0.02) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED SERIES EQUITY & STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Series A Convertible Preferred Stock | Series B Convertible Preferred Stock | Common Stock | Additional Paid-in-Capital | Retained Earnings | Accumulated Other Comprehensive Income | Treasury Stock |
Temporary equity, beginning balance, shares at Dec. 31, 2019 | 13,812,500 | |||||||
Temporary equity, beginning balance at Dec. 31, 2019 | $ 4,250 | |||||||
Beginning balance, shares at Dec. 31, 2019 | 42,066,700 | |||||||
Beginning balance at Dec. 31, 2019 | $ 22,998 | $ 421 | $ 16,723 | $ 9,732 | $ 6 | $ (3,884) | ||
Net income (loss) | (667) | (667) | ||||||
Issuance of common stock, shares | 243,825 | |||||||
Issuance of common stock | 1,346 | $ 2 | 1,344 | |||||
Common stock repurchase, shares | (41,667) | |||||||
Common stock repurchase | (231) | (231) | ||||||
Issuance of series B convertible preferred stock, net of issuance costs, shares | 6,608,700 | |||||||
Issuance of series B convertible preferred stock, net of issuance costs | $ 36,030 | |||||||
Series B convertible preferred stock dividend | $ 333 | |||||||
Series B convertible preferred stock dividend, permanent equity | (333) | (333) | ||||||
Options exercised, shares | 2,259,585 | |||||||
Options exercised | 210 | $ 23 | 187 | |||||
Foreign currency translation | (76) | (76) | ||||||
Stock-based compensation | 1,233 | 1,233 | ||||||
Temporary equity, ending balance, shares at Sep. 30, 2020 | 13,812,500 | 6,608,700 | ||||||
Temporary equity, ending balance at Sep. 30, 2020 | $ 4,250 | $ 36,363 | ||||||
Ending balance, shares at Sep. 30, 2020 | 44,528,443 | |||||||
Ending balance at Sep. 30, 2020 | 24,480 | $ 446 | 19,487 | 8,732 | (70) | (4,115) | ||
Temporary equity, beginning balance, shares at Jun. 30, 2020 | 13,812,500 | |||||||
Temporary equity, beginning balance at Jun. 30, 2020 | $ 4,250 | |||||||
Beginning balance, shares at Jun. 30, 2020 | 43,188,445 | |||||||
Beginning balance at Jun. 30, 2020 | 20,189 | $ 432 | 19,051 | 5,257 | (436) | (4,115) | ||
Net income (loss) | 3,808 | 3,808 | ||||||
Issuance of series B convertible preferred stock, net of issuance costs, shares | 6,608,700 | |||||||
Issuance of series B convertible preferred stock, net of issuance costs | $ 36,030 | |||||||
Series B convertible preferred stock dividend | $ 333 | |||||||
Series B convertible preferred stock dividend, permanent equity | (333) | (333) | ||||||
Options exercised, shares | 1,339,998 | |||||||
Options exercised | 85 | $ 14 | 71 | |||||
Foreign currency translation | 366 | 366 | ||||||
Stock-based compensation | 365 | 365 | ||||||
Temporary equity, ending balance, shares at Sep. 30, 2020 | 13,812,500 | 6,608,700 | ||||||
Temporary equity, ending balance at Sep. 30, 2020 | $ 4,250 | $ 36,363 | ||||||
Ending balance, shares at Sep. 30, 2020 | 44,528,443 | |||||||
Ending balance at Sep. 30, 2020 | 24,480 | $ 446 | 19,487 | 8,732 | (70) | (4,115) | ||
Temporary equity, beginning balance, shares at Dec. 31, 2020 | 13,812,500 | 6,608,700 | ||||||
Temporary equity, beginning balance at Dec. 31, 2020 | $ 4,250 | $ 36,842 | ||||||
Beginning balance, shares at Dec. 31, 2020 | 46,738,540 | |||||||
Beginning balance at Dec. 31, 2020 | 30,393 | $ 467 | 22,107 | 12,418 | 823 | (5,422) | ||
Net income (loss) | (7,518) | (7,518) | ||||||
Issuance of common stock, shares | 151,515 | |||||||
Issuance of common stock | 1,000 | $ 1 | 999 | |||||
Common stock repurchase, shares | (85,049) | |||||||
Common stock repurchase | (561) | (561) | ||||||
Issuance of series B convertible preferred stock, net of issuance costs | $ 1,516 | |||||||
Series B convertible preferred stock dividend, permanent equity | $ (1,516) | (1,516) | ||||||
Options exercised, shares | 234,205 | 234,206 | ||||||
Options exercised | $ 443 | $ 2 | 441 | |||||
Foreign currency translation | (575) | (575) | ||||||
Stock-based compensation | 2,747 | 2,747 | ||||||
Temporary equity, ending balance, shares at Sep. 30, 2021 | 13,812,500 | 6,608,700 | ||||||
Temporary equity, ending balance at Sep. 30, 2021 | $ 4,250 | $ 38,358 | ||||||
Ending balance, shares at Sep. 30, 2021 | 47,039,212 | |||||||
Ending balance at Sep. 30, 2021 | 24,413 | $ 470 | 26,294 | 3,384 | 248 | (5,983) | ||
Temporary equity, beginning balance, shares at Jun. 30, 2021 | 13,812,500 | 6,608,700 | ||||||
Temporary equity, beginning balance at Jun. 30, 2021 | $ 4,250 | $ 37,784 | ||||||
Beginning balance, shares at Jun. 30, 2021 | 46,969,305 | |||||||
Beginning balance at Jun. 30, 2021 | 29,092 | $ 470 | 25,171 | 9,065 | 369 | (5,983) | ||
Net income (loss) | (5,107) | (5,107) | ||||||
Series B convertible preferred stock dividend | $ 574 | |||||||
Series B convertible preferred stock dividend, permanent equity | (574) | (574) | ||||||
Options exercised, shares | 69,907 | |||||||
Options exercised | 91 | 91 | ||||||
Foreign currency translation | (121) | (121) | ||||||
Stock-based compensation | 1,032 | 1,032 | ||||||
Temporary equity, ending balance, shares at Sep. 30, 2021 | 13,812,500 | 6,608,700 | ||||||
Temporary equity, ending balance at Sep. 30, 2021 | $ 4,250 | $ 38,358 | ||||||
Ending balance, shares at Sep. 30, 2021 | 47,039,212 | |||||||
Ending balance at Sep. 30, 2021 | $ 24,413 | $ 470 | $ 26,294 | $ 3,384 | $ 248 | $ (5,983) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED SERIES EQUITY & STOCKHOLDERS' EQUITY (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended |
Jul. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2020 | |
Series B Convertible Preferred Stock | |||
Issuance costs | $ 1,970 | $ 1,970 | $ 1,970 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
OPERATING ACTIVITIES | ||
Net loss | $ (7,518) | $ (667) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 6,094 | 4,493 |
Allowance for doubtful accounts | 139 | 632 |
Provision for excess and obsolete inventories | 2,226 | 2,770 |
Stock-based compensation | 2,747 | 1,233 |
Amortization of debt issuance costs | 372 | 92 |
Change in fair value of earnout liabilities | 60 | |
Deferred income taxes | 1,080 | |
Loss on disposal of property and equipment | 118 | 476 |
Unrealized FX gain/loss | 178 | 153 |
Changes in other assets and liabilities, net of acquisitions: | ||
Accounts receivable | (807) | 1,925 |
Inventories | (7,860) | (10,018) |
Other current assets | (3,952) | 948 |
Accounts payable | 3,404 | (5,220) |
Accrued expenses and other current liabilities | 2,935 | (2,109) |
Income taxes receivable and payable | 668 | 175 |
Net cash used in operating activities | (1,196) | (4,037) |
Cash flows from investing activities | ||
Purchases of property and equipment | (10,270) | (7,511) |
Proceeds from sale of property and equipment | 581 | 373 |
Purchases of intangible assets | (1,196) | (495) |
Acquisition of Additive Orthopaedics | (15,000) | |
Net cash used in investing activities | (25,885) | (7,633) |
Cash flows from financing activities | ||
Payments on note payable - related party | (3,000) | |
Payments on revolving credit facility | (9,821) | |
Proceeds from issuance of long-term debt | 25,985 | 472 |
Payments on long-term debt | (5,991) | (1,092) |
Proceeds from PPP loan | 3,747 | |
Payments of debt issuance costs | (3,080) | |
Proceeds from issuance of common stock | 1,001 | 1,348 |
Proceeds from issuance of Series B capital stock, net of issuance costs | 36,030 | |
Payments on treasury stock repurchased | (561) | (231) |
Proceeds from Stock Options Exercised | 442 | 210 |
Net cash provided by (used in) financing activities | 17,796 | 27,663 |
Effect of Exchange Rate on Cash | (340) | (257) |
Net decrease in cash | (9,625) | 15,736 |
Cash at beginning of period | 17,501 | 2,610 |
Cash at end of period | 7,876 | 18,346 |
Supplemental disclosures of cash flow information: | ||
Cash paid for taxes | 381 | 162 |
Cash paid for interest | 670 | 466 |
Purchase of property and equipment included in accounts payable | 58 | |
Series B convertible preferred stock dividend | $ 1,516 | $ 333 |
Business and Basis of Presentat
Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Business and Basis of Presentation | NOTE 1. BUSINESS AND BASIS OF PRESENTATION Business Paragon 28, Inc. (collectively with its subsidiaries, “we”, “us”, “our”, “P28” or the “Company”) develops, distributes, and sells medical devices in the foot and ankle segment of the orthopedic implant marketplace. Our approach to product development is procedurally focused, resulting in a full range of procedure-specific foot and ankle products designed specifically for foot and ankle anatomy. Our products and product families include plates and plating systems, screws, staples, and nails aimed to address all major foot and ankle procedures including ankle, charcot, fracture fixation, hallux valgus, hammertoe, and flatfoot. P28 is a United States (“U.S.”) based company incorporated in the State of Colorado, with headquarters in Englewood, Colorado. Our sales representatives and distributors are located globally with the majority concentrated in the U.S. and Europe. Initial Public Offering In October, 2021, the Company completed its initial public offering (“IPO”), in which it issued and sold 8,984,375 shares of its common stock at the public offering price of $ 16.00 per share, including 1,171,875 shares of its common stock upon the exercise of the underwriters’ option to purchase additional shares. The Company received net proceeds after deducting underwriting discounts and commissions of $ 133,688 . The Company has incurred $ 2,977 of offering expenses classified as deferred IPO costs as of September 30, 2021 that will be offset against proceeds for the quarter ended December 31, 2021. In connection with the IPO, all of the shares of the Company’s outstanding convertible preferred stock automatically converted into an aggregate of 20,421,200 shares of the common stock. Basis of Presentation and Consolidation The accompanying Condensed Consolidated Financial Statements include the accounts of Paragon 28, Inc. and its wholly owned subsidiaries Paragon 28 Medical Devices Trading Limited—Ireland, Paragon 28 Medical Devices Trading Limited—South Africa, and Paragon Advanced Technologies, Inc. The accompanying Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information required by U.S. GAAP for complete financial statements. The interim Condensed Consolidated Financial Statements reflect all adjustments that are of a normal recurring nature and that are considered necessary for a fair representation of the results for the periods presented and should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the year ended December 31, 2020, which include a complete set of footnote disclosures, including our significant accounting policies. The audited Consolidated Financial Statements and notes thereto for the year ended December 31, 2020 are included in the Company’s final prospectus dated October 14, 2021 that forms a part of the Company’s Registration Statement on Form S-1 (File No. 333-259789) that was filed with the SEC pursuant to Rule 424(b) (the “Final Prospectus”). The results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year or for any other future period. All intercompany balances and transactions have been eliminated in consolidation. COVID-19 Pandemic During the first quarter ended March 31, 2020, concerns related to the spread of coronavirus (“COVID-19”) began to create global business disruptions as well as disruptions in our operations. COVID-19 was declared a global pandemic by the World Health Organization on March 11, 2020. Governments at the national, state and local level in the U.S., and globally, implemented aggressive actions to reduce the spread of the virus, with such actions including lockdown and shelter in place orders, limitations on non-essential gatherings of people, suspension of all non-essential travel, and ordering certain businesses and governmental agencies to cease non-essential operations at physical locations. The spread of COVID-19 has caused significant volatility in the U.S. and international markets through the current period. We have assessed various accounting estimates and other matters, including those that require consideration of forecasted financial information, in context with the unknown future impacts of COVID-19 using information that is reasonably available to us at this time. While our current assessment of our estimates did not have a material impact on our Condensed Consolidated Financial Statements as of and for the three and nine months ended September 30, 2021, as additional information becomes available to us, our future assessment of our estimates, including our expectations at the time regarding the duration, scope and severity of the pandemic, as well as other factors, could materially and adversely impact our Condensed Consolidated Financial Statements in future reporting periods. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Because future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Any changes in these estimates will be reflected in the Company’s Condensed Consolidated Financial Statements. Significant items subject to such estimates and assumptions include the determination of the collectability of trade receivables, inventory obsolescence, impairment of long-lived assets, recoverability of goodwill and intangible assets, earn-out liability, income taxes and stock-based compensation. Deferred Initial Public Offering Costs We have incurred certain costs in connection with our initial public offering (“IPO”) completed on October 19, 2021. We capitalize such deferred costs, which primarily consist of incremental legal, professional, and other third-party fees directly attributable to the IPO. The deferred IPO costs will be offset against IPO proceeds and will be reflected in our results for the quarter ended December 31, 2021. As of September 30, 2021 and December 31, 2020, deferred IPO costs were $ 2,977 and $ 0 , respectively, and were included within Other current assets in the Condensed Consolidated Balance Sheets. Business Combination We allocate the purchase consideration to the identifiable net assets acquired, including intangible assets and liabilities assumed, based on estimated fair values at the date of the acquisition. The excess of the fair value of the purchase consideration over the fair value of the identifiable assets and liabilities, if any, is recorded as goodwill. During the measurement period, which is up to one year from the acquisition date, we may adjust provisional amounts that were recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date. Determining the fair value of assets acquired and liabilities assumed requires significant judgment, including the selection of valuation methodologies including the income approach, the cost approach, and the market approach. Significant assumptions used in those methodologies include, but are not limited to, the expected values of the underlying metric, the systematic risk embedded in the underlying metric, the volatility of the underlying metric, the risk-free rate, and the counterparty risk. The use of different valuation methodologies and assumptions is highly subjective and inherently uncertain and, as a result, actual results may differ materially from estimates. Intangibles The costs associated with applying for patents and trademarks are capitalized. Patents are amortized on a straight-line basis over the lesser of the patent’s economic or legal life, which is seventeen years . Costs associated with capitalized patents include third-party attorney fees and other third-party fees as well as costs related to the following: the preparation of patent applications, government filings and registration fees, drawings, computer searches, and translations related to specific patents. Trademarks that are anticipated to be renewed every ten years have an indefinite life and are not amortized but tested for impairment annually. Once it is determined a trademark will no longer be renewed, the trademark is amortized over the remainder of the trademark’s registration period. Acquired intellectual property is assumed to have an indefinite life. Customer relationships and other intangibles, which mainly consist of noncompete arrangements, are amortized over an estimated useful life of three years on a straight-line basis. Developed technology is amortized over an estimated useful life of twelve years on a straight-line basis. Amortizable intangible assets are assessed for impairment upon triggering events that indicate that the carrying value of an asset may not be recoverable. Recoverability is measured by a comparison of the carrying amount to future net undiscounted cash flows expected to be generated by the associated asset. If the asset’s carrying value is determined to not be recoverable, the impairment to be recognized is measured by the amount by which the carrying amount exceeds the fair market value of the intangible assets. Indefinite-lived trademark assets and acquired intellectual property are reviewed for impairment annually or whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The Company can elect to first apply the optional qualitative impairment assessment to determine whether the indefinite-lived intangible asset is more-likely-than-not impaired. If, on the basis of the qualitative impairment assessment, an entity asserts that it is more likely than not that the indefinite-lived intangible asset is impaired, the Company would be required to calculate the fair value of the asset for an impairment test. Impairment loss is recognized if the carrying amount of the asset exceeds its fair value. A qualitative assessment considers macroeconomic and other industry-specific factors, such as trends in short-term and long-term interest rates and the ability to access capital, and company specific factors such as trends in revenue generating activities, and merger or acquisition activity. If the Company elects to bypass qualitatively assessing its indefinite-lived intangible assets, or it is not more likely than not that the fair value of the intangible asset exceeds its carrying value, management estimates the fair value of the intangible asset and compares it to the carrying value. The estimated fair value of the intangible asset is established using an income approach based on a discounted cash flow model that includes significant assumptions about the future operating results and cash flows of the intangible asset or assets. Goodwill Goodwill represents the excess of the purchase price as compared to the fair value of net assets acquired and liabilities assumed. Goodwill is not amortized, but is tested for impairment annually or when indications of impairment exist. We can elect to qualitatively assess goodwill for impairment if it is more likely than not that the fair value of a reporting unit exceeds its carrying value. Impairment exists when the carrying amount, including goodwill, of the reporting unit exceeds its fair value, resulting in an impairment charge for this excess (not t o exceed the carrying amount of the goodwill). Our annual impairment testing date is October 1. The impairment, if determined, is recorded within Operating expenses in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) in the period the determination is made. There were no impairments recorded during the periods presented. Contingent Earn-out Consideration Business combinations may include contingent earn-out consideration as part of the purchase price under which the Company will make future payments to the seller upon the achievement of certain milestones. The fair value of the contingent earn-out consideration is estimated as of the acquisition date at the present value of the expected contingent payments. Two methodologies may be considered in the valuation: the scenario-based model (“SBM”) and Monte Carlo simulation. The SBM relies on multiple outcomes to estimate the likelihood of future payoff of the contingent consideration. The resulting earnout payoff is then probability-weighted and discounted at an appropriate risk adjusted rate in order to arrive at the present value of the expected earnout payment. The Monte Carlo simulation is used to value the non-linear contingent considerations based on projected financial metrics. Each trial of the Monte Carlo simulation draws a value from the assumed distribution for the underlying metric. The earnout payoff for each simulation trial is calculated based on that particular simulated path for the underlying metrics and then discounted to present value using the risk-free rate, adjusted for counterparty credit risk. The value of the earnout is estimated as the average value from all simulation trials. The fair value estimates use unobservable inputs that reflect our own assumptions as to the ability of the acquired business to meet the targeted benchmarks and discount rates used in the calculations. The unobservable inputs are defined in ASC Topic 820, “Fair Value Measurements and Disclosures,” as Level 3 inputs. We review the probabilities of achievement of the earnout milestones to determine impact on the fair value of the earnout consideration on a quarterly basis over the earn-out period. Actual results are compared to the estimates and probabilities of achievement used in our forecasts. Should actual results of the acquired business increase or decrease as compared to our estimates and assumptions, the estimated fair value of the contingent earn-out consideration liability will increase or decrease, up to the contractual limit, as applicable. Changes in the estimated fair value of the contingent earn-out consideration are reflected in our results of operations in the period in which they are identified. Changes in the estimated fair value of the contingent earn-out consideration may materially impact or cause volatility in our operating results. Trade Receivables, Less Allowance for Doubtful Accounts The Company estimates an allowance for doubtful accounts based upon an evaluation of the current status of receivables, historical experience, and other factors as necessary. It is reasonably possible that the Company’s estimate of the allowance for doubtful accounts will change. The allowance for doubtful accounts was $ 802 and $ 1,296 as of September 30, 2021 and December 31, 2020, respectively. Inventories, Net The Company estimates a reserve for obsolete and slow-moving inventory based on current inventory levels, historical sales and future projected demand. Charges for excess and obsolete inventory are included in Cost of goods sold and were $ 1,004 and $ 1,239 for the three months ended September 30, 2021 and 2020, respectively and were $ 2,229 and $ 2,805 for the nine months ended September 30, 2021 and 2020, respectively. The inventory reserve was $ 18,833 and $ 16,771 as of September 30, 2021 and December 31, 2020, respectively. Revenue Recognition Revenue is recorded when our performance obligation is satisfied which is when our customers take title of the product, and typically when the product is used in surgery. As such, the timing of revenue recognition may differ from the timing of invoicing to our customers. We have recorded unbilled accounts receivable related to this timing difference of $ 3,181 and $ 3,273 as of September 30, 2021 and December 31, 2020, respectively. Accounting Pronouncements Issued Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard 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 right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. ASU 2016-02 supersedes the previous leases standard, ASC 840, Leases. ASU 2016-02, as subsequently amended for various technical issues, is effective for emerging growth companies following private company adoption dates in fiscal years beginning after December 15, 2021, and interim periods with fiscal years beginning after December 15, 2022. The Company is currently evaluating the new guidance, but does not believe it will have a material impact on the Consolidated Financial Statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires entities to estimate all expected credit losses for certain types of financial instruments, including trade receivables, held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The updated guidance also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses over the entire contractual term of the instrument from the date of initial recognition of that instrument. ASU 2016-13, as subsequently amended for various technical issues, is effective for emerging growth companies following private company adoption dates for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the new guidance to determine the impact it will have on the Consolidated Financial Statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) (“ASU 2019-12”), which is part of the FASB’s overall simplification initiative to reduce the costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. ASU 2019-12 simplifies accounting guidance for intra-period allocations, deferred tax liabilities, year-to-date losses in interim periods, franchise taxes, step-up in tax basis of goodwill, separate entity financial statements, and interim recognition of tax laws or rate changes. ASU 2019-12 is effective for emerging growth companies following private company adoption dates in fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the new guidance to determine the impact it will have on our Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”), subsequently clarified in January 2021 by ASU 2021-01, Reference Rate Reform (Topic 848) (“ASU 2021-01”). The main provisions of this update provides optional expedients and exceptions for contracts, hedging relationships, and other transactions that reference the London Inter-bank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. The guidance in ASU 2020-04 and ASU 2021-01 was effective upon issuance and, once adopted, may be applied prospectively to contract modifications and hedging relationships through December 31, 2022. The adoption of this guidance did not have a significant impact on the Company's Consolidated Financial Statements and related disclosures. |
Business Combination
Business Combination | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination And Asset Acquisition [Abstract] | |
Business Combination | NOTE 3. BUSINESS COMBINATION Additive Orthopaedics On May 28, 2021 (“Closing Date”), the Company entered into an Asset Purchase Agreement (“APA”) with Additive Orthopaedics, LLC (“Additive” or “Seller”) and completed an acquisition of substantially all of the operating and intangible assets of Additive, for total cash consideration of $ 15,000 at closing. The APA also provided for potential earn-out consideration to the Seller in connection with the achievement of certain milestones, including both project-based and revenue-based milestones, with various expiration dates through the fourth anniversary of the Closing Date. The earn-out has a maximum payment not to exceed $ 9,500 , in the aggregate. If an individual milestone is not met by the specified milestone expiration date, the earn-out related to that specific milestone will not be paid. The contingent earn-out consideration had an estimated fair value of $ 3,910 as of the Closing Date. Acquisition related costs were approximately $ 524 during the nine months ended September 30, 2021 and are included in Selling, general, and administrative expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss. No acquisition related costs were incurred in the nine months ended September 30, 2020. Additive’s 3D-printed Patient Specific Talus Spacer is the only U.S. Food and Drug Administration-approved patient-specific total talus replacement implant authorized in the U.S. for the treatment of avascular necrosis. The acquisition of Additive allowed the Company to further expand into the patient specific implant market. The Company has accounted for the acquisition of Additive under ASC Topic 805, Business Combinations (“ASC 805”). Additive’s results of operations are included in the Condensed Consolidated Financial Statements beginning after May 28, 2021, the acquisition date. The following table summarizes the preliminary purchase consideration transferred in connection with the acquisition of Additive and consists of the following: Consideration Paid Cash consideration $ 15,000 Contingent consideration 3,910 Total consideration $ 18,910 The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed as of the Closing Date: Measurement Preliminary allocation period adjustments Adjusted allocation Assets acquired: Accounts receivable $ 761 $ - $ 761 Inventory 113 - 113 Intangible assets 11,560 - 11,560 Goodwill 7,872 ( 559 ) 7,313 Total Assets Acquired $ 20,306 $ ( 559 ) $ 19,747 Liabilities assumed: Accounts payable $ 796 $ - $ 796 Accrued expenses 600 ( 559 ) 41 Total Liabilities Assumed $ 1,396 $ ( 559 ) $ 837 Net assets acquired $ 18,910 $ - $ 18,910 Due to a change in our estimated accrued expenses, we made a measurement period adjustment of $ 559 during the three and nine months ended September 30, 2021. Identified intangible assets consist of noncompete arrangements, customer relationships, and developed technology. The fair value of each were determined with the assistance of an external valuation specialist using a combination of the income, market, and asset approach, in accordance with ASC 805. The purchase consideration was allocated to the identifiable net assets acquired based on estimated fair values at the date of the acquisition. The purchase consideration and its allocation are preliminary and may be adjusted to reflect new information obtained about facts and circumstances that existed as of the acquisition date. The excess of the fair value of the purchase consideration over the fair value of the identifiable assets and liabilities, if any, was recorded as goodwill. The goodwill is attributable to the expected synergies with the Company’s existing operations. The entire amount of the purchase price allocated to goodwill will be deductible for income tax purposes pursuant to Internal Revenue Code Section 197 over a 15-year period. The useful life determination was made by management in line with the Company’s policy on assets. Both determinations are outlined in the table below: Fair Value Estimated Useful Life (in years) Noncompete arrangements $ 30 3 Customer relationships 240 3 Developed technology 11,290 12 $ 11,560 There is no supplemental proforma presentation of operating results of the acquisition of Additive due to the immaterial impact on the Company’s Consolidated operations for the three and nine months ended September 30, 2021 and 2020. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | NOTE 4. GOODWILL AND INTANGIBLE ASSETS Goodwill As of September 30, 2021 and December 31, 2020, goodwill was $ 7,313 and $ 0 , respectively; the activity is as follows: Balance at December 31, 2020 $ - Acquisitions 7,872 Measurement period adjustments ( 559 ) Balance at September 30, 2021 $ 7,313 Intangibles Intangible assets as of September 30, 2021 are as follows: Estimated Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patents, definite-lived 12.6 $ 3,134 $ 653 $ 2,481 Trademarks, indefinite-lived Indefinite 366 - 366 Acquired intellectual property, indefinite-lived Indefinite 1,378 - 1,378 Customer relationships 3 240 27 213 Developed technology 12 11,290 314 10,976 Other intangibles 3 34 3 31 Total patents, trademarks and intangibles, net $ 16,442 $ 997 $ 15,445 Intangible assets, excluding the Additive intangible assets, increased $ 1,196 during the nine months ended September 30, 2021 due to the purchase of new patents and additional legal fees associated with our patents and trademarks. Intangible assets as of December 31, 2020, are as follows: Estimated Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patents, definite-lived 13.3 $ 2,504 $ 363 $ 2,141 Trademarks, indefinite-lived Indefinite 306 - 306 Acquired intellectual property, indefinite-lived Indefinite 878 - 878 Total patents, trademarks and intangibles, net $ 3,688 $ 363 $ 3,325 Amortization expense is included in Selling, general, and administrative expenses and was $ 494 and $ 24 for the three months ended September 30, 2021 and 2020, respectively. Amortization expense for the nine months ended September 30, 2021 and 2020 totaled $ 635 and $ 72 , respectively. Expected future amortization expense is as follows: 2021 (Remaining) $ 636 2022 $ 1,704 2023 $ 1,226 2024 $ 1,173 2025 $ 1,136 2026 $ 1,136 No impairment charges related to intangibles and goodwill were recorded for the three and nine months ended September 3 0 , 2021 and 2020. |
Contingent Earn-Out Considerati
Contingent Earn-Out Consideration | 9 Months Ended |
Sep. 30, 2021 | |
Business Combinations [Abstract] | |
Contingent Earn-Out Consideration | NOTE 5. CONTINGENT EARN-OUT CONSIDERATION The following table provides a reconciliation of our Level 3 earn-out liabilities for the nine months ended September 30, 2021: Balance at December 31, 2020 $ - Acquisition date fair value of earn-out liabilities 3,910 Change in fair value of earn-out liabilities 60 Balance at September 30, 2021 $ 3,970 The current portion of contingent earn-out liability is included in Other-current liabilities and the non-current portion is included in Other long-term liabilities on the Condensed Consolidated Balance Sheet. As of September 30, 2021, the current portion was $ 1,910 . During the three months ended September 30, 2021, we reassessed the estimate of the earn-out liabilities which resulted in an increase of $ 60 classified as other expense within the Condensed Consolidated Statement of Operations and Comprehensive Income (Loss). We made no cash payments for contingent earn-out consideration during the three and nine months ended September 30, 2021. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 6. DEBT Long-term debt as of September 30, 2021 and December 31, 2020 consists of the following: September 30, 2021 December 31, 2020 Equipment note payable, due July 2021 $ 9 $ 72 New 2020 Term Loan - 5,814 Bank of Ireland Note Payable 290 427 MidCap Revolving Loan 15,985 - MidCap Term Loan 10,000 - $ 26,284 $ 6,313 Less: deferred issuance costs ( 2,760 ) ( 52 ) Total debt, net of issuance costs 23,524 6,261 Less: current portion ( 173 ) ( 2,231 ) Long-term debt, net, less current maturities $ 23,351 $ 4,030 MidCap Credit Agreements On May 6, 2021, the Company entered into a new credit agreement with MidCap Financial Trust to provide a total of $ 70,000 including up to a $ 30,000 revolving loan (“MidCap Revolving Loan”) and up to a $ 40,000 term loan (“MidCap Term Loan”), secured by substantially all the Company’s assets, debt, and equity (“MidCap Credit Agreements”). The MidCap Term Loan is comprised of two tranches, the first of which provides a commitment amount of $ 10,000 , and the second a commitment of $ 30,000 . The MidCap Term Loan and Midcap Revolving Loan bear a variable interest rate of LIBOR plus 6 % and LIBOR plus 3 %, respectively, and mature on the earlier of May 1, 2026 or a change in control event (the "Termination Date"). The entire principal balances of the MidCap Revolving Loan and MidCap Term Loan are due on the Termination Date. Interest payments are payable monthly, with optional principal prepayments allowed under the MidCap Credit Agreements. Total debt issuance costs associated with the MidCap Credit Agreements was $ 3,080 . Amortization expense associated with such debt issuance costs totaled $ 192 for the three months ended September 30, 2021 and $ 318 for the nine months ended September 30,2021, and is included in Selling, general and administrative expenses on the Condensed Consolidated Statements of Operations and Comprehensive Loss. Vectra Bank Colorado Loan Agreements On June 20, 2018, the Company entered into a loan agreement (the “Loan Agreement”) with Zions Bancorporation, N.A. dba Vectra Bank Colorado (“VBC”). The Loan Agreement consisted of a $ 12,500 revolving line of credit (the “Revolving Loan”). The borrowing base on the Revolving Loan is an amount equal to the greater of 1.25 multiplied by the Company’s EBITDA for the past 12 months or the sum of: (1) 85 % of eligible accounts receivable plus (2) 50 % of eligible inventory plus (3) 30 % of eligible fixed assets. The Revolving Loan bears interest at the adjustable rate equal to the one-month London Inter-bank Offered Rate (“LIBOR”) rate plus an applicable margin per annum, but not less than 2.00 %, and had an original maturity of December 1, 2018 . The applicable margin is subject to adjustment as provided in the Loan Agreement. The Revolving Loan may be used only for working capital purposes. The original Loan Agreement was secured by all assets and personal property of the Company, including all goods, equipment, inventory, cash, intellectual property, and certificates of deposit. The Loan Agreement contains financial and other customary covenants. On November 27, 2018, the Company entered into the First Amendment to the Loan Agreement (“First VBC Loan Amendment”). The First VBC Loan Amendment extended the Revolving Loan maturity to June 30, 2019 . A new Intellectual Property Security Agreement, dated November 27, 2018, was executed with the First VBC Loan Amendment which grants a security interest in substantially all assets of the Company, including all right, title, and interest of the Company in all currently owned and subsequently acquired copyrights, trademarks, and patents and all products and proceeds thereof to VBC. On April 25, 2019, the Company entered into the Second Amendment to the Loan Agreement (“Second VBC Loan Amendment”). The Second VBC Loan Amendment added a $ 5,000 term loan facility (the “Term Loan”) to the Loan Agreement. The Term Loan bears interest at the adjustable rate equal to the one-month LIBOR plus an applicable margin per annum and has a maturity date of April 25, 2021 . The Term loan may only be used to fund new equipment purchases and tenant improvements at the Company’s leased facilities. On June 17, 2019, the Company entered into the Third Amendment to the Loan Agreement (“Third VBC Loan Amendment”). The Third VBC Loan Amendment extended the maturity date of the Revolving Loan to August 31, 2019 . No other terms of the Loan Agreement were materially changed. On September 23, 2019, the Company entered into the Fourth Amendment to the Loan Agreement (“Fourth VBC Loan Amendment”). The Fourth VBC Loan Amendment extended the maturity date of the Revolving Loan to June 30, 2020 . The Fourth VBC Loan Amendment also sets forth a minimum tangible net worth calculated as total assets, excluding intangible assets, less total liabilities (i) of not less than $ 18,000 tested quarterly on a rolling 4-quarter basis commencing June 30, 2018 , and (ii) of not less than $ 20,900 tested quarterly on a rolling 4-quarter basis commencing September 30, 2019 . On November 6, 2019, the Company entered into the Fifth Amendment to the Loan Agreement (“Fifth VBC Loan Amendment”). The Fifth VBC Loan Amendment added a $ 5,000 draw-to-term loan facility (the “Buyout Loan”) to the Loan Agreement. The Buyout Loan had a maturity date of June 30, 2020 and bears interest at the adjustable rate equal to the one-month LIBOR rate plus 2.00 % per annum. On March 27, 2020 , the Company entered into the Amended and Restated Loan Agreement (the “New Loan Agreement”). The New Loan Agreement refinanced the existing Term Loan and existing Buyout Loan into a single term loan in the aggregate principal amount of $ 6,802 (the “New 2020 Term Loan”) and increased the maximum principal amount of the existing Revolving Loan to $ 15,000 (the “New 2020 Revolving Loan”). The maturity date for both loans was September 30, 2020 and was subsequently extended to October 5, 2023 . The New Loan Agreement is secured by substantially all the Company’s assets. The New Loan Agreement contains financial and other customary covenants and bears an interest rate of 3 %. The Company repaid this New 2020 Revolving Loan in 2021 with proceeds from the MidCap Credit agreements. Bank of Ireland Note Payable On June 12, 2020, the Company entered a term loan with Bank of Ireland in a principal amount of $ 474 (the “Bank of Ireland Note Payable”). The Bank of Ireland Note Payable bears an annual interest rate of 4 % and is due in equal monthly installments over a 36-month period, including interest. The Bank of Ireland Note Payable contains financial and other customar |
Note Payable - Related Party
Note Payable - Related Party | 9 Months Ended |
Sep. 30, 2021 | |
Note Payable Related Party [Abstract] | |
Note Payable - Related Party | NOTE 7. NOTE PAYABLE—RELATED PARTY On November 15, 2019, the Company entered into a $ 3,000 promissory note with a stockholder of the Company (the “Stockholder Note”). The Stockholder Note is unsecured and bears interest at a rate of 6 % per annum, payable monthly. The Company paid the full principal and interest accrued on the Stockholder Note in July 2020. The interest expense associated with such Stockholder Note was $ 0 and $ 20 for the three months ended September 3, 2021 and 2020, respectively, which is recorded in Interest expense on the Condensed Consolidated Statements of Operations and Comprehensive Loss. Interest expense associated with such Stockholder Note was $ 0 and $ 110 for the nine months ended September 30, 2021 and 2020, respectively. |
Convertible Preferred Series Eq
Convertible Preferred Series Equity and Stockholders' Equity | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
Convertible Preferred Series Equity and Stockholders' Equity | NOTE 8. CONVERTIBLE PREFERRED SERIES EQUITY AND STOCKHOLDERS’ EQUITY Under its Amended and Restated Articles of Incorporation dated July 22, 2020 and the Board resolution adopted June 27, 2021, the Company had a total of 95,109,045 shares of capital stock authorized for issuance, consisting of 74,687,845 shares of common stock, par value of $ 0.01 per share, and 20,421,200 shares of convertible preferred stock, par value of $ 0.01 per share. The convertible preferred stock consists of 13,812,500 shares of Series A convertible preferred stock and 6,608,700 shares of Series B convertible preferred stock. Common Stock In January 2021, the Company issued an aggregate of 151,515 shares of its common stock at a price of $ 6.60 , resulting in total proceeds of approximately $ 1,000 . Common stock reserved for future issuance are as follows: September 30, 2021 Convertible preferred stock 20,421,200 Common stock options granted and outstanding 5,307,200 Common stock reserved for future option grants 2,069,875 Total common stock reserved for future issuance 27,798,275 Series A Convertible Preferred Stock In December 2011, the Company issued an aggregate of 3,250,005 shares of its Series A convertible preferred stock at a price of $ 0.30769 per share, resulting in total proceeds of approximately $ 1,000 . In February and November 2012, the Company issued an aggregate of 10,562,495 shares of its Series A convertible preferred stock at a price of $ 0.30769 per share, resulting in total proceeds of approximately $ 3,250 . As of September 30, 2021, there are 13,812,500 shares of Series A convertible preferred stock outstanding. As of September 30, 2021 and December 31, 2020, the Company’s Series A convertible preferred stock have been classified as temporary equity in the accompanying Condensed Consolidated Balance Sheets given that a majority of the Company’s board of directors seats are held by convertible preferred stockholders and they could cause certain events to occur that are outside of the Company’s control whereby the Company could be obligated to redeem the convertible preferred stock. In connection with the IPO, all of the shares of the Company’s outstanding Series A convertible preferred stock automatically converted into an aggregate of 13,812,500 shares of the common stock. Convertible Series B Preferred Stock In July 2020, the Company issued an aggregate of 6,608,700 shares of its Series B convertible preferred stock at a price of $ 5.75 per share, resulting in total net proceeds of approximately $ 36,030 , net of issuance costs of $ 1,970 . As of September 30, 2021, there are 6,608,700 shares of Series B convertible preferred stock outstanding. As of September 30, 2021 and December 31, 2020, the Company’s Series B convertible preferred stock have been classified as temporary equity in the accompanying balance sheets given that a majority of the Company’s Board of Directors seats are held by convertible preferred stockholders and they could cause certain events to occur that are outside of the Company’s control whereby the Company could be obligated to redeem the convertible preferred stock. In connection with the IPO, all of the shares of the Company’s outstanding Series B convertible preferred stock automatically converted into an aggregate of 6,608,700 shares of the common stock. Treasury Stock The Company purchased a total of 85,050 and 41,665 shares of its common stock during the nine months ended September 30, 2021 and 2020, respectively, for $ 561 and $ 231 , respectively. Share purchases during the first nine months of September 30, 2021 and 2020 were made at an average of $ 6.60 and $ 5.50 per share, respectively. All repurchased shares were recorded in Treasury stock at cost. |
Earnings (loss) Per Share
Earnings (loss) Per Share | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | NOTE 9. EARNINGS (LOSS) PER SHARE Basic net (loss) income per share is computed by dividing net (loss) income attributable to common stockholders (the numerator) by the weighted average number of common stock outstanding for the period (the denominator). Diluted net income per common stock attributable to common stockholders is computed by dividing net income by the weighted average number of common stocks outstanding during the period adjusted for the dilutive effects of common stock equivalents using the treasury stock method or the method based on the nature of such securities. In periods when losses from continuing operations are reported, the weighted-average number of common stock outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. The computation of net loss per share for the three months and nine months ended September 30, 2021 and 2020, respectively was as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except per share data) 2021 2020 2021 2020 Net (loss) income attributable to common stockholders Net (loss) income attributable to Paragon 28, Inc. $ ( 5,107 ) $ 3,808 $ ( 7,518 ) $ ( 667 ) Less: Dividends on Series B convertible preferred stock ( 574 ) ( 333 ) ( 1,516 ) ( 333 ) Net (loss) income attributable to common stockholders $ ( 5,681 ) $ 3,475 $ ( 9,034 ) $ ( 1,000 ) Weighted-average common stock outstanding: Basic 47,005,334 43,429,308 46,926,344 42,792,176 Diluted 47,005,334 61,376,701 46,926,344 42,792,176 Loss per share: Basic $ ( 0.12 ) $ 0.08 $ ( 0.19 ) $ ( 0.02 ) Diluted $ ( 0.12 ) $ 0.06 $ ( 0.19 ) $ ( 0.02 ) The following outstanding potentially dilutive securities were excluded from the calculation of diluted net loss per share attributable to common stockholders because their impact would have been antidilutive for the period presented: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Stock options 5,307,200 2,036,390 5,307,200 6,171,280 Series A convertible preferred stock 13,812,500 - 13,812,500 13,812,500 Series B convertible preferred stock 6,608,700 6,608,700 6,608,700 6,608,700 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | NOTE 10. STOCK-BASED COMPENSATION The Company approved and adopted the March 11, 2011 stock option plan, which permits the grant of stock options to its employees for up to 15,800,000 shares of common stock. Option awards are generally granted with an exercise price equal to the market price of the Company’s stock at the date of grant; those options generally, vest based on one to four years of continuous service and have ten-year contractual terms. There were 816,250 and 785,000 options granted during the nine months ended September 30, 2021 and 2020. As of September 30, 2021, the Company had reserved 2,069,875 options for future grant. The time-based stock options vest in equal installments each year from one to four years . The performance-based options are eligible to vest in equal installments each year subject to the individual meeting certain sales targets. During the three months ended September 30, 2021 and 2020, the Company recognized $ 1,032 and $ 365 , respectively, of compensation expense related to stock options. During the nine months ended September 30, 2021 and 2020, the Company recognized $ 2,747 and $ 1,233 , respectively, of compensation expense related to stock options. Stock-based compensation expenses are recorded in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss. The Company received cash in the amount of $ 91 and $ 85 from the exercise of stock options for the three months ended September 30, 2021 and 2020, respectively. The Company received cash in the amount of $ 442 and $ 210 from the exercise of stock options for the nine months ended September 30, 2021 and 2020, respectively. The tax benefit from equity options exercised were $ 19 and $ 18 for the three months ended September 30, 2021 and 2020, respectively. The tax benefit from equity options exercised were $ 93 and $ 44 for the nine months ended September 30, 2021 and 2020, respectively. During the first nine months of 2020, the Company granted certain officers and contractors of the Company an aggregate of 785,000 options at a weighted average strike price of $ 6.11 . Of the options granted, there were time-based options and performance-based options, which vest upon achievement of the sales performance milestone. During the first nine months of 2021, the Company granted certain officers and contractors of the Company an aggregate of 816,250 time-based options at a weighted average strike price of $ 6.60 . The following summarizes the Company’s stock option plan and the activity for the three months and nine months ended September 30, 2021: Nine Months Ended September 30, 2021 2020 Expected volatility 52 % - 54 % 51 % - 56 % Expected dividends - - Expected term (in years) 5.75 - 6.25 5.75 - 6.0 Risk-free rate 0.47 % - 0.93 % 0.35 % - 1.66 % The aggregate intrinsic value of options outstanding as of September 30, 2021 is $ 43,432 . The aggregate intrinsic value of vested and exercisable options as of September 30, 2021 is $ 28,713 . The weighted average fair value of options granted during the nine months ended September 30, 2021 and 2020 was $ 5.04 and $ 3.26 , respectively, on the dates of grant. As of September 30, 2021, there was approximately $ 6,979 total unrecognized compensation cost related to non-vested stock-based compensation arrangements, which is expected to be recognized over a weighted average period of 1.86 years. The fair value of each option award is estimated on the date of grant using a Black Scholes option pricing model. The absence of an active market for the Company’s common stock required it to estimate the fair value of the Company’s common stock for purposes of granting stock options and for determining stock-based compensation expense for the periods presented. The Company obtained third-party valuations to assist in determining the estimated fair value of its common stock in addition to contemporaneous sales of common stock. These third-party valuations used the methodologies, approaches, and assumptions consistent with the American Institute of Certified Public Accountants Practice Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation . Expected volatilities are based on historical volatilities of comparable companies. The Company uses the “simplified” method of calculation for estimating expected term since the simplified method provides a reasonable estimate in comparison to actual experience. The risk-free rate is based on the U.S. Treasury yield rates for the expected term. The Company does not anticipate that dividends on common stock will be distributed in the near future. Below are the following assumptions used for the nine months ended September 30, 2021 and 2020 in determining the fair value of each option award: Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Outstanding December 31, 2020 4,759,530 $ 4.55 7.84 Granted 816,250 6.49 Exercised ( 234,205 ) 1.89 Forfeited or expired ( 34,375 ) 6.16 Outstanding September 30, 2021 5,307,200 $ 5.52 7.63 Exercisable September 30, 2021 2,864,992 $ 3.68 6.27 Vested and expected to vest at September 30, 2021 5,307,200 $ 5.52 7.63 |
Employee Benefit Plan
Employee Benefit Plan | 9 Months Ended |
Sep. 30, 2021 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plan | NOTE 11. EMPLOYEE BENEFIT PLAN The Company sponsors a defined contribution plan for eligible employees who are 21 years of age with three months of service can voluntarily contribute up to 100 % of their eligible compensation. The Company has elected a Safe Harbor plan in which the Company must contribute 3 % of eligible compensation. In addition, the Company may make discretionary contributions which are determined and authorized by the Board of Directors each plan year. The Company made matching contributions to its employee benefit plan of $ 129 and $ 111 for the three months ended September 30, 2021 and 2020, respectively. The Company made matching contributions to its employee benefit plan of $ 425 and $ 360 for the nine months ended September 30, 2021 and 2020, respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 12. INCOME TAXES The effective tax rates for the nine months ended September 30, 2021 and 2020 are as follows: Nine Months Ended September 30, 2021 2020 Effective tax rate - 6.3 % - 227.9 % For the three months ended September 30, 2021 and 2020, the Company recorded tax expense of $ 105 and benefit of $ 19 , respectively. For the nine months ended September 30, 2021 and 2020, the Company recorded tax expense of $ 437 and $ 1,396 , respectively. The majority of change in tax expense recorded in 2020 versus 2021 relates to losses generated in the U.S. for which no benefit is recognized. The Company’s 2021 and 2020 income tax expense and rates differed from the amount of income tax determined by applying the U.S. Federal income tax rate to pre-tax income primarily as a result of the U.S. jurisdiction that has a full valuation allowance recorded on U.S. deferred tax assets. In addition, the tax rate is lower than the U.S. statutory federal tax rate as a result of foreign earnings that are taxed at lower tax rates. The Company continues to monitor the realization of its deferred tax assets and assesses the need for a valuation allowance. The Company analyzes available positive and negative evidence to determine if a valuation allowance is needed based on the weight of the evidence. This objectively verifiable evidence includes the current & prior two years' profit and loss positions after considering pre-tax book income plus or minus permanent adjustments as well as other positive & negative evidence available. This process requires management to make estimates, assumptions, and judgments that are uncertain in nature. The Company has established a valuation allowance with respect to deferred tax assets in the U.S. and continues to monitor and assess potential valuation allowances in all its jurisdictions. |
Commitments And Contingencies
Commitments And Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 13. COMMITMENTS AND CONTIGENCIES Leases The Company leases office space, machinery and equipment under long-term lease agreements expiring through 2029 . Rent expense under operating leases totaled $ 339 and $ 321 for the three months ended September 30, 2021 and 2020, respectively, and is included in Selling, general, and administrative expense in the Condensed Consolidated Statements of Operations and Comprehensive Loss. Rent expense under operating leases totaled $ 1,006 and $ 1,007 for the nine months ended September 30, 2021 and 2020, respectively. Legal Proceedings We are involved in various lawsuits, claims, inquiries, and other regulatory and compliance matters, most of which are routine to the nature of our business. When it is probable that a loss will be incurred and where a range of the loss can be reasonably estimated, the best estimate within the range is accrued. When the best estimate within the range cannot be determined, the low end of the range is accrued. The ultimate resolution of these claims could affect future results of operations should our exposure be materially different from our estimates or should liabilities be incurred that were not previously accrued. Potential insurance reimbursements are not offset against potential liabilities. During 2018 Wright Medical Technology, Inc. (“Wright Medical”) sued the Company, claiming patent infringement targeting essentially all of our patents. The case was subsequently updated to include trade secret misappropriations. We have filed motions to dismiss all allegations. We currently believe that we have substantial and meritorious defenses to Wright Medical’s claims and intend to vigorously defend our position, including through the trial and appellate stages if necessary. As the case is ongoing, we are unable to determine the likelihood of an outcome or estimate a range of reasonably possible settlement, if any. Accordingly, we have not made an accrual for any possible loss. The outcome of any litigation, however, is inherently uncertain, and an adverse judgment or settlement in the Wright Medical proceeding, if any, could materially and adversely affect our business, financial position, results of operations or cash flows. We have incurred, and expect that we will continue to incur, significant expense in defending against the allegations made by Wright Medical. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 14. RELATED PARTY TRANSACTIONS The Company has a license agreement dated July 1, 2017 for certain intellectual property with an entity that is affiliated with one of the directors of the Company, under which the Company pays a royalty of four percent ( 4 %) of net revenue related to the licensed intellectual property for the 15 years following the date of first sale, including a minimum annual payment of $ 250 . The term of the agreement is 20 years , and automatically renews for five-year periods thereafter. Payments to the entity under this license agreement totaled $ 29 and $ 16 for the three months ended September 30, 2021 and 2020, respectively. Payments to the entity under this license agreement totaled $ 236 and $ 82 for the nine months ended September 30, 2021 and 2020, respectively. Amounts payable to this entity as of September 30, 2021 and December 31, 2020 were $ 25 and $ 175 , respectively. The Company purchased property and equipment of $ 299 and $ 323 for the three months ended September 30, 2021 and 2020, respectively, from a related party tray manufacturing company. The Company purchased property and equipment of $ 827 and $ 1,169 for the nine months ended September 30, 2021 and 2020, respectively, from a related party tray manufacturing company. Amounts payable as of September 30, 2021 and December 31, 2020 to this related party were $ 73 and $ 102 , respectively. The Company paid professional services fees to a related party totaling $ 148 and $ 251 for the three months ended September 30, 2021 and 2020, respectively, and are included in Selling, general, and administrative expense in the Condensed Consolidated Statements of Operations and Comprehensive Loss. The Company paid professional services fees to a related party totaling $ 485 and $ 400 for the nine months ended September 30, 2021 and 2020, respectively. Amounts payable as of September 30, 2021 and December 31, 2020 to this related party were $ 34 and $ 68 , respectively. On August 27, 2017, the Company entered into a standard supplier quality agreement with a related party, owned by a non-officer employee of the Company, for purchases of screws and surgical instrumentation. Payments to the related party under the agreement totaled $ 241 and $ 240 for the three months ended September 30, 2021 and 2020, respectively, and are included in Costs of goods sold in the Condensed Consolidated Statements of Operations and Comprehensive Loss. Payments to the related party under the agreement totaled $ 554 and $ 507 for the nine months ended September 30, 2021 and 2020, respectively. Amounts payable to the related party as of September 30, 2021 and December 31, 2020 were $ 238 and $ 119 , respectively. |
Segment and Geographic Informat
Segment and Geographic Information | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | NOTE 15. SEGMENT AND GEOGRAPHIC INFORMATION The following table represents total net revenue by geographic area, based on the location of the customer for the three months and nine months ended September 30, 2021 and 2020, respectively. Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 United States $ 31,882 $ 27,482 $ 92,014 $ 68,593 International 3,969 2,786 12,675 7,331 Total net revenue $ 35,851 $ 30,268 $ 104,689 $ 75,924 No individual country with net revenue originating outside of the United States accounted for more than 10% of consolidated net revenue for the three months and nine months ended September 30, 2021 and 2020. The following table represents total assets by geographic area for the as of September 30, 2021 and December 31, 2020, respectively. September 30, 2021 December 31, 2020 United States $ 108,951 $ 85,489 International 12,597 12,094 Total assets $ 121,548 $ 97,583 No individual country with total assets outside of the United States accounted for more than 10% of consolidated total assets as of September 30, 2021 and December 31, 2020. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 16. SUBSEQUENT EVENTS We have evaluated subsequent events through November 22, 2021 which is the date these Condensed Consolidated Financial Statements were available to be issued. On October 8, 2021, the Company filed a certificate of amendment (“Certificate of Amendment”) with the Secretary of State of the State of Delaware, pursuant to which, the Company effected a 5 -for-1 forward stock split of the Company’s authorized, issued and outstanding common stock, the Company’s authorized, issued and outstanding Series A convertible preferred stock, and the Company’s authorized, issued and outstanding Series B convertible preferred stock (the “Stock Split”). The Stock Split was approved by the Company’s Board of Directors on October 6, 2021. All share amounts and per share data presented in the accompanying Condensed Consolidated Financial Statements have been retrospectively adjusted to reflect the forward stock split for all periods presented. On October 19, 2021, the Company completed its IPO by issuing and selling 8,984,375 shares of its common stock, at a price to the public of $ 16.00 per share. The gross proceeds to the Company from the initial public offering were $ 143,750 , before deducting underwriting discounts and commissions and estimated offering expenses payable by the Company. The net proceeds after deducting underwriting discounts and commissions were $ 133,688 . The Company has incurred $ 2,977 of offering expenses classified as deferred IPO costs as of September 30, 2021 that will be offset against proceeds for the quarter ended December 31, 2021. Concurrent with the IPO, the Company issued 2,578,000 stock options with an exercise price of $ 16.00 per share and an estimated fair market value of $ 8.35 per share. On October 19, 2021, upon the completion of the IPO, all convertible preferred stocks then outstanding, including 13,812,500 shares of Series A convertible preferred stock and 6,608,700 shares of Series B convertible preferred stock, converted into an aggregate of 20,421,200 shares of common stock. Pursuant to the terms of the Series B convertible preferred stock offering, the $ 2,328 of cash dividends accrued as of September 30, 2021 were cancelled upon conversion of the Series B preferred stock into common stock. In October 2021, the Company’s board of directors adopted, and its stockholders approved, the 2021 Incentive Award Plan (“2021 Plan”), which became effective in connection with the IPO. The 2021 Plan provides for the grant of incentive stock options, stock appreciation rights, restricted stock, RSU, performance stock units, performance bonus awards, dividend equivalents, and other stock or cash based awards. The number of shares of the Company’s common stock reserved for issuance under the 2021 Plan is 7,641,979 shares. In October 2021, the Company’s board of directors adopted, and its stockholders approved, the 2021 Employee Stock Purchase Plan (“ESPP”), which became effective in connection with the IPO. The ESPP authorizes the issuance of shares of common stock pursuant to purchase rights granted to employees. The ESPP initially provides participating employees with the opportunity to purchase up to an aggregate of 1,329,040 shares of the Company’s common stock. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying Condensed Consolidated Financial Statements include the accounts of Paragon 28, Inc. and its wholly owned subsidiaries Paragon 28 Medical Devices Trading Limited—Ireland, Paragon 28 Medical Devices Trading Limited—South Africa, and Paragon Advanced Technologies, Inc. The accompanying Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information required by U.S. GAAP for complete financial statements. The interim Condensed Consolidated Financial Statements reflect all adjustments that are of a normal recurring nature and that are considered necessary for a fair representation of the results for the periods presented and should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the year ended December 31, 2020, which include a complete set of footnote disclosures, including our significant accounting policies. The audited Consolidated Financial Statements and notes thereto for the year ended December 31, 2020 are included in the Company’s final prospectus dated October 14, 2021 that forms a part of the Company’s Registration Statement on Form S-1 (File No. 333-259789) that was filed with the SEC pursuant to Rule 424(b) (the “Final Prospectus”). The results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year or for any other future period. All intercompany balances and transactions have been eliminated in consolidation. |
COVID-19 Pandemic | COVID-19 Pandemic During the first quarter ended March 31, 2020, concerns related to the spread of coronavirus (“COVID-19”) began to create global business disruptions as well as disruptions in our operations. COVID-19 was declared a global pandemic by the World Health Organization on March 11, 2020. Governments at the national, state and local level in the U.S., and globally, implemented aggressive actions to reduce the spread of the virus, with such actions including lockdown and shelter in place orders, limitations on non-essential gatherings of people, suspension of all non-essential travel, and ordering certain businesses and governmental agencies to cease non-essential operations at physical locations. The spread of COVID-19 has caused significant volatility in the U.S. and international markets through the current period. We have assessed various accounting estimates and other matters, including those that require consideration of forecasted financial information, in context with the unknown future impacts of COVID-19 using information that is reasonably available to us at this time. While our current assessment of our estimates did not have a material impact on our Condensed Consolidated Financial Statements as of and for the three and nine months ended September 30, 2021, as additional information becomes available to us, our future assessment of our estimates, including our expectations at the time regarding the duration, scope and severity of the pandemic, as well as other factors, could materially and adversely impact our Condensed Consolidated Financial Statements in future reporting periods. |
Use of Estimates | Use of Estimates The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Because future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Any changes in these estimates will be reflected in the Company’s Condensed Consolidated Financial Statements. Significant items subject to such estimates and assumptions include the determination of the collectability of trade receivables, inventory obsolescence, impairment of long-lived assets, recoverability of goodwill and intangible assets, earn-out liability, income taxes and stock-based compensation. |
Deferred Initial Public Offering Costs | Deferred Initial Public Offering Costs We have incurred certain costs in connection with our initial public offering (“IPO”) completed on October 19, 2021. We capitalize such deferred costs, which primarily consist of incremental legal, professional, and other third-party fees directly attributable to the IPO. The deferred IPO costs will be offset against IPO proceeds and will be reflected in our results for the quarter ended December 31, 2021. As of September 30, 2021 and December 31, 2020, deferred IPO costs were $ 2,977 and $ 0 , respectively, and were included within Other current assets in the Condensed Consolidated Balance Sheets. |
Business Combination | Business Combination We allocate the purchase consideration to the identifiable net assets acquired, including intangible assets and liabilities assumed, based on estimated fair values at the date of the acquisition. The excess of the fair value of the purchase consideration over the fair value of the identifiable assets and liabilities, if any, is recorded as goodwill. During the measurement period, which is up to one year from the acquisition date, we may adjust provisional amounts that were recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date. Determining the fair value of assets acquired and liabilities assumed requires significant judgment, including the selection of valuation methodologies including the income approach, the cost approach, and the market approach. Significant assumptions used in those methodologies include, but are not limited to, the expected values of the underlying metric, the systematic risk embedded in the underlying metric, the volatility of the underlying metric, the risk-free rate, and the counterparty risk. The use of different valuation methodologies and assumptions is highly subjective and inherently uncertain and, as a result, actual results may differ materially from estimates. |
Intangibles | Intangibles The costs associated with applying for patents and trademarks are capitalized. Patents are amortized on a straight-line basis over the lesser of the patent’s economic or legal life, which is seventeen years . Costs associated with capitalized patents include third-party attorney fees and other third-party fees as well as costs related to the following: the preparation of patent applications, government filings and registration fees, drawings, computer searches, and translations related to specific patents. Trademarks that are anticipated to be renewed every ten years have an indefinite life and are not amortized but tested for impairment annually. Once it is determined a trademark will no longer be renewed, the trademark is amortized over the remainder of the trademark’s registration period. Acquired intellectual property is assumed to have an indefinite life. Customer relationships and other intangibles, which mainly consist of noncompete arrangements, are amortized over an estimated useful life of three years on a straight-line basis. Developed technology is amortized over an estimated useful life of twelve years on a straight-line basis. Amortizable intangible assets are assessed for impairment upon triggering events that indicate that the carrying value of an asset may not be recoverable. Recoverability is measured by a comparison of the carrying amount to future net undiscounted cash flows expected to be generated by the associated asset. If the asset’s carrying value is determined to not be recoverable, the impairment to be recognized is measured by the amount by which the carrying amount exceeds the fair market value of the intangible assets. Indefinite-lived trademark assets and acquired intellectual property are reviewed for impairment annually or whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The Company can elect to first apply the optional qualitative impairment assessment to determine whether the indefinite-lived intangible asset is more-likely-than-not impaired. If, on the basis of the qualitative impairment assessment, an entity asserts that it is more likely than not that the indefinite-lived intangible asset is impaired, the Company would be required to calculate the fair value of the asset for an impairment test. Impairment loss is recognized if the carrying amount of the asset exceeds its fair value. A qualitative assessment considers macroeconomic and other industry-specific factors, such as trends in short-term and long-term interest rates and the ability to access capital, and company specific factors such as trends in revenue generating activities, and merger or acquisition activity. If the Company elects to bypass qualitatively assessing its indefinite-lived intangible assets, or it is not more likely than not that the fair value of the intangible asset exceeds its carrying value, management estimates the fair value of the intangible asset and compares it to the carrying value. The estimated fair value of the intangible asset is established using an income approach based on a discounted cash flow model that includes significant assumptions about the future operating results and cash flows of the intangible asset or assets. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price as compared to the fair value of net assets acquired and liabilities assumed. Goodwill is not amortized, but is tested for impairment annually or when indications of impairment exist. We can elect to qualitatively assess goodwill for impairment if it is more likely than not that the fair value of a reporting unit exceeds its carrying value. Impairment exists when the carrying amount, including goodwill, of the reporting unit exceeds its fair value, resulting in an impairment charge for this excess (not t o exceed the carrying amount of the goodwill). Our annual impairment testing date is October 1. The impairment, if determined, is recorded within Operating expenses in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) in the period the determination is made. There were no impairments recorded during the periods presented. |
Contingent Earn-Out Consideration | Contingent Earn-out Consideration Business combinations may include contingent earn-out consideration as part of the purchase price under which the Company will make future payments to the seller upon the achievement of certain milestones. The fair value of the contingent earn-out consideration is estimated as of the acquisition date at the present value of the expected contingent payments. Two methodologies may be considered in the valuation: the scenario-based model (“SBM”) and Monte Carlo simulation. The SBM relies on multiple outcomes to estimate the likelihood of future payoff of the contingent consideration. The resulting earnout payoff is then probability-weighted and discounted at an appropriate risk adjusted rate in order to arrive at the present value of the expected earnout payment. The Monte Carlo simulation is used to value the non-linear contingent considerations based on projected financial metrics. Each trial of the Monte Carlo simulation draws a value from the assumed distribution for the underlying metric. The earnout payoff for each simulation trial is calculated based on that particular simulated path for the underlying metrics and then discounted to present value using the risk-free rate, adjusted for counterparty credit risk. The value of the earnout is estimated as the average value from all simulation trials. The fair value estimates use unobservable inputs that reflect our own assumptions as to the ability of the acquired business to meet the targeted benchmarks and discount rates used in the calculations. The unobservable inputs are defined in ASC Topic 820, “Fair Value Measurements and Disclosures,” as Level 3 inputs. We review the probabilities of achievement of the earnout milestones to determine impact on the fair value of the earnout consideration on a quarterly basis over the earn-out period. Actual results are compared to the estimates and probabilities of achievement used in our forecasts. Should actual results of the acquired business increase or decrease as compared to our estimates and assumptions, the estimated fair value of the contingent earn-out consideration liability will increase or decrease, up to the contractual limit, as applicable. Changes in the estimated fair value of the contingent earn-out consideration are reflected in our results of operations in the period in which they are identified. Changes in the estimated fair value of the contingent earn-out consideration may materially impact or cause volatility in our operating results. |
Trade Receivables, Less Allowance for Doubtful Accounts | Trade Receivables, Less Allowance for Doubtful Accounts The Company estimates an allowance for doubtful accounts based upon an evaluation of the current status of receivables, historical experience, and other factors as necessary. It is reasonably possible that the Company’s estimate of the allowance for doubtful accounts will change. The allowance for doubtful accounts was $ 802 and $ 1,296 as of September 30, 2021 and December 31, 2020, respectively. |
Inventories, Net | Inventories, Net The Company estimates a reserve for obsolete and slow-moving inventory based on current inventory levels, historical sales and future projected demand. Charges for excess and obsolete inventory are included in Cost of goods sold and were $ 1,004 and $ 1,239 for the three months ended September 30, 2021 and 2020, respectively and were $ 2,229 and $ 2,805 for the nine months ended September 30, 2021 and 2020, respectively. The inventory reserve was $ 18,833 and $ 16,771 as of September 30, 2021 and December 31, 2020, respectively. |
Revenue Recognition | Revenue Recognition Revenue is recorded when our performance obligation is satisfied which is when our customers take title of the product, and typically when the product is used in surgery. As such, the timing of revenue recognition may differ from the timing of invoicing to our customers. We have recorded unbilled accounts receivable related to this timing difference of $ 3,181 and $ 3,273 as of September 30, 2021 and December 31, 2020, respectively. |
Accounting Pronouncements Issued Not Yet Adopted | Accounting Pronouncements Issued Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard 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 right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. ASU 2016-02 supersedes the previous leases standard, ASC 840, Leases. ASU 2016-02, as subsequently amended for various technical issues, is effective for emerging growth companies following private company adoption dates in fiscal years beginning after December 15, 2021, and interim periods with fiscal years beginning after December 15, 2022. The Company is currently evaluating the new guidance, but does not believe it will have a material impact on the Consolidated Financial Statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires entities to estimate all expected credit losses for certain types of financial instruments, including trade receivables, held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The updated guidance also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses over the entire contractual term of the instrument from the date of initial recognition of that instrument. ASU 2016-13, as subsequently amended for various technical issues, is effective for emerging growth companies following private company adoption dates for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the new guidance to determine the impact it will have on the Consolidated Financial Statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) (“ASU 2019-12”), which is part of the FASB’s overall simplification initiative to reduce the costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. ASU 2019-12 simplifies accounting guidance for intra-period allocations, deferred tax liabilities, year-to-date losses in interim periods, franchise taxes, step-up in tax basis of goodwill, separate entity financial statements, and interim recognition of tax laws or rate changes. ASU 2019-12 is effective for emerging growth companies following private company adoption dates in fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the new guidance to determine the impact it will have on our Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”), subsequently clarified in January 2021 by ASU 2021-01, Reference Rate Reform (Topic 848) (“ASU 2021-01”). The main provisions of this update provides optional expedients and exceptions for contracts, hedging relationships, and other transactions that reference the London Inter-bank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. The guidance in ASU 2020-04 and ASU 2021-01 was effective upon issuance and, once adopted, may be applied prospectively to contract modifications and hedging relationships through December 31, 2022. The adoption of this guidance did not have a significant impact on the Company's Consolidated Financial Statements and related disclosures. |
Business Combination (Tables)
Business Combination (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination And Asset Acquisition [Abstract] | |
Summary of Preliminary Purchase Consideration Transferred | The following table summarizes the preliminary purchase consideration transferred in connection with the acquisition of Additive and consists of the following: Consideration Paid Cash consideration $ 15,000 Contingent consideration 3,910 Total consideration $ 18,910 |
Summary of Preliminary Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed as of the Closing Date: Measurement Preliminary allocation period adjustments Adjusted allocation Assets acquired: Accounts receivable $ 761 $ - $ 761 Inventory 113 - 113 Intangible assets 11,560 - 11,560 Goodwill 7,872 ( 559 ) 7,313 Total Assets Acquired $ 20,306 $ ( 559 ) $ 19,747 Liabilities assumed: Accounts payable $ 796 $ - $ 796 Accrued expenses 600 ( 559 ) 41 Total Liabilities Assumed $ 1,396 $ ( 559 ) $ 837 Net assets acquired $ 18,910 $ - $ 18,910 |
Useful Life Determination of Assets | The useful life determination was made by management in line with the Company’s policy on assets. Both determinations are outlined in the table below: Fair Value Estimated Useful Life (in years) Noncompete arrangements $ 30 3 Customer relationships 240 3 Developed technology 11,290 12 $ 11,560 |
Goodwill And Intangible Assets
Goodwill And Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | As of September 30, 2021 and December 31, 2020, goodwill was $ 7,313 and $ 0 , respectively; the activity is as follows: Balance at December 31, 2020 $ - Acquisitions 7,872 Measurement period adjustments ( 559 ) Balance at September 30, 2021 $ 7,313 |
Intangible Assets | Intangible assets as of September 30, 2021 are as follows: Estimated Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patents, definite-lived 12.6 $ 3,134 $ 653 $ 2,481 Trademarks, indefinite-lived Indefinite 366 - 366 Acquired intellectual property, indefinite-lived Indefinite 1,378 - 1,378 Customer relationships 3 240 27 213 Developed technology 12 11,290 314 10,976 Other intangibles 3 34 3 31 Total patents, trademarks and intangibles, net $ 16,442 $ 997 $ 15,445 Intangible assets as of December 31, 2020, are as follows: Estimated Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patents, definite-lived 13.3 $ 2,504 $ 363 $ 2,141 Trademarks, indefinite-lived Indefinite 306 - 306 Acquired intellectual property, indefinite-lived Indefinite 878 - 878 Total patents, trademarks and intangibles, net $ 3,688 $ 363 $ 3,325 |
Schedule of Expected Future Amortization Expense | Expected future amortization expense is as follows: 2021 (Remaining) $ 636 2022 $ 1,704 2023 $ 1,226 2024 $ 1,173 2025 $ 1,136 2026 $ 1,136 |
Contingent Earn-Out Considera_2
Contingent Earn-Out Consideration (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Business Combinations [Abstract] | |
Schedule of Reconciliation Level 3 Earn-out Liabilities | The following table provides a reconciliation of our Level 3 earn-out liabilities for the nine months ended September 30, 2021: Balance at December 31, 2020 $ - Acquisition date fair value of earn-out liabilities 3,910 Change in fair value of earn-out liabilities 60 Balance at September 30, 2021 $ 3,970 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt as of September 30, 2021 and December 31, 2020 consists of the following: September 30, 2021 December 31, 2020 Equipment note payable, due July 2021 $ 9 $ 72 New 2020 Term Loan - 5,814 Bank of Ireland Note Payable 290 427 MidCap Revolving Loan 15,985 - MidCap Term Loan 10,000 - $ 26,284 $ 6,313 Less: deferred issuance costs ( 2,760 ) ( 52 ) Total debt, net of issuance costs 23,524 6,261 Less: current portion ( 173 ) ( 2,231 ) Long-term debt, net, less current maturities $ 23,351 $ 4,030 |
Convertible Preferred Series _2
Convertible Preferred Series Equity and Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Temporary Equity Disclosure [Abstract] | |
Schedule of Common Stock Reserved for Future Issuance | Common stock reserved for future issuance are as follows: September 30, 2021 Convertible preferred stock 20,421,200 Common stock options granted and outstanding 5,307,200 Common stock reserved for future option grants 2,069,875 Total common stock reserved for future issuance 27,798,275 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Summary of Computation of Net Loss Per Share | The computation of net loss per share for the three months and nine months ended September 30, 2021 and 2020, respectively was as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except per share data) 2021 2020 2021 2020 Net (loss) income attributable to common stockholders Net (loss) income attributable to Paragon 28, Inc. $ ( 5,107 ) $ 3,808 $ ( 7,518 ) $ ( 667 ) Less: Dividends on Series B convertible preferred stock ( 574 ) ( 333 ) ( 1,516 ) ( 333 ) Net (loss) income attributable to common stockholders $ ( 5,681 ) $ 3,475 $ ( 9,034 ) $ ( 1,000 ) Weighted-average common stock outstanding: Basic 47,005,334 43,429,308 46,926,344 42,792,176 Diluted 47,005,334 61,376,701 46,926,344 42,792,176 Loss per share: Basic $ ( 0.12 ) $ 0.08 $ ( 0.19 ) $ ( 0.02 ) Diluted $ ( 0.12 ) $ 0.06 $ ( 0.19 ) $ ( 0.02 ) |
Summary of Potentially Dilutive Securities Excluded from Calculation of Diluted Net Loss Per Share Attributable to Common Stockholders | The following outstanding potentially dilutive securities were excluded from the calculation of diluted net loss per share attributable to common stockholders because their impact would have been antidilutive for the period presented: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Stock options 5,307,200 2,036,390 5,307,200 6,171,280 Series A convertible preferred stock 13,812,500 - 13,812,500 13,812,500 Series B convertible preferred stock 6,608,700 6,608,700 6,608,700 6,608,700 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Assumptions used in Determining Fair Value | The following summarizes the Company’s stock option plan and the activity for the three months and nine months ended September 30, 2021: Nine Months Ended September 30, 2021 2020 Expected volatility 52 % - 54 % 51 % - 56 % Expected dividends - - Expected term (in years) 5.75 - 6.25 5.75 - 6.0 Risk-free rate 0.47 % - 0.93 % 0.35 % - 1.66 % |
Summary of Stock Option Activity | Below are the following assumptions used for the nine months ended September 30, 2021 and 2020 in determining the fair value of each option award: Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Outstanding December 31, 2020 4,759,530 $ 4.55 7.84 Granted 816,250 6.49 Exercised ( 234,205 ) 1.89 Forfeited or expired ( 34,375 ) 6.16 Outstanding September 30, 2021 5,307,200 $ 5.52 7.63 Exercisable September 30, 2021 2,864,992 $ 3.68 6.27 Vested and expected to vest at September 30, 2021 5,307,200 $ 5.52 7.63 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Tax Rates | The effective tax rates for the nine months ended September 30, 2021 and 2020 are as follows: Nine Months Ended September 30, 2021 2020 Effective tax rate - 6.3 % - 227.9 % |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Total Net Revenue by Geographic Area | The following table represents total net revenue by geographic area, based on the location of the customer for the three months and nine months ended September 30, 2021 and 2020, respectively. Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 United States $ 31,882 $ 27,482 $ 92,014 $ 68,593 International 3,969 2,786 12,675 7,331 Total net revenue $ 35,851 $ 30,268 $ 104,689 $ 75,924 |
Schedule of Total Assets by Geographic Area | The following table represents total assets by geographic area for the as of September 30, 2021 and December 31, 2020, respectively. September 30, 2021 December 31, 2020 United States $ 108,951 $ 85,489 International 12,597 12,094 Total assets $ 121,548 $ 97,583 |
Business and Basis of Present_2
Business and Basis of Presentation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 19, 2021 | Oct. 31, 2021 | Sep. 30, 2021 |
Common Stock | Subsequent Event | |||
Subsidiary, Sale of Stock [Line Items] | |||
Net proceeds after deducting underwriting discounts and commissions | $ 133,688 | $ 133,688 | |
Initial Public Offering | |||
Subsidiary, Sale of Stock [Line Items] | |||
Deferred IPO costs | $ 2,977 | ||
Initial Public Offering | Common Stock | Subsequent Event | |||
Subsidiary, Sale of Stock [Line Items] | |||
Number of shares issued and sold | 8,984,375 | 8,984,375 | |
Public offering price per share | $ 16 | $ 16 | |
Number of shares issued upon conversion of convertible securities | 20,421,200 | 20,421,200 | |
Underwriters Option to Purchase Additional Shares | Common Stock | Subsequent Event | |||
Subsidiary, Sale of Stock [Line Items] | |||
Number of shares issued and sold | 1,171,875 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Impairment of goodwill | $ 0 | $ 0 | $ 0 | $ 0 | |
Allowance for doubtful accounts | 802,000 | 802,000 | $ 1,296,000 | ||
Charges for excess and obsolete inventory included in cost of goods sold | 1,004,000 | $ 1,239,000 | 2,229,000 | $ 2,805,000 | |
Inventory reserve | 18,833,000 | 18,833,000 | 16,771,000 | ||
Unbilled accounts receivable | 3,181,000 | $ 3,181,000 | $ 3,273,000 | ||
Patents | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization period | 17 years | ||||
Estimated useful life | 12 years 7 months 6 days | 13 years 3 months 18 days | |||
Developed Technology | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated useful life | 12 years | ||||
Customer Relationships | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated useful life | 3 years | ||||
Other Intangibles | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated useful life | 3 years | ||||
Other Current Assets | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Deferred IPO costs | $ 2,977,000 | $ 2,977,000 | $ 0 |
Business Combination - Addition
Business Combination - Additional Information (Details) - Additive Orthopaedics, LLC - USD ($) | May 28, 2021 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Business Acquisition [Line Items] | ||||
Cash consideration | $ 15,000,000 | |||
Contingent earn-out consideration, estimated fair value | 3,910,000 | |||
Maximum earn out payment | $ 9,500,000 | |||
Acquisition related costs | $ 0 | |||
Business acquisition, pro forma information, description | There is no supplemental proforma presentation of operating results of the acquisition of Additive due to the immaterial impact on the Company’s Consolidated operations for the three and nine months ended September 30, 2021 and 2020. | |||
Accrued Expenses | ||||
Business Acquisition [Line Items] | ||||
Measurement period adjustment | $ 559,000 | $ 559,000 | ||
Selling, General, and Administrative Expenses | ||||
Business Acquisition [Line Items] | ||||
Acquisition related costs | $ 524,000 |
Business Combination - Summary
Business Combination - Summary of Preliminary Purchase Consideration Transferred (Details) - Additive Orthopaedics, LLC $ in Thousands | May 28, 2021USD ($) |
Consideration Paid | |
Cash consideration | $ 15,000 |
Contingent consideration | 3,910 |
Total consideration | $ 18,910 |
Business Combination - Summar_2
Business Combination - Summary of Preliminary Fair Values of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | May 28, 2021 | Dec. 31, 2020 |
Assets acquired: | |||
Goodwill | $ 7,313 | $ 0 | |
Additive Orthopaedics, LLC | |||
Assets acquired: | |||
Accounts receivable | $ 761 | ||
Inventory | 113 | ||
Intangible assets | 11,560 | ||
Goodwill | 7,313 | ||
Total Assets Acquired | 19,747 | ||
Liabilities assumed: | |||
Accounts payable | 796 | ||
Accrued expenses | 41 | ||
Total Liabilities Assumed | 837 | ||
Net assets acquired | 18,910 | ||
Preliminary Allocation | Additive Orthopaedics, LLC | |||
Assets acquired: | |||
Accounts receivable | 761 | ||
Inventory | 113 | ||
Intangible assets | 11,560 | ||
Goodwill | 7,872 | ||
Total Assets Acquired | 20,306 | ||
Liabilities assumed: | |||
Accounts payable | 796 | ||
Accrued expenses | 600 | ||
Total Liabilities Assumed | 1,396 | ||
Net assets acquired | 18,910 | ||
Measurement Period Adjustments | Additive Orthopaedics, LLC | |||
Assets acquired: | |||
Goodwill | (559) | ||
Total Assets Acquired | (559) | ||
Liabilities assumed: | |||
Accrued expenses | (559) | ||
Total Liabilities Assumed | $ (559) |
Business Combination - Useful L
Business Combination - Useful Life Determination of Assets (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Business Acquisition [Line Items] | |
Fair Value | $ 11,560 |
Noncompete Arrangements | |
Business Acquisition [Line Items] | |
Fair Value | $ 30 |
Estimated Useful Life (in years) | 3 years |
Customer Relationships | |
Business Acquisition [Line Items] | |
Fair Value | $ 240 |
Estimated Useful Life (in years) | 3 years |
Developed Technology | |
Business Acquisition [Line Items] | |
Fair Value | $ 11,290 |
Estimated Useful Life (in years) | 12 years |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | $ 7,313,000 | $ 7,313,000 | $ 0 | ||
Amortization expense | 635,000 | $ 72,000 | |||
Impairment charges related to intangibles | 0 | $ 0 | 0 | 0 | |
Impairment charges related to goodwill | 0 | 0 | 0 | $ 0 | |
Intangible assets acquired excluding Additive intangible assets | 11,560,000 | ||||
Patents and Trademarks | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets acquired excluding Additive intangible assets | $ 1,196,000 | ||||
Selling, General, and Administrative Expenses | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization expense | $ 494,000 | $ 24,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Balance at December 31, 2020 | $ 0 |
Acquisitions | 7,872 |
Measurement period adjustments | (559) |
Balance at September 30, 2021 | $ 7,313 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Gross Carrying Amount | $ 16,442 | $ 3,688 |
Accumulated Amortization | 997 | 363 |
Net Carrying Amount | 15,445 | 3,325 |
Trademarks, Indefinite-Lived | ||
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Net Carrying Amount | 366 | 306 |
Acquired Intellectual Property, Indefinite-Lived | ||
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Net Carrying Amount | $ 1,378 | $ 878 |
Patents, Definite-Lived | ||
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Estimated Useful Life (in years) | 12 years 7 months 6 days | 13 years 3 months 18 days |
Gross Carrying Amount | $ 3,134 | $ 2,504 |
Accumulated Amortization | 653 | 363 |
Net Carrying Amount | $ 2,481 | $ 2,141 |
Customer Relationships | ||
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Estimated Useful Life (in years) | 3 years | |
Gross Carrying Amount | $ 240 | |
Accumulated Amortization | 27 | |
Net Carrying Amount | $ 213 | |
Developed Technology | ||
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Estimated Useful Life (in years) | 12 years | |
Gross Carrying Amount | $ 11,290 | |
Accumulated Amortization | 314 | |
Net Carrying Amount | $ 10,976 | |
Other Intangibles | ||
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Estimated Useful Life (in years) | 3 years | |
Gross Carrying Amount | $ 34 | |
Accumulated Amortization | 3 | |
Net Carrying Amount | $ 31 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Schedule of Expected Future Amortization Expense (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
2021 (Remaining) | $ 636 |
2022 | 1,704 |
2023 | 1,226 |
2024 | 1,173 |
2025 | 1,136 |
2026 | $ 1,136 |
Contingent Earn-out Considearti
Contingent Earn-out Consideartion - Schedule of Reconciliation of Level 3 Earn-Out Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | |
Business Combinations [Abstract] | ||
Acquisition date fair value of earn-out liabilities | $ 3,910 | |
Change in fair value of earn-out liabilities | $ 60 | 60 |
Ending Balance | $ 3,970 | $ 3,970 |
Contingent Earn-out Considear_2
Contingent Earn-out Consideartion - Additional Information (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021USD ($) | Sep. 30, 2021USD ($) | |
Business Combinations [Abstract] | ||
Contingent earn-out liability, current | $ 1,910,000 | $ 1,910,000 |
Increase in estimate of earn-out liabilities | 60,000 | 60,000 |
Payment for contingent earn-out consideration liability | $ 0 | $ 0 |
Debt - Schedule of Long-term De
Debt - Schedule of Long-term Debt Instruments (Details) (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Debt gross amount | $ 26,284 | $ 6,313 |
Less: deferred issuance costs | (2,760) | (52) |
Total debt, net of issuance costs | 23,524 | 6,261 |
Less: current portion | (173) | (2,231) |
Long-term debt net, less current maturities | 23,351 | 4,030 |
Equipment Notes Payable | ||
Debt Instrument [Line Items] | ||
Debt gross amount | 9 | 72 |
New 2020 Term Loan | ||
Debt Instrument [Line Items] | ||
Debt gross amount | 5,814 | |
Bank of Ireland Note Payable | ||
Debt Instrument [Line Items] | ||
Debt gross amount | 290 | $ 427 |
MidCap Revolving Loan | ||
Debt Instrument [Line Items] | ||
Debt gross amount | 15,985 | |
MidCap Term Loan | ||
Debt Instrument [Line Items] | ||
Debt gross amount | $ 10,000 |
Debt - Schedule of Long-term _2
Debt - Schedule of Long-term Debt Instruments (Parenthetical) (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Equipment Notes Payable | ||
Debt Instrument [Line Items] | ||
Debt instrument due date | 2021-07 | 2021-07 |
Debt - MidCap Credit Agreements
Debt - MidCap Credit Agreements - Additional Information (Details) - USD ($) | May 06, 2021 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 |
Debt Instrument [Line Items] | |||||
Total debt issuance costs | $ 2,760,000 | $ 2,760,000 | $ 52,000 | ||
Amortization expense | 372,000 | $ 92,000 | |||
MidCap Credit Agreements | |||||
Debt Instrument [Line Items] | |||||
Expiration date | May 1, 2026 | ||||
Total debt issuance costs | 3,080,000 | 3,080,000 | |||
MidCap Credit Agreements | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Variable interest rate | 6.00% | ||||
MidCap Credit Agreements | Selling, General and Administrative Expenses | |||||
Debt Instrument [Line Items] | |||||
Amortization expense | $ 192,000 | $ 318,000 | |||
MidCap Credit Agreements | Mid Cap Financial Trust | |||||
Debt Instrument [Line Items] | |||||
Maximum principal amount | $ 70,000,000 | ||||
MidCap Credit Agreements | Mid Cap Financial Trust | Term Loan | |||||
Debt Instrument [Line Items] | |||||
Maximum principal amount | 40,000,000 | ||||
MidCap Credit Agreements | Mid Cap Financial Trust | First Commitment | |||||
Debt Instrument [Line Items] | |||||
Maximum principal amount | 10,000,000 | ||||
MidCap Credit Agreements | Mid Cap Financial Trust | Second Commitment | |||||
Debt Instrument [Line Items] | |||||
Maximum principal amount | 30,000,000 | ||||
MidCap Credit Agreements | Mid Cap Financial Trust | Revolving Loan | |||||
Debt Instrument [Line Items] | |||||
Maximum principal amount | $ 30,000,000 | ||||
MidCap Revolving Loan | |||||
Debt Instrument [Line Items] | |||||
Expiration date | May 1, 2026 | ||||
MidCap Revolving Loan | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Variable interest rate | 3.00% |
Debt - Vectra Bank Colorado Loa
Debt - Vectra Bank Colorado Loan Agreements - Additional Information (Details) | Mar. 27, 2020USD ($) | Nov. 06, 2019USD ($) | Sep. 23, 2019USD ($) | Jun. 17, 2019 | Apr. 25, 2019USD ($) | Nov. 27, 2018 | Jun. 20, 2018USD ($) |
Second VBC Loan Amendment | Term Loan | |||||||
Line Of Credit Facility [Line Items] | |||||||
Expiration date | Apr. 25, 2021 | ||||||
Additional borrowing amount | $ 5,000,000 | ||||||
Fifth VBC Loan Amendment | Draw-to-Term Loan Facility | |||||||
Line Of Credit Facility [Line Items] | |||||||
Expiration date | Jun. 30, 2020 | ||||||
Additional borrowing amount | $ 5,000,000 | ||||||
Fifth VBC Loan Amendment | Draw-to-Term Loan Facility | LIBOR | |||||||
Line Of Credit Facility [Line Items] | |||||||
Variable interest rate | 2.00% | ||||||
New Loan Agreement | |||||||
Line Of Credit Facility [Line Items] | |||||||
Maturity date | Sep. 30, 2020 | ||||||
Maturity extended date | Oct. 5, 2023 | ||||||
Interest rate | 3.00% | ||||||
New Loan Agreement | New 2020 Term Loan | |||||||
Line Of Credit Facility [Line Items] | |||||||
Principal amount | $ 6,802,000 | ||||||
Vectra Bank Colorado | Vectra Bank Colorado Loan Agreements | |||||||
Line Of Credit Facility [Line Items] | |||||||
Borrowing base multiplier by company's EBITDA | 1.25 | ||||||
Percentage eligible on accounts receivable | 85.00% | ||||||
Percentage eligible on fixed assets | 30.00% | ||||||
Percentage eligible on inventory | 50.00% | ||||||
Expiration date | Dec. 1, 2018 | ||||||
Vectra Bank Colorado | Vectra Bank Colorado Loan Agreements | LIBOR | |||||||
Line Of Credit Facility [Line Items] | |||||||
Variable interest rate | 2.00% | ||||||
Revolving Loan | First VBC Loan Amendment | |||||||
Line Of Credit Facility [Line Items] | |||||||
Expiration date | Jun. 30, 2019 | ||||||
Revolving Loan | Third VBC Loan Amendment | |||||||
Line Of Credit Facility [Line Items] | |||||||
Expiration date | Aug. 31, 2019 | ||||||
Revolving Loan | Fourth VBC Loan Amendment | |||||||
Line Of Credit Facility [Line Items] | |||||||
Expiration date | Jun. 30, 2020 | ||||||
Revolving Loan | Fourth VBC Loan Amendment | Commencing June 30, 2018 | |||||||
Line Of Credit Facility [Line Items] | |||||||
Minimum tangible net worth | $ 18,000,000 | ||||||
Commencing date | Jun. 30, 2018 | ||||||
Revolving Loan | Fourth VBC Loan Amendment | Commencing September 30, 2019 | |||||||
Line Of Credit Facility [Line Items] | |||||||
Minimum tangible net worth | $ 20,900,000 | ||||||
Commencing date | Sep. 30, 2019 | ||||||
Revolving Loan | Vectra Bank Colorado | Vectra Bank Colorado Loan Agreements | |||||||
Line Of Credit Facility [Line Items] | |||||||
Maximum principal amount | $ 12,500,000 | ||||||
New 2020 Revolving Loan | New Loan Agreement | |||||||
Line Of Credit Facility [Line Items] | |||||||
Additional borrowing amount | $ 15,000,000 |
Debt - Bank of Ireland Note Pay
Debt - Bank of Ireland Note Payable - Additional Information (Details) - Bank of Ireland Note Payable - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Jun. 12, 2020 | |
Debt Instrument [Line Items] | ||
Principal amount | $ 474,000 | |
Interest rate | 4.00% | |
Debt payment terms | The Bank of Ireland Note Payable bears an annual interest rate of 4% and is due in equal monthly installments over a 36-month period, including interest. | |
Debt frequency of payment | monthly |
Note Payable-Related Party - Ad
Note Payable-Related Party - Additional Information (Details) - Notes Payable Related Party - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Nov. 15, 2019 | |
Debt Instrument [Line Items] | |||||
Related party, promissory note payable | $ 3,000 | ||||
Interest rate | 6.00% | 6.00% | |||
Interest expense, related party | $ 0 | $ 20 | $ 0 | $ 110 |
Convertible Preferred Series _3
Convertible Preferred Series Equity and Stockholders Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||
Jan. 31, 2021 | Jul. 31, 2020 | Nov. 30, 2012 | Feb. 29, 2012 | Dec. 31, 2011 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Oct. 31, 2021 | Oct. 19, 2021 | Jun. 30, 2021 | Jun. 27, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Class of Stock [Line Items] | |||||||||||||||
Date of Incorporation | Jul. 22, 2020 | ||||||||||||||
Options reserved for future grant | 27,798,275 | ||||||||||||||
Common stock share authorized | 74,687,845 | 74,687,845 | 72,187,845 | ||||||||||||
Common stock par value | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||||||
Convertible preferred stock, authorized | 20,421,200 | ||||||||||||||
Convertible preferred stock, par value | $ 0.01 | ||||||||||||||
Number of aggregate issued | 151,515 | ||||||||||||||
Proceeds from issuance of common stock | $ 1,000 | $ 1,001 | $ 1,348 | ||||||||||||
Proceeds from issuance of convertible preferred stock | $ 36,030 | ||||||||||||||
Price per share | $ 6.60 | ||||||||||||||
Treasury stock repurchase shares | 85,050 | 41,665 | |||||||||||||
Treasury stock repurchase value | $ 561 | $ 231 | |||||||||||||
Average cost per share | $ 6.60 | $ 5.50 | |||||||||||||
Common Stock | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Number of aggregate issued | 151,515 | 243,825 | |||||||||||||
Subsequent Event | Initial Public Offering | Common Stock | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Conversion of shares | 20,421,200 | 20,421,200 | |||||||||||||
Series A Convertible Preferred Stock | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Convertible preferred stock, authorized | 13,812,500 | 13,812,500 | 13,812,500 | ||||||||||||
Convertible preferred stock, par value | $ 0.01 | $ 0.01 | |||||||||||||
Number of aggregate issued | 10,562,495 | 10,562,495 | 3,250,005 | ||||||||||||
Proceeds from issuance of convertible preferred stock | $ 3,250 | $ 3,250 | $ 1,000 | ||||||||||||
Price per share | $ 0.30769 | $ 0.30769 | $ 0.30769 | ||||||||||||
Convertible preferred stock, outstanding | 13,812,500 | 13,812,500 | 13,812,500 | 13,812,500 | 13,812,500 | 13,812,500 | 13,812,500 | ||||||||
Series A Convertible Preferred Stock | Subsequent Event | Initial Public Offering | Common Stock | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Conversion of shares | 13,812,500 | ||||||||||||||
Series B Convertible Preferred Stock | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Convertible preferred stock, authorized | 6,608,700 | 6,608,700 | 6,608,700 | ||||||||||||
Convertible preferred stock, par value | $ 0.01 | $ 0.01 | |||||||||||||
Number of aggregate issued | 6,608,700 | ||||||||||||||
Proceeds from issuance of convertible preferred stock | $ 36,030 | ||||||||||||||
Issuance costs | $ 1,970 | $ 1,970 | $ 1,970 | ||||||||||||
Price per share | $ 5.75 | ||||||||||||||
Convertible preferred stock, outstanding | 6,608,700 | 6,608,700 | 6,608,700 | 6,608,700 | 6,608,700 | ||||||||||
Series B Convertible Preferred Stock | Subsequent Event | Initial Public Offering | Common Stock | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Conversion of shares | 6,608,700 |
Convertible Preferred Series _4
Convertible Preferred Series Equity and Stockholders' Equity - Schedule of Common Stock Reserved for Future Issuance (Details) | Sep. 30, 2021shares |
Class of Stock [Line Items] | |
Total common stock reserved for future issuance | 27,798,275 |
Common Stock Options Granted and Outstanding | |
Class of Stock [Line Items] | |
Total common stock reserved for future issuance | 5,307,200 |
Common Stock Reserved for Future Option Grants | |
Class of Stock [Line Items] | |
Total common stock reserved for future issuance | 2,069,875 |
Convertible Preferred Stock | |
Class of Stock [Line Items] | |
Total common stock reserved for future issuance | 20,421,200 |
Earnings (Loss) Per Share - Sum
Earnings (Loss) Per Share - Summary of Computation of Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Net (loss) income attributable to common stockholders | ||||
Net (loss) income attributable to Paragon 28, Inc. | $ (5,107) | $ 3,808 | $ (7,518) | $ (667) |
Less: Dividends on Series B convertible preferred stock | (574) | (333) | (1,516) | (333) |
Net (loss) income attributable to common stockholders | $ (5,681) | $ 3,475 | $ (9,034) | $ (1,000) |
Weighted-average common stock outstanding: | ||||
Basic | 47,005,334 | 43,429,308 | 46,926,344 | 42,792,176 |
Diluted | 47,005,334 | 61,376,701 | 46,926,344 | 42,792,176 |
Loss per share: | ||||
Basic | $ (0.12) | $ 0.08 | $ (0.19) | $ (0.02) |
Diluted | $ (0.12) | $ 0.06 | $ (0.19) | $ (0.02) |
Earnings (Loss) Per Share - S_2
Earnings (Loss) Per Share - Summary of Potentially Dilutive Securities Excluded from Calculation of Diluted Net Loss Per Share Attributable to Common Stockholders (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Stock Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially dilutive securities excluded from computation of dilutive net loss per share | 5,307,200 | 2,036,390 | 5,307,200 | 6,171,280 |
Series A Convertible Preferred Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially dilutive securities excluded from computation of dilutive net loss per share | 13,812,500 | 13,812,500 | 13,812,500 | |
Series B Convertible Preferred Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially dilutive securities excluded from computation of dilutive net loss per share | 6,608,700 | 6,608,700 | 6,608,700 | 6,608,700 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 11, 2011 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options permitted to grant | 15,800,000 | |||||
Contractual term | 10 years | |||||
Options granted | 816,250 | 785,000 | ||||
Vesting, description | Option awards are generally granted with an exercise price equal to the market price of the Company’s stock at the date of grant; those options generally, vest based on one to four years of continuous service and have ten-year contractual terms. | |||||
Compensation expense related to stock options | $ 1,032 | $ 365 | $ 2,747 | $ 1,233 | ||
Cash received from exercise of stock options | 91 | 85 | 442 | 210 | ||
Tax benefit from equity options exercised | $ 19 | $ 18 | $ 93 | $ 44 | ||
Options reserved for future grant | 27,798,275 | 27,798,275 | ||||
Weighted average strike price | $ 5.52 | $ 5.52 | $ 4.55 | |||
Aggregate intrinsic value of options outstanding | $ 43,432 | $ 43,432 | ||||
Aggregate intrinsic value of vested and exercisable options | 28,713 | $ 28,713 | ||||
Weighted average fair value of options granted | $ 5.04 | $ 3.26 | ||||
Total unrecognized compensation cost related to non-vested stock-based compensation arrangements | $ 6,979 | $ 6,979 | ||||
Total unrecognized compensation cost related to non-vested stock-based compensation arrangements weighted average period | 1 year 10 months 9 days | |||||
Common Stock Reserved for Future Options Grants [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options reserved for future grant | 2,069,875 | 2,069,875 | ||||
Time-based Stock Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting, description | The time-based stock options vest in equal installments each year from one to four years. | |||||
Time-based Stock Options | Certain Officers and Contractors | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options granted | 816,250 | |||||
Weighted average strike price | $ 6.60 | $ 6.60 | ||||
Performance-based Stock Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting, description | The performance-based options are eligible to vest in equal installments each year subject to the individual meeting certain sales targets. | |||||
Options | Certain Officers and Contractors | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options granted | 785,000 | |||||
Vesting, description | Of the options granted, there were time-based options and performance-based options, which vest upon achievement of the sales performance milestone. | |||||
Weighted average strike price | $ 6.11 | $ 6.11 | ||||
Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 1 year | |||||
Minimum | Time-based Stock Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 1 year | |||||
Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 4 years | |||||
Maximum | Time-based Stock Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 4 years |
Stock Based Compensation - Assu
Stock Based Compensation - Assumptions used in Determining Fair Value (Details) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility, minimum | 52.00% | 51.00% |
Expected volatility, maximum | 54.00% | 56.00% |
Expected dividends | 0.00% | 0.00% |
Risk-free rate, minimum | 0.47% | 0.35% |
Risk-free rate, maximum | 0.93% | 1.66% |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 5 years 9 months | 5 years 9 months |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 6 years 3 months | 6 years |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Details) - $ / shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Number of Shares Outstanding, Beginning Balance | 4,759,530 | ||
Number of Shares Outstanding, Granted | 816,250 | 785,000 | |
Number of Shares Outstanding, Exercised | (234,205) | ||
Number of Shares Outstanding, Forfeited or Expired | (34,375) | ||
Number of Shares Outstanding, Ending Balance | 5,307,200 | 4,759,530 | |
Number of Shares Exercisable | 2,864,992 | ||
Number of Shares, Vested and Expected To Vest | 5,307,200 | ||
Shares Outstanding, Weighted-Average Exercise Price, Beginning Balance | $ 4.55 | ||
Shares Outstanding, Weighted-Average Exercise Price, Granted | 6.49 | ||
Shares Outstanding, Weighted-Average Exercise Price, Exercised | 1.89 | ||
Shares Outstanding, Weighted-Average Exercise Price, Forfeited or Expired | 6.16 | ||
Shares Outstanding, Weighted-Average Exercise Price, Ending Balance | 5.52 | $ 4.55 | |
Shares Outstanding, Weighted-Average Exercise Price, Exercisable | 3.68 | ||
Shares Outstanding, Weighted-Average Exercise Price, Vested and Expected To Vest | $ 5.52 | ||
Shares Outstanding, Weighted-Average Remaining Contractual Term (Years) | 7 years 7 months 17 days | 7 years 10 months 2 days | |
Shares Outstanding, Weighted-Average Remaining Contractual Term (Years), Exercisable | 6 years 3 months 7 days |
Employee Benefit Plan - Additio
Employee Benefit Plan - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Compensation And Retirement Disclosure [Abstract] | ||||
Defined contribution plan, description | The Company sponsors a defined contribution plan for eligible employees who are 21 years of age with three months of service can voluntarily contribute up to 100% of their eligible compensation. | |||
Defined contribution plan minimum annual contributions per employee percent | 3.00% | |||
Defined benefit plan, plan assets, contributions by employer | $ 129 | $ 111 | $ 425 | $ 360 |
Defined contribution plan, maximum voluntarily contributions percent | 100.00% |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Tax Rates (Details) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | (6.30%) | (227.90%) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ 105 | $ (19) | $ 437 | $ 1,396 |
Commitments And Contigencies -
Commitments And Contigencies - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | ||||
Lease expiration year | 2029 | |||
Rent expense | $ 339 | $ 321 | $ 1,006 | $ 1,007 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | |||||
Due to related parties | $ 34 | $ 34 | $ 68 | ||
Payments to acquire property and equipment | 10,270 | $ 7,511 | |||
Selling, general and administrative expenses from transactions with related party | 148 | $ 251 | 485 | 400 | |
Tray Manufucturer | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 73 | 73 | 102 | ||
Payments to acquire property and equipment | 299 | 323 | $ 827 | 1,169 | |
Director | License Agreement | |||||
Related Party Transaction [Line Items] | |||||
Percentage of revenue paid as royalty | 4.00% | ||||
Royalty estimated useful life | 15 years | ||||
Related party transaction term of agreement | 20 years | ||||
Due to related parties | 25 | $ 25 | 175 | ||
Payments to related party | 29 | 16 | 236 | 82 | |
Non Officer Employee | Standard Supplier Quality Agreement | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 238 | 238 | $ 119 | ||
Payments to related party | 241 | $ 240 | 554 | $ 507 | |
Minimum | Director | License Agreement | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction to related party | $ 250 | $ 250 |
Segment and Geographic Inform_3
Segment and Geographic Information - Schedule of Total Net Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Segment Reporting Information [Line Items] | ||||
Total net revenue | $ 35,851 | $ 30,268 | $ 104,689 | $ 75,924 |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 31,882 | 27,482 | 92,014 | 68,593 |
International | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | $ 3,969 | $ 2,786 | $ 12,675 | $ 7,331 |
Segment and Geographic Inform_4
Segment and Geographic Information - Schedule of Total Assets by Geographic Area (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 |
Segment Reporting Information [Line Items] | |||
Total assets | $ 121,548 | $ 97,583 | $ 97,583 |
United States | |||
Segment Reporting Information [Line Items] | |||
Total assets | 108,951 | 85,489 | |
International | |||
Segment Reporting Information [Line Items] | |||
Total assets | $ 12,597 | $ 12,094 |
Segment and Geographic Inform_5
Segment and Geographic Information - Additional Information - (Details) - International - Country | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||
Number of countries accounted more than ten percent of net revenue | 0 | 0 |
Number of countries accounted more than ten percent of total assets | 0 | 0 |
Subsequent Events - Additional
Subsequent Events - Additional Information - (Details) $ / shares in Units, $ in Thousands | Oct. 19, 2021USD ($)$ / sharesshares | Oct. 08, 2021 | Oct. 31, 2021USD ($)$ / sharesshares | Sep. 30, 2021USD ($)shares | Sep. 30, 2020shares | Mar. 11, 2011shares |
Subsequent Event [Line Items] | ||||||
Stock options issued | 816,250 | 785,000 | ||||
Number of shares of common stock reserved for issuance | 27,798,275 | |||||
Number of shares to be purchased by participating employees | 15,800,000 | |||||
Series B Convertible Preferred Stock | ||||||
Subsequent Event [Line Items] | ||||||
Cash dividends accrued | $ | $ 2,328 | |||||
Initial Public Offering | ||||||
Subsequent Event [Line Items] | ||||||
Deferred IPO costs | $ | $ 2,977 | |||||
Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Forward stock split | 0.05 | |||||
Forward stock split, description | the Company effected a 5-for-1 forward stock split of the Company’s authorized, issued and outstanding common stock, the Company’s authorized, issued and outstanding Series A convertible preferred stock, and the Company’s authorized, issued and outstanding Series B convertible preferred stock (the “Stock Split”). | |||||
Stock options issued | 2,578,000 | |||||
Stock options issued, exercise Price | $ / shares | $ 16 | |||||
Stock options issued, estimated fair market value | $ / shares | $ 8.35 | |||||
Subsequent Event | 2021 Plan | ||||||
Subsequent Event [Line Items] | ||||||
Number of shares of common stock reserved for issuance | 7,641,979 | |||||
Subsequent Event | 2021 ESPP | ||||||
Subsequent Event [Line Items] | ||||||
Number of shares to be purchased by participating employees | 1,329,040 | |||||
Subsequent Event | Common Stock | ||||||
Subsequent Event [Line Items] | ||||||
Gross proceeds from initial public offering | $ | $ 143,750 | |||||
Net proceeds after deducting underwriting discounts and commissions | $ | $ 133,688 | $ 133,688 | ||||
Subsequent Event | Initial Public Offering | Common Stock | ||||||
Subsequent Event [Line Items] | ||||||
Number of shares issued | 8,984,375 | 8,984,375 | ||||
Public offering price per share | $ / shares | $ 16 | $ 16 | ||||
Conversion of shares | 20,421,200 | 20,421,200 | ||||
Subsequent Event | Initial Public Offering | Common Stock | Series A Convertible Preferred Stock | ||||||
Subsequent Event [Line Items] | ||||||
Conversion of shares | 13,812,500 | |||||
Subsequent Event | Initial Public Offering | Common Stock | Series B Convertible Preferred Stock | ||||||
Subsequent Event [Line Items] | ||||||
Conversion of shares | 6,608,700 |