Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 16, 2022 | Jun. 30, 2021 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Transition Report | false | ||
Entity File Number | 001-37526 | ||
Entity Registrant Name | TELA Bio, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 45-5320061 | ||
Entity Address, Address Line One | 1 Great Valley Parkway, Suite 24 | ||
Entity Address, City or Town | Malvern | ||
Entity Address, State or Province | PA | ||
Entity Address, Postal Zip Code | 19355 | ||
City Area Code | 484 | ||
Local Phone Number | 320-2930 | ||
Title of 12(b) Security | Common Stock, $0.001 par value per share | ||
Trading Symbol | TELA | ||
Security Exchange Name | NASDAQ | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 153.5 | ||
Entity Common Stock, Shares Outstanding | 14,551,869 | ||
Entity Central Index Key | 0001561921 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | KPMG LLP | ||
Auditor Firm ID | 185 | ||
Auditor Location | Philadelphia, PA |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 43,931 | $ 74,394 |
Accounts receivable, net | 4,234 | 2,683 |
Inventory | 7,658 | 3,907 |
Prepaid expenses and other assets | 3,232 | 2,241 |
Total current assets | 59,055 | 83,225 |
Property and equipment, net | 1,186 | 626 |
Intangible assets, net | 2,303 | 2,607 |
Total assets | 62,544 | 86,458 |
Current liabilities: | ||
Accounts payable | 2,414 | 652 |
Accrued expenses and other current liabilities | 8,161 | 5,953 |
Total current liabilities | 10,575 | 6,605 |
Longterm debt with related party | 31,491 | 30,827 |
Other longterm liabilities | 380 | |
Total liabilities | 42,446 | 37,432 |
Commitments and contingencies (Note 11) | ||
Stockholders' equity: | ||
Preferred stock; $0.001 par value: 10,000,000 shares authorized; no shares issued and outstanding | ||
Common stock; $0.001 par value: 200,000,000 shares authorized; 14,529,606 and 14,437,289 shares issued and 14,529,577 and 14,437,107 shares outstanding at December 31, 2021 and December 31, 2020, respectively | 15 | 14 |
Additional paid-in capital | 250,064 | 245,736 |
Accumulated other comprehensive loss | (52) | (71) |
Accumulated deficit | (229,929) | (196,653) |
Total stockholders' equity | 20,098 | 49,026 |
Total liabilities and stockholders' equity | $ 62,544 | $ 86,458 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Consolidated Balance Sheets | ||
Preferred stock, Par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, Par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 14,529,606 | 14,437,289 |
Common stock, shares outstanding (in shares) | 14,529,577 | 14,437,107 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Consolidated Statements of Operations and Comprehensive Loss | |||
Revenue | $ 29,463 | $ 18,213 | $ 15,446 |
Cost of revenue (excluding amortization of intangible assets) | 10,346 | 6,675 | 5,870 |
Amortization of intangible assets | 304 | 304 | 304 |
Gross profit | 18,813 | 11,234 | 9,272 |
Operating expenses: | |||
Sales and marketing | 29,062 | 22,111 | 18,060 |
General and administrative | 12,459 | 10,143 | 6,223 |
Research and development | 6,743 | 4,255 | 4,151 |
Total operating expenses | 48,264 | 36,509 | 28,434 |
Loss from operations | (29,451) | (25,275) | (19,162) |
Other (expense) income: | |||
Interest expense | (3,597) | (3,564) | (3,609) |
Change in fair value of preferred stock warrant liability | (5) | ||
Other (expense) income | (228) | 45 | 351 |
Total other expense | (3,825) | (3,519) | (3,263) |
Net loss | (33,276) | (28,794) | (22,425) |
Accretion of redeemable convertible preferred stock to redemption value | (7,783) | ||
Net loss attributable to common stockholders | $ (33,276) | $ (28,794) | $ (30,208) |
Net loss per common share, basic | $ (2.30) | $ (2.23) | $ (17.10) |
Net loss per common share, diluted | $ (2.30) | $ (2.23) | $ (17.10) |
Weighted average common shares outstanding, basic | 14,473,213 | 12,934,421 | 1,766,412 |
Weighted average common shares outstanding, diluted | 14,473,213 | 12,934,421 | 1,766,412 |
Comprehensive loss: | |||
Net loss | $ (33,276) | $ (28,794) | $ (22,425) |
Foreign currency translation adjustment | 19 | (52) | (15) |
Unrealized loss on short-term investments | (4) | ||
Comprehensive loss | $ (33,257) | $ (28,846) | $ (22,444) |
Consolidated Statements of Rede
Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders Equity (Deficit) - USD ($) $ in Thousands | Series A Redeemable convertible preferred stockPreferred stock | Series B Redeemable convertible preferred stockPreferred stock | Common stock | Additional paid-in capital | Accumulated other comprehensive (loss) income | Accumulated deficit | Total |
Balance at Beginning of period at Dec. 31, 2018 | $ 33,112 | $ 91,038 | |||||
Balance at Beginning of period (in shares) at Dec. 31, 2018 | 22,501,174 | 63,032,500 | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Sale of Series B redeemable convertible preferred stock, net of stock issue costs | 12,527,956 | ||||||
Sale of Series B redeemable convertible preferred stock, net of stock issue costs | $ 14,367 | ||||||
Accretion of redeemable convertible preferred stock to redemption value | $ 1,563 | $ 6,220 | |||||
Balance at Beginning of period at Dec. 31, 2018 | $ (137,860) | $ (137,860) | |||||
Balance at Beginning of period (in shares) at Dec. 31, 2018 | 295,717 | ||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Vesting of common stock previously subject to repurchase | $ 4 | 4 | |||||
Vesting of common stock previously subject to repurchase (in shares) | 628 | ||||||
Exercise of stock options | 14 | $ 14 | |||||
Exercise of stock options (in shares) | 2,527 | 2,527 | |||||
Foreign currency translation adjustment | $ (15) | $ (15) | |||||
Stock-based compensation expense | 457 | 457 | |||||
Issuance/Conversion of convertible preferred stock (in shares) | (22,501,174) | (75,560,456) | 6,708,649 | ||||
Issuance/Conversion of convertible preferred stock | $ (34,675) | $ (111,625) | $ 7 | 146,293 | 146,300 | ||
Issuance of common stock | $ 4 | 50,625 | 50,629 | ||||
Issuance of common stock (in shares) | 4,398,700 | ||||||
Unrealized loss on short-term investments | (4) | (4) | |||||
Accretion of redeemable convertible preferred stock to redemption value | (209) | (7,574) | (7,783) | ||||
Conversion of preferred stock warrants to redemption value | 1,645 | 1,645 | |||||
Net loss | (22,425) | (22,425) | |||||
Balance at Ending period at Dec. 31, 2019 | $ 11 | 198,829 | (19) | (167,859) | 30,962 | ||
Balance at Ending period (in shares) at Dec. 31, 2019 | 11,406,221 | ||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Vesting of common stock previously subject to repurchase | 3 | 3 | |||||
Vesting of common stock previously subject to repurchase (in shares) | 306 | ||||||
Exercise of stock options | 175 | $ 175 | |||||
Exercise of stock options (in shares) | 27,783 | 27,783 | |||||
Issuance of common stock under the employee stock purchase plan | 34 | $ 34 | |||||
Issuance of common stock under the employee stock purchase plan (in shares) | 2,797 | ||||||
Foreign currency translation adjustment | (52) | (52) | |||||
Stock-based compensation expense | 1,976 | 1,976 | |||||
Issuance of common stock | $ 3 | 44,719 | 44,722 | ||||
Issuance of common stock (in shares) | 3,000,000 | ||||||
Net loss | (28,794) | (28,794) | |||||
Balance at Ending period at Dec. 31, 2020 | $ 14 | 245,736 | (71) | (196,653) | 49,026 | ||
Balance at Ending period (in shares) at Dec. 31, 2020 | 14,437,107 | ||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Vesting of common stock previously subject to repurchase | 1 | 1 | |||||
Vesting of common stock previously subject to repurchase (in shares) | 153 | ||||||
Exercise of stock options | $ 1 | 546 | $ 547 | ||||
Exercise of stock options (in shares) | 77,154 | 77,154 | |||||
Issuance of common stock under the employee stock purchase plan | 38 | $ 38 | |||||
Issuance of common stock under the employee stock purchase plan (in shares) | 3,163 | ||||||
Foreign currency translation adjustment | 19 | 19 | |||||
Stock-based compensation expense | 3,661 | 3,661 | |||||
Stock-based compensation expense (in shares) | 12,000 | ||||||
Reclassification of liability-classified stock-based compensation awards | 82 | 82 | |||||
Net loss | (33,276) | (33,276) | |||||
Balance at Ending period at Dec. 31, 2021 | $ 15 | $ 250,064 | $ (52) | $ (229,929) | $ 20,098 | ||
Balance at Ending period (in shares) at Dec. 31, 2021 | 14,529,577 |
Consolidated Statements of Re_2
Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders Equity (Deficit) (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Series B Redeemable convertible preferred stock | |
Stock issue costs | $ 165 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | |||
Net loss | $ (33,276) | $ (28,794) | $ (22,425) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation expense | 231 | 221 | 278 |
Noncash interest expense | 664 | 584 | 523 |
Amortization of intangible assets | 304 | 304 | 304 |
Inventory excess and obsolescence charge | 1,439 | 1,327 | 1,591 |
Change in fair value of warrants | 5 | ||
Stockbased compensation expense | 3,661 | 2,058 | 457 |
Loss on disposal of fixed assets | 2 | ||
Change in operating assets and liabilities: | |||
Accounts receivable, net | (1,553) | 149 | (1,528) |
Inventory | (5,194) | (620) | (1,839) |
Prepaid expenses and other assets | (992) | 66 | (1,977) |
Accounts payable | 1,597 | (2,002) | (773) |
Accrued expenses and other current and long-term liabilities | 2,673 | 2,321 | (118) |
Foreign currency remeasurement loss | 12 | (70) | (21) |
Net cash used in operating activities | (30,432) | (24,456) | (25,523) |
Cash flows from investing activities: | |||
Purchases of short-term investments | (9,284) | ||
Proceeds from the sale and maturity of short-term investments | 9,289 | ||
Payment for intangible asset | (2,500) | ||
Purchase of property and equipment | (627) | (167) | (197) |
Net cash (used in) provided by investing activities | (627) | 9,122 | (11,981) |
Cash flows from financing activities: | |||
Proceeds from follow-on offering, net of underwriting discounts, commissions and offering costs | 44,722 | ||
Proceeds from initial public offering, net of underwriting discounts, commissions and offering costs | 51,151 | ||
Proceeds from issuance of Series B redeemable convertible preferred stock, net of offering costs | 14,367 | ||
Payment of initial public offering costs | (522) | ||
Proceeds from exercise of stock options | 547 | 175 | 14 |
Proceeds from issuance of common stock under the employee stock purchase plan | 38 | 34 | |
Net cash provided by financing activities | 585 | 44,409 | 65,532 |
Effect of exchange rate on cash and cash equivalents | 11 | 17 | (4) |
Net (decrease) increase in cash and cash equivalents | (30,463) | 29,092 | 28,024 |
Cash and cash equivalents, beginning of year | 74,394 | 45,302 | 17,278 |
Cash and cash equivalents, end of year | 43,931 | 74,394 | 45,302 |
Supplemental disclosure of cash flow information: | |||
Cash paid during the period for interest | 2,933 | 2,980 | 3,086 |
Supplemental disclosures of noncash investing and financing activities: | |||
Accretion of redeemable convertible preferred stock | 7,783 | ||
Conversion of convertible preferred stock to common stock in connection with the initial public offering | 146,300 | ||
Conversion of outstanding preferred stock warrants | 1,645 | ||
Offering costs in accounts payable and accrued expenses and other current liabilities | 522 | ||
Property and equipment in accounts payable | 166 | 3 | |
Issuance of common stock for early exercised stock options | 1 | 3 | 4 |
Unrealized loss on short-term investments | $ 4 | ||
Liability-classified stock-based compensation in accrued expenses and other current liabilities | $ 82 | ||
Reclassification of liability-classified stock-based compensation awards to equity-classified | $ 82 |
Background
Background | 12 Months Ended |
Dec. 31, 2021 | |
Background | |
Background | (1) Background TELA Bio, Inc. (the “Company”) was incorporated in the state of Delaware on April 17, 2012 and wholly owns TELA Bio Limited, a company incorporated in the United Kingdom. The Company is commercial-stage medical technology company focused on providing innovation soft-tissue reconstruction solutions that optimize clinical outcomes by prioritizing the preservation and restoration of the patient’s own anatomy. OviTex Reinforced Tissue Matrix (“OviTex”), the Company’s first portfolio of products, addresses unmet needs in hernia repair and abdominal wall reconstruction by combining the benefits of biologic matrices and polymer materials while minimizing their shortcomings, at a cost-effective price. OviTex PRS Reinforced Tissue Matrix (“OviTex PRS”), the Company’s second portfolio of products, addresses unmet needs in plastic and reconstructive surgery. The Company’s principal corporate office and research facility is located in Malvern, Pennsylvania. The Company has been impacted by the pandemic resulting from the novel coronavirus and the disease it causes, including variants thereof (“COVID-19”). To date, among other impacts on its business related to the pandemic, physicians and their patients are required by state mandates, or are choosing to defer elective surgery procedures in which its products otherwise would be used. There remains uncertainty and lack of visibility regarding the Company’s near-term revenue growth prospects and product development plans due to the rapidly evolving environment and continued uncertainties resulting from the ongoing COVID-19 pandemic. While certain regions are experiencing a reduction in COVID-19 cases and a relaxing of governmental restrictions, at this time, the full extent of the impact of the ongoing COVID-19 pandemic on its business, results of operations and financial condition, including revenue, expenses, manufacturing capability, supply chain integrity, research and development costs and employee-related compensation, will depend on future developments that are highly uncertain, including new information that may emerge concerning COVID-19 and the actions taken to mitigate the spread of or treat COVID-19, the emergence of new variants of COVID-19, as well as the economic impact on local, regional, national and international customers and markets. |
Risks and Liquidity
Risks and Liquidity | 12 Months Ended |
Dec. 31, 2021 | |
Risks and Liquidity | |
Risks and Liquidity | (2) Risks and Liquidity The Company’s operations to date have focused on commercializing products, developing and acquiring technology and assets, business planning, raising capital and organization and staffing. The Company has incurred recurring losses and negative cash flows from operations since inception and has an accumulated deficit of $229.9 million as of December 31, 2021. The Company anticipates incurring additional losses until such time, if ever, it can generate sufficient revenue from its products to cover its expenses. The operations of the Company are subject to certain risks and uncertainties including, among others, uncertainty of product development, the impact of COVID-19 and the development of any variants, on the business, ongoing economic uncertainty, including as a result of geopolitical factors such as hostilities and the conflict between Russia and Ukraine, technological uncertainty, commercial acceptance of any developed products, alternative competing technologies, dependence on collaborative partners, uncertainty regarding patents and proprietary rights, comprehensive government regulations, and dependence on key personnel. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | (3) Summary of Significant Accounting Policies Basis of Presentation and Principals of Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) promulgated by the Financial Accounting Standards Board (“FASB”). The consolidated financial statements include the accounts of TELA Bio, Inc. and its wholly owned subsidiary TELA Bio Limited. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and contingent liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. The most significant judgments are employed in estimates used to determine stock-based awards issued and recoverability of the carrying value of the Company’s inventory. As future events and their effects cannot be determined with precision, actual results may differ significantly from these estimates. Segments Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one segment. Concentration of Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company places its cash with high-credit-quality financial institutions and primarily invests in money market funds. The Company has established guidelines relative to credit ratings and maturities that seek to maintain safety and liquidity. As described in Note 11, the Company has licensed patents and other intellectual property from Aroa Biosurgery Ltd. (“Aroa”). As part of this agreement, Aroa is also the sole manufacturer of the Company’s products. The inability of Aroa to fulfill supply requirements of the Company could materially impact future operating results. A change in the relationship with Aroa, or an adverse change in their business, could materially impact future operating results. Cash and Cash Equivalents The Company considers cash equivalents to be highly liquid investments with maturities of three months or less from the date of purchase. Cash equivalents consist of investments in a money market fund. The Company’s cash and cash equivalents are carried at the fair value based on quoted market prices. Inventory Inventory consists of finished goods and is identified and tracked by lot and stated at the lower of cost or net realizable value, with cost being determined on a first-in, first-out basis. The Company periodically analyzes its inventory levels and writes down inventory that has become obsolete or that has a cost basis in excess of its expected net realizable value based on expected customer demand. As of December 31, 2021 and 2020, the Company had $1.7 million and $1.4 million, respectively, in finished goods consigned to others. Property and Equipment Property and equipment are stated at the aggregate cost incurred to acquire and place the asset in service. Expenditures for routine maintenance and repairs are charged to expense as incurred and costs of improvements and renewals are capitalized. Depreciation is provided over the estimated useful lives of the assets using the straight-line method. Intangible Assets Upfront payments and milestone payments due related to licenses or commercialization rights prior to future economic benefit being established are recorded as research and development expenses. Milestone payments due related to licenses or commercialization rights after future economic benefit is established are recorded as intangible assets. In 2021, 2020 and 2019, the Company recorded $0.3 million of amortization expense in each year related to intangible assets. At December 31, 2021, the remaining life of intangible assets was 7.6 years. The Company anticipates recognizing amortization expense of $0.3 million next five years Long-Lived Assets Long-lived assets, such as property and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by such asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group exceeds the undiscounted cash flows, an impairment is recognized to the extent the carrying value exceeds its fair value. Fair value is determined using various valuation techniques, including discounted cash flow models, quoted market values, and third-party independent appraisals, as considered necessary. No impairment losses were recognized during the years ended December 31, 2021, 2020 or 2019. Debt Issuance Costs Debt issuance costs incurred in connection with debt (Note 6) are amortized to interest expense over the term of the respective financing arrangement using the effective-interest method, and debt issuance costs incurred under the revolver are amortized to interest expense over the term of the respective financing arrangement using the straight-line method. Debt issuance costs, net of related amortization are deducted from the carrying value of the related debt. Revenue Recognition Under ASC Topic 606, Revenue from Contracts with Customers A significant portion of the Company’s revenue is generated from product shipped to a customer or from consigned inventory maintained at hospitals. Revenue from the sale of consigned products is recognized when control is transferred to the customer, which occurs at the time the product is used in a surgical procedure. For product that is not held on consignment, the Company recognizes revenue when control transfers to the customer which occurs at the time the product is shipped or delivered. For all of the Company’s contracts, the only identified performance obligation is providing the product to the customer. Revenue is recognized at the estimated net sales price which includes estimates of variable consideration. The Company contracts with certain third-party payors for the payment of rebates with respect to the utilization of its products. These rebates are based on contractual percentages. The Company estimates these rebates and records in the same period the related revenue is recognized, resulting in a reduction of product revenue. Payment terms with customers do not exceed one year and, therefore, the Company does not account for a financing component in its arrangements. There are no incremental costs of obtaining a contract that would rise to or enhance an asset other than product costs, which are a component of inventory. The Company expenses incremental costs of obtaining a contract with a customer (e.g., sales commissions) when incurred as the period of benefit is less than one year. Fees charged to customers for shipping are recognized as revenue. The following table presents revenue disaggregated (in thousands): Year ended December 31, 2021 2020 2019 OviTex $ 22,990 $ 15,093 $ 14,041 OviTex PRS 6,473 3,120 1,405 Total revenue $ 29,463 $ 18,213 $ 15,446 Sales outside of the U.S. were immaterial for the years ended December 31, 2021, 2020 and 2019. Research and Development Research and development costs are charged to expense as incurred and consist primarily of salaries, benefits, and other related costs, including stock-based compensation for personnel serving in the research and development functions as well as costs incurred with Aroa under development agreements related to technology transfer, laboratory materials and supplies. At the end of the reporting period, the Company compares payments made to third-party service providers to the estimated progress toward completion of the research or development objectives. Such estimates are subject to change as additional information becomes available. Depending on the timing of payments to the service providers and the progress that the Company estimates has been made as a result of the service provided, the Company may record net prepaid or accrued expense relating to these costs. Costs incurred in obtaining patent and other intellectual property licenses for which there are no alternative future uses are charged to expense as incurred. Stock-Based Compensation The Company accounts for stock-based awards in accordance with provisions of ASC Topic 718, Compensation—Stock Compensation Income Taxes Income taxes are accounted for under the asset-and-liability method as required by ASC Topic 740 - (“ASC 740”), Income Taxes ASC Subtopic 740-10 (“ASC 740-10”), Accounting for Uncertainty of Income Taxes Fair value of financial instruments Fair value is the price that could be received to sell an asset or paid to transfer a liability in an orderly transaction among market participants. Fair value determination in accordance with applicable accounting guidance requires that a number of significant judgments are made. Additionally, fair value is used on a nonrecurring basis to evaluate assets for impairment or as required for disclosure purposes by applicable accounting guidance on disclosures about fair value of financial instruments. Depending on the nature of the assets and liabilities, various valuation techniques and assumptions are used when estimating fair value. The carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable and other assets, and accounts payable are shown at cost, which approximates fair value due to the short-term nature of these instruments. Due to the related-party relationship of our OrbiMed Credit Facility (Note 6), it is impractical to determine the fair value of the debt. Items measured at fair value on a recurring basis included the Company’s preferred stock warrants. The warrants were carried at their estimated fair value. All outstanding warrants to purchase shares of preferred stock were converted into warrants to purchase shares of common stock after our IPO. The Company follows the provisions of ASC Topic 820, Fair Value Measurement ● Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. ● Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liabilities. ● Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). The following fair value hierarchy table presents information about each major category of the Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2021 and 2020 (in thousands): Fair value measurement at reporting date using Quoted prices in active markets Significant other Significant for identical observable unobservable assets inputs inputs (Level 1) (Level 2) (Level 3) December 31, 2021: Cash equivalents – money market fund $ 41,396 $ — $ — December 31, 2020: Cash equivalents – money market fund $ 72,889 $ — $ — A rollforward of the warrant liability (Level 3 measurement) was as follows (in thousands): January 1, 2019 $ 1,640 Change in fair value of warrants 5 Conversion into common stock warrants (1,645) December 31, 2019 $ — The fair value of the warrants at November 13, 2019 was determined using the Black-Scholes option pricing model with the following assumptions: Convertible MidCap Credit promissory Facility notes Notes payable Expected dividend yield — — — Expected volatility 57.5 % 57.4 % 57.5 % Risk-free interest rate 2.04 % 1.79 % 1.79 % Remaining contractual term in years 8.4 7.2 7.4 Net loss per share Basic and diluted net loss per common share is determined by dividing net loss attributable to common stockholders by the weighted-average shares of common stock outstanding during the reporting period. The Company’s outstanding redeemable convertible preferred stock contractually entitled the holders of such shares to participate in distributions but contractually did not require the holders of such shares to participate in losses of the Company. In periods in which the Company reports a net loss attributable to common stockholders, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders since dilutive shares are not assumed to have been issued if their effect is antidilutive. Therefore, the weighted-average shares used to calculate both basic and diluted loss per share are the same. The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares outstanding as of December 31, 2021, 2020 and 2019, as they would be antidilutive. Year ended December 31, 2021 2020 2019 Stock options (including shares subject to repurchase) 1,706,438 1,498,390 1,421,697 Unvested restricted stock units 163,043 — — Common stock warrants 88,556 88,556 88,556 Total 1,958,037 1,586,946 1,510,253 Recently Issued Accounting Pronouncements The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. In February 2016, the FASB issued ASU No. 2016-02, Leases In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2021 | |
Property and Equipment | |
Property and Equipment | (4) Property and Equipment Property and equipment consisted of the following (in thousands): December 31, Asset description Estimated useful lives 2021 2020 Lab equipment 5 Years $ 2,352 $ 2,304 Furniture and fixtures 5 Years 242 118 Computer equipment and software 3 Years 468 577 Leasehold improvements Lesser of useful life or lease term 1,881 1,360 Total 4,943 4,359 Less accumulated depreciation and amortization (3,757) (3,733) Property and equipment, net $ 1,186 $ 626 The cost of property and equipment at both December 31, 2021 and 2020 includes $0.2 million of equipment located at Aroa. Depreciation expense was $0.2 million, $0.2 million and $0.3 million for the years ended December 31, 2021, 2020 and 2019, respectively. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2021 | |
Accrued Expenses and Other Current Liabilities | |
Accrued Expenses and Other Current Liabilities | (5) Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): December 31, 2021 2020 Compensation and related benefits $ 4,976 $ 3,666 Interest — 40 Third-party and professional fees 2,233 1,626 Amounts due to Aroa 842 498 Research and development expenses 31 7 Other 79 116 Total accrued expenses and other current liabilities $ 8,161 $ 5,953 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2021 | |
Debt | |
Debt | (6) Debt Long-term debt consisted of the following (in thousands): December 31, 2021 2020 OrbiMed Term Loan (related party) $ 30,000 $ 30,000 End of term charge 3,000 3,000 Unamortized end of term charge and issuance costs (1,509) (2,173) Long-term debt with related party $ 31,491 $ 30,827 OrbiMed Term Loan (Related Party) In November 2018, the Company entered into a senior secured term loan facility (“OrbiMed Credit Facility”) with OrbiMed Royalty Opportunities II, LP (“OrbiMed”), a related party as the lender is affiliated with a stockholder of the Company, which consists of up to $35.0 million in term loans (“OrbiMed Term Loans”). The OrbiMed Term Loans consist of two tranches, a $30.0 million Tranche 1 (“Tranche 1”) and a $5.0 million Tranche 2 (“Tranche 2”). In November 2018, the Company borrowed $30.0 million of Tranche 1. The Company elected not to borrow Tranche 2 prior to its expiration on December 31, 2019. Pursuant to the OrbiMed Credit Facility, the Company provided a first priority security interest in all existing and future acquired assets, excluding intellectual property and certain other assets, owned by the Company. The OrbiMed Credit Facility contains a negative pledge on intellectual property owned by the Company. The OrbiMed Credit Facility also contains customary indemnification obligations and customary events of default, including, among other things, (i) nonpayment, (ii) breach of warranty, (iii) nonperformance of covenants and obligations, (iv) default on other indebtedness, (v) judgments, (iv) change of control, (vii) bankruptcy and insolvency, (viii) impairment of security, (ix) key permit events, (x) key person events, (xi) regulatory matters, (xii) and key contracts. In addition, the Company must maintain a minimum cash balance of $2.0 million. If an event of default occurs under the OrbiMed Credit Facility, the Company may become obligated to immediately pay all outstanding principal and interest and all other due and unpaid obligations at the current rate in effect plus 3%. The OrbiMed Term Loan matures on November 16, 2023 and bears interest at a rate equal to 7.75% plus the greater of one-month LIBOR or 2.0%. At December 31, 2021, the interest rate was 9.75%. The Company is required to make 60 monthly interest payments beginning on November 30, 2018, with the entire principal payment due at maturity. The OrbiMed Term Loans have a prepayment penalty equal to 10.0% of the prepaid principal amount prior to the second anniversary of the Term Loans, 5.0% of the prepaid principal amount after the second anniversary but prior to the third anniversary and 2.5% of the prepaid principal amount after the third anniversary. The Company is also required to pay an exit fee at the time of maturity or prepayment event equal to 10.0% of all principal borrowings (the “End of Term Charge”) and an administration fee equal to $10,000 on the last day of each quarter until all obligations have been paid in full. In conjunction with the closing of the OrbiMed Term Loans, the Company incurred $0.3 million of third party and lender fees, which along with the End of Term Charge of $3.0 million were recorded as debt issuance costs, and are being recognized as interest expense over the term of the loan using the effective-interest method. Interest expense associated with the OrbiMed Credit Facility recorded during each of 2021, 2020 and 2019 was $3.6 million. |
Redeemable Convertible Preferre
Redeemable Convertible Preferred Stock and Stockholders Equity (Deficit) | 12 Months Ended |
Dec. 31, 2021 | |
Redeemable Convertible Preferred Stock and Stockholders Equity (Deficit) | |
Redeemable Convertible Preferred Stock and Stockholders Equity (Deficit) | (7) Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) Public Stock Offerings In November 2019, the Company closed its initial public offering (“IPO”) in which the Company issued and sold 4,398,700 shares of its common stock at a public offering price of $13.00 per share, including 398,700 shares of the Company’s common stock sold pursuant to the underwriters’ option to purchase additional shares. The Company received net proceeds of In June 2020, the Company completed a follow-on public offering in which the Company issued and sold 3,000,000 shares of its common stock at a public offering price of $16.00 per share. The Company received net proceeds of $44.7 million after deducting underwriting discounts, commissions and other offering expenses. In December 2020, the Company entered into an Equity Distribution Agreement (the “Equity Agreement”) with Piper Sandler & Co (the “Agent”) in connection with the establishment of an at-the-market offering program under which it may sell up to an aggregate of $50.0 million of shares of the Company’s common stock, from time to time through the Agent as sales agent. No sales were made under the Equity Agreement during the years ended December 31, 2021 or 2020. Preferred Stock Prior to the IPO, all of the Company’s redeemable convertible preferred stock was classified outside of stockholders’ deficit because the shares contain certain redemption features that were not solely within the control of the Company. At the time of issuance, the redeemable convertible preferred stock was recorded at its issuance price, less issuance costs. Throughout 2019, the Company entered into various stock purchase agreements with new and existing investors pursuant to which the Company sold an aggregate 12,527,956 shares of the Company’s Series B preferred stock at $1.16 per share for aggregate gross proceeds of $14.5 million. Transaction fees of $0.2 million were recorded as a reduction of the carrying value of the Series B preferred stock. Warrants The Company had the following warrants outstanding at December 31, 2021: Exercise Expiration Outstanding price dates Common stock warrants 8,379 $ 28.65 2028 Common stock warrants 80,177 28.65 2027 88,556 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Stock-Based Compensation | |
Stock-Based Compensation | (8) Stock-Based Compensation The Company has two equity incentive plans: the 2012 Stock Incentive Plan and the Amended and Restated 2019 Equity Incentive Plan. New awards can only be granted under the Amended and Restated 2019 Equity Incentive Plan (the “Plan”). At December 31, 2021, 1,299,218 shares were available for future issuances under the Plan. The Plan is subject to an annual increase, subject to prior approval by the Company’s board of directors, equal to the lesser of (i) 432,442 shares, (ii) 4% of the shares outstanding on the last day of the immediately preceding fiscal year and (iii) such smaller number of shares as determined by the board of directors. The Plan provides for the grant of incentive stock options, nonqualified stock options, restricted stock awards, restricted stock units and/or stock appreciation rights to employees, directors, and other persons, as determined by the Company’s board of directors. The Company’s stock options vest based on the terms in each award agreements and generally vest over four years and have a term of 10 years. The Company estimates forfeitures that it expects will occur and adjusts expense for actual forfeitures in the periods they occur. The Company measures employee and nonemployee stock-based awards at grant-date fair value and records compensation expense ratably over the vesting period of the award. The Company recorded stock-based compensation expense in the following expense categories of its accompanying consolidated statements of operations (in thousands): Year ended December 31, 2021 2020 2019 Sales and marketing $ 961 $ 696 $ 164 General and administrative 1,542 1,030 225 Research and development 1,158 332 68 Total stock‑based compensation $ 3,661 $ 2,058 $ 457 The following table summarizes stock option activity for the Plan: Weighted average Weighted remaining Number of average exercise contractual term shares price per share (years) Outstanding at January 1, 2019 489,222 $ 5.84 Granted 978,415 12.51 Exercised (2,527) 5.93 Early exercised (471) 5.93 Canceled/forfeited (43,697) 8.58 Outstanding at December 31, 2019 1,420,942 10.35 Granted 175,086 15.03 Exercised (27,783) 6.29 Canceled/forfeited (70,037) 12.41 Outstanding at December 31, 2020 1,498,208 10.87 Granted 468,000 14.80 Exercised (77,154) 7.08 Canceled/forfeited (182,645) 13.08 Outstanding at December 31, 2021 1,706,409 $ 11.88 7.36 Vested and expected to vest at December 31, 2021 1,657,511 $ 11.83 7.31 Exercisable at December 31, 2021 917,602 $ 10.23 6.18 At December 31, 2021, the aggregate intrinsic value of outstanding options and exercisable options was $3.0 million and $2.8 million, respectively. The 2012 Stock Incentive Plan provided the holders of stock options an election to early exercise prior to vesting. The Company had the right, but not the obligation, to repurchase early exercised options without transferring any appreciation to the employee if the employee terminates employment before the end of the original vesting period. The repurchase price is the lesser of the original exercise price or the then fair value of the common stock. At December 31, 2021, an immaterial amount of proceeds from early exercised options are recognized as a current liability in accrued expenses and other current liabilities in the accompanying consolidated balance sheet. The following table summarizes activity relating to early exercise of stock options: Number of shares Unvested balance at January 1, 2019 912 Early exercised 471 Vested (628) Unvested balance at December 31, 2019 755 Vested (306) Forfeited (267) Unvested balance at December 31, 2020 182 Vested (153) Unvested balance at December 31, 2021 29 The weighted average grant-date fair value per share of options granted was $8.66, $8.13 and $6.81 for the years ended December 31, 2021, 2020 and 2019, respectively. The aggregate intrinsic value of options exercised was $0.4 million and $0.2 million for the years ended December 31, 2021 and 2020, respectively, and nominal for the year ended December 31, 2019. As of December 31, 2021, the total unrecognized compensation expense related to unvested employee and nonemployee stock option awards was $5.1 million, which is expected to be recognized in expense over a weighted-average period of approximately 2.5 years. Estimating Fair Value of Stock Options The fair value of each grant of stock options was determined by the Company using the methods and assumptions discussed below. Certain of these inputs are subjective and generally require judgment to determine. Expected term Expected volatility Risk-free interest rate Expected dividend The fair value of each option was estimated on the date of grant using the weighted average assumptions in the table below: Year ended December 31, 2021 2020 2019 Expected dividend yield — — — Expected volatility 63.9 % 59.1 % 55.9 % Risk‑free interest rate 0.99 % 0.87 % 1.82 % Expected term (in years) 6.15 5.98 6.24 Restricted Stock Units The Company’s restricted stock units (“RSUs”) vest based on the terms in each award agreement and generally vest over four years. The following table summarizes restricted stock units for the Plan: Number of shares Outstanding at January 1, 2021 — Granted 194,232 Vested (12,000) Canceled/forfeited (19,189) Outstanding at December 31, 2021 163,043 The weighted average grant-date fair value per RSU granted was $16.57 during the year ended December 31, 2021. The aggregate intrinsic value of RSUs outstanding was $2.1 million at December 31, 2021. The total unrecognized compensation expense at December 31, 2021 related to RSUs was $1.6 million, which is expected to be recognized in expense over a weighted-average period of approximately 3.2 years. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2021 | |
Employee Benefit Plans | |
Employee Benefit Plans | (9) Employee Benefit Plans 401(k) Defined Contribution Plan The Company sponsors a 401(k) defined-contribution plan covering all employees. Participants are permitted to contribute up to 100% of their eligible annual pretax compensation up to an established federal limit on aggregate participant contributions. Discretionary contributions made by the Company, if any, are determined annually by the board of directors. Effective January 1, 2020, the Company matched 50% of employees’ contributions up to 6%, subject to a maximum annual amount. The Company’s contributions were $0.3 million and $0.2 million for the years ended December 31, 2021 and 2020, respectively. The match was suspended from April to August 2020 due to COVID-19. Participants are immediately vested in their own contributions to the plan and are fully vested in discretionary profit sharing made by the Company after three years of service. 2019 Employee Stock Purchase Plan In November 2019, the Company adopted the 2019 Employee Stock Purchase Plan (the “ESPP”). At December 31, 2021, 317,701 shares were available for future issuance under the ESPP. The ESPP is subject to an annual increase, subject to prior approval by the Company’s board of directors, equal to the least of (i) 107,887 shares of common stock, (ii) 1% of the shares outstanding on the final day of the immediately preceding calendar year, and (iii) such smaller number of shares as determined by the board of directors. The ESPP provides the opportunity to purchase the Company’s common stock at a 5% discount to the market price through payroll deductions. As of December 31, 2021 and 2020, 3,163 and 2,797 shares, respectively, have been issued under the ESPP. No shares were issued under the ESPP as of December 31, 2019. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes | |
Income Taxes | (10) Income Taxes The Company has incurred losses since inception. Deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and tax bases of assets and liabilities using enacted tax rates in effect for years in which differences are expected to reverse. Significant components of the Company’s deferred tax assets for federal income taxes consisted of the following (in thousands): December 31, 2021 2020 Deferred tax assets Net operating loss carryforwards $ 47,737 $ 39,937 Research and development credits 623 747 Depreciation and amortization (89) 239 Accrued expenses and other 1,356 611 Inventory reserve 171 205 Gross deferred tax asset 49,798 41,739 Valuation allowance (49,798) (41,739) Net deferred tax asset $ — $ — The Company does not have unrecognized tax benefits as of December 31, 2021 and 2020. The Company recognizes interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. The Company’s net operating loss (“NOL”) carryforwards for federal and state income tax purposes consisted of the following (in thousands): December 31, 2021 2020 NOL carryforwards Federal $ 181,443 $ 150,642 State 151,488 128,912 The NOL carryforwards begin expiring in 2032 for federal purposes and in 2026 for state income tax purposes. The Company recorded a valuation allowance on the deferred tax assets as of December 31, 2021 and 2020 because of the uncertainty of their realization. The valuation allowance increased by $8.1 million and $6.9 million for the years ended December 31, 2021 and 2020, respectively, mainly due to losses incurred. Utilization of the net operating losses and general business tax credits carryforwards may be subject to a substantial limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, if changes in ownership of the company have occurred previously or occur in the future. Ownership changes may limit the amount of net operating losses and general business tax credits carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of 5% shareholders in the stock of a corporation by more than 50 percentage points over a three-year period. If the Company experiences a Section 382 ownership change, the tax benefits related to the NOL carryforwards may be further limited or lost. The Company has not performed an analysis under Section 382 and cannot predict or otherwise determine whether there would be any limitation to the amount of net operating losses and general business tax credits carryforwards that can be utilized. A reconciliation of income tax benefit at the statutory federal income tax rate and as reflected in the consolidated financial statements is as follows: Year ended December 31, 2021 2020 2019 Rate reconciliation Federal tax benefit at statutory rate (21.0) % (21.0) % (21.0) % State rate, net of federal benefit (3.5) (4.2) (2.9) Permanent differences 0.2 0.6 0.4 Research and development 0.4 0.7 (0.7) Change in valuation allowance 24.2 24.0 24.2 Other (0.3) (0.1) — Total tax provision — % — % — % The Company files income tax returns in the U.S. federal jurisdiction, various state jurisdictions and the United Kingdom. Tax years 2017 and forward remain open for examination for federal tax purposes and tax years 2017 and forward remain open for examination for the Company’s more significant state tax jurisdictions. Carryforward attributes from prior years may be adjusted upon examination by taxing authorities if used in an open period. Many governments have enacted or are currently contemplating economic stimulus and financial aid measures. Many of these measures include deferring the due dates for tax payments, including both income tax and other taxes. The Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was enacted on March 27, 2020 in the United States to address the economic impacts of the COVID-19 pandemic. The CARES Act includes corporate income tax, payroll tax, and other provisions. While the Company may receive financial, tax, or other benefits under the bill, this legislation did not impact the Company during the year ended December 31, 2020. During the year ended December 31, 2021, the Company claimed an employee retention payroll tax credit of $0.5 million for certain employment taxes. |
Contingencies and Commitments
Contingencies and Commitments | 12 Months Ended |
Dec. 31, 2021 | |
Contingencies and Commitments | |
Contingencies and Commitments | (11) Commitments and Contingencies Legal Proceedings From time to time, the Company may be a party to various other lawsuits, claims, and other legal proceedings that arise in the ordinary course of its business. While the outcomes of these matters are uncertain, management does not expect that the ultimate costs to resolve these matters will have a material adverse effect on the Company’s financial position, results of operations, or cash flows. Agreements with Aroa In August 2012, the Company entered into a License, Product Development, and Supply Umbrella Agreement (“Aroa Agreement”) with Aroa. The Aroa Agreement provides the Company a license to patent rights and other intellectual property related to Aroa’s products and technologies for use in certain indications and expires on the expiration of the last patent covering the products (currently April 19, 2031). The Company has the right to extend the term of the agreement by an additional 10 years following the expiration of the last patent covering the products on commercially reasonable terms to be negotiated by the parties. This agreement initially limited the Company’s license rights to the U.S. but was subsequently amended in March 2013 to include the European Union and certain former Union of Soviet Socialist Republic satellite nations. The Aroa Agreement required payments aggregating up to $4.0 million upon the achievement of U.S. and European cumulative product sales targets. The Company paid $1.0 million to Aroa in 2018 related to one of the cumulative product sales targets and the remaining $2.0 million in 2019. With respect to the sales milestone payments in the European territory, a payment of $1.0 million is due when cumulative product net sales in the European territory reach certain amounts. Other key terms of the amended Aroa agreement in addition to those disclosed above are as follows: ● The transfer price for product produced by Aroa is 200% of Aroa’s cost of goods sold. The transfer price and the quarterly true-up amount continued to equal 27% of Company’s net sales of licensed products. Upon a change in control of the Company (as defined in the amended agreement), the annual minimum amounts will be extended for a sixth year with a $5.0 million minimum amount for the North American territory and $1.0 million minimum amount for the European territory. If a change in control of the Company occurs prior to the first product launch in the applicable territory, then the annual minimum requirements shall commence upon such change in control. If the make whole payments, if any, are not made by the Company after a notice and cure period, then the license will convert to a nonexclusive basis in the territory for which the payment was required but not made. ● Provisions exist for the Company to step in and operate Aroa’s plant if a supply failure occurs and is not cured within a set timeframe. Under the amended agreement, the criteria for a supply failure was modified to mean a failure by Aroa to timely supply, during any consecutive 60-day period, at least 75% of the products ordered by the Company under binding purchase orders. During the period that the Company steps in and assumes manufacturing responsibility, it shall not be required to purchase product from or pay transfer prices to Aroa, the annual minimums shall be proportionately reduced to reflect the lack of supply responsibility by Aroa and the Company shall pay a royalty of 6% of net sales in lieu of 27% of net sales of the licensed products. The Company expects to enter into similar milestone-based agreements with its strategic partner for both product territories and new products in order to expand and extend its product portfolio. As of December 31, 2021, the Company had $1.8 million in purchase commitments with Aroa and certain other suppliers to maintain exclusivity rights. Other Commitments In November 2021, the Company entered into an exclusive distribution agreement with Next Science, a medical technology company, granting the Company exclusive rights to sell and market Next Science’s proprietary antimicrobial surgical wash in the U.S. plastic reconstructive surgery market. To maintain exclusivity, the Company has $10.8 million in purchase commitments and annual license fees over a ten-year period. Employment Agreements The Company entered into employment agreements with key personnel providing for compensation and severance in certain circumstances, as defined in the respective employment agreements. Operating Leases The Company leases office and laboratory space in Malvern, Pennsylvania under a noncancelable lease, which was amended in December 2020 to extend the term of the lease from May 2021 to May 2028. The facility lease agreement has annual scheduled payment increases. The Company is recognizing the rent expense on a straight-line basis over the lease term. The Company recognized rent expense of $0.4 million, $0.3 million and $0.3 million for the years ended December 31, 2021, 2020 and 2019, respectively. The future minimum lease payments under the facility operating lease agreement as of December 31, 2021 are as follows (in thousands): 2022 $ 349 2023 358 2024 366 2025 375 2026 383 Thereafter 557 $ 2,388 |
Related-Party Transactions
Related-Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related-Party Transactions | |
Related-Party Transactions | (12) Related-Party Transactions On November 16, 2018, the Company entered into a senior secured term loan facility with OrbiMed, an entity affiliated with an owner of a material amount of the Company’s outstanding voting securities. The terms of the debt and related components are further described in more detail in Note 6. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Basis of Presentation and Principals of Consolidation | Basis of Presentation and Principals of Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) promulgated by the Financial Accounting Standards Board (“FASB”). The consolidated financial statements include the accounts of TELA Bio, Inc. and its wholly owned subsidiary TELA Bio Limited. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and contingent liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. The most significant judgments are employed in estimates used to determine stock-based awards issued and recoverability of the carrying value of the Company’s inventory. As future events and their effects cannot be determined with precision, actual results may differ significantly from these estimates. |
Segments | Segments Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one segment. |
Concentration of Risk | Concentration of Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company places its cash with high-credit-quality financial institutions and primarily invests in money market funds. The Company has established guidelines relative to credit ratings and maturities that seek to maintain safety and liquidity. As described in Note 11, the Company has licensed patents and other intellectual property from Aroa Biosurgery Ltd. (“Aroa”). As part of this agreement, Aroa is also the sole manufacturer of the Company’s products. The inability of Aroa to fulfill supply requirements of the Company could materially impact future operating results. A change in the relationship with Aroa, or an adverse change in their business, could materially impact future operating results. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers cash equivalents to be highly liquid investments with maturities of three months or less from the date of purchase. Cash equivalents consist of investments in a money market fund. The Company’s cash and cash equivalents are carried at the fair value based on quoted market prices. |
Inventory | Inventory Inventory consists of finished goods and is identified and tracked by lot and stated at the lower of cost or net realizable value, with cost being determined on a first-in, first-out basis. The Company periodically analyzes its inventory levels and writes down inventory that has become obsolete or that has a cost basis in excess of its expected net realizable value based on expected customer demand. As of December 31, 2021 and 2020, the Company had $1.7 million and $1.4 million, respectively, in finished goods consigned to others. |
Property and Equipment | Property and Equipment Property and equipment are stated at the aggregate cost incurred to acquire and place the asset in service. Expenditures for routine maintenance and repairs are charged to expense as incurred and costs of improvements and renewals are capitalized. Depreciation is provided over the estimated useful lives of the assets using the straight-line method. |
Intangible Assets | Intangible Assets Upfront payments and milestone payments due related to licenses or commercialization rights prior to future economic benefit being established are recorded as research and development expenses. Milestone payments due related to licenses or commercialization rights after future economic benefit is established are recorded as intangible assets. In 2021, 2020 and 2019, the Company recorded $0.3 million of amortization expense in each year related to intangible assets. At December 31, 2021, the remaining life of intangible assets was 7.6 years. The Company anticipates recognizing amortization expense of $0.3 million next five years |
Long-Lived Assets | Long-Lived Assets Long-lived assets, such as property and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by such asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group exceeds the undiscounted cash flows, an impairment is recognized to the extent the carrying value exceeds its fair value. Fair value is determined using various valuation techniques, including discounted cash flow models, quoted market values, and third-party independent appraisals, as considered necessary. No impairment losses were recognized during the years ended December 31, 2021, 2020 or 2019. |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs incurred in connection with debt (Note 6) are amortized to interest expense over the term of the respective financing arrangement using the effective-interest method, and debt issuance costs incurred under the revolver are amortized to interest expense over the term of the respective financing arrangement using the straight-line method. Debt issuance costs, net of related amortization are deducted from the carrying value of the related debt. |
Revenue Recognition | Revenue Recognition Under ASC Topic 606, Revenue from Contracts with Customers A significant portion of the Company’s revenue is generated from product shipped to a customer or from consigned inventory maintained at hospitals. Revenue from the sale of consigned products is recognized when control is transferred to the customer, which occurs at the time the product is used in a surgical procedure. For product that is not held on consignment, the Company recognizes revenue when control transfers to the customer which occurs at the time the product is shipped or delivered. For all of the Company’s contracts, the only identified performance obligation is providing the product to the customer. Revenue is recognized at the estimated net sales price which includes estimates of variable consideration. The Company contracts with certain third-party payors for the payment of rebates with respect to the utilization of its products. These rebates are based on contractual percentages. The Company estimates these rebates and records in the same period the related revenue is recognized, resulting in a reduction of product revenue. Payment terms with customers do not exceed one year and, therefore, the Company does not account for a financing component in its arrangements. There are no incremental costs of obtaining a contract that would rise to or enhance an asset other than product costs, which are a component of inventory. The Company expenses incremental costs of obtaining a contract with a customer (e.g., sales commissions) when incurred as the period of benefit is less than one year. Fees charged to customers for shipping are recognized as revenue. The following table presents revenue disaggregated (in thousands): Year ended December 31, 2021 2020 2019 OviTex $ 22,990 $ 15,093 $ 14,041 OviTex PRS 6,473 3,120 1,405 Total revenue $ 29,463 $ 18,213 $ 15,446 Sales outside of the U.S. were immaterial for the years ended December 31, 2021, 2020 and 2019. |
Research and Development | Research and Development Research and development costs are charged to expense as incurred and consist primarily of salaries, benefits, and other related costs, including stock-based compensation for personnel serving in the research and development functions as well as costs incurred with Aroa under development agreements related to technology transfer, laboratory materials and supplies. At the end of the reporting period, the Company compares payments made to third-party service providers to the estimated progress toward completion of the research or development objectives. Such estimates are subject to change as additional information becomes available. Depending on the timing of payments to the service providers and the progress that the Company estimates has been made as a result of the service provided, the Company may record net prepaid or accrued expense relating to these costs. Costs incurred in obtaining patent and other intellectual property licenses for which there are no alternative future uses are charged to expense as incurred. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based awards in accordance with provisions of ASC Topic 718, Compensation—Stock Compensation |
Income Taxes | Income Taxes Income taxes are accounted for under the asset-and-liability method as required by ASC Topic 740 - (“ASC 740”), Income Taxes ASC Subtopic 740-10 (“ASC 740-10”), Accounting for Uncertainty of Income Taxes |
Fair value of financial instruments | Fair value of financial instruments Fair value is the price that could be received to sell an asset or paid to transfer a liability in an orderly transaction among market participants. Fair value determination in accordance with applicable accounting guidance requires that a number of significant judgments are made. Additionally, fair value is used on a nonrecurring basis to evaluate assets for impairment or as required for disclosure purposes by applicable accounting guidance on disclosures about fair value of financial instruments. Depending on the nature of the assets and liabilities, various valuation techniques and assumptions are used when estimating fair value. The carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable and other assets, and accounts payable are shown at cost, which approximates fair value due to the short-term nature of these instruments. Due to the related-party relationship of our OrbiMed Credit Facility (Note 6), it is impractical to determine the fair value of the debt. Items measured at fair value on a recurring basis included the Company’s preferred stock warrants. The warrants were carried at their estimated fair value. All outstanding warrants to purchase shares of preferred stock were converted into warrants to purchase shares of common stock after our IPO. The Company follows the provisions of ASC Topic 820, Fair Value Measurement ● Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. ● Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liabilities. ● Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). The following fair value hierarchy table presents information about each major category of the Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2021 and 2020 (in thousands): Fair value measurement at reporting date using Quoted prices in active markets Significant other Significant for identical observable unobservable assets inputs inputs (Level 1) (Level 2) (Level 3) December 31, 2021: Cash equivalents – money market fund $ 41,396 $ — $ — December 31, 2020: Cash equivalents – money market fund $ 72,889 $ — $ — A rollforward of the warrant liability (Level 3 measurement) was as follows (in thousands): January 1, 2019 $ 1,640 Change in fair value of warrants 5 Conversion into common stock warrants (1,645) December 31, 2019 $ — The fair value of the warrants at November 13, 2019 was determined using the Black-Scholes option pricing model with the following assumptions: Convertible MidCap Credit promissory Facility notes Notes payable Expected dividend yield — — — Expected volatility 57.5 % 57.4 % 57.5 % Risk-free interest rate 2.04 % 1.79 % 1.79 % Remaining contractual term in years 8.4 7.2 7.4 |
Net loss per share | Net loss per share Basic and diluted net loss per common share is determined by dividing net loss attributable to common stockholders by the weighted-average shares of common stock outstanding during the reporting period. The Company’s outstanding redeemable convertible preferred stock contractually entitled the holders of such shares to participate in distributions but contractually did not require the holders of such shares to participate in losses of the Company. In periods in which the Company reports a net loss attributable to common stockholders, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders since dilutive shares are not assumed to have been issued if their effect is antidilutive. Therefore, the weighted-average shares used to calculate both basic and diluted loss per share are the same. The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares outstanding as of December 31, 2021, 2020 and 2019, as they would be antidilutive. Year ended December 31, 2021 2020 2019 Stock options (including shares subject to repurchase) 1,706,438 1,498,390 1,421,697 Unvested restricted stock units 163,043 — — Common stock warrants 88,556 88,556 88,556 Total 1,958,037 1,586,946 1,510,253 |
Recently Issued Accounting Pronouncement | Recently Issued Accounting Pronouncements The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. In February 2016, the FASB issued ASU No. 2016-02, Leases In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Disaggregation of Revenue | The following table presents revenue disaggregated (in thousands): Year ended December 31, 2021 2020 2019 OviTex $ 22,990 $ 15,093 $ 14,041 OviTex PRS 6,473 3,120 1,405 Total revenue $ 29,463 $ 18,213 $ 15,446 |
Schedule of fair value of assets and liabilities measured on recurring basis | The following fair value hierarchy table presents information about each major category of the Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2021 and 2020 (in thousands): Fair value measurement at reporting date using Quoted prices in active markets Significant other Significant for identical observable unobservable assets inputs inputs (Level 1) (Level 2) (Level 3) December 31, 2021: Cash equivalents – money market fund $ 41,396 $ — $ — December 31, 2020: Cash equivalents – money market fund $ 72,889 $ — $ — |
Schedule of warrant liability | January 1, 2019 $ 1,640 Change in fair value of warrants 5 Conversion into common stock warrants (1,645) December 31, 2019 $ — |
Schedule of fair value of warrants | Convertible MidCap Credit promissory Facility notes Notes payable Expected dividend yield — — — Expected volatility 57.5 % 57.4 % 57.5 % Risk-free interest rate 2.04 % 1.79 % 1.79 % Remaining contractual term in years 8.4 7.2 7.4 |
Schedule of dilutive securities excluded | Year ended December 31, 2021 2020 2019 Stock options (including shares subject to repurchase) 1,706,438 1,498,390 1,421,697 Unvested restricted stock units 163,043 — — Common stock warrants 88,556 88,556 88,556 Total 1,958,037 1,586,946 1,510,253 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property and Equipment | |
Schedule of Property and Equipment | Property and equipment consisted of the following (in thousands): December 31, Asset description Estimated useful lives 2021 2020 Lab equipment 5 Years $ 2,352 $ 2,304 Furniture and fixtures 5 Years 242 118 Computer equipment and software 3 Years 468 577 Leasehold improvements Lesser of useful life or lease term 1,881 1,360 Total 4,943 4,359 Less accumulated depreciation and amortization (3,757) (3,733) Property and equipment, net $ 1,186 $ 626 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accrued Expenses and Other Current Liabilities | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following (in thousands): December 31, 2021 2020 Compensation and related benefits $ 4,976 $ 3,666 Interest — 40 Third-party and professional fees 2,233 1,626 Amounts due to Aroa 842 498 Research and development expenses 31 7 Other 79 116 Total accrued expenses and other current liabilities $ 8,161 $ 5,953 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt | |
Schedule of long term debt | Long-term debt consisted of the following (in thousands): December 31, 2021 2020 OrbiMed Term Loan (related party) $ 30,000 $ 30,000 End of term charge 3,000 3,000 Unamortized end of term charge and issuance costs (1,509) (2,173) Long-term debt with related party $ 31,491 $ 30,827 |
Redeemable Convertible Prefer_2
Redeemable Convertible Preferred Stock and Stockholders Equity (Deficit) (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Redeemable Convertible Preferred Stock and Stockholders Equity (Deficit) | |
Schedule of warrants outstanding to purchase common stock | Exercise Expiration Outstanding price dates Common stock warrants 8,379 $ 28.65 2028 Common stock warrants 80,177 28.65 2027 88,556 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Stock-Based Compensation | |
Schedule of stock based compensation expense categories in statement of operations | Year ended December 31, 2021 2020 2019 Sales and marketing $ 961 $ 696 $ 164 General and administrative 1,542 1,030 225 Research and development 1,158 332 68 Total stock‑based compensation $ 3,661 $ 2,058 $ 457 |
Schedule of stock option activity | Weighted average Weighted remaining Number of average exercise contractual term shares price per share (years) Outstanding at January 1, 2019 489,222 $ 5.84 Granted 978,415 12.51 Exercised (2,527) 5.93 Early exercised (471) 5.93 Canceled/forfeited (43,697) 8.58 Outstanding at December 31, 2019 1,420,942 10.35 Granted 175,086 15.03 Exercised (27,783) 6.29 Canceled/forfeited (70,037) 12.41 Outstanding at December 31, 2020 1,498,208 10.87 Granted 468,000 14.80 Exercised (77,154) 7.08 Canceled/forfeited (182,645) 13.08 Outstanding at December 31, 2021 1,706,409 $ 11.88 7.36 Vested and expected to vest at December 31, 2021 1,657,511 $ 11.83 7.31 Exercisable at December 31, 2021 917,602 $ 10.23 6.18 |
Schedule of activity relating to early exercise of stock options | Number of shares Unvested balance at January 1, 2019 912 Early exercised 471 Vested (628) Unvested balance at December 31, 2019 755 Vested (306) Forfeited (267) Unvested balance at December 31, 2020 182 Vested (153) Unvested balance at December 31, 2021 29 |
Schedule of weighted average assumptions | Year ended December 31, 2021 2020 2019 Expected dividend yield — — — Expected volatility 63.9 % 59.1 % 55.9 % Risk‑free interest rate 0.99 % 0.87 % 1.82 % Expected term (in years) 6.15 5.98 6.24 |
Schedule of restricted stock units (RSUs) | The Company’s restricted stock units (“RSUs”) vest based on the terms in each award agreement and generally vest over four years. The following table summarizes restricted stock units for the Plan: Number of shares Outstanding at January 1, 2021 — Granted 194,232 Vested (12,000) Canceled/forfeited (19,189) Outstanding at December 31, 2021 163,043 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes | |
Summary of Significant components of the Company's deferred tax assets | December 31, 2021 2020 Deferred tax assets Net operating loss carryforwards $ 47,737 $ 39,937 Research and development credits 623 747 Depreciation and amortization (89) 239 Accrued expenses and other 1,356 611 Inventory reserve 171 205 Gross deferred tax asset 49,798 41,739 Valuation allowance (49,798) (41,739) Net deferred tax asset $ — $ — |
Schedule of Company's net operating loss (NOL) carryforwards | December 31, 2021 2020 NOL carryforwards Federal $ 181,443 $ 150,642 State 151,488 128,912 |
Schedule of reconciliation of income tax benefit | Year ended December 31, 2021 2020 2019 Rate reconciliation Federal tax benefit at statutory rate (21.0) % (21.0) % (21.0) % State rate, net of federal benefit (3.5) (4.2) (2.9) Permanent differences 0.2 0.6 0.4 Research and development 0.4 0.7 (0.7) Change in valuation allowance 24.2 24.0 24.2 Other (0.3) (0.1) — Total tax provision — % — % — % |
Contingencies and Commitments (
Contingencies and Commitments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Contingencies and Commitments | |
Schedule of future minimum lease payments under the facility operating lease agreement | The future minimum lease payments under the facility operating lease agreement as of December 31, 2021 are as follows (in thousands): 2022 $ 349 2023 358 2024 366 2025 375 2026 383 Thereafter 557 $ 2,388 |
Risks and Liquidity (Details)
Risks and Liquidity (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Risks and Liquidity | ||
Accumulated deficit | $ (229,929) | $ (196,653) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Segments (Details) | 12 Months Ended |
Dec. 31, 2021segment | |
Segments | |
Number of segments | 1 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Inventory (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Inventory | ||
Inventory consigned to others | $ 1.7 | $ 1.4 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Intangible Assets | |||
Amortization expense related to intangible assets | $ 304 | $ 304 | $ 304 |
Remaining life of intangible assets | 7 years 7 months 6 days | ||
Intangible assets future amortization | |||
Year 1 | $ 300 | ||
Year 2 | 300 | ||
Year 3 | 300 | ||
Year 4 | 300 | ||
Year 5 | 300 | ||
Thereafter | $ 800 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Long-Lived Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Long-Lived Assets | |||
Impairment of Long-Lived Assets | $ 0 | $ 0 | $ 0 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Revenue Recognition (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Summary of Significant Accounting Policies | |
Incremental costs of obtaining a contract | $ 0 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Revenue Disaggregated (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 29,463 | $ 18,213 | $ 15,446 |
OviTex [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 22,990 | 15,093 | 14,041 |
OviTex PRS [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 6,473 | $ 3,120 | $ 1,405 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Fair value of financial instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Recurring | Level 1 | Money market funds | ||
Fair value of financial instruments | ||
Cash equivalents | $ 41,396 | $ 72,889 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Warrant liability (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Summary of Significant Accounting Policies | |
Beginning balance | $ 1,640 |
Change in fair value of warrants | 5 |
Conversion into common stock warrants | $ (1,645) |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Fair value of warrant (Details) | Nov. 13, 2019 |
MidCap Credit Facility | |
Fair value of the warrants | |
Remaining contractual term in years | 8 years 4 months 24 days |
Convertible promissory notes | |
Fair value of the warrants | |
Remaining contractual term in years | 7 years 2 months 12 days |
Notes payable | |
Fair value of the warrants | |
Remaining contractual term in years | 7 years 4 months 24 days |
Expected volatility | MidCap Credit Facility | |
Fair value of the warrants | |
Fair value of warrants | 57.5 |
Expected volatility | Convertible promissory notes | |
Fair value of the warrants | |
Fair value of warrants | 57.4 |
Expected volatility | Notes payable | |
Fair value of the warrants | |
Fair value of warrants | 57.5 |
Risk-free interest rate | MidCap Credit Facility | |
Fair value of the warrants | |
Fair value of warrants | 2.04 |
Risk-free interest rate | Convertible promissory notes | |
Fair value of the warrants | |
Fair value of warrants | 1.79 |
Risk-free interest rate | Notes payable | |
Fair value of the warrants | |
Fair value of warrants | 1.79 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies - Potentially dilutive securities (Details) - shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Potentially dilutive securities | |||
Potentially dilutive securities excluded from computation of diluted weighted average shares | 1,958,037 | 1,586,946 | 1,510,253 |
Stock Options | |||
Potentially dilutive securities | |||
Potentially dilutive securities excluded from computation of diluted weighted average shares | 1,706,438 | 1,498,390 | 1,421,697 |
Restricted stock units | |||
Potentially dilutive securities | |||
Potentially dilutive securities excluded from computation of diluted weighted average shares | 163,043 | ||
Common Stock Warrants | |||
Potentially dilutive securities | |||
Potentially dilutive securities excluded from computation of diluted weighted average shares | 88,556 | 88,556 | 88,556 |
Summary of Significant Accou_14
Summary of Significant Accounting Policies - Recently Issued Accounting Pronouncements (Details) - ASU 2016-02 - Cumulative Effect, Period of Adoption, Adjustment [Member] $ in Millions | Jan. 01, 2022USD ($) |
Minimum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Right-of-use asset | $ 1.2 |
Lease liability | 1.5 |
Maximum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Right-of-use asset | 1.6 |
Lease liability | $ 1.9 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property and Equipment | |||
Property and Equipment, Total | $ 4,943 | $ 4,359 | |
Less accumulated depreciation and amortization | (3,757) | (3,733) | |
Property and equipment, net | 1,186 | 626 | |
Depreciation expense | 231 | 221 | $ 278 |
Umbrella Agreement with Aroa | |||
Property and Equipment | |||
Property and Equipment, Total | 200 | 200 | |
Lab equipment | |||
Property and Equipment | |||
Property and Equipment, Total | $ 2,352 | 2,304 | |
Estimated useful lives | 5 years | ||
Furniture and fixtures | |||
Property and Equipment | |||
Property and Equipment, Total | $ 242 | 118 | |
Estimated useful lives | 5 years | ||
Computer equipment and software | |||
Property and Equipment | |||
Property and Equipment, Total | $ 468 | 577 | |
Estimated useful lives | 3 years | ||
Leasehold improvements | |||
Property and Equipment | |||
Property and Equipment, Total | $ 1,881 | $ 1,360 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Accrued Expenses and Other Current Liabilities | ||
Compensation and related benefits | $ 4,976 | $ 3,666 |
Interest | 40 | |
Third-party and professional fees | 2,233 | 1,626 |
Amounts due to Aroa | 842 | 498 |
Research and development expenses | 31 | 7 |
Other | 79 | 116 |
Total accrued expenses and other current liabilities | $ 8,161 | $ 5,953 |
Debt - Schedule of long term de
Debt - Schedule of long term debt (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Debt | ||
Longterm debt with related party | $ 31,491 | $ 30,827 |
OrbiMed Term Loans (related party) | ||
Debt | ||
Long Term Debt | 30,000 | 30,000 |
End of term charge | 3,000 | 3,000 |
Unamortized end of term charge and issuance costs | (1,509) | (2,173) |
Longterm debt with related party | $ 31,491 | $ 30,827 |
Debt - OrbiMed Term Loan (relat
Debt - OrbiMed Term Loan (related party) (Details) | 12 Months Ended | |||
Dec. 31, 2021USD ($)tranche | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Nov. 30, 2018 | |
OrbiMed Term Loans (related party) | ||||
Debt | ||||
Number of Tranches | tranche | 2 | |||
Minimum Cash Balance | $ 2,000,000 | |||
Interest due to unpaid obligation | 3.00% | |||
Interest Rate (as a percent) | 9.75% | 7.75% | ||
Number of Installment | 60 months | |||
Exit fee (as a percent) | 10.00% | |||
Administration Fees | $ 10,000 | |||
Debt issuance costs | 300,000 | |||
End of term charge | 3,000,000 | |||
Interest Expenses | $ 3,600,000 | $ 3,600,000 | $ 3,600,000 | |
OrbiMed Term Loans (related party) | Prior to second anniversary | ||||
Debt | ||||
Percentage of prepayment penalty on prepaid principal amount | 10.00% | |||
OrbiMed Term Loans (related party) | After second anniversary but prior to third anniversary | ||||
Debt | ||||
Percentage of prepayment penalty on prepaid principal amount | 5.00% | |||
OrbiMed Term Loans (related party) | After third anniversary | ||||
Debt | ||||
Percentage of prepayment penalty on prepaid principal amount | 2.50% | |||
OrbiMed Term Loans (related party) | LIBOR | ||||
Debt | ||||
Interest Rate (as a percent) | 2.00% | |||
OrbiMed Term Loans (related party) | Maximum | ||||
Debt | ||||
Debt Amount | $ 35,000,000 | |||
Tranche One | ||||
Debt | ||||
Debt Amount | 30,000,000 | |||
Tranche Two | ||||
Debt | ||||
Debt Amount | $ 5,000,000 |
Redeemable Convertible Prefer_3
Redeemable Convertible Preferred Stock and Stockholders Equity (Deficit) - Public Stock Offerings (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | |||
Jun. 30, 2020 | Nov. 30, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | |
IPO | ||||
Stockholders' Equity | ||||
Common stock issued and sold (in shares) | 4,398,700 | |||
Offering price (in dollar per share) | $ 13 | |||
Received net proceeds of after deducting underwriting discounts, commissions and other offering expenses | $ 50.6 | |||
Over-Allotment Option | ||||
Stockholders' Equity | ||||
Common stock issued and sold (in shares) | 398,700 | |||
Second Underwritten Public Offering [Member] | ||||
Stockholders' Equity | ||||
Common stock issued and sold (in shares) | 3,000,000 | |||
Offering price (in dollar per share) | $ 16 | |||
Received net proceeds of after deducting underwriting discounts, commissions and other offering expenses | $ 44.7 | |||
Equity Distribution Agreement | ||||
Stockholders' Equity | ||||
Value Of Shares Authorized To Be Sold | $ 0 | $ 50 | ||
Convertible Preferred Stock | IPO | ||||
Stockholders' Equity | ||||
Aggregate of common stock | 6,708,649 | |||
Warrants | IPO | ||||
Stockholders' Equity | ||||
Aggregate of common stock | 88,556 |
Redeemable Convertible Prefer_4
Redeemable Convertible Preferred Stock and Stockholders Equity - Preferred Stock (Details) - Convertible Preferred Stock - Series B - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Stockholders' Equity | ||
Shares issued (in shares) | 12,527,956 | |
Issue price | $ 1.16 | |
Gross proceeds | $ 14.5 | |
Transaction Fee | $ 0.2 |
Redeemable Convertible Prefer_5
Redeemable Convertible Preferred Stock and Stockholders Equity (Deficit) - Warrants outstanding (Details) | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Stockholders' Equity | |
Warrants outstanding | 88,556 |
Common stock warrants expiring in 2027 | |
Stockholders' Equity | |
Warrants outstanding | 80,177 |
Warrants exercise price | $ / shares | $ 28.65 |
Expiration dates | 2027 |
Common stock warrants expiring in 2028 | |
Stockholders' Equity | |
Warrants outstanding | 8,379 |
Warrants exercise price | $ / shares | $ 28.65 |
Expiration dates | 2028 |
Stock-Based Compensation - Expe
Stock-Based Compensation - Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stock-Based Compensation | |||
Total stock-based compensation | $ 3,661 | $ 2,058 | $ 457 |
Sales and marketing | |||
Stock-Based Compensation | |||
Total stock-based compensation | 961 | 696 | 164 |
General and administrative | |||
Stock-Based Compensation | |||
Total stock-based compensation | 1,542 | 1,030 | 225 |
Research and development | |||
Stock-Based Compensation | |||
Total stock-based compensation | $ 1,158 | $ 332 | $ 68 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Number of shares | |||
Balance at beginning of period | 1,498,208 | 1,420,942 | 489,222 |
Granted | 468,000 | 175,086 | 978,415 |
Exercised | (77,154) | (27,783) | (2,527) |
Early exercised | (471) | ||
Canceled/forfeited | (182,645) | (70,037) | (43,697) |
Balance at end of period | 1,706,409 | 1,498,208 | 1,420,942 |
Vested and expected to vest at end of period | 1,657,511 | ||
Exercisable at end of period | 917,602 | ||
Weighted average exercise price per share | |||
Balance at beginning of period (in dollars per share) | $ 10.87 | $ 10.35 | $ 5.84 |
Granted ( in dollars per share) | 14.80 | 15.03 | 12.51 |
Exercised (in dollars per share) | 7.08 | 6.29 | 5.93 |
Early exercised (in dollars per share) | 5.93 | ||
Canceled/forfeited (in dollars per share) | 13.08 | 12.41 | 8.58 |
Balance at end of period (in dollars per share) | 11.88 | $ 10.87 | $ 10.35 |
Vested and expected to vest at end of period (in dollars per share) | 11.83 | ||
Exercisable at end of period (in dollars per share) | $ 10.23 | ||
Weighted average remaining contractual term (years) | |||
Weighted average remaining contractual term, outstanding | 7 years 4 months 9 days | ||
Weighted average remaining contractual term, Vested and expected to vest | 7 years 3 months 21 days | ||
Weighted average remaining contractual term, Exercisable | 6 years 2 months 4 days |
Stock-Based Compensation - Earl
Stock-Based Compensation - Early Exercise Of Stock Options (Details) - shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stock-Based Compensation | |||
Early exercised stock options, Unvested balance at beginning of period | 182 | 755 | 912 |
Early exercised | 471 | ||
Vested | (153) | (306) | (628) |
Forfeited | (267) | ||
Early exercised stock options, Unvested balance at end of period | 29 | 182 | 755 |
Stock-Based Compensation - Weig
Stock-Based Compensation - Weighted average assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stock-Based Compensation | |||
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Expected volatility | 63.90% | 59.10% | 55.90% |
Risk-free interest rate | 0.99% | 0.87% | 1.82% |
Expected term (in years) | 6 years 1 month 24 days | 5 years 11 months 23 days | 6 years 2 months 26 days |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Units (Details) - Restricted stock units $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($)shares | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |
Granted | 194,232 |
Vested | (12,000) |
Canceled/forfeited | (19,189) |
Outstanding at December 31, 2021 | 163,043 |
Aggregate intrinsic value | $ | $ 2.1 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narratives (Details) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2021USD ($)item$ / sharesshares | Dec. 31, 2020USD ($)$ / shares | Dec. 31, 2019$ / shares | |
Stock-Based Compensation | |||
Number of equity incentive plans | item | 2 | ||
Aggregate intrinsic value of outstanding options | $ 3 | ||
Aggregate intrinsic value of exercisable options | $ 2.8 | ||
Restricted stock units | |||
Stock-Based Compensation | |||
Vesting period | 4 years | ||
Weighted average grant date fair value, Equity Instruments (per share) | $ / shares | $ 16.57 | ||
Unrecognized compensation expense | $ 1.6 | ||
Weighted average period for recognition of unrecognized expenses | 3 years 2 months 12 days | ||
2012 Stock Incentive Plan | |||
Stock-Based Compensation | |||
Weighted average grant date fair value, Options (per share) | $ / shares | $ 8.66 | $ 8.13 | $ 6.81 |
2019 Equity Incentive Plan | |||
Stock-Based Compensation | |||
Shares available for future issuance | shares | 1,299,218 | ||
Common Stock Capital Shares Reserved For Future Annual Issuance | shares | 432,442 | ||
Common Stock Capital Shares Reserved For Future Issuance, Percentage Of Shares Outstanding Last Day Of Fiscal Year | 4.00% | ||
Vesting period | 4 years | ||
Vesting term | 10 years | ||
2012 Stock Incentive Plan and 2019 Equity Incentive Plan | |||
Stock-Based Compensation | |||
Aggregate intrinsic value of exercisable options | $ 0.4 | $ 0.2 | |
Unrecognized compensation expense | $ 5.1 | ||
Weighted average period for recognition of unrecognized expenses | 2 years 6 months |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Defined Contribution Plan Disclosure [Line Items] | ||||
Maximum contribution of participant (as a percent) | 100.00% | |||
Percentage of employer's contribution | 50.00% | |||
Percentage of employer's contribution to employees | 6.00% | |||
Amount of employer's contribution | $ 0.3 | $ 0.2 | ||
Deferred Compensation Arrangement with Individual, Requisite Service Period | 3 years | |||
Employee Stock Purchase Plan 2019 | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Shares reserved for future issuance | 317,701 | 317,701 | ||
Increase in number of shares | 107,887 | |||
Increase in percentage of shares outstanding | 1.00% | |||
Discount on purchase of common stock | 5.00% | |||
Shares issued | 3,163 | 2,797 | 0 |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets | ||
Net operating loss carryforwards | $ 47,737 | $ 39,937 |
Research and development credits | 623 | 747 |
Depreciation and amortization | (89) | 239 |
Accrued expenses and other | 1,356 | 611 |
Inventory reserve | 171 | 205 |
Gross deferred tax asset | 49,798 | 41,739 |
Valuation allowance | (49,798) | (41,739) |
Net deferred tax asset | $ 0 | $ 0 |
Income Taxes - NOL carryforward
Income Taxes - NOL carryforwards (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Federal | ||
Income Taxes | ||
NOL carryforwards | $ 181,443 | $ 150,642 |
State | ||
Income Taxes | ||
NOL carryforwards | $ 151,488 | $ 128,912 |
Income Taxes - Rate reconciliat
Income Taxes - Rate reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Rate reconciliation | |||
Federal tax benefit at statutory rate | (21.00%) | (21.00%) | (21.00%) |
State rate, net of federal benefit | (3.50%) | (4.20%) | (2.90%) |
Permanent differences | 0.2 | 0.6 | 0.4 |
Research and development | 0.40% | 0.70% | (0.70%) |
Change in valuation allowance | 24.20% | 24.00% | 24.20% |
Other | (0.30%) | (0.10%) | 0.00% |
Total tax provision |
Income Taxes - Narratives (Deta
Income Taxes - Narratives (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Taxes | |||
Unrecognized tax benefits | $ 0 | $ 0 | |
Increase (decrease) in valuation allowance | $ 8,100 | $ 6,900 | |
Corporate income tax rate | 21.00% | 21.00% | 21.00% |
Employee retention payroll tax credit | $ 500 |
Contingencies and Commitments_2
Contingencies and Commitments (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Aug. 31, 2012 | Dec. 31, 2021 | Dec. 31, 2019 | Dec. 31, 2018 | |
Contingencies and Commitments | ||||
Agreement extended term | 10 years | |||
Umbrella Agreement with Aroa | ||||
Contingencies and Commitments | ||||
Payment for agreement | $ 4 | |||
Fixed Cost Of Net Sales | 27.00% | |||
Purchase commitments | $ 1.8 | |||
Number of days for product supply | 60 days | |||
Percentage of products ordered to be supplied | 75.00% | |||
Royalty percentage of net sales | 6.00% | |||
Umbrella Agreement with Aroa | European territory | ||||
Contingencies and Commitments | ||||
Sales milestone payments due | $ 1 | |||
Purchase commitments due year Six | $ 1 | |||
Umbrella Agreement with Aroa | North American territory | ||||
Contingencies and Commitments | ||||
Sales milestone payment | $ 2 | $ 1 | ||
Transfer Price For Product Produced | 200.00% | |||
Fixed Cost Of Net Sales | 27.00% | |||
Purchase commitments due year Six | $ 5 | |||
Next Science | ||||
Contingencies and Commitments | ||||
Purchase commitments | $ 10.8 | |||
Term of Contract | 10 years |
Contingencies and Commitments -
Contingencies and Commitments - Operating Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Leases, Operating [Abstract] | |||
Rent expense | $ 400 | $ 300 | $ 300 |
2022 | 349 | ||
2023 | 358 | ||
2024 | 366 | ||
2025 | 375 | ||
2026 | 383 | ||
Thereafter | 557 | ||
Future minimum lease payments | $ 2,388 |