Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 03, 2023 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-39130 | |
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, $0.001 par value per share | |
Trading Symbol | TELA | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 24,487,451 | |
Entity Central Index Key | 0001561921 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 65,266 | $ 42,019 |
Accounts receivable, net | 7,894 | 6,621 |
Inventory | 14,098 | 11,792 |
Prepaid expenses and other assets | 1,910 | 2,015 |
Total current assets | 89,168 | 62,447 |
Property and equipment, net | 1,764 | 1,682 |
Intangible assets, net | 2,309 | 2,499 |
Right-of-use assets | 1,145 | 1,227 |
Total assets | 94,386 | 67,855 |
Current liabilities: | ||
Accounts payable | 2,250 | 1,534 |
Accrued expenses and other current liabilities | 10,795 | 10,869 |
Total current liabilities | 13,045 | 12,403 |
Longterm debt | 40,212 | 39,916 |
Other longterm liabilities | 1,124 | 1,231 |
Total liabilities | 54,381 | 53,550 |
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; 24,475,504 and 19,165,027 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively | 24 | 19 |
Additional paid-in capital | 336,939 | 288,361 |
Accumulated other comprehensive income | 84 | 150 |
Accumulated deficit | (297,042) | (274,225) |
Total stockholders' equity | 40,005 | 14,305 |
Total liabilities and stockholders' equity | $ 94,386 | $ 67,855 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
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) | 24,475,504 | 19,165,027 |
Common stock, shares outstanding (in shares) | 24,475,504 | 19,165,027 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Consolidated Statements of Operations and Comprehensive Loss | ||||
Revenue | $ 14,494 | $ 10,406 | $ 26,403 | $ 18,637 |
Cost of revenue (excluding amortization of intangible assets) | 4,198 | 3,318 | 8,114 | 6,474 |
Amortization of intangible assets | 95 | 538 | 190 | 614 |
Gross profit | 10,201 | 6,550 | 18,099 | 11,549 |
Operating expenses: | ||||
Sales and marketing | 14,577 | 11,055 | 28,043 | 20,433 |
General and administrative | 3,472 | 3,630 | 7,106 | 7,088 |
Research and development | 2,514 | 2,102 | 4,566 | 4,109 |
Total operating expenses | 20,563 | 16,787 | 39,715 | 31,630 |
Loss from operations | (10,362) | (10,237) | (21,616) | (20,081) |
Other expense: | ||||
Interest expense | (1,298) | (934) | (2,544) | (1,845) |
Loss on extinguishment of debt | (1,228) | (1,228) | ||
Other income (expense) | 870 | (342) | 1,343 | (449) |
Total other expense | (428) | (2,504) | (1,201) | (3,522) |
Net loss | $ (10,790) | $ (12,741) | $ (22,817) | $ (23,603) |
Net loss per common share, basic | $ (0.46) | $ (0.88) | $ (1.08) | $ (1.62) |
Net loss per common share, diluted | $ (0.46) | $ (0.88) | $ (1.08) | $ (1.62) |
Weighted average common shares outstanding, basic | 23,239,262 | 14,557,453 | 21,223,639 | 14,548,210 |
Weighted average common shares outstanding, diluted | 23,239,262 | 14,557,453 | 21,223,639 | 14,548,210 |
Comprehensive loss: | ||||
Net loss | $ (10,790) | $ (12,741) | $ (22,817) | $ (23,603) |
Foreign currency translation adjustment | (36) | 134 | (66) | 181 |
Comprehensive loss | $ (10,826) | $ (12,607) | $ (22,883) | $ (23,422) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common stock | Additional paid-in capital | Accumulated other comprehensive income | Accumulated deficit | Total |
Balance at Beginning of period at Dec. 31, 2021 | $ 15 | $ 250,064 | $ (52) | $ (229,929) | $ 20,098 |
Balance at Beginning of period (in shares) at Dec. 31, 2021 | 14,529,577 | ||||
Vesting of common stock previously subject to repurchase (in shares) | 29 | ||||
Vesting of share-based awards and exercise of stock options | 12 | 12 | |||
Vesting of share-based awards and exercise of stock options (in shares) | 40,872 | ||||
Shares withheld for employee taxes | (153) | (153) | |||
Shares withheld for employee taxes (in shares) | (12,918) | ||||
Foreign currency translation adjustment | 181 | 181 | |||
Stock-based compensation expense | 1,923 | 1,923 | |||
Net loss | (23,603) | (23,603) | |||
Balance at Ending period at Jun. 30, 2022 | $ 15 | 251,846 | 129 | (253,532) | (1,542) |
Balance at Ending period (in shares) at Jun. 30, 2022 | 14,557,560 | ||||
Balance at Beginning of period at Mar. 31, 2022 | $ 15 | 250,819 | (5) | (240,791) | 10,038 |
Balance at Beginning of period (in shares) at Mar. 31, 2022 | 14,556,748 | ||||
Vesting of common stock previously subject to repurchase (in shares) | 2 | ||||
Vesting of share-based awards and exercise of stock options | 5 | 5 | |||
Vesting of share-based awards and exercise of stock options (in shares) | 810 | ||||
Foreign currency translation adjustment | 134 | 134 | |||
Stock-based compensation expense | 1,022 | 1,022 | |||
Net loss | (12,741) | (12,741) | |||
Balance at Ending period at Jun. 30, 2022 | $ 15 | 251,846 | 129 | (253,532) | (1,542) |
Balance at Ending period (in shares) at Jun. 30, 2022 | 14,557,560 | ||||
Balance at Beginning of period at Dec. 31, 2022 | $ 19 | 288,361 | 150 | (274,225) | 14,305 |
Balance at Beginning of period (in shares) at Dec. 31, 2022 | 19,165,027 | ||||
Vesting of share-based awards and exercise of stock options | 100 | $ 100 | |||
Vesting of share-based awards and exercise of stock options (in shares) | 117,238 | 19,429 | |||
Shares withheld for employee taxes | (280) | $ (280) | |||
Shares withheld for employee taxes (in shares) | (25,951) | ||||
Foreign currency translation adjustment | (66) | (66) | |||
Stock-based compensation expense | 2,422 | 2,422 | |||
Sale of common stock, net of underwriting discounts, commissions and offering costs | $ 5 | 46,336 | 46,341 | ||
Sale of common stock, net of underwriting discounts, commissions and offering costs (in shares) | 5,219,190 | ||||
Net loss | (22,817) | (22,817) | |||
Balance at Ending period at Jun. 30, 2023 | $ 24 | 336,939 | 84 | (297,042) | 40,005 |
Balance at Ending period (in shares) at Jun. 30, 2023 | 24,475,504 | ||||
Balance at Beginning of period at Mar. 31, 2023 | $ 19 | 289,254 | 120 | (286,252) | 3,141 |
Balance at Beginning of period (in shares) at Mar. 31, 2023 | 19,227,777 | ||||
Vesting of share-based awards and exercise of stock options | 56 | 56 | |||
Vesting of share-based awards and exercise of stock options (in shares) | 28,650 | ||||
Shares withheld for employee taxes | (1) | (1) | |||
Shares withheld for employee taxes (in shares) | (113) | ||||
Foreign currency translation adjustment | (36) | (36) | |||
Stock-based compensation expense | 1,294 | 1,294 | |||
Sale of common stock, net of underwriting discounts, commissions and offering costs | $ 5 | 46,336 | 46,341 | ||
Sale of common stock, net of underwriting discounts, commissions and offering costs (in shares) | 5,219,190 | ||||
Net loss | (10,790) | (10,790) | |||
Balance at Ending period at Jun. 30, 2023 | $ 24 | $ 336,939 | $ 84 | $ (297,042) | $ 40,005 |
Balance at Ending period (in shares) at Jun. 30, 2023 | 24,475,504 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (22,817) | $ (23,603) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation expense | 239 | 161 |
Noncash interest expense | 296 | 359 |
Noncash loss on extinguishment of debt | 1,228 | |
Amortization of intangible assets | 190 | 614 |
Net changes in operating lease ROU assets and liabilities | (22) | (17) |
Inventory excess and obsolescence charge | 704 | 1,193 |
Stockbased compensation expense | 2,422 | 1,923 |
Change in operating assets and liabilities: | ||
Accounts receivable, net | (1,219) | (1,115) |
Inventory | (2,936) | (3,987) |
Prepaid expenses and other current assets | 107 | 920 |
Accounts payable | 651 | (411) |
Accrued expenses and other current and long-term liabilities | (104) | 216 |
Foreign currency remeasurement (gain) loss | (349) | 403 |
Net cash used in operating activities | (22,838) | (22,116) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (272) | (536) |
Net cash used in investing activities | (272) | (536) |
Cash flows from financing activities: | ||
Proceeds from sale of common stock, net of underwriting discounts, commissions and offering costs | 46,354 | |
Proceeds from issuance of longterm debt | 40,000 | |
Repayment of longterm debt | (30,000) | |
Payment of debt financing costs | (3,357) | |
Proceeds from exercise of stock options | 100 | 12 |
Payment of withholding taxes related to stock-based compensation to employees | (280) | (153) |
Net cash provided by financing activities | 46,174 | 6,502 |
Effect of exchange rate on cash and cash equivalents | 183 | (56) |
Net increase (decrease) in cash and cash equivalents | 23,247 | (16,206) |
Cash and cash equivalents, beginning of period | 42,019 | 43,931 |
Cash and cash equivalents, end of period | 65,266 | 27,725 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for interest | 2,248 | 1,486 |
Supplemental disclosures of noncash investing and financing activities: | ||
Property and equipment in accounts payable and accrued expenses and other current liabilities | 49 | 146 |
Offering costs in accounts payable and accrued expenses and other current liabilities | $ 13 | 103 |
Intangible asset in accrued expenses and other liabilities | 1,000 | |
Operating lease ROU asset exchanged for operating lease liabilities | 1,376 | |
Tenant improvement and deferred rent reclassified to operating lease liabilities | 380 | |
Operating lease liabilities assumed for operating lease ROU assets | $ 1,756 |
Background
Background | 6 Months Ended |
Jun. 30, 2023 | |
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 a commercial-stage medical technology company focused on providing innovative 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 directly impacted by the COVID-19 pandemic since the onset of the pandemic in 2020. To date, among other impacts on the Company’s business related to the pandemic, physicians and their patients have been required by state mandates, or have chosen to, defer elective surgery procedures in which the Company’s 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 volatility in the frequency of surgical procedures using the Company’s products, including through labor and hospital staffing shortages and the allocation of hospital resources due to financial strain experienced during the COVID-19 pandemic. Although the Company continues to monitor developments related to hospital capacity and the volume of elective procedures, there is uncertainty regarding the pace to which surgical volumes will normalize to their pre-pandemic levels and the timing to address the backlog of deferred procedures. The full extent of the impact of the COVID-19 pandemic on the Company’s business, results of operations and financial condition, including revenue, expenses, manufacturing capability, supply chain integrity, staffing availability, research and development costs and employee-related compensation, will depend on future developments that are highly uncertain. |
Risks and Liquidity
Risks and Liquidity | 6 Months Ended |
Jun. 30, 2023 | |
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 $297.0 million as of June 30, 2023. The Company anticipates incurring additional losses until such time, if ever, it can generate sufficient revenue from its products to cover its expenses. On April 21, 2023, the Company completed an underwritten public offering in which the Company sold 5,219,190 shares of its common stock (including 469,190 shares sold pursuant to the underwriters’ overallotment option on May 5, 2023) at a public offering price of $9.50 per share, receiving net proceeds of approximately $46.3 million after deducting underwriting discounts, commissions and other offering expenses. The operations of the Company are subject to certain risks and uncertainties including, among others, the uncertainty of product development, the impact of macroeconomic conditions, including the COVID-19 pandemic or other public health crises, general economic uncertainty, including as a result of inflationary pressures and the measures undertaken by various governments to address them, banking instability, geopolitical factors such as the ongoing war in 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 | 6 Months Ended |
Jun. 30, 2023 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | (3) Summary of Significant Accounting Policies The Company’s complete summary of significant accounting policies can be found in “Note 3, Summary of Significant Accounting Policies” in the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Any reference in these notes to applicable guidance is meant to refer to generally accepted accounting principles (“GAAP”) in the U.S. as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) promulgated by the Financial Accounting Standards Board (“FASB”). Interim Financial Statements The accompanying unaudited interim consolidated financial statements have been prepared from the books and records of the Company in accordance with GAAP for interim financial information and Rule 10-01 of Regulation S-X promulgated by the Securities and Exchange Commission (“SEC”), which permits reduced disclosures for interim periods. All adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the accompanying consolidated balance sheets and statements of operations and comprehensive loss, stockholders’ equity and cash flows have been made. Although these interim consolidated financial statements do not include all of the information and footnotes required for complete annual consolidated financial statements, management believes the disclosures are adequate to make the information presented not misleading. The unaudited interim results of operations and cash flows are not necessarily indicative of the results that may be expected for the full year. The unaudited interim consolidated financial statements and footnotes should be read in conjunction with the consolidated financial statements and footnotes included in the Annual Report on Form 10-K for the year ended December 31, 2022. 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 the 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. 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 customers or from consigned inventory maintained at hospitals or other surgical facilities. 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 customer 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 enters into 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 and records these rebates 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 these 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 by our portfolio of products (in thousands): Three months ended June 30, Six months ended June 30, 2023 2022 2023 2022 OviTex $ 10,058 $ 7,028 $ 18,081 $ 12,689 OviTex PRS 4,390 3,353 8,251 5,901 Other 46 25 71 47 Total revenue $ 14,494 $ 10,406 $ 26,403 $ 18,637 Sales outside of the U.S. were $1.5 million and $2.5 million for the three and six months ended June 30, 2023, respectively, and immaterial for the three and six months ended June 30, 2022. 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, other assets, and accounts payable are shown at cost, which approximates fair value due to the short-term nature of these instruments. The carrying amounts of the Company’s current Credit and Security Agreement approximated its fair value due to its variable interest rate. The Company follows the provisions of FASB 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 (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) June 30, 2023: Cash equivalents – money market fund $ 61,635 $ — $ — December 31, 2022: Cash equivalents – money market fund $ 39,010 $ — $ — Net loss per common share Basic and diluted net loss per common share is determined by dividing net loss by the weighted-average shares of common stock outstanding during the reporting period. In periods in which the Company reports a net loss, diluted net loss per share is the same as basic net loss per share 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 net loss per share are the same. The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares outstanding for the periods presented, as they would be antidilutive. Three and Six months ended June 30, 2023 2022 Stock options (including shares subject to repurchase) 2,218,832 1,959,437 Unvested restricted stock units 781,011 309,767 Common stock warrants 88,556 88,556 Total 3,088,399 2,357,760 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 June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments In August 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity (“ . in an entity’s own equity that are currently accounted for as derivatives because of specific settlement provisions. The new guidance also modifies how particular convertible instruments and certain contracts that may be settled in cash or shares impact the diluted EPS computation. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those annual periods. The adoption of this guidance is not expected to have a significant impact on the consolidated financial statements and related disclosures. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2023 | |
Leases | |
Leases | (4) Leases The Company leases office and laboratory space in Malvern, Pennsylvania under a noncancelable lease (the “Malvern Lease”). The Malvern Lease, which was concluded to be an operating lease, was amended in December 2020 to extend the term of the lease from May 2021 to May 2028. The Malvern Lease has annual scheduled payment increases and provides the Company a renewal option for an additional term of 60 months at the end of the lease term. The Company evaluates renewal options at lease inception and on an ongoing basis and includes renewal options that it is reasonably certain to exercise in its expected lease terms when classifying leases and measuring lease liabilities. As the Company is not reasonably certain to exercise the renewal option, the additional 60-month term has been excluded. The Company's lease does not provide an implicit rate, and therefore, the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease. The Company used an incremental borrowing rate of 9.75% to discount the Malvern Lease payments included in the operating lease liabilities recognized. The Company recognized $0.1 million and $0.2 million of lease cost during both the three and six months ended June 30, 2023 and 2022, respectively. Cash paid for amounts included in the measurement of operating lease liabilities was $0.1 million and $0.2 million for both the three and six months ended June 30, 2023 and 2022, respectively, and these amounts are included in operating activities in the consolidated statements of cash flows. As of June 30, 2023, the remaining lease term for the Malvern Lease is 5.0 years. The following table reconciles the undiscounted future minimum lease payments (displayed in aggregate by year) under non-cancelable operating leases with terms of more than one year to the total operating lease liabilities recognized on the consolidated balance sheets as of June 30, 2023 (in thousands): Remainder of 2023 $ 181 2024 366 2025 375 2026 383 2027 392 Thereafter 164 Total undiscounted future minimum lease payments $ 1,861 Less imputed interest (394) Total operating lease liabilities $ 1,467 As of June 30, 2023, $0.3 million representing the current portion of operating lease liabilities is included in accrued expenses and other current liabilities other long-term liabilities |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 6 Months Ended |
Jun. 30, 2023 | |
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): June 30, December 31, 2023 2022 Compensation and related benefits $ 6,235 $ 6,420 Third-party and professional fees 2,220 2,563 Amounts due to contract manufacturer 1,629 1,263 Current portion of operating lease liabilities 343 340 Research and development expenses 115 137 Other 253 146 Total accrued expenses and other current liabilities $ 10,795 $ 10,869 |
Long term Debt
Long term Debt | 6 Months Ended |
Jun. 30, 2023 | |
Long term Debt | |
Long term Debt | (6) Long-term Debt Long-term debt consisted of the following (in thousands): June 30, December 31, 2023 2022 MidCap Term Loan $ 40,000 $ 40,000 End of term charge 2,000 2,000 Unamortized end of term charge and issuance costs (1,788) (2,084) Long-term debt $ 40,212 $ 39,916 MidCap Term Loan On May 26, 2022, the Company entered into the Credit and Security Agreement (the “MidCap Credit Agreement”) with MidCap Financial Trust, as agent, and certain lender parties thereto. The MidCap Credit Agreement provides for up to $50.0 million in term loans (the “MidCap Term Loans”), consisting of a $40.0 million Tranche 1 (“Tranche 1”) and a $10.0 million Tranche 2 (“Tranche 2”). Upon closing, the Company borrowed $40.0 million of Tranche 1 and used a portion of the proceeds to repay borrowings under the OrbiMed Credit Facility (described below) and intends to use the remaining proceeds to fund operations and other general corporate purposes. The Company will be eligible to borrow Tranche 2 at the Company’s option upon meeting certain conditions, including, but not limited to, reaching $65.0 million of net product revenue over the preceding four quarters by fiscal year end 2023. Pursuant to the MidCap Credit Agreement, the Company provided a first priority security interest in all existing and future acquired assets, including intellectual property, owned by the Company. The MidCap Credit Agreement contains certain covenants that limit the Company’s ability to engage in certain transactions that may be in the Company’s long-term best interests, including the incurrence of additional indebtedness, effecting certain corporate changes, making certain investments, acquisitions or dispositions and paying dividends. The MidCap Credit Agreement also contains customary indemnification obligations and customary events of default, including, among other things, (i) non-payment, (ii) breach of warranty, (iii) non-performance of covenants and obligations, (iv) default on other indebtedness, (v) judgments, (vi) change of control, (vii) bankruptcy and insolvency, (viii) impairment of security, (ix) key permit events, (x) termination of a pension plan, (xi) regulatory matters, (xii) material adverse effect and (xiii) breach of material contracts. In addition, the Company must maintain minimum net revenue levels tested quarterly. In the event of default under the MidCap Credit Agreement, the Company would be required to pay interest on principal and all other due and unpaid obligations at the current rate in effect plus 2%. The MidCap Term Loans mature on May 1, 2027 and bear interest at a rate equal to 6.25% plus the greater of one-month Term SOFR (as defined in the MidCap Credit Agreement) or 1.0%. The Company is required to make 36 monthly interest payments beginning on June 1, 2022 (the “Interest-Only Period”). If the Company is in covenant compliance at the end of the Interest-Only Period, the Company will have the option to extend the Interest-Only Period by 12 months to 48 monthly interest payments, followed by 12 months of straight-line amortization, with the entire principal payment due at maturity. If the Company is not in covenant compliance at the end of the Interest-Only Period, the Company is required to make 24 months of straight-line amortization payments, with the entire principal amount due at maturity. Subject to certain limitations, the MidCap Term Loans have a prepayment fee equal to 3.0% of the prepaid principal amount for the first year following the closing date of the MidCap Term Loans, 2.0% of the prepaid principal amount for the second year following the closing date and 1.0% of the prepaid principal amount for the third year following the closing date and thereafter. The Company is also required to pay an exit fee at the time of maturity or prepayment event equal to 5% of all principal borrowings (the “End of Term Charge”) (or in the event of a prepayment event, the amount of principal being prepaid). Interest expense associated with the MidCap Credit Facility recorded for the three and six months ended June 30, 2023 was $1.3 million and $2.5 million, respectively, of which $0.2 million and $0.3 million, respectively, was related to the amortization of debt issuance costs. Interest expense associated with the MidCap Credit Facility recorded for both the three and six months ended June 30, 2022 was $0.3 million, of which $0.1 million was related to the amortization of debt issuance costs. OrbiMed Term Loan (Related Party) In November 2018, the Company entered into a senior secured term loan facility with OrbiMed (the “OrbiMed Credit Facility”), a related party as the lender is affiliated with a stockholder of the Company, which consisted of up to $35.0 million in term loans (the “OrbiMed Term Loans”). The OrbiMed Term Loans consisted of two tranches, a $30.0 million Tranche 1 (“First Tranche”) and a $5.0 million Tranche 2 (“Second Tranche”). In November 2018, the Company borrowed $30.0 million of the First Tranche. The Company elected not to borrow the Second Tranche prior to its expiration on December 31, 2019. On May 26, 2022, the Company entered into the MidCap Credit Agreement and upon closing used a portion of the proceeds to repay all borrowings under the OrbiMed Credit Facility. The OrbiMed Term Loan bore interest at a rate equal to 7.75% plus the greater of one-month LIBOR or 2.0% until the aggregate principal, interest and End of Term Charge of $3.0 million were paid with part of the proceeds received from the MidCap Credit Agreement. As a result of these payments, a $1.2 million loss on extinguishment was recorded during the three months ended June 30, 2022. Interest expense associated with the OrbiMed Credit Facility recorded for the three and six months ended June 30, 2022 was $0.6 million and $1.5 million, respectively, of which $0.1 million and $0.3 million, respectively, was related to the amortization of debt issuance costs. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2023 | |
Stockholders' Equity | |
Stockholders' Equity | (7) Stockholders’ Equity In December 2020, the Company entered into an Equity Distribution Agreement (the “Equity Agreement”) with Piper Sandler & Co, (the “Sales Agent”) in connection with the establishment of an at-the-market offering program under which the Company may sell up to an aggregate of $50.0 million of shares of the Company’s common stock, from time to time through the Sales Agent. No sales were made under the Equity Agreement during the six months ended June 30, 2023. In August 2022, the Company completed an underwritten public offering in which the Company issued and sold 4,600,000 shares of its common stock at a public offering price of $8.00 per share. The Company received net proceeds of approximately $34.4 million after deducting underwriting discounts, commissions and other offering expenses. In April 2023, the Company completed an underwritten public offering in which the Company issued and sold 5,219,190 shares of its common stock (including 469,190 shares sold pursuant to the underwriters’ overallotment option in May 2023) at a public offering price of $9.50 per share. The Company received net proceeds of approximately $46.3 million after deducting underwriting discounts, commissions and other offering expenses. Warrants The Company had the following warrants outstanding to purchase common stock at June 30, 2023: 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 | 6 Months Ended |
Jun. 30, 2023 | |
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 June 30, 2023, 718,453 shares of common stock 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 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 the accompanying consolidated statements of operations and comprehensive loss (in thousands): Three months ended June 30, Six months ended June 30, 2023 2022 2023 2022 Sales and marketing $ 467 $ 340 $ 868 $ 647 General and administrative 637 535 1,191 999 Research and development 190 147 363 277 Total stock‑based compensation $ 1,294 $ 1,022 $ 2,422 $ 1,923 Stock Options The Company’s stock options vest based on the terms in each award agreement and generally vest over four years and have a term of 10 years. The following table summarizes stock option activity: Weighted average Weighted remaining Number of average exercise contractual term shares price per share (years) Outstanding at January 1, 2023 2,071,848 $ 11.49 Granted 212,960 10.50 Exercised (19,429) 5.17 Canceled/forfeited (46,547) 11.03 Outstanding at June 30, 2023 2,218,832 $ 11.46 6.97 Vested and expected to vest at June 30, 2023 2,170,777 $ 11.46 6.93 Exercisable at June 30, 2023 1,456,572 $ 11.36 6.08 Included in outstanding options at June 30, 2023, were 366,369 stock options granted outside of the Plan. These grants were made pursuant to the Nasdaq inducement grant exception in accordance with Nasdaq listing rule 5635(c)(4). At June 30, 2023, the aggregate intrinsic value of both outstanding options and exercisable The weighted average grant-date fair value per share of options granted was $7.19 during the six months ended June 30, 2023. The aggregate intrinsic value of options exercised was $35,000 and $0.1 million for the three and six months ended June 30, 2023, respectively. At June 30, 2023, the total unrecognized compensation expense related to unvested employee and nonemployee stock option awards was $5.0 million, which is expected to be recognized in expense over a weighted-average period of approximately 2.4 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 Black-Scholes option pricing model and the weighted average assumptions in the table below: Six months ended June 30, 2023 Expected dividend yield — Expected volatility 74.3 % Risk‑free interest rate 3.99 % Expected term (in years) 6.15 Restricted Stock Units The Company has issued service-based and performance-based restricted stock units (“RSUs”). During the six months ended June 30, 2023, the Company granted 348,110 service-based awards at a weighted average grant-date fair value of $10.65 per RSU. Vesting of the service-based RSUs is based on the terms in each award agreement and is generally over four years. During the six months ended June 30, 2023, the Company granted 225,208 performance-based RSUs at a weighted average grant-date fair value of $11.09 per RSU. Vesting of these performance-based RSUs is subject to continued service through 2026 and the achievement of certain performance milestones for fiscal year 2026. The amount of RSUs that will vest can range from 0% to 110% of the original number of RSUs granted. Expense for the performance-based RSUs is not recognized until the performance conditions are deemed probable of achievement. The Company did not record any expense related to the performance-based RSUs during the six months ended June 30, 2023. The following table summarizes RSUs for the Plan: Number of shares Unvested balance at January 1, 2023 311,991 Granted 573,318 Vested (97,809) Canceled/forfeited (6,489) Outstanding at June 30, 2023 781,011 Included in outstanding RSUs at June 30, 2023, were 44,600 RSUs granted outside of the Plan. These grants were made pursuant to the Nasdaq inducement grant exception in accordance with Nasdaq listing rule 5635(c)(4). The aggregate intrinsic value of RSUs outstanding was $7.9 million at June 30, 2023. The total unrecognized compensation expense at June 30, 2023 related to RSUs was $5.1 million, which is expected to be recognized in expense over a weighted-average period of approximately 3.2 years. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Summary of Significant Accounting Policies | |
Interim Financial Statements | Interim Financial Statements The accompanying unaudited interim consolidated financial statements have been prepared from the books and records of the Company in accordance with GAAP for interim financial information and Rule 10-01 of Regulation S-X promulgated by the Securities and Exchange Commission (“SEC”), which permits reduced disclosures for interim periods. All adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the accompanying consolidated balance sheets and statements of operations and comprehensive loss, stockholders’ equity and cash flows have been made. Although these interim consolidated financial statements do not include all of the information and footnotes required for complete annual consolidated financial statements, management believes the disclosures are adequate to make the information presented not misleading. The unaudited interim results of operations and cash flows are not necessarily indicative of the results that may be expected for the full year. The unaudited interim consolidated financial statements and footnotes should be read in conjunction with the consolidated financial statements and footnotes included in the Annual Report on Form 10-K for the year ended December 31, 2022. |
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 the 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. |
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 customers or from consigned inventory maintained at hospitals or other surgical facilities. 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 customer 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 enters into 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 and records these rebates 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 these 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 by our portfolio of products (in thousands): Three months ended June 30, Six months ended June 30, 2023 2022 2023 2022 OviTex $ 10,058 $ 7,028 $ 18,081 $ 12,689 OviTex PRS 4,390 3,353 8,251 5,901 Other 46 25 71 47 Total revenue $ 14,494 $ 10,406 $ 26,403 $ 18,637 Sales outside of the U.S. were $1.5 million and $2.5 million for the three and six months ended June 30, 2023, respectively, and immaterial for the three and six months ended June 30, 2022. |
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, other assets, and accounts payable are shown at cost, which approximates fair value due to the short-term nature of these instruments. The carrying amounts of the Company’s current Credit and Security Agreement approximated its fair value due to its variable interest rate. The Company follows the provisions of FASB 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 (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) June 30, 2023: Cash equivalents – money market fund $ 61,635 $ — $ — December 31, 2022: Cash equivalents – money market fund $ 39,010 $ — $ — |
Net loss per share | Net loss per common share Basic and diluted net loss per common share is determined by dividing net loss by the weighted-average shares of common stock outstanding during the reporting period. In periods in which the Company reports a net loss, diluted net loss per share is the same as basic net loss per share 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 net loss per share are the same. The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares outstanding for the periods presented, as they would be antidilutive. Three and Six months ended June 30, 2023 2022 Stock options (including shares subject to repurchase) 2,218,832 1,959,437 Unvested restricted stock units 781,011 309,767 Common stock warrants 88,556 88,556 Total 3,088,399 2,357,760 |
Recently Issued Accounting Pronouncements | 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 June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments In August 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity (“ . in an entity’s own equity that are currently accounted for as derivatives because of specific settlement provisions. The new guidance also modifies how particular convertible instruments and certain contracts that may be settled in cash or shares impact the diluted EPS computation. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those annual periods. The adoption of this guidance is not expected to have a significant impact on the consolidated financial statements and related disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Summary of Significant Accounting Policies | |
Disaggregation of Revenue | The following table presents revenue disaggregated by our portfolio of products (in thousands): Three months ended June 30, Six months ended June 30, 2023 2022 2023 2022 OviTex $ 10,058 $ 7,028 $ 18,081 $ 12,689 OviTex PRS 4,390 3,353 8,251 5,901 Other 46 25 71 47 Total revenue $ 14,494 $ 10,406 $ 26,403 $ 18,637 |
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 (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) June 30, 2023: Cash equivalents – money market fund $ 61,635 $ — $ — December 31, 2022: Cash equivalents – money market fund $ 39,010 $ — $ — |
Schedule of dilutive securities excluded | Three and Six months ended June 30, 2023 2022 Stock options (including shares subject to repurchase) 2,218,832 1,959,437 Unvested restricted stock units 781,011 309,767 Common stock warrants 88,556 88,556 Total 3,088,399 2,357,760 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Leases | |
Schedule of future minimum lease payments under non-cancelable operating lease agreement | The following table reconciles the undiscounted future minimum lease payments (displayed in aggregate by year) under non-cancelable operating leases with terms of more than one year to the total operating lease liabilities recognized on the consolidated balance sheets as of June 30, 2023 (in thousands): Remainder of 2023 $ 181 2024 366 2025 375 2026 383 2027 392 Thereafter 164 Total undiscounted future minimum lease payments $ 1,861 Less imputed interest (394) Total operating lease liabilities $ 1,467 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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): June 30, December 31, 2023 2022 Compensation and related benefits $ 6,235 $ 6,420 Third-party and professional fees 2,220 2,563 Amounts due to contract manufacturer 1,629 1,263 Current portion of operating lease liabilities 343 340 Research and development expenses 115 137 Other 253 146 Total accrued expenses and other current liabilities $ 10,795 $ 10,869 |
Long term Debt (Tables)
Long term Debt (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Long term Debt | |
Schedule of long term debt | Long-term debt consisted of the following (in thousands): June 30, December 31, 2023 2022 MidCap Term Loan $ 40,000 $ 40,000 End of term charge 2,000 2,000 Unamortized end of term charge and issuance costs (1,788) (2,084) Long-term debt $ 40,212 $ 39,916 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Stockholders' Equity | |
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) | 6 Months Ended |
Jun. 30, 2023 | |
Stock-Based Compensation | |
Schedule of stock based compensation expense categories in statement of operations | Three months ended June 30, Six months ended June 30, 2023 2022 2023 2022 Sales and marketing $ 467 $ 340 $ 868 $ 647 General and administrative 637 535 1,191 999 Research and development 190 147 363 277 Total stock‑based compensation $ 1,294 $ 1,022 $ 2,422 $ 1,923 |
Schedule of stock option activity | Weighted average Weighted remaining Number of average exercise contractual term shares price per share (years) Outstanding at January 1, 2023 2,071,848 $ 11.49 Granted 212,960 10.50 Exercised (19,429) 5.17 Canceled/forfeited (46,547) 11.03 Outstanding at June 30, 2023 2,218,832 $ 11.46 6.97 Vested and expected to vest at June 30, 2023 2,170,777 $ 11.46 6.93 Exercisable at June 30, 2023 1,456,572 $ 11.36 6.08 |
Schedule of weighted average assumptions | Six months ended June 30, 2023 Expected dividend yield — Expected volatility 74.3 % Risk‑free interest rate 3.99 % Expected term (in years) 6.15 |
Schedule of restricted stock units (RSUs) | Number of shares Unvested balance at January 1, 2023 311,991 Granted 573,318 Vested (97,809) Canceled/forfeited (6,489) Outstanding at June 30, 2023 781,011 |
Risks and Liquidity (Details)
Risks and Liquidity (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||||
May 05, 2023 | Apr. 21, 2023 | Apr. 30, 2023 | Aug. 31, 2022 | May 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Dec. 31, 2022 | Apr. 21, 2022 | |
Unusual Risk or Uncertainty [Line Items] | ||||||||||
Accumulated deficit | $ (297,042) | $ (297,042) | $ (274,225) | |||||||
Received net proceeds of after deducting underwriting discounts, commissions and other offering expenses | $ 46,354 | |||||||||
Underwritten public offering | ||||||||||
Unusual Risk or Uncertainty [Line Items] | ||||||||||
Common stock issued and sold (in shares) | 5,219,190 | 5,219,190 | 4,600,000 | |||||||
Offering price (in dollar per share) | $ 9.50 | $ 8 | $ 9.50 | |||||||
Received net proceeds of after deducting underwriting discounts, commissions and other offering expenses | $ 34,400 | $ 46,300 | $ 46,300 | |||||||
Over-Allotment Option | ||||||||||
Unusual Risk or Uncertainty [Line Items] | ||||||||||
Common stock issued and sold (in shares) | 469,190 | 469,190 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Revenue Disaggregated (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 14,494 | $ 10,406 | $ 26,403 | $ 18,637 |
Incremental costs of obtaining a contract | 0 | |||
Non-US [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,500 | 2,500 | ||
OviTex | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 10,058 | 7,028 | 18,081 | 12,689 |
OviTex PRS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 4,390 | 3,353 | 8,251 | 5,901 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 46 | $ 25 | $ 71 | $ 47 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Fair value of financial instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Recurring | Level 1 | Money market funds | ||
Fair value of financial instruments | ||
Cash equivalents | $ 61,635 | $ 39,010 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Net loss per share (Potentially dilutive securities) (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Potentially dilutive securities | ||||
Potentially dilutive securities excluded from computation of diluted weighted average shares | 3,088,399 | 2,357,760 | 3,088,399 | 2,357,760 |
Stock Options | ||||
Potentially dilutive securities | ||||
Potentially dilutive securities excluded from computation of diluted weighted average shares | 2,218,832 | 1,959,437 | 2,218,832 | 1,959,437 |
Restricted stock units | ||||
Potentially dilutive securities | ||||
Potentially dilutive securities excluded from computation of diluted weighted average shares | 781,011 | 309,767 | 781,011 | 309,767 |
Common Stock Warrants | ||||
Potentially dilutive securities | ||||
Potentially dilutive securities excluded from computation of diluted weighted average shares | 88,556 | 88,556 | 88,556 | 88,556 |
Leases - Narratives (Details)
Leases - Narratives (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Dec. 31, 2020 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Jan. 01, 2022 | |
Lessee, Lease, Description [Line Items] | |||||||
Lease liability | $ 1,467 | $ 1,467 | |||||
Right-of-use assets | 1,145 | 1,145 | $ 1,227 | ||||
Operating lease cost | 100 | $ 100 | 200 | $ 200 | |||
Operating lease payments made | 100 | $ 100 | 200 | $ 200 | |||
Operating Lease, Liability, Current | $ 343 | $ 343 | $ 340 | ||||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued Liabilities, Current | Accrued Liabilities, Current | |||||
Operating Lease, Liability, Noncurrent | $ 1,100 | $ 1,100 | |||||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Noncurrent | Other Liabilities, Noncurrent | |||||
Office and laboratory space | Pennsylvania | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Lessee, Operating Lease, Existence of Option to Extend [true false] | true | ||||||
Renewal term of operating lease | 60 months | ||||||
Incremental borrowing rate | 9.75% | ||||||
Remaining lease term | 5 years | 5 years |
Leases - Future minimum lease p
Leases - Future minimum lease payments (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Undiscounted future minimum lease payments under non-cancelable leases | |
Remainder of 2023 | $ 181 |
2024 | 366 |
2025 | 375 |
2026 | 383 |
2027 | 392 |
Thereafter | 164 |
Total undiscounted future minimum lease payments | 1,861 |
Less imputed interest | (394) |
Total operating lease liabilities | $ 1,467 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Accrued Expenses and Other Current Liabilities | ||
Compensation and related benefits | $ 6,235 | $ 6,420 |
Third-party and professional fees | 2,220 | 2,563 |
Amounts due to contract manufacturer | 1,629 | 1,263 |
Current portion of operating lease liabilities | 343 | 340 |
Research and development expenses | 115 | 137 |
Other | 253 | 146 |
Total accrued expenses and other current liabilities | $ 10,795 | $ 10,869 |
Long term Debt - Schedule of lo
Long term Debt - Schedule of long term debt (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | May 26, 2022 |
Long term Debt | ||||
End of term charge | $ 2,000 | $ 2,000 | ||
Unamortized end of term charge and issuance costs | (1,788) | (2,084) | ||
Longterm debt | 40,212 | 39,916 | ||
MidCap Term Loan | ||||
Long term Debt | ||||
Long Term Debt | $ 40,000 | $ 40,000 | $ 50,000 | |
OrbiMed Term Loans (related party) | ||||
Long term Debt | ||||
End of term charge | $ 3,000 |
Long term Debt - MidCap Term Lo
Long term Debt - MidCap Term Loan (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
May 26, 2022 | Jun. 30, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
MidCap Term Loan | |||||
Long term Debt | |||||
Debt amount | $ 50,000 | $ 40,000 | $ 40,000 | $ 40,000 | |
Eligibility Requirement To Borrow Tranche 2 | 65,000 | ||||
Interest due to unpaid obligation | 2% | ||||
Interest Rate (as a percent) | 6.25% | 6.25% | |||
Number of Installment | 36 months | ||||
Exit fee (as a percent) | 5% | ||||
Interest expenses | $ 1,300 | $ 2,500 | $ 300 | ||
Amortization of debt issuance costs | $ 200 | $ 300 | $ 100 | ||
MidCap Term Loan | Maximum | |||||
Long term Debt | |||||
Extension for interest only payment period | 48 months | ||||
MidCap Term Loan | Minimum | |||||
Long term Debt | |||||
Extension for interest only payment period | 12 months | ||||
MidCap Term Loan | First year | |||||
Long term Debt | |||||
Percentage of prepayment penalty on prepaid principal amount | 3% | ||||
MidCap Term Loan | Second year | |||||
Long term Debt | |||||
Percentage of prepayment penalty on prepaid principal amount | 2% | ||||
MidCap Term Loan | Third year | |||||
Long term Debt | |||||
Percentage of prepayment penalty on prepaid principal amount | 1% | ||||
MidCap Term Loan | SOFR | |||||
Long term Debt | |||||
Variable Interest Rate (as a percent) | 1% | ||||
Tranche One | |||||
Long term Debt | |||||
Debt amount | 40,000 | ||||
Tranche Two | |||||
Long term Debt | |||||
Debt amount | $ 10,000 |
Long term Debt - OrbiMed Term L
Long term Debt - OrbiMed Term Loan (related party) (Details) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) tranche | |
Long term Debt | ||
Loss on extinguishment of debt | $ (1,228) | $ (1,228) |
OrbiMed Term Loans (related party) | ||
Long term Debt | ||
Number of Tranches | tranche | 2 | |
Interest Rate (as a percent) | 7.75% | 7.75% |
Variable Interest Rate (as a percent) | 2% | |
Loss on extinguishment of debt | $ 1,200 | |
Interest expenses | 600 | $ 1,500 |
Amortization of debt issuance costs | 100 | 300 |
OrbiMed Term Loans (related party) | Maximum | ||
Long term Debt | ||
Debt amount | 35,000 | 35,000 |
OrbiMed Term Loans - Tranche One | ||
Long term Debt | ||
Debt amount | 30,000 | 30,000 |
OrbiMed Term Loans - Tranche Two | ||
Long term Debt | ||
Debt amount | $ 5,000 | $ 5,000 |
Stockholders' Equity - Public S
Stockholders' Equity - Public Stock Offerings (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||||
May 05, 2023 | Apr. 21, 2023 | Apr. 30, 2023 | Aug. 31, 2022 | May 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Apr. 21, 2022 | Dec. 31, 2020 | |
Stockholders' Equity | ||||||||||
Received net proceeds of after deducting underwriting discounts, commissions and other offering expenses | $ 46,354 | |||||||||
Over-Allotment Option | ||||||||||
Stockholders' Equity | ||||||||||
Common stock issued and sold (in shares) | 469,190 | 469,190 | ||||||||
Underwritten public offering | ||||||||||
Stockholders' Equity | ||||||||||
Common stock issued and sold (in shares) | 5,219,190 | 5,219,190 | 4,600,000 | |||||||
Offering price (in dollar per share) | $ 9.50 | $ 8 | $ 9.50 | |||||||
Received net proceeds of after deducting underwriting discounts, commissions and other offering expenses | $ 34,400 | $ 46,300 | $ 46,300 | |||||||
Equity Distribution Agreement | ||||||||||
Stockholders' Equity | ||||||||||
Value Of Shares Authorized To Be Sold Under Equity Distribution Agreement | $ 0 | $ 0 | $ 50,000 |
Stockholders' Equity - Warrants
Stockholders' Equity - Warrants outstanding (Details) | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Stockholders' Equity | |
Warrants outstanding | 88,556 |
Common stock warrants expiring in 2028 | |
Stockholders' Equity | |
Warrants outstanding | 8,379 |
Warrants exercise price | $ / shares | $ 28.65 |
Expiration dates | 2028 |
Common stock warrants expiring in 2027 | |
Stockholders' Equity | |
Warrants outstanding | 80,177 |
Warrants exercise price | $ / shares | $ 28.65 |
Expiration dates | 2027 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narratives (Details) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2023 USD ($) item shares | Jun. 30, 2023 USD ($) item $ / shares shares | |
Stock-Based Compensation | ||
Number of equity incentive plans | item | 2 | 2 |
Aggregate intrinsic value of exercised options | $ | $ 35,000 | $ 100,000 |
Stock Options | ||
Stock-Based Compensation | ||
Weighted average grant date fair value, Options (per share) | $ / shares | $ 7.19 | |
Inducement grants | 366,369 | 366,369 |
Aggregate intrinsic value of outstanding options | $ | $ 2,000,000 | $ 2,000,000 |
Aggregate intrinsic value of exercisable options | $ | 2,000,000 | 2,000,000 |
Unrecognized compensation expense | $ | $ 5,000,000 | $ 5,000,000 |
Weighted average period for recognition of unrecognized expenses | 2 years 4 months 24 days | |
Restricted stock units | ||
Stock-Based Compensation | ||
Granted | 573,318 | |
Performance based restricted stock units | ||
Stock-Based Compensation | ||
Weighted average grant date fair value, Equity Instruments (per share) | $ / shares | $ 11.09 | |
Granted | 225,208 | |
Performance based restricted stock units | Minimum | ||
Stock-Based Compensation | ||
Vest Range | 0% | |
Performance based restricted stock units | Maximum | ||
Stock-Based Compensation | ||
Vest Range | 110% | |
Service based restricted stock unit | ||
Stock-Based Compensation | ||
Vesting period | 4 years | |
Weighted average grant date fair value, Equity Instruments (per share) | $ / shares | $ 10.65 | |
Inducement grants | 44,600 | 44,600 |
Aggregate intrinsic value | $ | $ 7,900,000 | $ 7,900,000 |
Unrecognized compensation expense | $ | $ 5,100,000 | $ 5,100,000 |
Weighted average period for recognition of unrecognized expenses | 3 years 2 months 12 days | |
Granted | 348,110 | |
2019 Equity Incentive Plan | ||
Stock-Based Compensation | ||
Shares available for future issuance | 718,453 | 718,453 |
Common Stock Capital Shares Reserved For Future Annual Issuance | 432,442 | 432,442 |
Potential Common Shares Added Annually To Equity Plan Evergreen Option, Percentage Of Shares Outstanding Last Day Of Fiscal Year | 4% | 4% |
2019 Equity Incentive Plan | Stock Options | ||
Stock-Based Compensation | ||
Vesting period | 4 years | |
Contractual term | 10 years |
Stock-Based Compensation - Expe
Stock-Based Compensation - Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Stock-Based Compensation | ||||
Total stock-based compensation | $ 1,294 | $ 1,022 | $ 2,422 | $ 1,923 |
Sales and marketing | ||||
Stock-Based Compensation | ||||
Total stock-based compensation | 467 | 340 | 868 | 647 |
General and administrative | ||||
Stock-Based Compensation | ||||
Total stock-based compensation | 637 | 535 | 1,191 | 999 |
Research and development | ||||
Stock-Based Compensation | ||||
Total stock-based compensation | $ 190 | $ 147 | $ 363 | $ 277 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) - $ / shares | 6 Months Ended |
Jun. 30, 2023 | |
Number of shares | |
Balance at beginning of period | 2,071,848 |
Granted | 212,960 |
Exercised | (19,429) |
Canceled/forfeited | (46,547) |
Balance at end of period | 2,218,832 |
Vested and expected to vest at end of period | 2,170,777 |
Exercisable at end of period | 1,456,572 |
Weighted average exercise price per share | |
Balance at beginning of period (in dollars per share) | $ 11.49 |
Granted ( in dollars per share) | 10.50 |
Exercised (in dollars per share) | 5.17 |
Canceled/forfeited (in dollars per share) | 11.03 |
Balance at end of period (in dollars per share) | 11.46 |
Vested and expected to vest at end of period (in dollars per share) | 11.46 |
Exercisable at end of period (in dollars per share) | $ 11.36 |
Weighted average remaining contractual term (years) | |
Weighted average remaining contractual term, outstanding | 6 years 11 months 19 days |
Weighted average remaining contractual term, Vested and expected to vest | 6 years 11 months 4 days |
Weighted average remaining contractual term, Exercisable | 6 years 29 days |
Stock-Based Compensation - Weig
Stock-Based Compensation - Weighted average assumptions (Details) | 6 Months Ended |
Jun. 30, 2023 | |
Stock-Based Compensation | |
Expected volatility | 74.30% |
Risk-free interest rate | 3.99% |
Expected term (in years) | 6 years 1 month 24 days |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Units (Details) - Restricted stock units | 6 Months Ended |
Jun. 30, 2023 shares | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |
Outstanding at beginning of period | 311,991 |
Granted | 573,318 |
Vested | (97,809) |
Canceled/forfeited | (6,489) |
Outstanding at end of period | 781,011 |