Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2024 | May 08, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-38593 | |
Entity Registrant Name | Establishment Labs Holdings Inc. | |
Entity Incorporation, State or Country Code | D8 | |
Entity Tax Identification Number | 98-1436377 | |
Entity Address, Address Line One | Building B15 and 25 | |
Entity Address, Address Line Two | Coyol Free Zone | |
Entity Address, City or Town | Alajuela | |
Entity Address, Country | CR | |
Country Region | 506 | |
City Area Code | 24 | |
Local Phone Number | 34 2400 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Shares, No Par Value | |
Trading Symbol | ESTA | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 27,514,756 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Entity Central Index Key | 0001688757 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash | $ 72,980 | $ 40,035 |
Accounts receivable, net of allowance for credit losses of $2,014 and $1,841 | 50,838 | 46,918 |
Inventory, net | 72,489 | 79,471 |
Prepaid expenses and other current assets | 7,388 | 8,477 |
Total current assets | 203,695 | 174,901 |
Long-term assets: | ||
Property and equipment, net of accumulated depreciation | 79,244 | 77,205 |
Goodwill | 465 | 465 |
Intangible assets, net of accumulated amortization | 9,515 | 7,987 |
Right-of-use operating lease assets, net | 3,908 | 3,381 |
Other non-current assets | 5,011 | 4,702 |
Total assets | 301,838 | 268,641 |
Current liabilities: | ||
Accounts payable | 31,070 | 41,624 |
Accrued liabilities | 15,207 | 13,690 |
Other liabilities, short-term | 1,739 | 1,836 |
Total current liabilities | 48,016 | 57,150 |
Long-term liabilities: | ||
Note payable, net of debt discount and issuance costs | 192,186 | 188,739 |
Operating lease liabilities, non-current | 3,180 | 2,712 |
Other liabilities, long-term | 1,545 | 1,645 |
Total liabilities | 244,927 | 250,246 |
Commitments and contingencies (Note 13) | ||
Shareholders’ equity: | ||
Common shares — zero par value, unlimited amount authorized; $27,884,749 and $26,495,250 shares issued at March 31, 2024 and December 31, 2023, respectively; $27,476,679 and $26,087,180 shares outstanding at March 31, 2024 and December 31, 2023, respectively | 367,138 | 315,634 |
Additional paid-in-capital | 66,841 | 63,748 |
Treasury shares, at cost, 408,070 shares held at March 31, 2024 and December 31, 2023 | (2,854) | (2,854) |
Accumulated deficit | (376,298) | (360,096) |
Accumulated other comprehensive income | 2,084 | 1,963 |
Total shareholders’ equity | 56,911 | 18,395 |
Total liabilities and shareholders’ equity | $ 301,838 | $ 268,641 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Allowance for credit losses | $ 2,014 | $ 1,841 |
Common stock, shares issued (in shares) | 27,884,749 | 26,495,250 |
Common stock, shares outstanding (in shares) | 27,476,679 | 26,087,180 |
Treasury stock, shares held (in shares) | 408,070 | 408,070 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement [Abstract] | ||
Revenue | $ 37,167 | $ 46,524 |
Cost of revenue | 12,787 | 16,445 |
Gross profit | 24,380 | 30,079 |
Operating expenses: | ||
Sales, general and administrative | 28,941 | 31,706 |
Research and development | 4,273 | 6,533 |
Total operating expenses | 33,214 | 38,239 |
Loss from operations | (8,834) | (8,160) |
Interest income | 488 | 75 |
Interest expense | (4,381) | (3,756) |
Other income (expense), net | (3,037) | 729 |
Loss before income taxes | (15,764) | (11,112) |
Provision for income taxes | (438) | (830) |
Net loss | $ (16,202) | $ (11,942) |
Basic net loss per share (in dollars per share) | $ (0.58) | $ (0.48) |
Diluted net loss per share (in dollars per share) | $ (0.58) | $ (0.48) |
Weighted average outstanding shares used for basic net loss per share (in shares) | 27,788,120 | 24,678,113 |
Weighted average outstanding shares used for diluted net loss per share (in shares) | 27,788,120 | 24,678,113 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (16,202) | $ (11,942) |
Other comprehensive income (loss): | ||
Foreign currency translation gain (loss) | 121 | (402) |
Other comprehensive income (loss) | 121 | (402) |
Comprehensive loss | $ (16,081) | $ (12,344) |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Shareholders’ Equity - USD ($) $ in Thousands | Total | Common Shares | Treasury Shares | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
Beginning balance (in shares) at Dec. 31, 2022 | 24,815,908 | |||||
Beginning balance at Dec. 31, 2022 | $ (8,185) | $ 223,637 | $ (2,854) | $ 49,911 | $ (281,594) | $ 2,715 |
Beginning balance, treasury stock (in shares) at Dec. 31, 2022 | (408,070) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock option exercises (in shares) | 52,148 | |||||
Stock option exercises | 1,271 | $ 1,271 | ||||
Share-based compensation (in shares) | 2,648 | |||||
Share-based compensation | 3,324 | $ 3 | 3,321 | |||
Shares withheld to cover income tax obligation upon vesting of restricted stock (in shares) | (941) | |||||
Shares withheld to cover income tax obligation upon vesting of restricted stock | (62) | $ (1) | (61) | |||
Foreign currency translation gain (loss) | (402) | (402) | ||||
Net loss | (11,942) | (11,942) | ||||
Ending balance (in shares) at Mar. 31, 2023 | 24,869,763 | |||||
Ending balance at Mar. 31, 2023 | $ (15,996) | $ 224,910 | $ (2,854) | 53,171 | (293,536) | 2,313 |
Ending balance, treasury stock (in shares) at Mar. 31, 2023 | (408,070) | |||||
Beginning balance (in shares) at Dec. 31, 2023 | 26,087,180 | 26,495,250 | ||||
Beginning balance at Dec. 31, 2023 | $ 18,395 | $ 315,634 | $ (2,854) | 63,748 | (360,096) | 1,963 |
Beginning balance, treasury stock (in shares) at Dec. 31, 2023 | (408,070) | (408,070) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock, net of underwriters discount and issuance costs (in shares) | 1,101,565 | |||||
Issuance of common shares, net of underwriters’ discount and issuance costs | $ 49,736 | $ 49,736 | ||||
Issuance of common stock in lieu of cash compensation (in shares) | 2,158 | |||||
Issuance of common shares in lieu of cash compensation | $ 110 | $ 110 | ||||
Stock option exercises (in shares) | 53,400 | 53,400 | ||||
Stock option exercises | $ 1,426 | $ 1,426 | ||||
Warrant exercises (in shares) | 223,019 | |||||
Warrant exercises | 0 | $ 223 | (223) | |||
Share-based compensation (in shares) | 11,979 | |||||
Share-based compensation | 3,444 | $ 12 | 3,432 | |||
Shares withheld to cover income tax obligation upon vesting of restricted stock (in shares) | (2,622) | |||||
Shares withheld to cover income tax obligation upon vesting of restricted stock | (119) | $ (3) | (116) | |||
Foreign currency translation gain (loss) | 121 | 121 | ||||
Net loss | $ (16,202) | (16,202) | ||||
Ending balance (in shares) at Mar. 31, 2024 | 27,476,679 | 27,884,749 | ||||
Ending balance at Mar. 31, 2024 | $ 56,911 | $ 367,138 | $ (2,854) | $ 66,841 | $ (376,298) | $ 2,084 |
Ending balance, treasury stock (in shares) at Mar. 31, 2024 | (408,070) | (408,070) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash flows from operating activities: | ||
Net loss | $ (16,202) | $ (11,942) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,268 | 936 |
Provision for credit losses | 275 | 282 |
Provision for inventory obsolescence | 562 | (387) |
Share-based compensation | 3,444 | 3,324 |
Loss from disposal of property and equipment | 6 | 288 |
Unrealized foreign currency (gain)/ loss, net | 2,039 | (1,709) |
Amortization of right-to-use asset | 145 | 177 |
Change in reserve for PP&E impairment | 0 | (341) |
Stock compensation in lieu of cash fees | 110 | 0 |
Interest capitalized for construction in progress | (537) | (797) |
Non-cash interest expense and amortization of debt discount | 3,447 | 3,187 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (4,608) | (5,356) |
Inventory | 5,001 | (8,494) |
Prepaid expenses and other current assets | 1,790 | (246) |
Other assets | (323) | (137) |
Accounts payable | (10,097) | (1,482) |
Accrued liabilities | 2,846 | 2,236 |
Operating lease liabilities | (142) | (175) |
Other liabilities | (176) | 22 |
Net cash used in operating activities | (11,152) | (20,614) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (3,312) | (432) |
Cost incurred for intangible assets | (1,879) | (49) |
Capital expenditures on construction in progress | (1,435) | (3,797) |
Net cash used in investing activities | (6,626) | (4,278) |
Cash flows from financing activities: | ||
Issuance of common stock, net of underwriters’ discount and issuance costs | 49,736 | 0 |
Repayments on finance leases | 0 | (26) |
Proceeds from stock option exercises | 1,426 | 1,271 |
Tax payments related to shares withheld upon vesting of restricted stock | (119) | (62) |
Net cash provided by financing activities | 51,043 | 1,183 |
Effect of exchange rate changes on cash and cash equivalents | (320) | 201 |
Net increase (decrease) in cash and cash equivalents | 32,945 | (23,508) |
Cash and cash equivalents at beginning of period | 40,035 | 66,355 |
Cash and cash equivalents at end of period | 72,980 | 42,847 |
Supplemental disclosures: | ||
Cash paid for interest | 1,466 | 1,360 |
Cash paid for income taxes | 676 | 218 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Unpaid balance for property and equipment | 1,309 | 1,514 |
Unpaid balance for intangible assets | $ 2,936 | $ 0 |
Formation and Business of the C
Formation and Business of the Company | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Formation and Business of the Company | Formation and Business of the Company Establishment Labs Holdings Inc., with its wholly owned subsidiaries, or the Company, is a global company that manufactures and markets innovative medical devices for aesthetic and reconstructive plastic surgery. The Company was established in the British Virgin Islands on October 9, 2013, at which time Establishment Labs, S.A., the Costa Rican manufacturing company, was reincorporated as a wholly-owned subsidiary. As of March 31, 2024, the Company also has wholly-owned subsidiaries in the United States (JAMM Technologies, Inc. and Motiva USA LLC), Brazil (Establishment Labs Produtos para Saude Ltda), Belgium (European Distribution Center Motiva BV), France (Motiva Implants France SAS), Sweden (Motiva Nordica AB), Switzerland (JEN-Vault AG), the United Kingdom (Motiva Implants UK Limited), Italy (Motiva Italy S.R.L), Spain (Motiva Implants Spain, S.L.), Austria (Motiva Austria GmbH), Germany (Motiva Germany GmbH) and Argentina (Motiva Argentina S.R.L). Substantially all of the Company’s revenues are derived from the sale of silicone gel-filled breast implants, branded as Motiva Implants. The main manufacturing activities are conducted at two manufacturing facilities in Costa Rica. The Company is in the process of finishing the construction for a third facility in Costa Rica. In 2010, the Company began operating under the Costa Rica free zone regime (Régimen de Zona Franca), which provides for reduced income tax and other tax obligations pursuant to an agreement with the Costa Rican authorities. The Company’s products are approved for sale in Europe, the Middle East, Latin America, and Asia, and the Company’s Motiva Flora SmoothSilk Tissue Expander is also approved for sale in the United States. The Company sells its products internationally through a combination of distributors and direct sales to customers. The Company is pursuing regulatory approval to commercialize its implants in the United States. The Company received approval for an investigational device exemption, or IDE, from the U.S. Food and Drug Administration, or FDA, in March 2018 to initiate a clinical trial in the United States for its Motiva Implants. In August 2019, the Company completed all patient surgeries for the IDE aesthetic cohorts, which include primary augmentation and revision. In 2021, the Company initiated a modular pre-market approval, or PMA, submission process with the FDA and submitted the first of four modules. In June 2022, full enrollment of the IDE clinical trial was complete, and all surgeries in the primary reconstruction cohort were performed. In August 2022, the third module was submitted to the FDA. By June 30, 2022, the Company completed the three-year study subject follow-up for the aesthetic cohort. The final fourth module was submitted to the FDA in February 2023. The Company presented three-year patient follow-up data for the primary augmentation cohort of the IDE clinical trial at The Aesthetic Meeting in April 2023. In October 2023, the FDA granted 510(k) clearance for the Motiva Flora SmoothSilk Tissue Expander. In January 2024, the Company announced completion of the first commercial procedure of the Motiva Flora SmoothSilk Tissue Expander in the United States and the commercial launch of Motiva Implants in China. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies There have been no material changes to the Company’s significant accounting policies during the three months ended March 31, 2024 as compared to the significant accounting policies described in Note 2 of the “Notes to Consolidated Financial Statements” in the Company’s audited consolidated financial statements as of December 31, 2023 and 2022 and for the years ended 2023, 2022 and 2021 presented in the Company’s Form 10-K filed with the Securities and Exchange Commission, or SEC, on March 4, 2024. Below are those policies with current period updates. Basis of Presentation and Consolidation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, and the applicable rules and regulations of the Securities and Exchange Commission, or SEC, for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The accompanying condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the years ended December 31, 2023, 2022 and 2021 presented in the Company’s Form 10-K filed with the SEC on March 4, 2024. The condensed consolidated financial statements include the Company’s accounts and those of its wholly owned subsidiaries as of March 31, 2024 as follows: Subsidiary Incorporation/Acquisition Date Establishment Labs, S.A. (Costa Rica) January 18, 2004 Motiva USA, LLC (USA) February 20, 2014 JAMM Technologies, Inc. (USA) October 27, 2015 Establishment Labs Produtos par Saude Ltda (Brazil) January 4, 2016 European Distribution Center Motiva BV (Belgium) March 4, 2016 Motiva Implants France SAS (France) September 12, 2016 JEN-Vault AG (Switzerland) November 22, 2016 Motiva Nordica AB (Sweden) November 2, 2017 Motiva Implants UK Limited (the United Kingdom) July 31, 2018 Motiva Italy S.R.L (Italy) July 31, 2018 Motiva Implants Spain, S.L. (Spain) January 3, 2019 Motiva Austria GmbH (Austria) January 14, 2019 Motiva Germany GmbH (Germany) August 1, 2019 Motiva Argentina S.R.L (Argentina) February 7, 2020 All intercompany accounts and transactions have been eliminated in consolidation. Unaudited Interim Condensed Consolidated Financial Information The accompanying interim condensed consolidated financial statements as of March 31, 2024 and for the three months ended March 31, 2024 and 2023, and the related interim information contained within the notes to the condensed consolidated financial statements, are unaudited. The unaudited interim condensed consolidated financial statements have been prepared in accordance with GAAP and on the same basis as the audited consolidated financial statements. In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments which are necessary to state fairly the Company’s financial position as of March 31, 2024, and the results of its operations and cash flows for the three months ended March 31, 2024 and 2023. Such adjustments are of a normal and recurring nature. The results for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the full fiscal year 2024, or for any future period. Segments The chief operating decision maker for the Company is the Chie f Executive Officer. The Chief Executive Officer reviews financial information presented on a consolidated basis, accompanied by information about revenue by geographic region, for purposes of allocating resources and evaluating financial performance. The Company has one business activity and there are no segment managers who are held accountable for operations, operating results or plans for levels or components below the consolidated unit level. Accordingly, the Company has determined that it has a single reportable and operating segment structure. The Company and its Chief Executive Officer evaluate performance based primarily on revenue in the geographic regions in which the Company operates. Geographic Concentrations The Company derives substantially all its revenues from sales to customers in Europe, the Middle East, Latin America, and Asia, and other than the Motiva Flora SmoothSilk Tissue Expander, has not yet received approval to sell its products in the United States. For the three months ended March 31, 2024 and 2023, Brazil accounted for 10.5% and 12.8%, respectively, of consolidated revenue and no other individual country exceeded 10% of consolidated revenue, on a ship-to destination basis. The majority of the Company’s consolidated total assets, including cash and tangible assets, is held in the United States. The Company’s long-lived assets, which primarily consist of property and equipment and intangible assets located in Costa Rica, represented 84% and 80% of the total long-lived assets as of March 31, 2024 and December 31, 2023 , respectively. Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Significant accounting estimates and management judgments reflected in the condensed consolidated financial statements include items such as accounts receivable valuation and allowances, inventory valuation and allowances, valuation of acquired intangible assets, and valuation of deferred income tax assets, including tax valuation allowances. Estimates are based on historical experience, where applicable, and other assumptions believed to be reasonable by management. Actual results may differ from those estimates under different assumptions or conditions. Concentration of Credit Risk and Other Risks and Uncertainties Financial instruments that potentially subject the Company to a concentration of credit risk consist principally of cash and accounts receivable. The majority of the Company’s cash is held at two financial institutions in the United States. Balances in the Company’s cash accounts exceed the Federal Deposit Insurance Corporation, or FDIC, limit of $250,000. The Company has not experienced any losses to its deposits of cash. Substantially all of the Company’s revenue has been derived from sales of its products in international markets, principally Europe, the Middle East, Latin America, and Asia. In the international markets in which the Company operates, the Company uses a combination of distributors and direct sales to customers. The Company performs ongoing credit evaluations of its distributors and customers, does not require collateral, and maintains allowances for potential credit losses on customer accounts when deemed necessary. Substantially all of the Company’s revenues were derived from the sale of Motiva Implants. During the three months ended March 31, 2024, no customer accounted for more than 10% of the Company’s revenue. During the three months ended March 31, 2023, one customer accounted for more than 10% of the Company’s revenue. Two customers accounted for 12.5% and 10.7% of the Company’s trade accounts receivable balance as of March 31, 2024. Two customers accounted for 12.7% and 11.6% of the Company’s trade accounts receivable balance as of December 31, 2023. The Company relies on Avantor, Inc. (formerly NuSil Technology, LLC), or Avantor, as the sole supplier of medical-grade silicone used in Motiva Implants. During the three months ended March 31, 2024 and 2023, the Company had purchases of $4.9 million, or 54.0% of total purchases, and $13.2 million, or 55.1% of total purchases, respectively, from Avantor. As of March 31, 2024 and December 31, 2023 , the Company had an outstanding balance owed to this vendor of $4.1 million and $5.3 million, respectively. The Company’s financial condition and future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, unfavorable economic conditions, uncertainty of regulatory approval of the Company’s current and potential future products, uncertainty of market acceptance of the Company’s products, competition from substitute products and larger companies, securing and protecting proprietary technology, access to capital, strategic relationships and dependence on key individuals and sole source suppliers. Products developed by the Company require clearances from the FDA or other international regulatory agencies prior to commercial sales. There can be no assurance that the products will receive the necessary clearances. If the Company is denied clearance, clearance is delayed, or the Company is unable to maintain its existing clearances, these developments could have a material adverse impact on the Company. Cash and Cash Equivalents The Company’s cash consists of cash maintained in checking and interest-bearing accounts. The majority of the Company’s cash is held at two financial institutions in the United States, with balances in excess of FDIC insurance limits. The Company accounts for financial instruments with original maturities of three months or less at the date of purchase as cash equivalents. The Company held $2.4 million and $2.8 million in cash equivalents as of March 31, 2024 and December 31, 2023, respectively. Accounts Receivable and Allowance for Credit Losses Accounts receivable balance is stated at invoice value less estimated allowances for returns and credit losses. The Company continually monitors customer payments and maintains an allowance for estimated losses resulting from customers’ inability to make required payments. In evaluating the Company’s ability to collect outstanding receivable balances, the Company considers various factors including the age of the balance, the creditworthiness of the customer, which is assessed based on ongoing credit evaluations and payment history, and the customer’s current financial condition. In cases where there are circumstances that may impair a specific customer’s ability to meet its financial obligations, an allowance is recorded against amounts due, which reduces the net recognized receivable to the amount reasonably believed to be collectible. Inventory and Cost of Revenue Inventory is stated at the lower of cost to purchase or manufacture the inventory or the net realizable value of such inventory. Cost is determined using the standard cost method which approximates actual costs using the first-in, first-out basis. The Company regularly reviews inventory quantities, actual losses, projected future demand, and remaining shelf life to record a provision for obsolete and/or damaged inventory. Provision for inventory obsolescence of $4.3 million and $3.9 million has been recorded as of March 31, 2024 and December 31, 2023, respectively. The Company recognizes the cost of inventory transferred to the customer in cost of revenue when revenue is recognized. Leases The Company determines if an arrangement is, or contains, a lease at the inception date of the contract. The Company has elected an expedient to account for each separate lease component and its associated non-lease components as a single lease component for the majority of its asset classes. The lease term may include periods covered by options to extend or terminate the lease when it is reasonably certain that the Company will exercise a renewal option, or reasonably certain it will not exercise an early termination option. The Company recognizes lease liabilities and right-of-use, or ROU, assets upon commencement for all material leases with a term greater than 12 months. The Company has elected an expedient not to recognize leases with a lease term of 12 months or less on the balance sheet. These short-term leases are expensed on a straight-line basis over the lease term. Shipping and Handling Costs Shipping and handling costs are expensed as incurred and are included in selling, general and administrative, or SG&A, expenses. For the three months ended March 31, 2024 and 2023, shipping and handling costs were $1.7 million and $2.8 million, respectively. Revenue Recognition The Company recognizes revenue related to sales of products to distributors or directly to customers in markets where it has regulatory approval, net of discounts and allowances. The Company recognizes revenue in accordance with Accounting Standards Codification, or ASC, Revenue from Contracts with Customers (Topic 606) . ASC 606 requires the Company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The Company recognizes revenue related to the sales of products to distributors at the time of shipment of the product, which represents the point in time when the distributor has taken ownership and assumed the risk of loss, and the required revenue recognition criteria are satisfied. The Company’s distributors are obligated to pay within specified terms regardless of when, or if, they sell the products. The Company’s contracts with distributors typically do not contain right of return or price protection and have no post-delivery obligations. The Company recognizes revenue when title to the product and risk of loss transfer to customers, provided there are no remaining performance obligations required of the Company or any written matters requiring customer acceptance. The Company allows for the return of product from direct customers in certain regions in limited instances within fifteen days after the original sale and records estimated sales returns as a reduction of sales in the same period revenue is recognized. Appropriate reserves are established for anticipated sales returns based on historical experience, recent gross sales and any notification of pending returns. Actual sales returns in any future period are inherently uncertain and thus may differ from the estimates. If actual sales returns differ significantly from the estimates, an adjustment to revenue in the current or subsequent period is recorded. An allowance of $0.1 million and $0.3 million was recorded for product returns as of March 31, 2024 and December 31, 2023, respectively. Taxes collected from customers for remittance to governmental authorities are excluded from net sales. A portion of the Company’s revenue is generated from the sale of consigned inventory maintained at physician, hospital, or clinic locations. For these products, revenue is recognized at the time the Company is notified by the consignee that the product has been implanted, not when the consigned products are delivered to the consignee’s warehouse. Revenue was generated in these primary geographic markets: Three Months Ended March 31, 2024 2023 (in thousands) EMEA (Europe / Middle East / Africa) $ 20,602 $ 19,985 Latin America 7,905 11,620 Asia-Pacific 8,598 14,021 Other 62 898 Total revenue $ 37,167 $ 46,524 The Company has a limited warranty for the shelf life of breast implants, which is five years from the time of manufacture. Estimated warranty obligations are recorded at the time of sale. The Company also offers a warranty to patients in the event of rupture and a replacement program for capsular contracture events, provided certain registration requirements are met. Revenue for extended warranties is recognized ratably over the term of the agreement. To date, these warranty and program costs have been de minimis. The Company will continue to evaluate the warranty reserve policies for adequacy considering claims history. Deferred revenue primarily consists of payments received in advance of meeting revenue recognition criteria. The Company has received payments from distributors to provide distribution exclusivity within a geographic area and recognizes revenue on a ratable basis over the term of such contractual distribution relationship. Additionally, the Company has received payments from customers in direct markets prior to surgical implantation and recognizes deferred revenue at the time the Company is notified by the customer that the product has been implanted. For all arrangements, any revenue that has been deferred and is expected to be recognized beyond one year is classified as long-term deferred revenue and included in “Other liabilities, long-term” on the condensed consolidated balance sheets (see Note 3). Research and Development Costs related to research and development, or R&D, activities are expensed as incurred. R&D costs primarily include personnel costs, materials, clinical expenses, regulatory expenses, product development, consulting services, and outside research activities, all of which are directly related to research and development activities. The Company estimates IDE clinical trial expenses based on the services performed, pursuant to contracts with research institutions and clinical research organizations that conduct and manage clinical trials on its behalf. In accruing service fees, the Company estimates the time period over which services will be performed and the level of patient enrollment and activity expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, the Company will adjust the accrual accordingly. Selling, General and Administrative Expenses SG&A expenses include sales and marketing costs, payroll and related benefit costs, insurance expenses, shipping and handling costs, legal and professional fees and administrative overhead. Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. The Company depreciates owned buildings on a straight-line basis over 50 years of useful life. Depreciation of property and equipment is computed using the straight-line method over the assets’ estimated useful lives of five Goodwill and Intangible Assets The Company records the excess of the acquisition purchase price over the net fair value of the tangible and identifiable intangible assets acquired and liabilities assumed as goodwill. In accordance with ASC 350, Intangibles - Goodwill and Other, the Company tests goodwill for impairment annually during the fourth quarter of each year and whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. In connection with the annual impairment test for goodwill, the Company elected the option to perform a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If the Company determines that it was more likely than not that the fair value of the reporting unit is less than its carrying amount, then the impairment test is performed. Consistent with the Company's assessment that it has only one reporting segment, the Company has determined that it has only one reporting unit and tests goodwill for impairment at the entity level using the two-step process required by ASC 350. In the first step, the Company compares the carrying amount of the reporting unit to the fair value of the enterprise. If the fair value of the enterprise exceeds the carrying value, goodwill is not considered impaired and no further testing is required. If the carrying value of the enterprise exceeds the fair value, goodwill is potentially impaired, and the second step of the impairment test must be performed. In the second step, the Company compares the implied fair value of the goodwill, as defined by ASC 350, to its carrying amount to determine the impairment loss, if any. The Company capitalizes certain costs related to intangible assets, such as patents, trademarks and software development costs. The Company follows the provisions of ASC 350-40, Internal Use Software for determining whether computer software is internal-use software and on accounting for the costs of computer software originally developed or obtained for internal use. The Company expenses all costs incurred during the preliminary project stage of software development and capitalizes the costs incurred during the application development stage. Costs incurred relating to upgrades and enhancements to the software are capitalized if it is determined that these upgrades or enhancements add additional functionality to the software. Costs incurred to improve and support products after they become available are charged to expense as incurred. The Company records purchased intangible assets at their respective estimated fair values at the date of acquisition. Purchased finite-lived intangible assets are being amortized using the straight-line method over their remaining estimated useful lives, which range from two During the year ended December 31, 2023, there was no impairment of goodwill or intangible assets based on the qualitative assessments performed by the Company. As of March 31, 2024, no triggering events have occurred which would indicate that the acquired intangible asset values may not be recoverable. Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable. When such an event occurs, management determines whether there has bee n impairment by comparing the anticipated undiscounted future net cash flows to the related asset group’s carrying value. If an asset is considered impaired, the asset is written down to fair value, which is determined based either on discounted cash flows or appraised value, depending on the nature of the asset. There were no impairment charges, or changes in estimated useful lives recorded during the year ended December 31, 2023. As of March 31, 2024, no triggering events have occurred which would indicate that the acquired long-lived asset values may not be recoverable. Debt Issuance Costs and Debt Discounts Costs incurred in connection with the issuance of new debt are capitalized. Capitalizable debt issuance costs paid to third parties and debt discounts, net of amortization, are recorded as a reduction to the long-term debt balance on the condensed consolidated balance sheets. Amortization expense on capitalized debt issuance costs and debt discounts related to loans are calculated using the effective interest method over the term of the loan commitment and is recorded as interest expense in the condensed consolidated statements of operations. Income Taxes The Company records income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s condensed consolidated financial statements or income tax returns. In estimating future tax consequences, expected future events, enactments or changes in the tax law or rates are considered. Valuation allowances are provided when necessary to reduce deferred tax assets to the amount expected to be realized. The Company operates in various tax jurisdictions and is subject to audits by various tax authorities. The Company records uncertain tax positions based on a two-step process whereby (1) a determination is made as to whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold the Company recognizes the largest amount of tax benefit that is greater than 50% likely to be realized upon ultimate settlement with the related tax authority. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. Significant judgment is required in the identification of uncertain tax positions and in the estimation of penalties and interest on uncertain tax positions. There were no material uncertain tax positions in fiscal year 2023 or for the three months ended March 31, 2024. Foreign Currency The financial statements of the Company’s foreign subsidiaries whose functional currencies are the local currencies are translated into U.S. dollars for consolidation as follows: assets and liabilities at the exchange rate as of the balance sheet date, stockholders’ equity at the historical rates of exchange, and income and expense amounts at the average exchange rate for the period. Translation adjustments resulting from the translation of the subsidiaries’ accounts are included in “Accumulated other comprehensive income” as equity in the condensed consolidated balance sheet. Transactions denominated in currencies other than the applicable functional currency are converted to the functional currency at the exchange rate on the transaction date. At period end, monetary assets and liabilities are remeasured to the functional currency using exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are remeasured at historical exchange rates. Gains and losses resulting from foreign currency transactions are included within “Other income (expense), net” in the condensed consolidated statements of operations. For the three months ended March 31, 2024, foreign currency transaction loss amounted to $3.0 million as compared to a foreign currency transaction gain of $0.9 million for the three months ended March 31, 2023. Comprehensive Loss The Company’s comprehensive loss consists of net loss and foreign currency translation adjustments arising from the consolidation of the Company’s foreign subsidiaries. Share-Based Compensation The Company measures and recognizes compensation expense for all share-based awards in accordance with the provisions of ASC 718, Stock Compensation . Share-based awards granted include stock options, restricted stock units, or RSUs, and restricted stock awards, or RSAs. Share-based compensation expense for stock options and RSAs or RSUs granted to employees is measured at the grant date based on the fair value of the awards and is recognized as an expense ratably on a straight-line basis over the requisite service period. The fair value of options to purchase shares is estimated on the grant date using the Black-Scholes option valuation model. The calculation of share-based compensation expense requires the Company to make assumptions and judgments about the variables used in the Black-Scholes model, including the expected term, expected volatility of the underlying common shares, risk-free interest rate and dividends. Net Income (Loss) Per Share Basic net income (loss) per share is calculated by dividing the net income (loss) attributable to shareholders by the weighted-average number of shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net income (loss) per share is computed by dividing the net income (loss) by the weighted-average number of shares and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, any shares issuable upon exercise of warrants, stock options and non-vested RSUs or RSAs outstanding under the Company’s equity plan are potentially dilutive securities. Diluted net loss per share is the same as basic net loss per share for periods where the Company reported a net loss because including the dilutive securities would be anti-dilutive. Reclassifications Certain reclassifications have been made to prior year amounts to conform to the current year presentation. These reclassifications had no material impact on the Company’s financial position as of March 31, 2024 or results of operations for the three months ended March 31, 2024. Recent Accounting Standards Periodically, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s consolidated financial statements upon adoption. The following recent accounting pronouncements issued by the FASB could have a material effect on the Company’s financial statements: Recently Issued Accounting Standards In November 2023, the FASB issued Accounting Standards Update, or ASU, No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which expands annual and interim disclosure requirements for reportable segments, especially significant segment expenses, and provides new disclosure requirements for entities with a single reportable segment. The new guidance is effective for our annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025. The Company is currently evaluating the potential impact of the updated requirements, but based on current understanding, does not expect a material impact on its consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topics 740): Improvements to Income Tax Disclosures , which enhances the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. The guidance is effective for annual periods beginning January 1, 2025, with early adoption permitted. The Company is currently evaluating the potential effect that the updated standard will have on the financial statement disclosures . |
Balance Sheet Accounts
Balance Sheet Accounts | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Accounts | Balance Sheet Accounts Inventory, Net March 31, December 31, (in thousands) Raw materials $ 39,080 $ 40,663 Work in process 1,578 1,727 Finished goods 31,831 37,081 Total inventory, net $ 72,489 $ 79,471 As of March 31, 2024 and December 31, 2023, $8.3 million and $7.1 million of inventory was on consignment, respectively. Prepaid Expenses and Other Current Assets March 31, December 31, (in thousands) Prepaid insurance $ 431 $ 2,747 Prepaid services 1,882 420 Prepaid taxes 792 1,073 Prepaid assets 352 394 Prepaid raw materials and accessories 254 468 Prepaid U.S. clinical trial costs 137 176 Prepaid warranty and distribution rights 249 275 Prepaid software 594 506 Other 2,697 2,418 Total prepaid expenses $ 7,388 $ 8,477 Property and Equipment, Net March 31, December 31, (in thousands) Machinery and equipment $ 20,040 $ 20,510 Building improvements 10,137 10,626 Furniture and fixtures 13,782 9,224 Building 16,109 16,109 Leasehold improvements 2,580 2,600 Land 3,694 3,694 Vehicles 176 176 Construction in process 29,951 30,593 Total 96,469 93,532 Less: Accumulated depreciation and amortization (17,225) (16,327) Total property and equipment, net $ 79,244 $ 77,205 For the three months ended March 31, 2024 and 2023, depreciation and amortization expense related to property and equipment was $0.9 million and $0.6 million, respectively. In August 2021, the Company entered into a contract with the Zona Franca Coyol, S.A., or CFZ, to begin construction of a new manufacturing facility in Costa Rica. The costs for improvement of the land and construction of a cold shell building were being paid for by CFZ while the Company paid for internal improvements and customization. In 2022, the Company exercised its option to purchase the title to the land and cold shell building for approximately $12.6 million. The Company has the option to buy an adjacent lot of land for approximately $2.8 million and engage CFZ to construct an additional manufacturing facility. In July 2023, the Company announced the grand opening of the first phase of the Sulàyöm Innovation Campus. Accrued Liabilities Accrued liabilities consisted of the following: March 31, December 31, (in thousands) Performance bonus $ 5,543 $ 4,451 Payroll and related expenses 5,319 5,223 Operating lease liabilities - current 837 773 Commissions 434 344 Professional and legal services 1,828 1,269 Taxes 380 109 Warranty reserve 130 119 Other 736 1,402 Total accrued liabilities $ 15,207 $ 13,690 Other Liabilities, Short-Term Other liabilities, short-term consisted of the following: March 31, December 31, (in thousands) Deferred revenue $ 1,739 $ 1,836 Other Liabilities, Long-Term Other liabilities, long-term consisted of the following: March 31, December 31, (in thousands) Deferred revenue $ 1,394 $ 1,498 Other 151 147 Total other liabilities, long-term $ 1,545 $ 1,645 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. Intangible assets resulting from the acquisitions of entities accounted for using the acquisition method of accounting are recorded at the estimated fair value of the assets acquired. Purchased intangibles include certain patents and license rights, 510(k) authorization by the FDA to sell a medical device and other intangible assets. The Company’s goodwill and most intangibles at March 31, 2024 are the result of previous asset and business acquisitions. Finite-lived intangibles are amortized over their estimated useful lives based on expected future benefit. In addition to the intangibles acquired, the Company capitalized certain patent and license rights as identified intangibles based on patent and license rights agreements entered into over the past several years. Additionally, the Company capitalized certain software development costs. There were no changes in the carrying amount of goodwill during the three months ended March 31, 2024: Balance as of January 1, 2024 Additions Accumulated Impairment Losses Balance as of March 31, 2024 (in thousands) Goodwill $ 465 $ — $ — $ 465 The carrying amounts of these intangible assets other than goodwill as of March 31, 2024 were as follows: Gross Carrying Amount Accumulated Amortization Net Carrying Amount Estimated Useful Lives (in thousands) (in years) Patents and license rights $ 2,007 $ (1,438) $ 569 7-12 Customer relationships 2,033 (1,992) 41 4-10 510(k) authorization 567 (317) 250 15 Developed technology 62 (62) — 10 Capitalized software development costs 5,293 (2,919) 2,374 2-5 Other 183 (42) 141 2-5 Capitalized software development costs not yet amortized 5,698 — 5,698 Patents and license rights not yet amortized 441 — 441 Total intangibles other than goodwill $ 16,284 $ (6,770) $ 9,515 The carrying amounts of intangible assets other than goodwill as of December 31, 2023 were as follows: Gross Carrying Amount Accumulated Amortization Net Carrying Amount Estimated Useful Lives (in thousands) (in years) Patents and license rights $ 2,007 $ (1,414) $ 593 7-12 Customer relationships 2,033 (1,987) 46 4-10 510(k) authorization 567 (307) 260 15 Developed technology 62 (62) — 10 Capitalized software development costs 5,293 (2,653) 2,640 2-5 Other 183 (41) 142 2-5 Capitalized software development costs not yet amortized 3,865 — 3,865 Patents and license rights not yet amortized 441 — 441 Total intangibles other than goodwill $ 14,451 $ (6,464) $ 7,987 The amortization expense associated with intangible assets was $0.3 million for each of the three months ended March 31, 2024 and 2023 . Non-product related amortization is recorded in SG&A while product related amortization is recorded in cost of revenue. As of March 31, 2024, the amortization expense related to identifiable intangible assets, with definite useful lives, in future periods is expected to be as follows: Year Ending December 31, (in thousands) 2024 (remaining) $ 848 2025 1,024 2026 561 2027 329 2028 185 Thereafter 427 Total expected future amortization expense $ 3,374 The Company evaluates the recoverability of goodwill and indefinite-lived intangible assets annually and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. During the year ended December 31, 2023, there was no impairment of goodwill or intangible assets based on the qualitative assessments performed by the Company. As of March 31, 2024, no triggering events have occurred which would indicate that the acquired intangible asset values may not be recoverable. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Debt | Debt Oaktree Debt On April 26, 2022, or the Closing Date, the Company entered into a Credit Agreement and Guaranty, or the Credit Agreement, together with certain of its subsidiaries party thereto as guarantors, the lenders from time to time party thereto, or the Lenders, and Oaktree Fund Administration, LLC, as administrative agent for the Lenders, or the Administrative Agent, pursuant to which the Lenders agreed to make term loans to the Company in an aggregate principal amount of up to $225 million, or collectively, the Term Loans. On February 21, 2024, the Company entered into a Second Amendment to the Credit Agreement, or the Amendment, which amends terms applicable to the two remaining available tranches, Tranche C Term Loans and Tranche D Term Loans. The terms of the Tranche A Term Loans and Tranche B Term Loans were not modified. Pursuant to the terms of the Credit Agreement, as amended, the Term Loans will be advanced in four tranches: • The first tranche, or the Tranche A Term Loan, was advanced in the amount of $150 million on the Closing Date. A portion of the first tranche was used to repay the outstanding principal and interest under the Company’s credit agreement with Madryn Health Partners, LP, as administrative agent, and a syndicate of lenders in full, including the early repayment penalty of $6.5 million. • The second tranche, or the Tranche B Term Loan, of $25 million was advanced in December 2022 at the Company’s election upon satisfaction of specified gross sales thresholds and subject to the other terms and conditions of the Credit Agreement. • The third tranche, or the Tranche C Term Loan, of $25 million will be advanced at the Company’s election prior to December 31, 2024, subject to the Administrative Agent having received evidence that FDA approval of Motiva Implants for augmentation use in the United States has been issued (or the Tranche A Milestone) and subject to the other terms and conditions of the Credit Agreement and the Amendment. • The fourth tranche, or the Tranche D Term Loan, of $25 million will be advanced at the Company’s election prior to June 30, 2025, subject to the Administrative Agent having received both (a) evidence that a specified gross sales threshold has been met, and (b) the Tranche C Term Loan having been funded, and subject to the other terms and conditions of the Credit Agreement. The Amendment reduced the applicable gross sales threshold from trailing twelve-month gross sales of $225 million to $195 million. The Term Loans will mature on the 5-year anniversary of the Closing Date, or the Maturity Date. The Term Loans accrue interest at a rate equal to 9% per annum for Tranche A and Tranche B, 10% per annum for Tranche C and Tranche D, or, at any time following the Tranche C Funding Milestone and the Administrative Agent’s receipt of evidence that a gross sale threshold of $225 million in trailing twelve month gross sales have been met, 8.25% per annum for Tranche A and Tranche B. Accrued interest is due and payable in cash on the last business day of March, June, September, and December of each year; provided, however, that prior to the second anniversary of the Closing Date, the Company may pay an amount of interest on the outstanding Tranche A Term Loans and Tranche B Term Loans corresponding to 600 basis points of the interest rate in kind, or PIK, on each applicable payment date, subject to prior written notice delivered to the Administrative Agent, which has been delivered. Each of the Term Loans will be subject to the original issue discount of 2% of the principal amount thereof upon the drawing of each applicable tranche. Upon any payment or prepayment in full or in part of the Term Loans, whether voluntary or involuntary, the Company is required to pay an exit fee equal to 3% of the principal amount of the Term Loan paid, or the Exit Fee. The Company may elect to prepay all or any portion of the amounts owed prior to the Maturity Date, provided that the Company provides notice to the Administrative Agent, the amount is not less than $5 million, and the amount is accompanied by all accrued and unpaid interest thereon through the date of prepayment, plus the applicable yield protection premium and the applicable Exit Fee. Prepayments of the Tranche A Term Loans or Tranche B Term Loans prior to the second anniversary of the Closing Date or prepayments of the Tranche C Term Loans or Tranche D Term Loans prior to the one-year anniversary of the applicable funding date will be accompanied by a yield protection premium equal to the sum of all interest that would have accrued through such second anniversary plus 4% of the principal amount so prepaid. Prepayments of the Term Loans after the second anniversary of the Closing Date in the case of Tranche A Term Loans and Tranche B Term Loans or the one year anniversary of the applicable funding date in the case of the Tranche C Term Loans and the Tranche D Term Loans but before, in each case, the third anniversary of the Closing Date, will be accompanied by a yield protection premium equal to 4% of the principal amount so prepaid if made prior to the third anniversary of the Closing Date, 2% if made on or after the 3rd anniversary of the Closing Date but prior to the fourth anniversary of the Closing Date, and 0% if made on or after the 4th anniversary of the Closing Date. If the Term Loans are accelerated following the occurrence of an event of default, the Company shall immediately pay to Lenders the sum of all obligations for principal, accrued interest, the applicable yield maintenance premium and the applicable Exit Fee. Under the Amendment, Tranche D Term Loans were modified to provide for a make whole plus 4% for any prepayments of the Tranche C Term Loans and Tranche D Term Loans during the one year period after their advance. The existing prepayment premium schedule was otherwise preserved. Pursuant to the Credit Agreement, the obligations of the Company are guaranteed by its subsidiaries that are party thereto as guarantors. On the Closing Date, the Company and such subsidiaries entered into a U.S. Security Agreement in favor of the Administrative Agent on behalf of Lenders, or the U.S. Security Agreement. Pursuant to the U.S. Security Agreement, the Company and its subsidiaries party thereto granted the Administrative Agent a security interest in substantially all of its personal property, rights and assets to secure the payment of all amounts owed to Lenders under the Credit Agreement. The Credit Agreement contains customary affirmative and restrictive covenants and representations and warranties. The Company and its subsidiaries are bound by certain affirmative covenants setting forth actions that are required during the term of the Credit Agreement, including, without limitation, certain information delivery requirements, obligations to maintain certain insurance, and certain notice requirements. Additionally, the Company and its subsidiaries are bound by certain restrictive covenants setting forth actions that are not permitted to be taken during the term of the Credit Agreement without prior written consent, including, without limitation, incurring certain additional indebtedness, consummating certain mergers, acquisitions or other business combination transactions, or incurring any non- permitted lien or other encumbrance on the assets of the Company or any of its subsidiaries. The Credit Agreement also contains other customary provisions, such as confidentiality obligations and indemnification rights for the benefit of Lenders. The Credit Agreement contains financial covenants requiring (a) the Company to maintain minimum liquidity of at least $20 million from and after the Closing Date or $25 million from and after the funding of the Tranche B Term Loans, and (b) for each fiscal quarter until gross sales of the Company and its subsidiaries for any 12-consecutive month period are no less than $200 million, minimum gross sales of the Company and its subsidiaries for each consecutive 12-month period ending on the last day of each fiscal quarter in excess of 50% of specified target gross sales for such period. The Credit Agreement provides for a customary equity cure right in the event the Company fails to comply with the minimum gross sales covenant. The effective interest rate under the Credit Agreement is 10.4%, and the weighted average interest rate is 9.0%. The Company elected to pay interest in kind on up to two-thirds of cash interest payments prior to the second anniversary of the Closing Date, resulting in a minimum initial cash interest rate of 3.00%. During the three months ended March 31, 2024 and 2023, the Company incurred $4.3 million and $4.1 million in interest expense, respectively, in connection with the Credit Agreement. No principal payments are due on the Term Loans until the final maturity date on April 26, 2027. As of March 31, 2024, $195.5 million was outstanding under the Credit Agreement representing the initial principal of $150 million for the Tranche A Term Loan, $25 million for the Tranche B Term Loan and $20.5 million of interest accrued into the principal balance. The Company recorded Oaktree debt on the condensed consolidated balance sheets as follows: March 31, December 31, (in thousands) Principal $ 195,455 $ 192,566 Net unamortized debt discount and issuance costs (3,269) (3,827) Net carrying value of Oaktree debt $ 192,186 $ 188,739 As of March 31, 2024, the Company was in compliance with all financial debt covenants. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Leases | Leases The Company recognizes lease liabilities and ROU assets upon commencement for all material leases with a term greater than 12 months. The Company has elected an expedient not to recognize leases with a lease term of 12 months or less on the balance sheet. These short-term leases are expensed on a straight-line basis over the lease term. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date of the lease based on the present value of lease payments over the lease term. When the rate implicit to the lease cannot be readily determined, the Company utilizes its incremental borrowing rate in determining the present value of the future lease payments. Lease liabilities are accreted each period and reduced for payments. The ROU asset also includes other adjustments, such as for the effects of escalating rents, rent abatement or initial lease costs. The lease term may include periods covered by options to extend or terminate the lease when it is reasonably certain that the Company will exercise a renewal option, or reasonably certain it will not exercise an early termination option. For operating leases, lease expense for minimum lease payments is recognized on a straight-line basis over the expected lease term. For finance leases, the ROU asset depreciates on a straight-line basis over the shorter of the lease term or useful life of the ROU asset and the lease liability accretes interest based on the interest method using the discount rate determined at lease commencement. The Company’s finance leases are not material. The Company has operating leases for facilities and office spaces. Operating lease assets and the related lease liabilities are included within the ROU operating lease assets on the condensed consolidated balance sheets. The determination of whether an arrangement is, or contains, a lease is performed at the inception of the arrangement. The Company has operating leases for certain facilities, and office spaces to be used in its operations, with remaining lease terms ranging from monthly to 6 years. These leases require monthly lease payments that may be subject to annual increases throughout the lease term. Certain of these leases also include renewal options at the election of the Company to renew or extend the lease for additional years. These optional periods have not been considered in the determination of the ROU or lease liabilities associated with these leases as management did not consider it reasonably certain it would exercise the options. During the three months ended March 31, 2024, the Company earned income from subleasing a warehouse facility for the remaining life of an existing master lease. The sublease agreement did not release the Company from its obligations under the master lease, and no modifications were made to the lease agreement. Income from the sublease is recognized on a straight-line basis over the term of the agreement. The Company’s lease and sublease agreements do not contain any termination options, material residual value guarantees, material bargain purchase options or material restrictive covenants. The Company does not have any lease transactions with related parties. Total lease cost includes the following components: Three Months Ended March 31, 2024 2023 (in thousands) Operating lease expense cost $ 313 $ 277 Sublease income (78) — Total lease cost, net of sublease income $ 235 $ 277 March 31, 2024 December 31, Supplemental balance sheet information (in thousands) Operating lease right-of-use assets $ 3,908 $ 3,381 Operating lease liabilities - short-term 837 773 Operating lease liabilities - long-term 3,180 2,712 Total operating lease liabilities $ 4,017 $ 3,485 Weighted-average remaining lease term (years) Operating leases 4.5 4.6 Weighted-average discount rate (%) Operating leases 10.1 % 9.3 % Three Months Ended March 31, 2024 2023 Cash paid for amounts included in the measurement of lease liabilities (in thousands) Operating cash outflows from operating lease expenses $ 306 $ 268 Operating cash inflows from subleases (80) — Operating cash outflows from operating leases, net of sublease income $ 226 $ 268 ROU assets obtained in exchange for new lease liabilities Operating leases $ 734 $ 478 Maturities of lease liabilities as of March 31, 2024 were as follows: Years Ending December 31, Operating Leases (in thousands) 2024 (remaining) $ 877 2025 1,101 2026 1,026 2027 920 2028 775 Thereafter 369 Total future minimum lease payments 5,068 Less: Amount of lease payments representing interest (1,051) Present value of future minimum lease payments $ 4,017 The undiscounted future cash receipts from the Company’s sublease as of March 31, 2024 were as follows: Years Ending December 31, Sublease (in thousands) 2024 (remaining) $ 241 2025 332 2026 343 2027 355 2028 368 Thereafter 315 Total undiscounted future sublease cash receipts $ 1,954 |
Shareholders_ Equity
Shareholders’ Equity | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Shareholders’ Equity | Shareholders’ Equity Under the Company’s Amended and Restated Memorandum of Association and Articles of Association, or Articles, in effect as of March 31, 2024 and December 31, 2023, the Company has authorized an unlimited number of common shares with no par value. As of March 31, 2024 and December 31, 2023, 27,884,749 and 26,495,250 common shares, respectively, were issued and 27,476,679 and 26,087,180 common shares, respectively, were outstanding. During the three months ended March 31, 2024, the Company granted stock options and RSUs to employees and contractors (see Note 9). On January 9, 2024. the Company entered into a securities purchase agreement with select institutional accredited investors to sell 1,101,565 common shares at a price of $25.00 per share and pre-funded warrants to purchase 898,435 common shares at a price of $24.999 per share. The pre-funded warrants may be exercised immediately at a price of $0.001 per share until exercised in full. Net proceeds to us from the offering, after deducting offering expenses, were approximately $49.7 million. On April 27, 2023, the Company issued 1,100,000 common shares in an underwritten public offering, at a price to the public of $71.50 per share. The underwriters purchased the shares from the Company at a price of $67.21 per share and exercised the option to purchase additional 165,000 common shares, at the public offering price per share. Net proceeds to the Company after deducting underwriting discounts and offering expenses were approximately $84.6 million. The Company had reserved common shares for future issuances as follows: March 31, December 31, 2023 Warrants to purchase common shares 675,413 — Options to purchase common shares 1,517,183 1,487,387 Remaining shares available under the 2018 Equity Incentive Plan 2,165,718 2,953,884 Shares issuable on vesting of grants of RSUs 312,426 196,177 Remaining shares available under the 2018 ESPP 1,222,000 1,035,000 Total 5,892,740 5,672,448 In January 2024, the Company issued pre-funded warrants for the purchase of 898,435 common shares to select institutional accredited investors at a fixed exercise price of $0.001 per share. The pre-funded warrants are exercisable immediately and until exercised in full. During the three months ended March 31, 2024, warrants to purchase 223,022 shares were net exercised to obtain 223,019 shares. As of March 31, 2024, warrants to purchase 675,413 common shares were outstanding and exercisable. As of December 31, 2023, no warrants were outstanding and exercisable. Warrant Holder Issue Date Shares Exercise Price Expiration Date Blackwell Partners LLC 1/9/2024 296,978 $ 0.001 * Pinehurst Partners, L.P. 1/9/2024 80,000 $ 0.001 * RTW Master Fund, Ltd. 1/9/2024 164,367 $ 0.001 * RTW Innovation Master Fund, Ltd. 1/9/2024 134,068 $ 0.001 * * The warrants are exercisable immediately and until exercised in full. |
Warrants
Warrants | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Warrants | Shareholders’ Equity Under the Company’s Amended and Restated Memorandum of Association and Articles of Association, or Articles, in effect as of March 31, 2024 and December 31, 2023, the Company has authorized an unlimited number of common shares with no par value. As of March 31, 2024 and December 31, 2023, 27,884,749 and 26,495,250 common shares, respectively, were issued and 27,476,679 and 26,087,180 common shares, respectively, were outstanding. During the three months ended March 31, 2024, the Company granted stock options and RSUs to employees and contractors (see Note 9). On January 9, 2024. the Company entered into a securities purchase agreement with select institutional accredited investors to sell 1,101,565 common shares at a price of $25.00 per share and pre-funded warrants to purchase 898,435 common shares at a price of $24.999 per share. The pre-funded warrants may be exercised immediately at a price of $0.001 per share until exercised in full. Net proceeds to us from the offering, after deducting offering expenses, were approximately $49.7 million. On April 27, 2023, the Company issued 1,100,000 common shares in an underwritten public offering, at a price to the public of $71.50 per share. The underwriters purchased the shares from the Company at a price of $67.21 per share and exercised the option to purchase additional 165,000 common shares, at the public offering price per share. Net proceeds to the Company after deducting underwriting discounts and offering expenses were approximately $84.6 million. The Company had reserved common shares for future issuances as follows: March 31, December 31, 2023 Warrants to purchase common shares 675,413 — Options to purchase common shares 1,517,183 1,487,387 Remaining shares available under the 2018 Equity Incentive Plan 2,165,718 2,953,884 Shares issuable on vesting of grants of RSUs 312,426 196,177 Remaining shares available under the 2018 ESPP 1,222,000 1,035,000 Total 5,892,740 5,672,448 In January 2024, the Company issued pre-funded warrants for the purchase of 898,435 common shares to select institutional accredited investors at a fixed exercise price of $0.001 per share. The pre-funded warrants are exercisable immediately and until exercised in full. During the three months ended March 31, 2024, warrants to purchase 223,022 shares were net exercised to obtain 223,019 shares. As of March 31, 2024, warrants to purchase 675,413 common shares were outstanding and exercisable. As of December 31, 2023, no warrants were outstanding and exercisable. Warrant Holder Issue Date Shares Exercise Price Expiration Date Blackwell Partners LLC 1/9/2024 296,978 $ 0.001 * Pinehurst Partners, L.P. 1/9/2024 80,000 $ 0.001 * RTW Master Fund, Ltd. 1/9/2024 164,367 $ 0.001 * RTW Innovation Master Fund, Ltd. 1/9/2024 134,068 $ 0.001 * * The warrants are exercisable immediately and until exercised in full. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation In 2015, the Board of Directors approved and adopted the 2015 Equity Incentive Plan, or 2015 Plan. Pursuant to the 2015 Plan, the Company granted RSAs and stock options to members of the Board of Directors, employees and consultants. In 2018, the Board of Directors terminated the 2015 Plan and approved the 2018 Equity Incentive Plan, or the 2018 Plan, with an initial reserve of 1,500,000 common shares. Under the 2018 Plan, the Company may grant stock options, equity appreciation rights, RSUs and RSAs. If an award granted under the 2018 Plan expires, terminates, is unexercised, or is forfeited, or if any shares are surrendered in connection with an incentive award, the shares subject to such award and the surrendered shares become available for further awards under the 2018 Plan. Pursuant to the “evergreen” provision contained in the 2018 Plan, the number of common shares reserved for issuance under the 2018 Plan automatically increases on first day of each fiscal year, commencing on January 1, 2019, in an amount equal to the least of (1) 750,000 shares, (2) 4% of the total number of the Company’s common shares outstanding on the last day of the preceding fiscal year, or (3) a number of common shares as may be determined by the Company’s Board of Directors prior to any such increase date. On each of January 1, 2019 through 2024 the number of common shares authorized for issuance increased automatically by 750,000 shares in accordance with the evergreen provision, increasing the maximum number of common shares reserved under the 2018 Plan to 6,000,000. During the periods presented, the Company recorded the following share-based compensation expense for stock options and RSUs: Three Months Ended March 31, 2024 2023 (in thousands) Sales, general and administrative $ 2,908 $ 2,748 Research and development 536 576 Total stock compensation expense $ 3,444 $ 3,324 Stock Options Number of Options Outstanding Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Balances at December 31, 2023 1,487,387 $ 47.47 6.27 $ 4,308 Granted (weighted-average fair value $32.58 per share) 144,463 46.47 Exercised (53,400) 26.70 Forfeited/canceled (61,267) 67.18 Balances at March 31, 2024 1,517,183 $ 47.31 6.38 $ 19,981 As of March 31, 2024, 975,179 options were vested and exercisable with a weighted-average exercise price of $41.52 per share and a total aggregate intrinsic value of $17.6 million. During the three months ended March 31, 2024, 53,400 options were exercised at a weighted-average price of $26.70 per share. The intrinsic value of the options exercised during the three months ended March 31, 2024 and 2023 was $1.1 million and $2.5 million, respectively. Upon the exercise of stock options, the Company issued new shares from its authorized shares. At March 31, 2024, unrecognized compensation expense was $14.5 million related to stock options granted to employees and members of the Board of Directors and $0.9 million related to stock options granted to consultants. The weighted-average period over which such compensation expense will be recognized is 2.3 years. Stock Options Granted to Employees Share-based compensation expense for employees is based on the grant date fair value. The Company recognizes compensation expense for all share-based awards ratably on a straight-line basis over the requisite service period of the awards, which is generally the vesting term of four years. During the three months ended March 31, 2024 and 2023, the Company recognized $1.8 million and $2.1 million, respectively, of share-based compensation expense for stock options granted to employees. The Company uses the Black-Scholes option valuation model to value options granted to employees and consultants, which requires the use of highly subjective assumptions to determine the fair value of share-based awards. The assumptions used in the Company’s option-pricing model represent management’s best estimates. These estimates are complex, involve a number of variables, uncertainties and assumptions and the application of management’s judgment. If factors change and different assumptions are used, the Company’s share-based compensation expense could be materially different in the future. The assumptions and estimates that the Company uses in the Black-Scholes model are as follows: ▪ Fair Value of Common Shares. The closing price of the Company’s publicly-traded common shares on the date of grant is used as the fair value of the shares. The Board of Directors intended all options granted to be exercisable at a price per share not less than the estimated per share fair value of the shares underlying those options on the date of grant. ▪ Risk-Free Interest Rate. The Company bases the risk-free interest rate used in the Black-Scholes valuation model on the implied yield available on U.S. Treasury zero-coupon issues with a term equivalent to that of the term of the options for each option group on the measurement date. ▪ Term. For employee stock options, the expected term represents the period that the Company’s share-based awards are expected to be outstanding. Because of the limitations on the sale or transfer of the Company’s shares during the period the Company was a privately held company, the Company does not believe its historical exercise pattern is indicative of the pattern it experiences as a publicly traded company. The Company consequently uses the Staff Accounting Bulletin 110, or SAB 110, simplified method to calculate the expected term of employee stock options, which is the average of the contractual term and vesting period. The Company plans to continue to use the SAB 110 simplified method until it has sufficient trading history as a publicly traded company. For consultant stock options, the term used is equal to the remaining contractual term on the measurement date. ▪ Volatility. The Company determines the price volatility based on the historical volatilities of industry peers as it does not have sufficient trading history for its shares. Industry peers consist of several public companies in the medical device industry with comparable characteristics, including revenue growth, operating model and working capital requirements. The Company intends to continue to consistently apply this process using the same or a similar peer group of public companies until a sufficient amount of historical information regarding the volatility of its own shares becomes available, or unless circumstances change such that the identified peer companies are no longer similar, in which case other suitable peer companies whose common share prices are publicly available would be utilized in the calculation. The volatility is calculated based on the term on the measurement date. ▪ Dividend Yield. The expected dividend assumption is based on the Company’s current expectations about its anticipated dividend policy. The Company has no expectation that it will declare dividends on its common shares, and therefore has used an expected dividend yield of zero. The fair value of stock options granted to employees was estimated using the following assumptions: Three Months Ended March 31, 2024 2023 Volatility 71% - 75% 62% Risk-free interest rate 4.1% - 4.8% 4.1% - 4.3% Term (in years) 6.25 6.25 Dividend yield — — Stock Options Granted to Non-Employees Share-based compensation expense related to stock options granted to non-employees is recognized as the stock options are earned using an accelerated attribution method. The Company believes that the estimated fair value of the stock options is more readily measurable than the fair value of the services rendered. For the three months ended March 31, 2024 and 2023, the Company recognized expense of $0.1 million and $0.4 million, respectively, for stock options granted to consultants. The fair value of stock options granted to consultants was estimated using the following assumptions during the following periods presented: Three Months Ended March 31, 2024 2023 Volatility 65% - 68% 60% Risk-free interest rate 4.1% - 4.5% 4.0% Term (in years) 10 10 Dividend yield — — Restricted Stock Each vested RSU entitles the holder to be issued one common share. These awards vest according to a vesting schedule determined by the Compensation Committee of the Company’s Board of Directors, generally over a one The following table represents RSU activity for fiscal 2024: Restricted Stock Units Weighted- Outstanding unvested at December 31, 2023 196,177 $ 56.89 Granted 140,770 47.29 Vested (11,979) 69.42 Forfeited/canceled (12,542) 62.24 Outstanding unvested at March 31, 2024 312,426 $ 51.87 The fair value of RSUs is the grant date market value of common shares. The Company recognizes share-based compensation expense related to RSUs using a straight-line method over the vesting term of the awards. The share-based compensation expense for RSUs that vested during the three months ended March 31, 2024 and 2023, was $1.5 million and $0.8 million, respectively, which was calculated based on the market value of the Company’s common shares on the applicable grant date. |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share The following table summarizes the computation of basic and diluted net loss per share for the periods presented: Three Months Ended March 31, 2024 2023 (in thousands, except share and per share data) Numerator: Net loss $ (16,202) $ (11,942) Denominator: Weighted average common shares used for basic and diluted earnings per share 27,788,120 24,678,113 Net loss per share: Basic and diluted $ (0.58) $ (0.48) Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares outstanding for the period. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of shares and dilutive share equivalents outstanding for the period, determined using the treasury-share method and the as-if converted method, for convertible securities, if inclusion of these is dilutive . If the Company reports a net loss , diluted net loss per share is the same as basic net loss per share for those periods because including the dilutive securities would be anti-dilutive. The following potentially dilutive securities outstanding at the end of the periods presented have been excluded from the computation of diluted shares: Three Months Ended March 31, 2024 2023 Options to purchase common shares 1,517,183 1,634,983 Shares issuable on vesting of grants of RSUs 312,426 202,680 Total potentially dilutive shares outstanding 1,829,609 1,837,663 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions During the three months ended March 31, 2024 and 2023, the Company recorded revenue of $0.2 million and $0.5 million, respectively, for product sales to Herramientas Medicas, S.A., a distribution company owned by a family member of the Chief Executive Officer of the Company. Accounts receivable owed to the Company from this distribution company amounted to approximately $0.4 million and $0.6 million as of March 31, 2024 and December 31, 2023, respectively. In 2016, the Company also entered into a separate agreement with Dr. Chacón Quirós, the brother of the Company’s Chief Executive Officer Juan José Chacón Quirós, to maintain his clinic in Costa Rica as a MotivaImagine Excellence Center and to host and train physicians in the use of the Company’s products in relevant procedures, among other services, in exchange for cash reimbursement of up to $4,500 per day that such services are rendered. In August 2022, the Company entered into a new agreement with Dr. Chacón Quirós, replacing the original agreement, to continue the training services in exchange for cash reimbursement of his hourly rate of $531 when such services are rendered. In December 2020, Dr. Chacón Quirós was granted options to purchase 22,068 common shares vesting over four years in equal annual installments, provided that he continues to provide these services at such times. During the three months ended March 31, 2024 and 2023, the Company paid Dr. Chacón Quirós approximately $30,000 and $60,000, respectively, for services rendered. On December 12, 2022, the Company granted to Nicholas Lewin, a member of the board of directors, a stock option award for 7,829 options with a grant date fair value of $0.4 million as a compensation for consulting services he performs for the Company in addition to his services as a non-employee director. In addition, on May 28, 2023, the Company awarded Mr. Lewin a performance-based grant for 27,756 restricted stock units with a grant date fair value of $1.8 million as compensation for consulting services he performed for the Company. On April 1, 2022, the Company entered into a consulting agreement with Lisa Gersh, who served on the Company’s board of directors until March 31, 2022. Pursuant to the consulting agreement, Ms. Gersh will perform consulting services as requested by the Company, with the expectation that she will advise the board of directors on elements of corporate leadership and governance. During the three months ended March 31, 2024 and 2023, the Company paid Ms. Gersh a consulting fee of $43,750. In addition, her outstanding equity awards granted during her term as a member of the board of directors continued to vest in accordance with their terms. The consulting agreement terminated on March 31, 2024. |
Employee Benefits
Employee Benefits | 3 Months Ended |
Mar. 31, 2024 | |
Postemployment Benefits [Abstract] | |
Employee Benefits | Employee Benefits Short-term employee benefits, including vacation (paid absences) and year-end bonuses (also known as 13th month salary), are current liabilities included in accrued liabilities on the consolidated balance sheets and are calculated at the non-discounted amount that the Company expects to pay as a result of uncharged employee salaries or retentions. Regarding employee termination benefits, Costa Rica labor laws establish the payment of benefits in case of death, retirement or termination without cause. This compensation is calculated according to time served in the Company and the corresponding salary in the last six months of employment and is equal to between 19.5 and 22 days’ salary for each year served, up to a maximum of 8 years. Company policy recognizes termination benefits as expenses of the period during which the termination occurs, when the legal obligation is assumed due to the aforementioned events. As of March 31, 2024, the Company has 41 employees in Brazil and 4 employees in Argentina who are represented by a labor union. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Contingencies Periodically, the Company may have certain contingent liabilities that arise in the ordinary course of business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated. As of March 31, 2024 and 2023, and as of December 31, 2023, contingent liabilities were not material, individually or in aggregate, to the Company's financial condition, results of operations or cash flows. However, any monetary liability or financial impact to the Company from these contingent liabilities could differ materially from the Company's expectations. Indemnification The Company enters into standard indemnification arrangements in the ordinary course of business. Pursuant to these arrangements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, patent or other intellectual property infringement claim by any third-party with respect to the Company’s technology. The term of these indemnification agreements is generally perpetual. The maximum potential amount of future payments the Company could be required to make under these agreements is not determinable because it involves claims that may be made against the Company in the future that have not yet been made. The Company has entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct of the individual. The Company has not incurred costs to defend lawsuits or settle claims related to these indemnification agreements. No liability associated with such indemnifications has been recorded to date. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net loss | $ (16,202) | $ (11,942) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 shares | |
Trading Arrangements, by Individual | |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Juan José Chacón Quirós [Member] | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | On March 1, 2024, Juan José Chacón Quirós, or the Executive, adopted a Rule 10b5-1 trading plan pursuant to which up to 45,000 common shares may be sold in accordance with the trading plan’s specifications. Sales under the trading plan may commence on July 1, 2024, are based upon pre-established stock price thresholds and will expire once all of the shares have been sold or on July 1, 2025, whichever is earlier. Actual sale transactions will be disclosed publicly through Form 4 filings with the Securities and Exchange Commission, as required. |
Name | Juan José Chacón Quirós, or |
Title | the Executive, |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | March 1, 2024 |
Arrangement Duration | 365 days |
Aggregate Available | 45,000 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation and Unaudited Interim Condensed Consolidated Financial Information | Basis of Presentation and Consolidation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, and the applicable rules and regulations of the Securities and Exchange Commission, or SEC, for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. Unaudited Interim Condensed Consolidated Financial Information |
Consolidation | The accompanying condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the years ended December 31, 2023, 2022 and 2021 presented in the Company’s Form 10-K filed with the SEC on March 4, 2024. The condensed consolidated financial statements include the Company’s accounts and those of its wholly owned subsidiaries as of March 31, 2024 as follows: Subsidiary Incorporation/Acquisition Date Establishment Labs, S.A. (Costa Rica) January 18, 2004 Motiva USA, LLC (USA) February 20, 2014 JAMM Technologies, Inc. (USA) October 27, 2015 Establishment Labs Produtos par Saude Ltda (Brazil) January 4, 2016 European Distribution Center Motiva BV (Belgium) March 4, 2016 Motiva Implants France SAS (France) September 12, 2016 JEN-Vault AG (Switzerland) November 22, 2016 Motiva Nordica AB (Sweden) November 2, 2017 Motiva Implants UK Limited (the United Kingdom) July 31, 2018 Motiva Italy S.R.L (Italy) July 31, 2018 Motiva Implants Spain, S.L. (Spain) January 3, 2019 Motiva Austria GmbH (Austria) January 14, 2019 Motiva Germany GmbH (Germany) August 1, 2019 Motiva Argentina S.R.L (Argentina) February 7, 2020 |
Segments | Segments The chief operating decision maker for the Company is the Chie f Executive Officer. The Chief Executive Officer reviews financial information presented on a consolidated basis, accompanied by information about revenue by geographic region, for purposes of allocating resources and evaluating financial performance. The Company has one business activity and there are no segment managers who are held accountable for operations, operating results or plans for levels or components below the consolidated unit level. Accordingly, the Company has determined that it has a single reportable and operating segment structure. The Company and its Chief Executive Officer evaluate performance based primarily on revenue in the geographic regions in which the Company operates. |
Geographic Concentrations | Geographic Concentrations |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Significant accounting estimates and management judgments reflected in the condensed consolidated financial statements include items such as accounts receivable valuation and allowances, inventory valuation and allowances, valuation of acquired intangible assets, and valuation of deferred income tax assets, including tax valuation allowances. Estimates are based on historical experience, where applicable, and other assumptions believed to be reasonable by management. Actual results may differ from those estimates under different assumptions or conditions. |
Concentration of Credit Risk and Other Risks and Uncertainties | Concentration of Credit Risk and Other Risks and Uncertainties Financial instruments that potentially subject the Company to a concentration of credit risk consist principally of cash and accounts receivable. The majority of the Company’s cash is held at two financial institutions in the United States. Balances in the Company’s cash accounts exceed the Federal Deposit Insurance Corporation, or FDIC, limit of $250,000. The Company has not experienced any losses to its deposits of cash. Substantially all of the Company’s revenue has been derived from sales of its products in international markets, principally Europe, the Middle East, Latin America, and Asia. In the international markets in which the Company operates, the Company uses a combination of distributors and direct sales to customers. The Company performs ongoing credit evaluations of its distributors and customers, does not require collateral, and maintains allowances for potential credit losses on customer accounts when deemed necessary. Substantially all of the Company’s revenues were derived from the sale of Motiva Implants. During the three months ended March 31, 2024, no customer accounted for more than 10% of the Company’s revenue. During the three months ended March 31, 2023, one customer accounted for more than 10% of the Company’s revenue. Two customers accounted for 12.5% and 10.7% of the Company’s trade accounts receivable balance as of March 31, 2024. Two customers accounted for 12.7% and 11.6% of the Company’s trade accounts receivable balance as of December 31, 2023. The Company relies on Avantor, Inc. (formerly NuSil Technology, LLC), or Avantor, as the sole supplier of medical-grade silicone used in Motiva Implants. During the three months ended March 31, 2024 and 2023, the Company had purchases of $4.9 million, or 54.0% of total purchases, and $13.2 million, or 55.1% of total purchases, respectively, from Avantor. As of March 31, 2024 and December 31, 2023 , the Company had an outstanding balance owed to this vendor of $4.1 million and $5.3 million, respectively. The Company’s financial condition and future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, unfavorable economic conditions, uncertainty of regulatory approval of the Company’s current and potential future products, uncertainty of market acceptance of the Company’s products, competition from substitute products and larger companies, securing and protecting proprietary technology, access to capital, strategic relationships and dependence on key individuals and sole source suppliers. |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Accounts Receivable and Allowance for Credit Losses | Accounts Receivable and Allowance for Credit Losses |
Inventory and Cost of Revenue | Inventory and Cost of Revenue Inventory is stated at the lower of cost to purchase or manufacture the inventory or the net realizable value of such inventory. Cost is determined using the standard cost method which approximates actual costs using the first-in, first-out basis. The Company regularly reviews inventory quantities, actual losses, projected future demand, and remaining shelf life to record a provision for obsolete and/or damaged inventory. Provision for inventory obsolescence of $4.3 million and $3.9 million has been recorded as of March 31, 2024 and December 31, 2023, respectively. The Company recognizes the cost of inventory transferred to the customer in cost of revenue when revenue is recognized. |
Leases | Leases The Company determines if an arrangement is, or contains, a lease at the inception date of the contract. The Company has elected an expedient to account for each separate lease component and its associated non-lease components as a single lease component for the majority of its asset classes. The lease term may include periods covered by options to extend or terminate the lease when it is reasonably certain that the Company will exercise a renewal option, or reasonably certain it will not exercise an early termination option. The Company recognizes lease liabilities and right-of-use, or ROU, assets upon commencement for all material leases with a term greater than 12 months. The Company has elected an expedient not to recognize leases with a lease term of 12 months or less on the balance sheet. These short-term leases are expensed on a straight-line basis over the lease term. |
Shipping and Handling Costs and Revenue Recognition | Shipping and Handling Costs Revenue Recognition The Company recognizes revenue related to sales of products to distributors or directly to customers in markets where it has regulatory approval, net of discounts and allowances. The Company recognizes revenue in accordance with Accounting Standards Codification, or ASC, Revenue from Contracts with Customers (Topic 606) . ASC 606 requires the Company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The Company recognizes revenue related to the sales of products to distributors at the time of shipment of the product, which represents the point in time when the distributor has taken ownership and assumed the risk of loss, and the required revenue recognition criteria are satisfied. The Company’s distributors are obligated to pay within specified terms regardless of when, or if, they sell the products. The Company’s contracts with distributors typically do not contain right of return or price protection and have no post-delivery obligations. The Company recognizes revenue when title to the product and risk of loss transfer to customers, provided there are no remaining performance obligations required of the Company or any written matters requiring customer acceptance. The Company allows for the return of product from direct customers in certain regions in limited instances within fifteen days after the original sale and records estimated sales returns as a reduction of sales in the same period revenue is recognized. Appropriate reserves are established for anticipated sales returns based on historical experience, recent gross sales and any notification of pending returns. Actual sales returns in any future period are inherently uncertain and thus may differ from the estimates. If actual sales returns differ significantly from the estimates, an adjustment to revenue in the current or subsequent period is recorded. An allowance of $0.1 million and $0.3 million was recorded for product returns as of March 31, 2024 and December 31, 2023, respectively. Taxes collected from customers for remittance to governmental authorities are excluded from net sales. A portion of the Company’s revenue is generated from the sale of consigned inventory maintained at physician, hospital, or clinic locations. For these products, revenue is recognized at the time the Company is notified by the consignee that the product has been implanted, not when the consigned products are delivered to the consignee’s warehouse. Revenue was generated in these primary geographic markets: Three Months Ended March 31, 2024 2023 (in thousands) EMEA (Europe / Middle East / Africa) $ 20,602 $ 19,985 Latin America 7,905 11,620 Asia-Pacific 8,598 14,021 Other 62 898 Total revenue $ 37,167 $ 46,524 The Company has a limited warranty for the shelf life of breast implants, which is five years from the time of manufacture. Estimated warranty obligations are recorded at the time of sale. The Company also offers a warranty to patients in the event of rupture and a replacement program for capsular contracture events, provided certain registration requirements are met. Revenue for extended warranties is recognized ratably over the term of the agreement. To date, these warranty and program costs have been de minimis. The Company will continue to evaluate the warranty reserve policies for adequacy considering claims history. Deferred revenue primarily consists of payments received in advance of meeting revenue recognition criteria. The Company has received payments from distributors to provide distribution exclusivity within a geographic area and recognizes revenue on a ratable basis over the term of such contractual distribution relationship. Additionally, the Company has received payments from customers in direct markets prior to surgical implantation and recognizes deferred revenue at the time the Company is notified by the customer that the product has been implanted. For all arrangements, any revenue that has been deferred and is expected to be recognized beyond one year is classified as long-term deferred revenue and included in “Other liabilities, long-term” on the condensed consolidated balance sheets (see Note 3). |
Research and Development | Research and Development Costs related to research and development, or R&D, activities are expensed as incurred. R&D costs primarily include personnel costs, materials, clinical expenses, regulatory expenses, product development, consulting services, and outside research activities, all of which are directly related to research and development activities. |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. five |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The Company records the excess of the acquisition purchase price over the net fair value of the tangible and identifiable intangible assets acquired and liabilities assumed as goodwill. In accordance with ASC 350, Intangibles - Goodwill and Other, the Company tests goodwill for impairment annually during the fourth quarter of each year and whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. In connection with the annual impairment test for goodwill, the Company elected the option to perform a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If the Company determines that it was more likely than not that the fair value of the reporting unit is less than its carrying amount, then the impairment test is performed. Consistent with the Company's assessment that it has only one reporting segment, the Company has determined that it has only one reporting unit and tests goodwill for impairment at the entity level using the two-step process required by ASC 350. In the first step, the Company compares the carrying amount of the reporting unit to the fair value of the enterprise. If the fair value of the enterprise exceeds the carrying value, goodwill is not considered impaired and no further testing is required. If the carrying value of the enterprise exceeds the fair value, goodwill is potentially impaired, and the second step of the impairment test must be performed. In the second step, the Company compares the implied fair value of the goodwill, as defined by ASC 350, to its carrying amount to determine the impairment loss, if any. The Company capitalizes certain costs related to intangible assets, such as patents, trademarks and software development costs. The Company follows the provisions of ASC 350-40, Internal Use Software for determining whether computer software is internal-use software and on accounting for the costs of computer software originally developed or obtained for internal use. The Company expenses all costs incurred during the preliminary project stage of software development and capitalizes the costs incurred during the application development stage. Costs incurred relating to upgrades and enhancements to the software are capitalized if it is determined that these upgrades or enhancements add additional functionality to the software. Costs incurred to improve and support products after they become available are charged to expense as incurred. The Company records purchased intangible assets at their respective estimated fair values at the date of acquisition. Purchased finite-lived intangible assets are being amortized using the straight-line method over their two |
Long-Lived Assets | Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable. When such an event occurs, management determines whether there has bee n impairment by comparing the anticipated undiscounted future net cash flows to the related asset group’s carrying value. If an asset is considered impaired, the asset is written down to fair value, which is determined based either on discounted cash flows or appraised value, depending on the nature of the asset. There were no impairment charges, or changes in estimated useful lives recorded during the year ended December 31, 2023. As of March 31, 2024, no triggering events have occurred which would indicate that the acquired long-lived asset values may not be recoverable. |
Debt Issuance Costs and Debt Discounts | Debt Issuance Costs and Debt Discounts Costs incurred in connection with the issuance of new debt are capitalized. Capitalizable debt issuance costs paid to third parties and debt discounts, net of amortization, are recorded as a reduction to the long-term debt balance on the condensed consolidated balance sheets. Amortization expense on capitalized debt issuance costs and debt discounts related to loans are calculated using the effective interest method over the term of the loan commitment and is recorded as interest expense in the condensed consolidated statements of operations. |
Income Taxes | Income Taxes The Company records income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s condensed consolidated financial statements or income tax returns. In estimating future tax consequences, expected future events, enactments or changes in the tax law or rates are considered. Valuation allowances are provided when necessary to reduce deferred tax assets to the amount expected to be realized. The Company operates in various tax jurisdictions and is subject to audits by various tax authorities. The Company records uncertain tax positions based on a two-step process whereby (1) a determination is made as to whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold the Company recognizes the largest amount of tax benefit that is greater than 50% likely to be realized upon ultimate settlement with the related tax authority. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. Significant judgment is required in the identification of uncertain tax positions and in the estimation of penalties and interest on uncertain tax positions. |
Foreign Currency | Foreign Currency The financial statements of the Company’s foreign subsidiaries whose functional currencies are the local currencies are translated into U.S. dollars for consolidation as follows: assets and liabilities at the exchange rate as of the balance sheet date, stockholders’ equity at the historical rates of exchange, and income and expense amounts at the average exchange rate for the period. Translation adjustments resulting from the translation of the subsidiaries’ accounts are included in “Accumulated other comprehensive income” as equity in the condensed consolidated balance sheet. Transactions denominated in currencies other than the applicable functional currency |
Comprehensive Loss | Comprehensive Loss |
Share-based Compensation | Share-Based Compensation The Company measures and recognizes compensation expense for all share-based awards in accordance with the provisions of ASC 718, Stock Compensation . Share-based awards granted include stock options, restricted stock units, or RSUs, and restricted stock awards, or RSAs. Share-based compensation expense for stock options and RSAs or RSUs granted to employees is measured at the grant date based on the fair value of the awards and is recognized as an expense ratably on a straight-line basis over the requisite service period. The fair value of options to purchase shares is estimated on the grant date using the Black-Scholes option valuation model. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic net income (loss) per share is calculated by dividing the net income (loss) attributable to shareholders by the weighted-average number of shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net income (loss) per share is computed by dividing the net income (loss) by the weighted-average number of shares and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, any shares issuable upon exercise of warrants, stock options and non-vested RSUs or RSAs outstanding under the Company’s equity plan are potentially dilutive securities. Diluted net loss per share is the same as basic net loss per share for periods where the Company reported a net loss because including the dilutive securities would be anti-dilutive. |
Reclassifications | Reclassifications Certain reclassifications have been made to prior year amounts to conform to the current year presentation. These reclassifications had no material impact on the Company’s financial position as of March 31, 2024 or results of operations for the three months ended March 31, 2024. |
Recent Accounting Standards | Recent Accounting Standards Periodically, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s consolidated financial statements upon adoption. The following recent accounting pronouncements issued by the FASB could have a material effect on the Company’s financial statements: Recently Issued Accounting Standards In November 2023, the FASB issued Accounting Standards Update, or ASU, No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which expands annual and interim disclosure requirements for reportable segments, especially significant segment expenses, and provides new disclosure requirements for entities with a single reportable segment. The new guidance is effective for our annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025. The Company is currently evaluating the potential impact of the updated requirements, but based on current understanding, does not expect a material impact on its consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topics 740): Improvements to Income Tax Disclosures , which enhances the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. The guidance is effective for annual periods beginning January 1, 2025, with early adoption permitted. The Company is currently evaluating the potential effect that the updated standard will have on the financial statement disclosures . |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Schedule of Consolidated Entities | The condensed consolidated financial statements include the Company’s accounts and those of its wholly owned subsidiaries as of March 31, 2024 as follows: Subsidiary Incorporation/Acquisition Date Establishment Labs, S.A. (Costa Rica) January 18, 2004 Motiva USA, LLC (USA) February 20, 2014 JAMM Technologies, Inc. (USA) October 27, 2015 Establishment Labs Produtos par Saude Ltda (Brazil) January 4, 2016 European Distribution Center Motiva BV (Belgium) March 4, 2016 Motiva Implants France SAS (France) September 12, 2016 JEN-Vault AG (Switzerland) November 22, 2016 Motiva Nordica AB (Sweden) November 2, 2017 Motiva Implants UK Limited (the United Kingdom) July 31, 2018 Motiva Italy S.R.L (Italy) July 31, 2018 Motiva Implants Spain, S.L. (Spain) January 3, 2019 Motiva Austria GmbH (Austria) January 14, 2019 Motiva Germany GmbH (Germany) August 1, 2019 Motiva Argentina S.R.L (Argentina) February 7, 2020 |
Disaggregation of Revenue | Revenue was generated in these primary geographic markets: Three Months Ended March 31, 2024 2023 (in thousands) EMEA (Europe / Middle East / Africa) $ 20,602 $ 19,985 Latin America 7,905 11,620 Asia-Pacific 8,598 14,021 Other 62 898 Total revenue $ 37,167 $ 46,524 |
Balance Sheet Accounts (Tables)
Balance Sheet Accounts (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Inventory, Net | March 31, December 31, (in thousands) Raw materials $ 39,080 $ 40,663 Work in process 1,578 1,727 Finished goods 31,831 37,081 Total inventory, net $ 72,489 $ 79,471 |
Schedule of Prepaid Expenses and Other Current Assets | March 31, December 31, (in thousands) Prepaid insurance $ 431 $ 2,747 Prepaid services 1,882 420 Prepaid taxes 792 1,073 Prepaid assets 352 394 Prepaid raw materials and accessories 254 468 Prepaid U.S. clinical trial costs 137 176 Prepaid warranty and distribution rights 249 275 Prepaid software 594 506 Other 2,697 2,418 Total prepaid expenses $ 7,388 $ 8,477 |
Schedule of Property and Equipment, Net | March 31, December 31, (in thousands) Machinery and equipment $ 20,040 $ 20,510 Building improvements 10,137 10,626 Furniture and fixtures 13,782 9,224 Building 16,109 16,109 Leasehold improvements 2,580 2,600 Land 3,694 3,694 Vehicles 176 176 Construction in process 29,951 30,593 Total 96,469 93,532 Less: Accumulated depreciation and amortization (17,225) (16,327) Total property and equipment, net $ 79,244 $ 77,205 |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following: March 31, December 31, (in thousands) Performance bonus $ 5,543 $ 4,451 Payroll and related expenses 5,319 5,223 Operating lease liabilities - current 837 773 Commissions 434 344 Professional and legal services 1,828 1,269 Taxes 380 109 Warranty reserve 130 119 Other 736 1,402 Total accrued liabilities $ 15,207 $ 13,690 |
Schedule of Short-term Debt | Other liabilities, short-term consisted of the following: March 31, December 31, (in thousands) Deferred revenue $ 1,739 $ 1,836 |
Schedule of Long-term Debt | Other liabilities, long-term consisted of the following: March 31, December 31, (in thousands) Deferred revenue $ 1,394 $ 1,498 Other 151 147 Total other liabilities, long-term $ 1,545 $ 1,645 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | There were no changes in the carrying amount of goodwill during the three months ended March 31, 2024: Balance as of January 1, 2024 Additions Accumulated Impairment Losses Balance as of March 31, 2024 (in thousands) Goodwill $ 465 $ — $ — $ 465 |
Schedule of Finite-Lived Intangible Assets | The carrying amounts of these intangible assets other than goodwill as of March 31, 2024 were as follows: Gross Carrying Amount Accumulated Amortization Net Carrying Amount Estimated Useful Lives (in thousands) (in years) Patents and license rights $ 2,007 $ (1,438) $ 569 7-12 Customer relationships 2,033 (1,992) 41 4-10 510(k) authorization 567 (317) 250 15 Developed technology 62 (62) — 10 Capitalized software development costs 5,293 (2,919) 2,374 2-5 Other 183 (42) 141 2-5 Capitalized software development costs not yet amortized 5,698 — 5,698 Patents and license rights not yet amortized 441 — 441 Total intangibles other than goodwill $ 16,284 $ (6,770) $ 9,515 The carrying amounts of intangible assets other than goodwill as of December 31, 2023 were as follows: Gross Carrying Amount Accumulated Amortization Net Carrying Amount Estimated Useful Lives (in thousands) (in years) Patents and license rights $ 2,007 $ (1,414) $ 593 7-12 Customer relationships 2,033 (1,987) 46 4-10 510(k) authorization 567 (307) 260 15 Developed technology 62 (62) — 10 Capitalized software development costs 5,293 (2,653) 2,640 2-5 Other 183 (41) 142 2-5 Capitalized software development costs not yet amortized 3,865 — 3,865 Patents and license rights not yet amortized 441 — 441 Total intangibles other than goodwill $ 14,451 $ (6,464) $ 7,987 |
Schedule of Indefinite-Lived Intangible Assets | The carrying amounts of these intangible assets other than goodwill as of March 31, 2024 were as follows: Gross Carrying Amount Accumulated Amortization Net Carrying Amount Estimated Useful Lives (in thousands) (in years) Patents and license rights $ 2,007 $ (1,438) $ 569 7-12 Customer relationships 2,033 (1,992) 41 4-10 510(k) authorization 567 (317) 250 15 Developed technology 62 (62) — 10 Capitalized software development costs 5,293 (2,919) 2,374 2-5 Other 183 (42) 141 2-5 Capitalized software development costs not yet amortized 5,698 — 5,698 Patents and license rights not yet amortized 441 — 441 Total intangibles other than goodwill $ 16,284 $ (6,770) $ 9,515 The carrying amounts of intangible assets other than goodwill as of December 31, 2023 were as follows: Gross Carrying Amount Accumulated Amortization Net Carrying Amount Estimated Useful Lives (in thousands) (in years) Patents and license rights $ 2,007 $ (1,414) $ 593 7-12 Customer relationships 2,033 (1,987) 46 4-10 510(k) authorization 567 (307) 260 15 Developed technology 62 (62) — 10 Capitalized software development costs 5,293 (2,653) 2,640 2-5 Other 183 (41) 142 2-5 Capitalized software development costs not yet amortized 3,865 — 3,865 Patents and license rights not yet amortized 441 — 441 Total intangibles other than goodwill $ 14,451 $ (6,464) $ 7,987 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of March 31, 2024, the amortization expense related to identifiable intangible assets, with definite useful lives, in future periods is expected to be as follows: Year Ending December 31, (in thousands) 2024 (remaining) $ 848 2025 1,024 2026 561 2027 329 2028 185 Thereafter 427 Total expected future amortization expense $ 3,374 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | The Company recorded Oaktree debt on the condensed consolidated balance sheets as follows: March 31, December 31, (in thousands) Principal $ 195,455 $ 192,566 Net unamortized debt discount and issuance costs (3,269) (3,827) Net carrying value of Oaktree debt $ 192,186 $ 188,739 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Lease, Cost | Total lease cost includes the following components: Three Months Ended March 31, 2024 2023 (in thousands) Operating lease expense cost $ 313 $ 277 Sublease income (78) — Total lease cost, net of sublease income $ 235 $ 277 Three Months Ended March 31, 2024 2023 Cash paid for amounts included in the measurement of lease liabilities (in thousands) Operating cash outflows from operating lease expenses $ 306 $ 268 Operating cash inflows from subleases (80) — Operating cash outflows from operating leases, net of sublease income $ 226 $ 268 ROU assets obtained in exchange for new lease liabilities Operating leases $ 734 $ 478 |
Assets And Liabilities, Lessee | March 31, 2024 December 31, Supplemental balance sheet information (in thousands) Operating lease right-of-use assets $ 3,908 $ 3,381 Operating lease liabilities - short-term 837 773 Operating lease liabilities - long-term 3,180 2,712 Total operating lease liabilities $ 4,017 $ 3,485 Weighted-average remaining lease term (years) Operating leases 4.5 4.6 Weighted-average discount rate (%) Operating leases 10.1 % 9.3 % |
Lessee, Operating Lease, Liability, Maturity | Maturities of lease liabilities as of March 31, 2024 were as follows: Years Ending December 31, Operating Leases (in thousands) 2024 (remaining) $ 877 2025 1,101 2026 1,026 2027 920 2028 775 Thereafter 369 Total future minimum lease payments 5,068 Less: Amount of lease payments representing interest (1,051) Present value of future minimum lease payments $ 4,017 |
Lessor, Operating Lease, Payment to be Received, Maturity | The undiscounted future cash receipts from the Company’s sublease as of March 31, 2024 were as follows: Years Ending December 31, Sublease (in thousands) 2024 (remaining) $ 241 2025 332 2026 343 2027 355 2028 368 Thereafter 315 Total undiscounted future sublease cash receipts $ 1,954 |
Shareholders_ Equity (Tables)
Shareholders’ Equity (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Schedule of Reserved Ordinary Shares for Future Issuances | The Company had reserved common shares for future issuances as follows: March 31, December 31, 2023 Warrants to purchase common shares 675,413 — Options to purchase common shares 1,517,183 1,487,387 Remaining shares available under the 2018 Equity Incentive Plan 2,165,718 2,953,884 Shares issuable on vesting of grants of RSUs 312,426 196,177 Remaining shares available under the 2018 ESPP 1,222,000 1,035,000 Total 5,892,740 5,672,448 |
Warrants (Tables)
Warrants (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Schedule of Stockholders' Equity , Warrants or Rights | As of March 31, 2024, warrants to purchase 675,413 common shares were outstanding and exercisable. As of December 31, 2023, no warrants were outstanding and exercisable. Warrant Holder Issue Date Shares Exercise Price Expiration Date Blackwell Partners LLC 1/9/2024 296,978 $ 0.001 * Pinehurst Partners, L.P. 1/9/2024 80,000 $ 0.001 * RTW Master Fund, Ltd. 1/9/2024 164,367 $ 0.001 * RTW Innovation Master Fund, Ltd. 1/9/2024 134,068 $ 0.001 * * The warrants are exercisable immediately and until exercised in full. |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share-based Compensation Expense | During the periods presented, the Company recorded the following share-based compensation expense for stock options and RSUs: Three Months Ended March 31, 2024 2023 (in thousands) Sales, general and administrative $ 2,908 $ 2,748 Research and development 536 576 Total stock compensation expense $ 3,444 $ 3,324 |
Schedule of Stock Options | Number of Options Outstanding Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Balances at December 31, 2023 1,487,387 $ 47.47 6.27 $ 4,308 Granted (weighted-average fair value $32.58 per share) 144,463 46.47 Exercised (53,400) 26.70 Forfeited/canceled (61,267) 67.18 Balances at March 31, 2024 1,517,183 $ 47.31 6.38 $ 19,981 |
Schedule of Employee Stock Options Valuation Assumptions | The fair value of stock options granted to employees was estimated using the following assumptions: Three Months Ended March 31, 2024 2023 Volatility 71% - 75% 62% Risk-free interest rate 4.1% - 4.8% 4.1% - 4.3% Term (in years) 6.25 6.25 Dividend yield — — The fair value of stock options granted to consultants was estimated using the following assumptions during the following periods presented: Three Months Ended March 31, 2024 2023 Volatility 65% - 68% 60% Risk-free interest rate 4.1% - 4.5% 4.0% Term (in years) 10 10 Dividend yield — — |
Schedule of Restricted Stock | The following table represents RSU activity for fiscal 2024: Restricted Stock Units Weighted- Outstanding unvested at December 31, 2023 196,177 $ 56.89 Granted 140,770 47.29 Vested (11,979) 69.42 Forfeited/canceled (12,542) 62.24 Outstanding unvested at March 31, 2024 312,426 $ 51.87 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | The following table summarizes the computation of basic and diluted net loss per share for the periods presented: Three Months Ended March 31, 2024 2023 (in thousands, except share and per share data) Numerator: Net loss $ (16,202) $ (11,942) Denominator: Weighted average common shares used for basic and diluted earnings per share 27,788,120 24,678,113 Net loss per share: Basic and diluted $ (0.58) $ (0.48) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following potentially dilutive securities outstanding at the end of the periods presented have been excluded from the computation of diluted shares: Three Months Ended March 31, 2024 2023 Options to purchase common shares 1,517,183 1,634,983 Shares issuable on vesting of grants of RSUs 312,426 202,680 Total potentially dilutive shares outstanding 1,829,609 1,837,663 |
Formation and Business of the_2
Formation and Business of the Company (Details) | Mar. 31, 2024 facility |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of manufacturing facilities | 2 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 USD ($) segment financial_institution unit | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||
Number of operating segments | segment | 1 | ||
Number of reportable segments | segment | 1 | ||
Number of financial institutions | financial_institution | 2 | ||
Cash equivalents | $ 2,400,000 | $ 2,800,000 | |
Inventory valuation reserves | 4,300,000 | 3,900,000 | |
Shipping and handling expenses | $ 28,941,000 | $ 31,706,000 | |
Product return period | 15 days | ||
Valuation allowances and reserves, amount | $ 100,000 | 300,000 | |
Product shelf life | 5 years | ||
Estimated useful lives | 50 years | ||
Number of reporting units | unit | 1 | ||
Goodwill and intangible asset impairment | 0 | ||
Asset impairment charges | 0 | ||
Foreign currency transaction gain (loss) | $ (3,000,000) | 900,000 | |
Minimum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Estimated useful lives | 5 years | ||
Estimated useful lives | 2 years | ||
Maximum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Estimated useful lives | 10 years | ||
Estimated useful lives | 15 years | ||
Shipping and Handling | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Shipping and handling expenses | $ 1,700,000 | 2,800,000 | |
Product Concentration Risk | Avantor, Inc | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Purchases from suppliers | 4,900,000 | $ 13,200,000 | |
Outstanding balance owed | $ 4,100,000 | $ 5,300,000 | |
Revenue from Contract with Customer Benchmark | Geographic Concentration Risk | Brazil | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk (as a percent) | 10.50% | 12.80% | |
Long-lived Assets | Geographic Concentration Risk | COSTA RICA | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk (as a percent) | 84% | 80% | |
Purchases | Product Concentration Risk | Avantor, Inc | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk (as a percent) | 54% | 55.10% | |
Customer One | Accounts Receivable | Customer concentration risk | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk (as a percent) | 12.50% | 12.70% | |
Customer Two | Accounts Receivable | Customer concentration risk | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk (as a percent) | 10.70% | 11.60% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 37,167 | $ 46,524 |
EMEA (Europe / Middle East / Africa) | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 20,602 | 19,985 |
Latin America | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 7,905 | 11,620 |
Asia-Pacific | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 8,598 | 14,021 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 62 | $ 898 |
Balance Sheet Accounts - Invent
Balance Sheet Accounts - Inventory (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 39,080 | $ 40,663 |
Work in process | 1,578 | 1,727 |
Finished goods | 31,831 | 37,081 |
Total inventory, net | $ 72,489 | $ 79,471 |
Balance Sheet Accounts - Narrat
Balance Sheet Accounts - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Aug. 31, 2021 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | |
Property, Plant and Equipment [Line Items] | |||||
Inventory on consignment | $ 8.3 | $ 7.1 | |||
Depreciation and amortization expense | $ 0.9 | $ 0.6 | |||
Land, Buildings and Improvements | Zona Franca Coyol, S.A. | |||||
Property, Plant and Equipment [Line Items] | |||||
Option to purchase land and buildings | $ 12.6 | ||||
Land | Zona Franca Coyol, S.A. | |||||
Property, Plant and Equipment [Line Items] | |||||
Option to purchase land and buildings | $ 2.8 |
Balance Sheet Accounts - Prepai
Balance Sheet Accounts - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid insurance | $ 431 | $ 2,747 |
Prepaid services | 1,882 | 420 |
Prepaid taxes | 792 | 1,073 |
Prepaid assets | 352 | 394 |
Prepaid raw materials and accessories | 254 | 468 |
Prepaid U.S. clinical trial costs | 137 | 176 |
Prepaid warranty and distribution rights | 249 | 275 |
Prepaid software | 594 | 506 |
Other | 2,697 | 2,418 |
Total prepaid expenses | $ 7,388 | $ 8,477 |
Balance Sheet Accounts - Proper
Balance Sheet Accounts - Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 96,469 | $ 93,532 |
Less: Accumulated depreciation and amortization | (17,225) | (16,327) |
Total property and equipment, net | 79,244 | 77,205 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 20,040 | 20,510 |
Building improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 10,137 | 10,626 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 13,782 | 9,224 |
Building | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 16,109 | 16,109 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,580 | 2,600 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 3,694 | 3,694 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 176 | 176 |
Construction in process | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 29,951 | $ 30,593 |
Balance Sheet Accounts - Accrue
Balance Sheet Accounts - Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Performance bonus | $ 5,543 | $ 4,451 |
Payroll and related expenses | 5,319 | 5,223 |
Operating lease liabilities - current | $ 837 | $ 773 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued liabilities | Accrued liabilities |
Commissions | $ 434 | $ 344 |
Professional and legal services | 1,828 | 1,269 |
Taxes | 380 | 109 |
Warranty reserve | 130 | 119 |
Other | 736 | 1,402 |
Accrued liabilities | $ 15,207 | $ 13,690 |
Balance Sheet Accounts - Other
Balance Sheet Accounts - Other Liabilities, Short-Term (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Deferred revenue | $ 1,739 | $ 1,836 |
Balance Sheet Accounts - Othe_2
Balance Sheet Accounts - Other Liabilities, Long-Term (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Deferred revenue | $ 1,394 | $ 1,498 |
Other | 151 | 147 |
Other liabilities, long-term | $ 1,545 | $ 1,645 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Goodwill [Roll Forward] | |
Beginning Balance | $ 465 |
Additions | 0 |
Accumulated Impairment Losses | 0 |
Ending Balance | $ 465 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Accumulated Amortization | $ (6,770) | $ (6,464) |
Net Carrying Amount | 3,374 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross Carrying Amount | 16,284 | 14,451 |
Net Carrying Amount | 9,515 | 7,987 |
Capitalized software development costs not yet amortized | ||
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract] | ||
Patents and license rights not yet amortized | 5,698 | 3,865 |
Patents and license rights not yet amortized | ||
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract] | ||
Patents and license rights not yet amortized | $ 441 | 441 |
Minimum | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Estimated Useful Lives | 2 years | |
Maximum | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Estimated Useful Lives | 15 years | |
Patents and license rights | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | $ 2,007 | 2,007 |
Accumulated Amortization | (1,438) | (1,414) |
Net Carrying Amount | $ 569 | $ 593 |
Patents and license rights | Minimum | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Estimated Useful Lives | 7 years | 7 years |
Patents and license rights | Maximum | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Estimated Useful Lives | 12 years | 12 years |
Customer relationships | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | $ 2,033 | $ 2,033 |
Accumulated Amortization | (1,992) | (1,987) |
Net Carrying Amount | $ 41 | $ 46 |
Customer relationships | Minimum | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Estimated Useful Lives | 4 years | 4 years |
Customer relationships | Maximum | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Estimated Useful Lives | 10 years | 10 years |
510(k) authorization | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | $ 567 | $ 567 |
Accumulated Amortization | (317) | (307) |
Net Carrying Amount | $ 250 | $ 260 |
Estimated Useful Lives | 15 years | 15 years |
Developed technology | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | $ 62 | $ 62 |
Accumulated Amortization | (62) | (62) |
Net Carrying Amount | $ 0 | $ 0 |
Estimated Useful Lives | 10 years | 10 years |
Capitalized software development costs not yet amortized | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | $ 5,293 | $ 5,293 |
Accumulated Amortization | (2,919) | (2,653) |
Net Carrying Amount | $ 2,374 | $ 2,640 |
Capitalized software development costs not yet amortized | Minimum | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Estimated Useful Lives | 2 years | 2 years |
Capitalized software development costs not yet amortized | Maximum | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Estimated Useful Lives | 5 years | 5 years |
Other | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | $ 183 | $ 183 |
Accumulated Amortization | (42) | (41) |
Net Carrying Amount | $ 141 | $ 142 |
Other | Minimum | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Estimated Useful Lives | 2 years | 2 years |
Other | Maximum | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Estimated Useful Lives | 5 years | 5 years |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of intangible assets | $ 300,000 | $ 300,000 | |
Goodwill and intangible asset impairment | $ 0 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Amortization Expense (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 (remaining) | $ 848 |
2025 | 1,024 |
2026 | 561 |
2027 | 329 |
2028 | 185 |
Thereafter | 427 |
Net Carrying Amount | $ 3,374 |
Debt - Narrative (Details)
Debt - Narrative (Details) | 3 Months Ended | 23 Months Ended | |||||
Feb. 21, 2024 USD ($) tranche | Feb. 20, 2024 USD ($) | Apr. 26, 2022 USD ($) | Mar. 31, 2024 USD ($) tranche | Mar. 31, 2023 USD ($) | Mar. 31, 2024 USD ($) tranche | Dec. 31, 2023 USD ($) | |
Debt Instrument [Line Items] | |||||||
Number of remaining available tranches | tranche | 2 | ||||||
Number of tranches | tranche | 4 | 4 | |||||
Oaktree Credit Agreement | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 225,000,000 | ||||||
Early repayment amount | $ 5,000,000 | ||||||
Capital lease term | 5 years | ||||||
Effective interest rate | 10.40% | 10.40% | |||||
Interest rate paid in kind, basis points | 6% | ||||||
Original discount rate | 2% | ||||||
Exit fee | 3% | ||||||
Minimum liquidity requirement | $ 20,000,000 | ||||||
Gross sales requirement, period | 12 months | ||||||
Minimum gross sales | $ 200,000,000 | ||||||
Minimum gross sales percentage | 50% | ||||||
Weighted average interest rate | 9% | 9% | |||||
Amount of cash interest payments eligible for interest-in-kind payment | 67% | 67% | |||||
Minimum initial cash interest rate | 0.0300 | ||||||
Interest expense | $ 4,300,000 | $ 4,100,000 | |||||
Outstanding principal balance | $ 195,455,000 | $ 195,455,000 | $ 192,566,000 | ||||
Interest accrued | $ 20,500,000 | ||||||
Oaktree Credit Agreement | Line of Credit | Prior to Second Anniversary | |||||||
Debt Instrument [Line Items] | |||||||
Yield protection premium fee | 4% | ||||||
Oaktree Credit Agreement | Line of Credit | Prior to Third Anniversary | |||||||
Debt Instrument [Line Items] | |||||||
Yield protection premium fee | 4% | ||||||
Oaktree Credit Agreement | Line of Credit | Prior to Fourth Anniversary | |||||||
Debt Instrument [Line Items] | |||||||
Yield protection premium fee | 2% | ||||||
Oaktree Credit Agreement | Line of Credit | Subsequent to Fourth Anniversary | |||||||
Debt Instrument [Line Items] | |||||||
Yield protection premium fee | 0% | ||||||
Credit Agreement, Tranche A Term Loan | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 150,000,000 | ||||||
Effective interest rate | 9% | ||||||
Madryn Credit Agreement | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Early repayment amount | $ 6,500,000 | ||||||
Credit Agreement, Tranche B Term Loan | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 25,000,000 | ||||||
Effective interest rate | 9% | ||||||
Minimum liquidity requirement | $ 25,000,000 | ||||||
Credit Agreement, Tranche C Term Loan | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 25,000,000 | ||||||
Trailing twelve month gross sales, milestones | $ 225,000,000 | ||||||
Effective interest rate | 10% | ||||||
Yield protection premium fee | 4% | ||||||
Period after advance | 1 year | ||||||
Credit Agreement, Tranche D Term Loan | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 25,000,000 | ||||||
Trailing twelve month gross sales, milestones | $ 195,000,000 | $ 225,000,000 | |||||
Effective interest rate | 10% | ||||||
Yield protection premium fee | 4% | ||||||
Period after advance | 1 year | ||||||
Credit Agreement, Tranche D Term Loan | Line of Credit | Triggering Event One | |||||||
Debt Instrument [Line Items] | |||||||
Effective interest rate | 8.25% |
Debt - Schedule of Madryn Debt
Debt - Schedule of Madryn Debt (Details) - Oaktree Credit Agreement - Line of Credit - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Line of Credit Facility [Line Items] | ||
Principal | $ 195,455 | $ 192,566 |
Net unamortized debt discount and issuance costs | (3,269) | (3,827) |
Net carrying value of Oaktree debt | $ 192,186 | $ 188,739 |
Leases - Narrative (Details)
Leases - Narrative (Details) - Maximum | Mar. 31, 2024 |
Lessee, Lease, Description [Line Items] | |
Operating lease, term of contract | 6 years |
Finance lease, term of contract | 6 years |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Leases [Abstract] | ||
Operating lease expense cost | $ 313 | $ 277 |
Sublease income | (78) | 0 |
Total lease cost, net of sublease income | $ 235 | $ 277 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Operating leases | ||
Right-of-use operating lease assets, net | $ 3,908 | $ 3,381 |
Operating lease liabilities - current | 837 | 773 |
Operating lease liabilities, non-current | 3,180 | 2,712 |
Total operating lease liabilities | $ 4,017 | $ 3,485 |
Weighted-average remaining lease term (years) | ||
Operating leases | 4 years 6 months | 4 years 7 months 6 days |
Weighted-average discount rate (%) | ||
Operating leases | 10.10% | 9.30% |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating cash outflows from operating lease expenses | $ 306 | $ 268 |
Operating cash inflows from subleases | (80) | 0 |
Operating cash outflows from operating leases, net of sublease income | 226 | 268 |
ROU assets obtained in exchange for new lease liabilities | ||
Operating leases | $ 734 | $ 478 |
Leases - Lease Maturity (Detail
Leases - Lease Maturity (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Operating Leases | ||
2024 (remaining) | $ 877 | |
2025 | 1,101 | |
2026 | 1,026 | |
2027 | 920 | |
2028 | 775 | |
Thereafter | 369 | |
Total future minimum lease payments | 5,068 | |
Less: Amount of lease payments representing interest | (1,051) | |
Present value of future minimum lease payments | $ 4,017 | $ 3,485 |
Leases - Undiscounted Future Ca
Leases - Undiscounted Future Cash Receipts (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Leases [Abstract] | |
2024 (remaining) | $ 241 |
2025 | 332 |
2026 | 343 |
2027 | 355 |
2028 | 368 |
Thereafter | 315 |
Total undiscounted future sublease cash receipts | $ 1,954 |
Shareholders_ Equity - Narrativ
Shareholders’ Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 09, 2024 | Apr. 27, 2023 | Mar. 31, 2024 | Jan. 31, 2024 | Dec. 31, 2023 |
Subsidiary, Sale of Stock [Line Items] | |||||
Common stock, shares issued (in shares) | 27,884,749 | 26,495,250 | |||
Common stock, shares outstanding (in shares) | 27,476,679 | 26,087,180 | |||
Number of shares called by warrants (in shares) | 223,019 | ||||
Consideration received on transaction | $ 84.6 | ||||
Private Placement | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Shares issued (in shares) | 1,101,565 | ||||
Purchase price per share (in dollars per share) | $ 24.999 | ||||
Number of shares called by warrants (in shares) | 898,435 | 898,435 | |||
Exercise price of warrants (in dollars per share) | $ 0.001 | $ 0.001 | |||
Consideration received on transaction | $ 49.7 | ||||
Underwritten Public Offering | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Shares issued (in shares) | 1,100,000 | ||||
Purchase price per share (in dollars per share) | $ 71.50 | ||||
Underwriter Shares | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Purchase price per share (in dollars per share) | $ 67.21 | ||||
Over-Allotment Option | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Shares issued (in shares) | 165,000 |
Shareholders_ Equity - Reserved
Shareholders’ Equity - Reserved Ordinary Shares (Details) - shares | Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2018 |
Class of Stock [Line Items] | |||
Shares reserved for future issuance (in shares) | 5,892,740 | 5,672,448 | |
Warrants to purchase common shares | |||
Class of Stock [Line Items] | |||
Shares reserved for future issuance (in shares) | 675,413 | 0 | |
Remaining shares available under the 2018 Equity Incentive Plan | |||
Class of Stock [Line Items] | |||
Shares reserved for future issuance (in shares) | 2,165,718 | 2,953,884 | 1,500,000 |
Options to purchase common shares | |||
Class of Stock [Line Items] | |||
Shares reserved for future issuance (in shares) | 1,517,183 | 1,487,387 | |
Shares issuable on vesting of grants of RSUs | |||
Class of Stock [Line Items] | |||
Shares reserved for future issuance (in shares) | 312,426 | 196,177 | |
Remaining shares available under the 2018 ESPP | |||
Class of Stock [Line Items] | |||
Shares reserved for future issuance (in shares) | 1,222,000 | 1,035,000 |
Warrants - Narrative (Details)
Warrants - Narrative (Details) - $ / shares | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 | Dec. 31, 2023 | Jan. 31, 2024 | Jan. 09, 2024 | |
Class of Stock [Line Items] | ||||
Number of shares called by warrants (in shares) | 223,019 | |||
Warrant net exercises (in shares) | 223,022 | |||
Warrants outstanding (in shares) | 0 | |||
Warrant exercises (in shares) | 0 | |||
Private Placement | ||||
Class of Stock [Line Items] | ||||
Number of shares called by warrants (in shares) | 898,435 | 898,435 | ||
Exercise price of warrants (in dollars per share) | $ 0.001 | $ 0.001 |
Warrants - Warrant (Details)
Warrants - Warrant (Details) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
Class of Stock [Line Items] | ||
Shares (in shares) | 0 | |
Blackwell Partners LLC | ||
Class of Stock [Line Items] | ||
Shares (in shares) | 296,978 | |
Exercise Price (in dollars per share) | $ 0.001 | |
Pinehurst Partners, L.P. | ||
Class of Stock [Line Items] | ||
Shares (in shares) | 80,000 | |
Exercise Price (in dollars per share) | $ 0.001 | |
RTW Master Fund, Ltd. | ||
Class of Stock [Line Items] | ||
Shares (in shares) | 164,367 | |
Exercise Price (in dollars per share) | $ 0.001 | |
RTW Innovation Master Fund, Ltd. | ||
Class of Stock [Line Items] | ||
Shares (in shares) | 134,068 | |
Exercise Price (in dollars per share) | $ 0.001 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | |||||||||
Jan. 01, 2019 shares | Mar. 31, 2024 USD ($) $ / shares shares | Mar. 31, 2023 USD ($) | Jan. 01, 2024 shares | Dec. 31, 2023 shares | Jan. 01, 2023 shares | Jan. 01, 2022 shares | Jan. 01, 2021 shares | Jan. 01, 2020 shares | Dec. 31, 2018 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares reserved for future issuance (in shares) | shares | 5,892,740 | 5,672,448 | ||||||||
Number of options vested and exercisable (in shares) | shares | 975,179 | |||||||||
Weighted average exercise price vested and exercisable (in dollars per share) | $ / shares | $ 41.52 | |||||||||
Aggregate intrinsic value of options vested and exercisable | $ 17,600 | |||||||||
Number of options exercised in period (in shares) | shares | 53,400 | |||||||||
Weighted average exercise price of options exercised (in dollars per share) | $ / shares | $ 26.70 | |||||||||
Intrinsic value of options exercised in period | $ 1,100 | $ 2,500 | ||||||||
Unrecognized compensation expense of stock options granted | $ 14,500 | |||||||||
Unrecognized compensation expense period for recognition | 2 years 3 months 18 days | |||||||||
Unrecognized share-based compensation cost of unvested RSAs | $ 3,444 | 3,324 | ||||||||
Employee Stock Option | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares reserved for future issuance (in shares) | shares | 1,517,183 | 1,487,387 | ||||||||
Vesting period | 4 years | |||||||||
Unrecognized share-based compensation cost of unvested RSAs | $ 1,800 | 2,100 | ||||||||
Restricted Stock | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares reserved for future issuance (in shares) | shares | 312,426 | 196,177 | ||||||||
Convertible conversion ratio | 1 | |||||||||
RSAs vested in period | $ 1,500 | 800 | ||||||||
Unrecognized share-based compensation cost | $ 14,900 | |||||||||
Employee unrecognized compensation expense, period for recognition | 2 years 8 months 12 days | |||||||||
Minimum | Restricted Stock | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting period | 1 year | |||||||||
Maximum | Restricted Stock | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting period | 4 years | |||||||||
Consultant | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Unrecognized compensation expense of stock options to non-employees | $ 900 | |||||||||
Issuance of stock options, associated expense | $ 100 | $ 400 | ||||||||
Remaining shares available under the 2018 Equity Incentive Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares reserved for future issuance (in shares) | shares | 2,165,718 | 2,953,884 | 1,500,000 | |||||||
Increase in common stock, shares authorized (in shares) | shares | 750,000 | 750,000 | 750,000 | 750,000 | 750,000 | 750,000 | ||||
Common stock, capital shares reserved for future issuance, increase (decrease), percent | 4% | |||||||||
Common shares reserved (in shares) | shares | 6,000,000 |
Share-Based Compensation - Stoc
Share-Based Compensation - Stock Options and Restricted Stock (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock compensation expense | $ 3,444 | $ 3,324 |
Sales, general and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock compensation expense | 2,908 | 2,748 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock compensation expense | $ 536 | $ 576 |
Share-Based Compensation - St_2
Share-Based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Number of Options Outstanding | ||
Balance outstanding (in shares) | 1,487,387 | |
Granted (in shares) | 144,463 | |
Exercised (in shares) | (53,400) | |
Forfeited/canceled (in shares) | (61,267) | |
Balance outstanding (in shares) | 1,517,183 | 1,487,387 |
Weighted average fair value (in dollars per share) | $ 32.58 | |
Weighted-Average Exercise Price | ||
Options outstanding (in dollars per share) | 47.47 | |
Granted (in dollars per share) | 46.47 | |
Exercised (in dollars per share) | 26.70 | |
Forfeited/canceled (in dollars per share) | 67.18 | |
Options outstanding (in dollars per share) | $ 47.31 | $ 47.47 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Weighted-average remaining contractual term | 6 years 4 months 17 days | 6 years 3 months 7 days |
Aggregate intrinsic value | $ 19,981 | $ 4,308 |
Share-Based Compensation - St_3
Share-Based Compensation - Stock Option Granted to Employees (Details) - Employee - Employee Stock Option | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility, minimum | 71% | |
Volatility, maximum | 75% | |
Volatility | 62% | |
Risk free interest rate, minimum | 4.10% | 4.10% |
Risk-free interest rate, maximum | 4.80% | 4.30% |
Term (in years) | 6 years 3 months | 6 years 3 months |
Dividend yield | 0% | 0% |
Share-Based Compensation - St_4
Share-Based Compensation - Stock Options Granted to Non-employees (Details) - Non-employee - Employee Stock Option - Consultant | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility, minimum | 65% | |
Volatility, maximum | 68% | |
Volatility | 60% | |
Risk free interest rate, minimum | 4.10% | |
Risk-free interest rate, maximum | 4.50% | |
Risk-free interest rate | 4% | |
Term (in years) | 10 years | 10 years |
Dividend yield | 0% | 0% |
Share-Based Compensation - Rest
Share-Based Compensation - Restricted Stock Activity (Details) - Restricted Stock | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Restricted Stock Units | |
Outstanding balance (in shares) | shares | 196,177 |
Granted (in shares) | shares | 140,770 |
Vested (in shares) | shares | (11,979) |
Forfeited/canceled (in shares) | shares | (12,542) |
Outstanding balance (in shares) | shares | 312,426 |
Weighted- Average Grant Date Fair Value | |
Balance outstanding (in dollars per share) | $ / shares | $ 56.89 |
Granted (in dollars per share) | $ / shares | 47.29 |
Vested (in dollars per share) | $ / shares | 69.42 |
Forfeited/canceled (in dollars per share) | $ / shares | 62.24 |
Balance outstanding (in dollars per share) | $ / shares | $ 51.87 |
Net Loss Per Share - Basic and
Net Loss Per Share - Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Numerator: | ||
Net loss | $ (16,202) | $ (11,942) |
Denominator: | ||
Weighted average common shares used for basic earnings per share (in shares) | 27,788,120 | 24,678,113 |
Weighted average common shares used for diluted earnings per share (in shares) | 27,788,120 | 24,678,113 |
Net loss per share: | ||
Basic net loss per share (in dollars per share) | $ (0.58) | $ (0.48) |
Diluted net loss per share (in dollars per share) | $ (0.58) | $ (0.48) |
Net Loss Per Share - Dilutive S
Net Loss Per Share - Dilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive shares outstanding (in shares) | 1,829,609 | 1,837,663 |
Options to purchase common shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive shares outstanding (in shares) | 1,517,183 | 1,634,983 |
Shares issuable on vesting of grants of RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive shares outstanding (in shares) | 312,426 | 202,680 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||||||
May 28, 2023 | Dec. 12, 2022 | Dec. 31, 2020 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Aug. 31, 2022 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | ||||||||
Revenue | $ 37,167,000 | $ 46,524,000 | ||||||
Accounts payable | $ 31,070,000 | $ 41,624,000 | ||||||
Grants in period (in shares) | 144,463 | |||||||
Sales, general and administrative | $ 28,941,000 | 31,706,000 | ||||||
Employee Stock Option | ||||||||
Related Party Transaction [Line Items] | ||||||||
Vesting period | 4 years | |||||||
Immediate Family Member of Management or Principal Owner | Herramientas Medicas, S.A. | ||||||||
Related Party Transaction [Line Items] | ||||||||
Revenue | $ 200,000 | 500,000 | ||||||
Accounts payable | 400,000 | $ 600,000 | ||||||
Immediate Family Member of Management or Principal Owner | Dr. Chacon Quiros | ||||||||
Related Party Transaction [Line Items] | ||||||||
Cash reimbursement per day for services | $ 4,500 | |||||||
Cash reimbursement per hour for services | $ 531 | |||||||
Grants in period (in shares) | 22,068 | |||||||
Vesting period | 4 years | |||||||
Sales, general and administrative | 30,000 | 60,000 | ||||||
Related Party | Nicholas Lewin, BoD | Employee Stock Option | ||||||||
Related Party Transaction [Line Items] | ||||||||
Grants in period (in shares) | 7,829 | |||||||
Grant date fair value, options | $ 400,000 | |||||||
Related Party | Nicholas Lewin, BoD | Restricted Stock Units (RSUs) | ||||||||
Related Party Transaction [Line Items] | ||||||||
Granted (in shares) | 27,756 | |||||||
Grant date fair value, restricted stock | $ 1,800,000 | |||||||
Related Party | Lisa Gerch, BoD | ||||||||
Related Party Transaction [Line Items] | ||||||||
Consulting fee | $ 43,750 | $ 43,750 |
Employee Benefits (Details)
Employee Benefits (Details) | 3 Months Ended |
Mar. 31, 2024 employee | |
Brazil | |
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |
Number of employees represented by a labor union | 41 |
Argentina | |
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |
Number of employees represented by a labor union | 4 |