| Delaware (State or other jurisdiction of incorporation or organization) | | | 3841 (Primary Standard Industrial Classification Code Number) | | | 26-1828101 (I.R.S. Employer Identification Number) | |
| Brett Hanson Emily Humbert Fox Rothschild LLP 33 South Sixth Street, Suite 3600 Minneapolis, Minnesota 55402 (612) 607-7000 | | | Barry I. Grossman Sarah Williams Matthew Bernstein Ellenoff Grossman & Schole LLP 1345 Avenue of the Americas New York, New York 10105 (212) 370-1300 (telephone number) (212) 370-7889 (facsimile number) | |
| Large accelerated filer ☐ | | | Accelerated filer ☐ | |
| Non-accelerated filer ☒ | | | Smaller reporting company ☒ | |
| | | | Emerging growth company ☐ | |
| | | Per Unit(1) | | | Total | | ||||||
Public offering price(2) | | | | $ | | | | | $ | | | ||
| | | $ | | | | | $ | | | |||
Proceeds, before expenses, to us | | | | $ | | | | | $ | | | |
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App Name | | | Focus/Approach | |
BetterMe | | | BetterMe markets itself as a healthy lifestyle program without extreme weight loss, focusing on wellbeing. | |
BetterSleep | | | Formally known as Relax Melodies, BetterSleep analyses users’ chronotypes, tracks sleep and creates bedtime routines. | |
Calm | | | Calm includes meditation tools, sleep aids and video lessons on gentle stretching. | |
Fabulous | | | A self-care coaching app to build daily habits such as drinking water, exercising and focused working. | |
Headspace | | | A meditation app that offers courses for stress, anger, depression, and work performance, as well as programs for sleep and exercise. | |
I Am | | | I Am centers around daily affirmations to build self-confidence and change thought patterns. | |
Relax | | | Users have access to exercises and programs to improve mindfulness and mental health. | |
Sleep Cycle | | | Intended to improve users’ sleep by analyzing sleep and recordings of snoring and sleep talking to provide an alarm based on those patterns. | |
App Name | | | Focus/Approach | |
Apple Health | | | Collects health information from iPhones, Apple Watches and other devices, sets medication reminders and organizes health records. | |
MyFitnessPal | | | Contains a database of food items with nutritional values and a fitness component. | |
Fitbit | | | Utilizes the sensors on fitness tracker, Fitbit, to track heartrate, electrodermal activity, temperature, sleep and menstrual cycles. | |
BetterMe | | | BetterMe markets itself as a healthy lifestyle program without extreme weight loss, focusing on wellbeing. | |
Noom | | | Weight management business Noom has extended into behavior change programs for chronic and non-chronic health conditions. | |
Lose It! | | | Lose It! Tracks food and water intake for users to meet diet goals and lose weight. | |
WeightWatchers | | | A weight loss program converts nutritional information into a points system to track caloric intake. | |
Flo | | | The most popular ovulation and period tracker, fertility calendar and pregnancy assistant app. | |
Waterlogged | | | Water tracking app that allows users to set goals for water consumption and receive reminders to drink. | |
Fastic | | | Fastic promotes weight loss through a program of intermittent fasting, mindfulness, improved nutrition and sleep. | |
| | As of September 30, 2022 (dollars in thousands) | | | As of June 30, 2023 (dollars in thousands) | | ||||||||||||||||||||
| | Actual | | As Adjusted(1) | | | Actual | | As Adjusted(1) | | ||||||||||||||||
Cash and cash equivalents | | | | 6,146 | | | | | 13,621 | | | | | | 4,567 | | | | | 11,805 | | | ||||
Stockholders’ equity: | | | | | | | | | | | | | | | | | | | | | | | ||||
Preferred stock, $0.001 par value; 10,000,000 shares authorized, actual and as adjusted | | | | — | | | | | — | | | | | | — | | | | | — | | | ||||
Series C convertible preferred stock, $0.001 par value, 95,388 shares issued and outstanding, actual and adjusted | | | | — | | | | | — | | | | | | — | | | | | — | | | ||||
Common stock, $0.001 par value; 100,000,000 shares authorized, actual and as adjusted; 451,919 shares issued and outstanding, actual, and 1,560,133, as adjusted | | | | — | | | | | 2 | | | |||||||||||||||
Additional paid-in capital | | | | 627,373 | | | | | 634,846 | | | |||||||||||||||
Common stock, $0.001 par value; 300,000,000 shares authorized, actual and as adjusted; 3,452,169 shares issued and outstanding, actual, and 10,118,836, as adjusted | | | | 3 | | | | | 10 | | | |||||||||||||||
Additional paid-in capital . | | | | 637,172 | | | | | 644,403 | | | |||||||||||||||
Accumulated deficit | | | | (606,362) | | | | | (606,362) | | | | | | (630,342) | | | | | (630,342) | | | ||||
Accumulated other comprehensive loss | | | | (68) | | | | | (68) | | | | | | (95) | | | | | (95) | | | ||||
Total stockholders’ equity | | | | 20,943 | | | | | 28,418 | | | | | | 6,738 | | | | | 13,976 | | |
| Assumed offering price per unit | | | $ | 7.67 | | | Assumed offering price per unit | | | $ | 1.20 | | | ||
| Net tangible book value per share as of September 30, 2022 | | | $ | 18.65 | | | Net tangible book value per share as of June 30, 2023 | | | $ | 1.88 | | | ||
| Decrease in net tangible book value per share attributable to new investors in this offering | | | $ | (8.46) | | | Decrease in net tangible book value per share attributable to new investors in this offering | | | $ | 0.52 | | | ||
| As adjusted net tangible book value per share as of September 30, 2022 after giving effect to this offering | | | $ | 10.19 | | | As adjusted net tangible book value per share as of June 30, 2023 after giving effect to this offering | | | $ | 1.36 | | | ||
| Immediate accretion per share to investors participating in this offering | | | $ | 2.52 | | | Immediate dilution per share to investors participating in this offering | | | $ | 0.70 | | |
| | | Year Ended December 31, | | |||||||||||||||||||||
| | | 2021 | | | 2020 | | ||||||||||||||||||
Revenue | | | | $ | 13,600 | | | | | | 100.0% | | | | | $ | 11,299 | | | | | | 100.0% | | |
Cost of goods sold | | | | | 5,252 | | | | | | 38.6% | | | | | | 5,037 | | | | | | 44.6% | | |
Gross profit | | | | | 8,348 | | | | | | 61.4% | | | | | | 6,262 | | | | | | 55.4% | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | |
Sales and marketing | | | | | 9,165 | | | | | | 67.4% | | | | | | 4,694 | | | | | | 41.5% | | |
General and administrative | | | | | 24,410 | | | | | | 179.5% | | | | | | 10,527 | | | | | | 93.2% | | |
Research and development | | | | | 2,522 | | | | | | 18.5% | | | | | | 3,498 | | | | | | 31.0% | | |
Loss on impairment of intangible assets and goodwill | | | | | 28,752 | | | | | | 211.4% | | | | | | — | | | | | | —% | | |
Total operating expenses | | | | | 64,849 | | | | | | 476.8% | | | | | | 18,719 | | | | | | 165.7% | | |
Operating loss | | | | | (56,501) | | | | | | (415.4)% | | | | | | (12,457) | | | | | | (110.2)% | | |
Other expense (income), net: | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense, net | | | | | 832 | | | | | | 6.1% | | | | | | 2,049 | | | | | | 18.1% | | |
Warrant expense | | | | | 2,813 | | | | | | 20.7% | | | | | | — | | | | | | —% | | |
Loss on extinguishment of debt, net | | | | | 2,061 | | | | | | 15.2% | | | | | | 7,715 | | | | | | 68% | | |
Gain on foreign currency | | | | | (168) | | | | | | (1.2)% | | | | | | (410)(4) | | | | | | % | | |
Loss before income tax provision | | | | | (62,039) | | | | | | (456.2)% | | | | | | (21,811) | | | | | | (193.0)% | | |
Income tax benefit | | | | | (106) | | | | | | (0.8)% | | | | | | (181) | | | | | | (1.6)% | | |
Net loss | | | | $ | (61,933) | | | | | | (455.4)% | | | | | $ | (21,630) | | | | | | (191.4)% | | |
| | | Years Ended December 31, | | |||||||||
| | | 2021 | | | 2020 | | ||||||
GAAP net loss | | | | $ | (61,933) | | | | | $ | (21,630) | | |
Adjustments: | | | | | | | | | | | | | |
Interest expense, net: | | | | | 832 | | | | | | 2,049 | | |
Income tax benefit | | | | | (106) | | | | | | (181) | | |
Depreciation and amortization | | | | | 1,971 | | | | | | 1,667 | | |
Stock-based compensation expense | | | | | 12,752 | | | | | | 1,323 | | |
Loss on impairment of intangible assets and goodwill | | | | | 28,752 | | | | | | — | | |
Loss on extinguishment of debt, net | | | | | 2,061 | | | | | | 7,715 | | |
Warrant expense | | | | | 2,813 | | | | | | — | | |
Professional fees incurred in connection with the Obalon merger | | | | | 2,277 | | | | | | — | | |
Non-GAAP loss | | | | $ | (10,581) | | | | | $ | (9,057) | | |
| | | Year Ended December 31, | | | Amount Change | | | Percentage Change | | |||||||||||||||||||||||||||
| | | 2021 | | | 2020 | | ||||||||||||||||||||||||||||||
United States | | | | $ | 10,297 | | | | | | 75.7% | | | | | $ | 8,275 | | | | | | 73.2% | | | | | $ | 2,022 | | | | | | 24.4% | | |
Australia | | | | | 1,039 | | | | | | 7.6% | | | | | | 1,086 | | | | | | 9.6% | | | | | | (47) | | | | | | (4.3)% | | |
Europe | | | | | 2,127 | | | | | | 15.7% | | | | | | 1,824 | | | | | | 16.2% | | | | | | 303 | | | | | | 16.6% | | |
Rest of world | | | | | 137 | | | | | | 1.0% | | | | | | 114 | | | | | | 1.0% | | | | | | 23 | | | | | | 20.2% | | |
Total revenue | | | | $ | 13,600 | | | | | | 100.0% | | | | | $ | 11,299 | | | | | | 100.0% | | | | | $ | 2,301 | | | | | | 20.4% | | |
| | | Year Ended December 31, | | | Amount Change | | | Percentage Change | | |||||||||||||||||||||||||||
| | | 2021 | | | 2020 | | ||||||||||||||||||||||||||||||
Revenue | | | | $ | 13,600 | | | | | | 100.0% | | | | | $ | 11,299 | | | | | | 100.0% | | | | | $ | 2,301 | | | | | | 20.4% | | |
Cost of goods sold | | | | | 5,252 | | | | | | 38.6% | | | | | | 5,037 | | | | | | 44.6% | | | | | | 215 | | | | | | 4.3% | | |
Gross profit | | | | $ | 8,348 | | | | | | 61.4% | | | | | $ | 6,262 | | | | | | 55.4% | | | | | $ | 2,086 | | | | | | 33.3% | | |
| | | Year Ended December 31, | | | Amount Change | | | Percentage Change | | |||||||||||||||||||||||||||
| | | 2021 | | | 2020 | | ||||||||||||||||||||||||||||||
Sales and marketing | | | | $ | 9,165 | | | | | | 67.4% | | | | | $ | 4,694 | | | | | | 41.5% | | | | | $ | 4,471 | | | | | | 95.2% | | |
General and administrative | | | | | 24,410 | | | | | | 179.5% | | | | | | 10,527 | | | | | | 93.2% | | | | | | 13,883 | | | | | | 131.9% | | |
Research and development | | | | | 2,522 | | | | | | 18.5% | | | | | | 3,498 | | | | | | 31.0% | | | | | | (976) | | | | | | (27.9)% | | |
Loss on impairment of intangible assets and goodwill | | | | | 28,752 | | | | | | 211.4% | | | | | | — | | | | | | —% | | | | | | 28,752 | | | | | | 100.0% | | |
Total operating expenses | | | | $ | 64,849 | | | | | | 476.8% | | | | | $ | 18,719 | | | | | | 165.7% | | | | | $ | 46,130 | | | | | | 246.4% | | |
| | | Year Ended December 31, | | |||||||||
| | | 2021 | | | 2020 | | ||||||
Net cash used in operating activities | | | | $ | (15,375) | | | | | $ | (8,550) | | |
Net cash received (used) in investing activates | | | | | 1,855 | | | | | | (2,390) | | |
Net cash provided in financing activities | | | | | 33,299 | | | | | | 11,075 | | |
Effect of exchange rate changes | | | | | 29 | | | | | | (113) | | |
Net change in cash and cash equivalents | | | | $ | 19,808 | | | | | $ | 22 | | |
| | | Three Months Ended September 30, | | | Nine Months Ended September 30, | | ||||||||||||||||||||||||||||||||||||||||||
| | | 2022 | | | 2021 | | | 2022 | | | 2021 | | ||||||||||||||||||||||||||||||||||||
Revenue | | | | $ | 2,798 | | | | | | 100.0% | | | | | $ | 3,708 | | | | | | 100.0% | | | | | $ | 8,130 | | | | | | 100.0% | | | | | $ | 10,458 | | | | | | 100.0% | | |
Cost of goods sold | | | | | 697 | | | | | | 24.9% | | | | | | 1,573 | | | | | | 42.4% | | | | | | 2,928 | | | | | | 36.0% | | | | | | 3,886 | | | | | | 37.2% | | |
Gross profit | | | | | 2,101 | | | | | | 75.1% | | | | | | 2,135 | | | | | | 57.6% | | | | | | 5,202 | | | | | | 64.0% | | | | | | 6,572 | | | | | | 62.8% | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Sales and marketing | | | | | 2,619 | | | | | | 93.6% | | | | | | 3,496 | | | | | | 94.3% | | | | | | 11,990 | | | | | | 147.5% | | | | | | 6,186 | | | | | | 59.2% | | |
General and administrative | | | | | 3,872 | | | | | | 138.4% | | | | | | 12,052 | | | | | | 325.0% | | | | | | 13,488 | | | | | | 165.9% | | | | | | 19,085 | | | | | | 182.5% | | |
Research and development | | | | | 588 | | | | | | 21.0% | | | | | | 1,571 | | | | | | 42.4% | | | | | | 2,096 | | | | | | 25.8% | | | | | | 2,245 | | | | | | 21.5% | | |
Impairment of intangible assets | | | | | 6,947 | | | | | | 248.3% | | | | | | — | | | | | | —% | | | | | | 6,947 | | | | | | 85.4% | | | | | | — | | | | | | —% | | |
Loss on disposal of assets, net | | | | | 1 | | | | | | —% | | | | | | — | | | | | | —% | | | | | | 383 | | | | | | 4.7% | | | | | | — | | | | | | —% | | |
Total operating expenses | | | | | 14,027 | | | | | | 501.3% | | | | | | 17,119 | | | | | | 461.7% | | | | | | 34,904 | | | | | | 429.3% | | | | | | 27,516 | | | | | | 263.2% | | |
Operating loss | | | | | (11,926) | | | | | | (426.2)% | | | | | | (14,984) | | | | | | (404.1)% | | | | | | (29,702) | | | | | | (365.3)% | | | | | | (20,944) | | | | | | (200.4)% | | |
Other expense (income), net: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest (income) expense, net | | | | | (31) | | | | | | (1.1)% | | | | | | 33 | | | | | | 0.9% | | | | | | (47) | | | | | | (0.6)% | | | | | | 804 | | | | | | 7.7% | | |
Warrant expense | | | | | — | | | | | | —% | | | | | | 2,813 | | | | | | 75.9% | | | | | | — | | | | | | —% | | | | | | 2,813 | | | | | | 26.9% | | |
Loss (gain) on extinguishment of debt, net | | | | | — | | | | | | —% | | | | | | — | | | | | | —% | | | | | | — | | | | | | —% | | | | | | 2,061 | | | | | | 19.7% | | |
Loss (gain) on foreign currency | | | | | 279 | | | | | | 10.0% | | | | | | (101) | | | | | | (2.7)% | | | | | | 467 | | | | | | 5.7% | | | | | | (170) | | | | | | (1.6)% | | |
Other, net | | | | | — | | | | | | —% | | | | | | — | | | | | | —% | | | | | | (9) | | | | | | (0.1)% | | | | | | — | | | | | | —% | | |
Loss before income tax provision | | | | | (12,174) | | | | | | (435.1)% | | | | | | (17,729) | | | | | | (478.1)% | | | | | | (30,113) | | | | | | (370.4)% | | | | | | (26,452) | | | | | | (253.0)% | | |
Income tax expense (benefit) | | | | | (363) | | | | | | (13.0)% | | | | | | (30) | | | | | | (0.8)% | | | | | | (511) | | | | | | (6.3)% | | | | | | 23 | | | | | | 0.2% | | |
Net loss | | | | $ | (11,811) | | | | | | (422.1)% | | | | | $ | (17,699) | | | | | | (477.3)% | | | | | $ | (29,602) | | | | | | (364.1)% | | | | | $ | (26,475) | | | | | | (253.3)% | | |
| | | Three Months Ended September 30, | | | Nine Months Ended September 30, | | ||||||||||||||||||
| | | 2022 | | | 2021 | | | 2022 | | | 2021 | | ||||||||||||
GAAP net loss | | | | $ | (11,811) | | | | | $ | (17,699) | | | | | $ | (29,602) | | | | | $ | (26,475) | | |
Adjustments: | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest (income) expense, net | | | | | (31) | | | | | | 33 | | | | | | (47) | | | | | | 804 | | |
Income tax expense (benefit) | | | | | (363) | | | | | | (30) | | | | | | (511) | | | | | | 23 | | |
Depreciation and amortization | | | | | 543 | | | | | | 548 | | | | | | 1,638 | | | | | | 1,416 | | |
Stock-based compensation expense | | | | | 388 | | | | | | 10,720 | | | | | | 1,957 | | | | | | 10,457 | | |
Impairment of intangible assets | | | | | 6,947 | | | | | | — | | | | | | 6,947 | | | | | | — | | |
Loss on disposal of assets, net | | | | | 1 | | | | | | — | | | | | | 383 | | | | | | — | | |
Loss on extinguishment of debt, net | | | | | — | | | | | | — | | | | | | — | | | | | | 2,061 | | |
Warrant expense | | | | | — | | | | | | 2,813 | | | | | | — | | | | | | 2,813 | | |
Professional fees incurred in connection with the Obalon merger | | | | | — | | | | | | — | | | | | | — | | | | | | 2,277 | | |
Non-GAAP loss | | | | $ | (4,326) | | | | | $ | (3,615) | | | | | $ | (19,235) | | | | | $ | (6,624) | | |
| | | Three Months Ended September 30, | | | Amount Change | | | Percentage Change | | |||||||||||||||||||||||||||
| | | 2022 | | | 2021 | | ||||||||||||||||||||||||||||||
United States | | | | $ | 2,412 | | | | | | 86.2% | | | | | $ | 2,745 | | | | | | 74.0% | | | | | $ | (333) | | | | | | (12.1)% | | |
Australia | | | | | 164 | | | | | | 5.9% | | | | | | 278 | | | | | | 7.5% | | | | | | (114) | | | | | | (41.0)% | | |
Europe | | | | | 206 | | | | | | 7.4% | | | | | | 653 | | | | | | 17.6% | | | | | | (447) | | | | | | (68.5)% | | |
Rest of world | | | | | 16 | | | | | | 0.5% | | | | | | 32 | | | | | | 0.9% | | | | | | (16) | | | | | | (50.0)% | | |
Total revenue | | | | $ | 2,798 | | | | | | 100.0% | | | | | $ | 3,708 | | | | | | 100.0% | | | | | $ | (910) | | | | | | (24.5)% | | |
| | | Three Months Ended September 30, | | | Amount Change | | | Percentage Change | | |||||||||||||||||||||||||||
| | | 2022 | | | 2021 | | ||||||||||||||||||||||||||||||
Revenue | | | | $ | 2,798 | | | | | | 100.0% | | | | | $ | 3,708 | | | | | | 100.0% | | | | | $ | (910) | | | | | | (24.5)% | | |
Cost of goods sold | | | | | 697 | | | | | | 24.9% | | | | | | 1,573 | | | | | | 42.4% | | | | | | (876) | | | | | | (55.7)% | | |
Gross profit | | | | $ | 2,101 | | | | | | 75.1% | | | | | $ | 2,135 | | | | | | 57.6% | | | | | $ | (34) | | | | | | (1.6)% | | |
| | | Three Months Ended September 30, | | | Amount Change | | | Percentage Change | | |||||||||||||||||||||||||||
| | | 2022 | | | 2021 | | ||||||||||||||||||||||||||||||
Sales and marketing | | | | $ | 2,619 | | | | | | 93.6% | | | | | $ | 3,496 | | | | | | 94.3% | | | | | $ | (877) | | | | | | (25.1)% | | |
General and administrative | | | | | 3,872 | | | | | | 138.4% | | | | | | 12,052 | | | | | | 325.1% | | | | | | (8,180) | | | | | | (67.9)% | | |
Research and development | | | | | 588 | | | | | | 21.0% | | | | | | 1,571 | | | | | | 42.4% | | | | | | (983) | | | | | | (62.6)% | | |
Impairment of intangible assets | | | | | 6,947 | | | | | | 248.3% | | | | | | — | | | | | | —% | | | | | | 6,947 | | | | | | 100.0% | | |
Loss on disposal of assets, net | | | | | 1 | | | | | | —% | | | | | | — | | | | | | —% | | | | | | 1 | | | | | | 100.0% | | |
Total operating expenses | | | | $ | 14,027 | | | | | | 501.3% | | | | | $ | 17,119 | | | | | | 461.8% | | | | | $ | (10,039) | | | | | | (58.6)% | | |
| | | Nine Months Ended September 30, | | | Amount Change | | | Percentage Change | | |||||||||||||||||||||||||||
| | | 2022 | | | 2021 | | ||||||||||||||||||||||||||||||
United States | | | | $ | 6,565 | | | | | | 80.8% | | | | | $ | 7,897 | | | | | | 75.5% | | | | | $ | (1,332) | | | | | | (16.9)% | | |
Australia | | | | | 533 | | | | | | 6.6% | | | | | | 849 | | | | | | 8.1% | | | | | | (316) | | | | | | (37.2)% | | |
Europe | | | | | 1,009 | | | | | | 12.4% | | | | | | 1,622 | | | | | | 15.5% | | | | | | (613) | | | | | | (37.8)% | | |
Rest of world | | | | | 23 | | | | | | 0.2% | | | | | | 90 | | | | | | 0.9% | | | | | | (67) | | | | | | (74.4)% | | |
Total revenue | | | | $ | 8,130 | | | | | | 100.0% | | | | | $ | 10,458 | | | | | | 100.0% | | | | | $ | (2,328) | | | | | | (22.3)% | | |
| | | Nine Months Ended September 30, | | | Amount Change | | | Percentage Change | | |||||||||||||||||||||||||||
| | | 2022 | | | 2021 | | ||||||||||||||||||||||||||||||
Revenue | | | | $ | 8,130 | | | | | | 100.0% | | | | | $ | 10,458 | | | | | | 100.0% | | | | | $ | (2,328) | | | | | | (22.3)% | | |
Cost of goods sold | | | | | 2,928 | | | | | | 36.0% | | | | | | 3,886 | | | | | | 37.2% | | | | | | (958) | | | | | | (24.7)% | | |
Gross profit | | | | $ | 5,202 | | | | | | 64.0% | | | | | $ | 6,572 | | | | | | 62.8% | | | | | $ | (1,370) | | | | | | (20.8)% | | |
| | | Nine Months Ended September 30, | | | Amount Change | | | Percentage Change | | |||||||||||||||||||||||||||
| | | 2022 | | | 2021 | | ||||||||||||||||||||||||||||||
Sales and marketing | | | | $ | 11,990 | | | | | | 147.5% | | | | | $ | 6,186 | | | | | | 59.2% | | | | | $ | 5,804 | | | | | | 93.8% | | |
General and administrative | | | | | 13,488 | | | | | | 165.9% | | | | | | 19,085 | | | | | | 182.5% | | | | | | (5,597) | | | | | | (29.3)% | | |
Research and development | | | | | 2,096 | | | | | | 25.8% | | | | | | 2,245 | | | | | | 21.5% | | | | | | (149) | | | | | | (6.6)% | | |
Impairment of intangible assets | | | | | 6,947 | | | | | | 85.4% | | | | | | — | | | | | | —% | | | | | | 6,947 | | | | | | 100.0% | | |
Loss on disposal of assets, net | | | | | 383 | | | | | | 4.7% | | | | | | — | | | | | | —% | | | | | | 383 | | | | | | —% | | |
Total operating expenses | | | | $ | 34,904 | | | | | | 429.3% | | | | | $ | 27,516 | | | | | | 263.2% | | | | | $ | 7,388 | | | | | | 26.8% | | |
| | | Nine Months Ended September 30, | | |||||||||
| | | 2022 | | | 2021 | | ||||||
Net cash used in operating activities | | | | $ | (19,072) | | | | | $ | (11,949) | | |
Net cash (used in) provided by investing activates | | | | | (13) | | | | | | 4,922 | | |
Net cash provided by financing activities | | | | | 2,492 | | | | | | 33,299 | | |
Effect of exchange rate changes | | | | | 24 | | | | | | 14 | | |
Net change in cash and cash equivalents and restricted cash | | | | $ | (16,569) | | | | | $ | 26,286 | | |
Name and Principal Position | | | Year | | | Salary ($) | | | Bonus ($) | | | Stock Awards ($) | | | Non- equity Incentive Plan Compensation ($) | | | All Other Compensation ($) | | | Total ($) | | |||||||||||||||||||||
Paul F. Hickey(1) President and Chief Executive Officer | | | | | 2022 | | | | | | 133,078 | | | | | | 25,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | 158,078 | | |
Bart Bandy(2) Former President and Chief Executive Officer | | | | | 2022 | | | | | | 346,537 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 346,537 | | |
| | | 2021 | | | | | | 430,500 | | | | | | 350,000(3) | | | | | | 5,170,986(5) | | | | | | 317,200(7) | | | | | | — | | | | | | 6,268,686 | | | ||
Thomas Stankovich Chief Financial Officer | | | | | 2022 | | | | | | 330,000 | | | | | | 77,338(6) | | | | | | — | | | | | | — | | | | | | 148,500(4) | | | | | | 555,838 | | |
| | | 2021 | | | | | | 325,000 | | | | | | 250,000(3) | | | | | | 1,625,164(5) | | | | | | 94,579(7) | | | | | | — | | | | | | 2,294,743 | | |
| | | Stock Awards | | |||||||||
Name | | | Number of shares or units of stock that have not vested (#)(1) | | | Market value of shares or units of stock that have not vested ($)(2) | | ||||||
Paul Hickey | | | | | — | | | | | | — | | |
Bart Bandy | | | | | — | | | | | | — | | |
Thomas Stankovich | | | | | 2,131 | | | | | | 14,363 | | |
Name(1) | | | Fees Earned or Paid in Cash ($)(2) | | | Total ($) | | ||||||
Dan Gladney | | | | | 95,261 | | | | | | 95,261 | | |
Gary Blackford | | | | | 77,000 | | | | | | 77,000 | | |
Lori McDougal | | | | | 57,500 | | | | | | 57,500 | | |
Arda Minocherhomjee | | | | | 52,500 | | | | | | 52,500 | | |
Title of Class | | | Name and Address of Beneficial Owner | | | Amount and Nature of Beneficial Ownership | | | Percent of Class | | ||||||
Common Stock | | | 5% Stockholders | | | | ||||||||||
| Armistice Capital Master Fund Ltd. | | | | | 47,851 | | | | | | 9.2% | | | ||
| 510 Madison Avenue, 7th Floor | | | | ||||||||||||
| New York, NY 10022 | | | | ||||||||||||
Common Stock | | | Directors and Executive Officers | | | | ||||||||||
| Paul Hickey | | | | | — | | | | | | * | | | ||
| Thomas Stankovich(1) | | | | | 6,509 | | | | | | 1.4% | | | ||
| Dan Gladney | | | | | 840 | | | | | | * | | | ||
| Gary Blackford | | | | | — | | | | | | * | | | ||
| Arda Minocherhomjee | | | | | — | | | | | | * | | | ||
| Lori McDougal | | | | | — | | | | | | * | | | ||
| Bart Bandy(2) | | | | | 8,850 | | | | | | 1.8% | | | ||
| All directors and executive officers as a group (6 persons) | | | | | 7,349 | | | | | | 1.6% | | |
| | | September 30, 2022 | | | December 31, 2021 | | ||||||
ASSETS | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash and cash equivalents | | | | $ | 6,146 | | | | | $ | 22,765 | | |
Restricted cash | | | | | 100 | | | | | | 50 | | |
Accounts and other receivables (net of allowance for doubtful accounts of $947 and $1,172 respectively) | | | | | 2,230 | | | | | | 2,815 | | |
Inventory | | | | | 4,171 | | | | | | 3,003 | | |
Prepaid expenses and other current assets | | | | | 926 | | | | | | 1,622 | | |
Total current assets | | | | | 13,573 | | | | | | 30,255 | | |
Property and equipment, net | | | | | 896 | | | | | | 1,454 | | |
Operating lease right-of-use assets | | | | | 255 | | | | | | 266 | | |
Other intangible assets, net | | | | | 12,513 | | | | | | 20,827 | | |
Other assets | | | | | 1,219 | | | | | | 1,456 | | |
Total assets | | | | $ | 28,456 | | | | | $ | 54,258 | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable | | | | $ | 1,992 | | | | | $ | 3,468 | | |
Accrued and other liabilities | | | | | 4,848 | | | | | | 3,169 | | |
Warranty liability, current | | | | | 418 | | | | | | 415 | | |
Operating lease liabilities, current | | | | | 255 | | | | | | 279 | | |
Total current liabilities | | | | | 7,513 | | | | | | 7,331 | | |
Warranty liability, noncurrent | | | | | — | | | | | | 300 | | |
Deferred income taxes, net | | | | | — | | | | | | 555 | | |
Total liabilities | | | | | 7,513 | | | | | | 8,186 | | |
Commitments and contingencies (Note 13) | | | | | | | | | | | | | |
Stockholders’ equity: | | | | | | | | | | | | | |
Preferred stock, 10,000,000 shares authorized: | | | | | | | | | | | | | |
Series C convertible preferred stock, $0.001 par value; 95,388 shares issued and outstanding at September 30, 2022 and December 31, 2021 | | | | | — | | | | | | — | | |
Common stock, $0.001 par value; 100,000,000 shares authorized at both September 30, 2022 and December 31, 2021; 451,919 and 356,641 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively | | | | | — | | | | | | — | | |
Additional paid-in capital | | | | | 627,373 | | | | | | 622,924 | | |
Accumulated deficit | | | | | (606,362) | | | | | | (576,760) | | |
Accumulated other comprehensive loss | | | | | (68) | | | | | | (92) | | |
Total stockholders’ equity | | | | | 20,943 | | | | | | 46,072 | | |
Total liabilities and stockholders’ equity | | | | $ | 28,456 | | | | | $ | 54,258 | | |
| | | Three Months Ended September 30, | | | Nine Months Ended September 30, | | ||||||||||||||||||
| | | 2022 | | | 2021 | | | 2022 | | | 2021 | | ||||||||||||
Revenue | | | | $ | 2,798 | | | | | $ | 3,708 | | | | | $ | 8,130 | | | | | $ | 10,458 | | |
Cost of revenue | | | | | 697 | | | | | | 1,573 | | | | | | 2,928 | | | | | | 3,886 | | |
Gross profit | | | | | 2,101 | | | | | | 2,135 | | | | | | 5,202 | | | | | | 6,572 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | |
Sales and marketing | | | | | 2,619 | | | | | | 3,496 | | | | | | 11,990 | | | | | | 6,186 | | |
General and administrative | | | | | 3,872 | | | | | | 12,052 | | | | | | 13,488 | | | | | | 19,085 | | |
Research and development | | | | | 588 | | | | | | 1,571 | | | | | | 2,096 | | | | | | 2,245 | | |
Impairment of intangible assets | | | | | 6,947 | | | | | | — | | | | | | 6,947 | | | | | | — | | |
Loss on disposal of assets, net | | | | | 1 | | | | | | — | | | | | | 383 | | | | | | — | | |
Total operating expenses | | | | | 14,027 | | | | | | 17,119 | | | | | | 34,904 | | | | | | 27,516 | | |
Operating loss | | | | | (11,926) | | | | | | (14,984) | | | | | | (29,702) | | | | | | (20,944) | | |
Other expense (income), net: | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest (income) expense, net | | | | | (31) | | | | | | 33 | | | | | | (47) | | | | | | 804 | | |
Warrant expense | | | | | — | | | | | | 2,813 | | | | | | — | | | | | | 2,813 | | |
Loss on extinguishment of debt, net | | | | | — | | | | | | — | | | | | | — | | | | | | 2,061 | | |
Loss (Gain) on foreign currency exchange, net | | | | | 279 | | | | | | (101) | | | | | | 467 | | | | | | (170) | | |
Other | | | | | — | | | | | | — | | | | | | (9) | | | | | | — | | |
Loss before income tax provision | | | | | (12,174) | | | | | | (17,729) | | | | | | (30,113) | | | | | | (26,452) | | |
Income tax (benefit) expense | | | | | (363) | | | | | | (30) | | | | | | (511) | | | | | | 23 | | |
Net loss | | | | $ | (11,811) | | | | | $ | (17,699) | | | | | $ | (29,602) | | | | | $ | (26,475) | | |
Net loss per share – basic and diluted: | | | | | | | | | | | | | | | | | | | | | | | | | |
Net loss per share – basic and diluted (as revised for the three and nine months ended September 30, 2021, see Note 1) | | | | $ | (26.18) | | | | | $ | (51.79) | | | | | $ | (73.44) | | | | | $ | (153.67) | | |
Shares used to compute basic and diluted net loss per share (as revised for the three and nine months ended September 30, 2021, see Note 1) | | | | | 451,184 | | | | | | 341,768 | | | | | | 403,104 | | | | | | 172,288 | | |
| | | Three Months Ended September 30, | | | Nine Months Ended September 30, | | ||||||||||||||||||
| | | 2022 | | | 2021 | | | 2022 | | | 2021 | | ||||||||||||
Net loss | | | | $ | (11,811) | | | | | $ | (17,699) | | | | | $ | (29,602) | | | | | $ | (26,475) | | |
Foreign currency translation adjustments | | | | | 4 | | | | | | 2 | | | | | | 24 | | | | | | 14 | | |
Other comprehensive income, net of tax | | | | | 4 | | | | | | 2 | | | | | | 24 | | | | | | 14 | | |
Comprehensive loss | | | | $ | (11,807) | | | | | $ | (17,697) | | | | | $ | (29,578) | | | | | $ | (26,461) | | |
| | | Three Months Ended September 30, 2022 | | |||||||||||||||||||||||||||||||||||||||||||||
| | | Series C Convertible Preferred Stock | | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive Loss | | | Total Stockholders’ Equity | | ||||||||||||||||||||||||||||||
| | | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||||||||||||||||||||||||||
Balance June 30, 2022 | | | | | 95,388 | | | | | $ | — | | | | | | 392,598 | | | | | $ | — | | | | | $ | 626,985 | | | | | $ | (594,551) | | | | | $ | (72) | | | | | $ | 32,362 | | |
Net loss | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (11,811) | | | | | | — | | | | | | (11,811) | | |
Other comprehensive income, net of tax | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 4 | | | | | | 4 | | |
Stock compensation | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 388 | | | | | | — | | | | | | — | | | | | | 388 | | |
Issuance of stock from RSUs | | | | | — | | | | | | — | | | | | | 2,321 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Exercise of warrants | | | | | — | | | | | | — | | | | | | 57,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Balance September 30, 2022 | | | | | 95,388 | | | | | $ | — | | | | | | 451,919 | | | | | $ | — | | | | | $ | 627,373 | | | | | $ | (606,362) | | | | | $ | (68) | | | | | $ | 20,943 | | |
| | | Nine Months Ended September 30, 2022 | | |||||||||||||||||||||||||||||||||||||||||||||
| | | Series C Convertible Preferred Stock | | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive Loss | | | Total Stockholders’ Equity | | ||||||||||||||||||||||||||||||
| | | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||||||||||||||||||||||||||
Balance December 31, 2021 | | | | | 95,388 | | | | | $ | — | | | | | | 356,641 | | | | | $ | — | | | | | $ | 622,924 | | | | | $ | (576,760) | | | | | $ | (92) | | | | | $ | 46,072 | | |
Net loss | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (29,602) | | | | | | — | | | | | | (29,602) | | |
Other comprehensive income, net of tax | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 24 | | | | | | 24 | | |
Stock compensation | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,957 | | | | | | — | | | | | | — | | | | | | 1,957 | | |
Issuance of stock from RSUs | | | | | — | | | | | | — | | | | | | 20,505 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Exercise of warrants | | | | | — | | | | | | — | | | | | | 74,773 | | | | | | — | | | | | | 2,492 | | | | | | — | | | | | | — | | | | | | 2,492 | | |
Balance September 30, 2022 | | | | | 95,388 | | | | | $ | — | | | | | | 451,919 | | | | | $ | — | | | | | $ | 627,373 | | | | | $ | (606,362) | | | | | $ | (68) | | | | | $ | 20,943 | | |
| | | Three Months Ended September 30, 2021 | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | Series B Convertible Preferred Stock | | | Series C Convertible Preferred Stock | | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Comprehensive Income (Loss) | | | Total Stockholders’ Equity | | |||||||||||||||||||||||||||||||||||||||
| | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||||||||||||||||||||||||||||||||
Balance June 30, 2021 | | | | | — | | | | | $ | — | | | | | | 95,388 | | | | | $ | — | | | | | | 163,375 | | | | | $ | — | | | | | $ | 564,126 | | | | | $ | (523,603) | | | | | $ | (109) | | | | | $ | 40,414 | | |
Net loss | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (17,699) | | | | | | — | | | | | | (17,699) | | |
Other comprehensive income, net of tax | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2 | | | | | | 2 | | |
Stock compensation | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 10,720 | | | | | | — | | | | | | — | | | | | | 10,720 | | |
Stock options exercised | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,817 | | | | | | — | | | | | | 201 | | | | | | — | | | | | | — | | | | | | 201 | | |
Issuance of stock from RSUs | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 35,115 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Issuance of warrants | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,535 | | | | | | — | | | | | | — | | | | | | 1,535 | | |
Institutional exercise of warrants | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 152,715 | | | | | | — | | | | | | 43,441 | | | | | | — | | | | | | — | | | | | | 43,441 | | |
Warrant liability reclassified to equity | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 476 | | | | | | — | | | | | | — | | | | | | 476 | | |
Restricted shares issued for consulting services | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 750 | | | | | | — | | | | | | 130 | | | | | | — | | | | | | — | | | | | | 130 | | |
Balance September 30, 2021 | | | | | — | | | | | $ | — | | | | | | 95,388 | | | | | $ | — | | | | | | 353,772 | | | | | $ | — | | | | | $ | 620,629 | | | | | $ | (541,302) | | | | | $ | (107) | | | | | $ | 79,220 | | |
| | | Nine Months Ended September 30, 2021 | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | Series B Convertible Preferred Stock | | | Series C Convertible Preferred Stock | | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive Loss | | | Total Stockholders’ Equity | | |||||||||||||||||||||||||||||||||||||||
| | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||||||||||||||||||||||||||||||||
Balance December 31, 2020 | | | | | 3 | | | | | $ | — | | | | | | 95,388 | | | | | $ | 1 | | | | | | 69,726 | | | | | $ | — | | | | | $ | 529,435 | | | | | $ | (514,827) | | | | | $ | (121) | | | | | $ | 14,488 | | |
Net loss | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (26,475) | | | | | | — | | | | | | (26,475) | | |
Other comprehensive income, net of tax | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 14 | | | | | | 14 | | |
Issuance of common stock pursuant to reverse acquisition | | | | | (3) | | | | | | — | | | | | | — | | | | | | (1) | | | | | | 66,801 | | | | | | — | | | | | | 30,562 | | | | | | — | | | | | | — | | | | | | 30,561 | | |
Stock compensation | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 10,457 | | | | | | — | | | | | | — | | | | | | 10,457 | | |
Stock options exercised | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,654 | | | | | | — | | | | | | 416 | | | | | | — | | | | | | — | | | | | | 416 | | |
Issuance of stock from RSUs | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 35,115 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Issuance of warrants | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 4,508 | | | | | | — | | | | | | — | | | | | | 4,508 | | |
Institutional exercise of warrants | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 177,725 | | | | | | — | | | | | | 44,645 | | | | | | — | | | | | | — | | | | | | 44,645 | | |
Warrant liability reclassified to equity | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 476 | | | | | | — | | | | | | — | | | | | | 476 | | |
Restricted shares issued for consulting services | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 750 | | | | | | — | | | | | | 130 | | | | | | — | | | | | | — | | | | | | 130 | | |
Balance September 30, 2021 | | | | | — | | | | | $ | — | | | | | | 95,388 | | | | | $ | — | | | | | | 353,772 | | | | | $ | — | | | | | $ | 620,629 | | | | | $ | (541,302) | | | | | $ | (107) | | | | | $ | 79,220 | | |
| | | Nine Months Ended September 30, | | |||||||||
| | | 2022 | | | 2021 | | ||||||
Cash flows from operating activities: | | | | | | | | | | | | | |
Net loss | | | | $ | (29,602) | | | | | $ | (26,475) | | |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | | | |
Depreciation expense | | | | | 271 | | | | | | 132 | | |
Amortization of intangible assets | | | | | 1,367 | | | | | | 1,284 | | |
Noncash interest expense | | | | | — | | | | | | 104 | | |
Impairment of intangible assets | | | | | 6,947 | | | | | | — | | |
Loss on extinguishment of debt, net | | | | | — | | | | | | 2,061 | | |
Loss on disposal of assets, net | | | | | 383 | | | | | | — | | |
Stock-based compensation | | | | | 1,957 | | | | | | 10,457 | | |
Bad debt (recoveries) expense | | | | | (72) | | | | | | 62 | | |
Provision for inventory excess and obsolescence | | | | | 148 | | | | | | 162 | | |
Deferred income tax | | | | | (555) | | | | | | — | | |
Warrant expense | | | | | — | | | | | | 2,813 | | |
Amortization of debt discount and deferred debt issuance costs | | | | | — | | | | | | 494 | | |
Other noncash items | | | | | (21) | | | | | | 12 | | |
Change in operating assets and liabilities, net of business combination: | | | | | | | | | | | | | |
Accounts and other receivables | | | | | 657 | | | | | | (900) | | |
Inventory | | | | | (1,317) | | | | | | 21 | | |
Prepaid expenses and other current assets | | | | | 696 | | | | | | (399) | | |
Accounts payable and accrued liabilities | | | | | 129 | | | | | | (1,838) | | |
Warranty liability | | | | | (297) | | | | | | (347) | | |
Other | | | | | 237 | | | | | | 408 | | |
Net cash used in operating activities | | | | | (19,072) | | | | | | (11,949) | | |
Cash flows from investing activities: | | | | | | | | | | | | | |
Capital expenditures | | | | | (52) | | | | | | (285) | | |
Proceeds from acquisition | | | | | — | | | | | | 5,207 | | |
Proceeds from sale of capital assets | | | | | 39 | | | | | | — | | |
Cash (used in) provided by investing activities: | | | | | (13) | | | | | | 4,922 | | |
Cash flows from financing activities: | | | | | | | | | | | | | |
Payments of financing costs | | | | | — | | | | | | (3,234) | | |
Proceeds from warrants exercised | | | | | 2,492 | | | | | | 45,616 | | |
Proceeds from stock options exercised | | | | | — | | | | | | 417 | | |
Proceeds from credit agreement | | | | | — | | | | | | 1,000 | | |
Payment of credit agreement | | | | | — | | | | | | (10,500) | | |
Net cash provided by financing activities | | | | | 2,492 | | | | | | 33,299 | | |
Effect of currency exchange rate changes on cash and cash equivalents | | | | | 24 | | | | | | 14 | | |
Net (decrease) increase in cash, cash equivalents and restricted cash | | | | | (16,569) | | | | | | 26,286 | | |
Cash, cash equivalents and restricted cash at beginning of period | | | | | 22,815 | | | | | | 3,007 | | |
Cash, cash equivalents and restricted cash at end of period | | | | $ | 6,246 | | | | | $ | 29,293 | | |
Supplemental disclosure: | | | | | | | | | | | | | |
Cash paid for income taxes | | | | $ | — | | | | | $ | 37 | | |
Cash paid for interest | | | | | — | | | | | | 296 | | |
Noncash investing and financing activities: | | | | | | | | | | | | | |
Capital expenditures accruals | | | | $ | 79 | | | | | $ | 68 | | |
Purchase price, net of cash received | | | | | — | | | | | | 25,355 | | |
Fair value of warrants included as a component of loss on extinguishment of debt | | | | | — | | | | | | 2,974 | | |
| | | Condensed Consolidated Statement of Operations | | |||||||||||||||
| | | As Previously Reported | | | Adjustment | | | As Revised | | |||||||||
For the year ended December 31, 2020 | | | | | | | | | | | | | | | | | | | |
Net loss per share – basic and diluted: | | | | | | | | | | | | | | | | | | | |
Net loss per share – basic and diluted | | | | $ | (276.97) | | | | | $ | (0.47) | | | | | $ | (277.43) | | |
Shares used to compute basic and diluted net loss per share | | | | | 78,096 | | | | | | (131) | | | | | | 77,965 | | |
Three months ended March 31, 2021 | | | | | | | | | | | | | | | | | | | |
Net loss per share – basic and diluted: | | | | | | | | | | | | | | | | | | | |
Net loss per share – basic and diluted | | | | $ | (62.04) | | | | | $ | 0.16 | | | | | $ | (61.88) | | |
Shares used to compute basic and diluted net loss per share | | | | | 78,560 | | | | | | 203 | | | | | | 78,763 | | |
Three months ended June 30, 2021 | | | | | | | | | | | | | | | | | | | |
Net loss per share – basic and diluted: | | | | | | | | | | | | | | | | | | | |
Net loss per share – basic and diluted | | | | $ | (23.72) | | | | | $ | (19.12) | | | | | $ | (42.84) | | |
Shares used to compute basic and diluted net loss per share | | | | | 164,523 | | | | | | (73,443) | | | | | | 91,080 | | |
Six months ended June 30, 2021 | | | | | | | | | | | | | | | | | | | |
Net loss per share – basic and diluted: | | | | | | | | | | | | | | | | | | | |
Net loss per share – basic and diluted | | | | $ | (55.34) | | | | | $ | (48.00) | | | | | $ | (103.34) | | |
Shares used to compute basic and diluted net loss per share | | | | | 158,575 | | | | | | (73,654) | | | | | | 84,921 | | |
| | | Condensed Consolidated Statement of Operations | | |||||||||||||||
| | | As Previously Reported | | | Adjustment | | | As Revised | | |||||||||
Three months ended September 30, 2021 | | | | | | | | | | | | | | | | | | | |
Net loss per share – basic and diluted: | | | | | | | | | | | | | | | | | | | |
Net loss per share – basic and diluted | | | | $ | (73.76) | | | | | $ | 21.98 | | | | | $ | (51.79) | | |
Shares used to compute basic and diluted net loss per share | | | | | 239,948 | | | | | | 101,820 | | | | | | 341,768 | | |
Nine months ended September 30, 2021 | | | | | | | | | | | | | | | | | | | |
Net loss per share – basic and diluted: | | | | | | | | | | | | | | | | | | | |
Net loss per share – basic and diluted | | | | $ | (125.43) | | | | | $ | (28.14) | | | | | $ | (153.56) | | |
Shares used to compute basic and diluted net loss per share | | | | | 210,934 | | | | | | (38,646) | | | | | | 172,288 | | |
For the year ended December 31, 2021 | | | | | | | | | | | | | | | | | | | |
Net loss per share – basic and diluted: | | | | | | | | | | | | | | | | | | | |
Net loss per share – basic and diluted | | | | $ | (250.16) | | | | | $ | (33.26) | | | | | $ | (283.42) | | |
Shares used to compute basic and diluted net loss per share | | | | | 247,571 | | | | | | (29,049) | | | | | | 218,522 | | |
Three months ended March 31, 2022 | | | | | | | | | | | | | | | | | | | |
Net loss per share – basic and diluted: | | | | | | | | | | | | | | | | | | | |
Net loss per share – basic and diluted | | | | $ | (22.16) | | | | | $ | 0.02 | | | | | $ | (22.14) | | |
Shares used to compute basic and diluted net loss per share | | | | | 370,792 | | | | | | 239 | | | | | | 371,031 | | |
| | | September 30, | | |||||||||
| | | 2022 | | | 2021 | | ||||||
Stock options | | | | | 22,820 | | | | | | 11,847 | | |
Unvested restricted stock units | | | | | 5,770 | | | | | | 36,141 | | |
Convertible preferred stock | | | | | 10 | | | | | | 10 | | |
Warrants | | | | | 139,047 | | | | | | 135,547 | | |
| | | September 30, 2022 | | | December 31, 2021 | | ||||||
Raw materials | | | | $ | 1,109 | | | | | $ | 829 | | |
Sub-assemblies | | | | | 927 | | | | | | 682 | | |
Finished goods | | | | | 2,135 | | | | | | 1,492 | | |
Total inventory | | | | $ | 4,171 | | | | | $ | 3,003 | | |
| | | September 30, 2022 | | | December 31, 2021 | | ||||||
Prepaid insurance | | | | $ | 721 | | | | | $ | 736 | | |
Prepaid advertising and marketing | | | | | 48 | | | | | | 698 | | |
Other current assets | | | | | 157 | | | | | | 188 | | |
Total prepaid expenses and other current assets | | | | $ | 926 | | | | | $ | 1,622 | | |
| | | September 30, 2022 | | | December 31, 2021 | | ||||||
Payroll and benefits | | | | $ | 2,535 | | | | | $ | 1,527 | | |
Accrued legal settlements | | | | | 1,000 | | | | | | — | | |
Customer deposits | | | | | 644 | | | | | | 549 | | |
Taxes | | | | | 120 | | | | | | 307 | | |
Accrued insurance premium | | | | | 115 | | | | | | 301 | | |
Accrued professional | | | | | 168 | | | | | | 300 | | |
Other liabilities | | | | | 266 | | | | | | 185 | | |
Total accrued and other liabilities | | | | $ | 4,848 | | | | | $ | 3,169 | | |
| | | September 30, 2022 | | ||||||||||||||||||
| | | Weighted Average Useful Life (years) | | | Gross Carrying Amount | | | Accumulated Amortization | | | Net Book Value | | |||||||||
Finite-lived intangible assets: | | | | | | | | | | | | | | | | | | | | | | |
Developed technology | | | 10.8 | | | | $ | 17,092 | | | | | $ | (5,681) | | | | | $ | 11,411 | | |
Trademarks/Tradenames | | | 10.0 | | | | | 2,045 | | | | | | (943) | | | | | | 1,102 | | |
Covenant not to compete | | | 3.0 | | | | | 76 | | | | | | (76) | | | | | | — | | |
| | | | | | | | 19,213 | | | | | | (6,700) | | | | | | 12,513 | | |
| | | September 30, 2022 | | ||||||||||||||||||
| | | Weighted Average Useful Life (years) | | | Gross Carrying Amount | | | Accumulated Amortization | | | Net Book Value | | |||||||||
Indefinite-lived intangible assets: | | | | | | | | | | | | | | | | | | | | | | |
In-process research and development | | | indefinite | | | | | — | | | | | | — | | | | | | — | | |
Total | | | | | | | $ | 19,213 | | | | | $ | (6,700) | | | | | $ | 12,513 | | |
|
| | | December 31, 2021 | | ||||||||||||||||||
| | | Weighted Average Useful Life (years) | | | Gross Carrying Amount | | | Accumulated Amortization | | | Net Book Value | | |||||||||
Finite-lived intangible assets: | | | | | | | | | | | | | | | | | | | | | | |
Developed technology | | | 10.8 | | | | $ | 17,092 | | | | | $ | (4,467) | | | | | $ | 12,625 | | |
Trademarks/Tradenames | | | 10.0 | | | | | 2,045 | | | | | | (790) | | | | | | 1,255 | | |
Covenant not to compete | | | 3.0 | | | | | 76 | | | | | | (76) | | | | | | — | | |
| | | | | | | | 19,213 | | | | | | (5,333) | | | | | | 13,880 | | |
Indefinite-lived intangible assets: | | | | | | | | | | | | | | | | | | | | | | |
In-process research and development | | | indefinite | | | | | 6,947 | | | | | | — | | | | | | 6,947 | | |
Total | | | | | | | $ | 26,160 | | | | | $ | (5,333) | | | | | $ | 20,827 | | |
Balance Sheet information | | | September 30 2022 | | | December 31, 2021 | | ||||||
Operating lease ROU assets | | | | $ | 255 | | | | | $ | 266 | | |
Operating lease liabilities, current portion | | | | $ | 255 | | | | | $ | 279 | | |
Total operating lease liabilities | | | | $ | 255 | | | | | $ | 279 | | |
Cash flow information for the nine months ended September 30, | | | 2022 | | | 2021 | | ||||||
Cash paid for amounts included in the measurement of operating leases liabilities | | | | $ | 473 | | | | | $ | 365 | | |
| Remainder of 2022 | | | | $ | 87 | | |
| 2023 | | | | | 173 | | |
| 2024 | | | | | — | | |
| Total lease payments | | | | | 260 | | |
| Less: imputed interest | | | | | 5 | | |
| Total lease liabilities | | | | $ | 255 | | |
| Weighted-average remaining lease term at end of period (in years) | | | | | 0.7 | | |
| Weighted-average discount rate at end of period | | | | | 5.1% | | |
| Current assets | | | | $ | 5,887 | | |
| Property and equipment, net | | | | | 796 | | |
| Right-of-use assets | | | | | 335 | | |
| Other assets | | | | | 1,898 | | |
| Goodwill | | | | | 21,566 | | |
| Developed technology | | | | | 2,730 | | |
| Liabilities assumed | | | | | (2,650) | | |
| Total purchase price | | | | | 30,562 | | |
| Less: cash acquired | | | | | (5,207) | | |
| Total purchase price, net of cash acquired | | | | $ | 25,355 | | |
| | | Three Months Ended September 30, | | | Nine Months Ended September 30, | | ||||||||||||||||||
| | | 2022 | | | 2021 | | | 2022 | | | 2021 | | ||||||||||||
United States | | | | $ | 2,412 | | | | | $ | 2,745 | | | | | $ | 6,565 | | | | | $ | 7,897 | | |
Australia | | | | | 164 | | | | | | 278 | | | | | | 533 | | | | | | 849 | | |
Europe | | | | | 206 | | | | | | 653 | | | | | | 1,009 | | | | | | 1,622 | | |
Rest of world | | | | | 16 | | | | | | 32 | | | | | | 23 | | | | | | 90 | | |
Total revenue | | | | $ | 2,798 | | | | | $ | 3,708 | | | | | $ | 8,130 | | | | | $ | 10,458 | | |
| | | Three Months Ended September 30, | | | Nine Months Ended September 30, | | ||||||||||||||||||
| | | 2022 | | | 2021 | | | 2022 | | | 2021 | | ||||||||||||
Sales and marketing | | | | $ | 38 | | | | | $ | 1,085 | | | | | $ | 294 | | | | | $ | 1,085 | | |
General and administrative | | | | | 278 | | | | | | 8,404 | | | | | | 1,397 | | | | | | 8,141 | | |
Research and development | | | | | 72 | | | | | | 1,231 | | | | | | 266 | | | | | | 1,231 | | |
Total stock-based compensation expense | | | | $ | 388 | | | | | $ | 10,720 | | | | | $ | 1,957 | | | | | $ | 10,457 | | |
| | | Shares | | | Weighted Average Exercise Price Per Share | | | Weighted Average Remaining Contractual Life (years) | | | Aggregate Intrinsic Value (in thousands) | | ||||||||||||
Outstanding at December 31, 2021 | | | | | 17,701 | | | | | $ | 398.50 | | | | | | | | | | | $ | — | | |
Options granted | | | | | 11,204 | | | | | | 59.00 | | | | | | | | | | | | | | |
Options exercised | | | | | — | | | | | | — | | | | | | | | | | | | | | |
Options cancelled | | | | | (6,084) | | | | | | 148.50 | | | | | | | | | | | | | | |
Outstanding at September 30, 2022 | | | | | 22,821 | | | | | | 298.50 | | | | | | 8.8 | | | | | $ | — | | |
Exercisable at September 30, 2022 | | | | | 13,476 | | | | | | 442.00 | | | | | | 8.4 | | | | | | — | | |
Vested and expected to vest at September 30, 2022 | | | | | 22,820 | | | | | | 298.50 | | | | | | 8.8 | | | | | | — | | |
| | | Shares | | | Weighted Average Grant Date Fair Value | | ||||||
Unvested RSUs at December 31, 2021 | | | | | 34,227 | | | | | $ | 218.00 | | |
Granted | | | | | 4,009 | | | | | | 59.00 | | |
Vested(1) | | | | | (20,814) | | | | | | 214.00 | | |
Cancelled/Forfeited | | | | | (11,651) | | | | | | 188.00 | | |
Non-vested RSUs at September 30, 2022 | | | | | 5,771 | | | | | | 181.50 | | |
| | | December 31, 2021 | | | December 31, 2020 | | ||||||
ASSETS | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash and cash equivalents | | | | $ | 22,765 | | | | | $ | 2,957 | | |
Restricted cash | | | | | 50 | | | | | | 50 | | |
Accounts and other receivables (net of allowance for doubtful accounts of $1,172 and $968 respectively) | | | | | 2,815 | | | | | | 2,620 | | |
Inventory | | | | | 3,003 | | | | | | 2,244 | | |
Prepaid expenses and other current assets | | | | | 1,622 | | | | | | 1,073 | | |
Total current assets | | | | | 30,255 | | | | | | 8,944 | | |
Property and equipment, net | | | | | 1,454 | | | | | | 584 | | |
Operating lease right-of-use assets | | | | | 266 | | | | | | 465 | | |
Other intangible assets, net | | | | | 20,827 | | | | | | 27,022 | | |
Other assets | | | | | 1,456 | | | | | | 46 | | |
Total assets | | | | $ | 54,258 | | | | | $ | 37,061 | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable | | | | $ | 3,468 | | | | | $ | 3,655 | | |
Accrued and other liabilities | | | | | 3,169 | | | | | | 3,630 | | |
Warranty liability, current | | | | | 415 | | | | | | 397 | | |
Debt, current portion, net of deferred financing costs | | | | | — | | | | | | 3,609 | | |
Operating lease liabilities, current | | | | | 279 | | | | | | 314 | | |
Total current liabilities | | | | | 7,331 | | | | | | 11,605 | | |
Debt, noncurrent portion | | | | | — | | | | | | 9,168 | | |
Operating lease liabilities, noncurrent | | | | | — | | | | | | 163 | | |
Warranty liability, noncurrent | | | | | 300 | | | | | | 1,022 | | |
Deferred income taxes | | | | | 555 | | | | | | 615 | | |
Total liabilities | | | | | 8,186 | | | | | | 22,573 | | |
Commitments and contingencies | | | | | | | | | | | | | |
Stockholders’ equity: | | | | | | | | | | | | | |
Preferred stock, 10,000,000 shares authorized: | | | | | | | | | | | | | |
Series B convertible preferred stock, $0.001 par value; zero and 3 issued and outstanding at December 31, 2021 and December 31, 2020, respectively | | | | | — | | | | | | — | | |
Series C convertible preferred stock, $0.001 par value; 95,388 shares issued and outstanding at December 31, 2021 and December 31, 2020 | | | | | — | | | | | | 1 | | |
Common stock, $0.001 par value; 100,000,000 and 275,000,000 shares authorized at December 31, 2021 and December 31, 2020, respectively; 356,641 and 69,726 shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively | | | | | — | | | | | | — | | |
Additional paid-in capital | | | | | 622,924 | | | | | | 529,435 | | |
Accumulated deficit | | | | | (576,760) | | | | | | (514,827) | | |
Accumulated other comprehensive loss | | | | | (92) | | | | | | (121) | | |
Total stockholders’ equity | | | | | 46,072 | | | | | | 14,488 | | |
Total liabilities and stockholders’ equity | | | | $ | 54,258 | | | | | $ | 37,061 | | |
| | | Year Ended December 31, | | |||||||||
| | | 2021 | | | 2020 | | ||||||
Revenue | | | | $ | 13,600 | | | | | $ | 11,299 | | |
Cost of revenue | | | | | 5,252 | | | | | | 5,037 | | |
Gross profit | | | | | 8,348 | | | | | | 6,262 | | |
Operating expenses: | | | | | | | | | | | | | |
Sales and marketing | | | | | 9,165 | | | | | | 4,694 | | |
General and administrative | | | | | 24,410 | | | | | | 10,527 | | |
Research and development | | | | | 2,522 | | | | | | 3,498 | | |
Loss on impairment of intangible asset and goodwill | | | | | 28,752 | | | | | | — | | |
Total operating expenses | | | | | 64,849 | | | | | | 18,719 | | |
Operating loss | | | | | (56,501) | | | | | | (12,457) | | |
Other expense (income), net: | | | | | | | | | | | | | |
Interest expense, net | | | | | 832 | | | | | | 2,049 | | |
Warrant expense | | | | | 2,813 | | | | | | — | | |
Loss on extinguishment of debt, net | | | | | 2,061 | | | | | | 7,715 | | |
Gain on foreign currency exchange, net | | | | | (168) | | | | | | (410) | | |
Loss before income tax provision | | | | | (62,039) | | | | | | (21,811) | | |
Income tax benefit | | | | | (106) | | | | | | (181) | | |
Net loss | | | | $ | (61,933) | | | | | $ | (21,630) | | |
Net loss per share – basic and diluted: | | | | | | | | | | | | | |
Net loss per share – basic and diluted | | | | $ | (283.42) | | | | | $ | (277.43) | | |
Shares used to compute basic and diluted net loss per share | | | | | 218,522 | | | | | | 77,965 | | |
| | | Year Ended December 31, | | |||||||||
| | | 2021 | | | 2020 | | ||||||
Net loss | | | | $ | (61,933) | | | | | $ | (21,630) | | |
Foreign currency translation adjustments | | | | | 29 | | | | | | (113) | | |
Other comprehensive income (loss), net of tax | | | | | 29 | | | | | | (113) | | |
Comprehensive loss | | | | $ | (61,904) | | | | | $ | (21,743) | | |
| | | Series B Convertible Preferred Stock | | | Series C Convertible Preferred Stock | | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive Income (Loss) | | | Total Stockholders’ Equity | | | |||||||||||||||||||||||||||||||||||||||||
| | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | ||||||||||||||||||||||||||||||||||||||||||||
Balance December 31, 2019 | | | | | 3 | | | | | $ | — | | | | | | 95,388 | | | | | $ | 1 | | | | | | 4,620 | | | | | $ | — | | | | | $ | 517,311 | | | | | $ | (493,197) | | | | | $ | (8) | | | | | $ | 24,107 | | | | ||
Net loss | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (21,630) | | | | | | — | | | | | | (21,630) | | | | ||
Other comprehensive income (loss), net of tax | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (113) | | | | | | (113) | | | | ||
Stock-based compensation expense, net | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,323 | | | | | | — | | | | | | — | | | | | | 1,323 | | | | ||
Issuance of warrants | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 9,917 | | | | | | — | | | | | | — | | | | | | 9,917 | | | | ||
Institutional exercise of warrants | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 63,877 | | | | | | — | | | | | | 679 | | | | | | — | | | | | | — | | | | | | 679 | | | | ||
Cashless exercise of warrants | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 665 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | ||
Common stock issued for professional services | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 564 | | | | | | — | | | | | | 205 | | | | | | — | | | | | | — | | | | | | 205 | | | | ||
Balance December 31, 2020 | | | | | 3 | | | | | $ | — | | | | | | 95,388 | | | | | $ | 1 | | | | | | 69,726 | | | | | $ | — | | | | | $ | 529,435 | | | | | $ | (514,827) | | | | | $ | (121) | | | | | $ | 14,488 | | | | ||
Net loss | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (61,933) | | | | | | — | | | | | | (61,933) | | | | ||
Other comprehensive income (loss), net of tax | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 29 | | | | | | 29 | | | | ||
Issuance of common stock pursuant to reverse acquisition | | | | | (3) | | | | | | — | | | | | | — | | | | | | (1) | | | | | | 66,801 | | | | | | — | | | | | | 30,562 | | | | | | — | | | | | | — | | | | | | 30,561 | | | | | |
Stock-based compensation expense, net | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 12,752 | | | | | | — | | | | | | — | | | | | | 12,752 | | | | ||
Stock options exercised | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,654 | | | | | | — | | | | | | 416 | | | | | | — | | | | | | — | | | | | | 416 | | | | ||
Issuance of stock from RSUs | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 37,986 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | ||
Issuance of warrants | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 4,508 | | | | | | — | | | | | | — | | | | | | 4,508 | | | | ||
Institutional exercise of warrants | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 177,724 | | | | | | — | | | | | | 44,645 | | | | | | — | | | | | | — | | | | | | 44,645 | | | | ||
Warrant liability reclassified to equity | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 476 | | | | | | — | | | | | | — | | | | | | 476 | | | | ||
Restricted shares issued for consulting services | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 750 | | | | | | — | | | | | | 130 | | | | | | — | | | | | | — | | | | | | 130 | | | | ||
Balance December 31, 2021 | | | | | — | | | | | $ | — | | | | | | 95,388 | | | | | $ | — | | | | | | 356,641 | | | | | $ | — | | | | | $ | 622,924 | | | | | $ | (576,760) | | | | | $ | (92) | | | | | $ | 46,072 | | | |
| | | Year Ended December 31, | | |||||||||
| | | 2021 | | | 2020 | | ||||||
Cash flows from operating activities: | | | | | | | | | | | | | |
Net loss | | | | $ | (61,933) | | | | | $ | (21,630) | | |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | | | |
Depreciation expense | | | | | 232 | | | | | | 15 | | |
Amortization of intangible assets | | | | | 1,739 | | | | | | 1,652 | | |
Noncash interest expense | | | | | 133 | | | | | | 230 | | |
Loss on impairment of intangible assets and goodwill | | | | | 28,752 | | | | | | — | | |
Loss on extinguishment of debt, net | | | | | 2,061 | | | | | | 7,715 | | |
Stock-based compensation | | | | | 12,752 | | | | | | 1,323 | | |
Bad debt expense | | | | | 89 | | | | | | 259 | | |
Provision for inventory excess and obsolescence | | | | | 294 | | | | | | 248 | | |
Warrant expense | | | | | 2,813 | | | | | | — | | |
Amortization of debt discount and deferred debt issuance costs | | | | | 494 | | | | | | 1,697 | | |
Deferred income tax benefit | | | | | (60) | | | | | | (86) | | |
Other noncash items | | | | | — | | | | | | 21 | | |
Change in operating assets and liabilities, net of business combination: | | | | | | | | | | | | | |
Accounts and other receivables | | | | | (284) | | | | | | 1,217 | | |
Inventory | | | | | (369) | | | | | | (1,175) | | |
Prepaid expenses and other current assets | | | | | (393) | | | | | | 843 | | |
Accounts payable and accrued liabilities | | | | | (1,480) | | | | | | (992) | | |
Warranty liability | | | | | (703) | | | | | | 61 | | |
Other | | | | | 488 | | | | | | 52 | | |
Net cash used in operating activities | | | | | (15,375) | | | | | | (8,550) | | |
Cash flows from investing activities: | | | | | | | | | | | | | |
Capital expenditures | | | | | (352) | | | | | | (390) | | |
Acquisition of Lap-Band product line assets | | | | | (3,000) | | | | | | (2,000) | | |
Proceeds received from acquisition | | | | | 5,207 | | | | | | — | | |
Cash provided by (used in) investing activities: | | | | | 1,855 | | | | | | (2,390) | | |
Cash flows from financing activities: | | | | | | | | | | | | | |
Payments of financing costs | | | | | (3,234) | | | | | | (59) | | |
Proceeds from institutional exercise of warrants | | | | | 45,616 | | | | | | 679 | | |
Proceeds from stock options exercised | | | | | 417 | | | | | | — | | |
Proceeds from credit agreement | | | | | 1,000 | | | | | | 9,500 | | |
Payment of credit agreement | | | | | (10,500) | | | | | | — | | |
Proceeds from PPP loan | | | | | — | | | | | | 955 | | |
Net cash provided by financing activities | | | | | 33,299 | | | | | | 11,075 | | |
Effect of currency exchange rate changes on cash and cash equivalents | | | | | 29 | | | | | | (113) | | |
Net increase in cash, cash equivalents and restricted cash | | | | | 19,808 | | | | | | 22 | | |
Cash, cash equivalents and restricted cash at beginning of period | | | | | 3,007 | | | | | | 2,985 | | |
Cash, cash equivalents and restricted cash at end of period | | | | $ | 22,815 | | | | | $ | 3,007 | | |
Supplemental disclosure: | | | | | | | | | | | | | |
Cash paid for income taxes | | | | $ | 102 | | | | | $ | 40 | | |
Cash paid for interest | | | | | 296 | | | | | | — | | |
Noncash investing and financing activities: | | | | | | | | | | | | | |
Purchase price, net of cash received | | | | $ | 25,355 | | | | | $ | — | | |
Fair value of warrants included as a component of loss on extinguishment of debt | | | | | 2,974 | | | | | | 8,523 | | |
Fair value of common stock and warrants issued related to the fundamental transaction exchange | | | | | 2,813 | | | | | | — | | |
Fair value of common stock issued for professional services | | | | | 97 | | | | | | — | | |
Capital expenditures accruals | | | | | 5 | | | | | | 193 | | |
Relative fair value of warrants classified as debt issuance costs | | | | | — | | | | | | 1,393 | | |
| | | Per Unit | | | Total | | ||||||
Public offering price | | | | $ | | | | | $ | | | ||
Placement agent fees | | | | $ | | | | | $ | | | ||
Proceeds, before expenses, to us | | | | $ | | | | | $ | | | |
| | | December 31, 2021 | | | December 31, 2020 | | ||||||
Cash and cash equivalents | | | | $ | 22,765 | | | | | $ | 2,957 | | |
Restricted cash | | | | | 50 | | | | | | 50 | | |
Total cash, cash equivalents, and restricted cash in the consolidated statement of cash flows | | | | $ | 22,815 | | | | | $ | 3,007 | | |
| | | December 31, | | |||||||||
| | | 2021 | | | 2020 | | ||||||
Stock options | | | | | 17,701 | | | | | | 1 | | |
Unvested restricted stock units | | | | | 34,227 | | | | | | — | | |
Convertible preferred stock | | | | | 10 | | | | | | 1,288 | | |
Warrants | | | | | 139047 | | | | | | 269,669 | | |
| | | December 31, 2021 | | | December 31, 2020 | | ||||||
Raw materials | | | | $ | 829 | | | | | $ | 174 | | |
Sub-assemblies | | | | | 682 | | | | | | 733 | | |
Finished goods | | | | | 1,492 | | | | | | 1,337 | | |
Total inventory | | | | $ | 3,003 | | | | | $ | 2,244 | | |
| | | December 31, 2021 | | | December 31, 2020 | | ||||||
Prepaid insurance | | | | $ | 736 | | | | | $ | 619 | | |
Prepaid advertising and marketing | | | | | 698 | | | | | | — | | |
Prepaid contract research organization expenses | | | | | — | | | | | | 295 | | |
Other current assets | | | | | 188 | | | | | | 159 | | |
Total prepaid expenses and other current assets | | | | $ | 1,622 | | | | | $ | 1,073 | | |
| | | December 31, 2021 | | | December 31, 2020 | | ||||||
Payroll and benefits | | | | $ | 1,527 | | | | | $ | 1,735 | | |
Customer deposits | | | | | 549 | | | | | | 398 | | |
Taxes | | | | | 307 | | | | | | 265 | | |
Accrued insurance premium | | | | | 301 | | | | | | 272 | | |
Accrued professional | | | | | 300 | | | | | | 446 | | |
Other liabilities | | | | | 185 | | | | | | 514 | | |
Total accrued and other liabilities | | | | $ | 3,169 | | | | | $ | 3,630 | | |
| | | December 31, | | |||||||||
| | | 2021 | | | 2020 | | ||||||
Machinery and equipment | | | | $ | 955 | | | | | $ | 179 | | |
Furniture and equipment | | | | | 38 | | | | | | 83 | | |
Computer hardware and software | | | | | 135 | | | | | | 78 | | |
Tooling and molds | | | | | 236 | | | | | | — | | |
Leasehold improvements | | | | | 23 | | | | | | 19 | | |
Construction in progress | | | | | 407 | | | | | | 404 | | |
| | | | | 1,794 | | | | | | 763 | | |
Less accumulated depreciation and amortization | | | | | (340) | | | | | | (179) | | |
Property and equipment, net | | | | $ | 1,454 | | | | | $ | 584 | | |
| | | December 31, 2021 | | |||||||||||||||||||||
| | | Weighted Average Useful Life (years) | | | Gross Carrying Amount | | | Accumulated Amortization | | | Net Book Value | | ||||||||||||
Finite-lived intangible assets: | | | | | | | | | | | | | | | | | | | | | | | | | |
Developed technology | | | | | 10.8 | | | | | $ | 17,092 | | | | | $ | (4,467) | | | | | $ | 12,625 | | |
Trademarks/Tradenames | | | | | 10.0 | | | | | | 2,045 | | | | | | (790) | | | | | | 1,255 | | |
Covenant not to compete | | | | | 3.0 | | | | | | 76 | | | | | | (76) | | | | | | 0 | | |
| | | | | | | | | | | 19,213 | | | | | | (5,333) | | | | | | 13,880 | | |
Indefinite-lived intangible assets: | | | | | | | | | | | | | | | | | | | | | | | | | |
In-process research and development | | | indefinite | | | | | 6,947 | | | | | | — | | | | | | 6,947 | | | |||
Total | | | | | | | | | | $ | 26,160 | | | | | $ | (5,333) | | | | | $ | 20,827 | | |
| | | December 31, 2020 | | |||||||||||||||||||||
| | | Weighted Average Useful Life (years) | | | Gross Carrying Amount | | | Accumulated Amortization | | | Net Book Value | | ||||||||||||
Finite-lived intangible assets: | | | | | | | | | | | | | | | | | | | | | | | | | |
Developed technology | | | | | 10.0 | | | | | $ | 14,362 | | | | | $ | (2,933) | | | | | $ | 11,429 | | |
Trademarks/Tradenames | | | | | 10.0 | | | | | | 2,045 | | | | | | (585) | | | | | | 1,460 | | |
Covenant not to compete | | | | | 3.0 | | | | | | 76 | | | | | | (76) | | | | | | 0 | | |
| | | | | | | | | | | 16,483 | | | | | | (3,594) | | | | | | 12,889 | | |
Indefinite-lived intangible assets: | | | | | | | | | | | | | | | | | | | | | | | | | |
In-process research and development | | | indefinite | | | | | 14,133 | | | | | | — | | | | | | 14,133 | | | |||
Total | | | | | | | | | | $ | 30,616 | | | | | $ | (3,594) | | | | | $ | 27,022 | | |
| | | December 31, | | |||||||||
| | | 2021 | | | 2020 | | ||||||
Gross amount | | | | $ | 20,721 | | | | | $ | 20,721 | | |
Accumulated impairment loss | | | | | (13,774) | | | | | | (6,588) | | |
Indefinite-lived intangible assets, net | | | | $ | 6,947 | | | | | $ | 14,133 | | |
Year ending December 31, | | | | | | | |
2022 | | | | $ | 1,823 | | |
2023 | | | | | 1,823 | | |
2024 | | | | | 1,823 | | |
2025 | | | | | 1,823 | | |
2026 | | | | | 1,823 | | |
Thereafter | | | | | 4,765 | | |
| | | | $ | 13,880 | | |
| | | December 31, 2021 | | | December 31, 2020 | | ||||||
Asset purchase consideration | | | | $ | — | | | | | $ | 2,867 | | |
Credit agreement | | | | | — | | | | | | 9,500 | | |
PPP loan | | | | | — | | | | | | 955 | | |
Total debt | | | | | — | | | | | | 13,322 | | |
Less: unamortized debt discount | | | | | — | | | | | | 545 | | |
Less: current portion of debt | | | | | — | | | | | | 3,609 | | |
Debt, noncurrent portion | | | | $ | — | | | | | $ | 9,168 | | |
Balance sheet information at December 31, 2021 | | | | | | | |
Operating lease ROU assets | | | | $ | 266 | | |
Operating lease liabilities, current portion | | | | $ | 279 | | |
Operating lease liabilities, long-term portion | | | | | — | | |
Total operating lease liabilities | | | | $ | 279 | | |
Cash flow information for the nine months ended September 30, 2021 | | | | | | | |
Cash paid for amounts included in the measurement of operating leases liabilities | | | | $ | 565 | | |
Twelve months ending December 31, 2021 | | | | | | | |
2022 | | | | $ | 283 | | |
Total lease payments | | | | | 283 | | |
Less: imputed interest | | | | | 4 | | |
Total lease liabilities | | | | $ | 279 | | |
Weighted-average remaining lease term at end of period (in years) | | | | | 0.4 | | |
Weighted-average discount rate at end of period | | | | | 5.1 | | |
| Current assets | | | | $ | 5,887 | | |
| Property and equipment, net | | | | | 796 | | |
| Right-of-use assets | | | | | 335 | | |
| Other assets | | | | | 1,898 | | |
| Goodwill | | | | | 21,566 | | |
| Developed technology | | | | | 2,730 | | |
| Liabilities assumed | | | | | (2,650) | | |
| Total purchase price | | | | | 30,562 | | |
| Less: cash acquired | | | | | (5,207) | | |
| Total purchase price, net of cash acquired | | | | $ | 25,355 | | |
| | | Revenue | | | Net Loss | | ||||||
| | | (Unaudited) | | | (Unaudited) | | ||||||
Combined entity: Supplemental pro forma from January 1, 2021 to December 31, 2021 | | | | $ | 13,432 | | | | | $ | (69,452) | | |
Combined entity: Supplemental pro forma from January 1, 2020 to December 31, 2020 | | | | | 12,887 | | | | | | (33,965) | | |
| | | Warrants Outstanding | | | Strike Price | | | Volatility | | | Remaining Life | | | Risk Free Rate | | |||||||||||||||
January 19, 2021 | | | | | 11,274 | | | | | $ | 310.50 | | | | | | 97.1% | | | | | | 5.0 | | | | | | 0.45% | | |
June 28, 2021 | | | | | 118,941 | | | | | $ | 300.00 | | | | | | 97.6% | | | | | | 5.0 | | | | | | 0.90% | | |
July 16, 2021 | | | | | 8,000 | | | | | $ | 202.00 | | | | | | 157.7% | | | | | | 5.0 | | | | | | 0.79% | | |
| | | Warrants Outstanding | | | Strike Price | | | Volatility | | | Remaining Life | | | Risk Free Rate | | |||||||||||||||
First Issuance | | | | | 24,000 | | | | | $ | 185.00 | | | | | | 97.0% | | | | | | 5.0 | | | | | | 0.56% | | |
Second Issuance | | | | | 24,000 | | | | | $ | 162.50 | | | | | | 101.1% | | | | | | 5.0 | | | | | | 0.27% | | |
Third Issuance | | | | | 80,000 | | | | | $ | 175.00 | | | | | | 100.8% | | | | | | 5.0 | | | | | | 0.37% | | |
| | | Year Ended December 31, | | |||||||||
| | | 2021 | | | 2020 | | ||||||
United States | | | | $ | 10,297 | | | | | $ | 8,275 | | |
Australia | | | | | 1,039 | | | | | | 1,086 | | |
Europe | | | | | 2,127 | | | | | | 1,824 | | |
Rest of world | | | | | 137 | | | | | | 114 | | |
Total revenue | | | | $ | 13,600 | | | | | $ | 11,299 | | |
| | | Shares | | | Weighted Average Exercise Price Per Share | | | Weighted Average Remaining Contractual Life (years) | | | Aggregate Intrinsic Value (in thousands) | | ||||||||||||
Outstanding at December 31, 2019 | | | | | 1 | | | | | $ | 106,534,131.00 | | | | | | | | | | | | | | |
Options granted | | | | | — | | | | | | — | | | | | | | | | | | | | | |
Options exercised | | | | | — | | | | | | — | | | | | | | | | | | | | | |
Options cancelled | | | | | — | | | | | | — | | | | | | | | | | | | | | |
Outstanding at December 31, 2020 | | | | | 1 | | | | | | 106,534,131.00 | | | | | | | | | | | $ | — | | |
Vested options obtained due to merger | | | | | 7,329 | | | | | | 1,794.00 | | | | | | | | | | | | | | |
Options granted | | | | | 15,814 | | | | | | 181.00 | | | | | | | | | | | | | | |
Options exercised | | | | | (3,654) | | | | | | 114.00 | | | | | | | | | | | | | | |
Options cancelled | | | | | (1,788) | | | | | | 51,261.50 | | | | | | | | | | | | | | |
Outstanding at December 31, 2021 | | | | | 17,702 | | | | | | 442.50 | | | | | | 8.9 | | | | | $ | — | | |
Exercisable at December 31, 2021 | | | | | 12,002 | | | | | | 398.50 | | | | | | 8.6 | | | | | | — | | |
Vested and expected to vest at December 31, 2021 | | | | | 17,701 | | | | | | 501.50 | | | | | | 8.9 | | | | | | — | | |
| | | Shares | | | Weighted Average Grant Date Fair Value | | ||||||
Unvested RSUs at December 31, 2020 | | | | | — | | | | | $ | — | | |
Granted | | | | | 72,212 | | | | | | 218.00 | | |
Vested(1) | | | | | (37,986) | | | | | | 218.00 | | |
Cancelled/Forfeited | | | | | — | | | | | | — | | |
Non-vested RSUs at December 31, 2021 | | | | | 34,226 | | | | | | 218.00 | | |
| | | Year Ended December 31, | | |||||||||
| | | 2021 | | | 2020 | | ||||||
Sales and marketing | | | | $ | 1,221 | | | | | $ | — | | |
General and administrative | | | | | 10,226 | | | | | | 1,323 | | |
Research and development | | | | | 1,305 | | | | | | — | | |
Total stock-based compensation expense | | | | $ | 12,752 | | | | | $ | 1,323 | | |
| | | Year ended December 31, | | |||||||||
| | | 2021 | | | 2020 | | ||||||
Deferred: | | | | | | | | | | | | | |
Federal | | | | $ | (69) | | | | | $ | (84) | | |
State | | | | | 9 | | | | | | (2) | | |
Deferred income tax benefit | | | | | (60) | | | | | | (86) | | |
Current: | | | | | | | | | | | | | |
Federal | | | | | — | | | | | | — | | |
State | | | | | 11 | | | | | | 1 | | |
Foreign | | | | | (57) | | | | | | (96) | | |
Total income tax benefit, net | | | | $ | (106) | | | | | $ | (181) | | |
| | | Year ended December 31, | | |||||||||
| | | 2021 | | | 2020 | | ||||||
Income tax benefit at U.S. federal statutory rate | | | | | 21.0% | | | | | | 21.0% | | |
State income tax benefit, net of federal benefit | | | | | 3.3% | | | | | | 4.2% | | |
Stock warrant valuation | | | | | (2.2)% | | | | | | (10.2)% | | |
Goodwill impairment | | | | | (7.7)% | | | | | | —% | | |
Stock-based compensation | | | | | (13.0)% | | | | | | —% | | |
Other permanent differences | | | | | (4.3)% | | | | | | (0.6)% | | |
Change in state tax rate | | | | | (0.8)% | | | | | | (0.3)% | | |
Foreign rate differential | | | | | —% | | | | | | 0.5% | | |
Net operating loss true up | | | | | 0.3% | | | | | | —% | | |
Other adjustments | | | | | 2.3% | | | | | | 1.4% | | |
Change in valuation allowance | | | | | 1.4% | | | | | | (15.2)% | | |
Effective income tax rate | | | | | 0.3% | | | | | | 0.8% | | |
| | | December 31, | | |||||||||
| | | 2021 | | | 2020 | | ||||||
Deferred tax assets: | | | | | | | | | | | | | |
Start-up costs | | | | $ | 1,225 | | | | | $ | 1,192 | | |
Capitalized research and development costs | | | | | 408 | | | | | | 503 | | |
Reserves and accruals | | | | | 1,679 | | | | | | 9,235 | | |
Property and equipment | | | | | 178 | | | | | | 133 | | |
Research and development credit | | | | | 3,323 | | | | | | 1,194 | | |
Lease liability | | | | | 74 | | | | | | 41 | | |
Net operating loss carryforwards | | | | | 54,653 | | | | | | 30,156 | | |
State and local taxes | | | | | 2 | | | | | | 2 | | |
Total gross deferred tax assets | | | | | 61,542 | | | | | | 42,456 | | |
Valuation allowance | | | | | (61,380) | | | | | | (39,803) | | |
Deferred tax assets, net of valuation allowance | | | | | 162 | | | | | | 2,653 | | |
Intangible assets | | | | | (647) | | | | | | (3,151) | | |
Operating lease right-of-use assets | | | | | (70) | | | | | | (117) | | |
Total gross deferred tax liabilities | | | | | (717) | | | | | | (3,268) | | |
Net deferred tax liability | | | | $ | (555) | | | | | $ | (615) | | |
| | | Consolidated Statement of Operations | | |||||||||||||||||||||
| | | As Previously Reported | | | Adjustment | | | As Revised | | | Adjusted for Reverse Stock Split | | ||||||||||||
For the year ended December 31, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | |
Net loss per share – basic and diluted: | | | | | | | | | | | | | | | | | | | | | | | | | |
Net loss per share – basic and diluted | | | | $ | (5.54) | | | | | $ | (.01) | | | | | $ | (5.55) | | | | | $ | (277.43) | | |
Shares used to compute basic and diluted net loss per share | | | | | 3,904,762 | | | | | | (6,612) | | | | | | 3,898,150 | | | | | | 77,965 | | |
For the year ended December 31, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | |
Net loss per share – basic and diluted: | | | | | | | | | | | | | | | | | | | | | | | | | |
Net loss per share – basic and diluted | | | | $ | (5.00) | | | | | $ | (0.67) | | | | | $ | (5.67) | | | | | $ | (283.42) | | |
Shares used to compute basic and diluted net loss per share | | | | | 12,378,502 | | | | | | (1,452,519) | | | | | | 10,925,983 | | | | | | 218,522 | | |
| | Amount to be paid | | | Amount to be paid | | ||||||||
SEC registration fee | | | $ | 2,265 | | | | | $ | 2,204 | | | ||
FINRA filing fee | | | | 5,000 | | | | | | 5,000 | | | ||
Accounting fees and expenses | | | | 200,000 | | | | | | 200,000 | | | ||
Legal fees and expenses | | | | 200,000 | | | | | | 200,000 | | | ||
Miscellaneous fees and expenses | | | | 22,735 | | | | | | 25,000 | | | ||
Total | | | $ | 430,000 | | | | | $ | 432,204 | | |
RESHAPE LIFESCIENCES INC. By: /s/ Paul F. Hickey Name: Paul F. Hickey Title: President and Chief Executive Officer POWER OF ATTORNEY We, the undersigned officers and directors of ReShape Lifesciences Inc., a Delaware corporation, hereby constitute and appoint Paul F. Hickey and Thomas Stankovich, and each of them individually, as the true and lawful agent and attorney-in-fact of the undersigned with full power and authority in said agent and attorney-in-fact to sign for the undersigned and in their respective names as an officer/director of the company, any and all amendments (including post-effective amendments) to this registration statement on Form S-1 (or any other registration statement for the same offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act) and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, and with full power of substitution, hereby ratifying and confirming all that said attorney-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. | ||||||||
| Signature | | | Capacity | | | Date | |
| /s/ Paul F. Hickey Paul F. Hickey | | | President and Chief Executive Officer and Director (Principal Executive Officer) | | | | |
| /s/ Thomas Stankovich Thomas Stankovich | | | Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | | | | |
| Dan W. Gladney | | | Director | | | | |
| Gary D. Blackford | | | Director | | | | |
| Lori C. McDougal | | | Director | | | | |
| Arda M. Minocherhomjee, Ph.D. | | | Director | | | ||
|