Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 29, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | Vapotherm, Inc. | |
Entity Central Index Key | 0001253176 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 25,661,162 | |
Entity Shell Company | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity File Number | 001-38740 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-2259298 | |
Entity Address, Address Line One | 100 Domain Drive | |
Entity Address, City or Town | Exeter | |
Entity Address, State or Province | NH | |
Entity Address, Postal Zip Code | 03833 | |
City Area Code | 603 | |
Local Phone Number | 658-0011 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Trading Symbol | VAPO | |
Security Exchange Name | NYSE |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 139,015 | $ 71,655 |
Accounts receivable, net | 10,875 | 8,243 |
Inventories | 25,029 | 9,137 |
Prepaid expenses and other current assets | 4,895 | 4,066 |
Total current assets | 179,814 | 93,101 |
Property and equipment, net | 17,992 | 15,086 |
Restricted cash | 1,853 | 1,852 |
Goodwill | 571 | 588 |
Intangible assets, net | 258 | 353 |
Deferred income tax assets | 66 | 66 |
Other long-term assets | 1,063 | 844 |
Total assets | 201,617 | 111,890 |
Current liabilities | ||
Accounts payable | 6,252 | 3,375 |
Contract liabilities | 279 | 137 |
Accrued expenses and other current liabilities | 19,134 | 9,187 |
Short-term line of credit | 4,495 | 3,491 |
Total current liabilities | 30,160 | 16,190 |
Long-term loans payable, net | 42,000 | 41,787 |
Other long-term liabilities | 881 | 174 |
Total liabilities | 73,041 | 58,151 |
Commitments and contingencies (Note 9) | ||
Stockholders' equity | ||
Preferred stock ($0.001 par value) 25,000,000 shares authorized; no shares issued and outstanding as of September 30, 2020 and December 31, 2019 | ||
Common stock ($0.001 par value) 175,000,000 shares authorized as of September 30, 2020 and December 31, 2019, 25,625,605 and 20,851,531 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively | 26 | 21 |
Additional paid-in capital | 428,306 | 319,115 |
Accumulated other comprehensive income | 3 | 44 |
Accumulated deficit | (299,759) | (265,441) |
Total stockholders' equity | 128,576 | 53,739 |
Total liabilities and stockholders’ equity | $ 201,617 | $ 111,890 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (Unaudited) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 175,000,000 | 175,000,000 |
Common stock, shares issued | 25,625,605 | 20,851,531 |
Common stock, shares outstanding | 25,625,605 | 20,851,531 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Net revenue | $ 30,559 | $ 10,809 | $ 84,826 | $ 35,094 |
Cost of revenue | 15,049 | 5,999 | 42,491 | 19,646 |
Gross profit | 15,510 | 4,810 | 42,335 | 15,448 |
Operating expenses | ||||
Research and development | 4,745 | 3,280 | 12,002 | 9,720 |
Sales and marketing | 15,932 | 9,193 | 44,107 | 27,786 |
General and administrative | 6,047 | 3,978 | 16,925 | 13,389 |
Total operating expenses | 26,724 | 16,451 | 73,034 | 50,895 |
Loss from operations | (11,214) | (11,641) | (30,699) | (35,447) |
Other (expense) income | ||||
Foreign currency gain (loss) | 38 | (28) | 37 | (37) |
Interest income | 42 | 242 | 227 | 658 |
Interest expense | (1,308) | (1,338) | (3,898) | (3,783) |
Other | 15 | |||
Net loss | (12,442) | (12,765) | (34,318) | (38,609) |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | 34 | (72) | (41) | (70) |
Total other comprehensive income (loss) | 34 | (72) | (41) | (70) |
Total comprehensive loss | $ (12,408) | $ (12,837) | $ (34,359) | $ (38,679) |
Net loss per share attributable to common stockholders - basic and diluted | $ (0.49) | $ (0.65) | $ (1.48) | $ (2.16) |
Weighted-average number of shares used in calculating net loss per share, basic and diluted | 25,578,328 | 19,531,153 | 23,192,703 | 17,854,730 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Total | At-The-Market offering | Common Stock | Common StockAt-The-Market offering | Additional Paid-in Capital | Additional Paid-in CapitalAt-The-Market offering | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Beginning balance at Dec. 31, 2018 | $ 51,561 | $ 17 | $ 265,926 | $ (214,382) | ||||
Beginning balance, shares at Dec. 31, 2018 | 16,782,837 | |||||||
Issuance of common stock upon exercise of warrants | 293 | 293 | ||||||
Issuance of common stock upon exercise of options, shares | 268 | |||||||
Issuance of restricted stock | 194 | 194 | ||||||
Issuance of restricted stock, shares | 116,580 | |||||||
Stock-based compensation expense | 1,935 | 1,935 | ||||||
Net loss | (12,964) | (12,964) | ||||||
Ending balance at Mar. 31, 2019 | 41,019 | $ 17 | 268,348 | (227,346) | ||||
Ending balance, shares at Mar. 31, 2019 | 16,899,685 | |||||||
Beginning balance at Dec. 31, 2018 | 51,561 | $ 17 | 265,926 | (214,382) | ||||
Beginning balance, shares at Dec. 31, 2018 | 16,782,837 | |||||||
Net loss | (38,609) | |||||||
Ending balance at Sep. 30, 2019 | 65,138 | $ 21 | 318,178 | $ (70) | (252,991) | |||
Ending balance, shares at Sep. 30, 2019 | 20,801,613 | |||||||
Beginning balance at Mar. 31, 2019 | 41,019 | $ 17 | 268,348 | (227,346) | ||||
Beginning balance, shares at Mar. 31, 2019 | 16,899,685 | |||||||
Issuance of common stock upon exercise of warrants, shares | 12,164 | |||||||
Issuance of common stock upon repayment of non-recourse loan | 144 | 144 | ||||||
Issuance of common stock upon repayment of non-recourse loan, Shares | 79,854 | |||||||
Issuance of common stock upon exercise of options | 193 | 193 | ||||||
Issuance of common stock upon exercise of options, shares | 122,497 | |||||||
Issuance of restricted stock | 82 | 82 | ||||||
Issuance of restricted stock, shares | 52,168 | |||||||
Stock-based compensation expense | 789 | 789 | ||||||
Foreign currency translation adjustments | 2 | 2 | ||||||
Net loss | (12,880) | (12,880) | ||||||
Ending balance at Jun. 30, 2019 | 29,349 | $ 17 | 269,556 | 2 | (240,226) | |||
Ending balance, shares at Jun. 30, 2019 | 17,166,368 | |||||||
Issuance of common stock, net | 48,308 | $ 4 | 48,304 | |||||
Issuance of common stock, net, shares | 3,570,750 | |||||||
Issuance of common stock upon exercise of options | 37 | 37 | ||||||
Issuance of common stock upon exercise of options, shares | 22,848 | |||||||
Issuance of restricted stock | 64 | 64 | ||||||
Issuance of restricted stock, shares | 41,647 | |||||||
Stock-based compensation expense | 217 | 217 | ||||||
Foreign currency translation adjustments | (72) | (72) | ||||||
Net loss | (12,765) | (12,765) | ||||||
Ending balance at Sep. 30, 2019 | 65,138 | $ 21 | 318,178 | (70) | (252,991) | |||
Ending balance, shares at Sep. 30, 2019 | 20,801,613 | |||||||
Beginning balance at Dec. 31, 2019 | 53,739 | $ 21 | 319,115 | 44 | (265,441) | |||
Beginning balance, shares at Dec. 31, 2019 | 20,851,531 | |||||||
Issuance of common stock upon exercise of options | 40 | 40 | ||||||
Issuance of common stock upon exercise of options, shares | 24,687 | |||||||
Issuance of restricted stock | 58 | 58 | ||||||
Issuance of restricted stock, shares | 40,931 | |||||||
Stock-based compensation expense | 1,447 | 1,447 | ||||||
Foreign currency translation adjustments | (71) | (71) | ||||||
Net loss | (13,844) | (13,844) | ||||||
Ending balance at Mar. 31, 2020 | 41,369 | $ 21 | 320,660 | (27) | (279,285) | |||
Ending balance, shares at Mar. 31, 2020 | 20,917,149 | |||||||
Beginning balance at Dec. 31, 2019 | 53,739 | $ 21 | 319,115 | 44 | (265,441) | |||
Beginning balance, shares at Dec. 31, 2019 | 20,851,531 | |||||||
Issuance of common stock under the Employee Stock Purchase Plan, shares | 36,389 | |||||||
Net loss | (34,318) | |||||||
Ending balance at Sep. 30, 2020 | 128,576 | $ 26 | 428,306 | 3 | (299,759) | |||
Ending balance, shares at Sep. 30, 2020 | 25,625,605 | |||||||
Beginning balance at Mar. 31, 2020 | 41,369 | $ 21 | 320,660 | (27) | (279,285) | |||
Beginning balance, shares at Mar. 31, 2020 | 20,917,149 | |||||||
Issuance of common stock, net | 93,827 | $ 9,784 | $ 4 | $ 1 | 93,823 | $ 9,783 | ||
Issuance of common stock, net, shares | 3,852,500 | 511,648 | ||||||
Issuance of common stock upon exercise of warrants, shares | 41,066 | |||||||
Issuance of common stock under the Employee Stock Purchase Plan | 359 | 359 | ||||||
Issuance of common stock under the Employee Stock Purchase Plan, shares | 36,389 | |||||||
Issuance of common stock upon exercise of options | 227 | 227 | ||||||
Issuance of common stock upon exercise of options, shares | 99,206 | |||||||
Issuance of restricted stock | 53 | 53 | ||||||
Issuance of restricted stock, shares | 35,100 | |||||||
Stock-based compensation expense | 1,377 | 1,377 | ||||||
Foreign currency translation adjustments | (4) | (4) | ||||||
Net loss | (8,032) | (8,032) | ||||||
Ending balance at Jun. 30, 2020 | 138,960 | $ 26 | 426,282 | (31) | (287,317) | |||
Ending balance, shares at Jun. 30, 2020 | 25,493,058 | |||||||
Issuance of common stock upon exercise of warrants, shares | 16,208 | |||||||
Issuance of common stock upon exercise of options | 217 | 217 | ||||||
Issuance of common stock upon exercise of options, shares | 80,020 | |||||||
Issuance of restricted stock | 51 | 51 | ||||||
Issuance of restricted stock, shares | 36,319 | |||||||
Stock-based compensation expense | 1,756 | 1,756 | ||||||
Foreign currency translation adjustments | 34 | 34 | ||||||
Net loss | (12,442) | (12,442) | ||||||
Ending balance at Sep. 30, 2020 | $ 128,576 | $ 26 | $ 428,306 | $ 3 | $ (299,759) | |||
Ending balance, shares at Sep. 30, 2020 | 25,625,605 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities | ||
Net loss | $ (34,318) | $ (38,609) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Stock-based compensation expense | 4,580 | 2,941 |
Depreciation and amortization | 3,371 | 2,219 |
Provision for bad debts | 251 | 77 |
Provision for inventory valuation | (428) | (602) |
Loss on disposal of property and equipment | 13 | 112 |
Amortization of discount on debt | 190 | 171 |
Changes in operating assets and liabilities, net of acquisition: | ||
Accounts receivable | (2,916) | 616 |
Inventories | (15,468) | 3,984 |
Prepaid expenses and other assets | (1,039) | 528 |
Accounts payable | 2,803 | (743) |
Contract liabilities | 142 | (31) |
Accrued expenses and other current liabilities | 10,710 | 807 |
Net cash used in operating activities | (32,109) | (28,530) |
Cash flows from investing activities | ||
Purchases of property and equipment | (5,944) | (3,132) |
Acquisition of business, net of cash acquired | (1,560) | |
Net cash used in investing activities | (5,944) | (4,692) |
Cash flows from financing activities | ||
Proceeds from issuance of common stock | 94,155 | 48,669 |
Common stock offering costs | (471) | (361) |
Short-term line of credit | 995 | (260) |
Proceeds from exercise of stock options and purchase of restricted stock | 485 | 374 |
Proceeds on loans | 10,500 | |
Debt issuance costs | (322) | |
Net cash provided by financing activities | 105,451 | 58,600 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (37) | (26) |
Net increase in cash, cash equivalents and restricted cash | 67,361 | 25,352 |
Cash, cash equivalents and restricted cash | ||
Beginning of period | 73,507 | 60,022 |
End of period | 140,868 | 85,374 |
Supplemental disclosures of cash flow information | ||
Interest paid during the period | 3,670 | 3,563 |
Property and equipment purchases in accounts payable and accrued expenses | 139 | 222 |
Issuance of warrants in conjunction with debt draw down | 293 | |
Issuance of common stock upon vesting of restricted stock | 162 | $ 340 |
At-The-Market offering | ||
Cash flows from financing activities | ||
Proceeds from issuance of common stock | 9,927 | |
Employee Stock Purchase Plan | ||
Cash flows from financing activities | ||
Proceeds from issuance of common stock under the Employee Stock Purchase Plan | $ 360 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of Business | 1. Description of Business Vapotherm, Inc. (the “Company”) was founded in 1993 and reincorporated under the laws of the State of Delaware in 2013. Since inception, the Company has focused on the development and commercialization of its proprietary High Velocity Therapy products that are used to treat patients of all ages suffering from respiratory distress. The Company’s High Velocity Therapy delivers non-invasive ventilatory support by providing heated, humidified and oxygenated air at a high velocity to patients through a comfortable small-bore nasal interface. The Company’s Precision Flow systems, which use High Velocity Therapy, are clinically validated alternatives to, and address many limitations of, the current standard of care for the treatment of respiratory distress in a hospital setting. The Company offers four versions of its Precision Flow systems: Precision Flow Hi-VNI, Precision Flow Plus, Precision Flow Classic and Precision Flow Heliox. The Company generates revenue from sales of its Precision Flow systems and related disposable products utilized with its Precision Flow systems. The Company also generates revenue from sales of its Precision Flow system’s companion products, which include the Vapotherm Transfer Unit 2.0, the Q50 compressor and various adaptors. The Company offers different options to its hospital customers for acquiring Precision Flow capital units, ranging from the purchase of the Precision Flow capital units with payment in full at the time of purchase, to financed purchases of the Precision Flow capital units, to bundled discounts involving the placement of Precision Flow capital units for use by the customer at no upfront charge in connection with the customer’s ongoing purchase of disposable products. The Company sells Precision Flow systems to hospitals through a direct sales force in the United States and in the United Kingdom and through distributors in select other countries outside of the United States and United Kingdom. In addition, the Company utilizes clinical educators who are typically experienced users of high velocity therapy and who focus on medical education efforts to facilitate adoption and increase utilization. The Company is focused on physicians, respiratory therapists and nurses who work in acute hospital settings, including the emergency department (“ED”) and adult, pediatric and neonatal intensive care units (the “ICUs”). The Company’s relationship with these clinicians is particularly important, as it enables its products to follow patients through the care continuum. In March 2020, the World Health Organization declared a global pandemic related to the novel coronavirus (“COVID-19”). The Company’s high velocity therapy is a first-line therapy for treating respiratory distress, which is experienced by many COVID-19 patients. The Journal of the American Medical Association published data from mainland China in April 2020 suggesting that 19% of all COVID-19 patients experience respiratory distress and require some amount of respiratory support. The Company’s hospital customers around the world are using the Company’s technology to support the respiratory distress experienced by many COVID-19 patients so that they can triage their sickest patients using a limited number of ventilators. As a result, the Company has seen a significant increase in worldwide demand for its products from both new and existing accounts in the first nine months of 2020. Since inception, the Company has financed its operations primarily through public offerings of its common stock, private placements of its convertible preferred stock, sales of its Precision Flow systems and amounts borrowed under its credit facilities. The Company has devoted the majority of its resources to research and development activities related to its Precision Flow systems, including regulatory initiatives and sales and marketing activities. The Company has invested heavily in its sales and marketing function by increasing the number of sales representatives and clinical educators to facilitate adoption and increase utilization of its high velocity therapy products and expanded its digital marketing initiatives and medical education programs. The Company is subject to risks common to companies in the medical device industry, including, but not limited to, risks relating to the successful development and commercialization of its Precision Flow products, fluctuations in operating results and financial risks, protection of proprietary knowledge and patent risks, dependence on key personnel and collaborative partners, competition, technological and manufacturing risks, customer acceptance and demand, compliance with the Food and Drug Administration and other governmental regulations, management of growth and effectiveness of marketing by the Company and by third parties. On November 16, 2018, the Company completed an initial public offering of 4,600,000 shares of common stock, which included the full exercise by the underwriters of their option to purchase 600,000 shares of common stock, at a price of $14.00 per share, which raised net proceeds of $57.4 million after deducting the underwriting discount of $4.5 million and offering expenses of $2.5 million. On February 28, 2019, the Company acquired Solus Medical Ltd. (“Solus”), its United Kingdom based distributor. See Note 3 “Business Combinations” to these condensed consolidated financial statements for details of this transaction. In August 2019, the Company completed a public offering of 3,570,750 shares of common stock, which included the full exercise by the underwriters of their option to purchase 465,750 shares of common stock, at a price of $14.50 per share, which raised net proceeds of $48.3 million after deducting the underwriting discount of $3.1 million and offering expenses of $0.4 million. On December 20, 2019, the Company entered into an Open Market Sales Agreement (the “ATM Agreement”) with Jefferies LLC (“Jefferies”), under which the Company may offer and sell its common stock having aggregate sales proceeds of up to $50.0 million from time to time through Jefferies as its sales agents. During April 2020, the Company sold 511,648 shares of common stock pursuant to the ATM Agreement for gross proceeds of $10.2 million, or $9.8 million net of commissions and offering expenses. In May 2020, the Company completed a public offering of 3,852,500 shares of common stock, which included the full exercise by the underwriters of their option to purchase 502,500 shares of common stock, at a price of $26.00 per share, which raised net proceeds of $93.8 million after deducting the underwriting discount of $6.0 million and offering expenses of $0.3 million. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The information included in this Quarterly Report on Form 10-Q should be read in conjunction with our audited consolidated financial statements and the accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Form 10-K”). Our accounting policies are described in the “ Notes to Consolidated Financial Statements ” in our 2019 Form 10-K and updated, as necessary, in this report. The year-end consolidated balance sheet data presented for comparative purposes was derived from our audited financial statements but does not include all disclosures required by U.S. GAAP. Principles of Consolidation These condensed consolidated financial statements include the financial statements of Solus, a wholly owned subsidiary of the Company based in the United Kingdom, which was acquired in the first quarter of 2019. All intercompany accounts and transactions have been eliminated upon consolidation. Segment Information Operating segments are defined as components of an enterprise for which separate discrete financial information is available and evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company globally manages the business within one reporting segment, Vapotherm, Inc. and two reporting units, Vapotherm and Solus. Segment information is consistent with how management reviews the business, makes investing and resource allocation decisions and assesses operating performance. The majority of the Company’s long-term assets are located in the United States. Long-term assets located outside the United States totaled $0.1 million as of each of September 30, 2020 and December 31, 2019. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires the Company to make judgments, assumptions, and estimates that affect the reported amounts of assets, liabilities, revenue and expenses, and the related disclosure of contingent assets and liabilities. The Company evaluates its estimates on an ongoing basis. The Company bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Significant estimates relied upon in preparing these condensed consolidated financial statements include calculation of stock-based compensation, valuation of warrants, fair values of acquired assets and liabilities, including goodwill and intangibles assets, realizability of inventories, allowance for bad debts, accrued expenses and the valuation allowances against deferred income tax assets. Actual results may differ from these estimates. Unaudited Interim Financial Information The accompanying condensed condensed condensed Reclassification Certain amounts in 2019 have been reclassified to conform to the presentation in 2020. None of the reclassifications had any impact to the Company’s results of operations. Concentrations of Credit Risk As of September 30, 2020, the Company’s financial instruments were comprised of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and debt, the carrying amounts of which approximated fair value due to their short-term nature and market interest rates. All of the Company’s cash and cash equivalents are maintained at creditworthy financial institutions. At September 30, 2020, deposits exceed the amount of any federal depositary insurance provided. The Company extends credit to customers in the normal course of business but typically does not require collateral or any other security to support amounts due. Management performs ongoing credit evaluations of the Company’s customers. An allowance for potentially uncollectible accounts is provided based on history, economic conditions, and composition of the accounts receivable aging. In some cases, the Company makes allowances for specific customers based on these and other factors. Provisions for the allowance for doubtful accounts are recorded in general and administrative expenses in the accompanying condensed consolidated statements of comprehensive loss. Foreign Currency and Foreign Operations The functional currency of the Company is the currency of the primary economic environment in which the entity operates, which is the U.S. dollar. For our non-U.S. subsidiary that transacts in a functional currency other than the U.S. dollar, assets and liabilities are translated at current rates of exchange as of the balance sheet date. Income and expense items are translated at the average foreign currency exchange rates for the period. Adjustments resulting from the translation of the financial statements of its foreign operations into U.S. dollars are excluded from the determination of net loss and are recorded in accumulated other comprehensive income (loss), a separate component of stockholders’ equity. Realized foreign currency gains or losses arising from transactions denominated in foreign currencies are recorded in other (expense) income in the condensed consolidated statements of comprehensive loss. Cash, Cash Equivalents, and Restricted Cash The Company considers all highly liquid temporary investments purchased with original maturities of 90 days or less to be cash equivalents. The Company holds restricted cash related to certificates of deposits and collateral in relation to lease agreements. As of September 30, 2020, $0.4 million of our $140.9 million of cash, cash equivalents and restricted cash balance was located outside the United States. The following table presents the components of total cash, cash equivalents, and restricted cash as set forth in the Company’s condensed consolidated statements of cash flows: September 30, 2020 December 31, 2019 Cash and cash equivalents $ 139,015 $ 71,655 Restricted cash 1,853 1,852 Total cash, cash equivalents, and restricted cash $ 140,868 $ 73,507 Product Warranty The Company provides its customers with a standard one-year Balance at December 31, 2019 $ 225 Provisions for warranty obligations 659 Settlements (166 ) Balance at September 30, 2020 $ 718 Insurance Effective January 1, 2020, the Company was self-insured for certain obligations related to health insurance. The Company also purchases stop-loss insurance to protect itself from material losses. Judgments and estimates are used in determining the potential value associated with reported claims and for events that have occurred but have not been reported. The Company’s estimates consider expected claim experience and other factors. Receivables for insurance recoveries are recorded as assets, on an undiscounted basis. The Company’s liabilities are based on estimates, and, while the Company believes that its accruals are adequate, the ultimate liability may be significantly different from the amounts recorded. Changes in claims experience, the Company’s ability to settle claims or other estimates and judgments used by management could have a material impact on the amount and timing of expense for any period. Revenue Recognition The Company’s revenue is primarily derived from the sale of products, leases and services. Product revenue consists of capital equipment and single-use disposables that are shipped and billed to customers both domestically and internationally. The Company’s main capital equipment products are the Precision Flow Hi-VNI, Precision Flow Plus, Precision Flow Classic, Vapotherm Transfer Unit 2.0 and Q50 compressor. The Company’s main disposable products are single-use disposables and nasal interfaces, or cannulas, and adaptors. Lease revenue consists of two components which include capital equipment that the Company leases out to its customers and, in certain situations, an allocation from disposable revenue to other lease revenue upon the sale of disposable products in bundled arrangements involving the placement of Precision Flow capital units for use by the customer at no upfront charge in connection with the customer’s ongoing purchase of disposable products. Service revenue consists of fees associated with routine service of capital units and the sale of extended service contracts and preventative maintenance plans, which are purchased by a small portion of the Company’s customer base. In addition, the Company sells small quantities of component parts in the United States, United Kingdom and to third-party international service centers who provide service on Precision Flow capital units outside of the United States and United Kingdom. Freight revenue is based upon actual freight costs plus a percentage markup of such costs associated with the shipment of products domestically, and to a lesser extent, internationally, and is included in service revenue. Rebates and fees consist of contractually obligated administrative fees and percentage-of-sales rebates paid to Group Purchasing Organizations (“GPOs”), Integrated Delivery Networks (“IDNs”) and distributor partners and accounted for as a reduction of service revenue. Under the Financial Accounting Standard Board’s (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”), revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and assesses whether each promised good or service is distinct and determines those that are performance obligations. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Sales, value-added, and other taxes collected on behalf of third parties are excluded from revenue. The Company’s standard payment terms are generally 30 days from the date of sale. Contracts with customers may contain multiple performance obligations. For such arrangements, the transaction price is allocated to each performance obligation based on the estimated relative stand-alone selling prices of the promised products or services underlying each performance obligation. The Company determines stand-alone selling prices based on the price at which the performance obligation is sold separately. If the stand-alone selling price is not observable through past transactions, the Company estimates the stand-alone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations. When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before or significantly after performance, resulting in a significant financing component. Applying the practical expedient in paragraph ASC 606-10-32-18, the Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations under the contract and when the customer pays is one year or less. None of the Company’s contracts contained a significant financing component during the nine months ended September 30, 2020 or 2019. The Company’s contracts with its customers have a duration of less than one year. Therefore, the Company has elected to apply a practical expedient and recognizes the incremental costs of obtaining contracts as an expense. These costs are included in sales and marketing expense in the accompanying condensed consolidated statements of comprehensive loss. Lease Revenue The Company also enters into agreements to lease its capital equipment. For such sales, the Company accounts for revenue under ASC 840, Leases, and assesses and classifies these transactions as sales-type or operating leases based on whether the lease transfers ownership of the equipment to the lessee by the end of the lease term. This criterion is met in situations in which the lease agreement provides for the transfer of title at or shortly after the end of the lease term. Equipment included in arrangements including transfer of title are accounted for as sales-type leases and the Company recognizes the total value of the lease payments due over the lease term to revenue at the inception of the lease. The Company records the current value of future lease payments under prepaid expenses and other current assets in the accompanying condensed consolidated balance sheets; these amounts totaled $1.7 and $0.9 million at September 30, 2020 and December 31, 2019, respectively. Equipment included in arrangements that do not include the transfer of title, nor any of the capital lease criteria, are accounted for as operating leases and revenue is recognized on a straight-line basis as it becomes receivable monthly over the term of the lease. The Company also enters into agreements involving the placement of Precision Flow capital units for use by the customer at no upfront charge in connection with the customer’s ongoing purchase of disposable products. In these bundled arrangements, revenue recognized for the sale of the disposables is allocated between disposable revenue and other lease revenue based on the estimated relative stand-alone selling prices of the individual performance obligations. Shipping and Handling Costs Amounts billed to customers for shipping and handling are included in service revenue. Shipping and handling costs are included in costs of sales. The total costs of shipping and handling for the three months ended September 30, 2020 and 2019 was $0.6 and $0.2 million, respectively. Shipping and handling costs for the nine months ended September 30, 2020 and 2019 totaled $1.7 and $0.7 million, respectively. Sales and Value-Added Taxes When required by local jurisdictions, the Company bills its customers for sales tax and value-added tax calculated on each sales invoice and records a liability for the sales and value-added tax payable, which is included in accrued expenses and other liabilities in the condensed consolidated balance sheets. Sales tax and value-added tax billed to a customer are not included in the Company’s revenue. Timing and Amount of Revenue Recognition The Company recognizes revenue on product sales and service of its capital equipment and product sales of disposables to its end users in the United States and United Kingdom and to its distribution partners in other international markets. In each instance, revenue is generally recognized when the customer obtains control of the Company’s product, which generally occurs at a point in time upon shipment based on the contractual shipping terms of a contract. Product and service revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or services to a customer. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the expected value amount method to which the Company expects to be entitled. As such, revenue on sales is recorded net of prompt pay discounts and payments made to GPOs, IDNs and distributors. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Determination of whether to include estimated amounts in the transaction price is based largely on an assessment of the Company’s anticipated performance and all information (historical, current and forecasted) that is reasonably available. The Company believes that the estimates it has established are reasonable based upon current facts and circumstances. Applying different judgments to the same facts and circumstances could result in different estimates. Stock-Based Compensation The Company maintains an equity incentive plan to provide long-term incentives for employees, consultants, and members of the board of directors. The plan allows for the issuance of non-statutory and incentive stock options, restricted stock, unrestricted stock, stock units, including restricted stock units, and stock appreciation rights to employees, consultants and non-employee directors. The Company recognizes stock-based compensation expense for awards of equity instruments to employees and non-employees based on the grant date fair value of those awards in accordance with ASC Topic 718, Stock Compensation (“ASC 718”). ASC 718 requires all equity-based compensation awards, including grants of restricted shares and stock options, to be recognized as expense in the condensed consolidated statements of comprehensive loss based on their grant date fair values. The fair value of each option grant is estimated on the grant date using the Black-Scholes option pricing model. The fair value is then amortized on a straight-line basis over the requisite service period of the awards, which is generally the vesting period. For performance-based awards, the related compensation cost is amortized over the performance period on an accelerated attribution basis. Compensation cost associated with performance awards is based on fair value on the date of grant and the number of units expected to be earned after assessing the probability that certain performance criteria will be met and the associated targeted payout level that is forecasted will be achieved. Cumulative adjustments are recorded each quarter to reflect estimated outcomes of the performance-related conditions until the results are determined and settled. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs, including the expected life (weighted average period of time that the options granted are expected to be outstanding), the volatility of the Company’s common stock and an assumed risk-free interest rate. Expected volatility is calculated based on historical volatility of a group of publicly traded companies that the Company considers a peer group. The expected life is estimated using the simplified method for “plain vanilla” options. The risk-free interest rate is based on U.S. Treasury rates with a remaining term that approximates the expected life assumed at the date of grant. No dividend yield is assumed as the Company does not pay, and does not expect to pay, dividends on its common stock. The Company estimates forfeitures based on historical experience with pre-vested forfeitures. To the extent actual forfeitures differ from the estimate, the difference is recorded to compensation expense in the period of the forfeiture. The Company recognizes stock-based expense for shares issued pursuant to its 2018 Employee Stock Purchase Plan (“ESPP”) on a straight-line basis over the related offering period. The Company estimates the fair value of shares to be issued under the ESPP based on a combination of options valued using the Black-Scholes option pricing model. The expected life is determined based on the contractual term. D ividend yield and forfeiture rates are estimated in a manner similar to option grants described above and expected volatility is based on the Company’s historical volatility . Income Tax The Company accounts for 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 condensed consolidated financial statements or in the Company’s tax returns. Deferred taxes are determined based on the difference between the financial reporting and tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The Company accounts for uncertainty in income taxes recognized in the condensed consolidated financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more likely than not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the condensed consolidated financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties. The Company’s major tax jurisdictions are the United States, New Hampshire and the United Kingdom. There is no provision or benefit for income taxes for the three or nine months ended September 30, 2020 or 2019 because the Company has historically incurred operating losses and maintains a full valuation allowance against its United States net deferred tax assets. Utilization of the net operating loss and tax credit carryforwards may be subject to a substantial annual limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”) due to ownership change limitations that have occurred previously or that could occur in the future. These ownership changes may limit the amount of net operating loss and tax credit carryforwards that can be utilized to offset future taxable income and reduce taxes, respectively. The Company has not currently completed an evaluation of ownership changes through September 30, 2020 or December 31, 2019 to assess whether utilization of the Company’s net operating loss and tax credit carryforwards would be subject to an annual limitation under Sections 382 and 383 of the Code. To the extent an ownership change is determined to have occurred under Sections 382 and 383 of the Code, the net operating loss and tax credit carryforwards may be subject to limitation. Recently Issued Accounting Pronouncements As an emerging growth company (“EGC”), the Jumpstart Our Business Startups Act (the “JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use the adoption dates applicable to private companies. As a result, the Company’s consolidated financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective date for new or revised accounting standards that are applicable to public companies. The Company expects it will no longer qualify as an EGC as of December 31, 2020 and, at that time, will begin to adopt certain accounting pronouncements at dates applicable to public companies. Leases (Topic 842): In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 establishes a comprehensive new lease accounting model. The new standard clarifies the definitions of a lease, requires a dual approach to lease classification similar to current lease classifications, and causes lessees to recognize leases on the balance sheet as a lease liability with a corresponding right-of-use asset for leases with a lease term of more than twelve months. In July 2018, the FASB issued ASU No. 2018-11 Leases (Topic 842) (“ASU 2018-11”) which provided another transition method in addition to the existing transition method by allowing entities to initially apply the new leases standard at the adoption date. In June 2020, the FASB issued ASU 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842), which defers the effective date for ASU 2016-02 to annual periods beginning after December 15, 2021 and interim periods beginning after December 15, 2022 for private companies or EGCs following private company adoption dates. The standard was effective for public companies for periods beginning after December 31, 2018. The new standard originally required a modified retrospective transition for capital or operating leases existing at or entered into after the beginning of the earliest comparative period presented in the financial statements, but it does not require transition accounting for leases that expire prior to the date of the initial application. The Company expects to adopt the new standard in the fourth quarter of 2020 with an effective date of January 1, 2020. The Company is in the process of adopting the new standard, including evaluating the changes that will be required under this standard to its future financial reporting and disclosures, and the Company has designed and implemented related processes and controls to address these changes. The Company expects the most significant effects of adoption to relate to (1) the recognition of new right-of-use assets and lease liabilities on the balance sheet for the Company’s facilities and certain other operating leases; and (2) the need to provide new disclosures about the Company’s leasing activities related to the amount, timing and uncertainty of cash flows arising from leases. Credit Losses (Topic 326): In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This standard requires that credit losses be reported using an expected losses model rather than the incurred losses model that is currently used and establishes additional disclosures related to credit risks. In November 2019, the FASB issued ASU 2019-10, Financial Instruments-Credit Losses (Topic 326), Derivative and Hedging (Topic 815) and Leases (Topic 842), which defers the effective date for ASU 2016-13 to interim and annual periods beginning after December 15, 2022 for private companies, EGCs following private company adoption dates, or public entities meeting the definition of smaller reporting companies as of the date of issuance of this update. The Company has not yet determined the effects, if any, that the adoption of ASU 2016-13 may have on its financial position, results of operations, cash flows, or disclosures. |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Business Combinations | 3. Business Combinations On February 28, 2019, the Company completed the acquisition of all outstanding equity securities of Solus, The following table summarizes the purchase price allocation that includes the fair values of the separately identifiable assets acquired and liabilities assumed as of February 28, 2019: Cash $ 466 Accounts receivable 411 Inventory 492 Prepaids and other assets 3 Property and equipment 1 Goodwill 592 Intangible assets 455 Total assets acquired 2,420 Accounts payable and accrued expenses (241 ) Contract liabilities (75 ) Deferred taxes (78 ) Total liabilities assumed (394 ) Total purchase price $ 2,026 The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill. The fair values assigned to tangible and identifiable intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions. In determining the purchase price allocation, the Company considered, among other factors, the opportunity provided by a customer agreement with the National Health Service. The fair value of the intangible assets associated with this agreement were estimated using a discounted cash flow method with the application of the multi-period excess earnings method. Under this method, an intangible asset’s fair value is equal to the present value of the incremental after-tax cash flows attributable to only the subject intangible assets after deducting contributory asset charges. An income and expenses forecast was built based upon specific intangible asset revenue and expense estimates. The rate used to discount the estimated future net cash flows to their present values for each intangible asset was based upon a weighted average cost of capital calculation. The discount rate was determined after consideration of market rates of return on debt and equity capital, the weighted average return on invested capital and the risk associated with achieving forecasted sales related to the assets acquired from Solus. The total weighted average amortization period for the intangible assets is approximately 3.83 years. The intangible assets are being amortized on a straight-line basis, which is consistent with the pattern that the economic benefits of the intangible assets are expected to be utilized based upon estimated cash flows generated from such assets. Goodwill associated with the acquisition was primarily attributable to the market expansion opportunity in the United Kingdom. The goodwill attributable to the United Kingdom jurisdiction is not deductible for tax purposes. The Company has included the financial results of Solus in the condensed consolidated financial statements from the date of acquisition. The transaction costs associated with the acquisition were approximately $0.2 million and were recorded in general and administrative expense as incurred during 2019. Pro Forma Financial Information The following unaudited pro forma information for the three and nine months ended September 30, 2019 presents consolidated information as if the Solus acquisition occurred on January 1, 2019, which was the first day of the Company’s fiscal year 2019: Three Months Ended September 30, Nine Months Ended September 30, 2019 2019 Net revenue $ 10,809 $ 35,331 Net loss $ (12,765 ) $ (38,553 ) Net loss per share, basic $ (0.65 ) $ (2.16 ) |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 4. Fair Value Measurements In accordance with ASC 820, Fair Value Measurements and Disclosures, the Company generally defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company uses a three-tier fair value hierarchy, which classifies the inputs used in measuring fair values. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements), and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: • Level 1 – inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. • Level 2 – inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability. • Level 3 – unobservable inputs for the asset or liability in which there is little, if any, market activity for the asset or liability at the measurement date. The Company’s cash equivalents primarily consist of money market deposits, which totaled approximately $123.2 million at September 30, 2020 and are valued based on Level 1 of the fair value hierarchy. As described in Note 8 “Debt”, during 2019, the Company granted warrants to purchase 19,789 shares of common stock in connection with an amendment to its financing arrangement. These equity-classified warrants were valued using the Black-Scholes pricing model, which falls within Level 3 of the fair value hierarchy. The assumptions used in the Black-Scholes pricing model were as follows at the date of grant: Expected dividend yield 0.0 % Risk free interest rate 2.4 % Expected stock price volatility 60.9 % Expected term (years) 10.0 |
Accounts Receivable
Accounts Receivable | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Accounts Receivable | 5. Accounts Receivable Accounts receivable by customer location consists of the following: September 30, 2020 December 31, 2019 United States $ 7,530 $ 5,574 International 3,883 2,908 Total accounts receivable 11,413 8,482 Less: Allowance for doubtful accounts (538 ) (239 ) Accounts receivable, net of allowance for doubtful accounts $ 10,875 $ 8,243 No individual customer accounted for 10% or more of revenue for the three or nine months ended September 30, 2020 or 2019. No individual customers accounted for 10% or more of total accounts receivable at either September 30, 2020 or December 31, 2019. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | 6. Inventories Inventories consist of the following: September 30, 2020 December 31, 2019 Component parts $ 10,918 $ 4,948 Finished goods 14,111 4,189 Total inventories $ 25,029 $ 9,137 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 7. Goodwill and Intangible Assets The changes in the carrying amount of goodwill and intangible assets during 2020 are as follows: Goodwill Intangible Assets Balance at December 31, 2019 $ 588 $ 353 Acquired during the period - - Amortization - (85 ) Foreign currency exchange rate changes (17 ) (10 ) Balance at September 30, 2020 $ 571 $ 258 The following table presents a summary of previously acquired intangible assets: As of September 30, 2020 Period of amortization Gross Carrying Amount Accumulated Amortization Customer agreements 3.83 $ 440 $ (182 ) Total identifiable intangible assets $ 440 $ (182 ) |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | 8. Debt Revolving Credit Line On November 16, 2016, the Company entered a Business Financing Agreement (the “Revolver Agreement”) with Western Alliance Bank, an Arizona corporation, which replaced its then-existing revolving line of credit. The Revolver Agreement made available $7.0 million of revolving credit upon the closing date. Availability under the Revolver Agreement is calculated based upon 80% of the eligible receivables (net of pre-paid deposits, pre-billed invoices, other offsets, and contras related to each specific account debtor). The original maturity date under the Revolver Agreement was September 30, 2018. The Company refinanced the Revolver Agreement in April 2018 (the “Amended Revolver Agreement”), increasing the line of credit to $7.5 million and extending the maturity date to September 30, 2020. The principal is due upon maturity. On March 22, 2019, the Company entered into an amendment to the Amended (as amended, the “First Amended Revolver Agreement”), which increased the allowable permitted indebtedness under the First Amended Revolver Agreement in connection with the Company’s credit card program from $0.3 million to $0.5 million. On July 7, 2020, the Company entered into a second amendment to the Amended Revolver Agreement (as amended, the “Second Amended Revolver Agreement”), which, under certain circumstances, reduced the amount of funds required to be held on deposit with Western Alliance Bank. On September 29, 2020, the Company entered into a third amendment to the Amended Revolver Agreement (as amended, the “Third Amended Revolver Agreement”), which extended the maturity date to February 28, 2023. Under the Third Amended Revolver Agreement, interest is required to be paid monthly on the outstanding balance at the Wall Street Journal Prime Rate in effect from time to time, subject to a floor of 3.25%. At September 30, 2020 the interest rate was 3.25%. The outstanding balance under the Third Amended Revolver Agreement was $4.5 million at September 30, 2020 and there was $0.8 million remaining availability based on eligible receivables. At December 31, 2019, the interest rate was 6.50%. The outstanding balance under the Third Amended Revolver Agreement The Third Amended Revolver Agreement is secured by substantially all of the Company’s assets, excluding intellectual property. As discussed in Note 15 “Subsequent Events,” the Company fully repaid and terminated the Third Amended Revolver Agreement on October 21, 2020. Term Loans On April 6, 2018, the Company entered into a Credit Agreement and Guaranty (the “Credit Agreement and Guaranty”) with Perceptive Credit Holdings II, LP (“Perceptive”). Pursuant to the Credit Agreement and Guaranty, a total of $42.5 million was available in three tranches. The first tranche was drawn down in the amount of $20.0 million on the closing date, April 6, 2018, and was used to repay a former loan agreement in full. On July 20, 2018, pursuant to the Credit Agreement and Guaranty, the Company drew down the second tranche of $10.0 million. In connection with this draw down, the Company granted Perceptive warrants to purchase 18,846 shares of Series D preferred stock which were converted into warrants to purchase shares of common stock at the time of the initial public offering. The warrants had an exercise price of $15.92 per share, were fully vested upon issuance, were exercisable at the option of the holder, in whole or in part, and would have expired in July 2028. On September 27, 2018, the Company entered into the first amendment to the Credit Agreement and Guaranty (as amended, the “Amended Credit Agreement and Guaranty”) with Perceptive. Pursuant to the Amended Credit Agreement and Guaranty, the Company was permitted to draw the final $12.5 million of availability at any time through March 31, 2019 and the minimum 2018 revenue requirement of $43.2 million that was required to draw down the final tranche was eliminated. Concurrently with the closing of the Amendment, the Company drew down $2.0 million of the remaining $12.5 million available. In connection with this draw down, the Company granted to Perceptive warrants to purchase 3,769 shares of its Series D preferred stock which were converted into warrants to purchase shares of common stock at the time of the initial public offering. The warrants ha d an exercise price of $15.92 per share, were fully vested upon issuance, were exercisable at the option of the holder, in whole or in part, and would have expire d in September 2028 . On March 22, 2019, the Company drew the remaining $10.5 million of availability under the Amended Credit Agreement and Guaranty. In connection with this draw down, the Company granted Perceptive warrants to purchase 19,789 shares of common stock. The warrants had an exercise price of $15.92 per share, were fully vested upon issuance, were exercisable at the option of the holder, in whole or in part, and would have expired in March 2029. On March 22, 2019, the Company entered into a second amendment to the Amended Credit Agreement and Guaranty increasing the allowable permitted indebtedness in connection with the Company’s credit card program from $0.3 million to $0.5 million. On June 10, 2020, Perceptive exercised all of its outstanding warrants. See Note 10 “Warrants” for further details. On June 16, 2020, the Company entered into a third amendment to the Amended Credit Agreement and Guaranty (the “2020 Amended Credit Agreement and Guaranty”), which amended the prepayment premium by clarifying the methodology for calculating Perceptive’s annualized internal rate of return under the term loan. Pursuant to the 2020 Amended Credit Agreement and Guaranty, the outstanding principal amount accrues interest at an annual rate equal to 9.06% plus the greater of (a) one-month LIBOR and (b) 1.75% per year. At September 30, 2020, the interest rate was 10.81%. The outstanding balance, including accretion of the additional final payment due upon maturity and described below, was $42.6 million at September 30, 2020 and there was no remaining availability. The 2020 Amended Credit Agreement and Guaranty is secured by substantially all of the Company’s assets, including intellectual property. On the maturity date, in addition to the payment of principal and accrued interest, the Company will be required to make a payment of 0.5% of the total amount borrowed under the 2020 Amended Credit Agreement and Guaranty unless the Company has already made such a payment in connection with an acceleration or prepayment of borrowings under the agreement. In the event the Company prepays all or part of the amounts borrowed under the 2020 Amended Credit and Guaranty prior to the maturity date, the Company will be subject to additional prepayment fees which decrease as the time to maturity decreases. The 2020 Amended Credit Agreement and Guaranty requires the Company to comply with a minimum liquidity covenant at all times and a minimum revenue covenant measured at the end of each fiscal quarter. As of September 30, 2020, the Company was in compliance with all covenants. The annual principal maturities of the Company’s term loans as of September 30, 2020 are as follows: 2020 - 2021 - 2022 - 2023 42,603 Less: Discount on loans payable (603 ) Long-term loans payable $ 42,000 As discussed in Note 15 “Subsequent Events,” the Company fully repaid and terminated the 2020 Amended Credit Agreement and Guaranty on October 21, 2020. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. Commitments and Contingencies Legal From time to time, the Company may become involved in various legal proceedings, including those that may arise in the ordinary course of business. The Company believes there is no litigation pending that could have, individually, or in the aggregate, a material adverse effect on the results of its operations or financial condition. |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2020 | |
Warrants And Rights Note Disclosure [Abstract] | |
Warrants | 10. Warrants The Company’s warrant activity is summarized as follows: Common Stock Warrants Number of Shares Weighted Average Exercise Price Outstanding at December 31, 2019 182,076 $ 14.84 Warrants granted - - Warrants exercised (105,271 ) 15.46 Outstanding at September 30, 2020 76,805 $ 14.00 On June 10, 2020, a warrant to purchase 80,097 shares of common stock was exercised on a net exercise basis. Upon exercise, the exercise price of $15.92 per share was satisfied through the Company’s withholding of 39,031 of the warrant shares and issuing 41,066 shares of common stock. On July 10, 2020, a warrant to purchase 20,889 shares of common stock held was exercised on a net exercise basis. Upon exercise, the exercise price of $14.00 per share was satisfied through the Company’s withholding of 6,902 of the warrant shares and issuing 13,986 shares of common stock to the holder. On August 7, 2020, a warrant to purchase 4,285 shares of common stock held was exercised on a net exercise basis. Upon exercise, the exercise price of $14.00 per share was satisfied through the Company’s withholding of 2,064 of the warrant shares and issuing 2,222 shares of common stock to the holder. On October 1, 2020, a warrant to purchase 42,857 shares of common stock held was exercised on a net exercise basis. Upon exercise, the exercise price of $14.00 per share was satisfied through the Company’s withholding of 20,689 of the warrant shares and issuing 22,168 shares of common stock to the holder. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | 11. Revenue Disaggregated Revenue The following table shows the Company’s net revenue disaggregated into categories the Company considers meaningful: Three Months Ended September 30, Nine Months Ended September 30, 2020 2020 US International Total US International Total Net revenue by: Product Revenue Capital Equipment $ 13,198 $ 2,047 $ 15,245 $ 30,578 $ 8,970 $ 39,548 Disposable 10,426 2,618 13,044 29,561 9,076 38,637 Subtotal Product Revenue 23,624 4,665 28,289 60,139 18,046 78,185 Lease Revenue Capital Equipment 1,117 12 1,129 3,364 43 3,407 Other 442 82 524 1,194 233 1,427 Service and Other Revenue 343 274 617 852 955 1,807 Net Revenue $ 25,526 $ 5,033 $ 30,559 $ 65,549 $ 19,277 $ 84,826 Three Months Ended September 30, Nine Months Ended September 30, 2019 2019 US International Total US International Total Net revenue by: Product Revenue Capital Equipment $ 1,408 $ 647 $ 2,055 $ 4,517 $ 2,198 $ 6,715 Disposable 5,962 1,865 7,827 20,023 5,353 25,376 Subtotal Product Revenue 7,370 2,512 9,882 24,540 7,551 32,091 Lease Revenue 463 - 463 1,410 - 1,410 Service and Other Revenue 202 262 464 812 781 1,593 Net Revenue $ 8,035 $ 2,774 $ 10,809 $ 26,762 $ 8,332 $ 35,094 United States and International net revenue is based on the customer location to which the product is shipped. No individual foreign country represents more than 10% of the Company’s total revenue. Contract Balances from Contracts with Customers Contract liabilities consist of deferred revenue and other contract liabilities associated with rebates and fees payable to GPOs, IDNs and distributor partners. Deferred revenues are included in accrued expenses and other liabilities in the accompanying consolidated balance sheets. The following table presents changes in contract liabilities during the nine months ended September 30, 2020: Contract Liabilities Deferred Revenue Balance at December 31, 2019 $ 137 $ 344 Additions 279 912 Subtractions (137 ) (735 ) Balance at September 30, 2020 $ 279 $ 521 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | 12. Stock-Based Compensation Stock-based compensation expense was allocated based on the employees’ and non-employees’ functions as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Cost of goods sold $ 86 $ 9 $ 231 $ 147 Research and development 204 11 604 266 Sales and marketing 592 (102 ) 1,512 657 General and administrative 874 299 2,233 1,871 Total $ 1,756 $ 217 $ 4,580 $ 2,941 Stock Options The Company granted options to purchase 964,568 shares of common stock at exercise prices ranging from $10.60 to $52.94 per share, with a weighted average exercise price of $13.07 per share, during the nine months ended September 30, 2020. The Company granted options to purchase 871,346 shares of common stock at exercise prices ranging from $13.35 to $19.40 per share, with a weighted average exercise price of $17.36 per share, during the nine months ended September 30, 2019. The weighted average fair value of stock options granted during the nine months ended September 30, 2020 and 2019 was $9.60 and $10.88, respectively. The weighted average assumptions used in the Black-Scholes options pricing model are as follows: Nine Months Ended September 30, 2020 2019 Expected dividend yield 0.0 % 0.0 % Risk free interest rate 1.7 % 2.1 % Expected stock price volatility 87.6 % 63.5 % Expected term (years) 6.1 6.2 Restricted Stock A summary of restricted stock activity for the nine months ended September 30, 2020 is as follows: Weighted Average Grant Date Shares Fair Value Unvested at December 31, 2019 229,913 $ 3.76 Granted 107,209 23.26 Vested (112,382 ) 4.64 Canceled (500 ) 10.97 Unvested at September 30, 2020 224,240 $ 10.50 Employee Stock Purchase Plan In connection with our initial public offering in November 2018, the Company’s board of directors adopted the ESPP and a total of 166,500 shares of common stock were initially reserved for issuance under the ESPP. The number of shares of common stock available for issuance under the ESPP is increased on the first day of each calendar year beginning January 1, 2019 and each year thereafter until 2028 by the lessor of (i) 1% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, and (ii) the number of shares of common stock determined by the Company’s board of directors up to such an initial maximum of 1,741,300 shares of common stock. The number of shares of common stock reserved under the plan at September 30, 2020 totals 512,048. The ESPP provides for successive discrete offering periods of approximately six months or as determined by the plan administrator. The first offering period began on January 2, 2020. As of September 30, 2020, 36,389 shares of common stock were purchased by employees under the ESPP at a price of $9.88 per share, resulting in cash proceeds of $0.4 million. The ESPP permits eligible employees to elect to purchase shares of common stock through fixed whole percentage contributions from eligible compensation during each offering period, not to exceed 10% of the eligible compensation a participant receives during an offering period and not to accrue at a rate which exceeds $25,000 of the fair value of the stock (determined on the grant date(s)) for each calendar year. A participant may purchase the lower of (a) a number of shares of common stock determined by dividing such participant’s accumulated payroll deductions on the exercise date by the option price, (b) 5,000 shares, or (c) such other lesser maximum number of shares as shall have been established by the plan administrator. Amounts deducted and accumulated by the participant will be used to purchase shares of common stock at the end of each offering period. The purchase price of the shares will be 85% of the lower of the fair value of common stock on the first trading day of each offering period or on the purchase date. Participants may end their participation during an offering period up to ten days in advance of the exercise date and will be paid their accumulated contributions that have not been used to purchase shares of common stock. Participation ends automatically upon termination of employment. The fair value of the purchase right for the ESPP option is estimated on the date of grant using the Black-Scholes pricing model with the following assumptions during 2020: Expected dividend yield 0.0% Risk free interest rate 0.2% - 1.6% Expected stock price volatility 107.9% - 115.8% Expected term (years) 0.4 - 0.5 |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 13. Net Loss Per Share The Company excluded the following potential common shares, based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect: As of September 30, 2020 2019 Options to purchase common stock 1,770,880 1,407,448 Unvested restricted stock 224,240 267,566 Warrants to purchase common stock 76,805 182,076 Employee stock purchase plan shares 23,628 - 2,095,553 1,857,090 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 14. Related Party Transactions See Note 8 “Debt” for a discussion of the Company’s 2020 Amended Credit Agreement and Guaranty and related transactions with Perceptive, a holder of more than 5% of the Company’s common stock. 15. Subsequent Events On October 21, 2020 (the “Closing Date”), the Company entered into a loan and security agreement with Canadian Imperial Bank of Commerce Innovation Banking (“CIBC”) (the “Loan Agreement”). The Loan Agreement provides for a revolving loan facility of $12.0 million (the “Revolving Facility”) and a term loan facility of $40.0 million (the “Term Facility” and, together with the Revolving Facility, the “Facilities”). The proceeds of the Facilities were used to repay the Company’s existing revolving loan facility and term loan facility and for general corporate and working capital purposes. The Revolving Facility will mature on October 21, 2022 and may be renewed on an annual basis thereafter by mutual agreement of the Company and CIBC. The Term Facility will mature on October 21, 2025. Advances under the Facilities shall bear interest at a floating rate per annum equal to, (i) in the case of the Revolving Facility, the Wall Street Journal (“WSJ”) Prime Rate plus 1.0% and (ii) in the case of the Term Facility, the WSJ Prime Rate plus 2.5%. In each case, the WSJ Prime Rate is subject to a floor of 3.25%. The Loan Agreement provides for interest-only payments on the Term Facility for the first thirty-six months following the Closing Date. Thereafter, amortization payments on the Term Facility will be payable monthly in twenty-four equal installments. The Term Facility may not be prepaid prior to the first anniversary of the Closing Date without prepaying all of the interest that otherwise would have been payable on the Term Facility during the period commencing on the Closing Date and ending on the first anniversary of the Closing Date plus a prepayment charge of 2.0%. Thereafter, the Term Facility may be prepaid in full, subject to a prepayment charge of (i) 2.0%, if such prepayment occurs after the first anniversary of the Closing Date but on or prior to the second anniversary of the Closing Date, and (ii) 1.0%, if such prepayment occurs after the second anniversary of the Closing Date but on or prior to the third anniversary of the Closing Date. The Facilities are secured by a lien on substantially all of the assets of the Company, including intellectual property. The Loan Agreement contains customary covenants and representations, including, without limitation, a minimum revenue covenant equal to 80% of each year’s annual operating plan (tested on a trailing twelve month basis at the end of each fiscal quarter) and other financial covenants, reporting obligations, and limitations on dispositions, changes in business or ownership, mergers or acquisitions, indebtedness, encumbrances, distributions and investments, transactions with affiliates and capital expenditures. The events of default under the Loan Agreement include, without limitation, and subject to customary grace periods, (1) the Company’s failure to make any payments of principal or interest under the Loan Agreement or other loan documents, (2) the Company’s breach or default in the performance of any covenant under the Loan Agreement, (3) the occurrence of a material adverse effect or an event that is reasonably likely to result in a material adverse effect, (4) the existence of an attachment or levy on a material portion of funds of the Company or its subsidiaries, (5) the Company’s insolvency or bankruptcy, or (6) the occurrence of certain material defaults with respect to any other indebtedness of the Company in excess of $500,000. If an event of default occurs, CIBC is entitled to take enforcement action, including acceleration of amounts due under the Loan Agreement. The Loan Agreement also contains other customary provisions, such as expense reimbursement and confidentiality. CIBC has indemnification rights and the right to assign the Facilities, subject to customary restrictions. On October 21, 2020, the Company used approximately $40 million of the Term Facility, approximately $4.9 million of the Revolving Facility and approximately $5.7 million of cash on hand to pay off all obligations owing under, and to terminate, both the 2020 Amended Credit Agreement and Guaranty and the Third Amended Revolver Agreement, which included a prepayment penalty and exit fees of $3.7 million. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events On October 21, 2020 (the “Closing Date”), the Company entered into a loan and security agreement with Canadian Imperial Bank of Commerce Innovation Banking (“CIBC”) (the “Loan Agreement”). The Loan Agreement provides for a revolving loan facility of $12.0 million (the “Revolving Facility”) and a term loan facility of $40.0 million (the “Term Facility” and, together with the Revolving Facility, the “Facilities”). The proceeds of the Facilities were used to repay the Company’s existing revolving loan facility and term loan facility and for general corporate and working capital purposes. The Revolving Facility will mature on October 21, 2022 and may be renewed on an annual basis thereafter by mutual agreement of the Company and CIBC. The Term Facility will mature on October 21, 2025. Advances under the Facilities shall bear interest at a floating rate per annum equal to, (i) in the case of the Revolving Facility, the Wall Street Journal (“WSJ”) Prime Rate plus 1.0% and (ii) in the case of the Term Facility, the WSJ Prime Rate plus 2.5%. In each case, the WSJ Prime Rate is subject to a floor of 3.25%. The Loan Agreement provides for interest-only payments on the Term Facility for the first thirty-six months following the Closing Date. Thereafter, amortization payments on the Term Facility will be payable monthly in twenty-four equal installments. The Term Facility may not be prepaid prior to the first anniversary of the Closing Date without prepaying all of the interest that otherwise would have been payable on the Term Facility during the period commencing on the Closing Date and ending on the first anniversary of the Closing Date plus a prepayment charge of 2.0%. Thereafter, the Term Facility may be prepaid in full, subject to a prepayment charge of (i) 2.0%, if such prepayment occurs after the first anniversary of the Closing Date but on or prior to the second anniversary of the Closing Date, and (ii) 1.0%, if such prepayment occurs after the second anniversary of the Closing Date but on or prior to the third anniversary of the Closing Date. The Facilities are secured by a lien on substantially all of the assets of the Company, including intellectual property. The Loan Agreement contains customary covenants and representations, including, without limitation, a minimum revenue covenant equal to 80% of each year’s annual operating plan (tested on a trailing twelve month basis at the end of each fiscal quarter) and other financial covenants, reporting obligations, and limitations on dispositions, changes in business or ownership, mergers or acquisitions, indebtedness, encumbrances, distributions and investments, transactions with affiliates and capital expenditures. The events of default under the Loan Agreement include, without limitation, and subject to customary grace periods, (1) the Company’s failure to make any payments of principal or interest under the Loan Agreement or other loan documents, (2) the Company’s breach or default in the performance of any covenant under the Loan Agreement, (3) the occurrence of a material adverse effect or an event that is reasonably likely to result in a material adverse effect, (4) the existence of an attachment or levy on a material portion of funds of the Company or its subsidiaries, (5) the Company’s insolvency or bankruptcy, or (6) the occurrence of certain material defaults with respect to any other indebtedness of the Company in excess of $500,000. If an event of default occurs, CIBC is entitled to take enforcement action, including acceleration of amounts due under the Loan Agreement. The Loan Agreement also contains other customary provisions, such as expense reimbursement and confidentiality. CIBC has indemnification rights and the right to assign the Facilities, subject to customary restrictions. On October 21, 2020, the Company used approximately $40 million of the Term Facility, approximately $4.9 million of the Revolving Facility and approximately $5.7 million of cash on hand to pay off all obligations owing under, and to terminate, both the 2020 Amended Credit Agreement and Guaranty and the Third Amended Revolver Agreement, which included a prepayment penalty and exit fees of $3.7 million. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The information included in this Quarterly Report on Form 10-Q should be read in conjunction with our audited consolidated financial statements and the accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Form 10-K”). Our accounting policies are described in the “ Notes to Consolidated Financial Statements ” in our 2019 Form 10-K and updated, as necessary, in this report. The year-end consolidated balance sheet data presented for comparative purposes was derived from our audited financial statements but does not include all disclosures required by U.S. GAAP. |
Principles of Consolidation | Principles of Consolidation These condensed consolidated financial statements include the financial statements of Solus, a wholly owned subsidiary of the Company based in the United Kingdom, which was acquired in the first quarter of 2019. All intercompany accounts and transactions have been eliminated upon consolidation. |
Segment Information | Segment Information Operating segments are defined as components of an enterprise for which separate discrete financial information is available and evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company globally manages the business within one reporting segment, Vapotherm, Inc. and two reporting units, Vapotherm and Solus. Segment information is consistent with how management reviews the business, makes investing and resource allocation decisions and assesses operating performance. The majority of the Company’s long-term assets are located in the United States. Long-term assets located outside the United States totaled $0.1 million as of each of September 30, 2020 and December 31, 2019. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires the Company to make judgments, assumptions, and estimates that affect the reported amounts of assets, liabilities, revenue and expenses, and the related disclosure of contingent assets and liabilities. The Company evaluates its estimates on an ongoing basis. The Company bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Significant estimates relied upon in preparing these condensed consolidated financial statements include calculation of stock-based compensation, valuation of warrants, fair values of acquired assets and liabilities, including goodwill and intangibles assets, realizability of inventories, allowance for bad debts, accrued expenses and the valuation allowances against deferred income tax assets. Actual results may differ from these estimates. |
Unaudited Interim Financial Information | Unaudited Interim Financial Information The accompanying condensed condensed condensed |
Reclassification | Reclassification Certain amounts in 2019 have been reclassified to conform to the presentation in 2020. None of the reclassifications had any impact to the Company’s results of operations. |
Concentrations of Credit Risk | Concentrations of Credit Risk As of September 30, 2020, the Company’s financial instruments were comprised of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and debt, the carrying amounts of which approximated fair value due to their short-term nature and market interest rates. All of the Company’s cash and cash equivalents are maintained at creditworthy financial institutions. At September 30, 2020, deposits exceed the amount of any federal depositary insurance provided. The Company extends credit to customers in the normal course of business but typically does not require collateral or any other security to support amounts due. Management performs ongoing credit evaluations of the Company’s customers. An allowance for potentially uncollectible accounts is provided based on history, economic conditions, and composition of the accounts receivable aging. In some cases, the Company makes allowances for specific customers based on these and other factors. Provisions for the allowance for doubtful accounts are recorded in general and administrative expenses in the accompanying condensed consolidated statements of comprehensive loss. |
Foreign Currency and Foreign Operations | Foreign Currency and Foreign Operations The functional currency of the Company is the currency of the primary economic environment in which the entity operates, which is the U.S. dollar. For our non-U.S. subsidiary that transacts in a functional currency other than the U.S. dollar, assets and liabilities are translated at current rates of exchange as of the balance sheet date. Income and expense items are translated at the average foreign currency exchange rates for the period. Adjustments resulting from the translation of the financial statements of its foreign operations into U.S. dollars are excluded from the determination of net loss and are recorded in accumulated other comprehensive income (loss), a separate component of stockholders’ equity. Realized foreign currency gains or losses arising from transactions denominated in foreign currencies are recorded in other (expense) income in the condensed consolidated statements of comprehensive loss. |
Cash, Cash Equivalents, and Restricted Cash | Cash, Cash Equivalents, and Restricted Cash The Company considers all highly liquid temporary investments purchased with original maturities of 90 days or less to be cash equivalents. The Company holds restricted cash related to certificates of deposits and collateral in relation to lease agreements. As of September 30, 2020, $0.4 million of our $140.9 million of cash, cash equivalents and restricted cash balance was located outside the United States. The following table presents the components of total cash, cash equivalents, and restricted cash as set forth in the Company’s condensed consolidated statements of cash flows: September 30, 2020 December 31, 2019 Cash and cash equivalents $ 139,015 $ 71,655 Restricted cash 1,853 1,852 Total cash, cash equivalents, and restricted cash $ 140,868 $ 73,507 |
Product Warranty | Product Warranty The Company provides its customers with a standard one-year Balance at December 31, 2019 $ 225 Provisions for warranty obligations 659 Settlements (166 ) Balance at September 30, 2020 $ 718 |
Insurance | Insurance Effective January 1, 2020, the Company was self-insured for certain obligations related to health insurance. The Company also purchases stop-loss insurance to protect itself from material losses. Judgments and estimates are used in determining the potential value associated with reported claims and for events that have occurred but have not been reported. The Company’s estimates consider expected claim experience and other factors. Receivables for insurance recoveries are recorded as assets, on an undiscounted basis. The Company’s liabilities are based on estimates, and, while the Company believes that its accruals are adequate, the ultimate liability may be significantly different from the amounts recorded. Changes in claims experience, the Company’s ability to settle claims or other estimates and judgments used by management could have a material impact on the amount and timing of expense for any period. |
Revenue Recognition | Revenue Recognition The Company’s revenue is primarily derived from the sale of products, leases and services. Product revenue consists of capital equipment and single-use disposables that are shipped and billed to customers both domestically and internationally. The Company’s main capital equipment products are the Precision Flow Hi-VNI, Precision Flow Plus, Precision Flow Classic, Vapotherm Transfer Unit 2.0 and Q50 compressor. The Company’s main disposable products are single-use disposables and nasal interfaces, or cannulas, and adaptors. Lease revenue consists of two components which include capital equipment that the Company leases out to its customers and, in certain situations, an allocation from disposable revenue to other lease revenue upon the sale of disposable products in bundled arrangements involving the placement of Precision Flow capital units for use by the customer at no upfront charge in connection with the customer’s ongoing purchase of disposable products. Service revenue consists of fees associated with routine service of capital units and the sale of extended service contracts and preventative maintenance plans, which are purchased by a small portion of the Company’s customer base. In addition, the Company sells small quantities of component parts in the United States, United Kingdom and to third-party international service centers who provide service on Precision Flow capital units outside of the United States and United Kingdom. Freight revenue is based upon actual freight costs plus a percentage markup of such costs associated with the shipment of products domestically, and to a lesser extent, internationally, and is included in service revenue. Rebates and fees consist of contractually obligated administrative fees and percentage-of-sales rebates paid to Group Purchasing Organizations (“GPOs”), Integrated Delivery Networks (“IDNs”) and distributor partners and accounted for as a reduction of service revenue. Under the Financial Accounting Standard Board’s (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”), revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and assesses whether each promised good or service is distinct and determines those that are performance obligations. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Sales, value-added, and other taxes collected on behalf of third parties are excluded from revenue. The Company’s standard payment terms are generally 30 days from the date of sale. Contracts with customers may contain multiple performance obligations. For such arrangements, the transaction price is allocated to each performance obligation based on the estimated relative stand-alone selling prices of the promised products or services underlying each performance obligation. The Company determines stand-alone selling prices based on the price at which the performance obligation is sold separately. If the stand-alone selling price is not observable through past transactions, the Company estimates the stand-alone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations. When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before or significantly after performance, resulting in a significant financing component. Applying the practical expedient in paragraph ASC 606-10-32-18, the Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations under the contract and when the customer pays is one year or less. None of the Company’s contracts contained a significant financing component during the nine months ended September 30, 2020 or 2019. The Company’s contracts with its customers have a duration of less than one year. Therefore, the Company has elected to apply a practical expedient and recognizes the incremental costs of obtaining contracts as an expense. These costs are included in sales and marketing expense in the accompanying condensed consolidated statements of comprehensive loss. |
Lease Revenue | Lease Revenue The Company also enters into agreements to lease its capital equipment. For such sales, the Company accounts for revenue under ASC 840, Leases, and assesses and classifies these transactions as sales-type or operating leases based on whether the lease transfers ownership of the equipment to the lessee by the end of the lease term. This criterion is met in situations in which the lease agreement provides for the transfer of title at or shortly after the end of the lease term. Equipment included in arrangements including transfer of title are accounted for as sales-type leases and the Company recognizes the total value of the lease payments due over the lease term to revenue at the inception of the lease. The Company records the current value of future lease payments under prepaid expenses and other current assets in the accompanying condensed consolidated balance sheets; these amounts totaled $1.7 and $0.9 million at September 30, 2020 and December 31, 2019, respectively. Equipment included in arrangements that do not include the transfer of title, nor any of the capital lease criteria, are accounted for as operating leases and revenue is recognized on a straight-line basis as it becomes receivable monthly over the term of the lease. The Company also enters into agreements involving the placement of Precision Flow capital units for use by the customer at no upfront charge in connection with the customer’s ongoing purchase of disposable products. In these bundled arrangements, revenue recognized for the sale of the disposables is allocated between disposable revenue and other lease revenue based on the estimated relative stand-alone selling prices of the individual performance obligations. |
Shipping and Handling Costs | Shipping and Handling Costs Amounts billed to customers for shipping and handling are included in service revenue. Shipping and handling costs are included in costs of sales. The total costs of shipping and handling for the three months ended September 30, 2020 and 2019 was $0.6 and $0.2 million, respectively. Shipping and handling costs for the nine months ended September 30, 2020 and 2019 totaled $1.7 and $0.7 million, respectively. |
Sales and Value-Added Taxes | Sales and Value-Added Taxes When required by local jurisdictions, the Company bills its customers for sales tax and value-added tax calculated on each sales invoice and records a liability for the sales and value-added tax payable, which is included in accrued expenses and other liabilities in the condensed consolidated balance sheets. Sales tax and value-added tax billed to a customer are not included in the Company’s revenue. |
Timing and Amount of Revenue Recognition | Timing and Amount of Revenue Recognition The Company recognizes revenue on product sales and service of its capital equipment and product sales of disposables to its end users in the United States and United Kingdom and to its distribution partners in other international markets. In each instance, revenue is generally recognized when the customer obtains control of the Company’s product, which generally occurs at a point in time upon shipment based on the contractual shipping terms of a contract. Product and service revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or services to a customer. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the expected value amount method to which the Company expects to be entitled. As such, revenue on sales is recorded net of prompt pay discounts and payments made to GPOs, IDNs and distributors. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Determination of whether to include estimated amounts in the transaction price is based largely on an assessment of the Company’s anticipated performance and all information (historical, current and forecasted) that is reasonably available. The Company believes that the estimates it has established are reasonable based upon current facts and circumstances. Applying different judgments to the same facts and circumstances could result in different estimates. |
Stock-Based Compensation | Stock-Based Compensation The Company maintains an equity incentive plan to provide long-term incentives for employees, consultants, and members of the board of directors. The plan allows for the issuance of non-statutory and incentive stock options, restricted stock, unrestricted stock, stock units, including restricted stock units, and stock appreciation rights to employees, consultants and non-employee directors. The Company recognizes stock-based compensation expense for awards of equity instruments to employees and non-employees based on the grant date fair value of those awards in accordance with ASC Topic 718, Stock Compensation (“ASC 718”). ASC 718 requires all equity-based compensation awards, including grants of restricted shares and stock options, to be recognized as expense in the condensed consolidated statements of comprehensive loss based on their grant date fair values. The fair value of each option grant is estimated on the grant date using the Black-Scholes option pricing model. The fair value is then amortized on a straight-line basis over the requisite service period of the awards, which is generally the vesting period. For performance-based awards, the related compensation cost is amortized over the performance period on an accelerated attribution basis. Compensation cost associated with performance awards is based on fair value on the date of grant and the number of units expected to be earned after assessing the probability that certain performance criteria will be met and the associated targeted payout level that is forecasted will be achieved. Cumulative adjustments are recorded each quarter to reflect estimated outcomes of the performance-related conditions until the results are determined and settled. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs, including the expected life (weighted average period of time that the options granted are expected to be outstanding), the volatility of the Company’s common stock and an assumed risk-free interest rate. Expected volatility is calculated based on historical volatility of a group of publicly traded companies that the Company considers a peer group. The expected life is estimated using the simplified method for “plain vanilla” options. The risk-free interest rate is based on U.S. Treasury rates with a remaining term that approximates the expected life assumed at the date of grant. No dividend yield is assumed as the Company does not pay, and does not expect to pay, dividends on its common stock. The Company estimates forfeitures based on historical experience with pre-vested forfeitures. To the extent actual forfeitures differ from the estimate, the difference is recorded to compensation expense in the period of the forfeiture. The Company recognizes stock-based expense for shares issued pursuant to its 2018 Employee Stock Purchase Plan (“ESPP”) on a straight-line basis over the related offering period. The Company estimates the fair value of shares to be issued under the ESPP based on a combination of options valued using the Black-Scholes option pricing model. The expected life is determined based on the contractual term. D ividend yield and forfeiture rates are estimated in a manner similar to option grants described above and expected volatility is based on the Company’s historical volatility . |
Income Tax | Income Tax The Company accounts for 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 condensed consolidated financial statements or in the Company’s tax returns. Deferred taxes are determined based on the difference between the financial reporting and tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The Company accounts for uncertainty in income taxes recognized in the condensed consolidated financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more likely than not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the condensed consolidated financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties. The Company’s major tax jurisdictions are the United States, New Hampshire and the United Kingdom. There is no provision or benefit for income taxes for the three or nine months ended September 30, 2020 or 2019 because the Company has historically incurred operating losses and maintains a full valuation allowance against its United States net deferred tax assets. Utilization of the net operating loss and tax credit carryforwards may be subject to a substantial annual limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”) due to ownership change limitations that have occurred previously or that could occur in the future. These ownership changes may limit the amount of net operating loss and tax credit carryforwards that can be utilized to offset future taxable income and reduce taxes, respectively. The Company has not currently completed an evaluation of ownership changes through September 30, 2020 or December 31, 2019 to assess whether utilization of the Company’s net operating loss and tax credit carryforwards would be subject to an annual limitation under Sections 382 and 383 of the Code. To the extent an ownership change is determined to have occurred under Sections 382 and 383 of the Code, the net operating loss and tax credit carryforwards may be subject to limitation. |
Recently Adopted Accounting Pronouncements | Recently Issued Accounting Pronouncements As an emerging growth company (“EGC”), the Jumpstart Our Business Startups Act (the “JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use the adoption dates applicable to private companies. As a result, the Company’s consolidated financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective date for new or revised accounting standards that are applicable to public companies. The Company expects it will no longer qualify as an EGC as of December 31, 2020 and, at that time, will begin to adopt certain accounting pronouncements at dates applicable to public companies. Leases (Topic 842): In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 establishes a comprehensive new lease accounting model. The new standard clarifies the definitions of a lease, requires a dual approach to lease classification similar to current lease classifications, and causes lessees to recognize leases on the balance sheet as a lease liability with a corresponding right-of-use asset for leases with a lease term of more than twelve months. In July 2018, the FASB issued ASU No. 2018-11 Leases (Topic 842) (“ASU 2018-11”) which provided another transition method in addition to the existing transition method by allowing entities to initially apply the new leases standard at the adoption date. In June 2020, the FASB issued ASU 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842), which defers the effective date for ASU 2016-02 to annual periods beginning after December 15, 2021 and interim periods beginning after December 15, 2022 for private companies or EGCs following private company adoption dates. The standard was effective for public companies for periods beginning after December 31, 2018. The new standard originally required a modified retrospective transition for capital or operating leases existing at or entered into after the beginning of the earliest comparative period presented in the financial statements, but it does not require transition accounting for leases that expire prior to the date of the initial application. The Company expects to adopt the new standard in the fourth quarter of 2020 with an effective date of January 1, 2020. The Company is in the process of adopting the new standard, including evaluating the changes that will be required under this standard to its future financial reporting and disclosures, and the Company has designed and implemented related processes and controls to address these changes. The Company expects the most significant effects of adoption to relate to (1) the recognition of new right-of-use assets and lease liabilities on the balance sheet for the Company’s facilities and certain other operating leases; and (2) the need to provide new disclosures about the Company’s leasing activities related to the amount, timing and uncertainty of cash flows arising from leases. Credit Losses (Topic 326): In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This standard requires that credit losses be reported using an expected losses model rather than the incurred losses model that is currently used and establishes additional disclosures related to credit risks. In November 2019, the FASB issued ASU 2019-10, Financial Instruments-Credit Losses (Topic 326), Derivative and Hedging (Topic 815) and Leases (Topic 842), which defers the effective date for ASU 2016-13 to interim and annual periods beginning after December 15, 2022 for private companies, EGCs following private company adoption dates, or public entities meeting the definition of smaller reporting companies as of the date of issuance of this update. The Company has not yet determined the effects, if any, that the adoption of ASU 2016-13 may have on its financial position, results of operations, cash flows, or disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Components of Cash, Cash Equivalents and Restricted Cash | The following table presents the components of total cash, cash equivalents, and restricted cash as set forth in the Company’s condensed consolidated statements of cash flows: September 30, 2020 December 31, 2019 Cash and cash equivalents $ 139,015 $ 71,655 Restricted cash 1,853 1,852 Total cash, cash equivalents, and restricted cash $ 140,868 $ 73,507 |
Summary of Roll-Forward Warranty Liability | A roll-forward of the Company’s warranty liability from December 31, 2019 to September 30, 2020 is as follows: Balance at December 31, 2019 $ 225 Provisions for warranty obligations 659 Settlements (166 ) Balance at September 30, 2020 $ 718 |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Summary of Purchase Price Allocation | The following table summarizes the purchase price allocation that includes the fair values of the separately identifiable assets acquired and liabilities assumed as of February 28, 2019: Cash $ 466 Accounts receivable 411 Inventory 492 Prepaids and other assets 3 Property and equipment 1 Goodwill 592 Intangible assets 455 Total assets acquired 2,420 Accounts payable and accrued expenses (241 ) Contract liabilities (75 ) Deferred taxes (78 ) Total liabilities assumed (394 ) Total purchase price $ 2,026 |
Summary of Business Acquisition Pro Forma Information | The following unaudited pro forma information for the three and nine months ended September 30, 2019 presents consolidated information as if the Solus acquisition occurred on January 1, 2019, which was the first day of the Company’s fiscal year 2019: Three Months Ended September 30, Nine Months Ended September 30, 2019 2019 Net revenue $ 10,809 $ 35,331 Net loss $ (12,765 ) $ (38,553 ) Net loss per share, basic $ (0.65 ) $ (2.16 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Warrants | |
Schedule of Assumptions Used in Black-Scholes Options Pricing Model at the Date of Grant | The assumptions used in the Black-Scholes pricing model were as follows at the date of grant: Expected dividend yield 0.0 % Risk free interest rate 2.4 % Expected stock price volatility 60.9 % Expected term (years) 10.0 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Summary of Accounts Receivable | Accounts receivable by customer location consists of the following: September 30, 2020 December 31, 2019 United States $ 7,530 $ 5,574 International 3,883 2,908 Total accounts receivable 11,413 8,482 Less: Allowance for doubtful accounts (538 ) (239 ) Accounts receivable, net of allowance for doubtful accounts $ 10,875 $ 8,243 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consist of the following: September 30, 2020 December 31, 2019 Component parts $ 10,918 $ 4,948 Finished goods 14,111 4,189 Total inventories $ 25,029 $ 9,137 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Amount of Goodwill and Intangible Assets | The changes in the carrying amount of goodwill and intangible assets during 2020 are as follows: Goodwill Intangible Assets Balance at December 31, 2019 $ 588 $ 353 Acquired during the period - - Amortization - (85 ) Foreign currency exchange rate changes (17 ) (10 ) Balance at September 30, 2020 $ 571 $ 258 |
Summary of Previously Acquired Intangible Assets | The following table presents a summary of previously acquired intangible assets: As of September 30, 2020 Period of amortization Gross Carrying Amount Accumulated Amortization Customer agreements 3.83 $ 440 $ (182 ) Total identifiable intangible assets $ 440 $ (182 ) |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Annual Principal Maturities of Term Loans | The annual principal maturities of the Company’s term loans as of September 30, 2020 are as follows: 2020 - 2021 - 2022 - 2023 42,603 Less: Discount on loans payable (603 ) Long-term loans payable $ 42,000 |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Warrants And Rights Note Disclosure [Abstract] | |
Summary of Warrants Activity | The Company’s warrant activity is summarized as follows: Common Stock Warrants Number of Shares Weighted Average Exercise Price Outstanding at December 31, 2019 182,076 $ 14.84 Warrants granted - - Warrants exercised (105,271 ) 15.46 Outstanding at September 30, 2020 76,805 $ 14.00 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Net Revenue Disaggregated into Categories | The following table shows the Company’s net revenue disaggregated into categories the Company considers meaningful: Three Months Ended September 30, Nine Months Ended September 30, 2020 2020 US International Total US International Total Net revenue by: Product Revenue Capital Equipment $ 13,198 $ 2,047 $ 15,245 $ 30,578 $ 8,970 $ 39,548 Disposable 10,426 2,618 13,044 29,561 9,076 38,637 Subtotal Product Revenue 23,624 4,665 28,289 60,139 18,046 78,185 Lease Revenue Capital Equipment 1,117 12 1,129 3,364 43 3,407 Other 442 82 524 1,194 233 1,427 Service and Other Revenue 343 274 617 852 955 1,807 Net Revenue $ 25,526 $ 5,033 $ 30,559 $ 65,549 $ 19,277 $ 84,826 Three Months Ended September 30, Nine Months Ended September 30, 2019 2019 US International Total US International Total Net revenue by: Product Revenue Capital Equipment $ 1,408 $ 647 $ 2,055 $ 4,517 $ 2,198 $ 6,715 Disposable 5,962 1,865 7,827 20,023 5,353 25,376 Subtotal Product Revenue 7,370 2,512 9,882 24,540 7,551 32,091 Lease Revenue 463 - 463 1,410 - 1,410 Service and Other Revenue 202 262 464 812 781 1,593 Net Revenue $ 8,035 $ 2,774 $ 10,809 $ 26,762 $ 8,332 $ 35,094 |
Schedule of Changes in Contract Liabilities | The following table presents changes in contract liabilities during the nine months ended September 30, 2020: Contract Liabilities Deferred Revenue Balance at December 31, 2019 $ 137 $ 344 Additions 279 912 Subtractions (137 ) (735 ) Balance at September 30, 2020 $ 279 $ 521 |
Stock Plans and Stock-Based Com
Stock Plans and Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Allocated Stock Based Compensation Expense | Stock-based compensation expense was allocated based on the employees’ and non-employees’ functions as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Cost of goods sold $ 86 $ 9 $ 231 $ 147 Research and development 204 11 604 266 Sales and marketing 592 (102 ) 1,512 657 General and administrative 874 299 2,233 1,871 Total $ 1,756 $ 217 $ 4,580 $ 2,941 |
Schedule of Weighted Average Assumptions Used in Black-Scholes Options Pricing Model | The weighted average assumptions used in the Black-Scholes options pricing model are as follows: Nine Months Ended September 30, 2020 2019 Expected dividend yield 0.0 % 0.0 % Risk free interest rate 1.7 % 2.1 % Expected stock price volatility 87.6 % 63.5 % Expected term (years) 6.1 6.2 |
Summary of Restricted Stock Activity | A summary of restricted stock activity for the nine months ended September 30, 2020 is as follows: Weighted Average Grant Date Shares Fair Value Unvested at December 31, 2019 229,913 $ 3.76 Granted 107,209 23.26 Vested (112,382 ) 4.64 Canceled (500 ) 10.97 Unvested at September 30, 2020 224,240 $ 10.50 |
Schedule of Fair Value of ESPP Used in Black-Scholes Options Pricing Model | The fair value of the purchase right for the ESPP option is estimated on the date of grant using the Black-Scholes pricing model with the following assumptions during 2020: Expected dividend yield 0.0% Risk free interest rate 0.2% - 1.6% Expected stock price volatility 107.9% - 115.8% Expected term (years) 0.4 - 0.5 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Diluted Net Loss Per Share Attributable to Common Stockholders | The Company excluded the following potential common shares, based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect: As of September 30, 2020 2019 Options to purchase common stock 1,770,880 1,407,448 Unvested restricted stock 224,240 267,566 Warrants to purchase common stock 76,805 182,076 Employee stock purchase plan shares 23,628 - 2,095,553 1,857,090 |
Description of Business - Addit
Description of Business - Additional Information (Details) $ / shares in Units, $ in Thousands | Dec. 20, 2019USD ($) | Nov. 16, 2018USD ($)$ / sharesshares | May 31, 2020USD ($)$ / sharesshares | Apr. 30, 2020USD ($)shares | Aug. 31, 2019USD ($)$ / sharesshares | Jun. 30, 2020shares | Sep. 30, 2019shares | Sep. 30, 2020USD ($)System | Sep. 30, 2019USD ($) |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||
Entity founded year | 1993 | ||||||||
Entity reincorporated year | 2013 | ||||||||
Number of versions of precision flow systems | System | 4 | ||||||||
Proceeds from issuance of common stock | $ 94,155 | $ 48,669 | |||||||
Common Stock | |||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||
Number of shares issued | shares | 3,852,500 | 3,570,750 | 3,852,500 | 3,570,750 | |||||
Exercise of underwriters option to purchase shares | shares | 502,500 | 465,750 | |||||||
Public offering price of common stock | $ / shares | $ 26 | $ 14.50 | |||||||
Proceeds from initial offering net of underwriting discounts and offering costs | $ 93,800 | $ 48,300 | |||||||
Underwriting discount | 6,000 | 3,100 | |||||||
Offering expenses | $ 300 | $ 400 | |||||||
Initial Public Offering | Common Stock | |||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||
Number of shares issued | shares | 4,600,000 | ||||||||
Exercise of underwriters option to purchase shares | shares | 600,000 | ||||||||
Public offering price of common stock | $ / shares | $ 14 | ||||||||
Proceeds from initial offering net of underwriting discounts and offering costs | $ 57,400 | ||||||||
Underwriting discount | 4,500 | ||||||||
Offering expenses | $ 2,500 | ||||||||
ATM Agreement | |||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||
Number of shares issued | shares | 511,648 | ||||||||
Gross proceeds from issuance of common stock | $ 10,200 | ||||||||
Proceeds from issuance of common stock | $ 9,800 | ||||||||
ATM Agreement | Jefferies LLC | |||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||
Gross proceeds from issuance of common stock | $ 50,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)Segment | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | ||||||
Number of reporting segment | Segment | 1 | |||||
Number of reporting units | Segment | 2 | |||||
Maturity period of highly liquid investments with original maturities | 90 days | |||||
Cash, cash equivalents and restricted cash balance | $ 140,868,000 | $ 85,374,000 | $ 140,868,000 | $ 85,374,000 | $ 73,507,000 | $ 60,022,000 |
Standard product warranty period | 1 year | |||||
Standard payment term to customer | 30 days | |||||
Revenue, performance obligation, description of payment terms | When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before or significantly after performance, resulting in a significant financing component. Applying the practical expedient in paragraph ASC 606-10-32-18, the Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations under the contract and when the customer pays is one year or less. | |||||
Revenue, remaining performance obligation, amount | 0 | 0 | $ 0 | $ 0 | ||
Dividend yield assumed | 0.00% | 0.00% | ||||
Provision or benefit for income taxes | 0 | 0 | $ 0 | $ 0 | ||
Shipping and Handling | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Shipping and handling costs | 600,000 | 200,000 | 1,700,000 | 700,000 | ||
Prepaid Expenses and Other Current Assets | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Current value of future lease payments | $ 1,700,000 | $ 1,700,000 | 900,000 | |||
Outside U.S. | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Long-term assets | 100,000 | 100,000 | $ 100,000 | |||
Cash, cash equivalents and restricted cash balance | $ 400,000 | $ 400,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Components of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 139,015 | $ 71,655 | ||
Restricted cash | 1,853 | 1,852 | ||
Total cash, cash equivalents, and restricted cash | $ 140,868 | $ 73,507 | $ 85,374 | $ 60,022 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Summary of Roll-Forward Warranty Liability (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Accounting Policies [Abstract] | |
Balance, beginning of period | $ 225 |
Provisions for warranty obligations | 659 |
Settlements | (166) |
Balance, end of period | $ 718 |
Business Combinations - Additio
Business Combinations - Additional Information (Details) - USD ($) $ in Thousands | Feb. 28, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||||
Purchase price, net of cash acquired | $ 1,560 | ||||
Solus | |||||
Business Acquisition [Line Items] | |||||
Acquisition date | Feb. 28, 2019 | ||||
Purchase price, net of cash acquired | $ 2,000 | ||||
Initial cash payment | 1,600 | ||||
Settlement of receivable from preexisting relationship | $ 400 | ||||
Contingent consideration as compensation expense | $ 1,000 | ||||
Weighted average amortization period for intangible assets | 3 years 9 months 29 days | ||||
Solus | General and administrative | |||||
Business Acquisition [Line Items] | |||||
Transaction costs associated with acquisition | $ 200 | ||||
Solus | Scenario Forecast | |||||
Business Acquisition [Line Items] | |||||
Contingent consideration as compensation to be recognized | $ 1,200 |
Business Combinations - Summary
Business Combinations - Summary of Purchase Price Allocation (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Feb. 28, 2019 |
Business Acquisition [Line Items] | |||
Goodwill | $ 571 | $ 588 | |
Solus | |||
Business Acquisition [Line Items] | |||
Cash | $ 466 | ||
Accounts receivable | 411 | ||
Inventory | 492 | ||
Prepaids and other assets | 3 | ||
Property and equipment | 1 | ||
Goodwill | 592 | ||
Intangible assets | 455 | ||
Total assets acquired | 2,420 | ||
Accounts payable and accrued expenses | (241) | ||
Contract liabilities | (75) | ||
Deferred taxes | (78) | ||
Total liabilities assumed | (394) | ||
Total purchase price | $ 2,026 |
Business Combinations - Summa_2
Business Combinations - Summary of Business Acquisition Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Business Combinations [Abstract] | ||
Net revenue | $ 10,809 | $ 35,331 |
Net loss | $ (12,765) | $ (38,553) |
Net loss per share, basic | $ (0.65) | $ (2.16) |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Mar. 22, 2019 |
Amendment To Financing Arrangement | Common Stock Warrants | ||
Class Of Warrant Or Right [Line Items] | ||
Granted warrants to purchase shares | 19,789 | |
Level 1 | Money Market Deposits | ||
Class Of Warrant Or Right [Line Items] | ||
Cash equivalents | $ 123.2 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assumptions Used in Black-Scholes Options Pricing Model at the Date of Grant (Details) | Sep. 30, 2020 |
Class Of Warrant Or Right [Line Items] | |
Expected term (years) | 10 years |
Expected Dividend Yield | |
Class Of Warrant Or Right [Line Items] | |
Key inputs used in valuation | 0 |
Risk Free Interest Rate | |
Class Of Warrant Or Right [Line Items] | |
Key inputs used in valuation | 0.024 |
Expected Stock Price Volatility | |
Class Of Warrant Or Right [Line Items] | |
Key inputs used in valuation | 0.609 |
Accounts Receivable - Summary o
Accounts Receivable - Summary of Accounts Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Accounts Notes And Loans Receivable [Line Items] | ||
Total accounts receivable | $ 11,413 | $ 8,482 |
Less: Allowance for doubtful accounts | (538) | (239) |
Accounts receivable, net of allowance for doubtful accounts | 10,875 | 8,243 |
United States | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Total accounts receivable | 7,530 | 5,574 |
International | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Total accounts receivable | $ 3,883 | $ 2,908 |
Accounts Receivable - Additiona
Accounts Receivable - Additional Information (Details) - Customer Concentration Risk - Customer | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Revenue | |||||
Accounts Notes And Loans Receivable [Line Items] | |||||
Number of customer accounted more than 10% | 0 | 0 | 0 | 0 | |
Percentage of concentration risk | 10.00% | 10.00% | 10.00% | 10.00% | |
Accounts Receivable | |||||
Accounts Notes And Loans Receivable [Line Items] | |||||
Number of customer accounted more than 10% | 0 | 0 | |||
Percentage of concentration risk | 10.00% | 10.00% |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Component parts | $ 10,918 | $ 4,948 |
Finished goods | 14,111 | 4,189 |
Total inventories | $ 25,029 | $ 9,137 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Changes in Carrying Amount of Goodwill and Intangible Assets (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Goodwill | |
Balance at December 31, 2019 | $ 588 |
Foreign currency exchange rate changes | (17) |
Balance at September 30, 2020 | 571 |
Intangible Assets | |
Balance at December 31, 2019 | 353 |
Amortization | (85) |
Foreign currency exchange rate changes | (10) |
Balance at September 30, 2020 | $ 258 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Summary of Previously Acquired Intangible Assets (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Acquired Finite Lived Intangible Assets [Line Items] | |
Gross Carrying Amount | $ 440 |
Accumulated Amortization | $ (182) |
Customer Agreements | |
Acquired Finite Lived Intangible Assets [Line Items] | |
Period of amortization | 3 years 9 months 29 days |
Gross Carrying Amount | $ 440 |
Accumulated Amortization | $ (182) |
Debt - Additional Information (
Debt - Additional Information (Details) | Sep. 29, 2020 | Jun. 16, 2020 | Mar. 22, 2019USD ($)$ / sharesshares | Sep. 27, 2018USD ($)$ / sharesshares | Jul. 20, 2018USD ($)$ / sharesshares | Apr. 06, 2018USD ($)Tranche$ / sharesshares | Nov. 16, 2016USD ($) | Apr. 30, 2018USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | Mar. 21, 2019USD ($) |
Debt Instrument [Line Items] | ||||||||||||
Proceeds from term loan | $ 10,500,000 | |||||||||||
Western Alliance Bank | Revolving Credit Line | Revolver Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Line of credit made available under agreement | $ 7,000,000 | $ 7,500,000 | ||||||||||
Percentage of eligible receivables used as base to calculate line of credit availability | 80.00% | |||||||||||
Line of credit, maturity date | Sep. 30, 2018 | Sep. 30, 2020 | ||||||||||
Western Alliance Bank | Revolving Credit Line | Revolver Agreement | Credit Card Program | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Line of credit made available under agreement | $ 300,000 | |||||||||||
Western Alliance Bank | Revolving Credit Line | First Amended Revolver Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Line of credit, maturity date | Feb. 28, 2023 | |||||||||||
Western Alliance Bank | Revolving Credit Line | First Amended Revolver Agreement | Prime Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Line of credit, interest rate | 3.25% | |||||||||||
Western Alliance Bank | Revolving Credit Line | First Amended Revolver Agreement | Credit Card Program | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Line of credit made available under agreement | $ 500,000 | |||||||||||
Western Alliance Bank | Revolving Credit Line | Third Amended Revolver Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Line of credit, interest rate | 3.25% | 6.50% | ||||||||||
Outstanding balance under line of credit | $ 4,500,000 | $ 3,500,000 | ||||||||||
Line of credit, remaining availability under agreement | 800,000 | $ 800,000 | ||||||||||
Perceptive Credit Holdings II, LP | Credit Agreement and Guaranty | Term Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Term loan, face amount | $ 42,500,000 | |||||||||||
Number of tranches available under agreement | Tranche | 3 | |||||||||||
Proceeds from term loan | $ 10,500,000 | |||||||||||
Granted warrants to purchase shares | shares | 19,789 | 37,693 | ||||||||||
Warrants exercise price | $ / shares | $ 15.92 | $ 15.92 | ||||||||||
Warrants expiration, month and year | 2029-03 | 2028-04 | ||||||||||
Perceptive Credit Holdings II, LP | Credit Agreement and Guaranty | First Tranche | Term Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Proceeds from term loan | $ 20,000,000 | |||||||||||
Perceptive Credit Holdings II, LP | Credit Agreement and Guaranty | Debt Instrument Second Tranche | Term Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Proceeds from term loan | $ 10,000,000 | |||||||||||
Granted warrants to purchase shares | shares | 18,846 | |||||||||||
Warrants exercise price | $ / shares | $ 15.92 | |||||||||||
Warrants expiration, month and year | 2028-07 | |||||||||||
Perceptive Credit Holdings II, LP | First Amendment to Credit Agreement and Guaranty | Term Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Term loan available to be drawn | $ 12,500,000 | |||||||||||
Minimum revenue requirement to draw final tranche | 43,200,000 | |||||||||||
Perceptive Credit Holdings II, LP | First Amendment to Credit Agreement and Guaranty | Credit Card Program | Term Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Line of credit made available under agreement | $ 300,000 | |||||||||||
Perceptive Credit Holdings II, LP | First Amendment to Credit Agreement and Guaranty | Debt Instrument Third Tranche | Term Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Proceeds from term loan | $ 2,000,000 | |||||||||||
Granted warrants to purchase shares | shares | 3,769 | |||||||||||
Warrants exercise price | $ / shares | $ 15.92 | |||||||||||
Warrants expiration, month and year | 2028-09 | |||||||||||
Perceptive Credit Holdings II, LP | Second Amendment to Credit Agreement and Guaranty | Credit Card Program | Term Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Line of credit made available under agreement | $ 500,000 | |||||||||||
Perceptive Credit Holdings II, LP | 2020 Amended Credit Agreement and Guaranty | Term Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Term loan, face amount | $ 42,600,000 | |||||||||||
Term loan, interest rate | 9.06% | 10.81% | ||||||||||
Debt instrument rate | 1.75% | |||||||||||
Debt instrument, description | one-month LIBOR | |||||||||||
Term loan, remaining availability under agreement | $ 0 | |||||||||||
Line of credit, covenant compliance description | The 2020 Amended Credit Agreement and Guaranty requires the Company to comply with a minimum liquidity covenant at all times and a minimum revenue covenant measured at the end of each fiscal quarter. As of September 30, 2020, the Company was in compliance with all covenants. | |||||||||||
Line of credit facility percentage of amount borrowed | 0.50% |
Debt - Schedule of Annual Princ
Debt - Schedule of Annual Principal Maturities of Term Loans (Details) - Loans Payable $ in Thousands | Sep. 30, 2020USD ($) |
Debt Instrument [Line Items] | |
2020 | $ 0 |
2021 | 0 |
2022 | 0 |
2023 | 42,603 |
Less: Discount on loans payable | (603) |
Long-term loans payable | $ 42,000 |
Warrants - Summary of Warrants
Warrants - Summary of Warrants Activity (Details) - Common Stock Warrants - $ / shares | Aug. 07, 2020 | Jul. 10, 2020 | Jun. 10, 2020 | Sep. 30, 2020 |
Class Of Warrant Or Right [Line Items] | ||||
Number of shares, beginning balance | 182,076 | |||
Number of shares, warrants exercised | (4,285) | (20,889) | (80,097) | (105,271) |
Number of shares, ending balance | 76,805 | |||
Weighted average exercise price, ending balance | $ 14 | $ 14 | $ 15.92 | |
Weighted Average | ||||
Class Of Warrant Or Right [Line Items] | ||||
Weighted average exercise price, beginning balance | $ 14.84 | |||
Weighted average exercise price, warrants exercised | 15.46 | |||
Weighted average exercise price, ending balance | $ 14 |
Warrants - Additional Informati
Warrants - Additional Information (Details) - Common Stock Warrants - $ / shares | Oct. 01, 2020 | Aug. 07, 2020 | Jul. 10, 2020 | Jun. 10, 2020 | Sep. 30, 2020 |
Class Of Warrant Or Right [Line Items] | |||||
Warrants to purchase of common stock shares, net exercised | 4,285 | 20,889 | 80,097 | 105,271 | |
Warrants exercise price | $ 14 | $ 14 | $ 15.92 | ||
Number of warrants withhold upon warrants exercise | 2,064 | 6,902 | 39,031 | ||
Issuance of common stock upon exercise of warrants, shares | 2,222 | 13,986 | 41,066 | ||
Subsequent Event | |||||
Class Of Warrant Or Right [Line Items] | |||||
Warrants to purchase of common stock shares, net exercised | 42,857 | ||||
Warrants exercise price | $ 14 | ||||
Number of warrants withhold upon warrants exercise | 20,689 | ||||
Issuance of common stock upon exercise of warrants, shares | 22,168 |
Revenue - Net Revenue Disaggreg
Revenue - Net Revenue Disaggregated into Categories (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation Of Revenue [Line Items] | ||||
Net Revenue | $ 30,559 | $ 10,809 | $ 84,826 | $ 35,094 |
US | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenue | 25,526 | 8,035 | 65,549 | 26,762 |
International | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenue | 5,033 | 2,774 | 19,277 | 8,332 |
Product Revenue, Capital Equipment | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenue | 15,245 | 2,055 | 39,548 | 6,715 |
Product Revenue, Capital Equipment | US | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenue | 13,198 | 1,408 | 30,578 | 4,517 |
Product Revenue, Capital Equipment | International | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenue | 2,047 | 647 | 8,970 | 2,198 |
Product Revenue, Disposable | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenue | 13,044 | 7,827 | 38,637 | 25,376 |
Product Revenue, Disposable | US | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenue | 10,426 | 5,962 | 29,561 | 20,023 |
Product Revenue, Disposable | International | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenue | 2,618 | 1,865 | 9,076 | 5,353 |
Subtotal Product Revenue | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenue | 28,289 | 9,882 | 78,185 | 32,091 |
Subtotal Product Revenue | US | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenue | 23,624 | 7,370 | 60,139 | 24,540 |
Subtotal Product Revenue | International | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenue | 4,665 | 2,512 | 18,046 | 7,551 |
Lease Revenue, Capital Equipment | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenue | 1,129 | 3,407 | ||
Lease Revenue, Capital Equipment | US | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenue | 1,117 | 3,364 | ||
Lease Revenue, Capital Equipment | International | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenue | 12 | 43 | ||
Lease Revenue, Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenue | 524 | 1,427 | ||
Lease Revenue, Other | US | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenue | 442 | 1,194 | ||
Lease Revenue, Other | International | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenue | 82 | 233 | ||
Service and Other Revenue | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenue | 617 | 464 | 1,807 | 1,593 |
Service and Other Revenue | US | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenue | 343 | 202 | 852 | 812 |
Service and Other Revenue | International | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenue | $ 274 | 262 | $ 955 | 781 |
Lease Revenue | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenue | 463 | 1,410 | ||
Lease Revenue | US | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenue | $ 463 | $ 1,410 |
Revenue - Schedule of Changes i
Revenue - Schedule of Changes in Contract Liabilities (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Contract Liabilities | |
Balance at December 31, 2019 | $ 137 |
Additions | 279 |
Subtractions | (137) |
Balance at September 30, 2020 | 279 |
Deferred Revenue | |
Balance at December 31, 2019 | 344 |
Additions | 912 |
Subtractions | (735) |
Balance at September 30, 2020 | $ 521 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Allocated Stock Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Allocated stock based compensation expense (income) | $ 1,756 | $ 217 | $ 4,580 | $ 2,941 |
Cost of goods sold | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Allocated stock based compensation expense (income) | 86 | 9 | 231 | 147 |
Research and development | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Allocated stock based compensation expense (income) | 204 | 11 | 604 | 266 |
Sales and marketing | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Allocated stock based compensation expense (income) | 592 | (102) | 1,512 | 657 |
General and administrative | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Allocated stock based compensation expense (income) | $ 874 | $ 299 | $ 2,233 | $ 1,871 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Nov. 30, 2018 | Jun. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | May 31, 2020 | Aug. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Stock options, granted | 964,568 | 871,346 | ||||
Exercise price range, lower range limit | $ 10.60 | $ 13.35 | ||||
Exercise price range, upper range limit | 52.94 | 19.40 | ||||
Weighted average exercise price | 13.07 | 17.36 | ||||
Weighted average fair value of stock options granted | $ 9.60 | $ 10.88 | ||||
Common Stock | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Common stock shares issued | 36,389 | 36,389 | ||||
Common stock price per share | $ 26 | $ 14.50 | ||||
Employee Stock Purchase Plan | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Common stock reserved for issuance | 166,500 | 512,048 | ||||
Common stock reserved and available for future issuance maximum cumulative increase percentage on immediate preceding year end common stock issued and outstanding | 1.00% | |||||
Common stock reserved and available for issuance cumulatively increase description | The number of shares of common stock available for issuance under the ESPP is increased on the first day of each calendar year beginning January 1, 2019 and each year thereafter until 2028 by the lessor of (i) 1% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, and (ii) the number of shares of common stock determined by the Company’s board of directors up to such an initial maximum of 1,741,300 shares of common stock. The number of shares of common stock reserved under the plan at September 30, 2020 totals 512,048. | |||||
Initial maximum number of common stock determined by board of directors | 1,741,300 | |||||
Cash proceeds from issuance of common stock | $ 360,000 | |||||
Maximum percentage to purchase shares of eligible compensation a participant receives during each offering period | 10.00% | |||||
Maximum amount of shares a participant can accrue at discounted rate of the fair market value. | $ 25,000 | |||||
Maximum number of shares per participant | 5,000 | |||||
Purchase price as a percentage of its market price on first trading day of each offering period | 85.00% | |||||
Employee Stock Purchase Plan | Common Stock | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Common stock price per share | $ 9.88 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Weighted Average Assumptions Used in Black-Scholes Options Pricing Model (Details) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Expected dividend yield | 0.00% | 0.00% |
Risk free interest rate | 1.70% | 2.10% |
Expected stock price volatility | 87.60% | 63.50% |
Expected term (years) | 6 years 1 month 6 days | 6 years 2 months 12 days |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Restricted Stock Activity (Details) - Restricted Stock | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Shares, Unvested, Beginning balance | shares | 229,913 |
Shares, Granted | shares | 107,209 |
Shares, Vested | shares | (112,382) |
Shares, Canceled | shares | (500) |
Shares, Unvested Ending balance | shares | 224,240 |
Weighted Average Grant Date Fair Value, Unvested, Beginning balance | $ / shares | $ 3.76 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 23.26 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 4.64 |
Weighted Average Grant Date Fair Value, Canceled | $ / shares | 10.97 |
Weighted Average Grant Date Fair Value, Unvested Ending balance | $ / shares | $ 10.50 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Fair Value of ESPP Used in Black-Scholes Options Pricing Model (Details) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected dividend yield | 0.00% | 0.00% |
Expected term (years) | 6 years 1 month 6 days | 6 years 2 months 12 days |
Employee Stock Purchase Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected dividend yield | 0.00% | |
Risk free interest rate, minimum | 0.20% | |
Risk free interest rate, maximum | 1.60% | |
Expected stock price volatility, minimum | 107.90% | |
Expected stock price volatility, maximum | 115.80% | |
Employee Stock Purchase Plan | Minimum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (years) | 4 months 24 days | |
Employee Stock Purchase Plan | Maximum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (years) | 6 months |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of Computation of Diluted Net Loss Per Share Attributable to Common Stockholders (Details) - shares | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,095,553 | 1,857,090 |
Employee Stock Purchase Plan Shares | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 23,628 | |
Options to Purchase Common Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,770,880 | 1,407,448 |
Warrants to Purchase Common Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 76,805 | 182,076 |
Unvested Restricted Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 224,240 | 267,566 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2020 | |
Minimum [Member] | |
Related Party Transaction [Line Items] | |
Percentage of common stock held by holder | 5.00% |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) $ in Thousands | Oct. 21, 2020 | Sep. 30, 2020 |
Canadian Imperial Bank of Commerce Innovation Banking | ||
Subsequent Event [Line Items] | ||
Line of credit facility, description | The Term Facility may not be prepaid prior to the first anniversary of the Closing Date without prepaying all of the interest that otherwise would have been payable on the Term Facility during the period commencing on the Closing Date and ending on the first anniversary of the Closing Date plus a prepayment charge of 2.0%. Thereafter, the Term Facility may be prepaid in full, subject to a prepayment charge of (i) 2.0%, if such prepayment occurs after the first anniversary of the Closing Date but on or prior to the second anniversary of the Closing Date, and (ii) 1.0%, if such prepayment occurs after the second anniversary of the Closing Date but on or prior to the third anniversary of the Closing Date. | |
Loan agreement, payment terms | The Loan Agreement provides for interest-only payments on the Term Facility for the first thirty-six months following the Closing Date. Thereafter, amortization payments on the Term Facility will be payable monthly in twenty-four equal installments. | |
Debt instrument, covenant description | The events of default under the Loan Agreement include, without limitation, and subject to customary grace periods, (1) the Company’s failure to make any payments of principal or interest under the Loan Agreement or other loan documents, (2) the Company’s breach or default in the performance of any covenant under the Loan Agreement, (3) the occurrence of a material adverse effect or an event that is reasonably likely to result in a material adverse effect, (4) the existence of an attachment or levy on a material portion of funds of the Company or its subsidiaries, (5) the Company’s insolvency or bankruptcy, or (6) the occurrence of certain material defaults with respect to any other indebtedness of the Company in excess of $500,000. If an event of default occurs, CIBC is entitled to take enforcement action, including acceleration of amounts due under the Loan Agreement. | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Prepayment penalty and exit fees | $ 3,700 | |
Subsequent Event | Cash | ||
Subsequent Event [Line Items] | ||
Amount to pay off all obligations owing and termination of agreements | $ 5,700 | |
Subsequent Event | Canadian Imperial Bank of Commerce Innovation Banking | ||
Subsequent Event [Line Items] | ||
Percentage of prepayment charge after first anniversary of closing date | 2.00% | |
Percentage of prepayment charge after second anniversary of closing date | 1.00% | |
Percentage of revenue covenant | 80.00% | |
Minimum amount of other indebtedness | $ 500,000 | |
Revolving Credit Line | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Amount to pay off all obligations owing and termination of agreements | 4,900 | |
Revolving Credit Line | Subsequent Event | Canadian Imperial Bank of Commerce Innovation Banking | ||
Subsequent Event [Line Items] | ||
Outstanding balance under line of credit | $ 12,000 | |
Debt instrument, maturity date | Oct. 21, 2022 | |
Debt instrument rate | 1.00% | |
Revolving Credit Line | Subsequent Event | Canadian Imperial Bank of Commerce Innovation Banking | Prime Rate | ||
Subsequent Event [Line Items] | ||
Line of credit, interest rate | 3.25% | |
Term Facility | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Amount to pay off all obligations owing and termination of agreements | $ 40,000 | |
Term Facility | Subsequent Event | Canadian Imperial Bank of Commerce Innovation Banking | ||
Subsequent Event [Line Items] | ||
Outstanding balance under line of credit | $ 40,000 | |
Debt instrument, maturity date | Oct. 21, 2025 | |
Debt instrument rate | 2.50% |