Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 01, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-34822 | |
Entity Registrant Name | ClearPoint Neuro, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 58-2394628 | |
Entity Address, Address Line One | 120 S. Sierra Ave. | |
Entity Address, Address Line Two | Suite 100 | |
Entity Address, City or Town | Solana Beach | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92075 | |
City Area Code | (888) | |
Local Phone Number | 287-9109 | |
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Trading Symbol | CLPT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 24,620,567 | |
Central Index Key | 0001285550 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 24,342 | $ 27,615 |
Short-term investments, at amortized cost | 0 | 9,874 |
Accounts receivable, net | 2,424 | 2,665 |
Inventory, net | 8,987 | 9,303 |
Prepaid expenses and other current assets | 1,557 | 1,723 |
Total current assets | 37,310 | 51,180 |
Property and equipment, net | 1,355 | 806 |
Operating lease, right-of-use assets | 3,689 | 1,895 |
Software license inventory | 405 | 450 |
Licensing rights | 969 | 1,028 |
Other assets | 109 | 131 |
Total assets | 43,837 | 55,490 |
Current liabilities: | ||
Accounts payable | 789 | 272 |
Accrued compensation | 2,288 | 2,824 |
Other accrued liabilities | 953 | 2,065 |
Operating lease liabilities, current portion | 384 | 561 |
Deferred product and service revenue, current portion | 1,175 | 1,066 |
Total current liabilities | 5,589 | 6,788 |
Operating lease liabilities, net of current portion | 3,695 | 1,532 |
Deferred product and service revenue, net of current portion | 524 | 390 |
2020 senior secured convertible note payable, net | 9,935 | 9,893 |
Total liabilities | 19,743 | 18,603 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued and outstanding at September 30, 2023 and December 31, 2022 | 0 | 0 |
Common stock, $0.01 par value; 90,000,000 shares authorized at September 30, 2023 and 200,000,000 shares authorized at December 31, 2022; 24,625,670 shares issued and outstanding at September 30, 2023; and 24,578,983 issued and outstanding at December 31, 2022 | 246 | 246 |
Additional paid-in capital | 191,685 | 187,008 |
Accumulated deficit | (167,837) | (150,367) |
Total stockholders’ equity | 24,094 | 36,887 |
Total liabilities and stockholders’ equity | $ 43,837 | $ 55,490 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
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 (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 90,000,000 | 200,000,000 |
Common stock, shares issued | 24,625,670 | 24,578,983 |
Common stock, shares outstanding | 24,625,670 | 24,578,983 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue: | ||||
Total revenue | $ 5,762 | $ 5,146 | $ 17,145 | $ 15,377 |
Cost of revenue | 2,489 | 1,467 | 7,544 | 5,212 |
Gross profit | 3,273 | 3,679 | 9,601 | 10,165 |
Research and development costs | 2,429 | 2,654 | 9,057 | 7,967 |
Sales and marketing expenses | 2,841 | 2,422 | 9,248 | 6,826 |
General and administrative expenses | 2,900 | 2,398 | 9,036 | 7,235 |
Operating loss | (4,897) | (3,795) | (17,740) | (11,863) |
Other expense: | ||||
Other expense, net | (12) | (25) | (25) | (22) |
Interest income (expense), net | 100 | 32 | 295 | (165) |
Net loss | $ (4,809) | $ (3,788) | $ (17,470) | $ (12,050) |
Net loss per share attributable to common stockholders: | ||||
Basic (in dollars per share) | $ (0.20) | $ (0.15) | $ (0.71) | $ (0.50) |
Diluted (in dollars per share) | $ (0.20) | $ (0.15) | $ (0.71) | $ (0.50) |
Weighted average shares used in computing net loss per share: | ||||
Basic (in shares) | 24,630,181 | 24,497,636 | 24,599,191 | 24,058,205 |
Diluted (in shares) | 24,630,181 | 24,497,636 | 24,599,191 | 24,058,205 |
Product revenue | ||||
Revenue: | ||||
Total revenue | $ 2,410 | $ 3,130 | $ 7,377 | $ 9,750 |
Service and other revenue | ||||
Revenue: | ||||
Total revenue | $ 3,352 | $ 2,016 | $ 9,768 | $ 5,627 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2021 | 23,665,991 | |||
Beginning balance at Dec. 31, 2021 | $ 48,787 | $ 237 | $ 182,482 | $ (133,932) |
Issuances of common stock: | ||||
Share-based compensation (in shares) | 29,916 | |||
Share-based compensation | 899 | 899 | ||
Warrant and option exercises (cash and cashless) (in shares) | 12,211 | |||
Warrant and option exercises (cash and cashless) | 3 | 3 | ||
Net loss for the period | (3,959) | (3,959) | ||
Ending balance (in shares) at Mar. 31, 2022 | 23,708,118 | |||
Ending balance at Mar. 31, 2022 | 45,730 | $ 237 | 183,384 | (137,891) |
Beginning balance (in shares) at Dec. 31, 2021 | 23,665,991 | |||
Beginning balance at Dec. 31, 2021 | 48,787 | $ 237 | 182,482 | (133,932) |
Issuances of common stock: | ||||
Net loss for the period | (12,050) | |||
Ending balance (in shares) at Sep. 30, 2022 | 24,500,832 | |||
Ending balance at Sep. 30, 2022 | 39,878 | $ 245 | 185,615 | (145,982) |
Beginning balance (in shares) at Mar. 31, 2022 | 23,708,118 | |||
Beginning balance at Mar. 31, 2022 | 45,730 | $ 237 | 183,384 | (137,891) |
Issuances of common stock: | ||||
Share-based compensation (in shares) | 379,122 | |||
Share-based compensation | 880 | $ 4 | 876 | |
Warrant exercises (cash and cashless), (in shares) | 367,006 | |||
Warrant exercises (cash and cashless) | 253 | $ 4 | 249 | |
Issuance of common stock under employee stock purchase plan (in shares) | 26,354 | |||
Issuance of common stock under employee stock purchase plan | 260 | 260 | ||
Net loss for the period | (4,303) | (4,303) | ||
Ending balance (in shares) at Jun. 30, 2022 | 24,480,600 | |||
Ending balance at Jun. 30, 2022 | 42,820 | $ 245 | 184,769 | (142,194) |
Issuances of common stock: | ||||
Share-based compensation (in shares) | 20,738 | |||
Share-based compensation | 1,175 | 1,175 | ||
Payments for taxes related to net share settlement of equity awards (in shares) | (24,269) | |||
Payments for taxes related to net share settlement of equity awards | $ (336) | (336) | ||
Option exercises (cash and cashless) (in shares) | 23,763 | |||
Option exercises (cash and cashless) | $ 7 | 7 | ||
Net loss for the period | (3,788) | (3,788) | ||
Ending balance (in shares) at Sep. 30, 2022 | 24,500,832 | |||
Ending balance at Sep. 30, 2022 | $ 39,878 | $ 245 | 185,615 | (145,982) |
Beginning balance (in shares) at Dec. 31, 2022 | 24,578,983 | 24,578,983 | ||
Beginning balance at Dec. 31, 2022 | $ 36,887 | $ 246 | 187,008 | (150,367) |
Issuances of common stock: | ||||
Share-based compensation (in shares) | 3,782 | |||
Share-based compensation | 1,307 | 1,307 | ||
Payments for taxes related to net share settlement of equity awards (in shares) | (514) | |||
Payments for taxes related to net share settlement of equity awards | (5) | (5) | ||
Net loss for the period | (5,609) | (5,609) | ||
Ending balance (in shares) at Mar. 31, 2023 | 24,582,251 | |||
Ending balance at Mar. 31, 2023 | $ 32,580 | $ 246 | 188,310 | (155,976) |
Beginning balance (in shares) at Dec. 31, 2022 | 24,578,983 | 24,578,983 | ||
Beginning balance at Dec. 31, 2022 | $ 36,887 | $ 246 | 187,008 | (150,367) |
Issuances of common stock: | ||||
Net loss for the period | $ (17,470) | |||
Ending balance (in shares) at Sep. 30, 2023 | 24,625,670 | 24,625,670 | ||
Ending balance at Sep. 30, 2023 | $ 24,094 | $ 246 | 191,685 | (167,837) |
Beginning balance (in shares) at Mar. 31, 2023 | 24,582,251 | |||
Beginning balance at Mar. 31, 2023 | 32,580 | $ 246 | 188,310 | (155,976) |
Issuances of common stock: | ||||
Share-based compensation (in shares) | 5,484 | |||
Share-based compensation | 1,645 | 1,645 | ||
Payments for taxes related to net share settlement of equity awards (in shares) | (11,102) | |||
Payments for taxes related to net share settlement of equity awards | (77) | (77) | ||
Issuance of common stock under employee stock purchase plan (in shares) | 51,041 | |||
Issuance of common stock under employee stock purchase plan | 314 | 314 | ||
Net loss for the period | (7,052) | (7,052) | ||
Ending balance (in shares) at Jun. 30, 2023 | 24,627,674 | |||
Ending balance at Jun. 30, 2023 | 27,410 | $ 246 | 190,192 | (163,028) |
Issuances of common stock: | ||||
Share-based compensation (in shares) | 1,001 | |||
Share-based compensation | 1,584 | 1,584 | ||
Payments for taxes related to net share settlement of equity awards (in shares) | (15,315) | |||
Payments for taxes related to net share settlement of equity awards | $ (91) | (91) | ||
Option exercises (cash and cashless) (in shares) | 14,312 | |||
Net loss for the period | $ (4,809) | (4,809) | ||
Ending balance (in shares) at Sep. 30, 2023 | 24,625,670 | 24,625,670 | ||
Ending balance at Sep. 30, 2023 | $ 24,094 | $ 246 | $ 191,685 | $ (167,837) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Cash flows from operating activities: | |||||||
Net loss | $ (4,809) | $ (5,609) | $ (3,788) | $ (3,959) | $ (17,470) | $ (12,050) | |
Adjustments to reconcile net loss to net cash flows from operating activities: | |||||||
Allowance for credit losses (recoveries) | 903 | (92) | |||||
Depreciation and amortization | 443 | 224 | |||||
Share-based compensation | 4,536 | 2,954 | |||||
Amortization of debt issuance costs and original issue discounts | 42 | 41 | |||||
Amortization of lease right-of-use, net of accretion in lease liabilities | 590 | 400 | |||||
Accretion of discounts on short-term investments | (126) | (159) | |||||
Increase (decrease) in cash resulting from changes in: | |||||||
Accounts receivable | (662) | (982) | |||||
Inventory, net | 263 | (3,318) | |||||
Prepaid expenses and other current assets | 241 | (1,150) | |||||
Other assets | 22 | 31 | |||||
Accounts payable and accrued expenses | (1,023) | 1,255 | |||||
Lease liabilities | (553) | (400) | |||||
Deferred revenue | 243 | 144 | |||||
Net cash flows from operating activities | (12,551) | (13,102) | $ (16,200) | ||||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (696) | (214) | |||||
Acquisition of licensing rights | (167) | (678) | |||||
Purchase of short-term investments | 0 | (21,590) | |||||
Proceeds from maturities of short-term investments | 10,000 | 0 | |||||
Net cash flows from investing activities | 9,137 | (22,482) | |||||
Cash flows from financing activities: | |||||||
Proceeds from stock option and warrant exercises | 0 | 263 | |||||
Payments for taxes related to net share settlement of equity awards | (173) | (336) | |||||
Proceeds from issuance of common stock under employee stock purchase plan | 314 | 260 | |||||
Net cash flows from financing activities | 141 | 187 | |||||
Net change in cash and cash equivalents | (3,273) | (35,397) | |||||
Cash and cash equivalents, beginning of period | $ 27,615 | $ 54,109 | 27,615 | 54,109 | 54,109 | ||
Cash and cash equivalents, end of period | $ 24,342 | $ 18,712 | 24,342 | 18,712 | $ 27,615 | ||
Cash paid for: | |||||||
Income taxes | 0 | 0 | |||||
Interest | $ 554 | $ 351 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Parenthetical) $ in Millions | 1 Months Ended |
Jun. 30, 2023 USD ($) | |
Statement of Cash Flows [Abstract] | |
Right-of-use assets obtained in exchange for operating lease liability | $ 2.5 |
Description of the Business and
Description of the Business and Financial Condition | 9 Months Ended |
Sep. 30, 2023 | |
Description Of Business And Liquidity [Abstract] | |
Description of the Business and Financial Condition | 1. Description of the Business and Financial Condition ClearPoint Neuro, Inc. (the “Company”) is a commercial-stage medical device company focused on the development and commercialization of innovative platforms for performing minimally invasive surgical procedures in the brain. From the Company’s inception in 1998, the Company has deployed significant resources to fund its efforts to develop the foundational capabilities for enabling MRI-guided interventions, building an intellectual property portfolio, and identifying and building out commercial applications for the technologies it develops. In 2021, the Company’s efforts expanded beyond the MRI suite to encompass development and commercialization of new neurosurgical device products for the operating room setting. In 2022, the Company commercialized the ClearPoint Prism Neuro Laser Therapy System as its first therapy product offering. The Company has exclusive global commercialization rights to the ClearPoint Prism Neuro Laser Therapy System through its Swedish partner, Clinical Laserthermia Systems ("CLS"). Since 2021, a growing part of the Company’s revenue is derived from consulting services to pharmaceutical and biotech companies, academic institutions, or contract research organizations having a focus on biologics and drug delivery. The Company’s services include protocol consultation and solutions for pre-clinical study design and execution. Currently, the Company has more than 50 biologics and drug delivery customers who are evaluating or using its products and services in trials to inject gene and cell therapies directly into the brain. These relationships involve drug development programs that are at various stages of development ranging from preclinical research to late-stage regulatory trials for multiple distinct disease states. This part of the Company’s business potentially represents the largest opportunity for growth; however, the Company’s ability to grow in this market is dependent on its ability to maintain and establish new relationships with customers, such customers' continuation of research and product development plans, and such customers achieving success in completion of clinical trials and subsequent regulatory approvals of their drugs and biologics. Macroeconomic Trends The Company continues to monitor the impact of various macroeconomic trends, such as global economic and supply chain disruptions, geopolitical instability (including instability resulting from military conflicts), labor shortages, instability of financial institutions and inflationary conditions. Changes in domestic and global economic conditions, supply chain disruptions, labor shortages, as well as other stimulus and spending programs, have led to higher inflation, which is likely to lead to increased costs and may cause further changes in fiscal and monetary policy. Impacts from inflationary pressures, such as increasing costs for research and development of the Company's products, administrative and other costs of doing business, the potential for instability of the financial institutions where the Company maintains its deposits or other assets, and the Company's access to capital markets and other sources of funding in the future could adversely affect the Company's business, financial condition and results of operations. Additionally, these trends could adversely affect the Company's customers, which could impact their willingness to spend on the Company's products and services, or their ability to make payment, which could harm the Company's collection of accounts receivable and financial results. The rapid development and fluidity of these situations precludes any prediction as to the ultimate impact they will have on the Company's business, financial condition, results of operation and cash flows, which will depend largely on future developments . Liquidity The Company has incurred net losses since its inception, which has resulted in a cumulative deficit at September 30, 2023 of $167.8 million. In addition, the Company’s use of cash from operations amounted to $12.6 million for the nine months ended September 30, 2023, and $16.2 million for the year ended December 31, 2022. Since its inception, the Company has financed its operations principally from the sale of equity securities and the issuance of notes payable, however, there is no assurance such sale of equity securities and/or issuance of notes payable will be at terms favorable to the Company or available at all in the future. As required by generally accepted accounting principles in the U.S. ("GAAP"), the Company has evaluated its ability to continue as a going concern and has determined that based on current forecasts, existing cash and cash equivalent balances at September 30, 2023 are sufficient to support the Company's operations and meet its obligations for at least the next twelve months. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | 2. Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Use of Estimates In the opinion of management, the accompanying unaudited condensed consolidated financial statements have been prepared on a basis consistent with the Company’s December 31, 2022 audited consolidated financial statements, and include all adjustments, consisting of only normal recurring adjustments, necessary to fairly state the information set forth therein. These condensed consolidated financial statements have been prepared in accordance with SEC rules for interim financial information, and, therefore, omit certain information and footnote disclosures necessary to present such statements in accordance with GAAP. The preparation of these condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2022 Form 10-K. The accompanying condensed consolidated balance sheet as of December 31, 2022 has been derived from the audited consolidated financial statements at that date but does not include all information and footnotes required by GAAP for a complete set of financial statements. The results of operations for the three and nine months ended September 30, 2023, may not be indicative of the results to be expected for the entire year or any future periods. Inventory Inventory is carried at the lower of cost or net realizable value. The costs of inventory are determined using the standard cost method, which approximates actual cost based on a first-in, first-out method. Items in inventory relate predominantly to the Company’s ClearPoint system and related disposables. Software license inventory related to ClearPoint systems undergoing on-site customer evaluation is included in inventory in the accompanying condensed consolidated balance sheets. All other software license inventory is classified as a non-current asset. The Company periodically reviews its inventory for excess and obsolete items and provides a reserve upon identification of potentially excess or obsolete items. Intangible Assets The Company is a party to a license agreement that provides rights to the Company for the development and commercialization of products. Under the terms of the license agreement, the Company made payments to the licensor upon execution of the license agreement for access to the underlying technology, and future payments will be based upon achievement of regulatory and commercialization milestones as defined in the license agreement. In 2022, the Company made a payment to the licensor for the achievement of a regulatory milestone, which acts as a prepayment for future royalties. In conformity with Accounting Standards Codification Section 350, “Intangibles – Goodwill and Other,” the Company amortizes its investment in the upfront license rights described above over an expected useful life of up to five years, or as commercial sales occur for the royalty prepayment. In addition, the Company periodically evaluates the recoverability of its investment in the license rights and records an impairment charge in the event such evaluation indicates that the Company’s investment is not likely to be recovered. Revenue Recognition The Company’s revenue is comprised primarily of: (1) product revenue, resulting from the sale of functional neurosurgery, navigation, therapy, and biologics and drug delivery disposable products; (2) product revenue resulting from the sale of ClearPoint capital equipment and software; (3) consultation revenue and clinical case support revenue in connection with customer-sponsored pre-clinical and clinical trials; (4) license revenue for the granting of licenses to develop and commercialize the Company's SmartFlow Cannula devices with our customers' proprietary biologics as a combination product, and (5) revenue resulting from the service, installation, training, and shipping related to ClearPoint capital equipment and software. The Company recognizes revenue when (i) control of the Company’s products is transferred to its customers or (ii) services are provided to customers, each in an amount that reflects the consideration the Company expects to receive from its customers in exchange for those products and services, in a process that involves identifying the contract with a customer, determining the performance obligations in the contract, determining the contract price, allocating the contract price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. When a contract calls for the satisfaction of multiple performance obligations for a single contract price, the Company typically allocates the contract price among the performance obligations based on the relative stand-alone prices for each such performance obligation customarily charged by the Company. The Company considers a performance obligation satisfied once it has transferred control of a good or service to the customer, meaning the customer has the ability to use and obtain the benefit of the good or service. The Company recognizes revenue for satisfied performance obligations only when it determines there are no uncertainties regarding payment terms or transfer of control. Lines of Business; Timing of Revenue Recognition • Functional neurosurgery navigation product, biologics and drug delivery systems product, and therapy product sales: Revenue from the sale of functional neurosurgery navigation products (consisting of disposable products sold commercially and related to cases utilizing the Company's ClearPoint system), biologics and drug delivery systems products (consisting primarily of disposable products related to customer-sponsored clinical trials utilizing the ClearPoint system), and therapy products (consisting primarily of disposable laser-related products used in neurosurgical and non-neurosurgical procedures) is generally based on customer purchase orders, the predominance of which require delivery within one week of the order having been placed, and is generally recognized at the point in time of shipping to the customer, which is the point at which legal title, and risks and rewards of ownership, transfer to the customer. For certain customers, legal title and risks and rewards of ownership transfer upon delivery to the customer as stated in their respective contracts, in which case revenue is recognized upon delivery. • Capital equipment and software sales: ◦ Capital equipment and software sales preceded by evaluation periods: The predominance of capital equipment and software sales (consisting of integrated computer hardware and software that are integral components of the Company's ClearPoint system) are preceded by customer evaluation periods. During these evaluation periods, installation of, and training of customer personnel on, the systems have been completed and the systems have been in operation. Accordingly, revenue from capital equipment and software sales following such evaluation periods is recognized at the point in time that the Company is in receipt of an executed purchase agreement or purchase order. ◦ Capital equipment and software sales not preceded by evaluation periods: Revenue from sales of capital equipment and software not having been preceded by an evaluation period is recognized upon delivery to the customer and installation. For capital equipment that does not require installation, revenue is recognized upon shipment, however, for those customers where legal title and risks and rewards of ownership transfer upon delivery, revenue is recognized at such time. For both types of capital equipment and software sales described above, the determination of the point in time at which to recognize revenue represents that point at which the customer has legal title, physical possession, and the risks and rewards of ownership, and the Company has a present right to payment. • Functional neurosurgery navigation and therapy services: The Company recognizes revenue for such services over time as the services are delivered to the customer based on the extent of progress towards completion of the performance obligation. • Biologics and drug delivery services and other revenue: ◦ Consultation Services: The Company recognizes consultation revenue over time as the services are delivered to the customer based on the extent of progress towards completion of the performance obligation. ◦ Clinical Service Access Fees: For contracts in which the Company receives a periodic fixed fee, irrespective of the number of cases attended by the Company's personnel or hours incurred during such periods, revenue is recognized ratably over the period covered by such fees. A time-elapsed output method is used for such fees because the Company transfers control evenly by providing a stand-ready service. ◦ Clinical Service Procedure-Based Fees: The Company recognizes revenue at the point in time a case is attended by Company personnel. ◦ License fees: License fees represent the use of functional intellectual property as it exists at the point in time at which the license is granted and does not require any significant development or customization. Accordingly, the Company recognizes license revenue at the point in time in which the license becomes effective and the intellectual property is made available to the customer. • Capital equipment-related services: ◦ Equipment service: Revenue from service of ClearPoint capital equipment and software previously sold to customers is based on agreements with terms ranging from one The Company may also enter into contracts with customers who own ClearPoint capital equipment, which bundle maintenance and support services and access to software and hardware upgrades made commercially available over the term of the contract, for a single contract price, typically paid on an annual basis. The Company allocates the contract price among the performance obligations based on the relative stand-alone prices for each such performance obligation and recognizes the revenue ratably on a monthly basis. A time-elapsed output method is used as the Company is providing a stand-ready service for each of the performance obligations. ◦ Installation, training and shipping: Consistent with the Company’s recognition of revenue for capital equipment and software sales as described above, fees for installation, training and shipping in connection with sales of capital equipment and software that have been preceded by customer evaluation periods are recognized as revenue at the point in time the Company is in receipt of an executed purchase order for the equipment and software. Installation, training and shipping fees related to capital equipment and software sales not having been preceded by an evaluation period are recognized as revenue concurrent with the recognition of revenue from sales of the related capital equipment. The Company operates in one industry segment, and the predominance of its sales are to U.S.-based customers. Payment terms under contracts with customers generally are in a range of 30-60 days after the customers’ receipt of the Company’s invoices. The Company’s terms and conditions do not provide for a right of return unless for: (a) product defects; or (b) other conditions subject to the Company’s approval. See Note 3 for additional information regarding revenue recognition. Net Loss Per Share The Company computes net loss per share using the weighted-average number of common shares outstanding during the period. Basic and diluted net loss per share are the same because the conversion, exercise or issuance of all potential common stock equivalents, which comprise the Company’s outstanding common stock options, unvested restricted stock and restricted stock units, as described in Note 8, and the potential conversion of the Outstanding First Closing Note, as described in Note 6, would be anti-dilutive, due to the reporting of a net loss for each of the periods in the accompanying condensed consolidated statements of operations. Concentration Risks and Other Risks and Uncertainties Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company may at times invest its excess cash in interest bearing accounts and U.S. government debt securities. It classifies all highly liquid investments with original stated maturities of three months or less from the date of purchase as cash equivalents and all highly liquid investments with stated maturities of greater than three months but less than twelve months as short-term investments. The Company classifies the U.S. government debt securities as held-to-maturity in accordance with ASC 320, "Investments - Debt and Equity Securities." Held-to-maturity securities are those securities that the Company has the ability and intent to hold until maturity and are recorded at amortized cost on the accompanying condensed consolidated balance sheet, adjusted for the accretion of discounts using the effective interest method. The Company holds the remainder of its cash and cash equivalents on deposit with financial institutions in the U.S. insured by the Federal Deposit Insurance Corporation. At September 30, 2023, the Company had approximately $1.5 million in bank balances that were in excess of the insured limits. At September 30, 2023, there were two customers whose accounts receivable balances represented 29% and 24% of accounts receivable at that date. At December 31, 2022, one customer accounted for 19% of accounts receivable at that date. One pharmaceutical customer, a related party who is a stockholder, a noteholder, and whose chief executive officer is a representative on the Company's Board of Directors (see Note 6), for whom the Company provides hardware, software, clinical services and market development services in support of the customer's clinical trials, and from whom the Company earns a quarterly fee, accounted for 12% and 14% of total sales in the three-month periods ended September 30, 2023 and 2022, respectively, and 12% and 16% of total sales in the nine-month periods ended September 30, 2023 and 2022, respectively. There was one additional customer who comprised 10% of the total sales in the three-month period ended September 30, 2023. Prior to granting credit to a customer, the Company generally performs credit evaluations of the customers’ financial condition. In general, the Company does not require collateral from customers in connection with an extension of credit. The accounts receivable balance is reduced by an allowance for credit losses from the potential inability of the Company's customers to make required payments. The allowance for credit losses at September 30, 2023, and December 31, 2022, was $1.0 million and $0.1 million, respectively. The Company evaluates the historic loss experience on the accounts receivable balance and also considers separately customers with receivable balances that may be negatively impacted by current economic developments and market conditions. The estimate is a result of the Company's ongoing evaluation of collectability, customer creditworthiness, historical levels of credit losses and future expectations. The Company is subject to risks common to emerging companies in the medical device industry, including, but not limited to: new technological innovations; acceptance and competitiveness of its products; dependence on key personnel; dependence on key suppliers; dependence on third-party collaboration, license and joint development partners; changes in general economic conditions and interest rates; protection of proprietary technology; compliance with changing government regulations; uncertainty of widespread market acceptance of products; access to credit for capital purchases by customers; and product liability claims. Certain components used in manufacturing have relatively few alternative sources of supply and establishing additional or replacement suppliers for such components cannot be accomplished quickly. The inability of any of these suppliers to fulfill the Company’s supply requirements may negatively impact future operating results. Adoption of New Accounting Standard In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses (Topic 326)," which replaces the previous incurred loss impairment methodology for most financial assets with the current expected credit loss, or CECL, methodology. The new guidance requires entities to use a forward-looking approach based on expected losses rather than incurred losses to estimate credit losses on certain types of financial instruments, including trade receivables. The Company adopted the new standard effective January 1, 2023, which did not have a material impact to the condensed consolidated financial statements. Reclassifications The accompanying condensed consolidated statement of operations for the three and nine months ended September 30, 2023 classifies share-based compensation in the same income statement line items as the cash compensation paid to recipient employees, rather than in general and administrative expense, as had been the practice in previous years. The accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2022 have been conformed to the 2023 presentation. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | 3. Revenue Recognition Revenue by Service Line Three Months Ended September 30, (in thousands) 2023 2022 Biologics and drug delivery Disposable products $ 455 $ 798 Services and license fees 3,032 1,448 Subtotal – Biologics and drug delivery revenue 3,487 2,246 Functional neurosurgery navigation and therapy Disposable products 1,874 2,045 Services 44 375 Subtotal – Functional neurosurgery navigation and therapy 1,918 2,420 Capital equipment and software Systems and software products 81 287 Services 276 193 Subtotal – Capital equipment and software revenue 357 480 Total revenue $ 5,762 $ 5,146 Nine Months Ended September 30, (in thousands) 2023 2022 Biologics and drug delivery Disposable products $ 1,395 $ 2,873 Services and license fees 8,136 3,935 Subtotal – Biologics and drug delivery revenue 9,531 6,808 Functional neurosurgery navigation and therapy Disposable products 5,550 5,706 Services 930 1,125 Subtotal – Functional neurosurgery navigation and therapy 6,480 6,831 Capital equipment and software Systems and software products 432 1,171 Services 702 567 Subtotal – Capital equipment and software revenue 1,134 1,738 Total revenue $ 17,145 $ 15,377 Contract Balances • Contract assets – The timing of revenue recognition may differ from the time of billing to the Company's customers. In most cases, customers are billed upon shipment of such products or delivery of such services and the related contract assets, which represent an unconditional right to consideration, comprise the accounts receivable balances that are included in the accompanying condensed consolidated balance sheets. When revenue is recognized in advance of its right to bill and receive consideration, the Company records a contract asset. At September 30, 2023, the Company had $0.6 million in contract assets classified as other current assets in the accompanying condensed consolidated balance sheets. Additionally, at December 31, 2022, the Company also had $0.3 million in deferred contract costs, classified as other current assets, related to up-front costs for direct materials incurred to fulfill a customer contract. These costs were recognized as cost of revenue in the second quarter of 2023. • Contract liabilities – Contract liabilities consist of amounts that have been invoiced and for which the Company has the right to bill, but that have not been recognized as revenue as the related goods or services have not been transferred. The Company's contract liabilities are generally comprised of the following (1) capital equipment and software-related service fees that are typically billed and collected at the inception of the service agreements, which have terms ranging from one During the three and nine months ended September 30, 2023, the Company recognized approximately $0.2 million and $1.0 million of revenue, respectively, which was previously included in deferred revenue in the accompanying condensed consolidated balance sheet at December 31, 2022. Transaction price allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue that will be recognized as revenue in future periods. The majority of the remaining performance obligations relate to capital equipment and software-related service agreements and the upfront payments discussed under the heading "Contract Balances" above, which amounted to approximately $1.7 million at |
Fair Value Measurement
Fair Value Measurement | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | 4. Fair Value Measurement Fair value measurements are based on a three-tier hierarchy that prioritizes the inputs used to measure fair value. These tiers include: Level 1, defined as observable inputs such as quoted market prices in active markets; Level 2, defined as inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions. The fair value of cash and cash equivalents of $24.3 million and $27.6 million as of September 30, 2023, and December 31, 2022, respectively, is derived using Level 1 inputs. The cash equivalents are comprised of short-term bank deposits, money market funds, and U.S. Government debt securities with original maturities of three months or less, and the carrying value is a reasonable estimate of fair value. The Company had $9.9 million of short-term investments on December 31, 2022, consisting of twelve-month U.S. Government debt securities, which were classified as held to maturity and carried at amortized cost, adjusted for the accretion of discounts using the effective interest method. The carrying value of the debt securities approximates fair value based on Level 1 inputs. The Company held the investments to maturity, which occurred in the second quarter of 2023. |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Inventory | 5. Inventory Inventory consists of the following as of September 30, 2023 and December 31, 2022: (in thousands) September 30, December 31, Raw materials and work in process $ 6,928 $ 6,513 Software licenses 211 210 Finished goods 1,848 2,580 Inventory, net, included in current assets 8,987 9,303 Software licenses – non-current 405 450 Total $ 9,392 $ 9,753 |
Note Payable
Note Payable | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Note Payable | 6. Note Payable As a result of a note financing in 2020, and further described in the following paragraphs, the Outstanding First Closing Note in an aggregate principal amount of $10 million was outstanding at September 30, 2023. At the option of the holder at any time prior to maturity on January 29, 2025, the principal amount may be convertible to the Company’s common stock at a conversion price of $6.00, subject to adjustments as set forth in the SPA and the note agreement. On January 29, 2020 (the "Closing Date"), the Company completed a financing transaction with two investors (the "2020 Convertible Noteholders"), whereby the Company issued an aggregate principal amount of $17.5 million of secured convertible notes (the "First Closing Notes") pursuant to the SPA, which, unless earlier converted or redeemed, mature on the fifth anniversary of the issuance and bear interest at a rate equal to the sum of (i) the greater of (a) the three (3)-month Secured Overnight Financing Rate (“SOFR”) and (b) two percent (2%), plus (ii) a margin of 2% on the outstanding balance of the First Closing Notes, payable quarterly on the first business day of each calendar quarter. The First Closing Notes may be converted at a price of $6.00 per share, subject to certain adjustments set forth in the SPA and the note agreement, and may not be pre-paid without the consent of the noteholder. On July 31, 2023, the Company and the 2020 Convertible Noteholders entered into a third amendment to the SPA and note agreement to replace the previously used London Interbank Offered Rate ("LIBOR") and the LIBOR-based mechanics with an interest rate benchmark based on the SOFR and related SOFR-based mechanics. In May 2021, one of the 2020 Convertible Noteholders (the “Converting Noteholder”) converted the entire $7.5 million principal amount of such Converting Noteholder’s First Closing Note, and related accrued interest, amounting to approximately $0.04 million, into 1,256,143 shares of the Company’s common stock. The SPA gave the Company the right, but not the obligation, to request at any time on or prior to January 11, 2022, that one of the 2020 Convertible Noteholders purchase additional Second Closing Note (as defined in the SPA) and additional Third Closing Note (as defined in the SPA), and provided that such 2020 Convertible Noteholder had the right, but not the obligation, to purchase such notes. In December 2020, upon execution of the second amendment to the SPA, the Company issued the Second Closing Note to one of the 2020 Convertible Noteholders. On November 3, 2021, the holder of the Second Closing Note converted the entire $7.5 million principal amount of such note, along with related accrued and payment in-kind interest aggregating $0.3 million, into 773,446 shares of the Company's common stock. The aggregate carrying amount of the Outstanding First Closing Note in the accompanying September 30, 2023 and December 31, 2022 condensed consolidated balance sheets is presented net of financing costs, comprised of commissions and legal expenses, having an unamortized balance of $0.1 million at each of those respective dates. The Outstanding First Closing Note is secured by all the assets of the Company. The holder of the Outstanding First Closing Note is a significant customer of the Company, whose chief executive officer is a member of the Company’s Board of Directors. See Note 2, Concentration Risks and Other Risks and Uncertainties . Scheduled Note Payable Maturity Scheduled principal payment as of September 30, 2023 with respect to the remaining note payable is summarized as follows: Year ending December 31, (in thousands) 2025 $ 10,000 Total scheduled principal payment 10,000 Less: Unamortized financing costs (65) Total $ 9,935 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Leases | 7. Leases The Company subleases office space in Solana Beach, California, that serves as its corporate headquarters and houses certain management and personnel. The sublease term commenced on December 15, 2020, is set to expire on December 31, 2026, and is renewable for an additional five-year period, at the Company’s option, provided that the Company’s landlord has entered into an extension of its prime lease for the office space that encompasses the Company’s office space for at least five years. The Company leases space in Carlsbad, California, that houses office space and a manufacturing facility under a lease that commenced on June 1, 2023 and ends on May 31, 2033. The Company has two options to extend the lease term for thirty-six |
Stockholders_ Equity
Stockholders’ Equity | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Stockholders' Equity | 8. Stockholders’ Equity The Fourth Amended and Restated 2013 Incentive Compensation Plan became effective in 2022. The plan permits the issuance of options, restricted stock, restricted stock units and other awards to selected employees, directors and consultants of the Company. The equity incentive plans are more fully described in Note 9 to the consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2022. Share-Based Compensation Expense The Company records share-based compensation expense on a straight-line basis over the vesting periods of the related grants and recognizes forfeitures as they occur. The following table sets forth share-based compensation expense included in the condensed consolidated statements of operations: Three Months Ended September 30, (in thousands) 2023 2022 Cost of revenue 26 17 Research and development 357 216 Sales and marketing 431 300 General and administrative 770 642 Share-based compensation expense $ 1,584 $ 1,175 Nine Months Ended September 30, (in thousands) 2023 2022 Cost of revenue 74 33 Research and development 1,009 701 Sales and marketing 1,277 639 General and administrative 2,176 1,581 Share-based compensation expense $ 4,536 $ 2,954 Share-based compensation expense by type of share-based award is summarized below: Three Months Ended September 30, (in thousands) 2023 2022 Stock options 233 260 RSAs and RSUs 1,308 860 ESPP 43 55 $ 1,584 $ 1,175 Nine Months Ended September 30, (in thousands) 2023 2022 Stock options 747 830 RSAs and RSUs 3,612 1,957 ESPP 177 167 $ 4,536 $ 2,954 Total unrecognized compensation expense by type of award and the weighted-average remaining requisite period over which such expense is expected to be recognized (in thousands, unless otherwise noted): Years Ended September 30, 2023 Unrecognized Expense Remaining Weighted-Average Recognition Period (in years) Stock options $ 1,208 1.82 RSAs and RSUs $ 8,187 1.94 Stock Option Activity Stock option activity under the Company’s current and previous plans during the nine months ended September 30, 2023 is summarized below: Stock Options Weighted-average Weighted-average Intrinsic Value (1) (in thousands) Outstanding at December 31, 2022 1,398,286 $ 8.69 Granted 111,107 $ 8.10 Exercised (20,000) $ 1.82 Forfeited or expired (4,374) $ 41.52 Outstanding at September 30, 2023 1,485,019 $ 8.64 5.69 $ 1,867 Exercisable at September 30, 2023 1,258,707 $ 8.29 5.10 $ 1,867 Vested and expected to vest at September 30, 2023 1,485,019 $ 8.64 5.69 $ 1,867 (1) Intrinsic value is calculated as the estimated fair value of the Company’s stock at the end of the related period less the option exercise price of in-the-money options. Restricted Stock Award Activity Restricted stock award ("RSA") activity for the nine months ended September 30, 2023 is summarized below: Restricted Stock Awards Weighted - Average Outstanding at December 31, 2022 684,389 $ 11.10 Vested (270,042) $ 10.06 Forfeited (5,395) $ 12.51 Outstanding at September 30, 2023 408,952 $ 11.78 Restricted Stock Unit Activity Restricted stock unit ("RSU") activity for the nine months ended September 30, 2023 is summarized below: Restricted Stock Units Weighted - Average Outstanding at December 31, 2022 13,146 $ 11.41 Granted 766,625 $ 8.11 Vested (13,660) $ 8.73 Outstanding at September 30, 2023 766,111 $ 8.15 ESPP On June 3, 2021, the Company’s stockholders adopted and approved the ClearPoint Neuro, Inc. Employee Stock Purchase Plan (the “ESPP”), which allows eligible employees to acquire shares of the Company’s common stock through payroll deductions at a discount to market price. A total of 400,000 shares of the Company’s common stock were made available for issuance pursuant to the terms of the ESPP. Each offering period is for six months, and the first offering period commenced on July 1, 2021. During the first offering period of 2023, 51,041 shares were purchased at an average per share price of $6.15. Warrants Warrants to purchase shares of the Company's common stock were issued in connection with financing transactions in 2015 and 2017. These warrants contained net exercise provisions giving the holder the option of acquiring a number of shares having a value equal to the difference between the exercise price and the current stock price, in lieu of paying the exercise price to acquire the full number of stated shares. All of the remaining outstanding warrants expired in the second quarter of 2023. Warrant activity for the nine months ended September 30, 2023 is summarized below: Shares Weighted - Average Outstanding at December 31, 2022 36,554 $ 16.23 Expired (36,554) $ 16.23 Outstanding at September 30, 2023 — — |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||||||
Net loss for the period | $ (4,809) | $ (7,052) | $ (5,609) | $ (3,788) | $ (4,303) | $ (3,959) | $ (17,470) | $ (12,050) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation and Use of Estimates In the opinion of management, the accompanying unaudited condensed consolidated financial statements have been prepared on a basis consistent with the Company’s December 31, 2022 audited consolidated financial statements, and include all adjustments, consisting of only normal recurring adjustments, necessary to fairly state the information set forth therein. These condensed consolidated financial statements have been prepared in accordance with SEC rules for interim financial information, and, therefore, omit certain information and footnote disclosures necessary to present such statements in accordance with GAAP. The preparation of these condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2022 Form 10-K. The accompanying condensed consolidated balance sheet as of December 31, 2022 has been derived from the audited consolidated financial statements at that date but does not include all information and footnotes required by GAAP for a complete set of financial statements. The results of operations for the three and nine months ended September 30, 2023, may not be indicative of the results to be expected for the entire year or any future periods. |
Use of Estimates | Basis of Presentation and Use of Estimates In the opinion of management, the accompanying unaudited condensed consolidated financial statements have been prepared on a basis consistent with the Company’s December 31, 2022 audited consolidated financial statements, and include all adjustments, consisting of only normal recurring adjustments, necessary to fairly state the information set forth therein. These condensed consolidated financial statements have been prepared in accordance with SEC rules for interim financial information, and, therefore, omit certain information and footnote disclosures necessary to present such statements in accordance with GAAP. The preparation of these condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2022 Form 10-K. The accompanying condensed consolidated balance sheet as of December 31, 2022 has been derived from the audited consolidated financial statements at that date but does not include all information and footnotes required by GAAP for a complete set of financial statements. The results of operations for the three and nine months ended September 30, 2023, may not be indicative of the results to be expected for the entire year or any future periods. |
Inventory | Inventory Inventory is carried at the lower of cost or net realizable value. The costs of inventory are determined using the standard cost method, which approximates actual cost based on a first-in, first-out method. Items in inventory relate predominantly to the Company’s ClearPoint system and related disposables. Software license inventory related to ClearPoint systems undergoing on-site customer evaluation is included in inventory in the accompanying condensed consolidated balance sheets. All other software license inventory is classified as a non-current asset. The Company periodically reviews its inventory for excess and obsolete items and provides a reserve upon identification of potentially excess or obsolete items. |
Intangible Assets | Intangible Assets The Company is a party to a license agreement that provides rights to the Company for the development and commercialization of products. Under the terms of the license agreement, the Company made payments to the licensor upon execution of the license agreement for access to the underlying technology, and future payments will be based upon achievement of regulatory and commercialization milestones as defined in the license agreement. In 2022, the Company made a payment to the licensor for the achievement of a regulatory milestone, which acts as a prepayment for future royalties. In conformity with Accounting Standards Codification Section 350, “Intangibles – Goodwill and Other,” the Company amortizes its investment in the upfront license rights described above over an expected useful life of up to five years, or as commercial sales occur for the royalty prepayment. In addition, the Company periodically evaluates the recoverability of its investment in the license rights and records an impairment charge in the event such evaluation indicates that the Company’s investment is not likely to be recovered. |
Revenue Recognition | Revenue Recognition The Company’s revenue is comprised primarily of: (1) product revenue, resulting from the sale of functional neurosurgery, navigation, therapy, and biologics and drug delivery disposable products; (2) product revenue resulting from the sale of ClearPoint capital equipment and software; (3) consultation revenue and clinical case support revenue in connection with customer-sponsored pre-clinical and clinical trials; (4) license revenue for the granting of licenses to develop and commercialize the Company's SmartFlow Cannula devices with our customers' proprietary biologics as a combination product, and (5) revenue resulting from the service, installation, training, and shipping related to ClearPoint capital equipment and software. The Company recognizes revenue when (i) control of the Company’s products is transferred to its customers or (ii) services are provided to customers, each in an amount that reflects the consideration the Company expects to receive from its customers in exchange for those products and services, in a process that involves identifying the contract with a customer, determining the performance obligations in the contract, determining the contract price, allocating the contract price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. When a contract calls for the satisfaction of multiple performance obligations for a single contract price, the Company typically allocates the contract price among the performance obligations based on the relative stand-alone prices for each such performance obligation customarily charged by the Company. The Company considers a performance obligation satisfied once it has transferred control of a good or service to the customer, meaning the customer has the ability to use and obtain the benefit of the good or service. The Company recognizes revenue for satisfied performance obligations only when it determines there are no uncertainties regarding payment terms or transfer of control. Lines of Business; Timing of Revenue Recognition • Functional neurosurgery navigation product, biologics and drug delivery systems product, and therapy product sales: Revenue from the sale of functional neurosurgery navigation products (consisting of disposable products sold commercially and related to cases utilizing the Company's ClearPoint system), biologics and drug delivery systems products (consisting primarily of disposable products related to customer-sponsored clinical trials utilizing the ClearPoint system), and therapy products (consisting primarily of disposable laser-related products used in neurosurgical and non-neurosurgical procedures) is generally based on customer purchase orders, the predominance of which require delivery within one week of the order having been placed, and is generally recognized at the point in time of shipping to the customer, which is the point at which legal title, and risks and rewards of ownership, transfer to the customer. For certain customers, legal title and risks and rewards of ownership transfer upon delivery to the customer as stated in their respective contracts, in which case revenue is recognized upon delivery. • Capital equipment and software sales: ◦ Capital equipment and software sales preceded by evaluation periods: The predominance of capital equipment and software sales (consisting of integrated computer hardware and software that are integral components of the Company's ClearPoint system) are preceded by customer evaluation periods. During these evaluation periods, installation of, and training of customer personnel on, the systems have been completed and the systems have been in operation. Accordingly, revenue from capital equipment and software sales following such evaluation periods is recognized at the point in time that the Company is in receipt of an executed purchase agreement or purchase order. ◦ Capital equipment and software sales not preceded by evaluation periods: Revenue from sales of capital equipment and software not having been preceded by an evaluation period is recognized upon delivery to the customer and installation. For capital equipment that does not require installation, revenue is recognized upon shipment, however, for those customers where legal title and risks and rewards of ownership transfer upon delivery, revenue is recognized at such time. For both types of capital equipment and software sales described above, the determination of the point in time at which to recognize revenue represents that point at which the customer has legal title, physical possession, and the risks and rewards of ownership, and the Company has a present right to payment. • Functional neurosurgery navigation and therapy services: The Company recognizes revenue for such services over time as the services are delivered to the customer based on the extent of progress towards completion of the performance obligation. • Biologics and drug delivery services and other revenue: ◦ Consultation Services: The Company recognizes consultation revenue over time as the services are delivered to the customer based on the extent of progress towards completion of the performance obligation. ◦ Clinical Service Access Fees: For contracts in which the Company receives a periodic fixed fee, irrespective of the number of cases attended by the Company's personnel or hours incurred during such periods, revenue is recognized ratably over the period covered by such fees. A time-elapsed output method is used for such fees because the Company transfers control evenly by providing a stand-ready service. ◦ Clinical Service Procedure-Based Fees: The Company recognizes revenue at the point in time a case is attended by Company personnel. ◦ License fees: License fees represent the use of functional intellectual property as it exists at the point in time at which the license is granted and does not require any significant development or customization. Accordingly, the Company recognizes license revenue at the point in time in which the license becomes effective and the intellectual property is made available to the customer. • Capital equipment-related services: ◦ Equipment service: Revenue from service of ClearPoint capital equipment and software previously sold to customers is based on agreements with terms ranging from one The Company may also enter into contracts with customers who own ClearPoint capital equipment, which bundle maintenance and support services and access to software and hardware upgrades made commercially available over the term of the contract, for a single contract price, typically paid on an annual basis. The Company allocates the contract price among the performance obligations based on the relative stand-alone prices for each such performance obligation and recognizes the revenue ratably on a monthly basis. A time-elapsed output method is used as the Company is providing a stand-ready service for each of the performance obligations. ◦ Installation, training and shipping: Consistent with the Company’s recognition of revenue for capital equipment and software sales as described above, fees for installation, training and shipping in connection with sales of capital equipment and software that have been preceded by customer evaluation periods are recognized as revenue at the point in time the Company is in receipt of an executed purchase order for the equipment and software. Installation, training and shipping fees related to capital equipment and software sales not having been preceded by an evaluation period are recognized as revenue concurrent with the recognition of revenue from sales of the related capital equipment. The Company operates in one industry segment, and the predominance of its sales are to U.S.-based customers. Payment terms under contracts with customers generally are in a range of 30-60 days after the customers’ receipt of the Company’s invoices. The Company’s terms and conditions do not provide for a right of return unless for: (a) product defects; or (b) other conditions subject to the Company’s approval. |
Net Loss Per Share | Net Loss Per Share The Company computes net loss per share using the weighted-average number of common shares outstanding during the period. Basic and diluted net loss per share are the same because the conversion, exercise or issuance of all potential common stock equivalents, which comprise the Company’s outstanding common stock options, unvested restricted stock and restricted stock units, as described in Note 8, and the potential conversion of the Outstanding First Closing Note, as described in Note 6, would be anti-dilutive, due to the reporting of a net loss for each of the periods in the accompanying condensed consolidated statements of operations. |
Concentration Risks and Other Risks and Uncertainties | Concentration Risks and Other Risks and Uncertainties Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company may at times invest its excess cash in interest bearing accounts and U.S. government debt securities. It classifies all highly liquid investments with original stated maturities of three months or less from the date of purchase as cash equivalents and all highly liquid investments with stated maturities of greater than three months but less than twelve months as short-term investments. The Company classifies the U.S. government debt securities as held-to-maturity in accordance with ASC 320, "Investments - Debt and Equity Securities." Held-to-maturity securities are those securities that the Company has the ability and intent to hold until maturity and are recorded at amortized cost on the accompanying condensed consolidated balance sheet, adjusted for the accretion of discounts using the effective interest method. The Company holds the remainder of its cash and cash equivalents on deposit with financial institutions in the U.S. insured by the Federal Deposit Insurance Corporation. At September 30, 2023, the Company had approximately $1.5 million in bank balances that were in excess of the insured limits. At September 30, 2023, there were two customers whose accounts receivable balances represented 29% and 24% of accounts receivable at that date. At December 31, 2022, one customer accounted for 19% of accounts receivable at that date. One pharmaceutical customer, a related party who is a stockholder, a noteholder, and whose chief executive officer is a representative on the Company's Board of Directors (see Note 6), for whom the Company provides hardware, software, clinical services and market development services in support of the customer's clinical trials, and from whom the Company earns a quarterly fee, accounted for 12% and 14% of total sales in the three-month periods ended September 30, 2023 and 2022, respectively, and 12% and 16% of total sales in the nine-month periods ended September 30, 2023 and 2022, respectively. There was one additional customer who comprised 10% of the total sales in the three-month period ended September 30, 2023. Prior to granting credit to a customer, the Company generally performs credit evaluations of the customers’ financial condition. In general, the Company does not require collateral from customers in connection with an extension of credit. The accounts receivable balance is reduced by an allowance for credit losses from the potential inability of the Company's customers to make required payments. The allowance for credit losses at September 30, 2023, and December 31, 2022, was $1.0 million and $0.1 million, respectively. The Company evaluates the historic loss experience on the accounts receivable balance and also considers separately customers with receivable balances that may be negatively impacted by current economic developments and market conditions. The estimate is a result of the Company's ongoing evaluation of collectability, customer creditworthiness, historical levels of credit losses and future expectations. The Company is subject to risks common to emerging companies in the medical device industry, including, but not limited to: new technological innovations; acceptance and competitiveness of its products; dependence on key personnel; dependence on key suppliers; dependence on third-party collaboration, license and joint development partners; changes in general economic conditions and interest rates; protection of proprietary technology; compliance with changing government regulations; uncertainty of widespread market acceptance of products; access to credit for capital purchases by customers; and product liability claims. Certain components used in manufacturing have relatively few alternative sources of supply and establishing additional or replacement suppliers for such components cannot be accomplished quickly. The inability of any of these suppliers to fulfill the Company’s supply requirements may negatively impact future operating results. |
Adoption of New Accounting Standard | Adoption of New Accounting StandardIn June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses (Topic 326)," which replaces the previous incurred loss impairment methodology for most financial assets with the current expected credit loss, or CECL, methodology. The new guidance requires entities to use a forward-looking approach based on expected losses rather than incurred losses to estimate credit losses on certain types of financial instruments, including trade receivables. The Company adopted the new standard effective January 1, 2023, which did not have a material impact to the condensed consolidated financial statements. |
Reclassifications | Reclassifications The accompanying condensed consolidated statement of operations for the three and nine months ended September 30, 2023 classifies share-based compensation in the same income statement line items as the cash compensation paid to recipient employees, rather than in general and administrative expense, as had been the practice in previous years. The accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2022 have been conformed to the 2023 presentation. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue by Service Line | Revenue by Service Line Three Months Ended September 30, (in thousands) 2023 2022 Biologics and drug delivery Disposable products $ 455 $ 798 Services and license fees 3,032 1,448 Subtotal – Biologics and drug delivery revenue 3,487 2,246 Functional neurosurgery navigation and therapy Disposable products 1,874 2,045 Services 44 375 Subtotal – Functional neurosurgery navigation and therapy 1,918 2,420 Capital equipment and software Systems and software products 81 287 Services 276 193 Subtotal – Capital equipment and software revenue 357 480 Total revenue $ 5,762 $ 5,146 Nine Months Ended September 30, (in thousands) 2023 2022 Biologics and drug delivery Disposable products $ 1,395 $ 2,873 Services and license fees 8,136 3,935 Subtotal – Biologics and drug delivery revenue 9,531 6,808 Functional neurosurgery navigation and therapy Disposable products 5,550 5,706 Services 930 1,125 Subtotal – Functional neurosurgery navigation and therapy 6,480 6,831 Capital equipment and software Systems and software products 432 1,171 Services 702 567 Subtotal – Capital equipment and software revenue 1,134 1,738 Total revenue $ 17,145 $ 15,377 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consists of the following as of September 30, 2023 and December 31, 2022: (in thousands) September 30, December 31, Raw materials and work in process $ 6,928 $ 6,513 Software licenses 211 210 Finished goods 1,848 2,580 Inventory, net, included in current assets 8,987 9,303 Software licenses – non-current 405 450 Total $ 9,392 $ 9,753 |
Note Payable (Tables)
Note Payable (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Principal Payment | Scheduled principal payment as of September 30, 2023 with respect to the remaining note payable is summarized as follows: Year ending December 31, (in thousands) 2025 $ 10,000 Total scheduled principal payment 10,000 Less: Unamortized financing costs (65) Total $ 9,935 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Schedule of Share-Based Compensation Expense | The following table sets forth share-based compensation expense included in the condensed consolidated statements of operations: Three Months Ended September 30, (in thousands) 2023 2022 Cost of revenue 26 17 Research and development 357 216 Sales and marketing 431 300 General and administrative 770 642 Share-based compensation expense $ 1,584 $ 1,175 Nine Months Ended September 30, (in thousands) 2023 2022 Cost of revenue 74 33 Research and development 1,009 701 Sales and marketing 1,277 639 General and administrative 2,176 1,581 Share-based compensation expense $ 4,536 $ 2,954 Share-based compensation expense by type of share-based award is summarized below: Three Months Ended September 30, (in thousands) 2023 2022 Stock options 233 260 RSAs and RSUs 1,308 860 ESPP 43 55 $ 1,584 $ 1,175 Nine Months Ended September 30, (in thousands) 2023 2022 Stock options 747 830 RSAs and RSUs 3,612 1,957 ESPP 177 167 $ 4,536 $ 2,954 Total unrecognized compensation expense by type of award and the weighted-average remaining requisite period over which such expense is expected to be recognized (in thousands, unless otherwise noted): Years Ended September 30, 2023 Unrecognized Expense Remaining Weighted-Average Recognition Period (in years) Stock options $ 1,208 1.82 RSAs and RSUs $ 8,187 1.94 |
Schedule of Stock Option Activity | Stock option activity under the Company’s current and previous plans during the nine months ended September 30, 2023 is summarized below: Stock Options Weighted-average Weighted-average Intrinsic Value (1) (in thousands) Outstanding at December 31, 2022 1,398,286 $ 8.69 Granted 111,107 $ 8.10 Exercised (20,000) $ 1.82 Forfeited or expired (4,374) $ 41.52 Outstanding at September 30, 2023 1,485,019 $ 8.64 5.69 $ 1,867 Exercisable at September 30, 2023 1,258,707 $ 8.29 5.10 $ 1,867 Vested and expected to vest at September 30, 2023 1,485,019 $ 8.64 5.69 $ 1,867 (1) Intrinsic value is calculated as the estimated fair value of the Company’s stock at the end of the related period less the option exercise price of in-the-money options. |
Schedule of Restricted Stock Activity | Restricted stock award ("RSA") activity for the nine months ended September 30, 2023 is summarized below: Restricted Stock Awards Weighted - Average Outstanding at December 31, 2022 684,389 $ 11.10 Vested (270,042) $ 10.06 Forfeited (5,395) $ 12.51 Outstanding at September 30, 2023 408,952 $ 11.78 Restricted Stock Unit Activity Restricted stock unit ("RSU") activity for the nine months ended September 30, 2023 is summarized below: Restricted Stock Units Weighted - Average Outstanding at December 31, 2022 13,146 $ 11.41 Granted 766,625 $ 8.11 Vested (13,660) $ 8.73 Outstanding at September 30, 2023 766,111 $ 8.15 |
Schedule of Common Stock Warrants | Warrant activity for the nine months ended September 30, 2023 is summarized below: Shares Weighted - Average Outstanding at December 31, 2022 36,554 $ 16.23 Expired (36,554) $ 16.23 Outstanding at September 30, 2023 — — |
Description of the Business a_2
Description of the Business and Financial Condition (Details) $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | |||
Feb. 28, 2021 USD ($) shares | Sep. 30, 2023 USD ($) customer | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2020 USD ($) investor | Jan. 29, 2020 investor | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Number of customers | customer | 50 | |||||
Cumulative deficit | $ 167,837 | $ 150,367 | ||||
Net cash used in operations | 12,551 | $ 13,102 | 16,200 | |||
Secured convertible notes | 9,935 | $ 9,893 | ||||
IPO | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Public offering (in shares) | shares | 2,127,660 | |||||
Net proceeds from offering | $ 46,800 | |||||
Security Purchase Agreement | 2020 Secured Notes | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Debt instrument, number of investors | investor | 2 | |||||
Secured convertible notes | $ 25,000 | |||||
Security Purchase Agreement | Convertible Debt | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Secured convertible notes | $ 15,000 | |||||
Security Purchase Agreement | Convertible Debt | First Closing Notes | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Debt instrument, number of investors | investor | 2 | |||||
Secured convertible notes | 100 | |||||
Security Purchase Agreement | Convertible Debt | First Closing Notes | Investor | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Secured convertible notes | $ 10,000 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 | Sep. 30, 2023 USD ($) segment | Sep. 30, 2022 | Dec. 31, 2022 USD ($) | |
Product Information [Line Items] | |||||
Number of industry segments | segment | 1 | ||||
Cash, uninsured amount | $ 1.5 | $ 1.5 | |||
Allowance for doubtful accounts | $ 1 | $ 1 | $ 0.1 | ||
Accounts Receivable | Customer Concentration Risk | Customer 1 | |||||
Product Information [Line Items] | |||||
Concentration risk, percentage | 29% | 19% | |||
Accounts Receivable | Customer Concentration Risk | Customer 2 | |||||
Product Information [Line Items] | |||||
Concentration risk, percentage | 24% | ||||
Revenue Benchmark | Customer Concentration Risk | Customer 1 | |||||
Product Information [Line Items] | |||||
Concentration risk, percentage | 12% | 14% | 12% | 16% | |
Revenue Benchmark | Customer Concentration Risk | Customer 2 | |||||
Product Information [Line Items] | |||||
Concentration risk, percentage | 10% | ||||
Minimum | |||||
Product Information [Line Items] | |||||
Estimated useful life | 5 years | 5 years | |||
Term of service agreements | 1 year | ||||
Payment terms | 30 days | 30 days | |||
Maximum | |||||
Product Information [Line Items] | |||||
Term of service agreements | 3 years | ||||
Payment terms | 60 days | 60 days |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Revenue by Service Line (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 5,762 | $ 5,146 | $ 17,145 | $ 15,377 |
Biologics and drug delivery | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 3,487 | 2,246 | 9,531 | 6,808 |
Biologics and Drug Delivery - Disposable Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 455 | 798 | 1,395 | 2,873 |
Biologics and Drug Delivery - Services and license fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 3,032 | 1,448 | 8,136 | 3,935 |
Functional neurosurgery navigation and therapy | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 1,918 | 2,420 | 6,480 | 6,831 |
Functional Neurosurgery Navigation and Therapy - Disposable Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 1,874 | 2,045 | 5,550 | 5,706 |
Functional Neurosurgery Navigation and Therapy - Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 44 | 375 | 930 | 1,125 |
Capital equipment and software | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 357 | 480 | 1,134 | 1,738 |
Capital Equipment and Software - Systems and Software Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 81 | 287 | 432 | 1,171 |
Capital Equipment and Software - Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 276 | $ 193 | $ 702 | $ 567 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | |||||
Contract assets current | $ 600 | $ 600 | $ 300 | ||
Refund liability | $ 500 | ||||
Total revenue | $ 5,762 | $ 5,146 | $ 17,145 | $ 15,377 | |
Minimum | |||||
Disaggregation of Revenue [Line Items] | |||||
Contract liabilities, service agreements, terms | 1 year | 1 year | |||
Maximum | |||||
Disaggregation of Revenue [Line Items] | |||||
Contract liabilities, service agreements, terms | 3 years | 3 years | |||
Capital Equipment Related Service Revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | $ 200 | $ 1,000 | |||
Capital Equipment and Software-Related Service | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue, remaining performance obligation amount | $ 1,700 | $ 1,700 | |||
Capital Equipment and Software-Related Service | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01 | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue, remaining performance obligation, percentage | 69% | 69% | |||
Revenue, remaining performance obligation, period | 12 months | 12 months | |||
Capital Equipment and Software-Related Service | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-01 | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue, remaining performance obligation, period |
Fair Value Measurement (Details
Fair Value Measurement (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value Disclosures [Abstract] | ||
Cash and cash equivalents | $ 24,342 | $ 27,615 |
Short-term investments, at amortized cost | $ 0 | $ 9,874 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials and work in process | $ 6,928 | $ 6,513 |
Software licenses | 211 | 210 |
Finished goods | 1,848 | 2,580 |
Inventory, net, included in current assets | 8,987 | 9,303 |
Software licenses – non-current | 405 | 450 |
Total | $ 9,392 | $ 9,753 |
Note Payable - Narratives (Deta
Note Payable - Narratives (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | |||||
Nov. 03, 2021 USD ($) shares | Jan. 29, 2020 USD ($) investor $ / shares | May 31, 2021 USD ($) shares | Sep. 30, 2023 USD ($) $ / shares | Dec. 31, 2022 USD ($) | Dec. 31, 2020 USD ($) | |
Debt Instrument [Line Items] | ||||||
Secured convertible notes | $ 9,935 | $ 9,893 | ||||
Security Purchase Agreement | Convertible Debt | ||||||
Debt Instrument [Line Items] | ||||||
Secured convertible notes | $ 15,000 | |||||
Security Purchase Agreement | First Closing Notes | Convertible Debt | ||||||
Debt Instrument [Line Items] | ||||||
Secured convertible notes | 100 | |||||
Debt instrument, conversion price (in dollars per share) | $ / shares | $ 6 | |||||
Debt instrument, number of investors | investor | 2 | |||||
Debt instrument, face amount | $ 17,500 | |||||
Debt instrument, variable interest rate | 0.02 | |||||
Debt instrument, basis spread on variable rate | 2% | |||||
Debt instrument, conversion amount | $ 7,500 | |||||
Accrued interest included in the conversion of debt | $ 40 | |||||
Debt conversion, shares issued (in shares) | shares | 1,256,143 | |||||
Security Purchase Agreement | Investor | First Closing Notes | Convertible Debt | ||||||
Debt Instrument [Line Items] | ||||||
Secured convertible notes | $ 10,000 | |||||
Debt instrument, conversion price (in dollars per share) | $ / shares | $ 6 | |||||
Security Purchase Agreement Amended | Second Closing Note | Convertible Debt | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 7,500 | |||||
Debt conversion, shares issued (in shares) | shares | 773,446 | |||||
Amount of accrued and paid-in-kind interest included in converted debt | $ 300 |
Note Payable - Schedule of Prin
Note Payable - Schedule of Principal Payment (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Debt Disclosure [Abstract] | |
2025 | $ 10,000 |
Total scheduled principal payment | 10,000 |
Less: Unamortized financing costs | (65) |
Total | $ 9,935 |
Leases (Details)
Leases (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) renewal_option | Sep. 30, 2022 USD ($) | |
Lessee, Lease, Description [Line Items] | ||||
Lease cost | $ | $ 0.2 | $ 0.1 | $ 0.5 | $ 0.4 |
Office Lease - Solana Beach, California | ||||
Lessee, Lease, Description [Line Items] | ||||
Lessee, operating lease, term of contract (in years) | 5 years | 5 years | ||
Renew the lease for two additional periods | 5 years | 5 years | ||
Office Lease - Irvine, California | ||||
Lessee, Lease, Description [Line Items] | ||||
Renew the lease for two additional periods | 5 years | 5 years | ||
Office Lease and Manufacturing facility - Carlsbad, California | ||||
Lessee, Lease, Description [Line Items] | ||||
Number of renewal options | renewal_option | 2 | |||
Office Lease and Manufacturing facility - Carlsbad, California | Minimum | ||||
Lessee, Lease, Description [Line Items] | ||||
Renew the lease for two additional periods | 36 months | 36 months | ||
Office Lease and Manufacturing facility - Carlsbad, California | Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Renew the lease for two additional periods | 60 months | 60 months |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Share Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 1,584 | $ 1,175 | $ 4,536 | $ 2,954 |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 233 | 260 | 747 | 830 |
RSAs and RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 1,308 | 860 | 3,612 | 1,957 |
ESPP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 43 | 55 | 177 | 167 |
Cost of revenue | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 26 | 17 | 74 | 33 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 357 | 216 | 1,009 | 701 |
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 431 | 300 | 1,277 | 639 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 770 | $ 642 | $ 2,176 | $ 1,581 |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Unrecognized Compensation Expense and Weighted-Average Requisite Period (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Remaining Weighted-Average Recognition Period | 5 years 8 months 8 days |
Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Expense | $ 1,208 |
Remaining Weighted-Average Recognition Period | 1 year 9 months 25 days |
RSAs and RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Expense | $ 8,187 |
Remaining Weighted-Average Recognition Period | 1 year 11 months 8 days |
Stockholders_ Equity - Schedule
Stockholders’ Equity - Schedule of Stock Option Activity (Details) $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) $ / shares shares | |
Stock Options | |
Outstanding, beginning balance (in shares) | shares | 1,398,286 |
Granted (in shares) | shares | 111,107 |
Exercised (in shares) | shares | (20,000) |
Forfeited or expired (in shares) | shares | (4,374) |
Outstanding, ending balance (in shares) | shares | 1,485,019 |
Exercisable at ending (in shares) | shares | 1,258,707 |
Vested and expected to vest at ending (in shares) | shares | 1,485,019 |
Weighted-average Exercise price per share | |
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 8.69 |
Granted (in dollars per share) | $ / shares | 8.10 |
Exercised (in dollars per share) | $ / shares | 1.82 |
Forfeited or expired (in dollars per share) | $ / shares | 41.52 |
Outstanding, ending balance (in dollars per share) | $ / shares | 8.64 |
Exercisable at ending (in usd per share) | $ / shares | 8.29 |
Vested and expected to vest (in usd per share) | $ / shares | $ 8.64 |
Weighted-average Remaining Contractual Life (in years) | |
Outstanding | 5 years 8 months 8 days |
Exercisable at ending | 5 years 1 month 6 days |
Vested and expected to vest | 5 years 8 months 8 days |
Intrinsic value, outstanding | $ | $ 1,867 |
Intrinsic value, exercisable | $ | 1,867 |
Intrinsic value, vested and expected to vest | $ | $ 1,867 |
Stockholders_ Equity - Schedu_2
Stockholders’ Equity - Schedule of Restricted Stock Activity (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
RSAs | ||
Restricted Stock Awards | ||
Outstanding, beginning balance (in shares) | 408,952 | 684,389 |
Vested (in shares) | (270,042) | |
Forfeited (in shares) | (5,395) | |
Outstanding, ending balance (in shares) | 408,952 | |
Weighted - Average Grant Date Fair Value | ||
Outstanding, beginning balance (in dollars per share) | $ 11.10 | |
Vested (in dollars per share) | 10.06 | |
Forfeited or expired (in dollars per share) | 12.51 | |
Outstanding, ending balance (in dollars per share) | $ 11.78 | |
RSUs | ||
Restricted Stock Awards | ||
Outstanding, beginning balance (in shares) | 766,111 | 13,146 |
Granted (in shares) | 766,625 | |
Vested (in shares) | (13,660) | |
Outstanding, ending balance (in shares) | 766,111 | |
Weighted - Average Grant Date Fair Value | ||
Outstanding, beginning balance (in dollars per share) | $ 11.41 | |
Granted (in dollars per share) | 8.11 | |
Vested (in dollars per share) | 8.73 | |
Outstanding, ending balance (in dollars per share) | $ 8.15 |
Stockholders_ Equity - Narrativ
Stockholders’ Equity - Narrative (Details) - Employee Stock Purchase Plan - $ / shares | 6 Months Ended | 9 Months Ended | |
Jun. 30, 2023 | Sep. 30, 2023 | Jun. 03, 2021 | |
Subsidiary, Sale of Stock [Line Items] | |||
Grant (in shares) | 400,000 | ||
Offering period | 6 months | ||
Purchase plan, shares purchased (in shares) | 51,041 | ||
Purchase plan, per share weighted average price of shares purchased (in dollars per share) | $ 6.15 |
Stockholders_ Equity - Schedu_3
Stockholders’ Equity - Schedule of Common Stock Warrants (Details) - Common Stock Warrants | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Shares | |
Outstanding, beginning balance (in shares) | shares | 36,554 |
Forfeited (in shares) | shares | (36,554) |
Outstanding, ending balance (in shares) | shares | 0 |
Weighted - Average Exercise Price | |
Beginning balance (in dollars per share) | $ / shares | $ 16.23 |
Expired (in dollars per share) | $ / shares | 16.23 |
Ending balance (in dollars per share) | $ / shares | $ 0 |