Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Mar. 16, 2022 | |
Cover [Abstract] | ||
Document Type | 10-K | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | FY | |
Entity Registrant Name | Sonendo, Inc. | |
Entity Central Index Key | 0001407973 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Current Fiscal Year End Date | --12-31 | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Small Business | true | |
Entity Filer Category | Non-accelerated Filer | |
Entity Public Float | $ 120.4 | |
Entity Common Stock, Shares Outstanding | 26,395,942 | |
Entity File Number | 001-40988 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-5041718 | |
Entity Address, Address Line One | 26061 Merit Circle | |
Entity Address, Address Line Two | Suite 102 | |
Entity Address, City or Town | Laguna Hills | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92653 | |
City Area Code | 949 | |
Local Phone Number | 766-3636 | |
Document Annual Report | true | |
Document Transition Report | false | |
Title of 12(b) Security | Common stock, par value $0.001 per share | |
Trading Symbol | SONX | |
Security Exchange Name | NYSE | |
Entity Well Known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Icfr Auditor Attestation Flag | true | |
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE None | |
Auditor Firm ID | 42 | |
Auditor Location | Irvine, California | |
Auditor Name | Ernst & Young LLP |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | |
Current assets: | |||
Cash and cash equivalents | $ 84,641 | $ 51,722 | |
Accounts receivable, net | 2,516 | 1,934 | |
Inventory | 8,150 | 4,338 | |
Prepaid expenses and other current assets | 3,552 | 901 | |
Total current assets | 98,859 | 58,895 | |
Property and equipment, net | 2,366 | 3,153 | |
Operating lease right-of-use assets | 2,746 | 3,308 | |
Intangible assets, net | 2,956 | 2,208 | |
Goodwill | 8,454 | 8,454 | |
Other assets | 118 | 123 | |
Total assets | 115,499 | 76,141 | |
Current liabilities: | |||
Accounts payable | 3,061 | 1,930 | |
Accrued expenses | 4,758 | 3,247 | |
Accrued compensation | 3,376 | 3,714 | |
Operating lease liabilities | 975 | 802 | |
Term loan | 28,352 | ||
Other current liabilities | 2,482 | 2,756 | |
Total current liabilities | 14,652 | 40,801 | |
Warrant liabilities | 1,914 | ||
Operating lease liabilities, net of current | 1,730 | 2,449 | |
Term loan, net of current | 26,496 | ||
Forward obligation | 2,750 | ||
Other liabilities | 558 | 776 | |
Total liabilities | 43,436 | 48,690 | |
Commitments and contingencies (Note 8) | |||
Convertible preferred stock, $0.0001 par value; authorized - none as of December 31, 2021 and 17,528,207 shares as of December 31, 2020; issued and outstanding - none as of December 31, 2021 and 17,031,887 shares as of December 31, 2020; aggregate liquidation preference - none as of December 31, 2021 and $282,198 as of December 31, 2020 | [1] | 281,342 | |
Stockholders' deficit: | |||
Preferred stock, $0.001 par value; authorized - 10,000,000 shares as of December 31, 2021 and none as of December 31, 2020; issued and outstanding - none as of December 31, 2021 and 2020 | |||
Common stock, $0.001 par value; authorized - 500,000,000 shares as of December 31,2021 and 21,643,836 shares as of December 31,2020; issued - 26,336,536 shares as of December 31, 2021 and 1,247,024 shares as of December 31, 2020; outstanding - 26,289,847 shares as of December 31, 2021 and 1,200,335 shares as of December 31, 2020 | 26 | 2 | |
Additional paid-in-capital | 384,132 | 9,703 | |
Accumulated deficit | (312,044) | (263,545) | |
Stockholders' deficit before treasury stock | 72,114 | (253,840) | |
Less: Treasury stock | (51) | (51) | |
Total stockholders’ deficit | 72,063 | (253,891) | |
Total liabilities, convertible preferred stock and stockholders’ deficit | $ 115,499 | $ 76,141 | |
[1] | The carrying value reflects the gross proceeds received from the sale of the preferred stock net of issuance costs and the fair value at issuance of preferred stock warrants classified as a liability |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Temporary equity, shares authorized | 17,528,207 | |
Temporary equity, shares issued | 17,031,887 | |
Temporary equity, shares outstanding | 17,031,887 | |
Temporary equity, liquidation preference | $ 282,198 | |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 0 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 21,643,836 |
Common stock, shares issued | 26,336,536 | 1,247,024 |
Common stock, shares outstanding | 26,289,847 | 1,200,335 |
Convertible Preferred Stock | ||
Temporary equity, par value | $ 0.0001 | $ 0.0001 |
Temporary equity, shares authorized | 0 | 17,528,207 |
Temporary equity, shares issued | 0 | 17,031,887 |
Temporary equity, shares outstanding | 0 | 17,031,887 |
Temporary equity, liquidation preference | $ 0 | $ 282,198 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Total revenue | $ 33,197 | $ 23,351 |
Cost of sales | 24,861 | 19,466 |
Gross profit | 8,336 | 3,885 |
Operating expenses: | ||
Selling, general and administrative | 33,913 | 26,695 |
Research and development | 18,568 | 20,461 |
Change in fair value of contingent earnout | 261 | (473) |
Total operating expenses | 52,742 | 46,683 |
Loss from operations | (44,406) | (42,798) |
Interest and financing cost, net | (4,214) | (3,961) |
Change in fair value of warrant liabilities | 71 | 346 |
Change in fair value of forward obligation | 52 | (250) |
Loss before income tax expense | (48,497) | (46,663) |
Income tax expense | (2) | (2) |
Net loss and comprehensive loss | $ (48,499) | $ (46,665) |
Net loss per share attributable to common stock - basic and diluted | $ (8.52) | $ (39.02) |
Weighted-average shares outstanding - basic and diluted | 5,694,594 | 1,195,944 |
Product | ||
Total revenue | $ 25,811 | $ 17,338 |
Cost of sales | 21,992 | 17,152 |
Gross profit | 3,819 | 186 |
Operating expenses: | ||
Selling, general and administrative | 31,781 | 24,794 |
Research and development | 16,959 | 19,027 |
Change in fair value of contingent earnout | 261 | (473) |
Total operating expenses | 49,001 | 43,348 |
Loss from operations | (45,182) | (43,162) |
Software | ||
Total revenue | 7,386 | 6,013 |
Cost of sales | 2,869 | 2,314 |
Gross profit | 4,517 | 3,699 |
Operating expenses: | ||
Selling, general and administrative | 2,132 | 1,901 |
Research and development | 1,609 | 1,434 |
Total operating expenses | 3,741 | 3,335 |
Loss from operations | $ 776 | $ 364 |
CONSOLIDATED STATEMENTS OF CONV
CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Total | Convertible Preferred Stock | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Deficit | |
Convertible Preferred Stock Beginning balance, Shares at Dec. 31, 2019 | 17,031,887 | ||||||
Convertible Preferred Stock Beginning balance at Dec. 31, 2019 | $ 281,342 | ||||||
Beginning balance, Shares at Dec. 31, 2019 | 1,179,296 | ||||||
Beginning balance at Dec. 31, 2019 | $ (208,914) | $ 2 | $ (51) | $ 8,015 | $ (216,880) | ||
Exercise of stock options | 44 | 44 | |||||
Exercise of stock options, Shares | 21,039 | ||||||
Stock-based compensation | 1,644 | 1,644 | |||||
Net loss | $ (46,665) | (46,665) | |||||
Convertible Preferred Stock Ending balance, Shares at Dec. 31, 2020 | 17,031,887 | 17,031,887 | |||||
Convertible Preferred Stock Ending balance at Dec. 31, 2020 | $ 281,342 | [1] | $ 281,342 | ||||
Ending balance, Shares at Dec. 31, 2020 | 1,200,335 | ||||||
Ending balance at Dec. 31, 2020 | (253,891) | $ 2 | (51) | 9,703 | (263,545) | ||
Conversion of convertible preferred stock into common stock on initial public offering | $ (281,342) | ||||||
Conversion of convertible preferred stock into common stock on initial public offering, shares | (17,031,887) | ||||||
Conversion of convertible preferred stock into common stock on initial public offering | 281,342 | $ 17 | 281,325 | ||||
Conversion of convertible preferred stock into common stock on initial public offering, shares | 17,031,887 | ||||||
Settlement of outstanding forward obligation into common stock on initial public offering | 2,698 | 2,698 | |||||
Settlement of outstanding forward obligation into common stock on initial public offering, shares | 224,842 | ||||||
Issuance of common stock in initial public offering, net of discounts and offering costs of $9.8 million | 83,792 | $ 7 | 83,785 | ||||
Issuance of common stock in initial public offering, net of discounts and offering costs of $9.8 million, shares | 7,800,000 | ||||||
Reclassification of convertible preferred stock warrant into common stock warrant on initial public offering | 3,978 | 3,978 | |||||
Exercise of stock options | 271 | 271 | |||||
Exercise of stock options, Shares | 79,472 | ||||||
Stock-based compensation | 2,372 | 2,372 | |||||
Net loss | (48,499) | (48,499) | |||||
Convertible Preferred Stock Ending balance, Shares at Dec. 31, 2021 | 0 | ||||||
Ending balance, Shares at Dec. 31, 2021 | 26,336,536 | ||||||
Ending balance at Dec. 31, 2021 | $ 72,063 | $ 26 | $ (51) | $ 384,132 | $ (312,044) | ||
[1] | The carrying value reflects the gross proceeds received from the sale of the preferred stock net of issuance costs and the fair value at issuance of preferred stock warrants classified as a liability |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (Parenthetical) $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Statement Of Stockholders Equity [Abstract] | |
Net of discounts and offering costs | $ 9.8 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (48,499) | $ (46,665) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 1,426 | 2,079 |
Amortization intangible assets | 586 | 531 |
Amortization of right-of-use lease assets | 985 | 957 |
Stock-based compensation | 2,372 | 1,644 |
Change in fair value of warrant liabilities | (71) | (346) |
Amortization of debt issuance costs | 778 | 807 |
Loss on disposal of assets | 2 | 57 |
Change in fair value of forward obligation | (52) | 250 |
Change in fair value of contingent earnout | 261 | (473) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (582) | 707 |
Inventory | (3,812) | 2,379 |
Prepaid expenses and other assets | (2,646) | 156 |
Accounts payable | 1,128 | (369) |
Accrued expenses and other liabilities | (71) | (1,850) |
Deferred revenue | (72) | 222 |
Accrued compensation | (338) | 1,370 |
Net cash used in operating activities | (48,605) | (38,544) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (638) | (916) |
Acquisition of intangible assets | (1,335) | |
Net cash used in investing activities | (1,973) | (916) |
Financing activities: | ||
Proceeds from the issuance of common stock, net of issuance costs | 84,390 | |
Proceeds from exercise of common stock options | 271 | 44 |
Payment of contingent consideration | (667) | (987) |
Borrowing on Small Business Administration loan | 5,138 | |
Repayment on Small Business Administration loan | (5,138) | |
Principal repayments on finance lease | (47) | (40) |
Payments of debt issuance costs | (450) | |
Net cash provided by (used in) financing activities | 83,497 | (983) |
Net increase (decrease) in cash and cash equivalents | 32,919 | (40,443) |
Cash and cash equivalents at beginning of year | 51,722 | 92,165 |
Cash and cash equivalents at end of year | 84,641 | 51,722 |
Cash paid for: | ||
Taxes | 2 | |
Interest | 3,445 | 3,446 |
Supplemental schedule of non-cash investing and financing activities: | ||
Operating lease right-of-use assets obtained in exchange for lease liabilities | 424 | $ 3,082 |
Conversion of convertible preferred stock into common stock on initial public offering | 281,342 | |
Settlement of outstanding forward obligation into common stock on initial public offering | 2,698 | |
Reclassification of convertible preferred stock warrant into common stock warrant on initial public offering | $ 3,978 |
Organization and Basis of Prese
Organization and Basis of Presentation | 12 Months Ended |
Dec. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Basis of Presentation | 1. Organization and Basis of Presentation Description of Business Sonendo, Inc. (“Sonendo” or the “Company”) was incorporated in June 2006 pursuant to the laws of the State of Delaware under the name Dentatek Corporation. In March 2011, the Company changed its name to Sonendo, Inc. The Company is a medical technology company that has developed and is commercializing the GentleWave System to treat tooth decay. The Company’s principal market is the United States. The Company’s products include the GentleWave System, which is cleared by the United States (“U.S.”) Food and Drug Administration (“FDA”) for sale in the U.S., along with the system’s sterilized, single-use procedure instruments. In addition, the Company offers practice management software to enable an integrated digital office for dental practitioners. Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements, including the accounts of Sonendo and its wholly-owned subsidiaries, Pipstek, LLC and TDO Software, Inc. (“TDO”), have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All significant inter-company balances and transactions among the consolidated entities have been eliminated in consolidation. The Company had no foreign-based operations during any of the years presented in the accompanying consolidated financial statements. Initial Public Offering and Reverse Stock Split On October 20, 2021, the Company’s Board of Directors approved an amendment to the Company’s certificate of incorporation to effect a reverse split of shares of the Company’s common stock and convertible preferred stock on a 1-for- 1.825 basis (the “Reverse Stock Split”). The par values of the common stock and convertible preferred stock were not adjusted as a result of the Reverse Stock Split. All references to common stock, options to purchase common stock, convertible preferred stock, warrants and forward obligation issued for preferred stock, share data, per share data and related information contained in the consolidated financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented. Outstanding stock options were proportionately reduced and the respective exercise prices, if applicable, were proportionately increased. The Reverse Stock Split was effected on October 22, 2021. On November 2, 2021, the Company completed its initial public offering (“IPO”) of 7.8 million shares of its common stock at a public offering price of $ 12.00 per share. The aggregate net proceeds from the offering, after deducting underwriting discounts and commissions and other offering expenses, were $ 83.8 million . On November 2, 2021, the Company amended and restated its certificate of incorporation and bylaws which provide for, among other things, the Company’s authorized capital stock to consist of 500,000,000 shares of common stock, par value $ 0.001 per share, and 10,000,000 shares of preferred stock, par value $ 0.001 per share. In addition, upon the closing of the IPO, all 17,031,887 outstanding shares of the Company’s convertible preferred stock were converted into an equal number of shares of common stock, 224,842 shares of common stock were issued in connection with the settlement of the outstanding forward obligation, and 331,503 shares of the warrants to purchase shares of convertible preferred stock were converted into equal number of warrants to purchase shares of common stock. The amended and restated certificate of incorporation defines the voting rights, dividends, liquidation, rights and preferences of each class of stock. Liquidity and Management’s Plans As of December 31, 2021, the Company had cash and cash equivalents of $ 84.6 million . The Company has a limited operating history, and the revenue and income potential of the Company’s business and market are unproven. The Company has experienced net losses and negative cash flows from operations since its inception and as of December 31, 2021 had an accumulated deficit of $ 312.0 million . During the year ended December 31, 2021, the Company incurred net losses of $ 48.5 million and used $ 48.6 million of cash and cash equivalents in operations. The Company will continue to incur significant costs and expenses related to its ongoing operations until it gains market acceptance of products and achieves a level of revenues adequate to support the Company’s operations. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty . Based on its current operating plan, the Company expects that its existing cash and cash equivalents will be sufficient to fund its operating expenses and capital expenditure requirements for at least 12 months from the date of issuance of the accompanying consolidated financial statements. COVID-19 The COVID-19 pandemic negatively impacted the Company's operations, revenue and overall financial condition in 2021 and 2020, and may negatively impact its operations, revenue, and overall financial condition in the future if new and more transmissible variants emerge. For a period of time during 2020, U.S federal, state and local governmental authorities recommended, and in certain cases required, that elective, specialty and other procedures (including root canal procedures) and appointments be suspended or canceled to avoid non-essential patient exposure to medical environments and potential infection with COVID-19 and to focus limited resources and personnel toward the treatment of COVID-19 patients. Even after the “shelter-in-place” orders, quarantines, executive orders a nd similar government orders and restrictions began to be lifted in 2021, the Company continued to experience disruptions to its business, including as a result of customers' continuing reluctance to start root canal procedures in light of the continuing risk posed by the virus. The Company's customers, including endodontists, experienced significant financial hardship and some of them may never fully recover. The number of root canal procedures performed during 2020 and 2021 decreased as a result of the COVID-19 pandemic, and consequently impacted the Company's ability to sell the GentleWave System. The Company also experienced disruptions, and may experience future disruptions, including: delays in capital and clinical sales representatives becoming fully trained and productive; difficulties and delays in dental practitioner outreach and training dental practitioners to use the GentleWave System; travel restrictions; delays in initiation, enrollment and follow-ups of our clinical studies; challenges with maintaining adequate supply from third-party manufacturers of components and finished goods and distribution providers; and access to dental practitioners for training and case support. The COVID-19 pandemic has also resulted in, and may continue to result in, significant disruption to the global financial markets, reducing the Company's ability to access capital, which could in the future negatively affect the Company's liquidity. While COVID-19 cases have decreased in 2022, primarily as a result of more individuals being vaccinated, the duration and ultimate economic impact of the COVID-19 pandemic on the Company's business remains uncertain at this time. The Company expects that any future restrictions on dental procedures, as a result of COVID-19 or the emergence of any vaccine resistant variant, would have a negative impact on its operations, revenue and overall financial condition. Operating Segments The Company operates two operating and reportable segments: Product and Software. Operating segments are defined as components of an enterprise for which discrete financial information is available and evaluated regularly by the chief operating decision maker, who is the Company’s chief executive officer (“CEO”), for the purpose of allocating resources and assessing performance. Description of the activities within these segments is included in Note 12. Emerging growth company status The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to avail itself of this exemption and, therefore, for new or revised accounting standards applicable to public companies, the Company will be subject to an extended transition period until those standards would otherwise apply to private companies. |
Summary of Accounting Policies
Summary of Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Accounting Policies | 2. Summary of Accounting Policies Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make informed estimates, judgements and assumptions that affect the reported amounts in the consolidated financial statements and disclosures in the accompanying notes, including estimates of probable losses and expenses, as of the date of the accompanying consolidated financial statements. Management considers many factors in selecting appropriate financial accounting policies and in developing the estimates and assumptions that are used in the preparation of these consolidated financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including the expected business and operational changes, the sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates. Actual results could differ materially from the estimates and assumptions used in the preparation of the accompanying consolidated financial statements under different assumptions or conditions. Cash Equivalents The Company's cash equivalents represent highly liquid investments in money market funds with an original maturity of three months or less at the date of purchase that can be liquidated without prior notice or penalty. Concentration of Risks Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash, cash equivalents and accounts receivable. The Company has established guidelines to mitigate such potential risks by maintaining the Company’s cash balances with entities that management believes possess high credit quality to limit the amount of credit exposure. Substantially all of the Company’s cash and cash equivalents are maintained at one financial institution domiciled in the United States. Cash and cash equivalents can exceed amounts insured by the Federal Deposit Insurance Corporation of up to $ 250,000 . The Company has not experienced any losses in its accounts and management believes it is not exposed to any significant credit risk on cash and cash equivalents. The primary objectives of the Company’s investment portfolio are the preservation of capital and maintenance of liquidity. The Company believes any concentration of credit risk in its accounts receivable is mitigated by its credit evaluation process, relatively short collection terms and the level of credit worthiness of its customers. No individual customer accounted for more than 10% of sales or accounts receivable in 2021 or 2020. The Company sources materials and services through several vendors. Certain materials are sourced from a single vendor. The loss of certain vendors could result in a temporary disruption of the Company’s commercialization efforts. The Company’s products require clearance from the FDA and foreign regulatory agencies before commercial sales can commence. There can be no assurance that the Company’s products in development will receive any of these required clearances. The denial or delay of such clearances may have a material adverse impact on the Company’s business in the future. In addition, after the clearance by the FDA, there is still an ongoing risk of adverse events that did not appear during the device clearance process. The Company is subject to risks common to companies in the medical device industry, including, but not limited to, new technological innovations, clinical development risk, establishment of appropriate commercial partnerships, protection of proprietary technology, compliance with government and environmental regulations, uncertainty of market acceptance of its products, product liability and the need to obtain additional financing. Accounts Receivable, Net Accounts receivable pertain to contracts with customers who are granted credit by the Company in the ordinary course of business and are recorded at the invoiced amount. Accounts receivable do not bear interest. Accounts receivable presented on the consolidated balance sheets are adjusted for any write-offs and net of allowance for credit losses. The Company’s allowance for credit losses is developed by using relevant available information including historical collection and loss experience, current economic conditions, prevailing economic conditions, supportable forecasted economic conditions and evaluations of customer balances. Once a receivable is deemed uncollectible after collection efforts have been exhausted, it is written off against the allowance for credit losses. The Company closely monitors the credit quality of its customers and does not generally require collateral or other security on receivables. The allowance for credit losses is measured on a collective basis when similar risk characteristics exist. The Company’s estimate of current expected credit losses was immaterial as of December 31, 2021 and 2020, respectively, and there were immaterial write-offs. Inventory Inventory consists of finished products, work-in-process and raw materials and is valued at the lower of cost or net realizable value. Cost may include materials, labor and manufacturing overhead. Cost is determined by the first in first out inventory method. The carrying value of inventory is reviewed for potential impairment whenever indicators suggest that the cost of inventory exceeds the carrying value and management adjusts the inventory to its net realizable value. The Company also periodically evaluates inventory for estimated losses from excess quantities and obsolescence and writes down the cost of inventory to net realizable value at the time such determinations are made. Net realizable value is determined using the estimated selling price, in the ordinary course of business, less estimated costs to complete and dispose. Property and Equipment, Net Property and equipment are recorded at cost, net of accumulated depreciation. The Company records depreciation over the estimated useful lives of the assets, typically three to five years , using the straight-line method, and amortizes leasehold improvements using a straight-line method over the shorter of the estimated economic lives or the related remaining lease term. Repairs and maintenance expenditures that do not significantly add value to property and equipment, or prolong the useful lives of the assets, are charged to expense as incurred. Gains and losses on dispositions of property and equipment are included in the operating results of the related period. Leases Lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized when the Company takes possession of the leased property (the “Commencement Date”) based on the present value of lease payments over the lease term. At the inception of a contract, the Company determines whether the arrangement is or contains a lease based on the facts and circumstances present. Operating lease right-of-use assets also include any lease payments made at or before lease commencement and exclude any lease incentives received. The lease terms used to calculate the right-of-use asset and related lease liability include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company elected the practical expedient to exclude short-term agreements of less than 12 months from capitalization and not to separate lease and non-lease components. The Company enters into various operating leases for office space. The leases expire at various dates, have various options to renew, and may contain escalation provisions. Rent expense on cancelable leases containing known future scheduled rent increases is recorded on a straight-line basis over the term of the respective leases beginning on the Commencement Date. The difference between rent expense and rent paid is accounted for as a component of operating lease right-of-use assets on the accompanying consolidated balance sheets. Landlord improvement allowances and other such lease incentives are recorded as property and equipment and as reduction of the right-of-use leased assets and are amortized on a straight-line basis as a reduction to operating lease costs. The key estimates for the Company’s leases include the incremental borrowing rate used to determine the present value of lease payments and the lease term. The Company’s leases generally do not include an implicit rate; therefore, management establishes a rate of interest the Company would have to pay on a collateralized borrowing, for an amount equal to the lease payments, over a similar term and in a similar economic environment. Goodwill and Intangible Assets Goodwill represents the excess of cost over fair value of identified assets acquired and liabilities assumed by the Company in an acquisition of a business. The determination of the value of goodwill and intangible assets arising from a business combination requires extensive use of accounting estimates and judgments to allocate the purchase price to the fair value of the net tangible and intangible assets acquired. The Company recorded $ 8.5 million of goodwill in conjunction with the acquisition of TDO. The Company performs its goodwill impairment analysis at the reporting unit level, which aligns with the Company’s reporting structure and availability of discrete financial information. The Company performs its annual impairment analysis by either comparing a reporting unit’s estimated fair value to its carrying amount or doing a qualitative assessment of a reporting unit’s fair value from the last quantitative assessment to determine if there is potential impairment. The Company may do a qualitative assessment when the results of the previous quantitative test indicated the reporting unit’s estimated fair value was significantly in excess of the carrying value of its net assets and it does not believe there have been significant changes in the reporting unit’s operations that would significantly decrease its estimated fair value or significantly increase its net assets. If a quantitative assessment is performed the evaluation includes management estimates of cash flow projections based on internal future projections and/or use of a market approach by looking at market values of comparable companies. Key assumptions for these projections include revenue growth, future gross and operating margin growth, and its weighted cost of capital and terminal growth rates. The revenue and margin growth is based on increased sales of new and existing products as the Company maintains investments in research and development. Additional assumed value creators may include increased efficiencies from capital spending. The resulting cash flows are discounted using a weighted average cost of capital. Operating mechanisms and requirements to ensure that growth and efficiency assumptions will ultimately be realized are also considered in the evaluation. The Company’s annual evaluation for impairment of goodwill consists of the software reporting unit from which the goodwill originated. In accordance with the Company’s policy, the Company completed its most recent annual evaluation for impairment as of December 31, 2021 using a qualitative assessment and determined that no impairment existed. The assumptions used in the estimate of fair value are generally consistent with the past performance of the Company and are also consistent with the projections and assumptions that are used in current operating plans. The assumptions are subject to change as a result of changing economic and competitive conditions. Definite-lived intangible assets are recorded at cost, net of accumulated amortization, and are amortized on a straight-line basis over their estimated useful life, which range from five to ten years . In determining the useful lives of intangible assets, the Company considers the expected use of the assets and the effects of obsolescence, demand, competition, anticipated technological advances, market influences and other economic factors. Trademarks and trade names that are related to products are assigned lives consistent with the period in which the products bearing each brand are expected to be sold. The Company evaluates its intangible assets with finite lives for indicators of impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors that could trigger an impairment review include significant under-performance relative to expected historical or projected future operating results, significant changes in the manner of the Company’s use of the acquired assets or the strategy for the Company’s overall business or significant negative industry or economic trends. If this evaluation indicates that the value of the intangible asset may be impaired, the Company makes an assessment of the recoverability of the net carrying value of the asset over its remaining useful life. If this assessment indicates that the intangible asset is not recoverable, based on the estimated undiscounted future cash flows of the technology over the remaining amortization period, the Company reduces the net carrying value of the related intangible asset to fair value and may adjust the remaining amortization period. An impairment analysis is subjective and assumptions regarding future growth rates and operating expense levels can have a significant impact on the expected future cash flows and impairment analysis. No indicators of impairment were identified in the years ended December 31, 2021 and 2020. Fair Value of Financial Instruments The Company applies fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The Company’s financial instruments consist principally of cash, cash equivalents, accounts receivable, accounts payable, operating lease liabilities, warrant liabilities, forward obligation, contingent earnout, and a term loan. Fair value is measured as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. Valuation techniques that are consistent with the market, income or cost approach are used to measure fair value. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels: Level 1 – Observable inputs such as unadjusted quoted prices in active markets that are accessible at the measurement date for identical unrestricted assets or liabilities the Company has the ability to access. Level 2 – Inputs (other than quoted prices included within Level 1) that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3 – Unobservable inputs that are significant to the fair value measurement and reflect the reporting entity’s use of significant management judgment and assumptions when there is little or no market data. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques and significant management judgment or estimation. These include the Black-Scholes option-pricing model which uses inputs such as expected volatility, risk-free interest rate and expected term to determine fair market valuation. Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. The Company reviews the fair value hierarchy classification at each reporting date. Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain assets or liabilities within the fair value hierarchy. The Company did no t have any transfers of assets and liabilities between the levels of the fair value measurement hierarchy during the years presented. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and certain accrued expenses approximate fair value due to the short-term nature of these items. Accordingly, the Company estimates that the recorded amounts approximate fair market value. Warrant Liabilities The Company recognizes freestanding warrants to purchase shares of its convertible preferred stock as a liability recognized at fair value as these warrant instruments are embedded in contracts that may be cash settled. The redeemable convertible preferred stock warrants were issued for no cash consideration as detachable freestanding instruments but can be converted to convertible preferred stock at the holder’s option based on the exercise price of the warrant. However, the deemed liquidation provisions of the convertible preferred stock are considered contingent redemption provisions that are not solely within the control of the Company. Therefore, the convertible preferred stock was classified in temporary equity on the accompanying consolidated balance sheets, and the warrants to purchase the convertible preferred stock were classified as liabilities as of December 31, 2020. The warrants were recorded on the accompanying consolidated balance sheets at their fair value on the date of issuance and subject to re-measurement at each balance sheet date. Changes in fair value for warrants classified as liabilities were recognized as a component of other income (expense), net on the accompanying consolidated statements of operations and comprehensive loss. The Company estimated the fair value of these liabilities using option pricing models and assumptions that are based on the individual characteristics of the warrants or instruments on the valuation date, as well as assumptions for expected volatility, expected life, yield, and risk-free interest rate. Pursuant to the terms of the warrants, on conversion of the class of convertible preferred stock underlying the warrant into common stock in connection with the Company’s IPO, the warrants automatically became exercisable for shares of the Company’s common stock, were no longer redeemable or subject to remeasurement, and were reclassified as a component of equity. Revenue Recognition Contracts with Customers The Company recognizes revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods and services. Specifically, the Company applies the following five core principles to recognize revenue: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when, or as, the Company satisfies a performance obligation. Product revenue is generated from sales of the GentleWave console and related procedure instruments and accessories. Software revenue is generated from sales of TDO’s The Digital Office endodontist practice management software licenses. The Company’s products are sold primarily in the United States directly to customers through its field sales force. Performance Obligations The Company’s performance obligations primarily arise from the manufacture and delivery of the GentleWave System, related procedure instruments and accessories, and the delivery or license of TDO software and related ancillary services. Payment terms are typically on open credit terms consistent with industry practice and do not have significant financing components. Consideration may be variable based on volume. The Company considers the individual deliverables in its product offering as separate performance obligations and assesses whether each promised good or service is distinct. The total contract transaction price is determined based on the consideration expected to be received, based on the stated value in contractual arrangements or the estimated cash to be collected in no-contracted arrangements, and is allocated to the identified performance obligations based upon the relative standalone selling prices of the performance obligations. The stand-alone selling price is based on an observable price offered to other comparable customers. The Company estimates the standalone selling price using the market assessment approach considering market conditions and entity-specific factors including, but not limited to, features and functionality of the products and services, geographies, type of customer and market conditions. The Company regularly reviews and updates standalone selling prices as necessary. The consideration the Company receives in exchange for its goods or services is only recognized when it is probable that a significant reversal will not occur. The consideration to which the Company expects to be entitled includes a stated list price, less various forms of variable consideration. The Company estimates related variable consideration at the point of sale, including discounts, product returns, refunds, and other similar obligations. Revenue is recognized over time when the customer simultaneously receives and consumes the benefits provided by the Company’s performance. Revenue is recognized at a point in time if the criteria for recognizing revenue over time are not met, and the Company has transferred control of the goods to the customer. Product revenue is recognized at a point in time when the Company has transferred control to the customer, which is generally when title of the goods transfers to the customer. Software is licensed via delivery to the customer or via a service arrangement under which cloud-based access is provided on a subscription basis (software-as-a-service). When a fixed up-front license fee is received in exchange for the delivery of software, revenue is recognized at the point in time when the delivery of the software has occurred. When software is licensed on a subscription basis, revenue is recognized over the respective license period. The Company also sells extended service contracts on its GentleWave Systems. Sales of extended service contracts are recorded as deferred revenue until such time as the standard warranty expires, which is generally up to two years from the date of sale. Service contract revenue is recognized on a straight-line basis over time consistent with the life of the related service contract in proportion to the costs incurred in fulfilling performance obligations under the service contract. Revenue for technical support and other services is recognized ratably over the performance obligation period. The Company generally does not experience returns. If necessary, a provision is recorded for estimated sales returns and allowances and is deducted from gross product revenue to arrive at net product revenue in the period the related revenue is recorded. These estimates are based on historical sales returns and allowances and other known factors. Actual returns and claims in any future period are inherently uncertain and thus may differ from these estimates. If actual or expected future returns and claims are significantly greater or lower than the reserves established, a reduction or increase to revenue will be recorded in the period in which such a determination is made. All non-income government-assessed taxes (sales and use taxes) collected from the Company’s customers and remitted to governmental agencies are recorded in accrued expenses and other current liabilities until they are remitted to the government agency. The Company has adopted the practical expedient permitting the direct expensing of costs incurred to obtain contracts where the amortization of such costs would occur over one year or less, and it applied to substantially all the Company’s contracts. Contract liabilities The Company recognizes a contract liability when a customer pays for good or services for which the Company has not yet transferred control. The balances of the Company’s contract liabilities are as follows: Year Ended December 31, 2021 2020 (in thousands) Extended service contracts $ 251 $ 271 Subscription software licenses 520 572 Total contract liabilities 771 843 Less: long-term portion — 5 Contract liabilities – current $ 771 $ 838 Contract liabilities are included within other current liabilities and other long-term liabilities in the accompanying consolidated balance sheets. Revenue recognized during the years ended December 31, 2021 and 2020 that was included in the contract liability beginning balance of each year was $ 0.8 million and $ 0.6 million , respectively. Disaggregation of revenue The Company disaggregates revenue from contracts with customers by segment and by the timing of when goods and services are transferred which depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected. The following table provides information regarding revenues disaggregated by segment and the timing of when goods and services are transferred: Year Ended December 31, 2021 2020 (in thousands) Product revenue recognized at a point in time $ 25,025 $ 16,857 Product revenue recognized over time 786 481 Software revenue recognized at a point in time 851 997 Software revenue recognized over time 6,535 5,016 Total $ 33,197 $ 23,351 Shipping and handling costs All customer related shipping and handling costs are expensed as incurred and are charged to cost of sales. Charges to customers for shipping and handling are credited to revenue. Advertising costs All advertising costs are expensed as incurred. Advertising costs incurred and recorded in the accompanying consolidated statements of comprehensive loss during each of the years ended December 31, 2021 and 2020 were approximate ly $ 0.3 m illion. Warranty Reserve The Company provides a standard warranty on its GentleWave Systems for a specified period of time. For the years ended December 31, 2021 and 2020, GentleWave Systems sold were covered by the warranty for a period of up to two years from the date of sale. Estimated warranty costs are recorded as a liability at the time of delivery with a corresponding provision to cost of sales. Warranty expenses expected to be incurred within 12 months from the date of sale are classified as other current liabilities while those expected to be incurred after 12 months from the date of sale are classified as other liabilities in the accompanying consolidated balance sheets. Warranty accruals are estimated based on the current product costs, the Company’s historical experience, management’s expectations of future conditions and standard maintenance schedules. The Company evaluates this reserve on a regular basis and makes adjustments as necessary. The following table provides a reconciliation of the change in estimated warranty liabilities for the years ended December 31, 2021 and 2020: Year Ended December 31, 2021 2020 Balance at beginning of period $ 1,584 $ 3,447 Provision for warranties issued 1,515 996 Warranty costs incurred ( 1,479 ) ( 2,859 ) Balance at end of period $ 1,620 $ 1,584 Current portion $ 1,132 $ 1,202 Non-current portion 488 382 Total $ 1,620 $ 1,584 The warranty liability, current and non-current, are included in other current liabilities and other liabilities, respectively, on the consolidated balance sheets. Research and Development Research and development (“R&D”) expenses consist of costs incurred for proprietary R&D programs, and are recorded to operating expenses when incurred. Research and development expenses primarily include (1) personnel-related costs, including compensation and benefits and stock-based compensation associated with R&D personnel, (2) costs related to clinical and pre-clinical testing of the Company’s technologies under development, and (3) other R&D expenses. Costs to acquire technologies to be used in R&D that have not reached technological feasibility and have no alternative future use are also expensed as incurred. Stock-Based Compensation The Company periodically grants equity-based payment awards in the form of stock options to employees, directors and non-employees and records stock-based compensation expenses for awards of stock-based payments based on their estimated fair value at the grant date. The Company recognizes stock-based compensation expense for all equity-based payments, including stock options. Stock-based compensation costs are calculated based on the estimated fair value of the underlying option using the Black-Scholes option-pricing model on the date of grant for stock options and recognized as expense in the accompanying consolidated statement of comprehensive loss on a straight-line basis over the requisite service period, which is the vesting period. Determining the appropriate fair value model and related input assumptions requires judgment, including estimating the fair value of the Company’s common stock, stock price volatility, and expected term: • Prior to the Company's IPO, given the absence of a public trading market, the fair value of the Company’s common stock was determined by the Company’s Board of Directors (the “Board”) at the time of each option grant by considering a number of objective and subjective factors. These factors included the valuation of a select group of public peer group companies within the medical device industry that focus on technological advances and development that the Board believed was comparable to the Company’s operations; operating and financial performance; the lack of liquidity of the common stock and trends in the broader economy and medical device industry also impacted the determination of the fair value of the common stock. In addition, the Company regularly engaged a third-party valuation specialist to assist with estimates related to the valuation of the Company’s common stock; • The risk-free interest rate used is based on the published U.S. Department of Treasury interest rates in effect at the time of stock option grant for zero coupon U.S. Treasury notes with maturities approximating each grant’s expected term; • The dividend yield is zero as the Company has not paid dividends and does not anticipate paying a cash dividend in the foreseeable future; • The expected term for options granted is calculated using the “simplified method” and represents the average time that options are expected to be outstanding based on the mid-point between the vesting date and the end of the contractual term of the award; • Expected volatility is derived from the historical volatilities of a select group of comparable peer companies, for a look-back period commensurate with the expected term of the stock options, as the Company has limited trading history of its common stock and limited data regarding company‑specific historical or implied volatility of its share price. No compensation cost is recognized for awards with performance conditions until that condition is probable of being met. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Income Taxes The Company accounts for income taxes under the asset and liability method. Accordingly, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using the enacted tax rates in effect for the year in which the differences are expected to reverse. Estimates and judgments occur in the calculation of certain tax liabilities and in the determination of the recoverability of certain deferred income tax assets, which arise from temporary differences and carryforwards. A valuation allowance related to a deferred tax asset is recorded when it is more likely |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Dec. 31, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Components | 3. Balance Sheet Components Inventory Inventory as of December 31 consisted of the following: 2021 2020 (in thousands) Raw materials $ 4,911 $ 2,114 Work in process 270 308 Finished goods 2,969 1,916 Total inventory $ 8,150 $ 4,338 The Company recorded a reserve for excess and obsolete inventory of $ 0.7 million an d $ 1.1 million as of December 31, 2021 and 2020, respectively. Property and equipment, net Property and equipment, net as of December 31 consis ted of the following: 2021 2020 (in thousands) Laboratory and warehouse equipment and tooling $ 5,937 $ 5,120 Computer equipment and software 1,501 1,492 Office furniture and fixtures 1,489 1,489 Leasehold improvements 2,585 2,585 Automobiles 29 29 Construction in progress 418 719 11,959 11,434 Less: accumulated depreciation ( 9,593 ) ( 8,281 ) Property and equipment, net $ 2,366 $ 3,153 Depreciation expense was $ 1.4 million and $ 2.1 million for the years ended December 31, 2021 and 2020, respectively. During 2021, approximately $ 0.1 million depreciation expense was recorded in Cost of sales, $ 0.8 million was recorded in Selling, general and administrative expenses, and $ 0.5 million was recorded in Research and development expenses in the consolidated statements of operations and comprehensive Loss. During 2020, approximately $ 0.5 million depreciation expense was recorded in Cost of sales, $ 1.2 million was recorded in Selling, general and administrative expenses, and $ 0.4 million was recorded in Research and development expenses in the accompanying consolidated statements of operations and comprehensive loss. Intangible assets, net Intangible assets as of December 31consisted of the following: 2021 Weighted Average Amortization Period Gross Accumulated Net (in years) (in thousands) Developed Technology ( 5 - 10 years) 4.0 $ 2,445 $ 768 $ 1,677 Customer relationships ( 7 years) 2.8 1,910 875 1,035 Tradenames ( 10 years) 0.8 360 116 244 Total intangible assets 7.6 $ 4,715 $ 1,759 $ 2,956 2020 Weighted Average Amortization Period Gross Accumulated Net (in years) (in thousands) Developed Technology ( 5 years) 1.6 $ 1,110 $ 490 $ 620 Customer relationships ( 7 years) 4.0 1,910 603 1,307 Tradenames ( 10 years) 1.1 360 79 281 Total intangible assets 6.7 $ 3,380 $ 1,172 $ 2,208 During 2021 and 2020, the Company did no t record any impairment charges related to intangible assets. Amortization expense was $ 0.6 million and $ 0.5 million in the years ended December 31, 2021 and 2020, respectively. During 2021, approximately $ 0.2 million amortization expense was recorded in Cost of sales and $ 0.4 million was recorded in Selling, general and administrative expenses in the accompanying consolidated statements of operations and comprehensive loss. During 2020, approximately $ 0.2 million amortization expense was recorded in Cost of sales and $ 0.3 million was recorded in Selling, general and administrative expenses in the accompanying consolidated statements of operations and comprehensive loss. The following table presents estimated future annual amortization expense related to intangible assets, net as of December 31, 2021: Future Intangible Asset Amortization Expenses (in thousands) 2022 $ 664 2023 618 2024 442 2025 386 2026 170 Thereafter 676 Total future amortization expense $ 2,956 Accrued Expenses Accrued expenses as of December 31 c onsisted of the following: 2021 2020 (in thousands) Vendor invoices $ 2,779 $ 2,232 Other accrued expenses 1,979 1,015 Total accrued expenses $ 4,758 $ 3,247 Other Current Liabilities Other current liabilities as of December 31 con sisted of the following: 2021 2020 (in thousands) Finance lease liability $ 55 $ 47 Contingent earnout 524 667 Warranty liability 1,132 1,202 Other current liabilities 771 840 Total other current liabilities $ 2,482 $ 2,756 Other Liabilities Other liabilities as of December 31 consisted of the following: 2021 2020 (in thousands) Non-current finance lease liability $ 70 $ 125 Non-current contingent earnout — 263 Other non-current liabilities 488 388 Total other liabilities $ 558 $ 776 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 4. Fair Value of Financial Instruments The following table provides the assets and liabilities measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such value at December 31: 2021 Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (in thousands) Assets: Money market funds $ 84,102 $ 84,102 $ — $ — Liabilities: Contingent earnout $ 524 $ — $ — $ 524 2020 Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (in thousands) Assets: Money market funds $ 50,897 $ 50,897 $ — $ — Liabilities: Warrants $ 1,914 $ — $ — $ 1,914 Forward obligation $ 2,750 $ — $ — $ 2,750 Contingent earnout $ 930 $ — $ — $ 930 Recurring liabilities included in Level 3 for the years presented consisted of preferred stock warrants, a forward obligation to transfer shares of Series D preferred stock, and a contingent earnout. The following tables present the rollforward of the estimated fair values for instruments classified by the Company within Level 3 of the fair value hierarchy defined above, measured using significant unobservable inputs: Warrant Forward Contingent Total (in thousands) December 31, 2020 $ 1,914 $ 2,750 $ 930 $ 5,594 Payment of contingent earnout — — ( 667 ) ( 667 ) Addition 2,135 — — 2,135 Change in fair value ( 71 ) ( 52 ) 261 138 Reclassification to equity upon initial public offering ( 3,978 ) — — ( 3,978 ) Settlement of forward obligation into common stock on initial public offering — ( 2,698 ) — ( 2,698 ) December 31, 2021 $ — $ — $ 524 $ 524 Warrant Forward Contingent Total (in thousands) December 31, 2019 $ 2,260 $ 2,500 $ 2,390 $ 7,150 Payment of contingent earnout — — ( 987 ) ( 987 ) Change in fair value ( 346 ) 250 ( 473 ) ( 569 ) December 31, 2020 $ 1,914 $ 2,750 $ 930 $ 5,594 There were no transfers in or out of Level 3, other than the reclassification of the warrant liability and settlement of forward obligation on the IPO during the year ended December 31, 2021. There were no transfers in or out of Level 3 during the year ended December 31, 2020. Warrants In 2009, the Company executed two convertible note and warrant purchase agreements (the “2009 Notes”) with certain stockholders. The principal and unpaid interest on the 2009 Notes was converted into shares of Series B preferred stock in March 2010. In connection with the 2009 Notes, the Company issued immediately exercisable warrants to the holders to purchase an aggregate of 76,956 shares of the Company’s Series B preferred stock. In 2019, 70,078 of these warrants were exercised in exchange for $ 0.5 million in cash while the remaining 6,878 warrants expired unexercised. In December 2013, the Company entered into a $ 10.0 million term loan facility with Oxford Finance LLC. The term loan was repaid in full in June 2017 . In connection with the term loan, the Company issued immediately exercisable warrants to the lender for the purchase of 27,397 shares of the Company’s Series C-1 preferred stock equal to three percent of the aggregate amount funded. In June 2017, the Company entered into a term loan facility with Perceptive Credit Holdings, LP, which was subsequently amended (see Note 9). Upon funding of the initial loan, and each initial tranche of the amended loans, the Company issued immediately exercisable warrants to the lender for the purchase of 54,793 shares of the Company’s Series D preferred stock, and 249,313 shares of the Company’s Series E preferred stock. In August 2021, the Company amended its term loan with Perceptive Credit Holdings, LP and issued immediately exercisable warrants to the lender for the purchase of 150,684 shares of the Company’s Series E preferred stock. The fair value at issuance of the Series E preferred stock warrants related to the August 2021 amendment was $ 2.1 million. Prior to the Company's IPO in November 2021, the Company recognized warrants to purchase shares of convertible preferred stock as liabilities, reflecting deemed liquidation provisions of the convertible preferred stock considered contingent redemption provisions that were not solely within the Company's control. Upon the closing of the IPO, the contingent redemption provisions were removed with the automatic conversion of the underlying preferred stock to common stock, and the Company revalued the convertible preferred stock warrants and reclassified the liability to stockholders equity. The common stock warrants are no longer subject to remeasurement subsequent to the IPO. Warrants at December 31 included t he following: Warrants outstanding Estimated fair value Warrants Number of warrants issued Exercise price per share 2021 2020 2020 (in thousands) Series C-1 27,397 $ 10.95 27,397 27,397 $ 225 Series D 54,793 $ 17.80 54,793 54,793 500 Series E 49,315 $ 20.08 49,315 49,315 575 Series E 49,314 $ 20.08 49,314 49,314 614 Series E 150,684 $ 20.08 150,684 — — 331,503 331,503 180,819 $ 1,914 As of December 31, 2020, warrants fully vested and outstanding had estimated fair values ranging between $ 7.78 to $ 12.45 . Fair values were determined using the option-pricing model with the following input assumptions for the year ended December 31: 2021 (1) 2020 Expected volatility range (weighted average) 78.86 % to 87.02 % ( 83.73 %) 78.57 to 81.37 % ( 79.91 %) Dividend yield 0.00 % 0.00 % Risk-free interest rates range (weighted average) 0.30 % to 1.25 % ( 1.07 %) 0.17 % to 0.81 % ( 0.65 %) Expected term range (average) 2.35 years to 10.00 years ( 8.02 years) 3.00 years to 8.77 years ( 7.26 years) (1) For period from beginning of the year to completion of the IPO, November 2, 2021 Assumptions were weighted by the relative fair value of the instruments. An increase in the expected volatility, risk-free interest rates, and expected term would result in an increase to the estimated value of the warrants while an increase in the dividend yield would result in a decrease to the estimated value of the warrants. These warrants expire between December 2023 and August 2031 . Forward obligation In connection with a December 2016 asset acquisition, a portion of the transaction consideration included the issuance of a maximum of 224,842 shares of the Company's Series D Preferred Stock, issued, paid and deliverable upon the earliest to occur of (i) an extraordinary event, as defined in the purchase agreement; (ii) a public offering of any securities of the Company, in which the shares of the Series D preferred stock of the Company are converted in accordance with the then effective certificate of incorporation of the Company, or in connection with which the holders of the Series D preferred stock agree to convert their shares of series D preferred stock into conversion shares, as defined in the purchase agreement; or (iii) the 7th anniversary after the closing of the transaction. The Company measured the estimated value of the shares of Series D Preferred Stock as of the acquisition date based on the estimated fair value of the Series D preferred stock reflecting a discount for marketability. The fair value of the forward obligation was estimated by the Board with input from a third party valuation specialist, based on management estimates and assumptions reflecting the anticipated timing of delivery of the underlying preferred stock and utilizing the probability tree valuation method. This approach calculates estimated fair value by future cash flows attributable to the forward obligation using significant unobservable inputs, including the probabilities of multiple scenarios with individual probabilities ranging from 10 % to 40 %, and estimates of the timing of the achievement of various liquidity event scenarios. In connection with the Company’s IPO, the Company settled the forward obligation by issuing 224,842 shares of common stock. Contingent earnout In connection with the acquisition of TDO, the Company recorded a liability related to certain contingent earnout provisions, which were based on annual sales of licenses and units, as defined in the stock purchase agreement, for each of the years ending December 31, 2019, 2020, and 2021. The fair value of the contingent earnout was estimated by management with input from a third party valuation specialist, using a Monte Carlo simulation model consistent with that utilized at the time of acquisition. The valuation utilized certain significant unobservable inputs which included forecast sales projections and discount rate, of 7.6 % as of December 31, 2020. During the year ended December 31, 2021 and 2020, the Company paid $ 0.7 million and $ 1.0 million, respectively. As of December 31, 2021, the Company recorded an accrual of $ 0.5 million for the contingent earnout, which was paid in Febru ary 2022. The co ntingent earnout period ended December 31, 2021, and the Company is not required to make any additional contingent earnout payment. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Shareholders' Equity | 5. Shareholders’ Equity Authorized Shares On November 2, 2021, the Company amended and restated its certificate of incorporation and bylaws which provide for, among other things, the Company’s authorized capital stock to consist of 500,000,000 shares of common stock, par value $ 0.001 per share, and 10,000,000 shares of preferred stock, par value $ 0.001 per share, which are unrelated to the shares of preferred stock that were converted to shares of common stock upon the closing of IPO. Convertible Preferred Stock The Company classified convertible preferred stock as temporary equity on the accompanying consolidated balance sheet as of December 31, 2020, as all such preferred stock is redeemable either at the option of the holder or upon an event outside the control of the Company. The requirements of a deemed liquidation event, as defined within its amended and restated certificate of incorporation filed in 2019 were not entirely within the Company’s control. In the event of such a deemed liquidation event, the proceeds from the event are distributed in accordance with the liquidation preferences, provided that the holders of preferred stock have not converted their shares into common stock. The Company recorded the issuance of preferred stock at the issuance price less related issuance costs. The Company did not adjust the carrying value of outstanding preferred stock to its liquidation preference because a deemed liquidation event was not probable of occurring as of the end of the reporting period. The following table summarizes information related to issuance of the Company’s preferred stock as of December 31, 2020: Preferred Number of Shares Carrying (1) Number of Liquidation (in thousands) (in thousands) Series A-1 730,591 730,591 $ 500 730,591 $ 500 Series B 955,573 955,573 6,999 955,573 6,941 Series C 917,554 917,554 9,073 917,554 9,210 Series C-1 1,671,229 1,643,832 17,941 1,643,832 18,000 Series D 4,261,994 3,982,359 70,686 3,982,359 70,847 Series E 8,991,266 8,801,978 176,143 8,801,978 176,700 17,528,207 17,031,887 $ 281,342 17,031,887 $ 282,198 (1) The carrying value reflects the gross proceeds received from the sale of the preferred stock net of issuance costs and the fair value at issuance of preferred stock warrants classified as a liability Upon the closing of the Company's IPO, all 17,031,887 outstanding shares of the Company’s convertible preferred stock were converted into an equal number of shares of common stock. |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Based Compensation | 6. Stock Based Compensation 2017 and 2021 Incentive Plan During 2017, the Company adopted a stock option plan (the “2017 Plan”) which replaced the Company’s 2007 stock option plan (the “2007 Plan”). Following the adoption of the 2017 Plan, no stock options were granted under the 2007 Plan. The exercise price of options granted under the 2017 Plan were set at fair market value at the date of the grant as estimated by the Company’s Board with an exer cise price of no less than 100 % of estimated fair market value on the date of grant. In connection with its IPO, the Company adopted the 2021 Equity Incentive Plan (the "2021 Plan"). The types of awards that may be granted under the 2021 Plan include stock options, including incentive stock options and nonqualified stock options, restricted stock, dividend equivalents, restricted stock units (“RSUs”), stock appreciation rights, and other stock or cash awards . Under the 2021 Plan, the vesting of stock awards is typically over four years . Following the adoption of the 2021 Plan, no further awards will be made under the 2017 Plan. Stock-based Compensation Expenses The following tables present the Company's stock-based compensation for equity-settled awards by type and financial statement lines included in the accompanying consolidated statement of operations and comprehensive loss for the years ended December 31: 2021 2020 (in thousands) Options $ 2,258 $ 1,644 RSUs 114 - Total stock-based compensation expense $ 2,372 $ 1,644 2021 2020 (in thousands) Cost of sales $ 230 $ 164 Selling, general and administrative 1,574 1,038 Research and development 568 442 Total stock-based compensation expense $ 2,372 $ 1,644 C o m p e n s a t i o n c o s t r e l a t e d t o u n v e s t e d s t o c k o p t i o n s a n d R S U s w i l l g e n e r a l l y b e a m o r t i z e d o n a s t r a i g h t - l i n e b a sis o v e r t h e r e m a i n i n g a v e r a g e s e r v i c e p e r i o d . T h e f o l l o w i n g t a b l e p r e s e n t s t h e u n am o rt i z e d c o m p e n s a t io n c o s t a n d w e i g h t e d a v e r a g e s e r v i c e p e r i o d o f a l l u n v e s t e d o u t s t a n d i n g a w a r d s a s o f D e c e m b e r 3 1 , 2 0 2 1 . Unamortized Compensation Costs Weighted Average Service Period (in thousands) (years) Options $ 9,575 3.2 RSUs 2,672 3.8 Total unamortized compensation cost $ 12,247 P l a n A c t i v i t i e s T h e f o l l o w i n g t a b l e s u m m a r i z e s s t o c k o p t i o n a c t i v i t y u n d e r t h e C o m p a n y ' s i n c e n t i v e p l a n s : Number Weighted Weighted- Average Remaining Contractual Life Aggregate Intrinsic Value (in years) (in thousands) Options outstanding, December 31, 2019 1,861,712 $ 3.98 Granted 907,997 $ 7.01 Exercised ( 11,104 ) $ 3.82 $ 35 Forfeited ( 511,469 ) $ 4.29 Options outstanding, December 31, 2020 2,247,136 $ 5.13 Granted 1,130,249 $ 11.98 Forfeited ( 175,030 ) $ 6.44 Exercised ( 79,076 ) $ 3.39 $ 669 Expired ( 3,286 ) $ 0.73 Options outstanding, December 31, 2021 3,119,993 $ 7.59 7.6 $ 2,325 Options vested and exercisable, December 31, 2021 1,487,143 $ 4.65 5.8 $ 2,229 Vested and expected to vest after December 31, 2021 2,918,841 $ 7.40 7.5 $ 2,311 The weighted-average grant-date fair value of options granted during the years ended December 31, 2021 and 2020 was $ 8.34 per share and $ 4.57 per share respectively. The following table summarizes the non-vested stock options as of December 31, 2021 and 2020: Number of Shares Weighted Non-vested Options, December 31, 2020 1,112,206 $ 4.21 Non-vested Options, December 31, 2021 1,632,852 $ 7.09 The total fair value of shares vested during the years ended December 31, 2021 and 2020 was $ 2.0 million and $ 1.3 million respectively. Certain stock option grants under the 2017 Plan allow the recipient to exercise the options prior to the options becoming fully vested. Under the 2017 Plan, the Company retains the right to repurchase common shares that have been issued upon early exercise of options at the original issue price. During the year ended December 31, 2021, the Company did not repurchase shares. There was no material amount of shares of common stock subject to repurchase as of December 31, 2021. Cash received for the early exercise of unvested stock options is initially recorded as a liability and are released to equity over the vesting period. During 2021 and 2020, early exercised stock options vested were immaterial. T h e f o l l o w i n g t a b l e s u m m a r i z e s R S U a c t i v i t y u n d e r t h e C o m p a n y ' s i n c e n t i v e p l a n s : Number Weighted RSUs outstanding, December 31, 2020 — $ — Granted 338,149 $ 9.37 RSUs outstanding, December 31, 2021 338,149 $ 9.37 F a i r V a l u e V a l u a t i o n A s s u m p t i o n s T h e fair value of the Company's stock options awards is estimated at the date of grant using the Black-Scholes option-pricing model with the following input assumptions during the year ended December 31 : 2021 2020 Range Weighted Average Range Weighted Average Expected volatility 80.49 % - 83.14 % 81.82 % 74.49 % - 82.26 % 75.42 % Dividend yield 0.00 % 0.00 % Risk-free interest rates 0.87 % - 1.31 % 1.19 % 0.27 % - 0.83 % 0.73 % Expected term (in years) 5.49 - 6.64 6.05 5.00 - 6.60 6.00 T h e f a i r v a l u e o f t h e C o m p a n y ' s R S U a w a r d s i s d e t e r m i n e d b a s e d u p o n t h e c l o s i n g p r i c e o f t h e C o m p a n y ' s s t o c k p r i c e o n t h e d a t e o f g r a n t . Stock Reserved for Issuance A s o f D e c e m b e r 3 1 , 2 0 2 1 , 6.5 m i l l i o n s h a r e s o f c o m m o n s t o c k were r e s e r v e d f o r i s s u a n c e u n d e r t h e C o m p a n y ' s i n c e n t i v e p l a n s . |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Leases | 7. Leases The Company leases office space under operating leases with expirations ranging from April 2022 to March 2025, some of which include rent escalations or an option to extend the lease for up to three years per renewal. The exercise of lease renewal options is at the sole discretion of the Company. Where real estate leases contain an option to renew, any period beyond the option date is only included as part of the lease term if the Company is reasonably certain to exercise the option. As of December 31, 2021, the Company has not entered into any leases that have not yet commenced that would entitle the Company to significant rights or create additional obligations. The Company determines whether a contract is or contains a lease at the inception of the contract. A contract will be deemed to be or contain a lease if the contract conveys the right to control and direct the use of identified property, plant, or equipment for a period of time in exchange for consideration. The Company generally must also have the right to obtain substantially all of the economic benefits from the use of the property, plant, and equipment. The Company has elected the practical expedient to not separate its lease component from non-lease component for its real estate leases. The Company has elected the practical expedient not to apply the lease recognition requirements to short-term leases with an initial term of 12 months or less. The Company uses either its incremental borrowing rate or the implicit rate in the lease agreement as the basis to calculate the present value of future lease payments at lease commencement. The incremental borrowing rate represents the rate the Company would have to pay to borrow funds on a collateralized basis over a similar term and in a similar economic environment. Future minimum lease payments under these leases are as follows: Lease Amounts (in thousands) 2022 $ 1,225 2023 1,038 2024 618 2025 104 2026 and thereafter — Total future minimum lease payments 2,985 Less: Imputed Interest ( 280 ) Present value of operating lease liabilities $ 2,705 Less: Current portion 975 Long-term operating lease liabilities $ 1,730 Weighted average remaining lease term in years 2.71 Weighted average discount rate 7.61 % Variable operating lease expenses consist primarily real estate taxes and insurance. The components of lease expense and related cash fl ows were as follows: Year Ended December 31, 2021 2020 (in thousands) Rent expense $ 1,204 $ 1,122 Short-term lease costs — 197 Variable lease costs 99 94 Total $ 1,303 $ 1,413 Cash paid for operating leases $ 1,206 $ 1,116 Year Ended December 31, 2021 2020 (in thousands) Cost of sales $ 219 $ 239 Selling, general and administrative 1,084 1,174 Total $ 1,303 $ 1,413 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. Commitments and Contingencies Contingencies The Company is subject to claims and assessments from time to time in the ordinary course of business, including without limitation, actions with respect to intellectual property, employment, regulatory, product liability and contractual matters. In connection with these proceedings or matters, the Company regularly assesses the probability and amount (or range) of possible issues based on the developments in these proceedings or matters. A liability is recorded in the accompanying consolidated financial statements if it is determined that it is probable that a loss has been incurred, and that the amount (or range) of the loss can be reasonably estimated. The Company’s management does not believe that any such matters, individually or in the aggregate, will have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows. |
Term Loan
Term Loan | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Term Loan | 9. Term Loan Perceptive loan On June 23, 2017, the Company entered into an aggregate $ 20.0 million delayed-draw term loan with Perceptive Credit Holdings, LP (the “Perceptive Loan”). The initial loan of $ 10.0 million was made in a single borrowing on June 23, 2017. The interest rate for the loan was the greater of the 1-month LIBOR and 2.00 % plus the applicable margin of 9.25 % ( 11.25 % at June 23, 2017 and December 31, 2021). In connection with the Perceptive Loan, the Company issued 54,793 warrants on its Series D Preferred shares (see Note 5). On October 16, 2018, the Company amended the terms of the Perceptive Loan (the “Amended Perceptive Loan”), providing an additional tranche consisting of two borrowings; an initial draw in the amount of $ 10.0 million with an initial delayed draw date that was extended from December 22, 2017 to October 31, 2018 and a delayed-draw term loan in the amount of $ 10.0 million that was required to be initiated on or before December 31, 2019. The initial draw was exercised on October 16, 2018 and required a loan origination fee of 1.50 % of the principal amount borrowed. In addition, the Company issued 49,315 warrants on its Series E Preferred shares upon the initial borrowing on the Amended Perceptive Loan (see Note 5). The Company evaluated the amendment as a modification. The subsequent delayed-draw term loan under the Amended Perceptive Loan was exercised on October 7, 2019 and included warrants of 49,314 Series E Preferred shares. In conjunction with the borrowing, the Company paid an origination fee equal to 1.50 % of the principal amount borrowed as well as lender’s legal fees and expenses. On October 7, 2019, the Company entered into a second amendment to the Perceptive Loan (the “Second Amended Perceptive Loan”), providing two additional tranches of delayed-draw term loans of $ 10.0 million each, for an aggregate amount of $ 20.0 million. The additional tranches were required to be initiated on or before December 31, 2020 and each included warrants of 32,876 shares of Series E Preferred shares. The second of these additional delayed-draw term loans included a revenue milestone requiring the achievement of a minimum level of trailing twelve month revenues prior to exercising the delayed-draw loan. The Second Amended Perceptive Loan also modified the repayment of all outstanding principal to be due at maturity on June 23, 2022 . The Company evaluated the amendment as a modification. The additional tranches were not exercised prior to their expiration. On May 15, 2020, the Company entered into a third amendment to the Perceptive Loan, which allowed the Company to waive the defaults that occurred with the initial grant and subsequent repayment of the Paycheck Protection Program (the “PPP loan”). The Company evaluated the amendment as a modification. On October 13, 2020, the Company entered into a fourth amendment to the Perceptive Loan, which amended the Perceptive Loan to remove the required revenue covenant calculation dates of September 30, 2020 and December 31, 2020. The Company accounted for the amendment as a modification. On August 23, 2021, the Company entered into a fifth amendment to the Perceptive Loan (the “Fifth Amended Perceptive Loan”) which transferred the loan to Perceptive Credit Holdings III, LP and provides two additional tranches of delayed-draw term loans of $ 10.0 million each, for an aggregate amount of $ 20.0 million. The Fifth Amended Perceptive Loan included warrants to purchase 150,684 shares of Series E Preferred shares at $ 11.00 per share. The Fifth Amended Perceptive Loan modified the repayment of all outstanding principal to be due at maturity on August 23, 2026 . In conjunction with the amendment, the Company paid a closing fee equal to $ 0.5 million as well as lender’s legal fees and expenses. The Company accounted for the amendment as a modification. On December 31, 2021, the first tranche of $ 10.0 million loan expired. The obligation of Perceptive Credit Holdings III, LP to make the second tranche loan is subject to the making of the first tranche. Because the Company did not draw t he first tranche, the second tranche due on March 31, 2 022 has also been forfeited. For the year ended December 31, 2021, the effective interest rate of the Perceptive Loan was 14.59 %. As of December 31, 2021 and 2020, the fair value of the Perceptive Loan approximates its carrying amount. Future principal repayments on the Perceptive Loan, as amended, as of December 31, 2021, are as follows: Principal (in thousands) 2026 $ 30,000 Total $ 30,000 The amended and restated credit agreement also includes financial covenants that require the Company to (i) maintain, at all times, a minimum aggregate balance of $ 3.0 million in cash in one or more controlled accounts, and (ii) satisfy certain minimum revenue thresholds, measured for the twelve consecutive month period on each calendar quarter-end until June 30, 2026. These thresholds increase over time and range from $ 26.4 million for the twelve month period ended September 30, 2021 to $ 95.3 million for the twelve month period ended June 30, 2026. Failure to satisfy these financial covenants would constitute an event of default under the agreement. During the year ended December 31, 2021, the Company was in compliance with all financial covenants and conditions required by the outstanding Perceptive Loan. Small Business Administration Paycheck Protection Program Loan (“PPP Loan”) On April 22, 2020, the Company was granted a loan in the aggregate amount of $ 5.1 million, pursuant to the Paycheck Protection Program (the “PPP loan”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The receipt of this loan triggered an event of default under the Perceptive Loan, which was subsequently waived by the lender through the third amendment on May 15, 2020 discussed above. On May 7, 2020, the PPP Loan was repaid in full. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes The income tax provision for the years ended December 31, 2021 and 2020 was immaterial. The effective tax rate was 0 % for the years ended December 31, 2021 and 2020 and differs from the statutory federal income tax rate due to the deferred tax assets being subject to a full valuation allowance. The provision (benefit) for income taxes charged to operations was as follows: 2021 2020 (in thousands) Current tax expense U.S. federal $ — $ — State and local 2 2 Total current 2 2 Deferred tax expense: U.S. federal $ — $ — State and local — — Total deferred — — Total provision for income taxes $ 2 $ 2 Pursuant to Internal Revenue Code ("IRC") Sections 382 and 383 as well as similar state provisions, annual use of the Company’s net operating loss and R&D credit carryforwards may be limited in the event a cumulative change in ownership. In general, an “ownership change,” as defined by IRC Section 382, results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders or public groups. The Company has not completed an IRC Sections 382 and 383 analysis regarding the limitation of net operating loss and R&D credit carryforwards as of December 31, 2021. The Company has not completed a formal R&D study but has estimated the federal and California credit for purposes of the tax footnote as of December 31, 2021. However, the Company has not reflected a benefit in the consolidated financial statements due to the recorded valuation allowance. A reconciliation of the provision for income taxes with the expected income tax computed by applying the statutory federal income tax rate to loss before provision for income taxes and a reconciliation of the statutory federal rate and the effective rate was calculated as follows: Year Ended December 31, 2021 2020 Tax computed at federal statutory rate 21.00 % 21.00 % State income tax - net of federal benefit 3.31 % 3.01 % Tax credits 1.13 % 1.44 % Change in valuation allowance ( 25.51 )% ( 26.65 )% Stock-based compensation ( 0.20 )% ( 0.22 )% Other deferred adjustments 0.56 % 1.51 % Permanent items ( 0.29 )% ( 0.09 )% Income tax provision 0.00 % 0.00 % The significant components that comprised the Company’s net deferred taxes at December 31, 2021 and 2020 are as follows: 2021 2020 (in thousands) Deferred tax assets: Net operating loss carryforwards $ 70,731 $ 60,260 Fixed assets and intangible assets 1,449 1,507 Lease liabilities 660 783 Accruals and reserves 1,178 1,349 Stock-based compensation 864 410 Tax credits 4,763 4,191 State Taxes 3 - Other 890 49 Gross deferred tax assets 80,538 68,549 Less: valuation allowance ( 79,476 ) ( 64,211 ) Net deferred tax assets 1,062 4,338 Deferred tax liabilities: Fixed assets and intangible assets ( 392 ) ( 605 ) Right-of-use assets ( 670 ) ( 773 ) State Taxes - ( 2,960 ) Total gross deferred tax liabilities: ( 1,062 ) ( 4,338 ) Net deferred tax asset (liability) $ — $ — The tax effects of items that give rise to significant portions of deferred tax assets are primarily net operating loss carryforwards. The Company evaluates the recoverability of deferred tax assets and assesses all available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. Based on the weight of all the evidence, including a history of operating losses and the Company’s ability to generate future taxable income to realize these assets, a full valuation allowance has been recorded to offset the net deferred tax asset as realization of such asset is uncertain. On the basis of this evaluation, as of December 31, 2021, a valuation allowance of $ 79.5 million has been recorded to recognize only the portion of the deferred tax asset that is more likely than not to be realized. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as the Company’s projections for growth. As of December 31, 2021 and 2020, the Company had federal net operating loss carryforwards of approximately $ 287.6 million and $ 245.4 million, respectively and state net operating loss carryforwards of $ 173.4 million and $ 145.0 million, respectively. The federal and state loss carryforwards begin to expire in 2026 , unless previously utilized. Due to the enactment of the Tax Cuts and Jobs Act, federal net operating losses generated beginning in 2018 are carried forward indefinitely. Therefore $ 170.5 million of federal net operating loss carryforwards will not expire. As of December 31, 2021 and 2020, the Company also had federal research and development tax credit carry-forwards of approximately $ 3.3 million and $ 2.9 million, respectively and state research and development tax credit carry-forwards of approximately $ 3.9 million and $ 3.4 million, respectively. The federal research and development tax credits will begi n to expire in 2032 . The California research a nd development tax credits carry-forward indefinitely. Any uncertain tax positions would be related to tax years that remain open and subject to examination by the relevant tax authorities. The Company has no liabilities recorded for uncertain tax positions but does have unrecognized tax benefits of $ 1.8 million which have been recorded as a direct reduction to the deferred tax asset as of the year ended December 31, 2021. The Company has no t accrued for interest or penalties associated with unrecognized tax liabilities. The Company is subject to U.S. federal tax authority examinations and U.S. state tax authority examinations for all years due to the net operating loss carryforwards. The Company files a federal U.S. tax return and several U.S. state income tax returns with varying statues of limitations. The following changes occurred in the amount of unrecognized tax benefits: 2021 2020 (in thousands) Gross unrecognized tax benefits at the beginning of the year $ 1,575 $ 1,311 Increases related to current year tax positions 204 251 Increases related to prior year tax positions 12 13 Gross unrecognized tax benefits at the end of the year $ 1,791 $ 1,575 On March 27, 2020, the United States enacted the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). The CARES Act is an emergency economic stimulus package that includes spending and tax breaks to strengthen the United States economy and fund a nationwide effort to curtail the effects of COVID-19. While the CARES Act provides sweeping tax changes in response to the pandemic, some of the more significant provisions which are expected to impact the Company’s financial statements include removal of certain limitations on utilization of net operating losses, increasing the loss carryback period for certain losses to five years and increasing the ability to deduct interest expense, as well as amending certain provisions of the previously enacted Tax Cuts and Jobs Act. The Company does not believe that the CARES Act will have a material impact on its financial position, results of operations, or cash flows. On December 27, 2020, the United States enacted the Consolidated Appropriations Act, which extended many of the benefits of the CARES Act that were scheduled to expire. The Company is evaluating the impact of the Consolidated Appropriations Act on its financial statements and related disclosures and does not expected a material impact. On June 29, 2020, the state of California enacted Assembly Bill No. 85 (AB 85) suspending California net operating loss utilization and imposing a cap on the amount of business incentive tax credits companies can utilize, effective for tax years 2020, 2021 and 2022. There was no material impact from the provisions of AB 85 in 2020. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 11. Related-Party Transactions During the years ended December 31, 2021 and 2020, the Company incur red an immaterial amount and $ 0.2 mill ion, respectively, for facility space, finance and accounting services and other general and administrative support services to a company owned and operated by a stockholder, who is also a member of the Company’s Board. The transactions are recorded as selling, general and administrative expenses on the consolidated statements of comprehensive loss. During each of the years ended December 31, 2021 and 2020, the Company paid $ 0.2 m illion for facility space and other general and administrative support services to a company owned and operated by the former owner of TDO who is now an employee of the Company. The transactions were recorded as selling, general and administrative expenses in the accompanying consolidated statements of comprehensive loss. Amounts payable as of December 31, 2021 and 2020 are not material. During the years ended December 31, 2021 and 2020, the Company paid $ 0.7 million and $ 1.0 million, respectively, of the contingent earnout to the former owner of TDO. See Note 4 for fu rther discussion of contingent earnout payment. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | 12. Segment Information The Company operates and reports its results in two business segments, Product and Software. The Company reports segment information based on the management approach. The management approach designates the internal reporting used by CODM for decision making and performance assessment as the basis for determining the Company’s reportable segments. The performance measures of the Company’s reportable segments is primarily income (loss) from operations. Income (loss) from operations for each segment includes all revenues, related cost of net revenues, gross margin and operating expenses directly attributable to the segment. The Company’s Product segment includes GentleWave System console and related accessories and instruments. The GentleWave System offers a novel approach to root canal therapy, using advanced fluid dynamics, broad-spectrum acoustic energy and accelerated chemistry to deliver optimal cleaning and disinfection of the root canal system. The Company’s Software segment includes selling traditional software licenses for practice management software to enable an integrated digital office for endodontists as well as Software-as-a-Service subscriptions for the software. The following tables present the Company’s segment information as of and for the years ended December 31: 2021 2020 (in thousands, except percentage data) Product Software Total Product Software Total Revenue $ 25,811 $ 7,386 $ 33,197 $ 17,338 $ 6,013 $ 23,351 Cost of sales 21,992 2,869 24,861 17,152 2,314 19,466 Gross profit 3,819 4,517 8,336 186 3,699 3,885 Gross margin 15 % 61 % 25 % 1 % 62 % 17 % Operating expenses: Selling, general and administrative 31,781 2,132 33,913 24,794 1,901 26,695 Research and development 16,959 1,609 18,568 19,027 1,434 20,461 Change in fair value of contingent earnout 261 — 261 ( 473 ) — ( 473 ) Total operating expenses 49,001 3,741 52,742 43,348 3,335 46,683 Income (loss) from operations $ ( 45,182 ) $ 776 $ ( 44,406 ) $ ( 43,162 ) $ 364 $ ( 42,798 ) Depreciation: 2021 2020 (in thousands) Product $ 1,409 $ 2,059 Software 17 20 Total $ 1,426 $ 2,079 Segment Assets: 2021 2020 (in thousands) Product $ 104,588 $ 64,021 Software 10,911 12,120 Total $ 115,499 $ 76,141 |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 13. Net Loss Per Share The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders for the periods presented: Year Ended December 31, 2021 2020 (in thousands, except shares and per share data) Numerator: Net loss attributable to common stock holders $ ( 48,499 ) $ ( 46,665 ) Denominator: Weighted-average shares outstanding – basic and diluted 5,694,594 1,195,944 Net loss per share – basic and diluted $ ( 8.52 ) $ ( 39.02 ) The following potentially dilutive securities were excluded from the computation of diluted net loss per share calculations for the periods presented because the impact of including them would be anti-dilutive: Year Ended December 31, 2021 2020 Convertible preferred stock — 17,031,887 Stock options 3,119,993 2,247,136 RSUs 338,149 — Warrants 331,503 180,819 Forward obligation — 224,842 Total 3,789,645 19,684,684 |
Summary of Accounting Policies
Summary of Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make informed estimates, judgements and assumptions that affect the reported amounts in the consolidated financial statements and disclosures in the accompanying notes, including estimates of probable losses and expenses, as of the date of the accompanying consolidated financial statements. Management considers many factors in selecting appropriate financial accounting policies and in developing the estimates and assumptions that are used in the preparation of these consolidated financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including the expected business and operational changes, the sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates. Actual results could differ materially from the estimates and assumptions used in the preparation of the accompanying consolidated financial statements under different assumptions or conditions. |
Cash Equivalents | Cash Equivalents The Company's cash equivalents represent highly liquid investments in money market funds with an original maturity of three months or less at the date of purchase that can be liquidated without prior notice or penalty. |
Concentration of Credit Risk | Concentration of Risks Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash, cash equivalents and accounts receivable. The Company has established guidelines to mitigate such potential risks by maintaining the Company’s cash balances with entities that management believes possess high credit quality to limit the amount of credit exposure. Substantially all of the Company’s cash and cash equivalents are maintained at one financial institution domiciled in the United States. Cash and cash equivalents can exceed amounts insured by the Federal Deposit Insurance Corporation of up to $ 250,000 . The Company has not experienced any losses in its accounts and management believes it is not exposed to any significant credit risk on cash and cash equivalents. The primary objectives of the Company’s investment portfolio are the preservation of capital and maintenance of liquidity. The Company believes any concentration of credit risk in its accounts receivable is mitigated by its credit evaluation process, relatively short collection terms and the level of credit worthiness of its customers. No individual customer accounted for more than 10% of sales or accounts receivable in 2021 or 2020. The Company sources materials and services through several vendors. Certain materials are sourced from a single vendor. The loss of certain vendors could result in a temporary disruption of the Company’s commercialization efforts. The Company’s products require clearance from the FDA and foreign regulatory agencies before commercial sales can commence. There can be no assurance that the Company’s products in development will receive any of these required clearances. The denial or delay of such clearances may have a material adverse impact on the Company’s business in the future. In addition, after the clearance by the FDA, there is still an ongoing risk of adverse events that did not appear during the device clearance process. The Company is subject to risks common to companies in the medical device industry, including, but not limited to, new technological innovations, clinical development risk, establishment of appropriate commercial partnerships, protection of proprietary technology, compliance with government and environmental regulations, uncertainty of market acceptance of its products, product liability and the need to obtain additional financing. |
Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable pertain to contracts with customers who are granted credit by the Company in the ordinary course of business and are recorded at the invoiced amount. Accounts receivable do not bear interest. Accounts receivable presented on the consolidated balance sheets are adjusted for any write-offs and net of allowance for credit losses. The Company’s allowance for credit losses is developed by using relevant available information including historical collection and loss experience, current economic conditions, prevailing economic conditions, supportable forecasted economic conditions and evaluations of customer balances. Once a receivable is deemed uncollectible after collection efforts have been exhausted, it is written off against the allowance for credit losses. The Company closely monitors the credit quality of its customers and does not generally require collateral or other security on receivables. The allowance for credit losses is measured on a collective basis when similar risk characteristics exist. The Company’s estimate of current expected credit losses was immaterial as of December 31, 2021 and 2020, respectively, and there were immaterial write-offs. |
Inventory | Inventory Inventory consists of finished products, work-in-process and raw materials and is valued at the lower of cost or net realizable value. Cost may include materials, labor and manufacturing overhead. Cost is determined by the first in first out inventory method. The carrying value of inventory is reviewed for potential impairment whenever indicators suggest that the cost of inventory exceeds the carrying value and management adjusts the inventory to its net realizable value. The Company also periodically evaluates inventory for estimated losses from excess quantities and obsolescence and writes down the cost of inventory to net realizable value at the time such determinations are made. Net realizable value is determined using the estimated selling price, in the ordinary course of business, less estimated costs to complete and dispose. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment are recorded at cost, net of accumulated depreciation. The Company records depreciation over the estimated useful lives of the assets, typically three to five years , using the straight-line method, and amortizes leasehold improvements using a straight-line method over the shorter of the estimated economic lives or the related remaining lease term. Repairs and maintenance expenditures that do not significantly add value to property and equipment, or prolong the useful lives of the assets, are charged to expense as incurred. Gains and losses on dispositions of property and equipment are included in the operating results of the related period. |
Leases | Leases Lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized when the Company takes possession of the leased property (the “Commencement Date”) based on the present value of lease payments over the lease term. At the inception of a contract, the Company determines whether the arrangement is or contains a lease based on the facts and circumstances present. Operating lease right-of-use assets also include any lease payments made at or before lease commencement and exclude any lease incentives received. The lease terms used to calculate the right-of-use asset and related lease liability include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company elected the practical expedient to exclude short-term agreements of less than 12 months from capitalization and not to separate lease and non-lease components. The Company enters into various operating leases for office space. The leases expire at various dates, have various options to renew, and may contain escalation provisions. Rent expense on cancelable leases containing known future scheduled rent increases is recorded on a straight-line basis over the term of the respective leases beginning on the Commencement Date. The difference between rent expense and rent paid is accounted for as a component of operating lease right-of-use assets on the accompanying consolidated balance sheets. Landlord improvement allowances and other such lease incentives are recorded as property and equipment and as reduction of the right-of-use leased assets and are amortized on a straight-line basis as a reduction to operating lease costs. The key estimates for the Company’s leases include the incremental borrowing rate used to determine the present value of lease payments and the lease term. The Company’s leases generally do not include an implicit rate; therefore, management establishes a rate of interest the Company would have to pay on a collateralized borrowing, for an amount equal to the lease payments, over a similar term and in a similar economic environment. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the excess of cost over fair value of identified assets acquired and liabilities assumed by the Company in an acquisition of a business. The determination of the value of goodwill and intangible assets arising from a business combination requires extensive use of accounting estimates and judgments to allocate the purchase price to the fair value of the net tangible and intangible assets acquired. The Company recorded $ 8.5 million of goodwill in conjunction with the acquisition of TDO. The Company performs its goodwill impairment analysis at the reporting unit level, which aligns with the Company’s reporting structure and availability of discrete financial information. The Company performs its annual impairment analysis by either comparing a reporting unit’s estimated fair value to its carrying amount or doing a qualitative assessment of a reporting unit’s fair value from the last quantitative assessment to determine if there is potential impairment. The Company may do a qualitative assessment when the results of the previous quantitative test indicated the reporting unit’s estimated fair value was significantly in excess of the carrying value of its net assets and it does not believe there have been significant changes in the reporting unit’s operations that would significantly decrease its estimated fair value or significantly increase its net assets. If a quantitative assessment is performed the evaluation includes management estimates of cash flow projections based on internal future projections and/or use of a market approach by looking at market values of comparable companies. Key assumptions for these projections include revenue growth, future gross and operating margin growth, and its weighted cost of capital and terminal growth rates. The revenue and margin growth is based on increased sales of new and existing products as the Company maintains investments in research and development. Additional assumed value creators may include increased efficiencies from capital spending. The resulting cash flows are discounted using a weighted average cost of capital. Operating mechanisms and requirements to ensure that growth and efficiency assumptions will ultimately be realized are also considered in the evaluation. The Company’s annual evaluation for impairment of goodwill consists of the software reporting unit from which the goodwill originated. In accordance with the Company’s policy, the Company completed its most recent annual evaluation for impairment as of December 31, 2021 using a qualitative assessment and determined that no impairment existed. The assumptions used in the estimate of fair value are generally consistent with the past performance of the Company and are also consistent with the projections and assumptions that are used in current operating plans. The assumptions are subject to change as a result of changing economic and competitive conditions. Definite-lived intangible assets are recorded at cost, net of accumulated amortization, and are amortized on a straight-line basis over their estimated useful life, which range from five to ten years . In determining the useful lives of intangible assets, the Company considers the expected use of the assets and the effects of obsolescence, demand, competition, anticipated technological advances, market influences and other economic factors. Trademarks and trade names that are related to products are assigned lives consistent with the period in which the products bearing each brand are expected to be sold. The Company evaluates its intangible assets with finite lives for indicators of impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors that could trigger an impairment review include significant under-performance relative to expected historical or projected future operating results, significant changes in the manner of the Company’s use of the acquired assets or the strategy for the Company’s overall business or significant negative industry or economic trends. If this evaluation indicates that the value of the intangible asset may be impaired, the Company makes an assessment of the recoverability of the net carrying value of the asset over its remaining useful life. If this assessment indicates that the intangible asset is not recoverable, based on the estimated undiscounted future cash flows of the technology over the remaining amortization period, the Company reduces the net carrying value of the related intangible asset to fair value and may adjust the remaining amortization period. An impairment analysis is subjective and assumptions regarding future growth rates and operating expense levels can have a significant impact on the expected future cash flows and impairment analysis. No indicators of impairment were identified in the years ended December 31, 2021 and 2020. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company applies fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The Company’s financial instruments consist principally of cash, cash equivalents, accounts receivable, accounts payable, operating lease liabilities, warrant liabilities, forward obligation, contingent earnout, and a term loan. Fair value is measured as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. Valuation techniques that are consistent with the market, income or cost approach are used to measure fair value. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels: Level 1 – Observable inputs such as unadjusted quoted prices in active markets that are accessible at the measurement date for identical unrestricted assets or liabilities the Company has the ability to access. Level 2 – Inputs (other than quoted prices included within Level 1) that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3 – Unobservable inputs that are significant to the fair value measurement and reflect the reporting entity’s use of significant management judgment and assumptions when there is little or no market data. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques and significant management judgment or estimation. These include the Black-Scholes option-pricing model which uses inputs such as expected volatility, risk-free interest rate and expected term to determine fair market valuation. Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. The Company reviews the fair value hierarchy classification at each reporting date. Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain assets or liabilities within the fair value hierarchy. The Company did no t have any transfers of assets and liabilities between the levels of the fair value measurement hierarchy during the years presented. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and certain accrued expenses approximate fair value due to the short-term nature of these items. Accordingly, the Company estimates that the recorded amounts approximate fair market value. |
Warrant Liabilities | Warrant Liabilities The Company recognizes freestanding warrants to purchase shares of its convertible preferred stock as a liability recognized at fair value as these warrant instruments are embedded in contracts that may be cash settled. The redeemable convertible preferred stock warrants were issued for no cash consideration as detachable freestanding instruments but can be converted to convertible preferred stock at the holder’s option based on the exercise price of the warrant. However, the deemed liquidation provisions of the convertible preferred stock are considered contingent redemption provisions that are not solely within the control of the Company. Therefore, the convertible preferred stock was classified in temporary equity on the accompanying consolidated balance sheets, and the warrants to purchase the convertible preferred stock were classified as liabilities as of December 31, 2020. The warrants were recorded on the accompanying consolidated balance sheets at their fair value on the date of issuance and subject to re-measurement at each balance sheet date. Changes in fair value for warrants classified as liabilities were recognized as a component of other income (expense), net on the accompanying consolidated statements of operations and comprehensive loss. The Company estimated the fair value of these liabilities using option pricing models and assumptions that are based on the individual characteristics of the warrants or instruments on the valuation date, as well as assumptions for expected volatility, expected life, yield, and risk-free interest rate. Pursuant to the terms of the warrants, on conversion of the class of convertible preferred stock underlying the warrant into common stock in connection with the Company’s IPO, the warrants automatically became exercisable for shares of the Company’s common stock, were no longer redeemable or subject to remeasurement, and were reclassified as a component of equity. |
Revenue Recognition | Revenue Recognition Contracts with Customers The Company recognizes revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods and services. Specifically, the Company applies the following five core principles to recognize revenue: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when, or as, the Company satisfies a performance obligation. Product revenue is generated from sales of the GentleWave console and related procedure instruments and accessories. Software revenue is generated from sales of TDO’s The Digital Office endodontist practice management software licenses. The Company’s products are sold primarily in the United States directly to customers through its field sales force. Performance Obligations The Company’s performance obligations primarily arise from the manufacture and delivery of the GentleWave System, related procedure instruments and accessories, and the delivery or license of TDO software and related ancillary services. Payment terms are typically on open credit terms consistent with industry practice and do not have significant financing components. Consideration may be variable based on volume. The Company considers the individual deliverables in its product offering as separate performance obligations and assesses whether each promised good or service is distinct. The total contract transaction price is determined based on the consideration expected to be received, based on the stated value in contractual arrangements or the estimated cash to be collected in no-contracted arrangements, and is allocated to the identified performance obligations based upon the relative standalone selling prices of the performance obligations. The stand-alone selling price is based on an observable price offered to other comparable customers. The Company estimates the standalone selling price using the market assessment approach considering market conditions and entity-specific factors including, but not limited to, features and functionality of the products and services, geographies, type of customer and market conditions. The Company regularly reviews and updates standalone selling prices as necessary. The consideration the Company receives in exchange for its goods or services is only recognized when it is probable that a significant reversal will not occur. The consideration to which the Company expects to be entitled includes a stated list price, less various forms of variable consideration. The Company estimates related variable consideration at the point of sale, including discounts, product returns, refunds, and other similar obligations. Revenue is recognized over time when the customer simultaneously receives and consumes the benefits provided by the Company’s performance. Revenue is recognized at a point in time if the criteria for recognizing revenue over time are not met, and the Company has transferred control of the goods to the customer. Product revenue is recognized at a point in time when the Company has transferred control to the customer, which is generally when title of the goods transfers to the customer. Software is licensed via delivery to the customer or via a service arrangement under which cloud-based access is provided on a subscription basis (software-as-a-service). When a fixed up-front license fee is received in exchange for the delivery of software, revenue is recognized at the point in time when the delivery of the software has occurred. When software is licensed on a subscription basis, revenue is recognized over the respective license period. The Company also sells extended service contracts on its GentleWave Systems. Sales of extended service contracts are recorded as deferred revenue until such time as the standard warranty expires, which is generally up to two years from the date of sale. Service contract revenue is recognized on a straight-line basis over time consistent with the life of the related service contract in proportion to the costs incurred in fulfilling performance obligations under the service contract. Revenue for technical support and other services is recognized ratably over the performance obligation period. The Company generally does not experience returns. If necessary, a provision is recorded for estimated sales returns and allowances and is deducted from gross product revenue to arrive at net product revenue in the period the related revenue is recorded. These estimates are based on historical sales returns and allowances and other known factors. Actual returns and claims in any future period are inherently uncertain and thus may differ from these estimates. If actual or expected future returns and claims are significantly greater or lower than the reserves established, a reduction or increase to revenue will be recorded in the period in which such a determination is made. All non-income government-assessed taxes (sales and use taxes) collected from the Company’s customers and remitted to governmental agencies are recorded in accrued expenses and other current liabilities until they are remitted to the government agency. The Company has adopted the practical expedient permitting the direct expensing of costs incurred to obtain contracts where the amortization of such costs would occur over one year or less, and it applied to substantially all the Company’s contracts. Contract liabilities The Company recognizes a contract liability when a customer pays for good or services for which the Company has not yet transferred control. The balances of the Company’s contract liabilities are as follows: Year Ended December 31, 2021 2020 (in thousands) Extended service contracts $ 251 $ 271 Subscription software licenses 520 572 Total contract liabilities 771 843 Less: long-term portion — 5 Contract liabilities – current $ 771 $ 838 Contract liabilities are included within other current liabilities and other long-term liabilities in the accompanying consolidated balance sheets. Revenue recognized during the years ended December 31, 2021 and 2020 that was included in the contract liability beginning balance of each year was $ 0.8 million and $ 0.6 million , respectively. Disaggregation of revenue The Company disaggregates revenue from contracts with customers by segment and by the timing of when goods and services are transferred which depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected. The following table provides information regarding revenues disaggregated by segment and the timing of when goods and services are transferred: Year Ended December 31, 2021 2020 (in thousands) Product revenue recognized at a point in time $ 25,025 $ 16,857 Product revenue recognized over time 786 481 Software revenue recognized at a point in time 851 997 Software revenue recognized over time 6,535 5,016 Total $ 33,197 $ 23,351 |
Shipping and Handling Costs | Shipping and handling costs All customer related shipping and handling costs are expensed as incurred and are charged to cost of sales. Charges to customers for shipping and handling are credited to revenue. |
Advertising Costs | Advertising costs All advertising costs are expensed as incurred. Advertising costs incurred and recorded in the accompanying consolidated statements of comprehensive loss during each of the years ended December 31, 2021 and 2020 were approximate ly $ 0.3 m illion. |
Warranty Reserve | Warranty Reserve The Company provides a standard warranty on its GentleWave Systems for a specified period of time. For the years ended December 31, 2021 and 2020, GentleWave Systems sold were covered by the warranty for a period of up to two years from the date of sale. Estimated warranty costs are recorded as a liability at the time of delivery with a corresponding provision to cost of sales. Warranty expenses expected to be incurred within 12 months from the date of sale are classified as other current liabilities while those expected to be incurred after 12 months from the date of sale are classified as other liabilities in the accompanying consolidated balance sheets. Warranty accruals are estimated based on the current product costs, the Company’s historical experience, management’s expectations of future conditions and standard maintenance schedules. The Company evaluates this reserve on a regular basis and makes adjustments as necessary. The following table provides a reconciliation of the change in estimated warranty liabilities for the years ended December 31, 2021 and 2020: Year Ended December 31, 2021 2020 Balance at beginning of period $ 1,584 $ 3,447 Provision for warranties issued 1,515 996 Warranty costs incurred ( 1,479 ) ( 2,859 ) Balance at end of period $ 1,620 $ 1,584 Current portion $ 1,132 $ 1,202 Non-current portion 488 382 Total $ 1,620 $ 1,584 The warranty liability, current and non-current, are included in other current liabilities and other liabilities, respectively, on the consolidated balance sheets. |
Research and Development | Research and Development Research and development (“R&D”) expenses consist of costs incurred for proprietary R&D programs, and are recorded to operating expenses when incurred. Research and development expenses primarily include (1) personnel-related costs, including compensation and benefits and stock-based compensation associated with R&D personnel, (2) costs related to clinical and pre-clinical testing of the Company’s technologies under development, and (3) other R&D expenses. Costs to acquire technologies to be used in R&D that have not reached technological feasibility and have no alternative future use are also expensed as incurred. |
Stock-Based Compensation | Stock-Based Compensation The Company periodically grants equity-based payment awards in the form of stock options to employees, directors and non-employees and records stock-based compensation expenses for awards of stock-based payments based on their estimated fair value at the grant date. The Company recognizes stock-based compensation expense for all equity-based payments, including stock options. Stock-based compensation costs are calculated based on the estimated fair value of the underlying option using the Black-Scholes option-pricing model on the date of grant for stock options and recognized as expense in the accompanying consolidated statement of comprehensive loss on a straight-line basis over the requisite service period, which is the vesting period. Determining the appropriate fair value model and related input assumptions requires judgment, including estimating the fair value of the Company’s common stock, stock price volatility, and expected term: • Prior to the Company's IPO, given the absence of a public trading market, the fair value of the Company’s common stock was determined by the Company’s Board of Directors (the “Board”) at the time of each option grant by considering a number of objective and subjective factors. These factors included the valuation of a select group of public peer group companies within the medical device industry that focus on technological advances and development that the Board believed was comparable to the Company’s operations; operating and financial performance; the lack of liquidity of the common stock and trends in the broader economy and medical device industry also impacted the determination of the fair value of the common stock. In addition, the Company regularly engaged a third-party valuation specialist to assist with estimates related to the valuation of the Company’s common stock; • The risk-free interest rate used is based on the published U.S. Department of Treasury interest rates in effect at the time of stock option grant for zero coupon U.S. Treasury notes with maturities approximating each grant’s expected term; • The dividend yield is zero as the Company has not paid dividends and does not anticipate paying a cash dividend in the foreseeable future; • The expected term for options granted is calculated using the “simplified method” and represents the average time that options are expected to be outstanding based on the mid-point between the vesting date and the end of the contractual term of the award; • Expected volatility is derived from the historical volatilities of a select group of comparable peer companies, for a look-back period commensurate with the expected term of the stock options, as the Company has limited trading history of its common stock and limited data regarding company‑specific historical or implied volatility of its share price. No compensation cost is recognized for awards with performance conditions until that condition is probable of being met. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method. Accordingly, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using the enacted tax rates in effect for the year in which the differences are expected to reverse. Estimates and judgments occur in the calculation of certain tax liabilities and in the determination of the recoverability of certain deferred income tax assets, which arise from temporary differences and carryforwards. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion of the deferred tax asset will not be realized. Current income taxes are based on the year’s taxable income for federal and state income tax reporting purposes. The Company assesses the likelihood that deferred tax assets will be recovered as deductions from future taxable income. The evaluation of the need for a valuation allowance is performed on a jurisdiction-by-jurisdiction basis and includes a review of all available positive and negative evidence. Factors reviewed include projections of pre-tax book income for the foreseeable future, determination of cumulative pre-tax book income after permanent differences, earnings history and reliability of forecasting. The Company is required to file federal and state income tax returns in the United States. The preparation of state tax returns requires the Company to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by the Company. The Company’s income tax returns are based on calculations and assumptions that are subject to examination by the Internal Revenue Service and other tax authorities. In addition, the calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. While the Company believes it has appropriate support for the positions taken on its tax returns, the Company regularly assesses the potential outcomes of examinations by tax authorities in determining the adequacy of its provision for income taxes. The Company continually assesses the likelihood and amount of potential revisions and adjusts the income tax provision, income taxes payable and deferred taxes in the period in which the facts that give rise to a revision become known. The Company follows the accounting guidance on accounting for uncertainty in income taxes. The guidance prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. As applicable, the Company recognizes accrued penalties and interest related to unrecognized tax benefits in the provision for income taxes. |
Net Loss Per Share | Net Loss Per Share Basic and diluted net loss per share attributable to common stockholders is computed in conformity with the two-class method required for participating securities. Prior to its IPO, the Company considered all series of its convertible preferred stock to be participating securities as the holders of such stock have the right to receive dividends on a pari passu basis in the event that a dividend is paid on common stock. Prior to the IPO, under the two-class method, the net loss attributable to common stockholders was not allocated to the convertible preferred stock as the preferred stockholders did not have a contractual obligation to share in the Company’s losses. Basic net loss per share is calculated by dividing net loss attributable to Company’s stockholders by the weighted average number of common stock outstanding for the period. Diluted net loss per share is computed by giving effect to all potentially dilutive common stock equivalents to the extent they are dilutive. As applicable, for purposes of this calculation, convertible preferred stock, stock options, and warrants are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is anti-dilutive for all periods presented. Diluted net loss per share is the same as basic net loss per share in periods when the effects of potentially dilutive securities are anti-dilutive. |
Recent Accounting Updates | Recent Accounting Updates Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASU”). ASU’s not listed below were assessed and determined not to be applicable or are expected to have minimal impact on the Company’s consolidated financial statements. Recent Accounting Updates Not Yet Effective In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes.” This guidance, among other provisions, eliminates certain exceptions to existing guidance related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. This guidance also requires an entity to reflect the effect of an enacted change in tax laws or rates in its effective income tax rate in the first interim period that includes the enactment date of the new legislation, aligning the timing of recognition of the effects from enacted tax law changes on the effective income tax rate with the effects on deferred income tax assets and liabilities. Under existing guidance, an entity recognizes the effects of the enacted tax law change on the effective income tax rate in the period that includes the effective date of the tax law. ASU 2019-12 is effective for interim and annual periods beginning after December 15, 2020 with early adoption permitted. This will be effective for the Company as an emerging growth company as defined by the SEC for fiscal years beginning after December 15, 2021, which for the Company is the first quarter of 2022. The Company is currently evaluating the i mpact of this guidance on the consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity,” which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. This will be effective for smaller reporting companies as defined by the SEC for fiscal years beginning after December 15, 2023, which for the Company is the first quarter of 2024, with early adoption permitted beginning first quarter of 2021. The Company is currently assessing the impact of the adoption of this standard on its financial statements as well as whether to early adopt the new standard. In May 2021, the FASB issued ASU 2021-04, “Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)”, which clarifies and reduces diversity in an issuer’s accounting for a modification or an exchange of a freestanding equity-classified written call option that remains equity being classified after modification or exchange as (1) an adjustment to equity and, if so, the related earnings per share (EPS) effects, if any, or (2) an expense and, if so, the manner and pattern of recognition. This will be effective for fiscal years beginning after December 15, 2021, and interim periods within those years. Early application is permitted, including application in an interim pe riod as of the beginning of the fiscal year that includes that interim period. The ASU should be applied prospectively. The Company is currently assessing the i mpact of the adoption of this standard on its financial statements. In October 2021, the FASB, issued Accounting Standards Update No. 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires an entity (acquirer) to recognize and measure contract assets and liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. This update is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption permitted. The amendments should be applied prospectively to business combinations occurring on or after the effective date of the amendments. The Company is currently evaluating the impact the standard will have on its consolidated financial statements. |
Summary of Accounting Policie_2
Summary of Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Balances of Contract Liabilities | The Company recognizes a contract liability when a customer pays for good or services for which the Company has not yet transferred control. The balances of the Company’s contract liabilities are as follows: Year Ended December 31, 2021 2020 (in thousands) Extended service contracts $ 251 $ 271 Subscription software licenses 520 572 Total contract liabilities 771 843 Less: long-term portion — 5 Contract liabilities – current $ 771 $ 838 |
Schedule of Revenues Disaggregated by Segment and Timing of Goods and Services Transferred | The following table provides information regarding revenues disaggregated by segment and the timing of when goods and services are transferred: Year Ended December 31, 2021 2020 (in thousands) Product revenue recognized at a point in time $ 25,025 $ 16,857 Product revenue recognized over time 786 481 Software revenue recognized at a point in time 851 997 Software revenue recognized over time 6,535 5,016 Total $ 33,197 $ 23,351 |
Schedule of Reconciliation of Change in Estimated Warranty Liabilities | The following table provides a reconciliation of the change in estimated warranty liabilities for the years ended December 31, 2021 and 2020: Year Ended December 31, 2021 2020 Balance at beginning of period $ 1,584 $ 3,447 Provision for warranties issued 1,515 996 Warranty costs incurred ( 1,479 ) ( 2,859 ) Balance at end of period $ 1,620 $ 1,584 Current portion $ 1,132 $ 1,202 Non-current portion 488 382 Total $ 1,620 $ 1,584 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Inventory | Inventory as of December 31 consisted of the following: 2021 2020 (in thousands) Raw materials $ 4,911 $ 2,114 Work in process 270 308 Finished goods 2,969 1,916 Total inventory $ 8,150 $ 4,338 |
Schedule of Property and Equipment, Net | Property and equipment, net as of December 31 consis ted of the following: 2021 2020 (in thousands) Laboratory and warehouse equipment and tooling $ 5,937 $ 5,120 Computer equipment and software 1,501 1,492 Office furniture and fixtures 1,489 1,489 Leasehold improvements 2,585 2,585 Automobiles 29 29 Construction in progress 418 719 11,959 11,434 Less: accumulated depreciation ( 9,593 ) ( 8,281 ) Property and equipment, net $ 2,366 $ 3,153 |
Schedule of Intangible Assets, Net | Intangible assets as of December 31consisted of the following: 2021 Weighted Average Amortization Period Gross Accumulated Net (in years) (in thousands) Developed Technology ( 5 - 10 years) 4.0 $ 2,445 $ 768 $ 1,677 Customer relationships ( 7 years) 2.8 1,910 875 1,035 Tradenames ( 10 years) 0.8 360 116 244 Total intangible assets 7.6 $ 4,715 $ 1,759 $ 2,956 2020 Weighted Average Amortization Period Gross Accumulated Net (in years) (in thousands) Developed Technology ( 5 years) 1.6 $ 1,110 $ 490 $ 620 Customer relationships ( 7 years) 4.0 1,910 603 1,307 Tradenames ( 10 years) 1.1 360 79 281 Total intangible assets 6.7 $ 3,380 $ 1,172 $ 2,208 |
Schedule of Estimated Future Annual Amortization Expense Related to Intangible Assets | The following table presents estimated future annual amortization expense related to intangible assets, net as of December 31, 2021: Future Intangible Asset Amortization Expenses (in thousands) 2022 $ 664 2023 618 2024 442 2025 386 2026 170 Thereafter 676 Total future amortization expense $ 2,956 |
Schedule of Accrued Expenses | Accrued expenses as of December 31 c onsisted of the following: 2021 2020 (in thousands) Vendor invoices $ 2,779 $ 2,232 Other accrued expenses 1,979 1,015 Total accrued expenses $ 4,758 $ 3,247 |
Schedule of Other Current Liabilities | Other current liabilities as of December 31 con sisted of the following: 2021 2020 (in thousands) Finance lease liability $ 55 $ 47 Contingent earnout 524 667 Warranty liability 1,132 1,202 Other current liabilities 771 840 Total other current liabilities $ 2,482 $ 2,756 |
Schedule of Other Liabilities | Other liabilities as of December 31 consisted of the following: 2021 2020 (in thousands) Non-current finance lease liability $ 70 $ 125 Non-current contingent earnout — 263 Other non-current liabilities 488 388 Total other liabilities $ 558 $ 776 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table provides the assets and liabilities measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such value at December 31: 2021 Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (in thousands) Assets: Money market funds $ 84,102 $ 84,102 $ — $ — Liabilities: Contingent earnout $ 524 $ — $ — $ 524 2020 Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (in thousands) Assets: Money market funds $ 50,897 $ 50,897 $ — $ — Liabilities: Warrants $ 1,914 $ — $ — $ 1,914 Forward obligation $ 2,750 $ — $ — $ 2,750 Contingent earnout $ 930 $ — $ — $ 930 |
Schedule of Rollforward of the Estimate Fair Values for Instruments | The following tables present the rollforward of the estimated fair values for instruments classified by the Company within Level 3 of the fair value hierarchy defined above, measured using significant unobservable inputs: Warrant Forward Contingent Total (in thousands) December 31, 2020 $ 1,914 $ 2,750 $ 930 $ 5,594 Payment of contingent earnout — — ( 667 ) ( 667 ) Addition 2,135 — — 2,135 Change in fair value ( 71 ) ( 52 ) 261 138 Reclassification to equity upon initial public offering ( 3,978 ) — — ( 3,978 ) Settlement of forward obligation into common stock on initial public offering — ( 2,698 ) — ( 2,698 ) December 31, 2021 $ — $ — $ 524 $ 524 Warrant Forward Contingent Total (in thousands) December 31, 2019 $ 2,260 $ 2,500 $ 2,390 $ 7,150 Payment of contingent earnout — — ( 987 ) ( 987 ) Change in fair value ( 346 ) 250 ( 473 ) ( 569 ) December 31, 2020 $ 1,914 $ 2,750 $ 930 $ 5,594 |
Summary of Warrants | Warrants at December 31 included t he following: Warrants outstanding Estimated fair value Warrants Number of warrants issued Exercise price per share 2021 2020 2020 (in thousands) Series C-1 27,397 $ 10.95 27,397 27,397 $ 225 Series D 54,793 $ 17.80 54,793 54,793 500 Series E 49,315 $ 20.08 49,315 49,315 575 Series E 49,314 $ 20.08 49,314 49,314 614 Series E 150,684 $ 20.08 150,684 — — 331,503 331,503 180,819 $ 1,914 |
Summary of Fair Values Determined Using Option-Pricing Model | As of December 31, 2020, warrants fully vested and outstanding had estimated fair values ranging between $ 7.78 to $ 12.45 . Fair values were determined using the option-pricing model with the following input assumptions for the year ended December 31: 2021 (1) 2020 Expected volatility range (weighted average) 78.86 % to 87.02 % ( 83.73 %) 78.57 to 81.37 % ( 79.91 %) Dividend yield 0.00 % 0.00 % Risk-free interest rates range (weighted average) 0.30 % to 1.25 % ( 1.07 %) 0.17 % to 0.81 % ( 0.65 %) Expected term range (average) 2.35 years to 10.00 years ( 8.02 years) 3.00 years to 8.77 years ( 7.26 years) (1) For period from beginning of the year to completion of the IPO, November 2, 2021 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Summary of Information Related to Issuance of Company's Preferred Stock | The following table summarizes information related to issuance of the Company’s preferred stock as of December 31, 2020: Preferred Number of Shares Carrying (1) Number of Liquidation (in thousands) (in thousands) Series A-1 730,591 730,591 $ 500 730,591 $ 500 Series B 955,573 955,573 6,999 955,573 6,941 Series C 917,554 917,554 9,073 917,554 9,210 Series C-1 1,671,229 1,643,832 17,941 1,643,832 18,000 Series D 4,261,994 3,982,359 70,686 3,982,359 70,847 Series E 8,991,266 8,801,978 176,143 8,801,978 176,700 17,528,207 17,031,887 $ 281,342 17,031,887 $ 282,198 (1) The carrying value reflects the gross proceeds received from the sale of the preferred stock net of issuance costs and the fair value at issuance of preferred stock warrants classified as a liability |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Schedule of Stock-Based Compensation Expense | The following tables present the Company's stock-based compensation for equity-settled awards by type and financial statement lines included in the accompanying consolidated statement of operations and comprehensive loss for the years ended December 31: 2021 2020 (in thousands) Options $ 2,258 $ 1,644 RSUs 114 - Total stock-based compensation expense $ 2,372 $ 1,644 2021 2020 (in thousands) Cost of sales $ 230 $ 164 Selling, general and administrative 1,574 1,038 Research and development 568 442 Total stock-based compensation expense $ 2,372 $ 1,644 |
Schedule of Unamortized Compensation Cost and Weighted Average Service Period of Unvested Outstanding Awards | T h e f o l l o w i n g t a b l e p r e s e n t s t h e u n am o rt i z e d c o m p e n s a t io n c o s t a n d w e i g h t e d a v e r a g e s e r v i c e p e r i o d o f a l l u n v e s t e d o u t s t a n d i n g a w a r d s a s o f D e c e m b e r 3 1 , 2 0 2 1 . Unamortized Compensation Costs Weighted Average Service Period (in thousands) (years) Options $ 9,575 3.2 RSUs 2,672 3.8 Total unamortized compensation cost $ 12,247 |
Summary of Stock Option Activity under Incentive Plans | T h e f o l l o w i n g t a b l e s u m m a r i z e s s t o c k o p t i o n a c t i v i t y u n d e r t h e C o m p a n y ' s i n c e n t i v e p l a n s : Number Weighted Weighted- Average Remaining Contractual Life Aggregate Intrinsic Value (in years) (in thousands) Options outstanding, December 31, 2019 1,861,712 $ 3.98 Granted 907,997 $ 7.01 Exercised ( 11,104 ) $ 3.82 $ 35 Forfeited ( 511,469 ) $ 4.29 Options outstanding, December 31, 2020 2,247,136 $ 5.13 Granted 1,130,249 $ 11.98 Forfeited ( 175,030 ) $ 6.44 Exercised ( 79,076 ) $ 3.39 $ 669 Expired ( 3,286 ) $ 0.73 Options outstanding, December 31, 2021 3,119,993 $ 7.59 7.6 $ 2,325 Options vested and exercisable, December 31, 2021 1,487,143 $ 4.65 5.8 $ 2,229 Vested and expected to vest after December 31, 2021 2,918,841 $ 7.40 7.5 $ 2,311 |
Summary of Non Vested Stock Options | The following table summarizes the non-vested stock options as of December 31, 2021 and 2020: Number of Shares Weighted Non-vested Options, December 31, 2020 1,112,206 $ 4.21 Non-vested Options, December 31, 2021 1,632,852 $ 7.09 |
Summary of RSU Activity under Incentive Plans | T h e f o l l o w i n g t a b l e s u m m a r i z e s R S U a c t i v i t y u n d e r t h e C o m p a n y ' s i n c e n t i v e p l a n s : Number Weighted RSUs outstanding, December 31, 2020 — $ — Granted 338,149 $ 9.37 RSUs outstanding, December 31, 2021 338,149 $ 9.37 |
Summary of Assumptions Used to Calculate Estimated Fair Value of Stock Option Awards | T h e fair value of the Company's stock options awards is estimated at the date of grant using the Black-Scholes option-pricing model with the following input assumptions during the year ended December 31 : 2021 2020 Range Weighted Average Range Weighted Average Expected volatility 80.49 % - 83.14 % 81.82 % 74.49 % - 82.26 % 75.42 % Dividend yield 0.00 % 0.00 % Risk-free interest rates 0.87 % - 1.31 % 1.19 % 0.27 % - 0.83 % 0.73 % Expected term (in years) 5.49 - 6.64 6.05 5.00 - 6.60 6.00 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Summary of Future Minimum Lease Payments | Future minimum lease payments under these leases are as follows: Lease Amounts (in thousands) 2022 $ 1,225 2023 1,038 2024 618 2025 104 2026 and thereafter — Total future minimum lease payments 2,985 Less: Imputed Interest ( 280 ) Present value of operating lease liabilities $ 2,705 Less: Current portion 975 Long-term operating lease liabilities $ 1,730 Weighted average remaining lease term in years 2.71 Weighted average discount rate 7.61 % |
Components of Lease Expense and Related Cash Flows | The components of lease expense and related cash fl ows were as follows: Year Ended December 31, 2021 2020 (in thousands) Rent expense $ 1,204 $ 1,122 Short-term lease costs — 197 Variable lease costs 99 94 Total $ 1,303 $ 1,413 Cash paid for operating leases $ 1,206 $ 1,116 Year Ended December 31, 2021 2020 (in thousands) Cost of sales $ 219 $ 239 Selling, general and administrative 1,084 1,174 Total $ 1,303 $ 1,413 |
Term Loan (Tables)
Term Loan (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Future Principal Repayments of Term Loan | Future principal repayments on the Perceptive Loan, as amended, as of December 31, 2021, are as follows: Principal (in thousands) 2026 $ 30,000 Total $ 30,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Components of Income Tax (Provision) Benefit | The provision (benefit) for income taxes charged to operations was as follows: 2021 2020 (in thousands) Current tax expense U.S. federal $ — $ — State and local 2 2 Total current 2 2 Deferred tax expense: U.S. federal $ — $ — State and local — — Total deferred — — Total provision for income taxes $ 2 $ 2 |
Schedule of Effective Tax Rate of Provision (Benefit) for Income Taxes | A reconciliation of the provision for income taxes with the expected income tax computed by applying the statutory federal income tax rate to loss before provision for income taxes and a reconciliation of the statutory federal rate and the effective rate was calculated as follows: Year Ended December 31, 2021 2020 Tax computed at federal statutory rate 21.00 % 21.00 % State income tax - net of federal benefit 3.31 % 3.01 % Tax credits 1.13 % 1.44 % Change in valuation allowance ( 25.51 )% ( 26.65 )% Stock-based compensation ( 0.20 )% ( 0.22 )% Other deferred adjustments 0.56 % 1.51 % Permanent items ( 0.29 )% ( 0.09 )% Income tax provision 0.00 % 0.00 % |
Significant Components of Net Deferred Taxes | The significant components that comprised the Company’s net deferred taxes at December 31, 2021 and 2020 are as follows: 2021 2020 (in thousands) Deferred tax assets: Net operating loss carryforwards $ 70,731 $ 60,260 Fixed assets and intangible assets 1,449 1,507 Lease liabilities 660 783 Accruals and reserves 1,178 1,349 Stock-based compensation 864 410 Tax credits 4,763 4,191 State Taxes 3 - Other 890 49 Gross deferred tax assets 80,538 68,549 Less: valuation allowance ( 79,476 ) ( 64,211 ) Net deferred tax assets 1,062 4,338 Deferred tax liabilities: Fixed assets and intangible assets ( 392 ) ( 605 ) Right-of-use assets ( 670 ) ( 773 ) State Taxes - ( 2,960 ) Total gross deferred tax liabilities: ( 1,062 ) ( 4,338 ) Net deferred tax asset (liability) $ — $ — |
Summary of Changes in Unrecognized Tax Benefits | The following changes occurred in the amount of unrecognized tax benefits: 2021 2020 (in thousands) Gross unrecognized tax benefits at the beginning of the year $ 1,575 $ 1,311 Increases related to current year tax positions 204 251 Increases related to prior year tax positions 12 13 Gross unrecognized tax benefits at the end of the year $ 1,791 $ 1,575 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | The following tables present the Company’s segment information as of and for the years ended December 31: 2021 2020 (in thousands, except percentage data) Product Software Total Product Software Total Revenue $ 25,811 $ 7,386 $ 33,197 $ 17,338 $ 6,013 $ 23,351 Cost of sales 21,992 2,869 24,861 17,152 2,314 19,466 Gross profit 3,819 4,517 8,336 186 3,699 3,885 Gross margin 15 % 61 % 25 % 1 % 62 % 17 % Operating expenses: Selling, general and administrative 31,781 2,132 33,913 24,794 1,901 26,695 Research and development 16,959 1,609 18,568 19,027 1,434 20,461 Change in fair value of contingent earnout 261 — 261 ( 473 ) — ( 473 ) Total operating expenses 49,001 3,741 52,742 43,348 3,335 46,683 Income (loss) from operations $ ( 45,182 ) $ 776 $ ( 44,406 ) $ ( 43,162 ) $ 364 $ ( 42,798 ) |
Depreciation | Depreciation: 2021 2020 (in thousands) Product $ 1,409 $ 2,059 Software 17 20 Total $ 1,426 $ 2,079 |
Segment Assets | Segment Assets: 2021 2020 (in thousands) Product $ 104,588 $ 64,021 Software 10,911 12,120 Total $ 115,499 $ 76,141 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders | The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders for the periods presented: Year Ended December 31, 2021 2020 (in thousands, except shares and per share data) Numerator: Net loss attributable to common stock holders $ ( 48,499 ) $ ( 46,665 ) Denominator: Weighted-average shares outstanding – basic and diluted 5,694,594 1,195,944 Net loss per share – basic and diluted $ ( 8.52 ) $ ( 39.02 ) |
Summary of Potentially Dilutive Securities Excluded from the Computation of Diluted Net Loss Per Share | The following potentially dilutive securities were excluded from the computation of diluted net loss per share calculations for the periods presented because the impact of including them would be anti-dilutive: Year Ended December 31, 2021 2020 Convertible preferred stock — 17,031,887 Stock options 3,119,993 2,247,136 RSUs 338,149 — Warrants 331,503 180,819 Forward obligation — 224,842 Total 3,789,645 19,684,684 |
Organization and Basis of Pre_2
Organization and Basis of Presentation - Additional Information (Details) $ / shares in Units, $ in Thousands | Nov. 02, 2021USD ($)$ / sharesshares | Oct. 20, 2021 | Dec. 31, 2021USD ($)Segment$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares |
Organization And Basis Of Presentation [Line Items] | ||||
Reverse stock split | On October 20, 2021, the Company’s Board of Directors approved an amendment to the Company’s certificate of incorporation to effect a reverse split of shares of the Company’s common stock and convertible preferred stock on a 1-for-1.825 basis (the “Reverse Stock Split”). The par values of the common stock and convertible preferred stock were not adjusted as a result of the Reverse Stock Split. | |||
Stock split, Conversion ratio | 0.5479 | |||
Proceeds from issuance of common stock net of underwriting discounts and commissions and other offering expenses | $ | $ 84,390 | |||
Common stock, shares authorized | 500,000,000 | 500,000,000 | 21,643,836 | |
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |
Temporary equity, shares authorized | 17,528,207 | |||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 0 | |
Preferred stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |
Cash and cash equivalents | $ | $ 84,641 | $ 51,722 | ||
Accumulated deficit | $ | (312,044) | (263,545) | ||
Net loss | $ | 48,499 | 46,665 | ||
Cash and cash equivalents used in operations | $ | $ 48,605 | $ 38,544 | ||
Operating and Reportable segments | Segment | 2 | |||
Common stock, shares issued | 26,336,536 | 1,247,024 | ||
Common Stock | ||||
Organization And Basis Of Presentation [Line Items] | ||||
Shares of common stock issued | 7,800,000 | |||
Conversion of convertible preferred stock into number of common stock | 17,031,887 | |||
Warrants | ||||
Organization And Basis Of Presentation [Line Items] | ||||
Conversion of convertible preferred stock into number of common stock | 331,503 | |||
Forward Obligation | ||||
Organization And Basis Of Presentation [Line Items] | ||||
Common stock, shares issued | 224,842 | |||
IPO | ||||
Organization And Basis Of Presentation [Line Items] | ||||
Shares of common stock issued | 7,800,000 | |||
Public offering price per share | $ / shares | $ 12 | |||
Proceeds from issuance of common stock net of underwriting discounts and commissions and other offering expenses | $ | $ 83,800 | |||
IPO | Common Stock | ||||
Organization And Basis Of Presentation [Line Items] | ||||
Conversion of convertible preferred stock into number of common stock | 17,031,887 |
Summary of Accounting Policie_3
Summary of Accounting Policies - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2021USD ($)Customer | Dec. 31, 2020USD ($)Customer | |
Summary Of Accounting Policies [Line Items] | ||
Goodwill | $ 8,454,000 | $ 8,454,000 |
Impairment of finite lived intangible assets | 0 | 0 |
Fair value, assets, level 1 to level 2 transfers, amount | 0 | |
Fair value, assets, level 2 to level 1 transfers, amount | 0 | |
Fair value, liabilities, level 1 to level 2 transfers, amount | 0 | |
Fair value, liabilities, level 2 to level 1 transfers, amount | 0 | |
Fair value, measurement with unobservable inputs reconciliation, asset, transfers into level 3 | 0 | |
Fair value, measurement with unobservable inputs reconciliation, asset, transfers out of level 3 | 0 | |
Fair value, measurement with unobservable inputs reconciliation, liability, transfers into level 3 | 0 | 0 |
Fair value, measurement with unobservable inputs reconciliation, liability, transfers out of level 3 | $ 0 | 0 |
Revenue, practical expedient, incremental cost of obtaining contract [true false] | true | |
Revenue recognized | $ 800,000 | 600,000 |
Dividend yield | 0.00% | |
Advertising costs | $ 300,000 | $ 300,000 |
Minimum amount tax benefits likely of being realized upon settlement | more than 50% | |
Maximum | ||
Summary Of Accounting Policies [Line Items] | ||
Cash and cash equivalents, FDIC insured amount | $ 250,000 | |
Property and equipment estimated useful life | 5 years | |
Finite-lived intangible assets, estimated useful life | 10 years | |
Minimum | ||
Summary Of Accounting Policies [Line Items] | ||
Property and equipment estimated useful life | 3 years | |
Finite-lived intangible assets, estimated useful life | 5 years | |
Customer Concentration Risk | Accounts Receivable | ||
Summary Of Accounting Policies [Line Items] | ||
Number of customer accounted for accounts receivable | Customer | 0 | 0 |
Customer Concentration Risk | Sales | ||
Summary Of Accounting Policies [Line Items] | ||
Number of customer accounted for sales | Customer | 0 | 0 |
GentleWave Systems | Maximum | ||
Summary Of Accounting Policies [Line Items] | ||
Standard product warranty period | 2 years | 2 years |
TDO Software, Inc. | ||
Summary Of Accounting Policies [Line Items] | ||
Goodwill | $ 8,500,000 | |
Goodwill impairment | $ 0 |
Summary of Accounting Policie_4
Summary of Accounting Policies - Summary of Balances of Contract Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Summary Of Accounting Policies [Line Items] | ||
Total contract liabilities | $ 771 | $ 843 |
Less: long-term portion | 5 | |
Contract liabilities – current | 771 | 838 |
Extended Service Contracts | ||
Summary Of Accounting Policies [Line Items] | ||
Total contract liabilities | 251 | 271 |
Subscription Software Licenses | ||
Summary Of Accounting Policies [Line Items] | ||
Total contract liabilities | $ 520 | $ 572 |
Summary of Accounting Policie_5
Summary of Accounting Policies - Schedule of Revenues Disaggregated by Segment and Timing of Goods and Services Transferred (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Summary Of Accounting Policies [Line Items] | ||
Total revenue | $ 33,197 | $ 23,351 |
Product | ||
Summary Of Accounting Policies [Line Items] | ||
Total revenue | 25,811 | 17,338 |
Product | Point in Time | ||
Summary Of Accounting Policies [Line Items] | ||
Total revenue | 25,025 | 16,857 |
Product | Over Time | ||
Summary Of Accounting Policies [Line Items] | ||
Total revenue | 786 | 481 |
Software | ||
Summary Of Accounting Policies [Line Items] | ||
Total revenue | 7,386 | 6,013 |
Software | Point in Time | ||
Summary Of Accounting Policies [Line Items] | ||
Total revenue | 851 | 997 |
Software | Over Time | ||
Summary Of Accounting Policies [Line Items] | ||
Total revenue | $ 6,535 | $ 5,016 |
Summary of Accounting Policie_6
Summary of Accounting Policies - Schedule of Reconciliation of Change in Estimated Warranty (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
Balance at beginning of period | $ 1,584 | $ 3,447 |
Provision for warranties issued | 1,515 | 996 |
Warranty costs incurred | (1,479) | (2,859) |
Balance at end of period | 1,620 | 1,584 |
Current portion | 1,132 | 1,202 |
Non-current portion | 488 | 382 |
Total | $ 1,620 | $ 1,584 |
Balance Sheet Components - Sche
Balance Sheet Components - Schedule of Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Balance Sheet Related Disclosures [Abstract] | ||
Raw materials | $ 4,911 | $ 2,114 |
Work in process | 270 | 308 |
Finished goods | 2,969 | 1,916 |
Total inventory | $ 8,150 | $ 4,338 |
Balance Sheet Components - Addi
Balance Sheet Components - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Reserve for excess and obsolete inventory | $ 700,000 | $ 1,100,000 |
Depreciation expense | 1,426,000 | 2,079,000 |
Impairment of finite lived intangible assets | 0 | 0 |
Amortization intangible assets | 586,000 | 531,000 |
Cost of Sales | ||
Depreciation expense | 100,000 | 500,000 |
Amortization intangible assets | 200,000 | 200,000 |
Selling, General and Administrative Expenses | ||
Depreciation expense | 800,000 | 1,200,000 |
Amortization intangible assets | 400,000 | 300,000 |
Research and Development Expense | ||
Depreciation expense | $ 500,000 | $ 400,000 |
Balance Sheet Components - Sc_2
Balance Sheet Components - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | $ 11,959 | $ 11,434 |
Less: accumulated depreciation | (9,593) | (8,281) |
Property and equipment, net | 2,366 | 3,153 |
Laboratory and warehouse equipment and tooling | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 5,937 | 5,120 |
Computer equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 1,501 | 1,492 |
Office furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 1,489 | 1,489 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 2,585 | 2,585 |
Automobiles | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 29 | 29 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | $ 418 | $ 719 |
Balance Sheet Components - Sc_3
Balance Sheet Components - Schedule of Intangible Assets Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 7 years 7 months 6 days | 6 years 8 months 12 days |
Gross | $ 4,715 | $ 3,380 |
Accumulated Amortization | 1,759 | 1,172 |
Total future amortization expense | $ 2,956 | $ 2,208 |
Developed Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 4 years | 1 year 7 months 6 days |
Gross | $ 2,445 | $ 1,110 |
Accumulated Amortization | 768 | 490 |
Total future amortization expense | $ 1,677 | $ 620 |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 2 years 9 months 18 days | 4 years |
Gross | $ 1,910 | $ 1,910 |
Accumulated Amortization | 875 | 603 |
Total future amortization expense | $ 1,035 | $ 1,307 |
Tradenames | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 9 months 18 days | 1 year 1 month 6 days |
Gross | $ 360 | $ 360 |
Accumulated Amortization | 116 | 79 |
Total future amortization expense | $ 244 | $ 281 |
Balance Sheet Components - Sc_4
Balance Sheet Components - Schedule of Intangible Assets Net (Parenthetical) (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Minimum | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated useful life | 5 years | |
Maximum | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated useful life | 10 years | |
Developed Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated useful life | 5 years | |
Developed Technology | Minimum | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated useful life | 5 years | |
Developed Technology | Maximum | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated useful life | 10 years | |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated useful life | 7 years | 7 years |
Tradenames | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated useful life | 10 years | 10 years |
Balance Sheet Components - Sc_5
Balance Sheet Components - Schedule of Estimated Future Annual Amortization Expense Related to Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Balance Sheet Related Disclosures [Abstract] | ||
2022 | $ 664 | |
2023 | 618 | |
2024 | 442 | |
2025 | 386 | |
2026 | 170 | |
Thereafter | 676 | |
Total future amortization expense | $ 2,956 | $ 2,208 |
Balance Sheet Components - Sc_6
Balance Sheet Components - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Accrued Liabilities, Current [Abstract] | ||
Vendor invoices | $ 2,779 | $ 2,232 |
Other accrued expenses | 1,979 | 1,015 |
Total accrued expenses | $ 4,758 | $ 3,247 |
Balance Sheet Components - Sc_7
Balance Sheet Components - Schedule of Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Other Liabilities, Current [Abstract] | ||
Finance lease liability | $ 55 | $ 47 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Total other current liabilities | Total other current liabilities |
Contingent earnout | $ 524 | $ 667 |
Warranty liability | 1,132 | 1,202 |
Other current liaiblities | 771 | 840 |
Total other current liabilities | $ 2,482 | $ 2,756 |
Balance Sheet Components - Sc_8
Balance Sheet Components - Schedule of Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Other Liabilities, Noncurrent [Abstract] | ||
Non-current finance lease liability | $ 70 | $ 125 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Total other Liabilities | Total other Liabilities |
Non-current contingent earnout | $ 263 | |
Other non-current liabilities | $ 488 | 388 |
Total other Liabilities | $ 558 | $ 776 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair Value Measurements Recurring Basis - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Warrants | ||
Liabilities: | ||
Liabilities | $ 1,914 | |
Forward Obligation | ||
Liabilities: | ||
Liabilities | 2,750 | |
Contingent Earnout | ||
Liabilities: | ||
Liabilities | $ 524 | 930 |
Significant Unobservable Inputs (Level 3) | Warrants | ||
Liabilities: | ||
Liabilities | 1,914 | |
Significant Unobservable Inputs (Level 3) | Forward Obligation | ||
Liabilities: | ||
Liabilities | 2,750 | |
Significant Unobservable Inputs (Level 3) | Contingent Earnout | ||
Liabilities: | ||
Liabilities | 524 | 930 |
Money Market Funds | ||
Assets: | ||
Assets | 84,102 | 50,897 |
Money Market Funds | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Assets | $ 84,102 | $ 50,897 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Schedule of Rollforward of the Estimate Fair Values for Instruments (Details) - Fair Value Measurements Recurring Basis - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | $ 5,594 | $ 7,150 |
Payout of contingent earnout | (667) | (987) |
Addition | 2,135 | |
Change in fair value | 138 | (569) |
Reclassification to equity upon initial public offering | (3,978) | |
Settlement of forward obligation into common stock on initial public offering | (2,698) | |
Ending Balance | 524 | 5,594 |
Warrant Liabilities | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | 1,914 | 2,260 |
Addition | 2,135 | |
Change in fair value | (71) | (346) |
Reclassification to equity upon initial public offering | (3,978) | |
Ending Balance | 1,914 | |
Forward Obligation | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | 2,750 | 2,500 |
Change in fair value | (52) | 250 |
Settlement of forward obligation into common stock on initial public offering | (2,698) | |
Ending Balance | 2,750 | |
Contingent Earnout | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | 930 | 2,390 |
Payout of contingent earnout | (667) | (987) |
Change in fair value | 261 | (473) |
Ending Balance | $ 524 | $ 930 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Additional Information (Details) | 1 Months Ended | 12 Months Ended | |||||
Aug. 31, 2021USD ($)shares | Jun. 30, 2017shares | Dec. 31, 2013USD ($)shares | Dec. 31, 2021USD ($)Warrantshares | Dec. 31, 2020USD ($)shares | Dec. 31, 2019USD ($)shares | Nov. 02, 2021shares | |
Fair Value Option Quantitative Disclosures [Line Items] | |||||||
Fair value, measurement with unobservable inputs reconciliation, liability, transfers into level 3 | $ | $ 0 | $ 0 | |||||
Fair value, measurement with unobservable inputs reconciliation, liability, transfers out of level 3 | $ | $ 0 | 0 | |||||
Warrants issued to purchase preferred stock | shares | 331,503 | ||||||
Fair value of warrants | $ | $ 1,914,000 | ||||||
Common stock, shares issued | shares | 26,336,536 | 1,247,024 | |||||
TDO Software, Inc. | |||||||
Fair Value Option Quantitative Disclosures [Line Items] | |||||||
Contingent consideration earnout paid | $ | $ 700,000 | $ 1,000,000 | |||||
Accrual contingent earnout | $ | $ 500,000 | ||||||
Forward Obligation | IPO Closing | |||||||
Fair Value Option Quantitative Disclosures [Line Items] | |||||||
Common stock, shares issued | shares | 224,842 | ||||||
Minimum | |||||||
Fair Value Option Quantitative Disclosures [Line Items] | |||||||
Warrants expiration date | 2023-12 | ||||||
Maximum | |||||||
Fair Value Option Quantitative Disclosures [Line Items] | |||||||
Warrants expiration date | 2031-08 | ||||||
Fair Values | Minimum | |||||||
Fair Value Option Quantitative Disclosures [Line Items] | |||||||
Warrants and Rights Outstanding, Measurement Input | 7.78 | ||||||
Fair Values | Maximum | |||||||
Fair Value Option Quantitative Disclosures [Line Items] | |||||||
Warrants and Rights Outstanding, Measurement Input | 12.45 | ||||||
Discount Rate | TDO Software, Inc. | |||||||
Fair Value Option Quantitative Disclosures [Line Items] | |||||||
Contingent earnout measurement input | 7.6 | ||||||
Series D | Minimum | |||||||
Fair Value Option Quantitative Disclosures [Line Items] | |||||||
Estimated fair value by future cash flows attributable to forward obligation probable percentage | 10.00% | ||||||
Series D | Maximum | |||||||
Fair Value Option Quantitative Disclosures [Line Items] | |||||||
Preferred stock issuance | $ | $ 224,842,000 | ||||||
Estimated fair value by future cash flows attributable to forward obligation probable percentage | 40.00% | ||||||
Term Loan | Oxford Finance LLC | |||||||
Fair Value Option Quantitative Disclosures [Line Items] | |||||||
Term loan facility amount | $ | $ 10,000,000 | ||||||
Debt repayment month and year | 2017-06 | ||||||
Percentage of aggregate amount funded to purchase preferred stock | 3.00% | ||||||
Term Loan | Oxford Finance LLC | Series C-1 | |||||||
Fair Value Option Quantitative Disclosures [Line Items] | |||||||
Warrants issued to purchase preferred stock | shares | 27,397 | ||||||
Term Loan | Perceptive Credit Holdings L P | Series E | |||||||
Fair Value Option Quantitative Disclosures [Line Items] | |||||||
Fair value of warrants | $ | $ 2,100,000 | ||||||
Warrants issued to purchase preferred stock | shares | 150,684 | 249,313 | |||||
Term Loan | Perceptive Credit Holdings L P | Series D | |||||||
Fair Value Option Quantitative Disclosures [Line Items] | |||||||
Warrants issued to purchase preferred stock | shares | 54,793 | ||||||
2009 Notes | |||||||
Fair Value Option Quantitative Disclosures [Line Items] | |||||||
Warrants issued to purchase preferred stock | shares | 70,078 | ||||||
Number of warrants executed | Warrant | 2 | ||||||
Fair value of warrants | $ | $ 500,000 | ||||||
Remaining warrants expired unexercised | shares | 6,878 | ||||||
2009 Notes | Series B | |||||||
Fair Value Option Quantitative Disclosures [Line Items] | |||||||
Warrants issued to purchase preferred stock | shares | 76,956 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Summary of Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Class Of Warrant Or Right [Line Items] | ||
Number of warrants issued | 331,503 | |
Warrants outstanding | 331,503 | 180,819 |
Fair value of warrants | $ 1,914 | |
Series C-1 | ||
Class Of Warrant Or Right [Line Items] | ||
Number of warrants issued | 27,397 | |
Exercise Price Per Share | $ 10.95 | |
Warrants outstanding | 27,397 | 27,397 |
Fair value of warrants | $ 225 | |
Series D | ||
Class Of Warrant Or Right [Line Items] | ||
Number of warrants issued | 54,793 | |
Exercise Price Per Share | $ 17.80 | |
Warrants outstanding | 54,793 | 54,793 |
Fair value of warrants | $ 500 | |
Series E | ||
Class Of Warrant Or Right [Line Items] | ||
Number of warrants issued | 49,315 | |
Exercise Price Per Share | $ 20.08 | |
Warrants outstanding | 49,315 | 49,315 |
Fair value of warrants | $ 575 | |
Series E | ||
Class Of Warrant Or Right [Line Items] | ||
Number of warrants issued | 49,314 | |
Exercise Price Per Share | $ 20.08 | |
Warrants outstanding | 49,314 | 49,314 |
Fair value of warrants | $ 614 | |
Series E | ||
Class Of Warrant Or Right [Line Items] | ||
Number of warrants issued | 150,684 | |
Exercise Price Per Share | $ 20.08 | |
Warrants outstanding | 150,684 |
Fair Value of Financial Instr_7
Fair Value of Financial Instruments - Summary of Fair Values Determined Using Black-Scholes Option-Pricing Model (Details) | Dec. 31, 2021 | Dec. 31, 2020 |
Expected Volatility | Minimum | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 78.86 | 78.57 |
Expected Volatility | Maximum | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 87.02 | 81.37 |
Expected Volatility | Weighted Average | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 83.73 | 79.91 |
Dividend Yield | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 0 | 0 |
Risk-Free Interest Rates | Minimum | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 0.30 | 0.17 |
Risk-Free Interest Rates | Maximum | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 1.25 | 0.81 |
Risk-Free Interest Rates | Weighted Average | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 1.07 | 0.65 |
Expected Term | Minimum | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Warrants and rights outstanding, term | 2 years 4 months 6 days | 3 years |
Expected Term | Maximum | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Warrants and rights outstanding, term | 10 years | 8 years 9 months 7 days |
Expected Term | Weighted Average | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Warrants and rights outstanding, term | 8 years 7 days | 7 years 3 months 3 days |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Nov. 02, 2021 | Dec. 31, 2020 | |
Class Of Stock [Line Items] | |||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 | 21,643,836 |
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 0 |
Convertible preferred stock, shares authorized | 17,528,207 | ||
Common Stock | |||
Class Of Stock [Line Items] | |||
Convertible preferred stock converted into equal number of shares of common stock | $ 17,031,887,000 |
Shareholders' Equity - Summary
Shareholders' Equity - Summary of Information Related to Issuance of Company's Preferred Stock (Details) $ in Thousands | Dec. 31, 2020USD ($)shares | |
Class Of Stock [Line Items] | ||
Number of Shares Authorized | 17,528,207 | |
Shares Issued | 17,031,887 | |
Shares Outstanding | 17,031,887 | |
Carrying Value | $ | $ 281,342 | [1] |
Number of Common Stock Equivalent Shares | 17,031,887 | |
Liquidation Preference | $ | $ 282,198 | |
Series A-1 | ||
Class Of Stock [Line Items] | ||
Number of Shares Authorized | 730,591 | |
Shares Issued | 730,591 | |
Shares Outstanding | 730,591 | |
Carrying Value | $ | $ 500 | [1] |
Number of Common Stock Equivalent Shares | 730,591 | |
Liquidation Preference | $ | $ 500 | |
Series B | ||
Class Of Stock [Line Items] | ||
Number of Shares Authorized | 955,573 | |
Shares Issued | 955,573 | |
Shares Outstanding | 955,573 | |
Carrying Value | $ | $ 6,999 | [1] |
Number of Common Stock Equivalent Shares | 955,573 | |
Liquidation Preference | $ | $ 6,941 | |
Series C | ||
Class Of Stock [Line Items] | ||
Number of Shares Authorized | 917,554 | |
Shares Issued | 917,554 | |
Shares Outstanding | 917,554 | |
Carrying Value | $ | $ 9,073 | [1] |
Number of Common Stock Equivalent Shares | 917,554 | |
Liquidation Preference | $ | $ 9,210 | |
Series C-1 | ||
Class Of Stock [Line Items] | ||
Number of Shares Authorized | 1,671,229 | |
Shares Issued | 1,643,832 | |
Shares Outstanding | 1,643,832 | |
Carrying Value | $ | $ 17,941 | [1] |
Number of Common Stock Equivalent Shares | 1,643,832 | |
Liquidation Preference | $ | $ 18,000 | |
Series D | ||
Class Of Stock [Line Items] | ||
Number of Shares Authorized | 4,261,994 | |
Shares Issued | 3,982,359 | |
Shares Outstanding | 3,982,359 | |
Carrying Value | $ | $ 70,686 | [1] |
Number of Common Stock Equivalent Shares | 3,982,359 | |
Liquidation Preference | $ | $ 70,847 | |
Series E | ||
Class Of Stock [Line Items] | ||
Number of Shares Authorized | 8,991,266 | |
Shares Issued | 8,801,978 | |
Shares Outstanding | 8,801,978 | |
Carrying Value | $ | $ 176,143 | [1] |
Number of Common Stock Equivalent Shares | 8,801,978 | |
Liquidation Preference | $ | $ 176,700 | |
[1] | The carrying value reflects the gross proceeds received from the sale of the preferred stock net of issuance costs and the fair value at issuance of preferred stock warrants classified as a liability |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Weighted-average grant-date fair value of options granted | $ 8.34 | $ 4.57 |
Fair value of shares vested | $ 2 | $ 1.3 |
2017 Plan | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Number of shares, options granted (shares) | 0 | |
2017 Plan | Minimum | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Exercise price percentage | 100.00% | |
2021 Equity Incentive Plan | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Number of shares, options granted (shares) | 0 | |
Vesting period | 4 years | |
2017 and 2021 Incentive Plan | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Aggregate shares of common stock reserved for issuance | 6,500,000 |
Stock Based Compensation - Sche
Stock Based Compensation - Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 2,372 | $ 1,644 |
Options | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation expense | 2,258 | 1,644 |
RSUs | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation expense | 114 | |
Cost of Sales | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation expense | 230 | 164 |
Selling, General and Administrative | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation expense | 1,574 | 1,038 |
Research and Development | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 568 | $ 442 |
Stock Based Compensation - Sc_2
Stock Based Compensation - Schedule of Unamortized Compensation Cost and Weighted Average Service Period of Unvested Outstanding Awards (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Unamortized Compensation Costs | $ 12,247 |
Options | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Unamortized Compensation Costs | $ 9,575 |
weighted Average Service Period | 3 years 2 months 12 days |
RSUs | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Unamortized Compensation Costs | $ 2,672 |
weighted Average Service Period | 3 years 9 months 18 days |
Stock Based Compensation - Summ
Stock Based Compensation - Summary of Stock Option Activity under Incentive Plans (Details) - 2017 and 2021 Incentive Plan - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of Shares, Options Outstanding, Beginning Balance | 2,247,136 | 1,861,712 |
Number of Shares, Granted | 1,130,249 | 907,997 |
Number of Shares, Exercised | (79,076) | (11,104) |
Number of Shares, Forfeited | (175,030) | (511,469) |
Number of Shares, Expired | (3,286) | |
Number of Shares, Options Outstanding, Ending Balance | 3,119,993 | 2,247,136 |
Number of Shares, Options Vested and exercisable, December 31, 2021 | 1,487,143 | |
Number of Shares, Vested and expected to vest after December 31, 2021 | 2,918,841 | |
Weighted Average Exercise Price Per Share, Options Outstanding, Beginning Balance | $ 5.13 | $ 3.98 |
Weighted Average Exercise Price Per Share, Granted | 11.98 | 7.01 |
Weighted Average Exercise Price Per Share, Exercised | 3.39 | 3.82 |
Weighted Average Exercise Price Per Share, Forfeited | 6.44 | 4.29 |
Weighted Average Exercise Price Per Share, Expired | 0.73 | |
Weighted Average Exercise Price Per Share, Options Outstanding, Ending Balance | 7.59 | $ 5.13 |
Weighted Average Exercise Price Per Share, Options Vested and exercisable, December 31, 2021 | 4.65 | |
Weighted Average Exercise Price Per Share, Vested and expected to vest after December 31, 2021 | $ 7.40 | |
Weighted-Average Remaining Contractual Life (in years), Options outstanding, December 31, 2021 | 7 years 7 months 6 days | |
Weighted-Average Remaining Contractual Life (in years) Options Vested and exercisable, December 31, 2021 | 5 years 9 months 18 days | |
Weighted-Average Remaining Contractual Life (in years) Vested and expected to vest after December 31, 2021 | 7 years 6 months | |
Aggregate Intrinsic Value, Exercised | $ 669 | $ 35 |
Aggregate Intrinsic Value, Options outstanding, December 31, 2021 | 2,325 | |
Aggregate Intrinsic Value, Options vested and exercisable, December 31, 2021 | 2,229 | |
Aggregate Intrinsic Value, Vested and expected to vest after December 31, 2021 | $ 2,311 |
Stock Based Compensation - Su_2
Stock Based Compensation - Summary of Non Vested Stock Options (Details) - Options | Dec. 31, 2021$ / sharesshares |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of Shares, Non-vested Options, December 31, 2020 | shares | 1,112,206 |
Number of Shares, Non-vested Options, December 31, 2021 | shares | 1,632,852 |
Weighted Average Grant Date Fair Value, Non-vested Options, December 31, 2020 | $ / shares | $ 4.21 |
Weighted Average Grant Date Fair Value, Non-vested Options, December 31, 2021 | $ / shares | $ 7.09 |
Stock Based Compensation - Su_3
Stock Based Compensation - Summary of RSU Activity under Incentive Plans (Details) - RSUs - 2017 and 2021 Incentive Plan | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of Shares, Granted | shares | 338,149 |
Number of Shares, RSUs outstanding, Ending Balance | shares | 338,149 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | $ 9.37 |
Weighted Average Grant Date Fair Value, RSUs outstanding, Ending Balance | $ / shares | $ 9.37 |
Stock Based Compensation - Su_4
Stock Based Compensation - Summary of Assumptions Used to Calculate Estimated Fair Value of Stock Option Awards (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Dividend yield | 0.00% | |
Stock Options | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected volatility, Minimum | 80.49% | 74.49% |
Expected volatility, Maximum | 83.14% | 82.26% |
Expected volatility, Weighted Average | 81.82% | 75.42% |
Dividend yield | 0.00% | 0.00% |
Risk-free interest rates, Minimum | 0.87% | 0.27% |
Risk-free interest rates, Maximum | 1.31% | 0.83% |
Risk-free interest rates, Weighted Average | 1.19% | 0.73% |
Expected term, Weighted Average | 6 years 18 days | 6 years |
Minimum | Stock Options | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term | 5 years 5 months 26 days | 5 years |
Maximum | Stock Options | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term | 6 years 7 months 20 days | 6 years 7 months 6 days |
Leases - Additional Information
Leases - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Operating lease description | The Company leases office space under operating leases with expirations ranging from April 2022 to March 2025, some of which include rent escalations or an option to extend the lease for up to three years per renewal. |
Operating lease renewal term | 3 years |
Lessee, Operating Lease, Existence of Option to Extend [true false] | true |
Operating lease, not yet commenced, description | the Company has not entered into any leases that have not yet commenced that would entitle the Company to significant rights or create additional obligations. |
Leases - Summary of Future Mini
Leases - Summary of Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
2022 | $ 1,225 | |
2023 | 1,038 | |
2024 | 618 | |
2025 | 104 | |
Total future minimum lease payments | 2,985 | |
Less: Imputed interest | (280) | |
Present value of operating lease liabilities | 2,705 | |
Less: Current portion | 975 | $ 802 |
Long-term operating lease liabilities | $ 1,730 | $ 2,449 |
Weighted average remaining lease term in years | 2 years 8 months 15 days | |
Weighted average discount rate | 7.61% |
Leases - Components of Lease Ex
Leases - Components of Lease Expense and Related Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Lessee, Lease, Description [Line Items] | ||
Rent expense | $ 1,204 | $ 1,122 |
Short-term lease costs | 197 | |
Variable lease costs | 99 | 94 |
Lease costs | 1,303 | 1,413 |
Cash paid for operating leases | 1,206 | 1,116 |
Cost of Sales | ||
Lessee, Lease, Description [Line Items] | ||
Lease costs | 219 | 239 |
Selling, General and Administrative | ||
Lessee, Lease, Description [Line Items] | ||
Lease costs | $ 1,084 | $ 1,174 |
Term Loan - Additional Informat
Term Loan - Additional Information (Details) $ / shares in Units, $ in Millions | Aug. 23, 2021USD ($)$ / sharesshares | Oct. 07, 2019USD ($)shares | Oct. 16, 2018USD ($)Borrowingshares | Jun. 23, 2017USD ($)shares | Jun. 30, 2026USD ($) | Dec. 31, 2021USD ($)shares | Sep. 30, 2021USD ($) | Apr. 22, 2020USD ($) |
Debt Instrument [Line Items] | ||||||||
Number of warrants issued | shares | 331,503 | |||||||
Amended and Restated Credit Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate minimum cash balance | $ 3 | |||||||
Debt instrument covenant description | The amended and restated credit agreement also includes financial covenants that require the Company to (i) maintain, at all times, a minimum aggregate balance of $3.0 million in cash in one or more controlled accounts, and (ii) satisfy certain minimum revenue thresholds, measured for the twelve consecutive month period on each calendar quarter-end until June 30, 2026. These thresholds increase over time and range from $26.4 million for the twelve month period ended September 30, 2021 to $95.3 million for the twelve month period ended June 30, 2026. Failure to satisfy these financial covenants would constitute an event of default under the agreement. During the year ended December 31, 2021, the Company was in compliance with all financial covenants and conditions required by the outstanding Perceptive Loan. | |||||||
Paycheck Protection Program Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate of loan amount granted | $ 5.1 | |||||||
Minimum | Amended and Restated Credit Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Revenue thresholds increase over time | $ 26.4 | |||||||
Maximum | Amended and Restated Credit Agreement | Forecast | ||||||||
Debt Instrument [Line Items] | ||||||||
Revenue thresholds increase over time | $ 95.3 | |||||||
Perceptive Credit Holdings L P | ||||||||
Debt Instrument [Line Items] | ||||||||
Delayed draw term loan | $ 10 | $ 20 | ||||||
Initial term loan | $ 10 | $ 10 | ||||||
Number of borrowings | Borrowing | 2 | |||||||
initial delayed draw date | Oct. 31, 2018 | Dec. 22, 2017 | ||||||
Loan origination fee percentage | 1.50% | 1.50% | ||||||
Aggregate delayed draw term loan | $ 20 | |||||||
Maturity date | Jun. 23, 2022 | |||||||
Perceptive Credit Holdings L P | LIBOR Plus 2% | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate margin on borrowings | 11.25% | 11.25% | ||||||
Perceptive Credit Holdings L P | LIBOR Plus 2% | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate margin on borrowings | 9.25% | |||||||
Additional interest rate on borrowing | 2.00% | |||||||
Perceptive Credit Holdings L P | Series D Preferred Shares | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of warrants issued | shares | 54,793 | |||||||
Perceptive Credit Holdings L P | Series E Preferred Shares | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of warrants issued | shares | 49,314 | 49,315 | ||||||
Perceptive Credit Holdings L P | Tranche One | ||||||||
Debt Instrument [Line Items] | ||||||||
Delayed draw term loan | $ 10 | |||||||
Perceptive Credit Holdings L P | Tranche One | Series E Preferred Shares | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of warrants issued | shares | 32,876 | |||||||
Perceptive Credit Holdings L P | Tranche Two | ||||||||
Debt Instrument [Line Items] | ||||||||
Delayed draw term loan | $ 10 | |||||||
Perceptive Credit Holdings L P | Tranche Two | Series E Preferred Shares | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of warrants issued | shares | 32,876 | |||||||
Perceptive Credit Holdings III, LP | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate delayed draw term loan | $ 20 | |||||||
Maturity date | Aug. 23, 2026 | |||||||
Term loan, closing fee | $ 0.5 | |||||||
Effective interest rate percentage | 14.59% | |||||||
Perceptive Credit Holdings III, LP | Tranche One | ||||||||
Debt Instrument [Line Items] | ||||||||
Delayed draw term loan | $ 10 | |||||||
Term loan expired | $ 10 | |||||||
Perceptive Credit Holdings III, LP | Tranche One | Series E Preferred Shares | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of warrants issued | shares | 150,684 | |||||||
Purchase price per share of warrant | $ / shares | $ 11 | |||||||
Perceptive Credit Holdings III, LP | Tranche Two | ||||||||
Debt Instrument [Line Items] | ||||||||
Delayed draw term loan | $ 10 | |||||||
Maturity date | Mar. 31, 2022 | |||||||
Perceptive Credit Holdings III, LP | Tranche Two | Series E Preferred Shares | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of warrants issued | shares | 150,684 | |||||||
Purchase price per share of warrant | $ / shares | $ 11 |
Term Loan - Schedule of Future
Term Loan - Schedule of Future Principal Repayments of Term Loan (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Debt Disclosure [Abstract] | |
2026 | $ 30,000 |
Total | $ 30,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Contingency [Line Items] | |||
Effective tax rate | 0.00% | 0.00% | |
Valuation allowance | $ 79,476,000 | $ 64,211,000 | |
Federal net operating loss carryforwards | 287,600,000 | 245,400,000 | |
State net operating loss carryforwards | 173,400,000 | 145,000,000 | |
Deferred tax assets operating loss carryforwards will not expired | 170,500,000 | ||
Federal research and development tax credit carry-forwards | 3,300,000 | 2,900,000 | |
State research and development tax credit carry-forwards | 3,900,000 | 3,400,000 | |
Unrecognized tax benefits | 1,791,000 | $ 1,575,000 | $ 1,311,000 |
Interest or penalties associated with unrecognized tax benefits | $ 0 | ||
CARES Act | |||
Income Tax Contingency [Line Items] | |||
CARES Act net operating loss carryback period for certain losses | 5 years | ||
CARES Act, tax period description | The CARES Act is an emergency economic stimulus package that includes spending and tax breaks to strengthen the United States economy and fund a nationwide effort to curtail the effects of COVID-19. While the CARES Act provides sweeping tax changes in response to the pandemic, some of the more significant provisions which are expected to impact the Company’s financial statements include removal of certain limitations on utilization of net operating losses, increasing the loss carryback period for certain losses to five years and increasing the ability to deduct interest expense, as well as amending certain provisions of the previously enacted Tax Cuts and Jobs Act. | ||
R&D credit carryforwards | |||
Income Tax Contingency [Line Items] | |||
Ownership change percentage | 50.00% | ||
Federal | |||
Income Tax Contingency [Line Items] | |||
Tax credit carryforward begin to expiration period | 2032 | ||
State | |||
Income Tax Contingency [Line Items] | |||
Operating loss carryforwards begin to expiration period | 2026 |
Income Taxes - Components of Pr
Income Taxes - Components of Provision (Benefit) for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Current tax expense | ||
State and local | $ 2 | $ 2 |
Total current | 2 | 2 |
Deferred tax expense: | ||
Total provision for income taxes | $ 2 | $ 2 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Tax Rate of Provision (Benefit) for Income Taxes (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Tax computed at federal statutory rate | 21.00% | 21.00% |
State income tax - net of federal benefit | 3.31% | 3.01% |
Tax credits | 1.13% | 1.44% |
Change in valuation allowance | (25.51%) | (26.65%) |
Stock-based compensation | (0.20%) | (0.22%) |
Other deferred adjustments | 0.56% | 1.51% |
Permanent items | (0.29%) | (0.09%) |
Income tax provision | 0.00% | 0.00% |
Income Taxes - Significant Comp
Income Taxes - Significant Components of Net Deferred Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 70,731 | $ 60,260 |
Fixed assets and intangible assets | 1,449 | 1,507 |
Lease liabilities | 660 | 783 |
Accruals and reserves | 1,178 | 1,349 |
Stock-based compensation | 864 | 410 |
Tax credits | 4,763 | 4,191 |
State Taxes | 3 | |
Other | 890 | 49 |
Gross deferred tax assets | 80,538 | 68,549 |
Less: valuation allowance | (79,476) | (64,211) |
Net deferred tax assets | 1,062 | 4,338 |
Deferred tax liabilities: | ||
Fixed assets and intangible assets | (392) | (605) |
Right of use assets | (670) | (773) |
State Taxes | (2,960) | |
Total gross deferred tax liabilities | $ (1,062) | $ (4,338) |
Income Taxes - Summary of Chang
Income Taxes - Summary of Changes in Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Gross unrecognized tax benefits at the beginning of the year | $ 1,575 | $ 1,311 |
Increases related to current year tax positions | 204 | 251 |
Increases related to prior year tax positions | 12 | 13 |
Gross unrecognized tax benefits at the end of the year | $ 1,791 | $ 1,575 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Member of Board and Stockholder | Facility space, finance and accounting services | Selling, General and Administrative | ||
Related Party Transaction [Line Items] | ||
Expenses incurred | $ 0.2 | $ 0.2 |
Former Owner of TDO | ||
Related Party Transaction [Line Items] | ||
Contingent earnout paid | 0.7 | 1 |
Former Owner of TDO | Facility space, finance and accounting services | Selling, General and Administrative | ||
Related Party Transaction [Line Items] | ||
Payments to related party | $ 0.2 | $ 0.2 |
Segment Information - Summary o
Segment Information - Summary of Segment Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 33,197 | $ 23,351 |
Cost of sales | 24,861 | 19,466 |
Gross profit | $ 8,336 | $ 3,885 |
Gross margin | 25.00% | 17.00% |
Operating expenses | ||
Selling, general and administrative | $ 33,913 | $ 26,695 |
Research and development | 18,568 | 20,461 |
Change in fair value of contingent earnout | 261 | (473) |
Total operating expenses | 52,742 | 46,683 |
Loss from operations | (44,406) | (42,798) |
Product | ||
Segment Reporting Information [Line Items] | ||
Revenue | 25,811 | 17,338 |
Cost of sales | 21,992 | 17,152 |
Gross profit | $ 3,819 | $ 186 |
Gross margin | 15.00% | 1.00% |
Operating expenses | ||
Selling, general and administrative | $ 31,781 | $ 24,794 |
Research and development | 16,959 | 19,027 |
Change in fair value of contingent earnout | 261 | (473) |
Total operating expenses | 49,001 | 43,348 |
Loss from operations | (45,182) | (43,162) |
Software | ||
Segment Reporting Information [Line Items] | ||
Revenue | 7,386 | 6,013 |
Cost of sales | 2,869 | 2,314 |
Gross profit | $ 4,517 | $ 3,699 |
Gross margin | 61.00% | 62.00% |
Operating expenses | ||
Selling, general and administrative | $ 2,132 | $ 1,901 |
Research and development | 1,609 | 1,434 |
Total operating expenses | 3,741 | 3,335 |
Loss from operations | $ 776 | $ 364 |
Segment Information - Depreciat
Segment Information - Depreciation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Depreciation | $ 1,426 | $ 2,079 |
Product | ||
Segment Reporting Information [Line Items] | ||
Depreciation | 1,409 | 2,059 |
Software | ||
Segment Reporting Information [Line Items] | ||
Depreciation | $ 17 | $ 20 |
Segment Information - Segment A
Segment Information - Segment Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Segment Reporting Asset Reconciling Item [Line Items] | ||
Total assets | $ 115,499 | $ 76,141 |
Product | ||
Segment Reporting Asset Reconciling Item [Line Items] | ||
Total assets | 104,588 | 64,021 |
Software | ||
Segment Reporting Asset Reconciling Item [Line Items] | ||
Total assets | $ 10,911 | $ 12,120 |
Net Loss Per Share - Computatio
Net Loss Per Share - Computation of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | ||
Net loss attributable to common stock holders | $ (48,499) | $ (46,665) |
Denominator: | ||
Weighted-average shares outstanding - basic and diluted | 5,694,594 | 1,195,944 |
Net loss per share - basic and diluted | $ (8.52) | $ (39.02) |
Net Loss Per Share - Summary of
Net Loss Per Share - Summary of Potentially Dilutive Securities Excluded from the Computation of Diluted Net Loss Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 3,789,645 | 19,684,684 |
Convertible Preferred Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 17,031,887 | |
Stock Options | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 3,119,993 | 2,247,136 |
RSUs | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 338,149 | |
Warrants | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 331,503 | 180,819 |
Forward Obligation | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 224,842 |