Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2022 | May 04, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | Sonendo, Inc. | |
Entity Central Index Key | 0001407973 | |
Entity Current Reporting Status | No | |
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 Common Stock, Shares Outstanding | 26,427,325 | |
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 Quarterly Report | true | |
Document Transition Report | false | |
Title of 12(b) Security | Common stock, par value $0.001 per share | |
Trading Symbol | SONX | |
Security Exchange Name | NYSE |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 66,054 | $ 84,641 |
Accounts receivable, net | 2,702 | 2,516 |
Inventory | 10,134 | 8,150 |
Prepaid expenses and other current assets | 3,968 | 3,552 |
Total current assets | 82,858 | 98,859 |
Property and equipment, net | 2,177 | 2,366 |
Operating lease right-of-use assets | 2,478 | 2,746 |
Intangible assets, net | 2,790 | 2,956 |
Goodwill | 8,454 | 8,454 |
Other assets | 118 | 118 |
Total assets | 98,875 | 115,499 |
Current liabilities: | ||
Accounts payable | 2,235 | 3,061 |
Accrued expenses | 4,416 | 4,758 |
Accrued compensation | 2,513 | 3,376 |
Operating lease liabilities | 966 | 975 |
Other current liabilities | 1,957 | 2,482 |
Total current liabilities | 12,087 | 14,652 |
Operating lease liabilities, net of current | 1,474 | 1,730 |
Term loan, net of current | 26,620 | 26,496 |
Other liabilities | 517 | 558 |
Total liabilities | 40,698 | 43,436 |
Commitments and contingencies (Note 8) | ||
Stockholders' deficit: | ||
Preferred stock, $0.001 par value; authorized -10,000,000 shares; issued and outstanding - none | ||
Common stock, $0.001 par value; authorized - 500,000,000 shares; issued - 26,465,797 shares as of March 31,2022 and 26,383,225 shares as of December 31, 2021; outstanding - 26,419,108 shares as of March 31, 2022 and 26,336,536 shares as of December 31, 2021 | 26 | 26 |
Additional paid-in-capital | 385,768 | 384,132 |
Accumulated deficit | (327,566) | (312,044) |
Stockholders' deficit before treasury stock | 58,228 | 72,114 |
Less: Treasury stock | (51) | (51) |
Total stockholders' equity | 58,177 | 72,063 |
Total liabilities and stockholders' equity | $ 98,875 | $ 115,499 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 26,465,797 | 26,383,225 |
Common stock, shares outstanding | 26,419,108 | 26,336,536 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Total revenue | $ 9,033 | $ 7,427 |
Cost of sales | 6,754 | 5,685 |
Gross profit | 2,279 | 1,742 |
Operating expenses: | ||
Selling, general and administrative | 11,985 | 6,524 |
Research and development | 4,850 | 5,046 |
Change in fair value of contingent earnout | 14 | |
Total operating expenses | 16,835 | 11,584 |
Loss from operations | (14,556) | (9,842) |
Interest and financing costs, net | (966) | (1,064) |
Loss before income tax expense | (15,522) | (10,906) |
Net loss and comprehensive loss | $ (15,522) | $ (10,906) |
Net loss per share attributable to common stock - basic and diluted | $ (0.59) | $ (9.05) |
Weighted-average shares outstanding - basic and diluted | 26,405,252 | 1,205,314 |
Product | ||
Total revenue | $ 7,203 | $ 5,809 |
Cost of sales | 6,078 | 5,075 |
Gross profit | 1,125 | 734 |
Operating expenses: | ||
Selling, general and administrative | 11,526 | 6,066 |
Research and development | 4,431 | 4,639 |
Change in fair value of contingent earnout | 14 | |
Total operating expenses | 15,957 | 10,719 |
Loss from operations | (14,832) | (9,985) |
Software | ||
Total revenue | 1,830 | 1,618 |
Cost of sales | 676 | 610 |
Gross profit | 1,154 | 1,008 |
Operating expenses: | ||
Selling, general and administrative | 459 | 458 |
Research and development | 419 | 407 |
Total operating expenses | 878 | 865 |
Loss from operations | $ 276 | $ 143 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (unaudited) - 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, 2020 | 17,031,887 | |||||
Convertible Preferred Stock Beginning balance at Dec. 31, 2020 | $ 281,342 | |||||
Beginning balance, Shares at Dec. 31, 2020 | 1,200,335 | |||||
Beginning balance at Dec. 31, 2020 | $ (253,891) | $ 2 | $ (51) | $ 9,703 | $ (263,545) | |
Exercise of stock options | 33 | 33 | ||||
Exercise of stock options, Shares | 12,797 | |||||
Stock-based compensation | 494 | 494 | ||||
Net loss | (10,906) | (10,906) | ||||
Convertible Preferred Stock Ending balance, Shares at Mar. 31, 2021 | 17,031,887 | |||||
Convertible Preferred Stock Ending balance at Mar. 31, 2021 | $ 281,342 | |||||
Ending balance, Shares at Mar. 31, 2021 | 1,213,132 | |||||
Ending balance at Mar. 31, 2021 | (264,270) | $ 2 | (51) | 10,230 | (274,451) | |
Beginning balance, Shares at Dec. 31, 2021 | 26,336,536 | |||||
Beginning balance at Dec. 31, 2021 | 72,063 | $ 26 | (51) | 384,132 | (312,044) | |
Employee stock plans | $ 242 | 242 | ||||
Employee stock plans, Shares | 82,572 | |||||
Exercise of stock options, Shares | 61,438 | |||||
Stock-based compensation | $ 1,394 | 1,394 | ||||
Net loss | (15,522) | (15,522) | ||||
Ending balance, Shares at Mar. 31, 2022 | 26,419,108 | |||||
Ending balance at Mar. 31, 2022 | $ 58,177 | $ 26 | $ (51) | $ 385,768 | $ (327,566) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (15,522) | $ (10,906) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 246 | 404 |
Amortization intangible assets | 166 | 133 |
Amortization of right-of-use lease assets | 269 | 232 |
Stock-based compensation | 1,394 | 494 |
Amortization of debt issuance costs | 124 | 218 |
Change in fair value of contingent earnout | 14 | |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (186) | |
Inventory | (1,984) | (872) |
Prepaid expenses and other assets | (416) | |
Accounts payable | (826) | (168) |
Accrued expenses and other liabilities | (423) | (1,529) |
Deferred revenue | (24) | 21 |
Accrued compensation | (863) | (1,108) |
Net cash used in operating activities | (18,045) | (13,067) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (56) | (74) |
Net cash used in investing activities | (56) | (74) |
Financing activities: | ||
Payment of common stock issuance costs | (598) | |
Proceeds from exercise of common stock options | 242 | 33 |
Payment of contingent earnout | (117) | (667) |
Principal repayments on finance lease | (13) | (11) |
Net cash used in financing activities | (486) | (645) |
Net decrease in cash and cash equivalents | (18,587) | (13,786) |
Cash and cash equivalents at beginning of period | 84,641 | 51,722 |
Cash and cash equivalents at end of period | 66,054 | 37,936 |
Cash paid for: | ||
Interest | $ 848 | 850 |
Supplemental schedule of non-cash investing and financing activities: | ||
Operating lease right-of-use assets obtained in exchange for lease liabilities | $ 168 |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2022 | |
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 ("PIs"). In addition, the Company offers practice management software to enable an integrated digital office for dental practitioners. Basis of Presentation The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”) on a consistent basis with the Company’s annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, considered necessary for a fair statement of the Company’s financial information. Accordingly, the accompanying unaudited condensed consolidated financial statements do not include all of the information and notes required by GAAP for complete financial statements. The condensed consolidated balance sheet as of December 31, 2021 included herein was derived from the audited financial statements as of that date. The results of operations included in these condensed consolidated financial statements are not necessarily indicative of the results of operations to be expected for the year, any other interim period, or for any other future annual or interim period. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed, consolidated, or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the SEC on March 23, 2022. Initial Public Offering and Reverse Stock Split On October 20, 2021, the Company’s Board of Directors (the "Board") 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 unaudited condensed 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 to 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 warrants to purchase 331,503 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 March 31, 2022, the Company had cash and cash equivalents of $ 66.1 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 March 31, 2022 had an accumulated deficit of $ 327.6 million . During the three months ended March 31, 2022, the Company incurred net losses of $ 15.5 million and used $ 18.0 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 unaudited condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, wh ich contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The unaudited condensed 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, together with anticipated revenue and available debt financing arrangements 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 unaudited condensed consolidated financial statements. If the Company's actual operating expenses significantly exceed its operating plan or its debt financing arrangements become unavailable because certain borrowing requirements are not met (see Note 9), the Company may have to significantly delay or scale back its operations to reduce working capital requirements, and substantial uncertainty would exist with respect to the Company’s ability to continue as a going concern. In addition, the Company would prioritize necessary and appropriate steps to enable the continued operations of the business and preservation of the value of its assets beyond the next 12 months, including but not limited to, actions such as reducing personnel-related costs and delaying or curtailing the Company’s commercial efforts, development activities and other discretionary expenditures that are within the Company’s control. These reductions in expenditures, if required, may have an adverse impact on the Company’s ability to achieve certain of the Company’s planned objectives in fiscal year 2022. COVID-19 The COVID-19 pandemic has negatively impacted our operations, revenue and overall financial condition, and may negatively impact our operations, revenue, and overall financial condition in the future if new and more transmissible vaccine-resistant variants emerge. We continued to experience disruptions to our business during the three months ended March 31, 2022, as a result of customers' continuing reluctance to start root canal procedures in light of the ongoing risk posed by the virus. Our customers, including endodontists, have experienced significant financial hardship and some of them may never fully recover. We 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 our 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 also resulted in, and may in the future result in, significant disruption to the global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity. As of March 31, 2022, the COVID-19 pandemic did not trigger any asset impairments for the Company. The duration and ultimate economic impact of the COVID-19 pandemic on our business remains uncertain at this time. We expect 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 our 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 Accounting Policies and
Summary Accounting Policies and Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary Accounting Policies and Recent Accounting Pronouncements | 2. Summary Accounting Policies and Recent Accounting Pronouncements The accounting policies followed by the Company are set forth in Part II, Item 8, Note 2, Summary of Accounting Policies , of the Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021. 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 unaudited condensed consolidated financial statements and disclosures in the accompanying notes, including estimates of probable losses and expenses, as of the date of the accompanying unaudited condensed 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 unaudited condensed 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 unaudited condensed consolidated financial statements under different assumptions or conditions. 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 PIs 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 and Canada 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 PIs 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: March 31, December 31, 2022 2021 (in thousands) Extended service contracts $ 187 $ 251 Subscription software licenses 560 520 Total contract liabilities 747 771 Less: long-term portion — — Contract liabilities – current $ 747 $ 771 Contract liabilities are included within other current liabilities and other long-term liabilities in the accompanying unaudited condensed consolidated balance sheets. Revenue recognized during the three months ended March 31, 2022 and 2021 that was included in the contract liability balance as of December 31, 2021 and 2020 was $ 0.6 million and $ 0.5 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: Three Months Ended March 31, 2022 2021 (in thousands) Product revenue recognized at a point in time $ 7,027 $ 5,614 Product revenue recognized over time 176 195 Software revenue recognized at a point in time 219 174 Software revenue recognized over time 1,611 1,444 Total $ 9,033 $ 7,427 No individual customer accounted for more than 10% of sales for the three months ended March 31, 2022 and 2021. Warranty Reserve The Company provides a standard warranty on its GentleWave Systems for a specified period of time. For the three months ended March 31, 2022 and 2021, 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 unaudited condensed 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 three months ended March 31, 2022 and 2021: Three Months Ended March 31, 2022 2021 (in thousands) Balance at beginning of period $ 1,620 $ 1,584 Provision for warranties issued 310 330 Warranty costs incurred ( 315 ) ( 461 ) Balance at end of period $ 1,615 $ 1,453 Current portion $ 1,153 $ 1,043 Non-current portion 462 410 Total $ 1,615 $ 1,453 The warranty liability, current and non-current, are included in other current liabilities and other liabilities, respectively, on the unaudited condensed consolidated balance sheets. Recent Accounti ng Pronouncements 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 unaudited condensed consolidated financial statements. Accounting Pronouncement Recently Adopted 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. The Company adopted ASU 2019-12 in the first quarter of 2022 as an emerging growth company. The adoption did no t have significant impact on the Company's unaudited condensed 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 aft er December 15, 2023, which for the Company is the first quarter of 2024, with early adoption permitted beginning first quarter of 2021. The Company early adopted the ASU on January 1, 2022 as a smaller reporting company. The adoption did no t have significant impact on the Company's unaudited condensed consolidated financial statements. 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 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. The Company early adopted the ASU on January 1, 2022 . The adoption did no t have significant impact on the Company's unaudited condensed consolidated financial statements. Recent Accounting Updates Not Yet Effective 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 condensed consolidated financial statements. |
Balance Sheet Components
Balance Sheet Components | 3 Months Ended |
Mar. 31, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Components | 3. Balance Sheet Components Inventory Inventory consisted of the following: March 31, December 31, 2022 2021 (in thousands) Raw materials $ 6,141 $ 4,911 Work in process 310 270 Finished goods 3,683 2,969 Total inventory $ 10,134 $ 8,150 The Company recorded a reserve for excess and obsolete inventory o f $ 0.6 million a nd $ 0.7 million at March 31, 2022 and December 31, 2021, respectively. Intangible assets, net Intangible assets as of March 31, 2022 and December 31, 2021 consisted of the following: March 31, 2022 Weighted Average Amortization Period Gross Accumulated Net (in years) (in thousands) Developed Technology ( 5 - 10 years) 4.0 $ 2,445 $ 857 $ 1,588 Customer relationships ( 7 years) 2.8 1,910 944 966 Tradenames ( 10 years) 0.8 360 124 236 Total intangible assets 7.6 $ 4,715 $ 1,925 $ 2,790 December 31, 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 Amortization expens e was $ 0.2 million for the three months ended March 31, 2022, with approximately $ 0.1 million amortization expense recorded in cost of sales and $ 0.1 million recorded in selling, general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss. Amortization expense was $ 0.1 million for the three months ended March 31, 2021, which was mostly recorded in selling, general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss. The following table presents estimated future annual amortization expense related to intangible assets, net as of March 31, 2022: Future Intangible Asset Amortization Expenses (in thousands) 2022 (remaining nine months) $ 498 2023 618 2024 442 2025 386 2026 and thereafter 846 Total future amortization expense $ 2,790 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 4. Fair Value of Financial Instruments 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 not have any transfers of assets and liabilities between the levels of the fair value measurement hierarchy during the periods presented. 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 March 31, 2022 and December 31, 2021: March 31, 2022 Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (in thousands) Assets: Money market funds $ 65,206 $ 65,206 $ — $ — 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 Recurring liabilities included in Level 3 for the periods presented consisted of 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, 2021 $ — $ — $ 524 $ 524 Payment of contingent earnout — — ( 524 ) ( 524 ) March 31, 2022 $ — $ — $ — $ — Warrant Forward Contingent Total (in thousands) December 31, 2020 $ 1,914 $ 2,750 $ 930 $ 5,594 Payment of contingent earnout — — ( 667 ) ( 667 ) Change in fair value — — 14 14 March 31, 2021 $ 1,914 $ 2,750 $ 277 $ 4,941 There were no transfers in or out of Level 3 during the three months ended March 31, 2022 and 2021. Warrants 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 Perceptive Credit Holdings III, 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 issued and outstanding at March 31, 2022 and December 31, 2021 included the following: Number of warrants Exercise price per share 27,397 $ 10.95 54,793 $ 17.80 249,313 $ 20.08 331,503 In April 2022, the Company amended its term loan and the warrants previously issued to Perceptive Credit Holdings III, LP and certain of its affiliates to purchase an aggregate of 304,105 shares of its common stock. Such warrants were amended solely to reduce the exercise price of the warrants to $ 12.00 per share. There was no impact to the Company's unaudited condensed financial statements as of March 31, 2022. As of March 31, 2021, warrants fully vested and outstanding had estimated fair values ranging betwee n $ 7.88 to $ 12.28 . Fair values were determined using the Black-Scholes option-pricing model with the following input assumptions for the three months ended March 31, 2021: Three Months Ended March 31, 2021 Expected volatility range (weighted average) 79.33 to 86.41 % ( 80.39 %) Dividend yield 0.00 % Risk-free interest rates range (weighted average) 0.30 % to 1.57 % ( 1.31 %) Expected term range (average) 2.75 years to 8.52 years ( 7.01 years) 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 . |
Convertible Preferred Stock and
Convertible Preferred Stock and Common Stock | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Convertible Preferred Stock and Common Stock | 5. Convertible Preferred Stock and Common Stock Authorized Shares On November 2, 2021, the Company amended and restated its certificate of incorporation and bylaws to 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. |
Stock-Based Compensation Expens
Stock-Based Compensation Expense | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Stock Based Compensation Expense | 6. Stock-based Compensation Expense 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 unaudited condensed consolidated statement of operations and comprehensive loss for the three months ended March 31: Three Months Ended March 31, 2022 2021 (in thousands) Options $ 883 $ 494 RSUs 511 - Total stock-based compensation expense $ 1,394 $ 494 Three Months Ended March 31, 2022 2021 (in thousands) Cost of sales $ 101 $ 61 Selling, general and administrative 978 292 Research and development 315 141 Total stock-based compensation expense $ 1,394 $ 494 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 March 31 , 2 0 22. Unamortized Compensation Costs Weighted Average Service Period (in thousands) (years) Options $ 8,674 2.3 RSUs 13,394 1.2 Total unamortized compensation cost $ 22,068 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, 2021 3,119,993 $ 7.59 Granted — Forfeited ( 33,599 ) $ 7.92 Exercised ( 61,438 ) $ 3.94 $ 123 Options outstanding, March 31, 2022 3,024,956 $ 7.66 7.4 $ 427 Options vested and exercisable, March 31, 2022 1,527,230 $ 4.96 5.8 $ 427 Vested and expected to vest after March 31, 2022 2,840,872 $ 7.48 7.3 $ 427 The weighted-average grant-date fair value of options granted during the three months ended March 31, 2022 and 2021 wa s $ 5.72 pe r share an d $ 11.26 per share, re spectively. The following table summarizes the non-vested stock options as of March 31, 2022 and December 31, 2021: Number of Shares Weighted Non-vested Options, December 31, 2021 1,632,852 $ 7.09 Non-vested Options, March 31, 2022 1,497,827 $ 7.19 The total fair value of shares vested during the three months ended March 31, 2022 and 2021 was $ 0.7 million and $ 0.7 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 three months ended March 31, 2022, the Company did not repurchase shares. There was no material amount of shares of common stock subject to repurchase as of March 31, 2022. 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 three months ended March 31, 2022 and 2021, 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, 2021 338,149 $ 9.37 Granted 2,370,259 $ 5.37 Forfeited ( 5,646 ) $ 7.78 RSUs outstanding, March 31, 2022 2,702,762 $ 5.86 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 , 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 (remaining nine months) $ 911 2023 1,038 2024 618 2025 104 2026 and thereafter — Total future minimum lease payments 2,671 Less: Imputed Interest ( 231 ) Present value of operating lease liabilities $ 2,440 Less: Current portion 966 Long-term operating lease liabilities $ 1,474 Weighted average remaining lease term in years 2.51 Weighted average discount rate 7.58 % Variable operating lease expenses consist primarily of real estate taxes and insurance. The components of lease expense and related cash flows were as follows: Three Months Ended March 31, 2022 2021 (in thousands) Rent expense $ 317 $ 293 Short-term lease costs — 36 Variable lease costs 26 42 Total $ 343 $ 371 Cash paid for operating leases $ 313 $ 298 Three Months Ended March 31, 2022 2021 (in thousands) Cost of sales $ 58 $ 60 Selling, general and administrative 285 311 Total $ 343 $ 371 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
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 unaudited condensed 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 | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Term Loan | 9. Term Loan Perceptive loan On August 23, 2021, the Company entered into a fifth amendment to the Credit Agreement and Guaranty with Perceptive Credit Holdings, LP (the " Perceptive Loan"), which transferred the loan to Perceptive Credit Holdings III, LP. In connection with this transfer and assignment, the Company entered into an amended and restated credit agreement and guaranty with Perceptive Credit Holdings III, LP (the "Amended Perceptive Loan Agreement"), which provides two additional tranches of delayed-draw term loans of $ 10.0 million each, for an aggregate amount of $ 20.0 million (the "Amended Perceptive Loan"). The Amended Perceptive Loan Agreement provided for the issuance by the Company of warrants to purchase 150,684 shares of Series E Preferred shares at $ 11.00 per share, which was converted to the common stock upon the Company's IPO. The Amended Perceptive Loan Agreement modified the repayment of all outstanding principal to be due at maturity on August 23, 2026 . In conjunction with the Amended Perceptive Loan, the Company paid a closing fee equal to $ 0.5 million as well as the lender’s legal fees and expenses. The Company accounted for the amendment as a modification. On December 31, 2021, the first $ 10.0 million loan expired. The obligation of Perceptive Credit Holdings III, LP to make the second $ 10.0 million loan was subject to the making of the first loan. Because the Company did not draw t he first loan, the second loan, which was required to be initiated on or before March 31, 2 022 was forfeited. For the three months ended March 31, 2 022 , the effective interest rate of the Amended Perceptive Loan was 14.59 %. As of March 31, 2 022 and 2021, the fair value of the Perceptive Loan approximates its carrying amount. Future principal repayments on the Amended Perceptive Loan, as amended, as of March 31, 2 022 , are as follows: Principal (in thousands) 2026 $ 30,000 Total $ 30,000 The Amended Perceptive Loan 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 three months ended March 31, 2 022 , the Company was in compliance with all financial covenants and conditions required by the outstanding Amended Perceptive Loan Agreement. On April 6, 2022, the Company entered into Amendment No. 1 (the “Amendment”) to the Amended Perceptive Loan Agreement. The Amendment extends the borrowing deadline for the first tranche of $ 10.0 million of delayed-draw term loans from December 31, 2021 to September 30, 2022 , subject to the Company having generated at least $ 36.0 million in revenue for the 12 consecutive month period most recently ended prior to the borrowing date. The Amendment also extends the borrowing deadline for the second tranche of $ 10.0 million delayed-draw term loans from March 31, 2022 to June 30, 2023 , subject to (i) the Company having generated at least $ 46.0 million in revenue for the 12 consecutive month period most recently ended prior to the borrowing date; and (ii) the closing market capitalization of the Company being at least $ 100.0 million on each trading day of the period of 15 consecutive trading days ending on the business day the borrowing notice for the tranche is delivered to the lender. As a condition to entering into the Amendment, on April 6, 2022, the Company also amended the warrants previously issued to Perceptive Credit Holdings III, LP and certain of its affiliates to purchase an aggregate of 304,105 shares of its common stock. Such warrants were amended solely to reduce the exercise price of the warrants to $ 12.00 per share. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes The Company maintains a full valuation allowance against its net deferred tax assets as of March 31, 2022 based on the current assessment that it is not more likely than not these future benefits will be realized before expiration. No material income tax expense or benefit has been recorded given the valuation allowance position and projected taxable losses in the jurisdictions where the Company files income tax returns. The Company has not experienced any significant increases or decreases to its unrecognized tax benefits since December 31, 2021 and does not expect any within the next 12 months. The Company monitors changes to the tax laws in the states it conducts business and files corporate income tax returns. Utilization of the net operating loss carryforwards may be subject to substantial annual limitation due to ownership change limitations that may have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), as well as similar state provisions. These ownership changes may limit the amount of net operating loss carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an “ownership change,” as defined by Section 382 of the Code, 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 analysis regarding the limitation of net operating loss and R&D credit carryforwards as of March 31, 2022. The Company is subject to U.S. federal and various states income taxes. The federal returns for tax years 2018 through 2021 remain open to examination and the state returns remain subject to examination for tax years 2017 through 2021 . Carryforward attributes that were generated in years where the statute of limitations is closed may still be adjusted upon examination by the Internal Revenue Service or other respective tax authorities. All other state jurisdictions remain open to examination. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2022 | |
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 the Company's Chief Operating Decision Maker ("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 for the three months ended March 31 : 2022 2021 (in thousands, except percentage data) Product Software Total Product Software Total Revenue $ 7,203 $ 1,830 $ 9,033 $ 5,809 $ 1,618 $ 7,427 Cost of sales 6,078 676 6,754 5,075 610 5,685 Gross profit 1,125 1,154 2,279 734 1,008 1,742 Gross margin 16 % 63 % 25 % 13 % 62 % 23 % Operating expenses: Selling, general and administrative 11,526 459 11,985 6,066 458 6,524 Research and development 4,431 419 4,850 4,639 407 5,046 Change in fair value of contingent earnout — — — 14 — 14 Total operating expenses 15,957 878 16,835 10,719 865 11,584 Income (loss) from operations $ ( 14,832 ) $ 276 $ ( 14,556 ) $ ( 9,985 ) $ 143 $ ( 9,842 ) S egment Assets: As of March 31, 2022 As of December 31, 2021 (in thousands) Product $ 87,992 $ 104,588 Software 10,883 10,911 Total $ 98,875 $ 115,499 |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2022 | |
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: Three Months Ended March 31, 2022 2021 (in thousands, except shares and per share data) Numerator: Net loss attributable to common stock holders $ ( 15,522 ) $ ( 10,906 ) Denominator: Weighted-average shares outstanding – basic and diluted 26,405,252 1,205,314 Net loss per share – basic and diluted $ ( 0.59 ) $ ( 9.05 ) 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: Three Months Ended March 31, 2022 2021 Convertible preferred stock — 17,031,887 Stock options 3,024,956 2,957,860 RSUs 2,702,762 — Warrants 331,503 180,819 Forward obligation — 224,842 Total 6,059,221 20,395,408 |
Summary Accounting Policies a_2
Summary Accounting Policies and Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
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 unaudited condensed consolidated financial statements and disclosures in the accompanying notes, including estimates of probable losses and expenses, as of the date of the accompanying unaudited condensed 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 unaudited condensed 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 unaudited condensed consolidated financial statements under different assumptions or conditions. |
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 PIs 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 and Canada 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 PIs 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: March 31, December 31, 2022 2021 (in thousands) Extended service contracts $ 187 $ 251 Subscription software licenses 560 520 Total contract liabilities 747 771 Less: long-term portion — — Contract liabilities – current $ 747 $ 771 Contract liabilities are included within other current liabilities and other long-term liabilities in the accompanying unaudited condensed consolidated balance sheets. Revenue recognized during the three months ended March 31, 2022 and 2021 that was included in the contract liability balance as of December 31, 2021 and 2020 was $ 0.6 million and $ 0.5 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: Three Months Ended March 31, 2022 2021 (in thousands) Product revenue recognized at a point in time $ 7,027 $ 5,614 Product revenue recognized over time 176 195 Software revenue recognized at a point in time 219 174 Software revenue recognized over time 1,611 1,444 Total $ 9,033 $ 7,427 No individual customer accounted for more than 10% of sales for the three months ended March 31, 2022 and 2021. |
Warranty Reserve | Warranty Reserve The Company provides a standard warranty on its GentleWave Systems for a specified period of time. For the three months ended March 31, 2022 and 2021, 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 unaudited condensed 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 three months ended March 31, 2022 and 2021: Three Months Ended March 31, 2022 2021 (in thousands) Balance at beginning of period $ 1,620 $ 1,584 Provision for warranties issued 310 330 Warranty costs incurred ( 315 ) ( 461 ) Balance at end of period $ 1,615 $ 1,453 Current portion $ 1,153 $ 1,043 Non-current portion 462 410 Total $ 1,615 $ 1,453 The warranty liability, current and non-current, are included in other current liabilities and other liabilities, respectively, on the unaudited condensed consolidated balance sheets. |
Recent Accounting Pronouncements | Recent Accounti ng Pronouncements 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 unaudited condensed consolidated financial statements. Accounting Pronouncement Recently Adopted 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. The Company adopted ASU 2019-12 in the first quarter of 2022 as an emerging growth company. The adoption did no t have significant impact on the Company's unaudited condensed 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 aft er December 15, 2023, which for the Company is the first quarter of 2024, with early adoption permitted beginning first quarter of 2021. The Company early adopted the ASU on January 1, 2022 as a smaller reporting company. The adoption did no t have significant impact on the Company's unaudited condensed consolidated financial statements. 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 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. The Company early adopted the ASU on January 1, 2022 . The adoption did no t have significant impact on the Company's unaudited condensed consolidated financial statements. Recent Accounting Updates Not Yet Effective 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 condensed consolidated financial statements. |
Summary of Accounting Policies
Summary of Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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: March 31, December 31, 2022 2021 (in thousands) Extended service contracts $ 187 $ 251 Subscription software licenses 560 520 Total contract liabilities 747 771 Less: long-term portion — — Contract liabilities – current $ 747 $ 771 |
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: Three Months Ended March 31, 2022 2021 (in thousands) Product revenue recognized at a point in time $ 7,027 $ 5,614 Product revenue recognized over time 176 195 Software revenue recognized at a point in time 219 174 Software revenue recognized over time 1,611 1,444 Total $ 9,033 $ 7,427 No individual customer accounted for more than 10% of sales for the three months ended March 31, 2022 and 2021. |
Schedule of Reconciliation of Change in Estimated Warranty | The following table provides a reconciliation of the change in estimated warranty liabilities for the three months ended March 31, 2022 and 2021: Three Months Ended March 31, 2022 2021 (in thousands) Balance at beginning of period $ 1,620 $ 1,584 Provision for warranties issued 310 330 Warranty costs incurred ( 315 ) ( 461 ) Balance at end of period $ 1,615 $ 1,453 Current portion $ 1,153 $ 1,043 Non-current portion 462 410 Total $ 1,615 $ 1,453 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Inventory | Inventory consisted of the following: March 31, December 31, 2022 2021 (in thousands) Raw materials $ 6,141 $ 4,911 Work in process 310 270 Finished goods 3,683 2,969 Total inventory $ 10,134 $ 8,150 |
Schedule of Intangible Assets, Net | Intangible assets as of March 31, 2022 and December 31, 2021 consisted of the following: March 31, 2022 Weighted Average Amortization Period Gross Accumulated Net (in years) (in thousands) Developed Technology ( 5 - 10 years) 4.0 $ 2,445 $ 857 $ 1,588 Customer relationships ( 7 years) 2.8 1,910 944 966 Tradenames ( 10 years) 0.8 360 124 236 Total intangible assets 7.6 $ 4,715 $ 1,925 $ 2,790 December 31, 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 |
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 March 31, 2022: Future Intangible Asset Amortization Expenses (in thousands) 2022 (remaining nine months) $ 498 2023 618 2024 442 2025 386 2026 and thereafter 846 Total future amortization expense $ 2,790 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 and December 31, 2021: March 31, 2022 Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (in thousands) Assets: Money market funds $ 65,206 $ 65,206 $ — $ — 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 |
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, 2021 $ — $ — $ 524 $ 524 Payment of contingent earnout — — ( 524 ) ( 524 ) March 31, 2022 $ — $ — $ — $ — Warrant Forward Contingent Total (in thousands) December 31, 2020 $ 1,914 $ 2,750 $ 930 $ 5,594 Payment of contingent earnout — — ( 667 ) ( 667 ) Change in fair value — — 14 14 March 31, 2021 $ 1,914 $ 2,750 $ 277 $ 4,941 |
Summary of Warrants Issued and Outstanding | Warrants issued and outstanding at March 31, 2022 and December 31, 2021 included the following: Number of warrants Exercise price per share 27,397 $ 10.95 54,793 $ 17.80 249,313 $ 20.08 331,503 |
Summary of Fair Values Determined Using Black-Scholes Option-Pricing Model | As of March 31, 2021, warrants fully vested and outstanding had estimated fair values ranging betwee n $ 7.88 to $ 12.28 . Fair values were determined using the Black-Scholes option-pricing model with the following input assumptions for the three months ended March 31, 2021: Three Months Ended March 31, 2021 Expected volatility range (weighted average) 79.33 to 86.41 % ( 80.39 %) Dividend yield 0.00 % Risk-free interest rates range (weighted average) 0.30 % to 1.57 % ( 1.31 %) Expected term range (average) 2.75 years to 8.52 years ( 7.01 years) |
Stock-Based Compensation Expe_2
Stock-Based Compensation Expense (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock-Based Compensation Expense | 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 unaudited condensed consolidated statement of operations and comprehensive loss for the three months ended March 31: Three Months Ended March 31, 2022 2021 (in thousands) Options $ 883 $ 494 RSUs 511 - Total stock-based compensation expense $ 1,394 $ 494 Three Months Ended March 31, 2022 2021 (in thousands) Cost of sales $ 101 $ 61 Selling, general and administrative 978 292 Research and development 315 141 Total stock-based compensation expense $ 1,394 $ 494 |
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 March 31 , 2 0 22. Unamortized Compensation Costs Weighted Average Service Period (in thousands) (years) Options $ 8,674 2.3 RSUs 13,394 1.2 Total unamortized compensation cost $ 22,068 |
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, 2021 3,119,993 $ 7.59 Granted — Forfeited ( 33,599 ) $ 7.92 Exercised ( 61,438 ) $ 3.94 $ 123 Options outstanding, March 31, 2022 3,024,956 $ 7.66 7.4 $ 427 Options vested and exercisable, March 31, 2022 1,527,230 $ 4.96 5.8 $ 427 Vested and expected to vest after March 31, 2022 2,840,872 $ 7.48 7.3 $ 427 |
Summary of Non Vested Stock Options | The following table summarizes the non-vested stock options as of March 31, 2022 and December 31, 2021: Number of Shares Weighted Non-vested Options, December 31, 2021 1,632,852 $ 7.09 Non-vested Options, March 31, 2022 1,497,827 $ 7.19 |
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, 2021 338,149 $ 9.37 Granted 2,370,259 $ 5.37 Forfeited ( 5,646 ) $ 7.78 RSUs outstanding, March 31, 2022 2,702,762 $ 5.86 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Summary of Future Minimum Lease Payments | Future minimum lease payments under these leases are as follows: Lease Amounts (in thousands) 2022 (remaining nine months) $ 911 2023 1,038 2024 618 2025 104 2026 and thereafter — Total future minimum lease payments 2,671 Less: Imputed Interest ( 231 ) Present value of operating lease liabilities $ 2,440 Less: Current portion 966 Long-term operating lease liabilities $ 1,474 Weighted average remaining lease term in years 2.51 Weighted average discount rate 7.58 % |
Components of Lease Expense and Related Cash Flows | Variable operating lease expenses consist primarily of real estate taxes and insurance. The components of lease expense and related cash flows were as follows: Three Months Ended March 31, 2022 2021 (in thousands) Rent expense $ 317 $ 293 Short-term lease costs — 36 Variable lease costs 26 42 Total $ 343 $ 371 Cash paid for operating leases $ 313 $ 298 Three Months Ended March 31, 2022 2021 (in thousands) Cost of sales $ 58 $ 60 Selling, general and administrative 285 311 Total $ 343 $ 371 |
Term Loan (Tables)
Term Loan (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Future Principal Repayments of Term Loan | Future principal repayments on the Amended Perceptive Loan, as amended, as of March 31, 2 022 , are as follows: Principal (in thousands) 2026 $ 30,000 Total $ 30,000 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | The following tables present the Company’s segment information for the three months ended March 31 : 2022 2021 (in thousands, except percentage data) Product Software Total Product Software Total Revenue $ 7,203 $ 1,830 $ 9,033 $ 5,809 $ 1,618 $ 7,427 Cost of sales 6,078 676 6,754 5,075 610 5,685 Gross profit 1,125 1,154 2,279 734 1,008 1,742 Gross margin 16 % 63 % 25 % 13 % 62 % 23 % Operating expenses: Selling, general and administrative 11,526 459 11,985 6,066 458 6,524 Research and development 4,431 419 4,850 4,639 407 5,046 Change in fair value of contingent earnout — — — 14 — 14 Total operating expenses 15,957 878 16,835 10,719 865 11,584 Income (loss) from operations $ ( 14,832 ) $ 276 $ ( 14,556 ) $ ( 9,985 ) $ 143 $ ( 9,842 ) |
Segment Assets | egment Assets: As of March 31, 2022 As of December 31, 2021 (in thousands) Product $ 87,992 $ 104,588 Software 10,883 10,911 Total $ 98,875 $ 115,499 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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: Three Months Ended March 31, 2022 2021 (in thousands, except shares and per share data) Numerator: Net loss attributable to common stock holders $ ( 15,522 ) $ ( 10,906 ) Denominator: Weighted-average shares outstanding – basic and diluted 26,405,252 1,205,314 Net loss per share – basic and diluted $ ( 0.59 ) $ ( 9.05 ) |
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: Three Months Ended March 31, 2022 2021 Convertible preferred stock — 17,031,887 Stock options 3,024,956 2,957,860 RSUs 2,702,762 — Warrants 331,503 180,819 Forward obligation — 224,842 Total 6,059,221 20,395,408 |
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 | Mar. 31, 2022USD ($)Segment$ / sharesshares | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($)$ / sharesshares |
Organization And Basis Of Presentation [Line Items] | |||||
Reverse stock split | On October 20, 2021, the Company’s Board of Directors (the "Board") 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 | ||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | ||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | ||
Preferred stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||
Cash and cash equivalents | $ | $ 66,054 | $ 84,641 | |||
Accumulated deficit | $ | (327,566) | $ (312,044) | |||
Net loss | $ | 15,522 | $ 10,906 | |||
Cash and cash equivalents used in operations | $ | $ 18,045 | $ 13,067 | |||
Operating and Reportable segments | Segment | 2 | ||||
Common stock, shares issued | 26,465,797 | 26,383,225 | |||
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 Accounting Policies a_3
Summary Accounting Policies and Recent Accounting Pronouncements - Additional Information (Details) | 3 Months Ended | ||
Mar. 31, 2022USD ($)Customer | Mar. 31, 2021USD ($)Customer | Dec. 31, 2021USD ($) | |
Summary Of Accounting Policies [Line Items] | |||
Goodwill | $ 8,454,000 | $ 8,454,000 | |
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 | $ 600,000 | $ 500,000 | |
ASU 2019-12 | |||
Summary Of Accounting Policies [Line Items] | |||
Change in accounting principle, accounting standards update, adopted [true false] | true | ||
Change in accounting principle, accounting standards update, immaterial effect [true false] | true | ||
ASU 2020-06 | |||
Summary Of Accounting Policies [Line Items] | |||
Change in accounting principle, accounting standards update, adopted [true false] | true | ||
Change in accounting principle, accounting standards update, adoption date | Jan. 1, 2022 | ||
Change in accounting principle, accounting standards update, immaterial effect [true false] | true | ||
ASU 2021-04 | |||
Summary Of Accounting Policies [Line Items] | |||
Change in accounting principle, accounting standards update, adopted [true false] | true | ||
Change in accounting principle, accounting standards update, adoption date | Jan. 1, 2022 | ||
Change in accounting principle, accounting standards update, immaterial effect [true false] | true | ||
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 |
Summary Accounting Policies a_4
Summary Accounting Policies and Recent Accounting Pronouncements- Summary of Balances of Contract Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Summary Of Accounting Policies [Line Items] | ||
Less: long-term portion | $ 747 | $ 771 |
Contract liabilities – current | 747 | 771 |
Extended Service Contracts | ||
Summary Of Accounting Policies [Line Items] | ||
Total contract liabilities | 187 | 251 |
Subscription Software Licenses | ||
Summary Of Accounting Policies [Line Items] | ||
Less: long-term portion | $ 560 | $ 520 |
Summary Accounting Policies a_5
Summary Accounting Policies and Recent Accounting Pronouncements - Schedule of Revenues Disaggregated by Segment and Timing of Goods and Services Transferred (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Summary Of Accounting Policies [Line Items] | ||
Total revenue | $ 9,033 | $ 7,427 |
Product | ||
Summary Of Accounting Policies [Line Items] | ||
Total revenue | 7,203 | 5,809 |
Product | Point in Time | ||
Summary Of Accounting Policies [Line Items] | ||
Total revenue | 7,027 | 5,614 |
Product | Over Time | ||
Summary Of Accounting Policies [Line Items] | ||
Total revenue | 176 | 195 |
Software | ||
Summary Of Accounting Policies [Line Items] | ||
Total revenue | 1,830 | 1,618 |
Software | Point in Time | ||
Summary Of Accounting Policies [Line Items] | ||
Total revenue | 219 | 174 |
Software | Over Time | ||
Summary Of Accounting Policies [Line Items] | ||
Total revenue | $ 1,611 | $ 1,444 |
Summary Accounting Policies a_6
Summary Accounting Policies and Recent Accounting Pronouncements - Schedule of Reconciliation of Change in Estimated Warranty (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Accounting Policies [Abstract] | ||
Balance at beginning of period | $ 1,620 | $ 1,584 |
Provision for warranties issued | 310 | 330 |
Warranty costs incurred | (315) | (461) |
Balance at end of period | 1,615 | 1,453 |
Current portion | 1,153 | 1,043 |
Non-current portion | 462 | 410 |
Total | $ 1,615 | $ 1,453 |
Balance Sheet Components - Sche
Balance Sheet Components - Schedule of Inventory (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Balance Sheet Related Disclosures [Abstract] | ||
Raw materials | $ 6,141 | $ 4,911 |
Work in process | 310 | 270 |
Finished goods | 3,683 | 2,969 |
Total | $ 10,134 | $ 8,150 |
Balance Sheet Components - Addi
Balance Sheet Components - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Reserve for excess and obsolete inventory | $ 600 | $ 700 | |
Amortization intangible assets | $ 166 | $ 133 | |
Weighted average amortization period of intangible assets | 7 years 7 months 6 days | 7 years 7 months 6 days | |
Cost of Sales | |||
Amortization intangible assets | $ 100 | ||
Selling, General and Administrative Expenses | |||
Amortization intangible assets | $ 100 | $ 100 |
Balance Sheet Components - Sc_2
Balance Sheet Components - Schedule of Intangible Assets Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 7 years 7 months 6 days | 7 years 7 months 6 days |
Gross | $ 4,715 | $ 4,715 |
Accumulated Amortization | 1,925 | 1,759 |
Net | $ 2,790 | $ 2,956 |
Developed Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 4 years | 4 years |
Gross | $ 2,445 | $ 2,445 |
Accumulated Amortization | 857 | 768 |
Net | $ 1,588 | $ 1,677 |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 2 years 9 months 18 days | 2 years 9 months 18 days |
Gross | $ 1,910 | $ 1,910 |
Accumulated Amortization | 944 | 875 |
Net | $ 966 | $ 1,035 |
Tradenames | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 9 months 18 days | 9 months 18 days |
Gross | $ 360 | $ 360 |
Accumulated Amortization | 124 | 116 |
Net | $ 236 | $ 244 |
Balance Sheet Components - Sc_3
Balance Sheet Components - Schedule of Intangible Assets Net (Parenthetical) (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Developed Technology | Minimum | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated useful life | 5 years | 5 years |
Developed Technology | Maximum | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated useful life | 10 years | 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_4
Balance Sheet Components - Schedule of Estimated Future Annual Amortization Expense Related to Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Balance Sheet Related Disclosures [Abstract] | ||
2022 (remaining nine months) | $ 498 | |
2023 | 618 | |
2024 | 442 | |
2025 | 386 | |
2026 and thereafter | 846 | |
Net | $ 2,790 | $ 2,956 |
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 | Mar. 31, 2022 | Dec. 31, 2021 |
Contingent Earnout | ||
Assets: | ||
Assets | $ 524 | |
Significant Unobservable Inputs (Level 3) | Contingent Earnout | ||
Assets: | ||
Assets | 524 | |
Money Market Funds | ||
Assets: | ||
Assets | $ 65,206 | 84,102 |
Money Market Funds | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Assets | $ 65,206 | $ 84,102 |
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 | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | $ 524 | $ 5,594 |
Payment of contingent earnout | (524) | (667) |
Change in fair value | 14 | |
Ending Balance | 4,941 | |
Warrant Liabilities | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | 1,914 | |
Ending Balance | 1,914 | |
Forward Obligation | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | 2,750 | |
Ending Balance | 2,750 | |
Contingent Earnout | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | 524 | 930 |
Payment of contingent earnout | $ (524) | (667) |
Change in fair value | 14 | |
Ending Balance | $ 277 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Additional Information (Details) | 1 Months Ended | 3 Months Ended | |||||
Aug. 31, 2021USD ($)shares | Jun. 30, 2017shares | Dec. 31, 2013USD ($)shares | Mar. 31, 2022USD ($)shares | Mar. 31, 2021USD ($) | Apr. 30, 2022$ / sharesshares | Dec. 31, 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 | 331,503 | 331,503 | |||||
Common stock, shares issued | 26,465,797 | 26,383,225 | |||||
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 | 7.88 | ||||||
Fair Values | Maximum | |||||||
Fair Value Option Quantitative Disclosures [Line Items] | |||||||
Warrants and Rights Outstanding, Measurement Input | 12.28 | ||||||
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 | 27,397 | ||||||
Term Loan | Perceptive Credit Holdings L P | Series E | |||||||
Fair Value Option Quantitative Disclosures [Line Items] | |||||||
Warrants issued to purchase preferred stock | 249,313 | ||||||
Term Loan | Perceptive Credit Holdings L P | Series D | |||||||
Fair Value Option Quantitative Disclosures [Line Items] | |||||||
Warrants issued to purchase preferred stock | 54,793 | ||||||
Term Loan | Perceptive Credit Holdings L P and Perceptive Credit Holdings III L P | Series E | |||||||
Fair Value Option Quantitative Disclosures [Line Items] | |||||||
Warrants issued to purchase preferred stock | 150,684 | ||||||
Fair value of warrants | $ | $ 2,100,000 | ||||||
Term Loan | Perceptive Credit Holdings III, LP | Subsequent Event | |||||||
Fair Value Option Quantitative Disclosures [Line Items] | |||||||
Warrant exercise price per share | $ / shares | $ 12 | ||||||
Term Loan | Perceptive Credit Holdings III, LP | Common Stock | Subsequent Event | |||||||
Fair Value Option Quantitative Disclosures [Line Items] | |||||||
Warrants issued to purchase preferred stock | 304,105 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Summary of Warrants Issued and Outstanding (Details) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Class Of Warrant Or Right [Line Items] | ||
Number of warrants issued | 331,503 | 331,503 |
Number of warrants outstanding | 331,503 | 331,503 |
Series C-1 | ||
Class Of Warrant Or Right [Line Items] | ||
Number of warrants issued | 27,397 | 27,397 |
Number of warrants outstanding | 27,397 | 27,397 |
Exercise Price Per Share | $ 10.95 | |
Series D | ||
Class Of Warrant Or Right [Line Items] | ||
Number of warrants issued | 54,793 | 54,793 |
Number of warrants outstanding | 54,793 | 54,793 |
Exercise Price Per Share | $ 17.80 | |
Series E | ||
Class Of Warrant Or Right [Line Items] | ||
Number of warrants issued | 249,313 | 249,313 |
Number of warrants outstanding | 249,313 | 249,313 |
Exercise Price Per Share | $ 20.08 |
Fair Value of Financial Instr_7
Fair Value of Financial Instruments - Summary of Fair Values Determined Using Black-Scholes Option-Pricing Model (Details) | Mar. 31, 2021 |
Expected Volatility | Minimum | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | 79.33 |
Expected Volatility | Maximum | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | 86.41 |
Expected Volatility | Weighted Average | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | 80.39 |
Dividend Yield | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | 0 |
Risk-Free Interest Rates | Minimum | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | 0.30 |
Risk-Free Interest Rates | Maximum | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | 1.57 |
Risk-Free Interest Rates | Weighted Average | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | 1.31 |
Expected Term | Minimum | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Warrants and rights outstanding, term | 2 years 9 months |
Expected Term | Maximum | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Warrants and rights outstanding, term | 8 years 6 months 7 days |
Expected Term | Weighted Average | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Warrants and rights outstanding, term | 7 years 3 days |
Convertible Preferred Stock a_2
Convertible Preferred Stock and Common Stock - Additional Information (Details) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 | Nov. 02, 2021 |
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 | 500,000,000 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 |
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Stock-Based Compensation Expe_3
Stock-Based Compensation Expense - Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 1,394 | $ 494 |
Cost of Sales | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation expense | 101 | 61 |
Selling, General and Administrative | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation expense | 978 | 292 |
Research and Development | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation expense | 315 | 141 |
Options | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation expense | 883 | $ 494 |
RSUs | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 511 |
Stock-Based Compensation Expe_4
Stock-Based Compensation Expense - Schedule of Unamortized Compensation Cost and Weighted Average Service Period of Unvested Outstanding Awards (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unamortized Compensation Costs | $ 22,068 |
Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unamortized Compensation Costs | $ 8,674 |
Weighted Average Service Period | 2 years 3 months 18 days |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unamortized Compensation Costs | $ 13,394 |
Weighted Average Service Period | 1 year 2 months 12 days |
Stock-Based Compensation Expe_5
Stock-Based Compensation Expense - Summary of Stock Option Activities (Details) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($)$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Number of Shares, Options Outstanding, Beginning Balance | shares | 3,119,993 |
Number of Shares, Forfeited | shares | (33,599) |
Number of Shares, Exercised | shares | (61,438) |
Number of Shares, Options Outstanding, Ending Balance | shares | 3,024,956 |
Number of Options Vested and exercisable at March 31, 2022 | shares | 1,527,230 |
Number of Shares, Vested and expected to vest after March 31, 2022 | shares | 2,840,872 |
Weighted Average Exercise Price Per Share, Options Outstanding, Beginning Balance | $ / shares | $ 7.59 |
Weighted Average Exercise Price Per Share, Forfeited | $ / shares | 7.92 |
Weighted Average Exercise Price Per Share, Exercised | $ / shares | 3.94 |
Weighted Average Exercise Price Per Share, Ending Balance | $ / shares | 7.66 |
Weighted Average Exercise Price Per Share, Options Vested and exercisable, March 31, 2022 | $ / shares | 4.96 |
Weighted Average Exercise Price Per Share, Vested and expected to vest after March 31, 2022 | $ / shares | $ 7.48 |
Weighted- Average Remaining Contractual Life (Years) Outstanding at March 31, 2022 | 7 years 4 months 24 days |
Weighted-Average Remaining Contractual Life (in years) Options Vested and exercisable, March 31, 2022 | 5 years 9 months 18 days |
Weighted-Average Remaining Contractual Life (in years) Vested and expected to vest after March 31, 2022 | 7 years 3 months 18 days |
Aggregate Intrinsic Value, Exercised | $ | $ 123 |
Aggregate Intrinsic Value, Options outstanding, March 31, 2022 | $ | 427 |
Aggregate Intrinsic Value, Options vested and exercisable, March 31, 2022 | $ | 427 |
Aggregate Intrinsic Value, Vested and expected to vest after March 31, 2022 | $ | $ 427 |
Stock-Based Compensation Expe_6
Stock-Based Compensation Expense - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Weighted-average grant-date fair value of options granted | $ 5.72 | $ 11.26 |
Fair value of shares vested | $ 700 | $ 700 |
Aggregate intrinsic value of stock options outstanding | 427 | |
Aggregate intrinsic value vested and exercisable | 427 | |
Unamortized compensation expense | $ 22,068 | |
Number of Shares, Vested and expected to vest after March 31, 2022 | 2,840,872 | |
Number of outstanding options vested, or expected to vest , weighted-average exercise price | $ 7.48 | |
Number of outstanding options vested, or expected to vest , average remaining life | 7 years 3 months 18 days | |
Number of outstanding options vested, or expected to vest aggregate intrinsic value | $ 427 | |
Stock Options | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Unamortized compensation expense | $ 8,674 | |
Weighted average period to be recognized | 2 years 3 months 18 days |
Stock-Based Compensation Expe_7
Stock-Based Compensation Expense - Summary of Non Vested Options (Details) - Options - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares, Non-vested Options, December 31, 2021 | 1,497,827 | 1,632,852 |
Number of Shares, Non-vested Options, March 31, 2022 | 1,497,827 | 1,632,852 |
Weighted Average Grant Date Fair Value, Non-vested Options, December 31, 2021 | $ 7.19 | $ 7.09 |
Weighted Average Grant Date Fair Value, Non-vested Options, March 31, 2022 | $ 7.19 | $ 7.09 |
Stock-based Compensation Expe_8
Stock-based Compensation Expense - Summary of RSU Activity under Incentive Plans (Details) - RSUs | 3 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares, RSUs outstanding, Beginning Balance | shares | 338,149 |
Number of Shares, Granted | shares | 2,370,259 |
Number of Shares, Forfeited | shares | (5,646) |
Number of Shares, RSUs outstanding, Ending Balance | shares | 2,702,762 |
Weighted Average Grant Date Fair Value, RSUs outstanding, Beginning Balance | $ / shares | $ 9.37 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 5.37 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 7.78 |
Weighted Average Grant Date Fair Value, RSUs outstanding, Ending Balance | $ / shares | $ 5.86 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 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. | |
Cash paid for amounts included in the lease liability | $ 313 | $ 298 |
Weighted-average lease term of operating leases | 2 years 6 months 3 days | |
Weighted-average discount rate of operating leases | 7.58% |
Leases - Summary of Future Mini
Leases - Summary of Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
2022 (remaining nine months) | $ 911 | |
2023 | 1,038 | |
2024 | 618 | |
2025 | 104 | |
Total future minimum lease payments | 2,671 | |
Less: Imputed Interest | (231) | |
Present value of operating lease liabilities | 2,440 | |
Less: Current portion | 966 | $ 975 |
Long-term operating lease liabilities | $ 1,474 | $ 1,730 |
Weighted average remaining lease term in years | 2 years 6 months 3 days | |
Weighted average discount rate | 7.58% |
Leases - Components of Lease Ex
Leases - Components of Lease Expense and Related Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Lessee, Lease, Description [Line Items] | ||
Rent expense | $ 317 | $ 293 |
Short-term lease costs | 36 | |
Variable lease costs | 26 | 42 |
Lease costs | 343 | 371 |
Cost of Sales | ||
Lessee, Lease, Description [Line Items] | ||
Lease costs | 58 | 60 |
Selling, General and Administrative | ||
Lessee, Lease, Description [Line Items] | ||
Lease costs | $ 285 | $ 311 |
Term Loan - Additional Informat
Term Loan - Additional Information (Details) $ / shares in Units, $ in Millions | Apr. 06, 2022USD ($)Days$ / sharesshares | Aug. 23, 2021USD ($)$ / sharesshares | Mar. 31, 2022USD ($)shares | Sep. 30, 2021USD ($) | Jun. 30, 2026USD ($) | Dec. 31, 2021USD ($)shares |
Debt Instrument [Line Items] | ||||||
Number of warrants issued | shares | 331,503 | 331,503 | ||||
Amended Perceptive Loan Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate minimum cash balance | $ 3 | |||||
Debt instrument covenant description | The Amended Perceptive Loan 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 three months ended March 31, 2022, the Company was in compliance with all financial covenants and conditions required by the outstanding Amended Perceptive Loan Agreement. | |||||
Minimum | Amended Perceptive Loan Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Revenue thresholds increase over time | $ 26.4 | |||||
Maximum | Amended Perceptive Loan Agreement | Forecast | ||||||
Debt Instrument [Line Items] | ||||||
Revenue thresholds increase over time | $ 95.3 | |||||
Subsequent Event | Amendment | ||||||
Debt Instrument [Line Items] | ||||||
Number of warrants issued | shares | 304,105 | |||||
Purchase price per share of warrant | $ / shares | $ 12 | |||||
Maximum market capitalization on each trading day | $ 100 | |||||
Number of consecutive trading days | Days | 15 | |||||
Tranche One | Subsequent Event | Amendment | ||||||
Debt Instrument [Line Items] | ||||||
Delayed draw term loan | $ 10 | |||||
Delayed-draw term loans start date | Dec. 31, 2021 | |||||
Delayed-draw term loans end date | Sep. 30, 2022 | |||||
Maximum revenue in borrowing date | $ 36 | |||||
Tranche Two | Subsequent Event | Amendment | ||||||
Debt Instrument [Line Items] | ||||||
Delayed draw term loan | $ 10 | |||||
Delayed-draw term loans start date | Mar. 31, 2022 | |||||
Delayed-draw term loans end date | Jun. 30, 2023 | |||||
Maximum revenue in borrowing date | $ 46 | |||||
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] | ||||||
Term loan expired | $ 10 | |||||
Perceptive Credit Holdings III, LP | Tranche Two | ||||||
Debt Instrument [Line Items] | ||||||
Delayed draw term loan | $ 10 | |||||
Initial 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 | Mar. 31, 2022USD ($) |
Debt Disclosure [Abstract] | |
2026 | $ 30,000 |
Total | $ 30,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Contingency [Line Items] | |
Ownership change percentage | 50.00% |
Federal | |
Income Tax Contingency [Line Items] | |
Open Tax Year | 2018 2019 2020 2021 |
State | |
Income Tax Contingency [Line Items] | |
Open Tax Year | 2017 2018 2019 2020 2021 |
Segment Information - Summary o
Segment Information - Summary of Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 9,033 | $ 7,427 |
Cost of sales | 6,754 | 5,685 |
Gross profit | $ 2,279 | $ 1,742 |
Gross margin | 25.00% | 23.00% |
Operating expenses | ||
Selling, general and administrative | $ 11,985 | $ 6,524 |
Research and development | 4,850 | 5,046 |
Change in fair value of contingent earnout | 14 | |
Total operating expenses | 16,835 | 11,584 |
Loss from operations | (14,556) | (9,842) |
Product | ||
Segment Reporting Information [Line Items] | ||
Revenue | 7,203 | 5,809 |
Cost of sales | 6,078 | 5,075 |
Gross profit | $ 1,125 | $ 734 |
Gross margin | 16.00% | 13.00% |
Operating expenses | ||
Selling, general and administrative | $ 11,526 | $ 6,066 |
Research and development | 4,431 | 4,639 |
Change in fair value of contingent earnout | 14 | |
Total operating expenses | 15,957 | 10,719 |
Loss from operations | (14,832) | (9,985) |
Software | ||
Segment Reporting Information [Line Items] | ||
Revenue | 1,830 | 1,618 |
Cost of sales | 676 | 610 |
Gross profit | $ 1,154 | $ 1,008 |
Gross margin | 63.00% | 62.00% |
Operating expenses | ||
Selling, general and administrative | $ 459 | $ 458 |
Research and development | 419 | 407 |
Total operating expenses | 878 | 865 |
Loss from operations | $ 276 | $ 143 |
Segment Information - Segment A
Segment Information - Segment Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Segment Reporting Asset Reconciling Item [Line Items] | ||
Total assets | $ 98,875 | $ 115,499 |
Product | ||
Segment Reporting Asset Reconciling Item [Line Items] | ||
Total assets | 87,992 | 104,588 |
Software | ||
Segment Reporting Asset Reconciling Item [Line Items] | ||
Total assets | $ 10,883 | $ 10,911 |
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 | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator: | ||
Net loss attributable to common stock holders | $ (15,522) | $ (10,906) |
Denominator: | ||
Weighted-average shares outstanding - basic and diluted | 26,405,252 | 1,205,314 |
Net loss per share - basic and diluted | $ (0.59) | $ (9.05) |
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 | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 6,059,221 | 20,395,408 |
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 | 3,024,956 | 2,957,860 |
RSUs | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 2,702,762 | |
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 |