Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 07, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2022 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-40902 | |
Entity Registrant Name | Paragon 28, Inc. | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001531978 | |
Current Fiscal Year End Date | --12-31 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 27-3170186 | |
Entity Address, Address Line One | 14445 Grasslands Drive | |
Entity Address, City or Town | Englewood | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80112 | |
City Area Code | 720 | |
Local Phone Number | 912-1332 | |
Title of 12(b) Security | Common stock, $0.01 par value per share | |
Trading Symbol | FNA | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 77,126,895 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash | $ 56,325 | $ 109,352 |
Trade receivables | 35,960 | 25,939 |
Inventories, net | 54,771 | 40,241 |
Income taxes receivable | 705 | 920 |
Other current assets | 1,947 | 3,078 |
Total current assets | 149,708 | 179,530 |
Property and equipment, net | 58,591 | 32,181 |
Intangible assets, net | 20,850 | 16,505 |
Goodwill | 26,975 | 6,329 |
Deferred income taxes | 841 | 0 |
Total assets | 256,965 | 234,545 |
Current liabilities: | ||
Accounts payable | 13,979 | 13,028 |
Accrued expenses | 19,507 | 18,232 |
Other current liabilities | 6,889 | 1,929 |
Current maturities of long-term debt | 735 | 153 |
Income taxes payable | 497 | 615 |
Total current liabilities | 41,607 | 33,957 |
Long-term liabilities: | ||
Long-term debt net, less current maturities | 42,492 | 7,476 |
Other long-term liabilities | 907 | 840 |
Deferred income taxes | 59 | 78 |
Income taxes payable | 527 | 0 |
Total liabilities | 85,592 | 42,351 |
Commitments and contingencies (Note 12) | ||
Stockholders' equity: | ||
Common stock, $0.01 par value, 300,000,000 shares authorized; 77,990,290 and 77,360,806 shares issued, and 77,076,771 and 76,447,287 shares outstanding as of September 30, 2022 and December 31, 2021, respectively | 769 | 763 |
Additional paid in capital | 207,109 | 197,868 |
Accumulated deficit | (29,026) | (463) |
Accumulated other comprehensive (loss) income | (1,497) | 8 |
Treasury stock, at cost; 913,519 shares as of September 30, 2022 and December 31, 2021 | (5,982) | (5,982) |
Total stockholders' equity | 171,373 | 192,194 |
Total liabilities & stockholders' equity | $ 256,965 | $ 234,545 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Common stock par value | $ 0.01 | $ 0.01 |
Common stock share authorized | 300,000,000 | 300,000,000 |
Common stock share issued | 77,990,290 | 77,360,806 |
Common stock shares, outstanding | 77,076,771 | 76,447,287 |
Treasury stock share issued | 913,519 | 913,519 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Net revenue | $ 46,006 | $ 35,851 | $ 129,875 | $ 104,689 |
Cost of goods sold | 8,491 | 7,096 | 22,920 | 20,209 |
Gross profit | 37,515 | 28,755 | 106,955 | 84,480 |
Operating expenses | ||||
Research and development costs | 6,337 | 4,118 | 18,100 | 11,254 |
Selling, general, and administrative | 39,667 | 28,968 | 114,857 | 79,009 |
Total operating expenses | 46,004 | 33,086 | 132,957 | 90,263 |
Operating loss | (8,489) | (4,331) | (26,002) | (5,783) |
Other income (expense) | ||||
Other income (expense) | 59 | (98) | 610 | (124) |
Interest expense, net | (1,093) | (573) | (2,865) | (1,174) |
Total other expense | (1,034) | (671) | (2,255) | (1,298) |
Loss before income taxes | (9,523) | (5,002) | (28,257) | (7,081) |
Income tax expense | 201 | 105 | 306 | 437 |
Net loss | (9,724) | (5,107) | (28,563) | (7,518) |
Less: cumulative dividends on Series B convertible preferred stock | 0 | (574) | 0 | (1,516) |
Net loss attributable to common stockholders | (9,724) | (5,681) | (28,563) | (9,034) |
Foreign currency translation adjustment | (588) | (121) | (1,505) | (575) |
Comprehensive loss | $ (10,312) | $ (5,802) | $ (30,068) | $ (9,609) |
Weighted-average number of common stocks outstanding: | ||||
Basic | 76,850,949 | 47,005,334 | 76,595,118 | 46,926,344 |
Diluted | 76,850,949 | 47,005,334 | 76,595,118 | 46,926,344 |
Net loss per share attributable to common stockholders: | ||||
Basic | $ (0.13) | $ (0.12) | $ (0.37) | $ (0.19) |
Diluted | $ (0.13) | $ (0.12) | $ (0.37) | $ (0.19) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED SERIES EQUITY & STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in-Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income (loss) | Treasury Stock | Preferred Stock Series A Convertible Preferred Stock | Preferred Stock Series B Convertible Preferred Stock |
Temporary equity, beginning balance, shares at Dec. 31, 2020 | 13,812,500 | 6,608,700 | ||||||
Temporary equity, beginning balance at Dec. 31, 2020 | $ 4,250 | $ 36,842 | ||||||
Beginning balance, shares at Dec. 31, 2020 | 46,738,540 | |||||||
Beginning balance at Dec. 31, 2020 | $ 30,393 | $ 467 | $ 22,107 | $ 12,418 | $ 823 | $ (5,422) | ||
Net loss | (7,518) | (7,518) | ||||||
Issuance of common stock, shares | 151,515 | |||||||
Issuance of common stock | 1,000 | $ 1 | 999 | |||||
Common stock repurchase, shares | (85,049) | |||||||
Common stock repurchase | (561) | (561) | ||||||
Series B convertible preferred stock dividend | $ 1,516 | |||||||
Series B convertible preferred stock dividend, permanent equity | (1,516) | (1,516) | ||||||
Options exercised, shares | 234,206 | |||||||
Options exercised | 443 | $ 2 | 441 | |||||
Foreign currency translation | (575) | (575) | ||||||
Stock-based compensation | 2,747 | 2,747 | ||||||
Temporary equity, ending balance, shares at Sep. 30, 2021 | 13,812,500 | 6,608,700 | ||||||
Temporary equity, ending balance at Sep. 30, 2021 | $ 4,250 | $ 38,358 | ||||||
Ending balance, shares at Sep. 30, 2021 | 47,039,212 | |||||||
Ending balance at Sep. 30, 2021 | 24,413 | $ 470 | 26,294 | 3,384 | 248 | (5,983) | ||
Temporary equity, beginning balance, shares at Jun. 30, 2021 | 13,812,500 | 6,608,700 | ||||||
Temporary equity, beginning balance at Jun. 30, 2021 | $ 4,250 | $ 37,784 | ||||||
Beginning balance, shares at Jun. 30, 2021 | 46,969,305 | |||||||
Beginning balance at Jun. 30, 2021 | 29,092 | $ 470 | 25,171 | 9,065 | 369 | (5,983) | ||
Net loss | (5,107) | (5,107) | ||||||
Series B convertible preferred stock dividend | $ 574 | |||||||
Series B convertible preferred stock dividend, permanent equity | (574) | (574) | ||||||
Options exercised, shares | 69,907 | |||||||
Options exercised | 91 | 91 | ||||||
Foreign currency translation | (121) | (121) | ||||||
Stock-based compensation | 1,032 | 1,032 | ||||||
Temporary equity, ending balance, shares at Sep. 30, 2021 | 13,812,500 | 6,608,700 | ||||||
Temporary equity, ending balance at Sep. 30, 2021 | $ 4,250 | $ 38,358 | ||||||
Ending balance, shares at Sep. 30, 2021 | 47,039,212 | |||||||
Ending balance at Sep. 30, 2021 | 24,413 | $ 470 | 26,294 | 3,384 | 248 | (5,983) | ||
Beginning balance, shares at Dec. 31, 2021 | 76,447,287 | |||||||
Beginning balance at Dec. 31, 2021 | 192,194 | $ 763 | 197,868 | (463) | 8 | (5,982) | ||
Net loss | (28,563) | (28,563) | ||||||
Common stock repurchase | (266) | (266) | ||||||
Series B convertible preferred stock dividend, permanent equity | $ 0 | |||||||
Options exercised, shares | 617,578 | 629,484 | ||||||
Options exercised | $ 2,361 | $ 6 | 2,355 | |||||
Foreign currency translation | (1,505) | (1,505) | ||||||
Employee stock purchase plan | 100 | 100 | ||||||
Stock-based compensation | 7,052 | 7,052 | ||||||
Ending balance, shares at Sep. 30, 2022 | 77,076,771 | |||||||
Ending balance at Sep. 30, 2022 | 171,373 | $ 769 | 207,109 | (29,026) | (1,497) | (5,982) | ||
Beginning balance, shares at Jun. 30, 2022 | 76,537,568 | |||||||
Beginning balance at Jun. 30, 2022 | 176,938 | $ 764 | 202,367 | (19,302) | (909) | (5,982) | ||
Net loss | (9,724) | (9,724) | ||||||
Options exercised, shares | 539,203 | |||||||
Options exercised | 2,060 | $ 5 | 2,055 | |||||
Foreign currency translation | (588) | (588) | ||||||
Employee stock purchase plan | 100 | 100 | ||||||
Stock-based compensation | 2,587 | 2,587 | ||||||
Ending balance, shares at Sep. 30, 2022 | 77,076,771 | |||||||
Ending balance at Sep. 30, 2022 | $ 171,373 | $ 769 | $ 207,109 | $ (29,026) | $ (1,497) | $ (5,982) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities | ||
Net loss | $ (28,563) | $ (7,518) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 9,624 | 6,094 |
Provision for excess and obsolete inventories | (91) | 2,226 |
Stock-based compensation | 7,052 | 2,747 |
Employee stock purchase program | 100 | 0 |
Amortization of debt issuance costs | 417 | 372 |
Change in fair value of earnout liabilities | (575) | 60 |
Deferred income taxes | (1,110) | 0 |
Loss on disposal of property and equipment | 902 | 118 |
Other | (1,029) | 317 |
Changes in other assets and liabilities, net of acquisitions: | ||
Accounts receivable | (10,227) | (807) |
Inventories | (15,316) | (7,860) |
Other current assets | 1,442 | (3,952) |
Accounts payable | 951 | 3,404 |
Accrued expenses and other current liabilities | 176 | 2,935 |
Income tax receivable/payable | 297 | 668 |
Net cash used in operating activities | (35,950) | (1,196) |
Cash flows from investing activities | ||
Purchase of office building | (18,300) | 0 |
Purchases of property and equipment | (15,637) | (10,270) |
Proceeds from sale of property and equipment | 642 | 581 |
Purchases of intangible assets | (1,720) | (1,196) |
Acquisition, net of cash received | (18,504) | (15,000) |
Net cash used in investing activities | (53,519) | (25,885) |
Cash flows from financing activities | ||
Proceeds from draw on term loan | 20,000 | 0 |
Proceeds from issuance of long-term debt | 16,000 | 25,985 |
Payments on long-term debt | (367) | (5,991) |
Payments of debt issuance costs | (420) | (3,080) |
Proceeds from issuance of common stock | 0 | 1,001 |
Payments on treasury stock repurchased | 0 | (561) |
Proceeds from exercise of stock options | 2,224 | 442 |
Payments on earnout liability | (500) | 0 |
Net cash provided by financing activities | 36,937 | 17,796 |
Effect of exchange rate changes on cash | (495) | (340) |
Net decrease in cash | (53,027) | (9,625) |
Cash at beginning of period | 109,352 | 17,501 |
Cash at end of period | 56,325 | 7,876 |
Supplemental disclosures of cash flow information: | ||
Cash paid for taxes | 788 | 381 |
Cash paid for interest | 2,111 | 670 |
Purchase of property and equipment included in accounts payable | 2,363 | 58 |
Series B convertible preferred stock dividend | $ 0 | $ 1,516 |
Business and Basis of Presentat
Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Business and Basis of Presentation | NOTE 1. BUSINESS AND BASIS OF PRESENTATION Business Paragon 28, Inc. (collectively with its subsidiaries, “we”, “us”, “our”, “P28” or the “Company”) develops, distributes, and sells medical devices in the foot and ankle segment of the orthopedic implant marketplace. Our approach to product development is procedurally focused, resulting in a full range of procedure-specific foot and ankle products designed specifically for foot and ankle anatomy. Our products and product families include plates and plating systems, screws, staples, and nails aimed to address all major foot and ankle procedures including fracture fixation, hallux valgus - which includes bunion and hammertoe, ankle, progressive collapsing foot deformity (PCDF) or flatfoot, charcot foot and orthobiologics. P28 is a United States (“U.S.”) based company incorporated in the State of Colorado, with headquarters in Englewood, Colorado. Our sales representatives and distributors are located globally with the majority concentrated in the U.S., Australia, South Africa, and the United Kingdom. Initial Public Offering In October 2021, the Company completed its initial public offering (“IPO”), in which it issued and sold 8,984,375 shares of its common stock at the public offering price of $ 16.00 per share, including 1,171,875 shares of its common stock upon the exercise of the underwriters’ option to purchase additional shares. The Company received net proceeds after deducting underwriting discounts and commissions and offering expenses of $ 129,118 . In connection with the IPO, all of the shares of the Company’s outstanding convertible preferred stock automatically converted into an aggregate of 20,421,200 shares of the common stock. Basis of Presentation and Consolidation The accompanying Condensed Consolidated Financial Statements include the accounts of Paragon 28, Inc. and its subsidiaries, all of which are wholly-owned. The accompanying Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information required by U.S. GAAP for complete financial statements. The interim Condensed Consolidated Financial Statements reflect all adjustments that are of a normal recurring nature and that are considered necessary for a fair representation of the results for the periods presented and should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the year ended December 31, 2021, which include a complete set of footnote disclosures, including our significant accounting policies. The audited Consolidated Financial Statements and notes thereto for the year ended December 31, 2021 are included in the Company’s Annual filing on Form 10-K filed with the SEC on March 8, 2022. The results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year or for any other future period. All intercompany balances and transactions have been eliminated in consolidation. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Because future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Any changes in these estimates will be reflected in the Company’s Condensed Consolidated Financial Statements. Significant items subject to such estimates and assumptions include the determination of the collectability of trade receivables, inventory obsolescence, impairment of long-lived assets, recoverability of goodwill and intangible assets, contingent earn-out liabilities, income taxes and stock-based compensation. Foreign Currency Translation The Condensed Consolidated Financial Statements are presented in U.S. dollars. The Company’s non-U.S. subsidiaries have a functional currency (i.e., the currency in which operational activities are primarily conducted) that is other than the U.S. dollar, generally the currency of the country in which such subsidiaries are domiciled. Such subsidiaries’ assets and liabilities are translated into U.S. dollars at quarter-end exchange rates, while revenue and expenses are translated at average exchange rates during the quarter based on the daily closing exchange rates. Adjustments that result from translating amounts from a subsidiary’s functional currency to U.S. dollars are reported in Accumulated Other Comprehensive (Loss) Income, net of tax. Business Combinations We allocate the purchase consideration to the identifiable net assets acquired, including intangible assets and liabilities assumed, based on estimated fair values at the date of the acquisition. The excess of the fair value of the purchase consideration over the fair value of the identifiable assets and liabilities, if any, is recorded as goodwill. During the measurement period, which is up to one year from the acquisition date, we may adjust provisional amounts that were recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date. Determining the fair value of assets acquired and liabilities assumed requires significant judgment, including the selection of valuation methodologies including the income approach, the cost approach, and the market approach. Significant assumptions used in those methodologies include, but are not limited to, the expected values of the underlying metric, the systematic risk embedded in the underlying metric, the volatility of the underlying metric, the risk-free rate, and the counterparty risk. The use of different valuation methodologies and assumptions is highly subjective and inherently uncertain and, as a result, actual results may differ materially from estimates. Trade Receivables, Less Allowance for Doubtful Accounts The Company estimates an allowance for doubtful accounts based upon an evaluation of the current status of receivables, historical experience, and other factors as necessary. It is reasonably possible that the Company’s estimate of the allowance for doubtful accounts will change. As of September 30, 2022 and December 31, 2021 the balance for allowance for doubtful accounts was not material. Inventories, Net The Company estimates a reserve for obsolete and slow-moving inventory based on current inventory levels, historical sales and future projected demand. Charges (benefit) for excess and obsolete inventory are included in Cost of goods sold and were $ 366 and $ 1,004 for the three months ended September 30, 2022 and 2021, respectively and were $( 62 ) and $ 2,229 for the nine months ended September 30, 2022 and 2021, respectively . The inventory reserve was $ 16,218 and $ 19,374 as of September 30, 2022 and December 31, 2021 , respectively. Intangibles The costs associated with applying for patents and trademarks are capitalized. Patents are amortized on a straight-line basis over the lesser of the patent’s economic or legal life, which is seventeen years . Costs associated with capitalized patents include third-party attorney fees and other third-party fees as well as costs related to the following: the preparation of patent applications, government filings and registration fees, drawings, computer searches, and translations related to specific patents. Trademarks that are anticipated to be renewed every ten years have an indefinite life and are not amortized but tested for impairment annually. Once it is determined a trademark will no longer be renewed, the trademark is amortized over the remainder of the trademark’s registration period. Customer relationships are amortized over an estimated useful life of three to seven years on a straight-line basis. Other intangibles, which mainly consist of noncompete arrangements, are amortized over an estimated useful life of three years on a straight-line basis. Developed technology is amortized over an estimated useful life of twelve years on a straight-line basis. Amortizable intangible assets are assessed for impairment upon triggering events that indicate that the carrying value of an asset may not be recoverable. Recoverability is measured by a comparison of the carrying amount to future net undiscounted cash flows expected to be generated by the associated asset. If the asset’s carrying value is determined to not be recoverable, the impairment to be recognized is measured by the amount by which the carrying amount exceeds the fair market value of the intangible assets. No impairment charges were recorded in any of the periods presented. Indefinite-lived trademark assets are reviewed for impairment annually or whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The Company can elect to first apply the optional qualitative impairment assessment to determine whether the indefinite-lived intangible asset is more-likely-than-not impaired. If, on the basis of the qualitative impairment assessment, an entity asserts that it is more likely than not that the indefinite-lived intangible asset is impaired, the Company would be required to calculate the fair value of the asset for an impairment test. Impairment loss is recognized if the carrying amount of the asset exceeds its fair value. A qualitative assessment considers macroeconomic and other industry-specific factors, such as trends in short-term and long-term interest rates and the ability to access capital, and company specific factors such as trends in revenue generating activities, and merger or acquisition activity. If the Company elects to bypass qualitatively assessing its indefinite-lived intangible assets, or it is not more likely than not that the fair value of the intangible asset exceeds its carrying value, management estimates the fair value of the intangible asset and compares it to the carrying value. The estimated fair value of the intangible asset is established using an income approach based on a discounted cash flow model that includes significant assumptions about the future operating results and cash flows of the intangible asset or assets. Goodwill Goodwill represents the excess of the purchase price as compared to the fair value of net assets acquired and liabilities assumed. Goodwill is not amortized, but is tested for impairment annually or when indications of impairment exist. We can elect to qualitatively assess goodwill for impairment if it is more likely than not that the fair value of a reporting unit exceeds its carrying value. Impairment exists when the carrying amount, including goodwill, of the reporting unit exceeds its fair value, resulting in an impairment charge for this excess (not to exceed the carrying amount of the goodwill). Our annual impairment testing date is October 1. The impairment, if determined, is recorded within Operating expenses in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) in the period the determination is made. There were no impairments recorded during the periods presented. Contingent Earn-out Consideration Business combinations may include contingent earn-out consideration as part of the purchase price under which the Company will make future payments to the seller upon the achievement of certain milestones. The fair value of the contingent earn-out consideration is estimated as of the acquisition date at the present value of the expected contingent payments and is subsequently remeasured at each balance sheet date. Two methodologies may be considered in the valuation: the scenario-based model (“SBM”) and Monte Carlo simulation. The SBM relies on multiple outcomes to estimate the likelihood of future payoff of the contingent consideration. The resulting earnout payoff is then probability-weighted and discounted at an appropriate risk adjusted rate in order to arrive at the present value of the expected earnout payment. The Monte Carlo simulation is used to value the non-linear contingent considerations based on projected financial metrics. Each trial of the Monte Carlo simulation draws a value from the assumed distribution for the underlying metric. The earnout payoff for each simulation trial is calculated based on that particular simulated path for the underlying metrics and then discounted to present value using the risk-free rate, adjusted for counterparty credit risk. The value of the earnout is estimated as the average value from all simulation trials. The fair value estimates use unobservable inputs that reflect our own assumptions as to the ability of the acquired business to meet the targeted benchmarks and discount rates used in the calculations. The unobservable inputs are defined in ASC Topic 820, “Fair Value Measurements and Disclosures,” as Level 3 inputs. We review the probabilities of achievement of the earnout milestones to determine impact on the fair value of the earnout consideration on a quarterly basis over the earn-out period. Actual results are compared to the estimates and probabilities of achievement used in our forecasts. Should actual results of the acquired business increase or decrease as compared to our estimates and assumptions, the estimated fair value of the contingent earn-out consideration liability will increase or decrease, up to the contractual limit, as applicable. Changes in the estimated fair value of the contingent earn-out consideration are recorded in other (expense) income in the Consolidated Statements of Operations and Comprehensive (Loss) Income and are reflected in the period in which they are identified. Changes in the estimated fair value of the contingent earn-out consideration may materially impact or cause volatility in our operating results. Revenue Recognition Revenue is recorded, net of estimated losses for bad debts, when our performance obligation is satisfied which is when our customers take title of the product, and typically when the product is used in surgery. As such, the timing of revenue recognition may differ from the timing of invoicing to our customers. We have recorded unbilled accounts receivable related to this timing difference of $ 3,987 and $ 3,637 as of September 30, 2022 and December 31, 2021 , respectively. Accounting Pronouncements Issued Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. ASU 2016-02 supersedes the previous leases standard, ASC 840, Leases. ASU 2016-02, as subsequently amended for various technical issues, is effective for emerging growth companies following private company adoption dates in fiscal years beginning after December 15, 2021, and interim periods with fiscal years beginning after December 15, 2022. The Company is currently evaluating the new guidance, but does not believe it will have a material impact on the Consolidated Financial Statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires entities to estimate all expected credit losses for certain types of financial instruments, including trade receivables, held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The updated guidance also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses over the entire contractual term of the instrument from the date of initial recognition of that instrument. ASU 2016-13, as subsequently amended for various technical issues, is effective for emerging growth companies following private company adoption dates for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the new guidance to determine the impact it will have on the Consolidated Financial Statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) (“ASU 2019-12”), which is part of the FASB’s overall simplification initiative to reduce the costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. ASU 2019-12 simplifies accounting guidance for intra-period allocations, deferred tax liabilities, year-to-date losses in interim periods, franchise taxes, step-up in tax basis of goodwill, separate entity financial statements, and interim recognition of tax laws or rate changes. ASU 2019-12 is effective for emerging growth companies following private company adoption dates in fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022, with early adoption permitted. The adoption of this guidance is not expected to have a significant impact on the Company's Consolidated Financial Statements and related disclosures. |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2022 | |
Business Combinations [Abstract] | |
Business Combinations | NOTE 3. BUSINESS COMBINATIONS Disior On January 10, 2022 ("Disior Acquisition Date"), the Company entered into a Securities Purchase Agreement (“SPA”) with Disior LTD. (“Disior”) and acquired 100 % of the outstanding equity of Disior (the "Disior Acquisition"). Disior is a leading three-dimensional analytics pre-operative planning software company based in Helsinki, Finland, focused on the complex foot and ankle anato my. The Disior Acquisition allowed the Company to broaden its capabilities within the pre-operative and intra-operative stages of the foot and ankle care and expand the Company's Smart 28 ecosystem. The aggregate purchase price of the Disior Acquisition was approximately $ 26,246 inclusive of an earn-out provision with a fair value of $ 6,550 and certain net working capital adjustments and deferred payments totaling a net payable of $ 222 . The SPA provided for potential earn-out consideration to the seller in connection with the achievement of certain milestones with various expiration dates through the second anniversary of the Disior Acquisition Date. The earn-out has a maximum payment not to exceed $ 8,000 in the aggregate. If an individual milestone is not met by the specified milestone expiration date, the earn-out related to that specific milestone will not be paid. The acquisition was primarily funded by a $ 20,000 draw on the Company's term loan. The Company has accounted for the acquisition of Disior under ASC Topic 805, Business Combinations (“ASC 805”). Disior’s results of operations are included in the Condensed Consolidated Financial Statements beginning after January 10, 2022, the Disior Acquisition Date. The following table summarizes the purchase price: Consideration Paid Cash consideration $ 19,696 Contingent consideration 6,550 Total consideration $ 26,246 Acquisition-related costs, which consisted of fees incurred for advisory, legal, and accounting services, w ere $ 0 and $ 761 for the three and nine months ended September 30, 2022, respectively, and were included in Selling, general and administrative expenses in the C ompany’s Condensed Consolidated Statements of Comprehensive Loss. No acquisition-related costs were incurred during the three and nine months ended September 30, 2021. Certain amounts recorded in connection with the Disior Acquisition are still considered preliminary as we finalize our fair value estimates and provisional amounts. Provisional amounts include items related to working capital adjustments, identified intangibles, and earnout consideration. During the measurement period, which is up to one year from the Disior Acquisition Date, we may adjust provisional amounts that were recognized at the Disior Acquisition Date to reflect new information obtained about facts and circumstances that existed as of the Disior Acquisition Date. The following table summarizes the fair values of the assets acquired and liabilities assumed as of the Disior Acquisition Date: Measurement Preliminary allocation period adjustments Adjusted allocation Assets acquired: Cash and cash equivalents $ 1,192 $ — $ 1,192 Other current assets 410 — 410 Intangible assets 4,900 — 4,900 Goodwill 20,343 303 20,646 Total assets acquired $ 26,845 $ 303 $ 27,148 Liabilities assumed: Accruals and other current liabilities $ 615 $ — $ 615 Deferred tax liabilities, net 287 — 287 Total liabilities assumed $ 902 — $ 902 Net assets acquired $ 25,943 $ 303 $ 26,246 Based on an adjustment to working capital as defined by the purchase agreement and included as part of the purchase price in the final settlement statement, we made one measurement period adjustment of $ 303 as of September 30, 2022. Identified intangible assets consist of tradenames and developed technology. The fair value of each were determined with the assistance of an external valuation specialist using a combination of the income, market, cost approach, and relief from royalty rate method, in accordance with ASC 805. The purchase consideration was allocated to the identifiable net assets acquired based on estimated fair values at the date of the acquisition. The purchase consideration and its allocation are preliminary and may be adjusted to reflect new information obtained about facts and circumstances that existed as of the acquisition date. The excess of the fair value of the purchase consideration over the fair value of the identifiable assets and liabilities, if any, was recorded as goodwill. The goodwill is attributable to the expected synergies with the Company’s existing operations. The useful life on intangible assets was determined by management to be in line with the Company’s policy on intangible assets. Both determinations are outlined in the table below: Fair Value Estimated Useful Life Developed Technology $ 4,500 12 Tradenames 400 Indefinite $ 4,900 The entire amount of the purchase price allocated to goodwill will not be deductible for income tax purposes under the Finnish Income Tax Act. There is no supplemental proforma presentation of operating results of the acquisition of Disior due to the immaterial impact on the Company’s Consolidated operations for the three and nine months ended September 30, 2021 . Additive Orthopaedics On May 28, 2021 (“Closing Date”), the Company entered into an Asset Purchase Agreement (“APA”) with Additive Orthopaedics, LLC (“Additive” or “Seller”) and completed an acquisition of substantially all of the operating and intangible assets of Additive, for total cash consideration of $ 15,000 at closing. The APA also provided for potential earn-out consideration to the Seller in connection with the achievement of certain milestones, including both project-based and revenue-based milestones, with various expiration dates through the fourth anniversary of the Closing Date. The earn-out has a maximum payment not to exceed $ 9,500 , in the aggregate. If an individual milestone is not met by the specified milestone expiration date, the earn-out related to that specific milestone will not be paid. The contingent earn-out consideration had an estimated fair value of $ 2,870 as of the Closing Date. Acquisition related costs were approximately $ 524 during the nine months ended September 30, 2021 and were included in Selling, general, and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss. No acquisition related costs were incurred during the three and nine months ended September 30, 2022. Additive’s 3D-printed Patient Specific Talus Spacer is the only U.S. Food and Drug Administration-approved patient-specific total talus replacement implant authorized in the U.S. for the treatment of avascular necrosis. The acquisition of Additive allowed the Company to further expand into the patient specific implant market. The Company has accounted for the acquisition of Additive under ASC Topic 805, Business Combinations (“ASC 805”). Additive’s results of operations are included in the Condensed Consolidated Financial Statements beginning after May 28, 2021, the acquisition date. The following table summarizes the purchase consideration transferred in connection with the acquisition of Additive and consists of the following: Consideration Paid Cash consideration $ 15,000 Contingent consideration 2,870 Total consideration $ 17,870 The following table summarizes the fair values of the assets acquired and liabilities assumed as of the Closing Date: Assets acquired: Accounts receivable $ 761 Inventory 113 Intangible assets 11,560 Goodwill 6,329 Total Assets Acquired 18,763 Liabilities assumed: Accounts payable 796 Accrued expenses $ 97 Total Liabilities Assumed 893 Net assets acquired $ 17,870 Identified intangible assets consist of noncompete arrangements, customer relationships, and developed technology. The fair value of each were determined with the assistance of an external valuation specialist using a combination of the income, market, and asset approach, in accordance with ASC 805. The purchase consideration was allocated to the identifiable net assets acquired based on estimated fair values at the date of the acquisition. The excess of the fair value of the purchase consideration over the fair value of the identifiable assets and liabilities, if any, was recorded as goodwill. The goodwill is attributable to the expected synergies with the Company’s existing operations. The entire amount of the purchase price allocated to goodwill will be deductible for income tax purposes pursuant to Internal Revenue Code Section 197 over a 15-year period. The useful life determination was made by management in line with the Company’s policy on assets. Both determinations are outlined in the table below: Fair Value Estimated Useful Life Noncompete arrangements $ 30 3 Customer relationships 240 3 Developed technology 11,290 12 $ 11,560 There is no supplemental proforma presentation of operating results of the acquisition of Additive due to the immaterial impact on the Company’s Consolidated operations for the three and nine months ended September 30, 2021 . |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | NOTE 4. GOODWILL AND INTANGIBLE ASSETS Goodwill As of September 30, 2022 and December 31, 2021, goodwill was $ 26,975 and $ 6,329 , respectively; the activity is as follows: Balance, December 31, 2021 $ 6,329 Acquisitions 20,646 Balance, September 30, 2022 $ 26,975 Intangibles Intangible assets as of September 30, 2022 are as follows: Estimated Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trademarks and tradenames, indefinite-lived Indefinite $ 853 $ — $ 853 Patents, definite-lived 15.1 6,466 2,301 4,165 Customer relationships 3 - 7 1,733 201 1,532 Developed technology 12 15,790 1,507 14,283 Other intangibles 3 30 13 17 Total intangible assets, net $ 24,872 $ 4,022 $ 20,850 Intangible assets, excluding the Disior intangible assets, increa sed $ 1,720 during the nine months ended September 30, 2022 primarily due to the purchase of new patents and customer relationships. Intangible assets as of December 31, 2021 , are as follows: Estimated Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trademarks, indefinite-lived Indefinite $ 413 $ — $ 413 Patents, definite-lived 13.2 5,335 1,133 4,202 Customer relationships 3 - 7 1,167 47 1,120 Developed technology 12 11,290 549 10,741 Other intangibles 3 35 6 29 Total intangible assets, net $ 18,240 $ 1,735 $ 16,505 Amortization expense is included in Selling, general, and administrative expenses and was $ 440 a nd $ 494 for the three months ended September 30, 2022 and 2021, respectively. Amortization expense for the nine months ended September 30, 2022 and 2021 totaled $ 2,290 and $ 635 , respectively. Expected future amortization expense is as follows: 2022 (Remaining) $ 424 2023 1,695 2024 1,643 2025 1,604 2026 1,604 2027 1,603 No impairment charges related to intangibles and goodwill were recorded for the three and nine months ended September 30, 2022 and 2021 . |
Contingent Earn-Out Considerati
Contingent Earn-Out Consideration | 9 Months Ended |
Sep. 30, 2022 | |
Business Combinations [Abstract] | |
Contingent Earn-Out Consideration | NOTE 5. CONTINGENT EARN-OUT CONSIDERATION The following table provides a reconciliation of our Level 3 earn-out liabilities for the nine months ended September 30, 2022: Balance, December 31, 2021 $ 2,310 Acquisition date fair value of earn-out liabilities 6,550 Achieved milestone paid ( 500 ) Change in fair value of earn-out liabilities ( 575 ) Balance, September 30, 2022 $ 7,785 The current portion of contingent earn-out liability is included in Other-current liabilities and the non-current portion is included in Other long-term liabilities on the Condensed Consolidated Balance Sheets. As of September 30, 2022, the current portion was $ 6,878 . During the three and nine months ended September 30, 2022, we reassessed the estimate of the earn-out liabilities which resulted in a decrease o f $ 35 and $ 575 , respectively, cl assified as other income within the Condensed Consolidated Statement of Operations and Comprehensive Loss. In addition, we completed and paid our second project milestone for Additive Orthopaedics as of September 30, 2022. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 6. DEBT Long-term debt as of September 30, 2022 and December 31, 2021 consists of the following: September 30, 2022 December 31, 2021 MidCap Term Loan $ 30,000 $ 10,000 Bank of Ireland Note Payable 112 245 Vectra Term Loan Facility 15,733 — $ 45,845 $ 10,245 Less: deferred issuance costs ( 2,618 ) ( 2,616 ) Total debt, net of issuance costs 43,227 7,629 Less: current portion ( 735 ) ( 153 ) Long-term debt, net, less current maturities $ 42,492 $ 7,476 MidCap Credit Agreements On May 6, 2021, the Company entered into a new credit agreement with MidCap Financial Trust to provide a total of $ 70,000 including up to a $ 30,000 revolving loan (“MidCap Revolving Loan”) and up to a $ 40,000 term loan (“MidCap Term Loan”), secured by substantially all the Company’s assets, debt, and equity (“MidCap Credit Agreements”). The MidCap Term Loan is comprised of two tranches, the first of which provides a commitment amount of $ 10,000 , and the second a commitment of $ 30,000 . The MidCap Term Loan and Midcap Revolving Loan bear a variable interest rate of LIBOR plus 6 % and LIBOR plus 3 %, respectively, and mature on the earlier of May 1, 2026 or a change in control event (the "Termination Date"). The entire principal balances of the MidCap Revolving Loan and MidCap Term Loan are due on the Termination Date. Interest payments are payable monthly, with optional principal prepayments allowed under the MidCap Credit Agreements. The Midcap Loan Agreements require us to maintain certain financial covenants as defined in the Midcap Loan Agreements. Total debt issuance costs associated with the MidCap Credit Agreements was $ 3,288 . Amortization expense associated with such debt issu ance costs totaled $ 165 and $ 409 for the three and nine months ended September 30, 2022 , respectively, and $ 192 and $ 318 for the three and nine months ended September 30, 2021, respectively, and is included in Interest expense on the Condensed Consolidated Statements of Operations and Comprehensive Loss. Vectra Bank Colorado Loan Agreements On March 27, 2020, the Company entered into an Amended and Restated Loan Agreement (the “Vectra Loan Agreement”) with Vectra Bank Colorado. The Vectra Loan Agreement refinanced the Company's existing Term Loan and existing Buyout Loan into a single term loan in the aggregate principal amount of $ 6,802 (the “2020 Term Loan”) and increased the maximum principal amount of the existing Revolving Loan to $ 15,000 (the 2020 Revolving Loan and together with the 2020 Term Loan, “2020 Loans”). The maturity date for both loans was September 30, 2020 and it was subsequently extended to October 5, 2023 . The Vectra Loan Agreement was secured by substantially all the Company’s assets. The Vectra Loan Agreement contained financial and other customary covenants and bore an interest rate of 3 %. The Company repaid the 2020 Loans in 2021 in connection with entering into the Midcap Term Loan Agreement described above. On March 24, 2022 the Company entered into a secured term loan facility (the “Zions Facility”) with Zions Bancorporation, N.A. dba Vectra Bank Colorado in the principal amount of $ 16,000 . The loans under the Zions Facility (i) bear interest at a variable rate per annum equal to the sum of (a) a one-month Term SOFR based rate, plus (b) 1.75 %, adjusted on a monthly basis and (ii) m ature on March 24, 2037 . Principal and interest payments are payable monthly , with optional prepayments allowed without premium or penalty. Total de bt issuance costs associated with the Zions Facility was $ 271 . Amortization expense associated with such debt issuance costs totaled $ 4 and $ 9 for the three and nine months ended September 30, 2022, respectively. Bank of Ireland Note Payable On June 12, 2020, the Company entered a term loan with Bank of Ireland in a principal amount of $ 474 (the “Bank of Ireland Note Payable”). The Bank of Ireland Note Payable bears an annual interest rate of 4 % and is due in equal monthly installments over a 36 -month period, including interest. The Bank of Ireland Note Payable contains financial and other customary covenants. |
Convertible Preferred Series Eq
Convertible Preferred Series Equity and Stockholders' Equity | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Convertible Preferred Series Equity And Stockholders' Equity | NOTE 7. CONVERTIBLE PREFERRED SERIES EQUITY AND STOCKHOLDERS’ EQUITY On October 8, 2021, the Company filed a certificate of amendment with the Secretary of State of the State of Delaware, pursuant to which, the Company effected a 5 -for-1 forward stock split of the Company’s authorized, issued and outstanding common stock, the Company’s authorized, issued and outstanding Series A convertible preferred stock, and the Company’s authorized, issued and outstanding Series B convertible preferred stock (the “Stock Split”). All share amounts and per share data presented in the accompanying Consolidated Financial Statements have been retrospectively adjusted to reflect the forward stock split for all periods presented. Under its Amended and Restated Certificate of Incorporation, the Company has a total of 310,000,000 shares of capital stock authorized for issuance, consisting of 300,000,000 shares of common stock, par value of $ 0.01 per share, and 10,000,000 new shares of convertible preferred stock, par value of $ 0.0001 per share. Common Stock In October 2021, the Company completed its initial public offering ("IPO"), in which it issued and sold 8,984,375 shares of its common stock at the public offering price of $ 16.00 per share, including 1,171,875 shares of its common stock upon exercise of the underwriters' option to purchase additional shares. Series A Convertible Preferred Stock In December 2011, the Company issued an aggregate of 3,250,005 shares of its Series A convertible preferred stock at a price of $ 0.30769 per share, resulting in total proceeds of approximately $ 1,000 . In February and November 2012, the Company issued an aggregate of 10,562,495 shares of its Series A convertible preferred stock at a price of $ 0.30769 per share, resulting in total proceeds of approximately $ 3,250 . In connection with the IPO, all of the shares of the Company’s outstanding Series A convertible preferred stock automatically converted into an aggregate of 13,812,500 shares of the common stock. Convertible Series B Preferred Stock In July 2020, the Company issued an aggregate of 6,608,700 shares of its Series B convertible preferred stock at a price of $ 5.75 per share, resulting in total net proceeds of approximately $ 36,030 , net of issuance costs of $ 1,970 . In connection with the IPO, all of the shares of the Company’s outstanding Series B convertible preferred stock automatically converted into an aggregate of 6,608,700 shares of the common stock. Pursuant to the terms of the Series B convertible preferred stock offering, the $ 2,328 of cash dividends accrued as of October 19, 2021 were cancelled upon conversion of the Series B preferred stock into common stock. Treasury Stock The Company purchased a total o f 0 and 85,050 shares of its common stock during the nine months ended September 30, 2022 and 2021, respectively, for $ 0 and $ 561 , respectively. The Company did no t purchase any shares of its common stock during the three months ended September 30, 2022 and 2021 . All repurchased shares were recorded in Treasury stock at cost. |
Earnings (loss) Per Share
Earnings (loss) Per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | NOTE 8. EARNINGS (LOSS) PER SHARE Basic net (loss) income per share is computed by dividing net (loss) income attributable to common stockholders (the numerator) by the weighted average number of common stock outstanding for the period (the denominator). Diluted net income per common stock attributable to common stockholders is computed by dividing net income by the weighted average number of common stocks outstanding during the period adjusted for the dilutive effects of common stock equivalents using the treasury stock method or the method based on the nature of such securities. In periods when losses from continuing operations are reported, the weighted-average number of common stock outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. The computation of net loss per share for the three and nine months ended September 30, 2022 and 2021, respectively was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Net loss attributable to common stockholders Net loss attributable to Paragon 28, Inc. $ ( 9,724 ) $ ( 5,107 ) $ ( 28,563 ) $ ( 7,518 ) Less: Dividends on Series B convertible preferred stock — ( 574 ) — ( 1,516 ) Net loss attributable to common stockholders $ ( 9,724 ) $ ( 5,681 ) $ ( 28,563 ) $ ( 9,034 ) Weighted-average common stock outstanding: Basic 76,850,949 47,005,334 76,595,118 46,926,344 Diluted 76,850,949 47,005,334 76,595,118 46,926,344 Loss per share: Basic $ ( 0.13 ) $ ( 0.12 ) $ ( 0.37 ) $ ( 0.19 ) Diluted $ ( 0.13 ) $ ( 0.12 ) $ ( 0.37 ) $ ( 0.19 ) The following outstanding potentially dilutive securities were excluded from the calculation of diluted net loss per share attributable to common stockholders because their impact would have been antidilutive for the period presented: As of September 30, 2022 2022 2021 Stock options 7,304,770 5,307,200 Restricted stock units 144,547 — Series A convertible preferred stock — 13,812,500 Series B convertible preferred stock — 6,608,700 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | NOTE 9. STOCK-BASED COMPENSATION Employee Stock Purchase Plan The Employee Stock Purchase Plan (“ESPP”) was adopted by the Company’s Board of Directors on October 8, 2021. The 2021 Plan was adopted by the Company’s stockholders on October 19, 2021 and became effective on the date prior to the first date of the effectiveness of the registration statement on Form S-1 filed by the Company. The ESPP initially provides participating employees with the opportunity to purchase up to an aggregate of 1,329,040 shares of the Company’s common stock at 85 % of the market price at the lesser of the date the purchase right is granted or exercisable. The Company currently holds offerings consisting of six month periods commencing on January 1 and July 1 of each calendar year, with a single purchase date at the end of the purchase period on June 30 and December 31 of each calendar year. The ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2022 and ending on January 1, 2031, by the lesser of 1 % of all classes of the Company’s common stock outstanding on the immediately preceding December 31, or such smaller number of shares as determined by the Company’s Board or the committee. On January 1, 2022, the number of shares reserved and available for issuance for the ESPP was increase d by 764,473 shares. As of September 30, 2022 , 2,076,453 shares remained available for issuance . Eligible employees can contribute up to 15 % of their gross base earnings for purchases under the ESPP through regular payroll deductions. Purchase of shares under the ESPP is limited for each employee at $ 25,000 worth of the Company’s shares of common stock (determined using the lesser of (i) the market price of a share of common stock on the first day of an applicable purchase period and (ii) the market price of a share of comm on stock on the purchase date) for each calendar year in which a purchase right is outstanding. During the nine months ended September 30, 2022 and 2021, the Company issued 17,060 and 0 shares, respectively, upon exercise of purchase rights. The Company recognizes compensation expense on a straight-line basis over the service period. During the three months ended September 30, 2022, and 2021, the Company recognized $ 100 and $ 0 , respectively, of compensation expense related to the ESPP. During the nine months ended September 30, 2022 and 2021, the Company recognized $ 100 and $ 0 , respectively, of compensation expense related to the ESPP. Below are the assumptions used for the nine months ended September 30, 2022 in determining the fair value of shares under the ESPP. No shares were issued duri ng the nine months ended September 30, 2021. Nine Months Ended September 30, 2022 Expected volatility 70.3 % Expected dividends — Expected term (in years) 0.50 Discount rate 10.0 % Risk-free rate 2.79 % 2021 Incentive Award Plan The 2021 Incentive Award Plan (“2021 Plan”) was adopted by the Company’s Board of Directors on October 8, 2021. The 2021 Plan was adopted by the Company’s stockholders on October 19, 2021 and became effective on the date prior to the first date of the effectiveness of the registration statement on Form S-1 filed by the Company. The 2021 Plan authorizes the Company to issue an initial aggregate maximum number of shares of common stock equal to (i) 7,641,979 shares plus (ii) the number of shares that are available for issuance under the 2011 Plan plus (iii) any shares that are subject to 2011 Plan that become available for issuance (via expiration, forfeitures, etc.) plus (iv) an increase commencing on January 1, 2022 and continuing annually on the anniversary thereof through January 1, 2031, equal to the lesser of (a) 5 % of the shares of all classes of the Company’s common stock outstanding on the last day of the immediately preceding calendar year or (b) such smaller number of shares as determined by the Company’s Board or the committee. On January 1, 2022, the number of shares reserved and available for issuance for the 2021 Plan was increased by 3,822,364 shares. As of September 30, 2022 , the Company had reserved 10,760,114 shares of common stock for future grants. Stock Options There were 359,054 and 816,250 options granted during the nine months ended September 30, 2022 and 2021, respectively. During the three months ended September 30, 2022 and 2021, the Company recognize d $ 2,254 a nd $ 1,032 , respectively, of compensation expense related to stock options. During the nine months ended September 30, 2022 and 2021, the Company recognized $ 6,351 and $ 2,747 , respectively, of compensation expense related to stock options. Stock-based compensation expenses are recorded in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss. The Company received cash in the amount of $ 1,923 an d $ 91 from the exercise of stock options for the three months ended September 30, 2022 and 2021, respectively. The Company received cash in the amount of $ 2,224 and $ 442 from the exercise of stock options for the nine months ended September 30, 2022 and 2021, respectively. The tax benefit from equity options exercised were $ 436 and $ 19 for the three months ended September 30, 2022 and 2021 , respectively. The tax benefit from equity options exercised were $ 504 and $ 93 for the nine months ended September 30, 2022 and 2021, respectively. During the first nine months of 2022, the Company granted certain officers and contractors of the Company an aggregate of 311,840 tim e-based options at a weighted average strike price o f $ 16.08 . During the first nine months of 2021, the Company granted certain officers and contractors of the Company an aggregate of 816,250 time-based options at a weighted average strike price of $ 6.60 . Below are the assumptions used for the nine months ended September 30, 2022 and 2021 in determining the fair value of each option award: Nine Months Ended September 30, 2022 2021 Expected volatility 52.0 % 52 % - 54 % Expected dividends — — Expected term (in years) 5.60 5.75 - 6.25 Risk-free rate 2.01 % 0.47 % - 0.93 % The aggregate intrinsic value of the options outstanding as of September 30, 2022 is $ 59,651 . The aggregate intrinsic value of vested and exercisable options as of September 30, 2022 is $ 43,280 . The weighted average fair value of options granted during the nine months ended September 30, 2022 and 2021 was $ 9.26 a nd $ 5.04 , respectively, on the dates of grant. As of September 30, 2022, there was approxi mately $ 21,662 total unrecognized compensation cost related to non-vested stock option compensation arrangements, which is expected to be recognized over a weighted average period of 3.03 years. The following summarizes the Company’s stock option plan and the activity for the nine months ended September 30, 2022: Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (Years) Outstanding, December 31, 2021 7,953,018 $ 9.02 8.16 Granted 359,054 16.08 Exercised or released ( 617,578 ) 3.89 Forfeited or expired ( 389,724 ) 11.84 Outstanding, September 30, 2022 7,304,770 $ 9.66 7.64 Exercisable, September 30, 2022 3,324,831 $ 4.80 6.17 Vested and expected to vest at September 30, 2022 7,304,770 $ 9.66 7.64 Restricted Stock Units The following summarizes the Company’s restricted stock units activity for the nine months ended September 30, 2022. Restricted Stock Units Weighted-Average Fair Value Outstanding, December 31, 2021 79,886 $ 17.84 Granted 87,641 17.12 Vested ( 14,062 ) 16.00 Forfeited or expired ( 8,918 ) 16.82 Outstanding, September 30, 2022 144,547 $ 17.64 Vested and expected to vest at September 30, 2022 144,547 $ 17.64 During the three and nine months ended September 30, 2 0 21 , no Restricted Stock Units (“RSUs”) were granted, vested or forfeited. The grant date fair value for RSUs is the market price of the common stock on the date of grant. The total fair value of RSUs vested during the three and nine months ended September 30, 2022 was $ 0 and $ 225 , respectively. The total fair value of RSUs vested during the three and nine months ended September 30, 2021 was $ 0 . During the three and nine months ended September 30, 2022, the Company re cognized $ 332 an d $ 701 , respectively, of compensation expense related to RSUs. There was no compensation expense related to RSUs recognized during the three and nine months ended September 30, 2021. Stock-based compensation expenses are recorded in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss. As of September 30, 2022 , there was approximately $ 1,997 total unrecognized compensation cost related to non-vested RSUs, which is expected to be recognized over a weighted average period of 1.90 years. |
Employee Benefit Plan
Employee Benefit Plan | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | NOTE 10. EMPLOYEE BENEFIT PLAN The Company sponsors a defined contribution plan for eligible employees who are 21 years of age with three months of service can voluntarily contribute up to 100 % of their eligible compensation. The Company has elected a Safe Harbor plan in which the Company must contribute 3 % of eligible compensation. In addition, the Company may make discretionary contributions which are determined and authorized by the Board of Directors each plan year. The Company made matching contributions to its employee benefit plan of $ 266 and $ 129 for the three months ended September 30, 2022 and 2021 , respectively, and $ 734 and $ 425 for the nine months ended September 30, 2022 and 2021 , respectively, which are recorded in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 11. INCOME TAXES The effective tax rates for the nine months ended September 30, 2022 and 2021 are as follows: Nine Months Ended September 30, 2022 2021 Effective tax rate ( 1.057 %) ( 6.300 %) For the three months ended September 30, 2022 and 2021 , the Company recorded tax expense of $ 201 and $ 105 , respectively. For nine months ended September 30, 2022 and 2021 , the Company recorded tax expense of $ 306 and $ 437 , respectively. The Company’s 2022 and 2021 income tax expense and rates differed from the amount of income tax determined by applying the U.S. Federal income tax rate to pre-tax income primarily as a result of the U.S., Finland, Germany and Italy jurisdictions that have a full valuation allowance recorded on deferred tax assets. In addition, the tax rate is lower than the U.S. statutory federal tax rate as a result of foreign earnings that are taxed at lower tax rates. The Company continues to monitor the realization of its deferred tax assets and assesses the need for a valuation allowance. The Company analyzes available positive and negative evidence to determine if a valuation allowance is needed based on the weight of the evidence. This objectively verifiable evidence includes the current & prior two years' profit and loss positions after considering pre-tax book income plus or minus permanent adjustments as well as other positive & negative evidence available. This process requires management to make estimates, assumptions, and judgments that are uncertain in nature. The Company has established a valuation allowance with respect to deferred tax assets in the U.S., Finland, Germany, and Italy and continues to monitor and assess potential valuation allowances in all its jurisdictions. The CHIPS and Science Act of 2022 (CHIPS) and the Inflation Reduction Act (IRA) of 2022 were recently signed into law by President Biden on August 9, 2022 and August 16, 2022, respectively. The legislation introduces new options for monetizing certain credits, a corporate alternative minimum tax, and a stock repurchase excise tax. The Company is currently evaluating the impact of the CHIPS and IRA Act(s), but at present does not expect that the any of the provisions included in the Act(s) would result in a material impact to the Company’s deferred tax assets, liabilities or income taxes payable. |
Commitments And Contingencies
Commitments And Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 12. COMMITMENTS AND CONTIGENCIES Legal Proceedings We are involved in various lawsuits, claims, inquiries, and other regulatory and compliance matters, most of which are routine to the nature of our business. When it is probable that a loss will be incurred and where a range of the loss can be reasonably estimated, the best estimate within the range is accrued. When the best estimate within the range cannot be determined, the low end of the range is accrued. The ultimate resolution of these claims could affect future results of operations should our exposure be materially different from our estimates or should liabilities be incurred that were not previously accrued. Potential insurance reimbursements are not offset against potential liabilities. During 2018 Wright Medical Technology, Inc. (“Wright Medical”) sued the Company, claiming patent infringement targeting essentially all of our patents. The case was subsequently updated to include trade secret misappropriations. We have filed motions to dismiss Wright's allegations and have a trial date set for June 2023. We currently believe that we have substantial and meritorious defenses to Wright Medical’s claims and intend to vigorously defend our position, including through the trial and appellate stages if necessary. As the case is ongoing, we are unable to determine the likelihood of an outcome or estimate a range of reasonably possible settlement, if any. Accordingly, we have not made an accrual for any possible loss. The outcome of any litigation, however, is inherently uncertain, and an adverse judgment or settlement in the Wright Medical proceeding, if any, could materially and adversely affect our business, financial position and results of operations or cash flows. In addition to Wright Medical’s claims set forth above, we received, in December 2021, an additional complaint from Wright Medical covering patents separate and apart from the Wright Asserted Patents. We do not at this time believe this complaint represents a material liability to our company. We have incurred, and expect that we will continue to incur, significant expense in defending against the allegations made by Wright Medical. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 13. RELATED PARTY TRANSACTIONS The Company has a license agreement dated July 1, 2017 for certain intellectual property with an entity that is affiliated with one of the directors of the Company, under which the Company pays a royalty of four percent ( 4 %) of net revenue related to the licensed intellectual property for the 15 years following the date of first sale, including a minimum annual payment of $ 250 . The term of the agreement is 20 years , and automatically renews for five-year periods thereafter. Payments to the entity under this license agreement totaled $ 28 and $ 29 for the three months ended September 30, 2022 and 2021, respectively. Payments to the entity under this license agreement totale d $ 221 and $ 236 for the nine months ended September 30, 2022 and 2021, respectively. Amounts payable to this entity as of September 30, 2022 and December 31, 2021 were $ 129 and $ 163 , respectively. The Company paid professional services fees to a related party totaling $ 0 and $ 148 for the three months ended September 30, 2022 and 2021, respectively, and such fees are included in Selling, general, and administrative expense in the Condensed Consolidated Statements of Operations and Comprehensive Loss. The Company paid professional services fees to a related party totaling $ 266 and $ 485 for the nine months ended September 30, 2022 and 2021, respectively. Amounts payable as of September 30, 2022 and December 31, 2021 to this related party were $ 184 and $ 66 , respectively. |
Segment and Geographic Informat
Segment and Geographic Information | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | NOTE 14. SEGMENT AND GEOGRAPHIC INFORMATION The following table represents total net revenue by geographic area, based on the location of the customer for the three and nine months ended September 30, 2022 and 2021, respectively. Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 United States $ 39,960 $ 31,882 $ 112,781 $ 92,014 International 6,046 3,969 17,094 12,675 Total net revenue $ 46,006 $ 35,851 $ 129,875 $ 104,689 No individual country with net revenue originating outside of the United States accounted for more than 10% of consolidated net revenue for three and nine months ended September 30, 2022 and 2021. The following table represents total non-current assets, excluding deferred taxes, by geographic area as of September 30, 2022 and December 31, 2021, respectively. September 30, 2022 December 31, 2021 United States $ 76,346 $ 51,809 International 30,070 3,206 Total assets $ 106,416 $ 55,015 With the acquisition of Disior, total non-current assets within both the United States and Finland exceed 10% of consolidated total assets as of September 30, 2022. No individual country with total non-current assets outside the United States accounted for more than 10% of the consolidated total assets as of December 31, 2021 . |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 15. SUBSEQUENT EVENTS On October 21, 2022, the Company granted certain officers and management of the Company an aggregate of 852,556 Restricted Stock Units (RSUs) at a price of $ 17.77 based on the thirty day trailing average price under the 2021 Plan. All RSUs granted were time-based awards and vest over a four-year period. On November 1, 2022, the Company filed a Registration Statement on Form S-3 (the “Shelf Registration Statement”). The Shelf Registration Statement covers the offering and sale of up to $ 100,000 of the Company’s securities, including common stock, preferred stock, debt securities, warrants, purchase contracts and units, as well as up to 10,000 shares of common stock by certain selling securityholders, in one or more transactions from time to time, including an “at-the-market” offering under the Securities Act of 1933. The SEC declared the Shelf Registration Statement effective on November 7, 2022. On November 9, 2022, the Company entered into an amendment to the MidCap Revolving Loan with MidCap Funding IV Trust (the "Revolving Loan Agreement") and an amendment t o the MidCap Term Loan with MidCap Financial Trust (the “Term Loan Agreement” and together with the "Revolving Loan Agreement", “MidCap Credit Agreements”). The amendment to the Midcap Revolving Loan provides up to $ 50,000 in total borrowing capacity compared to up to $ 30,000 available previously. The MidCap amendments modified the MidCap Credit Agreements to include provisions related to the transition from the LIBOR Interest Rate plus Applicable Margin to the SOFR Interest Rate plus Applicable Margin, maintaining the Applicable Margin of 6 % under the MidCap Term Loan and increasing the Applicable Margin from 3 % to 3.75 % under the Midcap Revolving Loan. In addition, the MidCap amendments amended certain covenants, terms and provisions in the Midcap Credit Agreements to, among other things, modify the covenant levels for the Minimum Net Product Sales financial covenant and to remove the Minimum Consolidated EBITDA financial covenant. On November 10, 2022, the Company entered into the First Amendment to the Zions Facility with Zions Bancorporation, N.A. dba Vectra Bank Colorado. The amendment to the Zions Facility amends the financial covenants to require the Company to maintain (i) the Liquidity Ratio, if the Cash Flow as of the last day of any quarter measured on a trailing three month basis is less than or equal to $ 0 , and (ii) the Fixed Charge Coverage Ratio which will be calculated as of the last day of each quarter on a trailing four quarter basis, as well as a certain level of Liquidity, if the Cash Flow is greater than $ 0 . In addition, a Net Revenue Growth covenant was added which will be calculated as of the last day of each quarter on a year-over-year basis. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying Condensed Consolidated Financial Statements include the accounts of Paragon 28, Inc. and its subsidiaries, all of which are wholly-owned. The accompanying Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information required by U.S. GAAP for complete financial statements. The interim Condensed Consolidated Financial Statements reflect all adjustments that are of a normal recurring nature and that are considered necessary for a fair representation of the results for the periods presented and should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the year ended December 31, 2021, which include a complete set of footnote disclosures, including our significant accounting policies. The audited Consolidated Financial Statements and notes thereto for the year ended December 31, 2021 are included in the Company’s Annual filing on Form 10-K filed with the SEC on March 8, 2022. The results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year or for any other future period. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Because future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Any changes in these estimates will be reflected in the Company’s Condensed Consolidated Financial Statements. Significant items subject to such estimates and assumptions include the determination of the collectability of trade receivables, inventory obsolescence, impairment of long-lived assets, recoverability of goodwill and intangible assets, contingent earn-out liabilities, income taxes and stock-based compensation. |
Foreign Currency Translation | Foreign Currency Translation The Condensed Consolidated Financial Statements are presented in U.S. dollars. The Company’s non-U.S. subsidiaries have a functional currency (i.e., the currency in which operational activities are primarily conducted) that is other than the U.S. dollar, generally the currency of the country in which such subsidiaries are domiciled. Such subsidiaries’ assets and liabilities are translated into U.S. dollars at quarter-end exchange rates, while revenue and expenses are translated at average exchange rates during the quarter based on the daily closing exchange rates. Adjustments that result from translating amounts from a subsidiary’s functional currency to U.S. dollars are reported in Accumulated Other Comprehensive (Loss) Income, net of tax. |
Business Combinations | Business Combinations We allocate the purchase consideration to the identifiable net assets acquired, including intangible assets and liabilities assumed, based on estimated fair values at the date of the acquisition. The excess of the fair value of the purchase consideration over the fair value of the identifiable assets and liabilities, if any, is recorded as goodwill. During the measurement period, which is up to one year from the acquisition date, we may adjust provisional amounts that were recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date. Determining the fair value of assets acquired and liabilities assumed requires significant judgment, including the selection of valuation methodologies including the income approach, the cost approach, and the market approach. Significant assumptions used in those methodologies include, but are not limited to, the expected values of the underlying metric, the systematic risk embedded in the underlying metric, the volatility of the underlying metric, the risk-free rate, and the counterparty risk. The use of different valuation methodologies and assumptions is highly subjective and inherently uncertain and, as a result, actual results may differ materially from estimates. |
Trade Receivables, Less Allowance for Doubtful Accounts | Trade Receivables, Less Allowance for Doubtful Accounts The Company estimates an allowance for doubtful accounts based upon an evaluation of the current status of receivables, historical experience, and other factors as necessary. It is reasonably possible that the Company’s estimate of the allowance for doubtful accounts will change. As of September 30, 2022 and December 31, 2021 the balance for allowance for doubtful accounts was not material. |
Inventories, Net | Inventories, Net The Company estimates a reserve for obsolete and slow-moving inventory based on current inventory levels, historical sales and future projected demand. Charges (benefit) for excess and obsolete inventory are included in Cost of goods sold and were $ 366 and $ 1,004 for the three months ended September 30, 2022 and 2021, respectively and were $( 62 ) and $ 2,229 for the nine months ended September 30, 2022 and 2021, respectively . The inventory reserve was $ 16,218 and $ 19,374 as of September 30, 2022 and December 31, 2021 , respectively. |
Intangibles | Intangibles The costs associated with applying for patents and trademarks are capitalized. Patents are amortized on a straight-line basis over the lesser of the patent’s economic or legal life, which is seventeen years . Costs associated with capitalized patents include third-party attorney fees and other third-party fees as well as costs related to the following: the preparation of patent applications, government filings and registration fees, drawings, computer searches, and translations related to specific patents. Trademarks that are anticipated to be renewed every ten years have an indefinite life and are not amortized but tested for impairment annually. Once it is determined a trademark will no longer be renewed, the trademark is amortized over the remainder of the trademark’s registration period. Customer relationships are amortized over an estimated useful life of three to seven years on a straight-line basis. Other intangibles, which mainly consist of noncompete arrangements, are amortized over an estimated useful life of three years on a straight-line basis. Developed technology is amortized over an estimated useful life of twelve years on a straight-line basis. Amortizable intangible assets are assessed for impairment upon triggering events that indicate that the carrying value of an asset may not be recoverable. Recoverability is measured by a comparison of the carrying amount to future net undiscounted cash flows expected to be generated by the associated asset. If the asset’s carrying value is determined to not be recoverable, the impairment to be recognized is measured by the amount by which the carrying amount exceeds the fair market value of the intangible assets. No impairment charges were recorded in any of the periods presented. Indefinite-lived trademark assets are reviewed for impairment annually or whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The Company can elect to first apply the optional qualitative impairment assessment to determine whether the indefinite-lived intangible asset is more-likely-than-not impaired. If, on the basis of the qualitative impairment assessment, an entity asserts that it is more likely than not that the indefinite-lived intangible asset is impaired, the Company would be required to calculate the fair value of the asset for an impairment test. Impairment loss is recognized if the carrying amount of the asset exceeds its fair value. A qualitative assessment considers macroeconomic and other industry-specific factors, such as trends in short-term and long-term interest rates and the ability to access capital, and company specific factors such as trends in revenue generating activities, and merger or acquisition activity. If the Company elects to bypass qualitatively assessing its indefinite-lived intangible assets, or it is not more likely than not that the fair value of the intangible asset exceeds its carrying value, management estimates the fair value of the intangible asset and compares it to the carrying value. The estimated fair value of the intangible asset is established using an income approach based on a discounted cash flow model that includes significant assumptions about the future operating results and cash flows of the intangible asset or assets. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price as compared to the fair value of net assets acquired and liabilities assumed. Goodwill is not amortized, but is tested for impairment annually or when indications of impairment exist. We can elect to qualitatively assess goodwill for impairment if it is more likely than not that the fair value of a reporting unit exceeds its carrying value. Impairment exists when the carrying amount, including goodwill, of the reporting unit exceeds its fair value, resulting in an impairment charge for this excess (not to exceed the carrying amount of the goodwill). Our annual impairment testing date is October 1. The impairment, if determined, is recorded within Operating expenses in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) in the period the determination is made. There were no impairments recorded during the periods presented. |
Contingent Earn-Out Consideration | Contingent Earn-out Consideration Business combinations may include contingent earn-out consideration as part of the purchase price under which the Company will make future payments to the seller upon the achievement of certain milestones. The fair value of the contingent earn-out consideration is estimated as of the acquisition date at the present value of the expected contingent payments and is subsequently remeasured at each balance sheet date. Two methodologies may be considered in the valuation: the scenario-based model (“SBM”) and Monte Carlo simulation. The SBM relies on multiple outcomes to estimate the likelihood of future payoff of the contingent consideration. The resulting earnout payoff is then probability-weighted and discounted at an appropriate risk adjusted rate in order to arrive at the present value of the expected earnout payment. The Monte Carlo simulation is used to value the non-linear contingent considerations based on projected financial metrics. Each trial of the Monte Carlo simulation draws a value from the assumed distribution for the underlying metric. The earnout payoff for each simulation trial is calculated based on that particular simulated path for the underlying metrics and then discounted to present value using the risk-free rate, adjusted for counterparty credit risk. The value of the earnout is estimated as the average value from all simulation trials. The fair value estimates use unobservable inputs that reflect our own assumptions as to the ability of the acquired business to meet the targeted benchmarks and discount rates used in the calculations. The unobservable inputs are defined in ASC Topic 820, “Fair Value Measurements and Disclosures,” as Level 3 inputs. We review the probabilities of achievement of the earnout milestones to determine impact on the fair value of the earnout consideration on a quarterly basis over the earn-out period. Actual results are compared to the estimates and probabilities of achievement used in our forecasts. Should actual results of the acquired business increase or decrease as compared to our estimates and assumptions, the estimated fair value of the contingent earn-out consideration liability will increase or decrease, up to the contractual limit, as applicable. Changes in the estimated fair value of the contingent earn-out consideration are recorded in other (expense) income in the Consolidated Statements of Operations and Comprehensive (Loss) Income and are reflected in the period in which they are identified. Changes in the estimated fair value of the contingent earn-out consideration may materially impact or cause volatility in our operating results. |
Revenue Recognition | Revenue Recognition Revenue is recorded, net of estimated losses for bad debts, when our performance obligation is satisfied which is when our customers take title of the product, and typically when the product is used in surgery. As such, the timing of revenue recognition may differ from the timing of invoicing to our customers. We have recorded unbilled accounts receivable related to this timing difference of $ 3,987 and $ 3,637 as of September 30, 2022 and December 31, 2021 , respectively. |
Accounting Pronouncements Issued Not Yet Adopted | Accounting Pronouncements Issued Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. ASU 2016-02 supersedes the previous leases standard, ASC 840, Leases. ASU 2016-02, as subsequently amended for various technical issues, is effective for emerging growth companies following private company adoption dates in fiscal years beginning after December 15, 2021, and interim periods with fiscal years beginning after December 15, 2022. The Company is currently evaluating the new guidance, but does not believe it will have a material impact on the Consolidated Financial Statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires entities to estimate all expected credit losses for certain types of financial instruments, including trade receivables, held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The updated guidance also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses over the entire contractual term of the instrument from the date of initial recognition of that instrument. ASU 2016-13, as subsequently amended for various technical issues, is effective for emerging growth companies following private company adoption dates for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the new guidance to determine the impact it will have on the Consolidated Financial Statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) (“ASU 2019-12”), which is part of the FASB’s overall simplification initiative to reduce the costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. ASU 2019-12 simplifies accounting guidance for intra-period allocations, deferred tax liabilities, year-to-date losses in interim periods, franchise taxes, step-up in tax basis of goodwill, separate entity financial statements, and interim recognition of tax laws or rate changes. ASU 2019-12 is effective for emerging growth companies following private company adoption dates in fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022, with early adoption permitted. The adoption of this guidance is not expected to have a significant impact on the Company's Consolidated Financial Statements and related disclosures. |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Disior LTD. | |
Business Acquisition [Line Items] | |
Summary of Purchase Consideration Transferred | The following table summarizes the purchase price: Consideration Paid Cash consideration $ 19,696 Contingent consideration 6,550 Total consideration $ 26,246 |
Summary of Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the fair values of the assets acquired and liabilities assumed as of the Disior Acquisition Date: Measurement Preliminary allocation period adjustments Adjusted allocation Assets acquired: Cash and cash equivalents $ 1,192 $ — $ 1,192 Other current assets 410 — 410 Intangible assets 4,900 — 4,900 Goodwill 20,343 303 20,646 Total assets acquired $ 26,845 $ 303 $ 27,148 Liabilities assumed: Accruals and other current liabilities $ 615 $ — $ 615 Deferred tax liabilities, net 287 — 287 Total liabilities assumed $ 902 — $ 902 Net assets acquired $ 25,943 $ 303 $ 26,246 |
Useful Life Determination of Assets | The useful life on intangible assets was determined by management to be in line with the Company’s policy on intangible assets. Both determinations are outlined in the table below: Fair Value Estimated Useful Life Developed Technology $ 4,500 12 Tradenames 400 Indefinite $ 4,900 |
Additive Orthopaedics, LLC | |
Business Acquisition [Line Items] | |
Summary of Purchase Consideration Transferred | The following table summarizes the purchase consideration transferred in connection with the acquisition of Additive and consists of the following: Consideration Paid Cash consideration $ 15,000 Contingent consideration 2,870 Total consideration $ 17,870 |
Summary of Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the fair values of the assets acquired and liabilities assumed as of the Closing Date: Assets acquired: Accounts receivable $ 761 Inventory 113 Intangible assets 11,560 Goodwill 6,329 Total Assets Acquired 18,763 Liabilities assumed: Accounts payable 796 Accrued expenses $ 97 Total Liabilities Assumed 893 Net assets acquired $ 17,870 |
Useful Life Determination of Assets | The useful life determination was made by management in line with the Company’s policy on assets. Both determinations are outlined in the table below: Fair Value Estimated Useful Life Noncompete arrangements $ 30 3 Customer relationships 240 3 Developed technology 11,290 12 $ 11,560 |
Goodwill And Intangible Assets
Goodwill And Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | As of September 30, 2022 and December 31, 2021, goodwill was $ 26,975 and $ 6,329 , respectively; the activity is as follows: Balance, December 31, 2021 $ 6,329 Acquisitions 20,646 Balance, September 30, 2022 $ 26,975 |
Indefinite lived and Finite Lived Intangible Assets | Intangible assets as of September 30, 2022 are as follows: Estimated Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trademarks and tradenames, indefinite-lived Indefinite $ 853 $ — $ 853 Patents, definite-lived 15.1 6,466 2,301 4,165 Customer relationships 3 - 7 1,733 201 1,532 Developed technology 12 15,790 1,507 14,283 Other intangibles 3 30 13 17 Total intangible assets, net $ 24,872 $ 4,022 $ 20,850 Intangible assets as of December 31, 2021 , are as follows: Estimated Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trademarks, indefinite-lived Indefinite $ 413 $ — $ 413 Patents, definite-lived 13.2 5,335 1,133 4,202 Customer relationships 3 - 7 1,167 47 1,120 Developed technology 12 11,290 549 10,741 Other intangibles 3 35 6 29 Total intangible assets, net $ 18,240 $ 1,735 $ 16,505 |
Schedule of Expected Future Amortization Expense | Expected future amortization expense is as follows: 2022 (Remaining) $ 424 2023 1,695 2024 1,643 2025 1,604 2026 1,604 2027 1,603 |
Contingent Earn-Out Considera_2
Contingent Earn-Out Consideration (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combinations [Abstract] | |
Schedule of Reconciliation Level 3 Earn-out Liabilities | The following table provides a reconciliation of our Level 3 earn-out liabilities for the nine months ended September 30, 2022: Balance, December 31, 2021 $ 2,310 Acquisition date fair value of earn-out liabilities 6,550 Achieved milestone paid ( 500 ) Change in fair value of earn-out liabilities ( 575 ) Balance, September 30, 2022 $ 7,785 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt as of September 30, 2022 and December 31, 2021 consists of the following: September 30, 2022 December 31, 2021 MidCap Term Loan $ 30,000 $ 10,000 Bank of Ireland Note Payable 112 245 Vectra Term Loan Facility 15,733 — $ 45,845 $ 10,245 Less: deferred issuance costs ( 2,618 ) ( 2,616 ) Total debt, net of issuance costs 43,227 7,629 Less: current portion ( 735 ) ( 153 ) Long-term debt, net, less current maturities $ 42,492 $ 7,476 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Summary of Computation of Net Loss Per Share | The computation of net loss per share for the three and nine months ended September 30, 2022 and 2021, respectively was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Net loss attributable to common stockholders Net loss attributable to Paragon 28, Inc. $ ( 9,724 ) $ ( 5,107 ) $ ( 28,563 ) $ ( 7,518 ) Less: Dividends on Series B convertible preferred stock — ( 574 ) — ( 1,516 ) Net loss attributable to common stockholders $ ( 9,724 ) $ ( 5,681 ) $ ( 28,563 ) $ ( 9,034 ) Weighted-average common stock outstanding: Basic 76,850,949 47,005,334 76,595,118 46,926,344 Diluted 76,850,949 47,005,334 76,595,118 46,926,344 Loss per share: Basic $ ( 0.13 ) $ ( 0.12 ) $ ( 0.37 ) $ ( 0.19 ) Diluted $ ( 0.13 ) $ ( 0.12 ) $ ( 0.37 ) $ ( 0.19 ) |
Summary of Potentially Dilutive Securities Excluded from Calculation of Diluted Net Loss Per Share Attributable to Common Stockholders | The following outstanding potentially dilutive securities were excluded from the calculation of diluted net loss per share attributable to common stockholders because their impact would have been antidilutive for the period presented: As of September 30, 2022 2022 2021 Stock options 7,304,770 5,307,200 Restricted stock units 144,547 — Series A convertible preferred stock — 13,812,500 Series B convertible preferred stock — 6,608,700 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Assumptions used in Determining Fair Value of Employee Stock Purchase Plan | Below are the assumptions used for the nine months ended September 30, 2022 in determining the fair value of shares under the ESPP. No shares were issued duri ng the nine months ended September 30, 2021. Nine Months Ended September 30, 2022 Expected volatility 70.3 % Expected dividends — Expected term (in years) 0.50 Discount rate 10.0 % Risk-free rate 2.79 % |
Assumptions used in Determining Fair Value of Stock Options | Below are the assumptions used for the nine months ended September 30, 2022 and 2021 in determining the fair value of each option award: Nine Months Ended September 30, 2022 2021 Expected volatility 52.0 % 52 % - 54 % Expected dividends — — Expected term (in years) 5.60 5.75 - 6.25 Risk-free rate 2.01 % 0.47 % - 0.93 % |
Summary of Stock Option Activity | The following summarizes the Company’s stock option plan and the activity for the nine months ended September 30, 2022: Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (Years) Outstanding, December 31, 2021 7,953,018 $ 9.02 8.16 Granted 359,054 16.08 Exercised or released ( 617,578 ) 3.89 Forfeited or expired ( 389,724 ) 11.84 Outstanding, September 30, 2022 7,304,770 $ 9.66 7.64 Exercisable, September 30, 2022 3,324,831 $ 4.80 6.17 Vested and expected to vest at September 30, 2022 7,304,770 $ 9.66 7.64 |
Summary of Restricted Stock Units Activity | The following summarizes the Company’s restricted stock units activity for the nine months ended September 30, 2022. Restricted Stock Units Weighted-Average Fair Value Outstanding, December 31, 2021 79,886 $ 17.84 Granted 87,641 17.12 Vested ( 14,062 ) 16.00 Forfeited or expired ( 8,918 ) 16.82 Outstanding, September 30, 2022 144,547 $ 17.64 Vested and expected to vest at September 30, 2022 144,547 $ 17.64 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Tax Rates | The effective tax rates for the nine months ended September 30, 2022 and 2021 are as follows: Nine Months Ended September 30, 2022 2021 Effective tax rate ( 1.057 %) ( 6.300 %) |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Total Net Revenue by Geographic Area | The following table represents total net revenue by geographic area, based on the location of the customer for the three and nine months ended September 30, 2022 and 2021, respectively. Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 United States $ 39,960 $ 31,882 $ 112,781 $ 92,014 International 6,046 3,969 17,094 12,675 Total net revenue $ 46,006 $ 35,851 $ 129,875 $ 104,689 |
Schedule of Total Non-current Assets, Excluding Deferred Taxes, by Geographic Area | The following table represents total non-current assets, excluding deferred taxes, by geographic area as of September 30, 2022 and December 31, 2021, respectively. September 30, 2022 December 31, 2021 United States $ 76,346 $ 51,809 International 30,070 3,206 Total assets $ 106,416 $ 55,015 |
Business and Basis of Present_2
Business and Basis of Presentation - Additional Information (Details) - Common Stock $ / shares in Units, $ in Thousands | Oct. 19, 2021 USD ($) $ / shares shares |
Initial Public Offering | |
Subsidiary, Sale of Stock [Line Items] | |
Number of shares issued and sold | 8,984,375 |
Public offering price per share | $ / shares | $ 16 |
Net proceeds after deducting underwriting discounts and commissions | $ | $ 129,118 |
Number of shares issued upon conversion of convertible securities | 20,421,200 |
Underwriters Option to Purchase Additional Shares | |
Subsidiary, Sale of Stock [Line Items] | |
Number of shares issued and sold | 1,171,875 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Impairment of intangible asset, finite-lived | $ 0 | $ 0 | $ 0 | $ 0 | |
Impairment of goodwill | 0 | 0 | 0 | 0 | |
Charges (benefit) for excess and obsolete inventory | (91,000) | 2,226,000 | |||
Inventory reserve | 16,218,000 | 16,218,000 | $ 19,374,000 | ||
Unbilled accounts receivable | 3,987,000 | $ 3,987,000 | $ 3,637,000 | ||
Patents | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization period | 17 years | ||||
Estimated useful life | 15 years 1 month 6 days | 13 years 2 months 12 days | |||
Developed Technology | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated useful life | 12 years | 12 years | |||
Customer Relationships | Minimum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated useful life | 3 years | 3 years | |||
Customer Relationships | Maximum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated useful life | 7 years | 7 years | |||
Other Intangibles | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated useful life | 3 years | 3 years | |||
Cost of Goods Sold | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Charges (benefit) for excess and obsolete inventory | $ 366,000 | $ 1,004,000 | $ (62,000) | $ 2,229,000 |
Business Combinations - Additio
Business Combinations - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Jan. 10, 2022 | May 28, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Business Acquisition [Line Items] | ||||||
Cash consideration | $ 18,504,000 | $ 15,000,000 | ||||
Proceeds from revolving credit facility | 20,000,000 | 0 | ||||
Disior LTD. | ||||||
Business Acquisition [Line Items] | ||||||
Acquired percentage | 100% | |||||
Aggregate purchase price of acquisition | $ 26,246,000 | |||||
Contingent earn-out consideration, estimated fair value | 6,550,000 | $ 6,550,000 | ||||
Net working capital adjustments and deferred payments, net payable | 222,000 | |||||
Cash consideration | 19,696,000 | |||||
Maximum earn out payment | 8,000,000 | |||||
Acquisition related costs | $ 0 | 0 | ||||
Business acquisition, pro forma information, description | There is no supplemental proforma presentation of operating results of the acquisition of Disior due to the immaterial impact on the Company’s Consolidated operations for the three and nine months ended September 30, 2021. | |||||
Measurement period adjustment | $ 303,000 | |||||
Disior LTD. | Term Loan | ||||||
Business Acquisition [Line Items] | ||||||
Proceeds from revolving credit facility | $ 20,000,000 | |||||
Disior LTD. | Selling, General, and Administrative Expenses | ||||||
Business Acquisition [Line Items] | ||||||
Acquisition related costs | $ 0 | 761,000 | ||||
Additive Orthopaedics, LLC | ||||||
Business Acquisition [Line Items] | ||||||
Aggregate purchase price of acquisition | $ 17,870,000 | |||||
Contingent earn-out consideration, estimated fair value | 2,870,000 | |||||
Cash consideration | 15,000,000 | |||||
Maximum earn out payment | $ 9,500,000 | |||||
Acquisition related costs | $ 0 | $ 0 | ||||
Business acquisition, pro forma information, description | There is no supplemental proforma presentation of operating results of the acquisition of Additive due to the immaterial impact on the Company’s Consolidated operations for the three and nine months ended September 30, 2021. | |||||
Additive Orthopaedics, LLC | Selling, General, and Administrative Expenses | ||||||
Business Acquisition [Line Items] | ||||||
Acquisition related costs | $ 524,000 |
Business Combinations - Summary
Business Combinations - Summary of Purchase Consideration Transferred (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Jan. 10, 2022 | May 28, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Consideration Paid | ||||
Cash consideration | $ 18,504 | $ 15,000 | ||
Disior LTD. | ||||
Consideration Paid | ||||
Cash consideration | $ 19,696 | |||
Contingent consideration | 6,550 | $ 6,550 | ||
Total consideration | $ 26,246 | |||
Additive Orthopaedics, LLC | ||||
Consideration Paid | ||||
Cash consideration | $ 15,000 | |||
Contingent consideration | 2,870 | |||
Total consideration | $ 17,870 |
Business Combinations - Summa_2
Business Combinations - Summary of Fair Values of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jan. 10, 2022 | Dec. 31, 2021 | May 28, 2021 |
Assets acquired: | ||||
Goodwill | $ 26,975 | $ 6,329 | ||
Additive Orthopaedics, LLC | ||||
Assets acquired: | ||||
Accounts receivable | $ 761 | |||
Inventory | 113 | |||
Intangible assets | 11,560 | |||
Goodwill | 6,329 | |||
Total assets acquired | 18,763 | |||
Liabilities assumed: | ||||
Accounts payable | 796 | |||
Accrued expenses | 97 | |||
Total liabilities assumed | 893 | |||
Net assets acquired | $ 17,870 | |||
Disior LTD. | ||||
Assets acquired: | ||||
Cash and cash equivalents | $ 1,192 | |||
Other current assets | 410 | |||
Intangible assets | 4,900 | |||
Goodwill | 20,646 | |||
Total assets acquired | 27,148 | |||
Liabilities assumed: | ||||
Accruals and other current liabilities | 615 | |||
Deferred tax liabilities, net | 287 | |||
Total liabilities assumed | 902 | |||
Net assets acquired | 26,246 | |||
Preliminary Allocation | Disior LTD. | ||||
Assets acquired: | ||||
Cash and cash equivalents | 1,192 | |||
Other current assets | 410 | |||
Intangible assets | 4,900 | |||
Goodwill | 20,343 | |||
Total assets acquired | 26,845 | |||
Liabilities assumed: | ||||
Accruals and other current liabilities | 615 | |||
Deferred tax liabilities, net | 287 | |||
Total liabilities assumed | 902 | |||
Net assets acquired | 25,943 | |||
Measurement Period Adjustments | Disior LTD. | ||||
Assets acquired: | ||||
Goodwill | 303 | |||
Total assets acquired | 303 | |||
Liabilities assumed: | ||||
Net assets acquired | $ 303 |
Business Combinations - Useful
Business Combinations - Useful Life Determination of Assets (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Disior LTD. | |
Business Acquisition [Line Items] | |
Fair Value | $ 4,900 |
Additive Orthopaedics, LLC | |
Business Acquisition [Line Items] | |
Fair Value | 11,560 |
Noncompete Arrangements | Additive Orthopaedics, LLC | |
Business Acquisition [Line Items] | |
Fair Value | $ 30 |
Estimated Useful Life (in years) | 3 years |
Customer Relationships | Additive Orthopaedics, LLC | |
Business Acquisition [Line Items] | |
Fair Value | $ 240 |
Estimated Useful Life (in years) | 3 years |
Developed Technology | Disior LTD. | |
Business Acquisition [Line Items] | |
Fair Value | $ 4,500 |
Estimated Useful Life (in years) | 12 years |
Developed Technology | Additive Orthopaedics, LLC | |
Business Acquisition [Line Items] | |
Fair Value | $ 11,290 |
Estimated Useful Life (in years) | 12 years |
Tradenames | Disior LTD. | |
Business Acquisition [Line Items] | |
Fair Value | $ 400 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | $ 26,975,000 | $ 26,975,000 | $ 6,329,000 | ||
Impairment charges related to intangibles | 0 | $ 0 | 0 | $ 0 | |
Impairment charges related to goodwill | 0 | 0 | 0 | 0 | |
Patents and Trademarks | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets acquired excluding Disior intangible assets | 1,720,000 | ||||
Selling, General, and Administrative Expenses | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization expense | $ 440,000 | $ 494,000 | $ 2,290,000 | $ 635,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Balance, December 31, 2021 | $ 6,329 |
Acquisitions | 20,646 |
Balance, September 30, 2022 | $ 26,975 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Gross Carrying Amount | $ 24,872 | $ 18,240 |
Accumulated Amortization | 4,022 | 1,735 |
Net Carrying Amount | 20,850 | 16,505 |
Trademarks and tradenames, Indefinite-Lived | ||
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Net Carrying Amount | $ 853 | $ 413 |
Patents, Definite-Lived | ||
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Estimated Useful Life (in years) | 15 years 1 month 6 days | 13 years 2 months 12 days |
Gross Carrying Amount | $ 6,466 | $ 5,335 |
Accumulated Amortization | 2,301 | 1,133 |
Net Carrying Amount | 4,165 | 4,202 |
Customer Relationships | ||
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Gross Carrying Amount | 1,733 | 1,167 |
Accumulated Amortization | 201 | 47 |
Net Carrying Amount | $ 1,532 | $ 1,120 |
Customer Relationships | Minimum | ||
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Estimated Useful Life (in years) | 3 years | 3 years |
Customer Relationships | Maximum | ||
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Estimated Useful Life (in years) | 7 years | 7 years |
Developed Technology | ||
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Estimated Useful Life (in years) | 12 years | 12 years |
Gross Carrying Amount | $ 15,790 | $ 11,290 |
Accumulated Amortization | 1,507 | 549 |
Net Carrying Amount | $ 14,283 | $ 10,741 |
Other Intangibles | ||
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Estimated Useful Life (in years) | 3 years | 3 years |
Gross Carrying Amount | $ 30 | $ 35 |
Accumulated Amortization | 13 | 6 |
Net Carrying Amount | $ 17 | $ 29 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Schedule of Expected Future Amortization Expense (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2022 (Remaining) | $ 424 |
2023 | 1,695 |
2024 | 1,643 |
2025 | 1,604 |
2026 | 1,604 |
2027 | $ 1,603 |
Contingent Earn-Out Considera_3
Contingent Earn-Out Consideration - Schedule of Reconciliation of Level 3 Earn-Out Liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Jan. 10, 2022 | Sep. 30, 2022 | |
Business Acquisition [Line Items] | ||
Beginning Balance | $ 2,310 | |
Achieved milestone paid | (500) | |
Change in fair value of earn-out liabilities | (575) | |
Ending Balance | 7,785 | |
Disior LTD. | ||
Business Acquisition [Line Items] | ||
Acquisition date fair value of earn-out liabilities | $ 6,550 | $ 6,550 |
Contingent Earn-Out Considera_4
Contingent Earn-Out Consideration - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Business Acquisition, Contingent Consideration [Line Items] | |||
Contingent earn-out liability, current | $ 6,878 | $ 6,878 | |
Decrease in estimate of earn-out liabilities | 575 | $ (60) | |
Other Income [Member] | |||
Business Acquisition, Contingent Consideration [Line Items] | |||
Decrease in estimate of earn-out liabilities | $ (35) | $ (575) |
Debt - Schedule of Long-term De
Debt - Schedule of Long-term Debt Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Debt, gross amount | $ 45,845 | $ 10,245 |
Less: deferred issuance costs | (2,618) | (2,616) |
Total debt, net of issuance costs | 43,227 | 7,629 |
Less: current portion | (735) | (153) |
Long-term debt net, less current maturities | 42,492 | 7,476 |
MidCap Term Loan | ||
Debt Instrument [Line Items] | ||
Debt, gross amount | 30,000 | 10,000 |
Bank of Ireland Note Payable | ||
Debt Instrument [Line Items] | ||
Debt, gross amount | 112 | 245 |
Vectra Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Debt, gross amount | $ 15,733 | $ 0 |
Debt - MidCap Credit Agreements
Debt - MidCap Credit Agreements - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
May 06, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Debt Instrument [Line Items] | |||||
Amortization expense | $ 417,000 | $ 372,000 | |||
MidCap Credit Agreements | |||||
Debt Instrument [Line Items] | |||||
Total borrowing capacity | $ 70,000,000 | ||||
Debt issuance cost before amortization | $ 3,288,000 | 3,288,000 | |||
MidCap Credit Agreements | Interest Expense | |||||
Debt Instrument [Line Items] | |||||
Amortization expense | $ 165,000 | $ 192,000 | $ 409,000 | $ 318,000 | |
MidCap Credit Agreements | Term Loan | |||||
Debt Instrument [Line Items] | |||||
Total borrowing capacity | $ 40,000,000 | ||||
Expiration date | May 01, 2026 | ||||
MidCap Credit Agreements | Term Loan | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Variable interest rate | 6% | ||||
MidCap Credit Agreements | Term Loan, First Commitment | |||||
Debt Instrument [Line Items] | |||||
Total borrowing capacity | $ 10,000,000 | ||||
MidCap Credit Agreements | Term Loan, Second Commitment | |||||
Debt Instrument [Line Items] | |||||
Total borrowing capacity | 30,000,000 | ||||
MidCap Credit Agreements | Revolving Loan | |||||
Debt Instrument [Line Items] | |||||
Total borrowing capacity | $ 30,000,000 | ||||
Expiration date | May 01, 2026 | ||||
MidCap Credit Agreements | Revolving Loan | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Variable interest rate | 3% |
Debt - Vectra Bank Colorado Loa
Debt - Vectra Bank Colorado Loan Agreements - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Mar. 24, 2022 | Mar. 27, 2020 | Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Line Of Credit Facility [Line Items] | ||||||
Total debt issuance costs | $ 2,618,000 | $ 2,618,000 | $ 2,616,000 | |||
Amortization of debt issuance costs | 417,000 | $ 372,000 | ||||
Vectra Loan Agreement | ||||||
Line Of Credit Facility [Line Items] | ||||||
Maturity date | Sep. 30, 2020 | |||||
Maturity extended date | Oct. 05, 2023 | |||||
Interest rate | 3% | |||||
Vectra Loan Agreement | 2020 Term Loan | ||||||
Line Of Credit Facility [Line Items] | ||||||
Principal amount | $ 6,802,000 | |||||
Secured Term Loan Facility | ||||||
Line Of Credit Facility [Line Items] | ||||||
Principal amount | $ 16,000,000 | |||||
Maturity date | Mar. 24, 2037 | |||||
Debt, frequency of payment | monthly | |||||
Total debt issuance costs | 271,000 | 271,000 | ||||
Amortization of debt issuance costs | $ 4,000 | $ 9,000 | ||||
Secured Term Loan Facility | SOFR | ||||||
Line Of Credit Facility [Line Items] | ||||||
Variable interest rate | 1.75% | |||||
New 2020 Revolving Loan | 2020 Term Loan | ||||||
Line Of Credit Facility [Line Items] | ||||||
Total borrowing capacity | $ 15,000,000 |
Debt - Bank of Ireland Note Pay
Debt - Bank of Ireland Note Payable - Additional Information (Details) - Bank of Ireland Note Payable | Jun. 12, 2020 USD ($) |
Debt Instrument [Line Items] | |
Principal amount | $ 474,000 |
Interest rate | 4% |
Debt, frequency of payment | monthly |
Debt instrument term | 36 months |
Convertible Preferred Series _2
Convertible Preferred Series Equity and Stockholders Equity - Additional Information (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
Oct. 19, 2021 USD ($) $ / shares shares | Oct. 08, 2021 $ / shares shares | Jul. 31, 2020 USD ($) $ / shares shares | Nov. 30, 2012 USD ($) $ / shares shares | Feb. 29, 2012 USD ($) $ / shares shares | Dec. 31, 2011 USD ($) $ / shares shares | Sep. 30, 2022 $ / shares shares | Sep. 30, 2021 shares | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) shares | Dec. 31, 2021 $ / shares shares | |
Class of Stock [Line Items] | |||||||||||
Forward stock split | 5 | ||||||||||
Shares of capital stock authorized for issuance | 310,000,000 | ||||||||||
Common stock share authorized | 300,000,000 | 300,000,000 | 300,000,000 | 300,000,000 | |||||||
Common stock par value | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | |||||||
Convertible preferred stock, authorized | 10,000,000 | ||||||||||
Convertible preferred stock, par value | $ / shares | $ 0.0001 | ||||||||||
Treasury stock repurchase shares | 0 | 0 | 0 | 85,050 | |||||||
Treasury stock repurchase value | $ | $ 0 | $ 561 | |||||||||
Common Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of aggregate issued | 151,515 | ||||||||||
Initial Public Offering | Common Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Public offering price per share | $ / shares | $ 16 | ||||||||||
Number of shares issued and sold | 8,984,375 | ||||||||||
Conversion of shares | 20,421,200 | ||||||||||
Underwriters Option to Purchase Additional Shares | Common Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares issued and sold | 1,171,875 | ||||||||||
Series A Convertible Preferred Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of aggregate issued | 10,562,495 | 10,562,495 | 3,250,005 | ||||||||
Proceeds from issuance of convertible preferred stock | $ | $ 3,250 | $ 3,250 | $ 1,000 | ||||||||
Price per share | $ / shares | $ 0.30769 | $ 0.30769 | $ 0.30769 | ||||||||
Series A Convertible Preferred Stock | Initial Public Offering | Common Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Conversion of shares | 13,812,500 | ||||||||||
Series B Convertible Preferred Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of aggregate issued | 6,608,700 | ||||||||||
Cash dividends accrued | $ | $ 2,328 | ||||||||||
Proceeds from issuance of convertible preferred stock | $ | $ 36,030 | ||||||||||
Issuance costs | $ | $ 1,970 | ||||||||||
Price per share | $ / shares | $ 5.75 | ||||||||||
Series B Convertible Preferred Stock | Initial Public Offering | Common Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Conversion of shares | 6,608,700 |
Earnings (Loss) Per Share - Sum
Earnings (Loss) Per Share - Summary of Computation of Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Net loss attributable to common stockholders | ||||
Net loss attributable to Paragon 28, Inc. | $ (9,724) | $ (5,107) | $ (28,563) | $ (7,518) |
Less: Dividends on Series B convertible preferred stock | 0 | (574) | 0 | (1,516) |
Net loss attributable to common stockholders | $ (9,724) | $ (5,681) | $ (28,563) | $ (9,034) |
Weighted-average common stock outstanding: | ||||
Basic | 76,850,949 | 47,005,334 | 76,595,118 | 46,926,344 |
Diluted | 76,850,949 | 47,005,334 | 76,595,118 | 46,926,344 |
Loss per share, Basic: | ||||
Basic | $ (0.13) | $ (0.12) | $ (0.37) | $ (0.19) |
Loss per share, Diluted: | ||||
Diluted | $ (0.13) | $ (0.12) | $ (0.37) | $ (0.19) |
Earnings (Loss) Per Share - S_2
Earnings (Loss) Per Share - Summary of Potentially Dilutive Securities Excluded from Calculation of Diluted Net Loss Per Share Attributable to Common Stockholders (Details) - shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Stock Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities excluded from computation of dilutive net loss per share | 7,304,770 | 5,307,200 |
Restricted Stock Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities excluded from computation of dilutive net loss per share | 144,547 | 0 |
Series A Convertible Preferred Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities excluded from computation of dilutive net loss per share | 0 | 13,812,500 |
Series B Convertible Preferred Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities excluded from computation of dilutive net loss per share | 0 | 6,608,700 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Jan. 01, 2022 | Oct. 19, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Employee contribution percentage | 100% | ||||||
Options granted | 359,054 | ||||||
Cash received from exercise of stock options | $ 2,224 | $ 442 | |||||
Weighted average strike price | $ 9.66 | $ 9.66 | $ 9.02 | ||||
Time-based Stock Options | Certain Officers and Contractors | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options granted | 311,840 | 816,250 | |||||
Weighted average strike price | $ 16.08 | $ 6.60 | $ 16.08 | $ 6.60 | |||
Stock Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options granted | 359,054 | 816,250 | |||||
Compensation expense | $ 2,254 | $ 1,032 | $ 6,351 | $ 2,747 | |||
Cash received from exercise of stock options | 1,923 | 91 | 2,224 | 442 | |||
Tax benefit from equity options exercised | 436 | 19 | 504 | $ 93 | |||
Aggregate intrinsic value of options outstanding | 59,651 | 59,651 | |||||
Aggregate intrinsic value of vested and exercisable options | 43,280 | $ 43,280 | |||||
Weighted average fair value of options granted | $ 9.26 | $ 5.04 | |||||
Total unrecognized compensation cost related to non-vested stock awards | 21,662 | $ 21,662 | |||||
Total unrecognized compensation cost related to non-vested stock awards, weighted average recognition period | 3 years 10 days | ||||||
Restricted Stock Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Compensation expense | 332 | 0 | $ 701 | $ 0 | |||
Total unrecognized compensation cost related to non-vested stock awards | 1,997 | $ 1,997 | |||||
Total unrecognized compensation cost related to non-vested stock awards, weighted average recognition period | 1 year 10 months 24 days | ||||||
Fair value of RSU vested | $ 0 | $ 0 | $ 225 | $ 0 | |||
Number of shares granted | 0 | 87,641 | 0 | ||||
Number of shares vested | 0 | 14,062 | 0 | ||||
Number of shares forfeited | 0 | 8,918 | 0 | ||||
Outstanding | 144,547 | 144,547 | 79,886 | ||||
Employee Stock Purchase Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock options permitted to grant | 1,329,040 | ||||||
Market price of shares authorized percentage | 85% | ||||||
Employee contribution percentage | 15% | ||||||
Maximum purchase value of shares available for each employee | $ 25,000 | ||||||
Shares issued | 17,060 | 0 | |||||
Shares available for issuance | 2,076,453 | 2,076,453 | |||||
Percentage of shares issued from outstanding number of shares | 1% | ||||||
Number of shares reserved and available for issuance increase (decrease) | 764,473 | ||||||
Compensation expense | $ 100 | $ 0 | $ 100 | $ 0 | |||
2021 Incentive Award Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock options permitted to grant | 7,641,979 | ||||||
Options reserved for future grants | 10,760,114 | 10,760,114 | |||||
Percentage of shares issued from outstanding number of shares | 5% | ||||||
Number of shares reserved and available for issuance increase (decrease) | 3,822,364 |
Stock Based Compensation - Assu
Stock Based Compensation - Assumptions used in Determining Fair Value (Details) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Stock Options | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Expected volatility | 52% | |
Expected dividends | 0% | 0% |
Expected term (in years) | 5 years 7 months 6 days | |
Risk-free rate | 2.01% | |
Stock Options | Minimum | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Expected volatility | 52% | |
Expected term (in years) | 5 years 9 months | |
Risk-free rate | 0.47% | |
Stock Options | Maximum | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Expected volatility | 54% | |
Expected term (in years) | 6 years 3 months | |
Risk-free rate | 0.93% | |
Employee Stock Purchase Plan | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Expected volatility | 70.30% | |
Expected dividends | 0% | |
Expected term (in years) | 6 months | |
Discount rate | 10% | |
Risk-free rate | 2.79% |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 $ / shares shares | Dec. 31, 2021 $ / shares shares | |
Share-Based Payment Arrangement [Abstract] | ||
Shares Outstanding, Beginning Balance | shares | 7,953,018 | |
Shares, Granted | shares | 359,054 | |
Shares, Exercised or released | shares | (617,578) | |
Shares, Forfeited or Expired | shares | (389,724) | |
Shares Outstanding, Ending Balance | shares | 7,304,770 | 7,953,018 |
Shares, Exercisable | shares | 3,324,831 | |
Shares, Vested and Expected To Vest | shares | 7,304,770 | |
Weighted-Average Exercise Price, Beginning Balance | $ / shares | $ 9.02 | |
Weighted-Average Exercise Price, Granted | $ / shares | 16.08 | |
Weighted-Average Exercise Price, Exercised | $ / shares | 3.89 | |
Weighted-Average Exercise Price, Forfeited or Expired | $ / shares | 11.84 | |
Weighted-Average Exercise Price, Ending Balance | $ / shares | 9.66 | $ 9.02 |
Weighted-Average Exercise Price, Exercisable | $ / shares | 4.80 | |
Weighted-Average Exercise Price, Vested and Expected To Vest | $ / shares | $ 9.66 | |
Weighted-Average Remaining Contractual Term (Years) | 7 years 7 months 20 days | 8 years 1 month 28 days |
Weighted-Average Remaining Contractual Term (Years), Exercisable | 6 years 2 months 1 day | |
Weighted-Average Remaining Contractual Term (Years), Vested and expected to vest | 7 years 7 months 20 days |
Stock Based Compensation - Summ
Stock Based Compensation - Summary of Restricted Stock Units (Details) - Restricted Stock Units - $ / shares | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Outstanding, Beginning balance | 79,886 | ||
Granted | 0 | 87,641 | 0 |
Vested | 0 | (14,062) | 0 |
Forfeited or expired | 0 | (8,918) | 0 |
Outstanding, Ending balance | 144,547 | ||
Vested and expected to vest | 144,547 | ||
Weighted Average Fair Value, Beginning Balance | $ 17.84 | ||
Weighted Average Fair Value, Granted | 17.12 | ||
Weighted Average Fair Value, Vested | 16 | ||
Weighted Average Fair Value, Forfeited or expired | 16.82 | ||
Weighted Average Fair Value, Ending Balance | 17.64 | ||
Weighted Average Fair Value, Vested and expected to vest | $ 17.64 |
Employee Benefit Plan - Additio
Employee Benefit Plan - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Retirement Benefits [Abstract] | ||||
Defined contribution plan, description | The Company sponsors a defined contribution plan for eligible employees who are 21 years of age with three months of service can voluntarily contribute up to 100% of their eligible compensation. | |||
Defined contribution plan minimum annual contributions per employee percent | 3% | |||
Defined benefit plan, plan assets, contributions by employer | $ 266 | $ 129 | $ 734 | $ 425 |
Defined contribution plan, maximum percentage of eligible compensation for voluntary contribution | 100% |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Tax Rates (Details) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | (1.057%) | (6.30%) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 201 | $ 105 | $ 306 | $ 437 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | |||||
Due to related parties | $ 184 | $ 184 | $ 66 | ||
Selling, general and administrative expenses from transactions with related party | 0 | $ 148 | $ 266 | $ 485 | |
Director | License Agreement | |||||
Related Party Transaction [Line Items] | |||||
Percentage of revenue paid as royalty | 4% | ||||
Royalty estimated useful life | 15 years | ||||
Related party transaction term of agreement | 20 years | ||||
Related party transaction, agreement renewal term | 5 years | ||||
Due to related parties | 129 | $ 129 | $ 163 | ||
Payments to related party | 28 | $ 29 | 221 | $ 236 | |
Annual Payment Threshold | Minimum | Director | License Agreement | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | $ 250 | $ 250 |
Segment and Geographic Inform_3
Segment and Geographic Information - Schedule of Total Net Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Total net revenue | $ 46,006 | $ 35,851 | $ 129,875 | $ 104,689 |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 39,960 | 31,882 | 112,781 | 92,014 |
International | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | $ 6,046 | $ 3,969 | $ 17,094 | $ 12,675 |
Segment and Geographic Inform_4
Segment and Geographic Information - Schedule of Total Non-current Assets, Excluding Deferred Taxes, by Geographic Area (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Segment Reporting Information [Line Items] | ||
Total assets | $ 106,416 | $ 55,015 |
United States | ||
Segment Reporting Information [Line Items] | ||
Total assets | 76,346 | 51,809 |
International | ||
Segment Reporting Information [Line Items] | ||
Total assets | $ 30,070 | $ 3,206 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Nov. 09, 2022 | Nov. 07, 2022 | Oct. 21, 2022 | May 06, 2021 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Restricted Stock Units | |||||||
Subsequent Event [Line Items] | |||||||
Number of shares granted | 0 | 87,641 | 0 | ||||
Weighted average grant price | $ 17.12 | ||||||
MidCap Credit Agreements | |||||||
Subsequent Event [Line Items] | |||||||
Total borrowing capacity | $ 70,000,000 | ||||||
Revolving Loan | MidCap Credit Agreements | |||||||
Subsequent Event [Line Items] | |||||||
Total borrowing capacity | $ 30,000,000 | ||||||
Revolving Loan | MidCap Credit Agreements | LIBOR | |||||||
Subsequent Event [Line Items] | |||||||
Variable interest rate | 3% | ||||||
Subsequent Event | 2021 Plan | Restricted Stock Units | |||||||
Subsequent Event [Line Items] | |||||||
Number of shares granted | 852,556 | ||||||
Weighted average grant price | $ 17.77 | ||||||
Vesting period | 4 years | ||||||
Subsequent Event | MidCap Credit Agreements | LIBOR | |||||||
Subsequent Event [Line Items] | |||||||
Variable interest rate | 6% | ||||||
Subsequent Event | Secured Term Loan Facility | |||||||
Subsequent Event [Line Items] | |||||||
Threshold amount of operating cash flow to calculate liquidity ratio | $ 0 | ||||||
Threshold Amount of Operating Cash Flow to Calculate Fixed Charge Coverage Ratio | 0 | ||||||
Subsequent Event | Revolving Loan | MidCap Credit Agreements | |||||||
Subsequent Event [Line Items] | |||||||
Total borrowing capacity | $ 50,000,000 | ||||||
Subsequent Event | Revolving Loan | MidCap Credit Agreements | LIBOR | |||||||
Subsequent Event [Line Items] | |||||||
Variable interest rate | 3.75% | ||||||
Subsequent Event | Maximum | |||||||
Subsequent Event [Line Items] | |||||||
Equity offering, value of securities to be issued | $ 100,000,000 | ||||||
Equity offering, number of common shares to be issued | 10,000 |