Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 31, 2019 | |
Cover page. | ||
Entity Registrant Name | Inspire Medical Systems, Inc. | |
Entity Central Index Key | 0001609550 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2019 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Document Transition Report | false | |
Entity File Number | 001-38468 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 26-1377674 | |
Entity Address, Address Line One | 5500 Wayzata Blvd. | |
Entity Address, Address Line Two | Suite 1600 | |
Entity Address, City or Town | Golden Valley | |
Entity Address, State or Province | MN | |
Entity Address, Postal Zip Code | 55416 | |
City Area Code | 844 | |
Local Phone Number | 672-4357 | |
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Trading Symbol | INSP | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 23,909,874 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 51,268 | $ 97,288 |
Investments, short-term | 107,352 | 90,922 |
Accounts receivable, net | 9,465 | 6,667 |
Inventories | 3,561 | 2,667 |
Prepaid expenses and other current assets | 5,596 | 1,734 |
Total current assets | 177,242 | 199,278 |
Investments, long-term | 6,116 | 0 |
Property and equipment, net | 1,826 | 802 |
Other non-current asset | 381 | 0 |
Total assets | 185,565 | 200,080 |
Current liabilities: | ||
Accounts payable | 2,681 | 3,429 |
Accrued expenses | 5,980 | 7,726 |
Total current liabilities | 8,661 | 11,155 |
Notes payable | 24,415 | 24,926 |
Total liabilities | 33,076 | 36,081 |
Stockholders' equity: | ||
Common Stock, $0.001 par value per share; 200,000,000 shares authorized at June 30, 2019 and December 31, 2018; 23,900,730 and 23,401,675 issued and outstanding at June 30, 2019 and December 31, 2018, respectively | 24 | 23 |
Additional paid-in capital | 315,243 | 310,941 |
Accumulated other comprehensive income (loss) | 51 | (52) |
Accumulated deficit | (162,829) | (146,913) |
Total stockholders' equity | 152,489 | 163,999 |
Total liabilities and stockholders' equity | $ 185,565 | $ 200,080 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, issued (in shares) | 23,900,730 | 23,401,675 |
Common stock, outstanding (in shares) | 23,900,730 | 23,401,675 |
STATEMENTS OF OPERATIONS AND CO
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenue | $ 18,032,000 | $ 10,938,000 | $ 34,282,000 | $ 20,980,000 |
Cost of goods sold | 3,094,000 | 2,102,000 | 5,948,000 | 4,396,000 |
Gross profit | 14,938,000 | 8,836,000 | 28,334,000 | 16,584,000 |
Operating expenses: | ||||
Research and development | 2,846,000 | 1,735,000 | 5,449,000 | 3,465,000 |
Selling, general and administrative | 20,268,000 | 12,738,000 | 39,838,000 | 23,951,000 |
Total operating expenses | 23,114,000 | 14,473,000 | 45,287,000 | 27,416,000 |
Operating loss | (8,176,000) | (5,637,000) | (16,953,000) | (10,832,000) |
Other (income) expense: | ||||
Interest income | (1,036,000) | (348,000) | (2,122,000) | (408,000) |
Interest expense | 523,000 | 550,000 | 1,060,000 | 1,935,000 |
Other (income) expense, net | (13,000) | 17,000 | 25,000 | (2,000) |
Total other (income) expense | (526,000) | 219,000 | (1,037,000) | 1,525,000 |
Loss before income taxes | (7,650,000) | (5,856,000) | (15,916,000) | (12,357,000) |
Income taxes | 0 | 0 | 0 | 0 |
Net loss | (7,650,000) | (5,856,000) | (15,916,000) | (12,357,000) |
Other comprehensive loss: | ||||
Unrealized gain on investments | 35,000 | 0 | 103,000 | 0 |
Total comprehensive loss | $ (7,615,000) | $ (5,856,000) | $ (15,813,000) | $ (12,357,000) |
Net loss per share, basic and diluted (in dollars per share) | $ (0.32) | $ (0.43) | $ (0.67) | $ (1.66) |
Weighted average common shares used to compute net loss per share, basic and diluted (in shares) | 23,753,647 | 13,543,558 | 23,598,466 | 7,448,955 |
STATEMENTS OF STOCKHOLDERS' EQU
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Convertible Preferred Stock | Accumulated Other Comprehensive Income | Accumulated Deficit |
Balance at Dec. 31, 2017 | $ 1,327 | $ 1 | $ 7,305 | $ 119,106 | $ (125,085) | |
Common stock, outstanding (in shares) at Dec. 31, 2017 | 1,272,360 | |||||
Preferred stock, outstanding (in shares) at Dec. 31, 2017 | 76,235,050 | |||||
Stockholders' Equity [Roll Forward] | ||||||
Stock options exercised | 386 | 386 | ||||
Stock options exercised (in shares) | 206,404 | |||||
Issuance of common stock | 112,040 | $ 8 | 112,032 | |||
Issuance of common stock (in shares) | 7,762,500 | |||||
Conversion of preferred stock to common stock | 0 | $ 12 | 119,094 | $ (119,106) | ||
Conversion of preferred stock to common stock (in shares) | 12,111,710 | (76,235,050) | ||||
Conversion of warrants to purchase preferred stock to warrants to purchase common stock | 855 | 855 | ||||
Stock-based compensation expense | 324 | 324 | ||||
Net loss | (12,357) | (12,357) | ||||
Balance at Jun. 30, 2018 | 102,575 | $ 21 | 239,996 | $ 0 | (137,442) | |
Common stock, outstanding (in shares) at Jun. 30, 2018 | 21,352,974 | |||||
Preferred stock, outstanding (in shares) at Jun. 30, 2018 | 0 | |||||
Balance at Mar. 31, 2018 | (4,933) | $ 1 | 7,546 | $ 119,106 | (131,586) | |
Common stock, outstanding (in shares) at Mar. 31, 2018 | 1,379,099 | |||||
Preferred stock, outstanding (in shares) at Mar. 31, 2018 | 76,235,050 | |||||
Stockholders' Equity [Roll Forward] | ||||||
Stock options exercised | 200 | 200 | ||||
Stock options exercised (in shares) | 99,665 | |||||
Issuance of common stock | 112,040 | $ 8 | 112,032 | |||
Issuance of common stock (in shares) | 7,762,500 | |||||
Conversion of preferred stock to common stock | 0 | $ 12 | 119,094 | $ (119,106) | ||
Conversion of preferred stock to common stock (in shares) | 12,111,710 | (76,235,050) | ||||
Conversion of warrants to purchase preferred stock to warrants to purchase common stock | 855 | 855 | ||||
Stock-based compensation expense | 269 | 269 | ||||
Net loss | (5,856) | (5,856) | ||||
Balance at Jun. 30, 2018 | 102,575 | $ 21 | 239,996 | $ 0 | (137,442) | |
Common stock, outstanding (in shares) at Jun. 30, 2018 | 21,352,974 | |||||
Preferred stock, outstanding (in shares) at Jun. 30, 2018 | 0 | |||||
Balance at Dec. 31, 2018 | $ 163,999 | $ 23 | 310,941 | $ (52) | (146,913) | |
Common stock, outstanding (in shares) at Dec. 31, 2018 | 23,401,675 | 23,401,675 | ||||
Stockholders' Equity [Roll Forward] | ||||||
Stock options exercised | $ 770 | $ 1 | 769 | |||
Stock options exercised (in shares) | 478,579 | 478,579 | ||||
Issuance of common stock | $ 116 | 116 | ||||
Issuance of common stock (in shares) | 2,289 | |||||
Issuance of common stock for employee stock purchase plan | 637 | 637 | ||||
Issuance of common stock for employee stock purchase plan (in shares) | 18,187 | |||||
Stock-based compensation expense | 2,780 | 2,780 | ||||
Other comprehensive income | 103 | 103 | ||||
Net loss | (15,916) | (15,916) | ||||
Balance at Jun. 30, 2019 | $ 152,489 | $ 24 | 315,243 | 51 | (162,829) | |
Common stock, outstanding (in shares) at Jun. 30, 2019 | 23,900,730 | 23,900,730 | ||||
Balance at Mar. 31, 2019 | $ 157,416 | $ 24 | 312,555 | 16 | (155,179) | |
Common stock, outstanding (in shares) at Mar. 31, 2019 | 23,503,010 | |||||
Stockholders' Equity [Roll Forward] | ||||||
Stock options exercised | 604 | 604 | ||||
Stock options exercised (in shares) | 378,490 | |||||
Issuance of common stock | 58 | 58 | ||||
Issuance of common stock (in shares) | 1,043 | |||||
Issuance of common stock for employee stock purchase plan | 637 | 637 | ||||
Issuance of common stock for employee stock purchase plan (in shares) | 18,187 | |||||
Stock-based compensation expense | 1,389 | 1,389 | ||||
Other comprehensive income | 35 | 35 | ||||
Net loss | (7,650) | (7,650) | ||||
Balance at Jun. 30, 2019 | $ 152,489 | $ 24 | $ 315,243 | $ 51 | $ (162,829) | |
Common stock, outstanding (in shares) at Jun. 30, 2019 | 23,900,730 | 23,900,730 |
STATEMENTS OF CASH FLOWS (Unaud
STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Operating activities | ||
Net loss | $ (15,916) | $ (12,357) |
Adjustments to reconcile net loss: | ||
Depreciation and amortization | 209 | 188 |
Accretion of investment discount | (609) | 0 |
Accretion of debt discount | 161 | 339 |
Stock-based compensation expense | 2,780 | 324 |
Non-cash stock issuance for services rendered | 116 | 0 |
Change in the fair value of preferred stock warrants | 0 | 595 |
Other, net | (141) | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (2,801) | (630) |
Inventories | (894) | 122 |
Prepaid expenses and other current assets | (4,241) | (607) |
Accounts payable | (745) | (753) |
Accrued expenses | (1,745) | 227 |
Net cash used in operating activities | (23,826) | (12,552) |
Investing activities | ||
Purchases of property and equipment, net of disposals | (1,233) | (59) |
Purchases of investments | (101,037) | (5,138) |
Proceeds from sales or maturities of investments | 79,204 | 10,220 |
Net cash (used in) provided by investing activities | (23,066) | 5,023 |
Financing activities | ||
Proceeds from issuance of notes payable | 0 | 8,000 |
Proceeds from the exercise of stock options | 769 | 386 |
Proceeds from sale of common stock | 0 | 112,041 |
Proceeds from issuance of common stock from employee stock purchase plan | 637 | 0 |
Payment of debt fees | (531) | 0 |
Net cash provided by financing activities | 875 | 120,427 |
Effect of exchange rate on cash | (3) | 0 |
(Decrease) increase in cash and cash equivalents | (46,020) | 112,898 |
Cash and cash equivalents at beginning of period | 97,288 | 8,955 |
Cash and cash equivalents at end of period | 51,268 | 121,853 |
Supplemental cash flow information | ||
Cash paid for interest | 1,087 | 893 |
Issuance of preferred stock warrants | $ 0 | $ 103 |
Organization
Organization | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Description of Business Inspire Medical Systems, Inc. is a medical technology company focused on the development and commercialization of innovative and minimally invasive solutions for patients with obstructive sleep apnea ("OSA"). Our proprietary Inspire system is the first and only FDA-approved neurostimulation technology that provides a safe and effective treatment for moderate to severe OSA. We have developed a novel, closed-loop solution that continuously monitors a patient's breathing and delivers mild hypoglossal nerve stimulation to maintain an open airway. Inspire therapy received premarket approval ("PMA") from the United States ("U.S.") Food and Drug Administration ("FDA") in April 2014 and has been commercially available in certain European markets since November 2011. In June 2018, Japan's Ministry of Health, Labour and Welfare approved Inspire therapy to treat moderate to severe OSA, and we are currently seeking reimbursement coverage in Japan. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying financial statements have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The financial statements may not include all disclosures required by U.S. generally accepted accounting principles ("U.S. GAAP"); however, we believe that the disclosures are adequate to make the information presented not misleading. These unaudited financial statements should be read in conjunction with the audited financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018. In the opinion of management, all adjustments, consisting of only normal recurring adjustments that are necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, have been made. The results of operations for the interim periods are not necessarily indicative of the operating results for the full fiscal year or any future periods. Certain prior period amounts have been reclassified to conform to the current presentation. These reclassifications had no material effect on the reported results of operations. Reverse Stock Split In connection with our initial public offering of common stock ("IPO"), our board of directors and stockholders approved a 1-for-6.650 reverse stock split of our common stock. The reverse stock split became effective on April 20, 2018. The par value of the common stock was not adjusted as a result of the reverse stock split. Adjustments corresponding to the reverse stock split were made to the ratio at which the convertible preferred stock converted into common stock immediately prior to the closing of the IPO. Accordingly, all share and per-share amounts for all periods presented in these financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the reverse stock split and adjustment of the conversion ratio of the convertible preferred stock. Initial Public Offering On May 7, 2018, we completed our IPO by issuing 7,762,500 shares of common stock, at an offering price of $16.00 per share, for net proceeds of approximately $112.0 million after deducting underwriting discounts and commissions and offering expenses payable by us. In connection with the IPO, our outstanding shares of convertible preferred stock were automatically converted into an aggregate of 12,111,710 shares of common stock, and our outstanding warrants to purchase shares of convertible preferred stock were automatically converted into warrants to purchase up to an aggregate of 100,558 shares of common stock, resulting in the reclassification of the related redeemable convertible preferred stock warrant liability of $0.9 million to additional paid-in capital ("APIC"). Follow-On Public Offering On December 11, 2018, we completed a follow-on offering that included our offer and sale of 1,875,000 shares of common stock and the selling stockholders’ offer and sale of 1,000,000 shares of common stock, at a public offering price of $40.00 per share. We received net proceeds of approximately $69.8 million after deducting underwriting discounts and commissions and offering expenses. We received no proceeds from the sale of our common stock by the selling stockholders. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts and disclosures reported in the financial statements. We use significant judgment when making estimates related to the allowance for doubtful accounts, inventory reserves, warranty reserves, and the valuations of our common stock prior to our IPO, share-based awards, and certain of our previously outstanding preferred stock warrants. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. JOBS Act Accounting Election As an emerging growth company under the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. We have elected to take advantage of the extended transition period for adopting new or revised accounting standards that have different effective dates for public and private companies until such time as those standards apply to private companies. Cash and Cash Equivalents We consider all highly liquid securities, readily convertible to cash, that mature within 90 days or less from the date of purchase to be cash equivalents. The carrying amount reported in the balance sheets for cash is cost, which approximates fair value. Foreign Currency Sales and expenses denominated in foreign currencies are translated at average exchange rates in effect throughout the year. Foreign currency transaction gains and losses are included in other (income) expense,net in the statements of operations and comprehensive loss. Assets and liabilities of foreign operations are remeasured at period-end exchange rates with the impacts of foreign currency remeasurement recognized in other (income) expense,net in the statements of operations and comprehensive loss. Investments At June 30, 2019 and December 31, 2018, our short-term investments consisted of commercial paper, corporate bonds, asset-backed securities, and U.S. government securities which are classified as available-for-sale debt securities and had maturities less than one year. Our long-term investments consisted of corporate bonds and asset-backed securities. Investments are reported at their estimated fair market value which approximates cost. Any unrealized gains and losses are reported as a separate component of accumulated other comprehensive income (loss). We had $0.1 million of unrecognized income and $0.1 million of unrecognized loss in accumulated other comprehensive income (loss) balance at June 30, 2019 and December 31, 2018, respectively. Any realized gains and losses are calculated on the specific identification method and reported net in other (income) expense, net. For the three and six months ended June 30, 2019 and 2018, we recognized $0 of gains, net. We review our investment portfolio periodically to assess for other-than-temporary impairment. Should we determine that any unrealized losses on the investments are other-than-temporary, the amount of that impairment to be recognized in earnings will depend on whether we intend to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current period credit loss. Fair Value of Financial Instruments We measure certain financial assets and liabilities at fair value on a recurring basis, including cash equivalents, investments, and our previously outstanding preferred stock warrants. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value: Level 1—Observable inputs, such as quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2—Other inputs that are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be derived from observable market data. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs, including interest rate curves, foreign exchange rates, and credit ratings. Level 3—Unobservable inputs that are supported by little or no market activities, which would require us to develop our own assumptions. We use the methods and assumptions described below in determining the fair value of our financial instruments. Money market funds: Fair values of money market funds are based on quoted market prices in active markets. These are included as Level 1 measurements in the tables below. Commercial paper and repurchase agreements: Short-term, highly liquid investments are included as a Level 2 measurement in the tables below. Corporate bonds: Consists of notes and bonds with original maturities of less than one year and various yields. These are included as a Level 2 measurement in the tables below. Asset-backed securities: Consists of short-term, securitized investments backed by pools of credit card receivables. These are included as a Level 2 measurement in the tables below. U.S. government securities: Consists of U.S. government Treasury bills with original maturities of less than one year. These are included as a Level 1 measurement in the table below. The following tables sets forth by level within the fair value hierarchy our assets that are measured on a recurring basis and reported at fair value as of June 30, 2019 and December 31, 2018. Assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Fair Value Measurements as of June 30, 2019 Estimated Level 1 Level 2 Level 3 Cash equivalents: Money market funds $ 24,801 $ 24,801 $ — $ — Repurchase agreements 25,000 — 25,000 — Total cash equivalents 49,801 24,801 25,000 — Investments: Commercial paper $ 17,384 $ — $ 17,384 $ — Corporate bonds 23,242 — 23,242 — Asset-backed securities 15,534 — 15,534 — U.S. government securities 57,308 57,308 — — Total investments 113,468 57,308 56,160 — Total cash equivalents and investments $ 163,269 $ 82,109 $ 81,160 $ — Fair Value Measurements as of December 31, 2018 Estimated Level 1 Level 2 Level 3 Cash equivalents: Money market funds $ 94,700 $ 94,700 $ — $ — Total cash equivalents 94,700 94,700 — — Investments: Commercial paper $ 27,898 $ — $ 27,898 $ — Corporate bonds 28,012 — 28,012 — Asset-backed securities 17,055 — 17,055 — U.S. government securities 17,957 17,957 — — Total investments 90,922 17,957 72,965 — Total cash equivalents and investments $ 185,622 $ 112,657 $ 72,965 $ — There were no transfers between levels during the periods ended June 30, 2019 and December 31, 2018. The recurring Level 3 fair value measurements of our preferred stock warrant liabilities used the Black-Scholes option pricing model and value of the respective class of our convertible preferred stock (see Note 8), which was unobservable. All other assumptions included in the model are observable Level 1 inputs. The following table provides a reconciliation of the beginning and ending balances of our preferred stock warrant liabilities: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Balance at beginning of period $ — $ 978 $ — $ 157 Initial fair value of preferred stock warrants issued — — — 103 Reclassified to equity — (855) — (855) Change in fair value of preferred stock warrants — (123) — 595 Balance at end of period $ — $ — $ — $ — Changes in the fair value of the preferred stock warrant liability were recorded in interest expense on the statements of operations and comprehensive loss. In connection with the closing of the IPO in May 2018, warrants to purchase shares of preferred stock automatically converted into warrants to purchase shares of common stock, resulting in the reclassification of the related convertible preferred stock warrant liability to APIC. Concentration of Credit Risk Financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash equivalents, investments, and accounts receivable. Our investment policy limits investments to certain types of debt securities issued by the U.S. government and its agencies, corporations with investment-grade credit ratings, or commercial paper and money market funds issued by the highest quality financial and non-financial companies. We place restrictions on maturities and concentration by type and issuer. We are exposed to credit risk in the event of a default by the issuers of these securities to the extent recorded on the balance sheets. However, as of June 30, 2019 and December 31, 2018, we limited our credit risk associated with cash equivalents by placing investments with banks we believe are highly creditworthy. We believe that the credit risk in our accounts receivable is mitigated by our credit evaluation process, relatively short collection terms, and dispersion of our customer base. We generally do not require collateral, and losses on accounts receivable have historically been within management's expectations. Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Customer credit terms are established prior to shipment with the general standard being net 30 days. Collateral or any other security to support payment of these receivables generally is not required. We record an allowance for doubtful accounts for accounts receivable deemed uncollectible. We evaluate the collectability of our accounts receivable based on known collection risks and historical experience. In circumstances where we are aware of a specific customer's inability to meet its financial obligations to us (e.g., bankruptcy filings or substantial downgrading of credit ratings), we record a specific allowance for bad debts against amounts due to reduce the carrying amount of accounts receivable to the amount we reasonably believe will be collected. Specific accounts receivable are written-off once a determination is made that the account is uncollectible. The allowance for doubtful accounts was less than $0.1 million as of each of June 30, 2019 and December 31, 2018. Inventories Inventories are valued at the lower of cost or net realizable value, computed on a first-in, first-out basis. We regularly review inventory quantities on-hand for excess and obsolete inventory and, when circumstances indicate, incur charges to write down inventories to their net realizable value. Our review of inventory for excess and obsolete quantities is based primarily on the estimated forecast of future product demand, product life cycles, including expiration of inventory prior to sale, and introduction of new products. The reserve for excess and obsolete inventory was $0.9 million as of June 30, 2019 and $0.8 million at December 31, 2018. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is determined using the straight-line method over the estimated useful lives of the respective assets, generally three five Impairment of Long-lived Assets Long-lived assets consist primarily of property and equipment and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require that an asset be tested for possible impairment, we compare the undiscounted cash flows expected to be generated by the asset to the carrying amount of the asset. If the carrying amount of the asset is not recoverable on an undiscounted cash flow basis, we determine the fair value of the asset and recognize an impairment loss to the extent the carrying amount of the asset exceeds its fair value. We determine fair value using the income approach based on the present value of expected future cash flows or other appropriate measures of estimated fair value. Our cash flow assumptions consider historical and forecasted revenue and operating costs and other relevant factors. We did not record any material impairment charges on long-lived assets during either of the six months ended June 30, 2019 and 2018. Revenue Recognition We recognize revenue in accordance with Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC 606"), which we adopted effective January 1, 2019 using the modified retrospective approach. The adoption of ASC 606 did not have a material impact on the amount and timing of revenue recognized in our financial statements. Revenues from product sales are recognized when the customer obtains control of the product, which occurs at a point in time, either upon shipment of the product or receipt of the product, depending on shipment terms. Our standard shipping terms are free on board shipping point, unless the customer requests that control and title to the inventory transfer upon delivery. In those cases where shipping and handling costs are billed to customers, we classify the amounts billed as a component of cost of goods sold. Revenue is measured as the amount of consideration we expect to receive, adjusted for any applicable estimates of variable consideration and other factors affecting the transaction price, which is based on the invoiced price, in exchange for transferring products. All revenue is recognized when we satisfy our performance obligations under the contract. The majority of our contracts have a single performance obligation and are short term in nature. Sales taxes and value added taxes in foreign jurisdictions that are collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from net sales. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of goods sold. Variable consideration related to certain customer sales incentives is estimated based on the amounts expected to be paid based on the agreement with the customer using probability assessments. We offer customers a limited right of return for its product in case of non-conformity or performance issues. We estimate the amount of our product sales that may be returned by our customers based on historical sales and returns. As our historical product returns to date have been immaterial, we have not recorded a reduction in revenue related to variable consideration for product returns. See Note 11 for disaggregated revenue by geographic area. Cost of Goods Sold Cost of goods sold consists primarily of manufacturing overhead costs, material costs, and direct labor. Overhead costs include the cost of material procurement, inventory control, facilities, equipment, and operations supervision and management, including employee compensation, stock-based compensation, supplies, and travel. Cost of goods sold also includes depreciation expense for production equipment, warranty replacement costs, and certain direct costs such as shipping costs. Research and Development Research and development expenses consist primarily of product development, clinical and regulatory affairs, consulting services, and other costs associated with products and technologies in development. These expenses include employee compensation, stock-based compensation, supplies, travel, and facility costs. Clinical expenses include clinical trial design, clinical site reimbursement, data management, travel expenses, and the cost of manufacturing products for clinical trials. Common Stock Valuation and Stock-Based Compensation We maintain an equity incentive plan to provide long-term incentives for eligible employees, consultants, and members of the board of directors. The plan allows for the issuance of non-statutory and incentive stock options to employees and non-statutory stock options to consultants and directors. We recognize equity-based compensation expense for awards of equity instruments to employees and directors based on the grant date fair value of those awards in accordance with ASC Topic 718, Stock Compensation ("ASC 718"). ASC 718 requires all equity-based compensation awards to employees and directors, including grants of restricted shares and stock options, to be recognized as expense in the statements of operations and comprehensive loss based on their grant date fair values. We estimate the fair value of stock options using the Black-Scholes option pricing model. We have not granted any restricted shares. We have not granted any share-based awards to our consultants. The Black-Scholes option pricing model requires the input of certain subjective assumptions, including (i) the expected share price volatility, (ii) the expected term of the award, (iii) the risk-free interest rate and (iv) the expected dividend yield. Due to the lack of a public market for the trading of our common stock and a lack of company-specific historical and implied volatility data, we have based our estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. The historical volatility is calculated based on a period of time commensurate with the expected term assumption. The group of representative companies have characteristics similar to us, including stage of product development and focus on the life science industry. We use the simplified method, which is the average of the final vesting tranche date and the contractual term, to calculate the expected term for options granted to employees and directors as we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. The risk-free interest rate is based on a U.S. government Treasury instrument whose term is consistent with the expected term of the stock options. We use an assumed dividend yield of zero as we have never paid dividends and have no current plans to pay any dividends on our common stock. We expense the fair value of our equity-based compensation awards granted to employees and directors on a straight-line basis over the associated service period, which is generally the period in which the related services are received. We account for award forfeitures as they occur. Advertising Expenses We expense the costs of advertising, including promotional expenses, as incurred. Advertising expenses were $4.4 million and $2.5 million during the three months ended June 30, 2019 and 2018, respectively, and $7.9 million and $4.7 million during the six months ended June 30, 2019 and 2018, respectively. Income Taxes We account for income taxes using the liability method. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates that will be in effect when the differences are expected to reverse. Valuation allowances against deferred tax assets are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized. As we have historically incurred operating losses, we have recorded a full valuation allowance against our net deferred tax assets, and there is no provision for income taxes. Our policy is to record interest and penalties expense related to uncertain tax positions as other expense in the statements of operations and comprehensive loss. Comprehensive Loss Comprehensive loss consists of net loss and changes in unrealized gains and losses on investments classified as available-for-sale. Accumulated other comprehensive income (loss) is presented in the accompanying balance sheets as a component of stockholders' equity. Loss Per Share Basic net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock and dilutive potential shares of common stock outstanding during the period. Because we have reported a net loss for all periods presented, diluted net loss per share is the same as basic net loss per share for those periods as all potentially dilutive shares consisting of convertible preferred stock, stock options and warrants were antidilutive in those periods. Recent Accounting Pronouncements We currently are an emerging growth company as defined by the JOBS Act. The JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the "Securities Act"), for complying with new or revised accounting standards. Accordingly, an emerging growth company can selectively delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We elected to avail ourselves of this exemption and, as a result, our financial statements may not be comparable to the financial statements of issuers that are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies. Section 107 of the JOBS Act provides that we can elect to opt out of the extended transition period at any time, which election is irrevocable. However, we will no longer qualify as an emerging growth company as of December 31, 2019 and will no longer be able to take advantage of the extended transition period. Therefore, as of December 31, 2019, we will be required to adopt new or revised accounting standards when they are applicable to public companies that are not emerging growth companies. In February 2016, the FASB issued Accounting Standards Update ("ASU") 2016-02, Leases (Topic 842) ("ASU 2016-02"), which supersedes the existing guidance for lease accounting, Leases (Topic 840) . ASU 2016-02 requires lessees to recognize a lease liability and a right-of-use asset for all leases with lease terms greater than 12 months. Lessor accounting remains largely unchanged. We currently are an emerging growth company as defined by the JOBS Act and previously disclosed that these amendments would become effective for us for interim and annual periods beginning after December 15, 2019. However, this ASU will instead become effective for us on December 31, 2019 when we no longer qualify for that status. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after, the date of initial adoption, with an option to elect to use certain transition relief. We are working to determine the anticipated impact of the adoption of this ASU on our financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses , to require the measurement of expected credit losses for financial instruments held at the reporting date to be based on historical experience, current conditions and reasonable forecasts. The ASU will become effective for us for interim and annual periods beginning January 1, 2020. We are currently evaluating the impact of this ASU on our financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement ("ASU 2018-13") . The amendments in the standard apply to all entities that are required, under existing U.S. GAAP, to make disclosures about recurring or nonrecurring fair value measurements. ASU 2018-13 removes, modifies, and adds certain disclosure requirements in ASC 820, Fair Value Measurement . The standard is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. We are currently evaluating the impact of this ASU on our financial statements and related disclosures. In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract ("ASU 2018-15") which clarifies and aligns the accounting for implementation costs for hosting arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU 2018-15 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted. We are currently evaluating the impact of this ASU on our financial statements and related disclosures. We have reviewed and considered all other recent accounting pronouncements and believe there are none that could potentially have a material impact on our business practices, financial condition, results of operations, or disclosures. |
Composition of Certain Financia
Composition of Certain Financial Statement Items | 6 Months Ended |
Jun. 30, 2019 | |
Composition of Certain Financial Statement Items | |
Composition of Certain Financial Statement Items | Composition of Certain Financial Statement Items Inventories June 30, 2019 December 31, 2018 Raw materials $ 1,026 $ 802 Finished goods 2,535 1,865 Total inventories, net of reserves $ 3,561 $ 2,667 Property and Equipment June 30, 2019 December 31, 2018 Computer equipment and software $ 698 $ 333 Furniture and office equipment — 4 Manufacturing equipment 1,604 1,049 Research and development equipment 52 30 Leasehold improvements 192 185 Property and equipment, cost 2,546 1,601 Less: accumulated depreciation and amortization (720) (799) Property and equipment, net 1,826 $ 802 Depreciation and amortization expense was $0.1 million for both the three months ended June 30, 2019 and 2018, and $0.2 million for both the six months ended June 30, 2019 and 2018. Accrued Expenses June 30, 2019 December 31, 2018 Payroll and commissions payable $ 5,095 $ 6,490 Interest 155 195 Other accrued expenses 730 1,041 Total accrued expenses $ 5,980 $ 7,726 |
Investments
Investments | 6 Months Ended |
Jun. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Short-Term Investments | Investments Our investments are classified as available-for-sale and consist of the following: June 30, 2019 Unrealized Cost Gains Losses Fair Value Short-Term: Commercial paper $ 17,384 $ — $ — $ 17,384 Corporate bonds 20,208 14 (5) 20,217 Asset-backed securities 12,438 5 — 12,443 U.S. government securities 57,277 31 — 57,308 Short-term investments $ 107,307 $ 50 $ (5) $ 107,352 Long-Term: Corporate bonds $ 3,019 $ 6 $ — $ 3,025 Asset-backed securities 3,091 — — 3,091 Long-term investments $ 6,110 $ 6 $ — $ 6,116 December 31, 2018 Unrealized Cost Gains Losses Fair Value Short-Term: Commercial paper $ 27,898 $ — $ — $ 27,898 Corporate bonds 28,043 — (31) 28,012 Asset-backed securities 17,074 — (19) 17,055 U.S. government securities 17,959 — (2) 17,957 Short-term investments $ 90,974 $ — $ (52) $ 90,922 As of June 30, 2019 and December 31, 2018, we had no investments with a contractual maturity of greater than two years. Currently, we do not intend to sell the investments and it is not more likely than not that we will be required to sell the investments before recovery of their amortized cost bases, which may be maturity. We do not consider those investments to be other-than-temporarily impaired at June 30, 2019. |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2019 | |
Long-term Debt, by Current and Noncurrent [Abstract] | |
Long-Term Debt | Long-Term Debt Credit Facility In August 2015, we entered into a loan and security agreement, which provided for a term A loan facility in the amount of $15.5 million, the proceeds of which were used to refinance the $12.0 million of borrowings outstanding under our original credit facility, and a term B loan facility in an amount between $3.5 million and $10.0 million, subject to our achievement of certain revenue milestones. Amounts outstanding under the credit facility bore interest at a fixed rate of 7.95% per annum. In February 2017, we amended the loan and security agreement. Under the loan and security agreement, as amended, and subject to the limitation noted below, amounts outstanding under the credit facility bear interest at a floating interest rate equal to the greater of 7.95% or LIBOR plus 6.9% per annum. Upon execution of the amendment, we borrowed an additional $1.0 million under the term A loan portion of the credit facility, receiving net proceeds of $0.5 million, net of expenses, for a total of $16.5 million outstanding under the credit facility and reduced borrowings available under the term B loan facility to $9.0 million. In connection with the execution of the amendment to the loan and security agreement, we issued 29,197 ten In February 2018, we borrowed an additional $8.0 million under the term B loan facility portion of the credit facility. After receipt of the $8.0 million, we had a total of $24.5 million outstanding under the credit facility, which bore interest at a floating interest rate equal to the greater of 7.95% or LIBOR plus 6.9% per annum. All amounts borrowed under the credit facility were interest-only through March 1, 2020, after which monthly payments of principal and interest were due through February 1, 2022. In connection with this borrowing, we issued 233,577 ten On March 27, 2019, we amended the loan and security agreement. The amendment modified the terms of the loan and security agreement to: (1) extend the interest-only date from March 1, 2020 to April 1, 2022 and extend the maturity date from February 1, 2022 to March 1, 2024; (2) reduce the final payment percentage from 5.50% to 3.50%; (3) modify the basic rate to be a per annum rate of interest (based on a year of 360 days) equal to the sum of (i) the greater of (A) the 30 day U.S. LIBOR rate reported in The Wall Street Journal on the last business day of the month that immediately precedes the month in which the interest will accrue or (B) 2.50%, plus (ii) 5.10%; provided, however, under no circumstances will the basic rate be less than 7.60%; (4) provide a mechanism for determining an alternative interest rate to replace the U.S. LIBOR rate upon the occurrence of certain circumstances; and (5) revise the prepayment fee to be between 1.00% and 3.00% of the principal amount, depending on the timing of any prepayment. Upon closing the amendment to the loan and security agreement, payment of the previously accrued final payment under the credit facility was required. In addition to the principal and interest payments, under the credit facility, we are required to pay a final payment fee of 3.50% on all amounts outstanding, which is being accreted using the effective interest rate method over the term of the loan and security agreement and shall be due at the earlier of maturity or prepayment. Borrowings are prepayable at our option in whole, but not in part, together with all accrued and unpaid interest thereon and, if not previously made, the final payment, subject to a prepayment fee of 3.00% if such borrowings are prepaid prior to March 27, 2020, 2.00% on or after March 27, 2020 but prior to March 27, 2021 and 1.00% if such borrowings are prepaid on or after March 27, 2021. The credit facility includes affirmative and restrictive covenants and events of default, including the following events of default: payment defaults, breaches of covenants, judgment defaults, cross defaults to certain other contracts, certain events with respect to governmental approvals if such events could cause a material adverse change, a material impairment in the perfection or priority of the lender's security interest or in the value of the collateral, a material adverse change in the business, operations, or condition of us or any of our subsidiaries, and a material impairment of the prospect of repayment of the loans. Upon the occurrence of an event of default, a default increase in the interest rate of an additional 5.00% could be applied to the outstanding loan balance and the lender could declare all outstanding obligations immediately due and payable and take such other actions as set forth in the loan and security agreement. Our obligations under the credit facility are secured by a first priority security interest in substantially all of our assets, other than our intellectual property. There are no financial covenants contained in the loan and security agreement. We were in compliance with the affirmative and restrictive covenants as of June 30, 2019. Expected future principal payments for the credit facility are as follows: Year ending December 31 : 2019 (remaining) $ — 2020 — 2021 — 2022 9,188 2023 12,250 Thereafter 3,062 Total expected future principal payments $ 24,500 |
Commitments
Commitments | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Commitments Operating Lease We rented office space under an operating lease that expired on March 31, 2019. In September 2018, we entered into a non-cancelable operating lease agreement to sublease approximately 45,000 square feet of office space for our corporate headquarters. This lease commenced January 15, 2019 and expires November 30, 2020. In May 2019, we entered into a non-cancelable operating lease agreement for the same space that provides for monthly rent, real estate taxes and operating expenses. The initial lease term commences on December 1, 2020 and expires May 31, 2028 with an option to renew for one additional period of five years. Future minimum annual operating lease payments are as follows: Year ending December 31: 2019 (remaining) $ 519 2020 1,026 2021 888 2022 1,504 2023 2,043 Thereafter 9,448 Total future operating lease payments $ 15,428 Rental payments are charged to expense on a straight-line basis over the period of the lease. Rent expense was $0.3 million and less than $0.1 million for the three months ended June 30, 2019 and 2018, respectively, and $0.5 million and $0.1 million for the for the six months ended June 30, 2019 and 2018, respectively. |
Employee Retirement Plan
Employee Retirement Plan | 6 Months Ended |
Jun. 30, 2019 | |
Retirement Benefits [Abstract] | |
Employee Retirement Plan | Employee Retirement PlanWe sponsor an employee retirement plan covering all of our full-time employees. The plan allows for eligible employees to defer a portion of their eligible compensation up to the maximum allowed by IRS Regulations. We may elect to make a voluntary contribution to the plan. We have not made contributions since inception. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders' Equity Preferred Stock In connection with the IPO in May 2018, 76,235,050 shares of convertible preferred stock were converted into 12,111,710 shares of common stock, resulting in the reclassification of the related convertible preferred stock of $119.1 million to common stock and APIC. As of June 30, 2019, no preferred stock had been issued. Preferred Stock Warrants and Common Stock Warrants In connection with the borrowing completed in February 2018 (see Note 5), we issued 233,577 ten The preferred stock warrants issued in connection with the execution of the original credit facility and its subsequent amendments required re-measurement of the value of the preferred stock warrants each period, with changes in fair value recognized within other expenses on the statements of operations and comprehensive loss. The fair value of the preferred stock warrants was determined using the Black-Scholes option pricing model. As of May 7, 2018, the date of the closing of our IPO, the following preferred stock warrants issued under the original credit facility and subsequent amendments were outstanding and exercisable: Issuance Expiration Series Exercise Warrants Initial Fair Value at February 8, 2018 February 8, 2028 F $ 1.37 233,577 $ 103 $ 320 February 24, 2017 February 24, 2027 F 1.37 29,197 4 40 August 7, 2015 August 7, 2025 E 2.62 29,580 33 41 June 27, 2014 June 27, 2024 E 2.62 76,334 85 174 August 5, 2013 August 5, 2023 C 1.07 74,768 39 80 November 16, 2012 November 16, 2022 C 1.07 186,916 96 200 Total 630,372 $ 855 In connection with the closing of the IPO in May 2018, the warrants to purchase shares of preferred stock automatically converted into warrants to purchase shares of common stock, resulting in the reclassification of the related convertible preferred stock warrant liability of $0.9 million to APIC. Upon the closing of the IPO, the warrants to purchase 630,372 shares of preferred stock at a weighted average exercise price of $1.46 per share became exercisable to purchase 100,558 shares of common stock at weighted average exercise price of $9.38 per share. During 2018, warrants for 93,963 shares were exercised through cashless exercises, resulting in the issuance of a net 76,762 shares of our common stock. Warrants to purchase shares of our common stock are summarized below: Common Stock Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Outstanding at December 31, 2018 6,595 $ 15.16 5.5 Exercised — $ — Outstanding at June 30, 2019 6,595 $ 15.16 5.0 |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Stock Options We adopted the 2007 Stock Incentive Plan (the "2007 Plan") in November 2007, which terminated in accordance with its terms on November 28, 2017; however, the outstanding stock options may continue to be exercised in accordance with their terms. Immediately following the termination of the 2007 Plan, we adopted the 2017 Stock Incentive Plan (the "2017 Plan"), which contains substantially similar terms and conditions as the 2007 Plan. Upon the IPO, no further grants were made under the 2017 Plan and we adopted the 2018 Stock Incentive Plan (the "2018 Plan"). The purpose of the 2018 Plan is to promote the interest of our company and our stockholders by aiding in attracting and retaining employees, officers, consultants, independent contractors, and directors capable of assuring the future success of our business and to afford such persons an opportunity to acquire a proprietary interest in our company. The board of directors may amend, alter, suspend, discontinue, or terminate the 2018 Plan at any time with the approval of our stockholders. A total of 1,386,809 shares of common stock were initially reserved for issuance under the 2018 Plan, and this share reserve will automatically be supplemented each January 1, commencing on January 1, 2019 and ending on and including January 1, 2028, by an amount of shares equal to the lesser of: a) 739,631 shares, b) 4% of the shares outstanding on the final day of the immediately preceding fiscal year and c) such smaller number of shares as determined by the board of directors. As of June 30, 2019, there were 2,126,440 shares reserved for issuance under the 2018 Plan, of which 1,220,020 shares were available for issuance. Prior to the IPO, the exercise price of stock options represented fair value of the common stock at the time of issuance and was determined by the board of directors with the assistance of a third-party valuation specialist. Post-IPO, options are granted at the exercise price, which is equal to the closing price of our stock on the date of grant. The stock options granted to employees include a four-year service period and 25% vest after the first year of service and the remainder vest in equal installments over the next 36 months of service. The stock options granted to the board of directors include either a one two A summary of stock option activity and related information is as follows: Options Weighted Average Weighted average Aggregate intrinsic Outstanding at December 31, 2018 2,745,156 $ 12.64 7.4 Granted 113,552 $ 53.44 Exercised (478,579) $ 1.61 Forfeited (15,070) $ 35.01 Outstanding at June 30, 2019 2,365,059 $ 16.69 7.6 $ 103,976 Exercisable at June 30, 2019 1,143,974 $ 3.65 6.2 $ 65,204 Total stock-based compensation recognized, before taxes, during the three and six months ended June 30, 2019 and 2018, is as follows: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Cost of goods sold $ 26 $ 1 $ 52 $ 3 Research and development 161 5 324 11 Selling, general and administrative 1,202 263 2,404 310 Total stock-based compensation $ 1,389 $ 269 $ 2,780 $ 324 As of June 30, 2019, the amount of unearned stock-based compensation currently estimated to be expensed from now through the year 2023 related to unvested employee and non-employee director share-based awards is $15.7 million and the weighted average period over which the unearned stock-based compensation is expected to be recognized is 2.9 years. If there are any modifications or cancellations of the underlying unvested securities, we may be required to accelerate, increase, or cancel any remaining unearned stock compensation expense. Future stock-based compensation expense and unearned stock-based compensation will increase to the extent that we grant additional share-based awards. We estimate the fair value of share-based awards on the date of grant using the Black-Scholes option pricing model using the fair market value of our common stock on the date of grant and a number of other complex and subjective assumptions. These assumptions include, but are not limited to, estimates regarding the expected term of the awards, estimates of the stock volatility over a duration that approximates the expected term of the awards, estimates of the risk-free rate, and estimates of expected dividend rates. Due to our limited amount of historical exercise, forfeiture, and expiration activity, we have opted to use the "simplified method" for estimating the expected term of options, whereby the expected term equals the arithmetic average of the vesting terms and the original contractual term of the option. We will continue to analyze our expected term assumption as more historical data becomes available. Due to our limited operating history and a lack of company specific historical and implied volatility data, we have based our estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. When selecting these public companies on which we have based our expected stock price volatility, we generally selected companies with comparable characteristics to it, including enterprise value, stages of clinical development, risk profiles, position within the industry, and with historical share price information sufficient to meet the expected life of the stock-based awards. The historical volatility data was computed using the daily closing prices for the selected companies' shares over historical periods that approximate calculated expected term of our share-based awards. We will continue to analyze the historical stock price volatility assumption as more historical data for our common stock becomes available. The risk-free rate assumption is based on the U.S. government Treasury instruments with maturities similar to the expected term of our stock options. The expected dividend assumption is based on our history of not paying dividends and our expectation that we will not declare dividends for the foreseeable future. The amount of stock-based compensation expense is recognized on a straight-line basis over the vesting term and is reduced by actual forfeitures as they occur. The fair value of options granted to employees and non-employee directors during the six months ended June 30, 2019 and 2018 was estimated as of the grant date using the Black-Scholes option pricing model using the following assumptions: Six Months Ended June 30, 2019 2018 Expected life (years) 5.50 - 6.25 5.50 - 6.25 Expected volatility 47.7 - 50.6% 37.5 - 49.8% Risk-free interest rate 1.87 - 2.63% 2.38 - 2.84% Dividend yield 0.0% 0.0% Weighted average fair value $26.55 $6.10 Employee Stock Purchase Plan Our employee stock purchase plan (“ESPP”) allows participating employees to purchase shares of our common stock at a discount through payroll deductions. The plan is available to all of our U.S.-based full-time employees. Participating employees may purchase common stock, on a voluntary after-tax basis, at a price equal to 85% of the lower of the closing market price per share of our common stock on the first or last trading day of each stock purchase period. The plan provides for six-month purchase periods, beginning on January 1 and July 1 of each calendar year. A total of 277,362 shares of common stock were initially reserved for issuance under the ESPP, and this share reserve will automatically be supplemented each January 1, commencing on January 1, 2019 and ending on and including January 1, 2028, by an amount of shares equal to the lesser of: a) 184,908 shares, b) 1% of the shares outstanding on the final day of the immediately preceding calendar year and c) such smaller number of shares as the board of directors may determine. The current purchase period under the ESPP began on July 1, 2019 and ends December 31, 2019. On June 30, 2019, 18,187 shares were purchased under the ESPP, utilizing $0.6 million of employee contributions. As of June 30, 2019, 444,083 shares were available for future issuance under the ESPP. We recognized stock-based compensation expense associated with the ESPP of $0.1 million and $0 for the three months ended June 30, 2019 and 2018, respectively, and $0.2 million and $0 for the six months ended June 30, 2019 and 2018, respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes During the three and six months ended June 30, 2019 and 2018, we did not record an income tax benefit related to our loss before income taxes in the statement of operations and comprehensive loss because a valuation allowance has been required to be established for all deferred tax assets due to our cumulative net loss position. As of December 31, 2018, our gross federal net operating loss carryforwards of $124.7 million will expire at various dates beginning in 2028. In addition, net operating loss carryforwards for state income tax purposes of $115.3 million that include net operating losses, will begin to expire in 2028. We also have research and development credit carryforwards of $1.9 million as of December 31, 2018, which will expire at various dates beginning in 2032. Utilization of the net operating loss carryforwards may be subject to an annual limitation due to the ownership change limitations provided by Section 382 of the Internal Revenue Code of 1986 and similar state provisions. The annual limitation may result in the expiration of the net operating loss before utilization. Realization of the deferred tax assets is dependent upon the generation of future taxable income, if any, the amount and timing of which are uncertain. Based on available objective evidence and cumulative losses, management believes it is more likely than not that the deferred tax assets are not recognizable and will not be recognizable until we have sufficient taxable income. Accordingly, the net deferred tax assets have been fully offset by a valuation allowance. |
Segment Reporting and Revenue D
Segment Reporting and Revenue Disaggregation | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting and Revenue Disaggregation | Segment Reporting and Revenue Disaggregation Operating segments are defined as components of an enterprise for which separate discrete financial information is available and evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. We globally manage the business within one reporting segment, the development and commercialization of innovative and minimally invasive solutions for patients with obstructive sleep apnea. Segment information is consistent with how management reviews the business, makes investing and resource allocation decisions and assesses operating performance. We sell our Inspire system to hospitals and ambulatory surgery centers in the U.S. and in select countries in Europe through a direct sales organization. Revenue by geographic region is as follows: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 United States $ 15,754 $ 9,529 $ 30,109 $ 18,272 Europe 2,278 1,409 4,173 2,708 Total revenue $ 18,032 $ 10,938 $ 34,282 $ 20,980 All of our long-lived assets are located in the U.S. |
Loss Per Share
Loss Per Share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Loss Per Share | Loss Per Share Basic net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock and dilutive potential shares of common stock outstanding during the period. Because we have reported a net loss for all periods presented, diluted net loss per share is the same as basic net loss per share for those periods as all potentially dilutive shares consisting of convertible preferred stock, convertible preferred stock warrants, convertible common stock warrants and common stock options were antidilutive in those periods. The following potentially dilutive securities outstanding at the end of the periods presented have been excluded from the computations of diluted shares outstanding because such securities have an antidilutive impact due to losses reported: June 30, 2019 2018 Common stock warrants 6,595 100,558 Common stock options outstanding 2,365,059 2,195,333 Total 2,371,654 2,295,891 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying financial statements have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The financial statements may not include all disclosures required by U.S. generally accepted accounting principles ("U.S. GAAP"); however, we believe that the disclosures are adequate to make the information presented not misleading. These unaudited financial statements should be read in conjunction with the audited financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018. In the opinion of management, all adjustments, consisting of only normal recurring adjustments that are necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, have been made. The results of operations for the interim periods are not necessarily indicative of the operating results for the full fiscal year or any future periods. Certain prior period amounts have been reclassified to conform to the current presentation. These reclassifications had no material effect on the reported results of operations. Reverse Stock Split In connection with our initial public offering of common stock ("IPO"), our board of directors and stockholders approved a 1-for-6.650 reverse stock split of our common stock. The reverse stock split became effective on April 20, 2018. The par value of the common stock was not adjusted as a result of the reverse stock split. Adjustments corresponding to the reverse stock split were made to the ratio at which the convertible preferred stock converted into common stock immediately prior to the closing of the IPO. Accordingly, all share and per-share amounts for all periods presented in these financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the reverse stock split and adjustment of the conversion ratio of the convertible preferred stock. Initial Public Offering On May 7, 2018, we completed our IPO by issuing 7,762,500 shares of common stock, at an offering price of $16.00 per share, for net proceeds of approximately $112.0 million after deducting underwriting discounts and commissions and offering expenses payable by us. In connection with the IPO, our outstanding shares of convertible preferred stock were automatically converted into an aggregate of 12,111,710 shares of common stock, and our outstanding warrants to purchase shares of convertible preferred stock were automatically converted into warrants to purchase up to an aggregate of 100,558 shares of common stock, resulting in the reclassification of the related redeemable convertible preferred stock warrant liability of $0.9 million to additional paid-in capital ("APIC"). Follow-On Public Offering On December 11, 2018, we completed a follow-on offering that included our offer and sale of 1,875,000 shares of common stock and the selling stockholders’ offer and sale of 1,000,000 shares of common stock, at a public offering price of $40.00 per share. We received net proceeds of approximately $69.8 million after deducting underwriting discounts and commissions and offering expenses. We received no proceeds from the sale of our common stock by the selling stockholders. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts and disclosures reported in the financial statements. We use significant judgment when making estimates related to the allowance for doubtful accounts, inventory reserves, warranty reserves, and the valuations of our common stock prior to our IPO, share-based awards, and certain of our previously outstanding preferred stock warrants. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. |
JOBS Act Accounting Election | JOBS Act Accounting Election As an emerging growth company under the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. We have elected to take advantage of the extended transition period for adopting new or revised accounting standards that have different effective dates for public and private companies until such time as those standards apply to private companies. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid securities, readily convertible to cash, that mature within 90 days or less from the date of purchase to be cash equivalents. The carrying amount reported in the balance sheets for cash is cost, which approximates fair value. |
Foreign Currency | Foreign CurrencySales and expenses denominated in foreign currencies are translated at average exchange rates in effect throughout the year. Foreign currency transaction gains and losses are included in other (income) expense,net in the statements of operations and comprehensive loss. Assets and liabilities of foreign operations are remeasured at period-end exchange rates with the impacts of foreign currency remeasurement recognized in other (income) expense,net in the statements of operations and comprehensive loss. |
Short-term Investments | InvestmentsAt June 30, 2019 and December 31, 2018, our short-term investments consisted of commercial paper, corporate bonds, asset-backed securities, and U.S. government securities which are classified as available-for-sale debt securities and had maturities less than one year. Our long-term investments consisted of corporate bonds and asset-backed securities. Investments are reported at their estimated fair market value which approximates cost. Any unrealized gains and losses are reported as a separate component of accumulated other comprehensive income (loss). We had $0.1 million of unrecognized income and $0.1 million of unrecognized loss in accumulated other comprehensive income (loss) balance at June 30, 2019 and December 31, 2018, respectively. Any realized gains and losses are calculated on the specific identification method and reported net in other (income) expense, net. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments We measure certain financial assets and liabilities at fair value on a recurring basis, including cash equivalents, investments, and our previously outstanding preferred stock warrants. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value: Level 1—Observable inputs, such as quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2—Other inputs that are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be derived from observable market data. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs, including interest rate curves, foreign exchange rates, and credit ratings. Level 3—Unobservable inputs that are supported by little or no market activities, which would require us to develop our own assumptions. We use the methods and assumptions described below in determining the fair value of our financial instruments. Money market funds: Fair values of money market funds are based on quoted market prices in active markets. These are included as Level 1 measurements in the tables below. Commercial paper and repurchase agreements: Short-term, highly liquid investments are included as a Level 2 measurement in the tables below. Corporate bonds: Consists of notes and bonds with original maturities of less than one year and various yields. These are included as a Level 2 measurement in the tables below. Asset-backed securities: Consists of short-term, securitized investments backed by pools of credit card receivables. These are included as a Level 2 measurement in the tables below. U.S. government securities: Consists of U.S. government Treasury bills with original maturities of less than one year. These are included as a Level 1 measurement in the table below. The following tables sets forth by level within the fair value hierarchy our assets that are measured on a recurring basis and reported at fair value as of June 30, 2019 and December 31, 2018. Assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Fair Value Measurements as of June 30, 2019 Estimated Level 1 Level 2 Level 3 Cash equivalents: Money market funds $ 24,801 $ 24,801 $ — $ — Repurchase agreements 25,000 — 25,000 — Total cash equivalents 49,801 24,801 25,000 — Investments: Commercial paper $ 17,384 $ — $ 17,384 $ — Corporate bonds 23,242 — 23,242 — Asset-backed securities 15,534 — 15,534 — U.S. government securities 57,308 57,308 — — Total investments 113,468 57,308 56,160 — Total cash equivalents and investments $ 163,269 $ 82,109 $ 81,160 $ — Fair Value Measurements as of December 31, 2018 Estimated Level 1 Level 2 Level 3 Cash equivalents: Money market funds $ 94,700 $ 94,700 $ — $ — Total cash equivalents 94,700 94,700 — — Investments: Commercial paper $ 27,898 $ — $ 27,898 $ — Corporate bonds 28,012 — 28,012 — Asset-backed securities 17,055 — 17,055 — U.S. government securities 17,957 17,957 — — Total investments 90,922 17,957 72,965 — Total cash equivalents and investments $ 185,622 $ 112,657 $ 72,965 $ — There were no transfers between levels during the periods ended June 30, 2019 and December 31, 2018. The recurring Level 3 fair value measurements of our preferred stock warrant liabilities used the Black-Scholes option pricing model and value of the respective class of our convertible preferred stock (see Note 8), which was unobservable. All other assumptions included in the model are observable Level 1 inputs. The following table provides a reconciliation of the beginning and ending balances of our preferred stock warrant liabilities: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Balance at beginning of period $ — $ 978 $ — $ 157 Initial fair value of preferred stock warrants issued — — — 103 Reclassified to equity — (855) — (855) Change in fair value of preferred stock warrants — (123) — 595 Balance at end of period $ — $ — $ — $ — Changes in the fair value of the preferred stock warrant liability were recorded in interest expense on the statements of operations and comprehensive loss. In connection with the closing of the IPO in May 2018, warrants to purchase shares of preferred stock automatically converted into warrants to purchase shares of common stock, resulting in the reclassification of the related convertible preferred stock warrant liability to APIC. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash equivalents, investments, and accounts receivable. Our investment policy limits investments to certain types of debt securities issued by the U.S. government and its agencies, corporations with investment-grade credit ratings, or commercial paper and money market funds issued by the highest quality financial and non-financial companies. We place restrictions on maturities and concentration by type and issuer. We are exposed to credit risk in the event of a default by the issuers of these securities to the extent recorded on the balance sheets. However, as of June 30, 2019 and December 31, 2018, we limited our credit risk associated with cash equivalents by placing investments with banks we believe are highly creditworthy. We believe that the credit risk in our accounts receivable is mitigated by our credit evaluation process, relatively short collection terms, and dispersion of our customer base. We generally do not require collateral, and losses on accounts receivable have historically been within management's expectations. |
Allowance for Doubtful Accounts | Allowance for Doubtful AccountsTrade accounts receivable are recorded at the invoiced amount and do not bear interest. Customer credit terms are established prior to shipment with the general standard being net 30 days. Collateral or any other security to support payment of these receivables generally is not required. We record an allowance for doubtful accounts for accounts receivable deemed uncollectible. We evaluate the collectability of our accounts receivable based on known collection risks and historical experience. In circumstances where we are aware of a specific customer's inability to meet its financial obligations to us (e.g., bankruptcy filings or substantial downgrading of credit ratings), we record a specific allowance for bad debts against amounts due to reduce the carrying amount of accounts receivable to the amount we reasonably believe will be collected. Specific accounts receivable are written-off once a determination is made that the account is uncollectible. The allowance for doubtful accounts was less than $0.1 million as of each of June 30, 2019 and December 31, 2018. |
Inventories | Inventories Inventories are valued at the lower of cost or net realizable value, computed on a first-in, first-out basis. We regularly review inventory quantities on-hand for excess and obsolete inventory and, when circumstances indicate, incur charges to write down inventories to their net realizable value. Our review of inventory for excess and obsolete quantities is based primarily on the estimated forecast of future product demand, product life cycles, including |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is determined using the straight-line method over the estimated useful lives of the respective assets, generally three five |
Impairment of Long-lived Assets | Impairment of Long-lived Assets Long-lived assets consist primarily of property and equipment and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require that an asset be tested for possible impairment, we compare the undiscounted cash flows expected to be generated by the asset to the carrying amount of the asset. If the carrying amount of the asset is not recoverable on an undiscounted cash flow basis, we determine the fair value of the asset and recognize an impairment loss to the extent the carrying amount of the asset exceeds its fair value. We determine fair value using the income approach based on the present value of expected future cash flows or other appropriate measures of estimated fair value. Our cash flow assumptions consider historical and forecasted revenue and operating costs and other relevant factors. We did not record any material impairment charges on long-lived assets during either of the six months ended June 30, 2019 and 2018. |
Revenue Recognition | Revenue Recognition We recognize revenue in accordance with Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC 606"), which we adopted effective January 1, 2019 using the modified retrospective approach. The adoption of ASC 606 did not have a material impact on the amount and timing of revenue recognized in our financial statements. Revenues from product sales are recognized when the customer obtains control of the product, which occurs at a point in time, either upon shipment of the product or receipt of the product, depending on shipment terms. Our standard shipping terms are free on board shipping point, unless the customer requests that control and title to the inventory transfer upon delivery. In those cases where shipping and handling costs are billed to customers, we classify the amounts billed as a component of cost of goods sold. Revenue is measured as the amount of consideration we expect to receive, adjusted for any applicable estimates of variable consideration and other factors affecting the transaction price, which is based on the invoiced price, in exchange for transferring products. All revenue is recognized when we satisfy our performance obligations under the contract. The majority of our contracts have a single performance obligation and are short term in nature. Sales taxes and value added taxes in foreign jurisdictions that are collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from net sales. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of goods sold. Variable consideration related to certain customer sales incentives is estimated based on the amounts expected to be paid based on the agreement with the customer using probability assessments. We offer customers a limited right of return for its product in case of non-conformity or performance issues. We estimate the amount of our product sales that may be returned by our customers based on historical sales and returns. As our historical product returns to date have been immaterial, we have not recorded a reduction in revenue related to variable consideration for product returns. |
Cost of Goods Sold | Cost of Goods Sold Cost of goods sold consists primarily of manufacturing overhead costs, material costs, and direct labor. Overhead costs include the cost of material procurement, inventory control, facilities, equipment, and operations supervision and management, including employee compensation, stock-based compensation, supplies, and travel. Cost of goods sold also includes depreciation expense for production equipment, warranty replacement costs, and certain direct costs such as shipping costs. |
Research and Development | Research and Development Research and development expenses consist primarily of product development, clinical and regulatory affairs, consulting services, and other costs associated with products and technologies in development. These expenses include employee compensation, stock-based compensation, supplies, travel, and facility costs. Clinical expenses include clinical trial design, clinical site reimbursement, data management, travel expenses, and the cost of manufacturing products for clinical trials. |
Common Stock Valuation and Stock-Based Compensation | Common Stock Valuation and Stock-Based Compensation We maintain an equity incentive plan to provide long-term incentives for eligible employees, consultants, and members of the board of directors. The plan allows for the issuance of non-statutory and incentive stock options to employees and non-statutory stock options to consultants and directors. We recognize equity-based compensation expense for awards of equity instruments to employees and directors based on the grant date fair value of those awards in accordance with ASC Topic 718, Stock Compensation ("ASC 718"). ASC 718 requires all equity-based compensation awards to employees and directors, including grants of restricted shares and stock options, to be recognized as expense in the statements of operations and comprehensive loss based on their grant date fair values. We estimate the fair value of stock options using the Black-Scholes option pricing model. We have not granted any restricted shares. We have not granted any share-based awards to our consultants. The Black-Scholes option pricing model requires the input of certain subjective assumptions, including (i) the expected share price volatility, (ii) the expected term of the award, (iii) the risk-free interest rate and (iv) the expected dividend yield. Due to the lack of a public market for the trading of our common stock and a lack of company-specific historical and implied volatility data, we have based our estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. The historical volatility is calculated based on a period of time commensurate with the expected term assumption. The group of representative companies have characteristics similar to us, including stage of product development and focus on the life science industry. We use the simplified method, which is the average of the final vesting tranche date and the contractual term, to calculate the expected term for options granted to employees and directors as we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. The risk-free interest rate is based on a U.S. government Treasury instrument whose term is consistent with the expected term of the stock options. We use an assumed dividend yield of zero as we have never paid dividends and have no current plans to pay any dividends on our common stock. We expense the fair value of our equity-based compensation awards granted to employees and directors on a straight-line basis over the associated service period, which is generally the period in which the related services are received. We account for award forfeitures as they occur. |
Advertising Expenses | Advertising ExpensesWe expense the costs of advertising, including promotional expenses, as incurred. |
Income Taxes | Income Taxes We account for income taxes using the liability method. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates that will be in effect when the differences are expected to reverse. Valuation allowances against deferred tax assets are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized. As we have historically incurred operating losses, we have recorded a full valuation allowance against our net deferred tax assets, and there is no provision for income taxes. Our policy is to record interest and penalties expense related to uncertain tax positions as other expense in the statements of operations and comprehensive loss. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss consists of net loss and changes in unrealized gains and losses on investments classified as available-for-sale. Accumulated other comprehensive income (loss) is presented in the accompanying balance sheets as a component of stockholders' equity. |
Loss Per Share | Loss Per Share Basic net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock and dilutive potential shares of common stock outstanding during the period. Because we have reported a net loss for all periods presented, diluted net loss per share is the same as basic net loss per share for those periods as all potentially dilutive shares consisting of convertible preferred stock, stock options and warrants were antidilutive in those periods. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements We currently are an emerging growth company as defined by the JOBS Act. The JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the "Securities Act"), for complying with new or revised accounting standards. Accordingly, an emerging growth company can selectively delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We elected to avail ourselves of this exemption and, as a result, our financial statements may not be comparable to the financial statements of issuers that are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies. Section 107 of the JOBS Act provides that we can elect to opt out of the extended transition period at any time, which election is irrevocable. However, we will no longer qualify as an emerging growth company as of December 31, 2019 and will no longer be able to take advantage of the extended transition period. Therefore, as of December 31, 2019, we will be required to adopt new or revised accounting standards when they are applicable to public companies that are not emerging growth companies. In February 2016, the FASB issued Accounting Standards Update ("ASU") 2016-02, Leases (Topic 842) ("ASU 2016-02"), which supersedes the existing guidance for lease accounting, Leases (Topic 840) . ASU 2016-02 requires lessees to recognize a lease liability and a right-of-use asset for all leases with lease terms greater than 12 months. Lessor accounting remains largely unchanged. We currently are an emerging growth company as defined by the JOBS Act and previously disclosed that these amendments would become effective for us for interim and annual periods beginning after December 15, 2019. However, this ASU will instead become effective for us on December 31, 2019 when we no longer qualify for that status. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after, the date of initial adoption, with an option to elect to use certain transition relief. We are working to determine the anticipated impact of the adoption of this ASU on our financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses , to require the measurement of expected credit losses for financial instruments held at the reporting date to be based on historical experience, current conditions and reasonable forecasts. The ASU will become effective for us for interim and annual periods beginning January 1, 2020. We are currently evaluating the impact of this ASU on our financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement ("ASU 2018-13") . The amendments in the standard apply to all entities that are required, under existing U.S. GAAP, to make disclosures about recurring or nonrecurring fair value measurements. ASU 2018-13 removes, modifies, and adds certain disclosure requirements in ASC 820, Fair Value Measurement . The standard is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. We are currently evaluating the impact of this ASU on our financial statements and related disclosures. In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract ("ASU 2018-15") which clarifies and aligns the accounting for implementation costs for hosting arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU 2018-15 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted. We are currently evaluating the impact of this ASU on our financial statements and related disclosures. We have reviewed and considered all other recent accounting pronouncements and believe there are none that could potentially have a material impact on our business practices, financial condition, results of operations, or disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of assets and liabilities measured at fair value on a recurring basis | Fair Value Measurements as of June 30, 2019 Estimated Level 1 Level 2 Level 3 Cash equivalents: Money market funds $ 24,801 $ 24,801 $ — $ — Repurchase agreements 25,000 — 25,000 — Total cash equivalents 49,801 24,801 25,000 — Investments: Commercial paper $ 17,384 $ — $ 17,384 $ — Corporate bonds 23,242 — 23,242 — Asset-backed securities 15,534 — 15,534 — U.S. government securities 57,308 57,308 — — Total investments 113,468 57,308 56,160 — Total cash equivalents and investments $ 163,269 $ 82,109 $ 81,160 $ — Fair Value Measurements as of December 31, 2018 Estimated Level 1 Level 2 Level 3 Cash equivalents: Money market funds $ 94,700 $ 94,700 $ — $ — Total cash equivalents 94,700 94,700 — — Investments: Commercial paper $ 27,898 $ — $ 27,898 $ — Corporate bonds 28,012 — 28,012 — Asset-backed securities 17,055 — 17,055 — U.S. government securities 17,957 17,957 — — Total investments 90,922 17,957 72,965 — Total cash equivalents and investments $ 185,622 $ 112,657 $ 72,965 $ — |
Schedule of reconciliation of preferred stock warrant liabilities | The following table provides a reconciliation of the beginning and ending balances of our preferred stock warrant liabilities: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Balance at beginning of period $ — $ 978 $ — $ 157 Initial fair value of preferred stock warrants issued — — — 103 Reclassified to equity — (855) — (855) Change in fair value of preferred stock warrants — (123) — 595 Balance at end of period $ — $ — $ — $ — Changes in the fair value of the preferred stock warrant liability were recorded in interest expense on the statements of operations and comprehensive loss. In connection with the closing of the IPO in May 2018, warrants to purchase shares of preferred stock automatically converted into warrants to purchase shares of common stock, resulting in the reclassification of the related convertible preferred stock warrant liability to APIC. |
Composition of Certain Financ_2
Composition of Certain Financial Statement Items (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Composition of Certain Financial Statement Items | |
Schedule of inventory | Inventories June 30, 2019 December 31, 2018 Raw materials $ 1,026 $ 802 Finished goods 2,535 1,865 Total inventories, net of reserves $ 3,561 $ 2,667 |
Schedule of property and equipment | Property and Equipment June 30, 2019 December 31, 2018 Computer equipment and software $ 698 $ 333 Furniture and office equipment — 4 Manufacturing equipment 1,604 1,049 Research and development equipment 52 30 Leasehold improvements 192 185 Property and equipment, cost 2,546 1,601 Less: accumulated depreciation and amortization (720) (799) Property and equipment, net 1,826 $ 802 |
Schedule of accrued expenses | Accrued Expenses June 30, 2019 December 31, 2018 Payroll and commissions payable $ 5,095 $ 6,490 Interest 155 195 Other accrued expenses 730 1,041 Total accrued expenses $ 5,980 $ 7,726 |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Short-term investments available-for-sale | Our investments are classified as available-for-sale and consist of the following: June 30, 2019 Unrealized Cost Gains Losses Fair Value Short-Term: Commercial paper $ 17,384 $ — $ — $ 17,384 Corporate bonds 20,208 14 (5) 20,217 Asset-backed securities 12,438 5 — 12,443 U.S. government securities 57,277 31 — 57,308 Short-term investments $ 107,307 $ 50 $ (5) $ 107,352 Long-Term: Corporate bonds $ 3,019 $ 6 $ — $ 3,025 Asset-backed securities 3,091 — — 3,091 Long-term investments $ 6,110 $ 6 $ — $ 6,116 December 31, 2018 Unrealized Cost Gains Losses Fair Value Short-Term: Commercial paper $ 27,898 $ — $ — $ 27,898 Corporate bonds 28,043 — (31) 28,012 Asset-backed securities 17,074 — (19) 17,055 U.S. government securities 17,959 — (2) 17,957 Short-term investments $ 90,974 $ — $ (52) $ 90,922 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Long-term Debt, by Current and Noncurrent [Abstract] | |
Schedule of expected future principal payments for the credit facility | Expected future principal payments for the credit facility are as follows: Year ending December 31 : 2019 (remaining) $ — 2020 — 2021 — 2022 9,188 2023 12,250 Thereafter 3,062 Total expected future principal payments $ 24,500 |
Commitments (Tables)
Commitments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum annual operating lease payments | Future minimum annual operating lease payments are as follows: Year ending December 31: 2019 (remaining) $ 519 2020 1,026 2021 888 2022 1,504 2023 2,043 Thereafter 9,448 Total future operating lease payments $ 15,428 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Summary of preferred stock warrants issued under the company's original credit facility and subsequent amendments | As of May 7, 2018, the date of the closing of our IPO, the following preferred stock warrants issued under the original credit facility and subsequent amendments were outstanding and exercisable: Issuance Expiration Series Exercise Warrants Initial Fair Value at February 8, 2018 February 8, 2028 F $ 1.37 233,577 $ 103 $ 320 February 24, 2017 February 24, 2027 F 1.37 29,197 4 40 August 7, 2015 August 7, 2025 E 2.62 29,580 33 41 June 27, 2014 June 27, 2024 E 2.62 76,334 85 174 August 5, 2013 August 5, 2023 C 1.07 74,768 39 80 November 16, 2012 November 16, 2022 C 1.07 186,916 96 200 Total 630,372 $ 855 |
Schedule of stock warrants outstanding | Warrants to purchase shares of our common stock are summarized below: Common Stock Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Outstanding at December 31, 2018 6,595 $ 15.16 5.5 Exercised — $ — Outstanding at June 30, 2019 6,595 $ 15.16 5.0 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of the company's stock option activity and related information | A summary of stock option activity and related information is as follows: Options Weighted Average Weighted average Aggregate intrinsic Outstanding at December 31, 2018 2,745,156 $ 12.64 7.4 Granted 113,552 $ 53.44 Exercised (478,579) $ 1.61 Forfeited (15,070) $ 35.01 Outstanding at June 30, 2019 2,365,059 $ 16.69 7.6 $ 103,976 Exercisable at June 30, 2019 1,143,974 $ 3.65 6.2 $ 65,204 |
Schedule of stock compensation recognized, before taxes | Total stock-based compensation recognized, before taxes, during the three and six months ended June 30, 2019 and 2018, is as follows: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Cost of goods sold $ 26 $ 1 $ 52 $ 3 Research and development 161 5 324 11 Selling, general and administrative 1,202 263 2,404 310 Total stock-based compensation $ 1,389 $ 269 $ 2,780 $ 324 |
Summary of weighted average assumptions for fair value of options granted | The fair value of options granted to employees and non-employee directors during the six months ended June 30, 2019 and 2018 was estimated as of the grant date using the Black-Scholes option pricing model using the following assumptions: Six Months Ended June 30, 2019 2018 Expected life (years) 5.50 - 6.25 5.50 - 6.25 Expected volatility 47.7 - 50.6% 37.5 - 49.8% Risk-free interest rate 1.87 - 2.63% 2.38 - 2.84% Dividend yield 0.0% 0.0% Weighted average fair value $26.55 $6.10 |
Segment Reporting and Revenue_2
Segment Reporting and Revenue Disaggregation (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of revenue by geographic region | Revenue by geographic region is as follows: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 United States $ 15,754 $ 9,529 $ 30,109 $ 18,272 Europe 2,278 1,409 4,173 2,708 Total revenue $ 18,032 $ 10,938 $ 34,282 $ 20,980 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of dilutive securities excluded from computations of diluted weighted average shares outstanding | The following potentially dilutive securities outstanding at the end of the periods presented have been excluded from the computations of diluted shares outstanding because such securities have an antidilutive impact due to losses reported: June 30, 2019 2018 Common stock warrants 6,595 100,558 Common stock options outstanding 2,365,059 2,195,333 Total 2,371,654 2,295,891 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Reverse Stock Split and Initial Public Offering (Details) $ / shares in Units, $ in Thousands | Dec. 11, 2018USD ($)$ / sharesshares | May 07, 2018USD ($)$ / sharesshares | Apr. 20, 2018 | Mar. 31, 2019USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2018shares | May 31, 2018shares |
Reverse Stock Split | ||||||||
Stock split ratio | 0.1504 | |||||||
Initial Public Offering | ||||||||
Convertible preferred stock warrants reclassified to additional paid-in capital | $ | $ 900 | $ 900 | ||||||
Proceeds from sale of common stock | $ | $ 0 | $ 112,041 | ||||||
Common Stock | ||||||||
Initial Public Offering | ||||||||
Aggregate number of shares called by warrants (in shares) | 100,558 | 76,762 | ||||||
IPO | Common Stock | ||||||||
Initial Public Offering | ||||||||
Shares issued during the period (in shares) | 7,762,500 | |||||||
Shares issue price (in dollars per share) | $ / shares | $ 16 | |||||||
Net proceeds from initial public offering | $ | $ 112,000 | |||||||
Shares issued upon conversion (in shares) | 12,111,710 | 12,111,710 | ||||||
Follow-On Public Offering | Selling Stockholders | ||||||||
Initial Public Offering | ||||||||
Shares sold (in shares) | 1,000,000 | |||||||
Follow-On Public Offering | Common Stock | ||||||||
Initial Public Offering | ||||||||
Shares issued during the period (in shares) | 1,875,000 | |||||||
Shares issue price (in dollars per share) | $ / shares | $ 40 | |||||||
Proceeds from sale of common stock | $ | $ 69,800 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Short-term Investments and Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Accumulated other comprehensive income (loss) | $ 51 | $ 51 | $ (52) | ||
Realized gains | 0 | $ 0 | 0 | $ 0 | |
Investments: | |||||
Total investments | 107,352 | 107,352 | 90,922 | ||
Fair value of assets transferred from Level 1 to Level 2 | 0 | 0 | 0 | ||
Fair value of assets transferred from Level 2 to Level 1 | 0 | 0 | 0 | ||
Fair value of liabilities transferred from Level 1 to Level 2 | 0 | 0 | 0 | ||
Fair value of liabilities transferred from Level 2 to Level 1 | 0 | 0 | 0 | ||
Recurring basis | |||||
Cash equivalents: | |||||
Money market funds | 24,801 | 24,801 | 94,700 | ||
Repurchase agreements | 25,000 | 25,000 | |||
Total cash equivalents | 49,801 | 49,801 | 94,700 | ||
Investments: | |||||
Commercial paper | 17,384 | 17,384 | 27,898 | ||
Corporate bonds | 23,242 | 23,242 | 28,012 | ||
Asset-backed securities | 15,534 | 15,534 | 17,055 | ||
U.S. government securities | 57,308 | 57,308 | 17,957 | ||
Total investments | 113,468 | 113,468 | 90,922 | ||
Total cash equivalents and investments | 163,269 | 163,269 | 185,622 | ||
Level 1 | Recurring basis | |||||
Cash equivalents: | |||||
Money market funds | 24,801 | 24,801 | 94,700 | ||
Repurchase agreements | 0 | 0 | |||
Total cash equivalents | 24,801 | 24,801 | 94,700 | ||
Investments: | |||||
Commercial paper | 0 | 0 | 0 | ||
Corporate bonds | 0 | 0 | 0 | ||
Asset-backed securities | 0 | 0 | 0 | ||
U.S. government securities | 57,308 | 57,308 | 17,957 | ||
Total investments | 57,308 | 57,308 | 17,957 | ||
Total cash equivalents and investments | 82,109 | 82,109 | 112,657 | ||
Level 2 | Recurring basis | |||||
Cash equivalents: | |||||
Money market funds | 0 | 0 | 0 | ||
Repurchase agreements | 25,000 | 25,000 | |||
Total cash equivalents | 25,000 | 25,000 | 0 | ||
Investments: | |||||
Commercial paper | 17,384 | 17,384 | 27,898 | ||
Corporate bonds | 23,242 | 23,242 | 28,012 | ||
Asset-backed securities | 15,534 | 15,534 | 17,055 | ||
U.S. government securities | 0 | 0 | 0 | ||
Total investments | 56,160 | 56,160 | 72,965 | ||
Total cash equivalents and investments | 81,160 | 81,160 | 72,965 | ||
Level 3 | Recurring basis | |||||
Cash equivalents: | |||||
Money market funds | 0 | 0 | 0 | ||
Repurchase agreements | 0 | 0 | |||
Total cash equivalents | 0 | 0 | 0 | ||
Investments: | |||||
Commercial paper | 0 | 0 | 0 | ||
Corporate bonds | 0 | 0 | 0 | ||
Asset-backed securities | 0 | 0 | 0 | ||
U.S. government securities | 0 | 0 | 0 | ||
Total investments | 0 | 0 | 0 | ||
Total cash equivalents and investments | $ 0 | $ 0 | $ 0 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Reconciliation of Preferred Stock Warrant Liabilities (Details) - Preferred stock warrant - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Reconciliation of preferred stock warrant liabilities: | ||||
Balance at beginning of period | $ 0 | $ 978 | $ 0 | $ 157 |
Initial fair value of preferred stock warrants issued | 0 | 0 | 0 | 103 |
Reclassified to equity | 0 | (855) | 0 | (855) |
Change in fair value of preferred stock warrants | 0 | (123) | 0 | 595 |
Balance at end of period | $ 0 | $ 0 | $ 0 | $ 0 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Accounts Receivable and Allowance for Doubtful Accounts (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
Allowance for doubtful accounts | $ 0.1 | $ 0.1 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
Reserve for excess and obsolete inventory | $ 900 | $ 800 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Property and Equipment (Details) | 6 Months Ended |
Jun. 30, 2019 | |
Minimum | |
Property and Equipment | |
Estimated useful lives | 3 years |
Maximum | |
Property and Equipment | |
Estimated useful lives | 5 years |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Stock Based Compensation (Details) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Dividend yield | 0.00% |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Advertising Expenses (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Advertising Expenses | ||||
Advertising expenses | $ 4.4 | $ 2.5 | $ 7.9 | $ 4.7 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Taxes | ||||
Provision for income taxes | $ 0 | $ 0 | $ 0 | $ 0 |
Composition of Certain Financ_3
Composition of Certain Financial Statement Items - Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Composition of Certain Financial Statement Items | ||
Raw materials | $ 1,026 | $ 802 |
Finished goods | 2,535 | 1,865 |
Total inventories, net of reserves | $ 3,561 | $ 2,667 |
Composition of Certain Financ_4
Composition of Certain Financial Statement Items - Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Property and Equipment | |||||
Property and equipment, gross | $ 2,546 | $ 2,546 | $ 1,601 | ||
Less: accumulated depreciation and amortization | (720) | (720) | (799) | ||
Property and equipment, net | 1,826 | 1,826 | 802 | ||
Depreciation and amortization expenses | 100 | $ 100 | 200 | $ 200 | |
Computer equipment and software | |||||
Property and Equipment | |||||
Property and equipment, gross | 698 | 698 | 333 | ||
Furniture and office equipment | |||||
Property and Equipment | |||||
Property and equipment, gross | 0 | 0 | 4 | ||
Manufacturing equipment | |||||
Property and Equipment | |||||
Property and equipment, gross | 1,604 | 1,604 | 1,049 | ||
Research and development equipment | |||||
Property and Equipment | |||||
Property and equipment, gross | 52 | 52 | 30 | ||
Leasehold improvements | |||||
Property and Equipment | |||||
Property and equipment, gross | $ 192 | $ 192 | $ 185 |
Composition of Certain Financ_5
Composition of Certain Financial Statement Items - Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Composition of Certain Financial Statement Items | ||
Payroll and commissions payable | $ 5,095 | $ 6,490 |
Interest | 155 | 195 |
Other accrued expenses | 730 | 1,041 |
Total accrued expenses | $ 5,980 | $ 7,726 |
Investments (Details)
Investments (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Investments with maturity greater than one year | $ 0 | $ 0 |
Short-term Debt | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 107,307,000 | 90,974,000 |
Unrealized Gains | 50,000 | 0 |
Unrealized Losses | (5,000) | (52,000) |
Fair Value | 107,352,000 | 90,922,000 |
Long-term Debt | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 6,110,000 | |
Unrealized Gains | 6,000 | |
Unrealized Losses | 0 | |
Fair Value | 6,116,000 | |
Commercial paper | Short-term Debt | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 17,384,000 | 27,898,000 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Fair Value | 17,384,000 | 27,898,000 |
Corporate bonds | Short-term Debt | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 20,208,000 | 28,043,000 |
Unrealized Gains | 14,000 | 0 |
Unrealized Losses | (5,000) | (31,000) |
Fair Value | 20,217,000 | 28,012,000 |
Corporate bonds | Long-term Debt | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 3,019,000 | |
Unrealized Gains | 6,000 | |
Unrealized Losses | 0 | |
Fair Value | 3,025,000 | |
Asset-backed securities | Short-term Debt | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 12,438,000 | 17,074,000 |
Unrealized Gains | 5,000 | 0 |
Unrealized Losses | 0 | (19,000) |
Fair Value | 12,443,000 | 17,055,000 |
Asset-backed securities | Long-term Debt | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 3,091,000 | |
Unrealized Gains | 0 | |
Unrealized Losses | 0 | |
Fair Value | 3,091,000 | |
U.S. government securities | Short-term Debt | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 57,277,000 | 17,959,000 |
Unrealized Gains | 31,000 | 0 |
Unrealized Losses | 0 | (2,000) |
Fair Value | $ 57,308,000 | $ 17,957,000 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 27, 2019 | Feb. 28, 2018 | Feb. 28, 2017 | Jun. 30, 2019 | Mar. 26, 2019 | Aug. 31, 2015 |
Expected future principal payments | ||||||
2019 (remaining) | $ 0 | |||||
2020 | 0 | |||||
2021 | 0 | |||||
2022 | 9,188 | |||||
2023 | 12,250 | |||||
Thereafter | 3,062 | |||||
Total expected future principal payments | $ 24,500 | |||||
March 2019 Amendment to Loan and Security Agreement | ||||||
Credit Facility | ||||||
Final payment percentage | 3.50% | |||||
Series F convertible preferred stock | ||||||
Credit Facility | ||||||
Aggregate number of shares called by warrants (in shares) | 233,577 | |||||
Period of warrants | 10 years | |||||
Exercise price (in dollars per share) | $ 1.37 | |||||
Series F convertible preferred stock | February 2017 Amendment to Loan and Security Agreement | ||||||
Credit Facility | ||||||
Aggregate number of shares called by warrants (in shares) | 29,197 | |||||
Period of warrants | 10 years | |||||
Exercise price (in dollars per share) | $ 1.37 | |||||
Original credit facility | ||||||
Credit Facility | ||||||
Outstanding credit facility amount | $ 12,000 | |||||
Term loan facility | ||||||
Credit Facility | ||||||
Outstanding credit facility amount | $ 24,500 | |||||
Fixed interest rate on credit facility | 7.95% | 7.95% | ||||
Final payment percentage | 5.50% | |||||
Term loan facility | February 2017 Amendment to Loan and Security Agreement | ||||||
Credit Facility | ||||||
Outstanding credit facility amount | $ 16,500 | |||||
Fixed interest rate on credit facility | 7.95% | |||||
Variable interest rate on credit facility | 6.90% | |||||
Term loan facility | March 2019 Amendment to Loan and Security Agreement | ||||||
Credit Facility | ||||||
Variable interest rate on credit facility | 5.10% | |||||
Final payment percentage | 3.50% | |||||
Variable interest rate | 2.50% | |||||
Term loan facility | LIBOR | ||||||
Credit Facility | ||||||
Variable interest rate on credit facility | 6.90% | |||||
Term loan facility | Minimum | March 2019 Amendment to Loan and Security Agreement | ||||||
Credit Facility | ||||||
Basic interest rate | 7.60% | |||||
Prepayment fee | 1.00% | |||||
Term loan facility | Maximum | March 2019 Amendment to Loan and Security Agreement | ||||||
Credit Facility | ||||||
Prepayment fee | 3.00% | |||||
Term A loan facility | ||||||
Credit Facility | ||||||
Maximum borrowing amount under credit facility | $ 15,500 | |||||
Term A loan facility | February 2017 Amendment to Loan and Security Agreement | ||||||
Credit Facility | ||||||
Additional borrowing amount under credit facility | $ 1,000 | |||||
Net proceeds from credit facility | 500 | |||||
Term B loan facility | ||||||
Credit Facility | ||||||
Additional borrowing amount under credit facility | $ 8,000 | |||||
Net proceeds from credit facility | $ 8,000 | |||||
Increase in interest rate in default | 5.00% | |||||
Term B loan facility | February 2017 Amendment to Loan and Security Agreement | ||||||
Credit Facility | ||||||
Outstanding credit facility amount | $ 9,000 | |||||
Term B loan facility | On or after March 27, 2019 but prior to March 27, 2020 / On or after March 27, 2020 but prior to March 27, 2021 | ||||||
Credit Facility | ||||||
Prepayment fee | 2.00% | |||||
Term B loan facility | On or after March 27, 2020 / On or after March 27, 2021 | ||||||
Credit Facility | ||||||
Prepayment fee | 1.00% | |||||
Term B loan facility | Prior to March 27, 2019 / Prior to March 27, 2020 | ||||||
Credit Facility | ||||||
Prepayment fee | 3.00% | |||||
Term B loan facility | Minimum | ||||||
Credit Facility | ||||||
Outstanding credit facility amount | 3,500 | |||||
Term B loan facility | Maximum | ||||||
Credit Facility | ||||||
Outstanding credit facility amount | $ 10,000 |
Commitments - Operating Lease (
Commitments - Operating Lease (Details) ft² in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019USD ($)ft² | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)ft² | Jun. 30, 2018USD ($) | |
Future minimum annual operating lease payments | ||||
2019 (remaining) | $ 519 | $ 519 | ||
2020 | 1,026 | 1,026 | ||
2021 | 888 | 888 | ||
2022 | 1,504 | 1,504 | ||
2023 | 2,043 | 2,043 | ||
Thereafter | 9,448 | 9,448 | ||
Total future operating lease payments | 15,428 | 15,428 | ||
Rent expense | ||||
Rent expense | $ 300 | $ 100 | $ 500 | $ 100 |
Office Space Sublease | ||||
Operating lease sublease land agreement | ft² | 45 | 45 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | May 07, 2018 | May 31, 2018 | Mar. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Class of Stock [Line Items] | |||||
Convertible preferred stock warrants reclassified to additional paid-in capital | $ 900 | $ 900 | |||
IPO | |||||
Class of Stock [Line Items] | |||||
Preferred shares, issued (in shares) | 0 | ||||
Convertible preferred stock outstanding | |||||
Class of Stock [Line Items] | |||||
Number of warrants converted (in shares) | 630,372 | ||||
Warrants, weighted average exercise price (in dollars per share) | $ 1.46 | ||||
Convertible preferred stock outstanding | IPO | |||||
Class of Stock [Line Items] | |||||
Number of shares converted (in shares) | 76,235,050 | ||||
Value of shares converted | $ 119,100 | ||||
Common Stock | |||||
Class of Stock [Line Items] | |||||
Warrants, weighted average exercise price (in dollars per share) | $ 9.38 | ||||
Aggregate number of shares called by warrants (in shares) | 100,558 | 76,762 | |||
Exercised (in shares) | 93,963 | 0 | |||
Common Stock | IPO | |||||
Class of Stock [Line Items] | |||||
Shares issued upon conversion (in shares) | 12,111,710 | 12,111,710 |
Stockholders' Equity - Preferre
Stockholders' Equity - Preferred Stock Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 28, 2018 | May 07, 2018 | Feb. 08, 2018 | Feb. 24, 2017 | Aug. 07, 2015 | Jun. 27, 2014 | Aug. 05, 2013 | Nov. 16, 2012 |
Convertible preferred stock outstanding | ||||||||
Preferred Stock Warrants | ||||||||
Warrants Outstanding (in shares) | 630,372 | |||||||
Fair Value | $ 855 | |||||||
Series F convertible preferred stock | ||||||||
Preferred Stock Warrants | ||||||||
Exercise Price (in dollars per share) | $ 1.37 | |||||||
Warrants Issued on February 8, 2018 | Series F convertible preferred stock | ||||||||
Preferred Stock Warrants | ||||||||
Warrants issued (in shares) | 233,577 | |||||||
Term of warrants | 10 years | |||||||
Value of each warrant (in dollars per share) | $ 0.44 | |||||||
Exercise Price (in dollars per share) | $ 1.37 | $ 1.37 | ||||||
Warrants Outstanding (in shares) | 233,577 | |||||||
Initial Value | $ 100 | $ 103 | ||||||
Fair Value | $ 320 | |||||||
Warrants Issued on February 24, 2017 | Series F convertible preferred stock | ||||||||
Preferred Stock Warrants | ||||||||
Exercise Price (in dollars per share) | $ 1.37 | |||||||
Warrants Outstanding (in shares) | 29,197 | |||||||
Initial Value | $ 4 | |||||||
Fair Value | $ 40 | |||||||
Warrants Issued on August 7, 2015 | Series E convertible preferred stock | ||||||||
Preferred Stock Warrants | ||||||||
Exercise Price (in dollars per share) | $ 2.62 | |||||||
Warrants Outstanding (in shares) | 29,580 | |||||||
Initial Value | $ 33 | |||||||
Fair Value | $ 41 | |||||||
Warrants Issued on June 27, 2014 | Series E convertible preferred stock | ||||||||
Preferred Stock Warrants | ||||||||
Exercise Price (in dollars per share) | $ 2.62 | |||||||
Warrants Outstanding (in shares) | 76,334 | |||||||
Initial Value | $ 85 | |||||||
Fair Value | $ 174 | |||||||
Warrants Issued on August 5, 2013 | Series C convertible preferred stock | ||||||||
Preferred Stock Warrants | ||||||||
Exercise Price (in dollars per share) | $ 1.07 | |||||||
Warrants Outstanding (in shares) | 74,768 | |||||||
Initial Value | $ 39 | |||||||
Fair Value | $ 80 | |||||||
Warrants Issued on November 16, 2012 | Series C convertible preferred stock | ||||||||
Preferred Stock Warrants | ||||||||
Exercise Price (in dollars per share) | $ 1.07 | |||||||
Warrants Outstanding (in shares) | 186,916 | |||||||
Initial Value | $ 96 | |||||||
Fair Value | $ 200 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock Warrants (Details) - Common Stock - $ / shares | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | May 07, 2018 | |
Common Stock Warrants | ||||
Aggregate number of shares called by warrants (in shares) | 76,762 | 100,558 | ||
Exercised (in shares) | 93,963 | 0 | ||
Warrants, weighted average exercise price (in dollars per share) | $ 9.38 | |||
Warrants | ||||
Outstanding at beginning of the year (in shares) | 6,595 | 6,595 | ||
Exercised (in shares) | (93,963) | 0 | ||
Outstanding at end of the year (in shares) | 6,595 | 6,595 | ||
Weighted Average Exercise Price] | ||||
Outstanding, beginning of the period (in dollars per share) | $ 15.16 | $ 15.16 | ||
Exercised (in dollars per share) | 0 | |||
Outstanding, end of the period (in dollars per share) | $ 15.16 | $ 15.16 | ||
Weighted average remaining contractual term | ||||
Outstanding (in years) | 5 years | 5 years 6 months |
Stock-Based Compensation - 2018
Stock-Based Compensation - 2018 Plan (Details) - shares | 6 Months Ended | ||
Jun. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | |
Options | |||
Stock Options | |||
Service period | 4 years | ||
Contractual life of stock options | 10 years | ||
Options | Directors | |||
Stock Options | |||
Service period | 1 year | ||
Vesting period | 1 year | ||
Options | Directors | Minimum | |||
Stock Options | |||
Service period | 1 year | ||
Options | Directors | Maximum | |||
Stock Options | |||
Service period | 2 years | ||
Options | Vesting after first year of service | |||
Stock Options | |||
Percentage of shares to vest | 25.00% | ||
Options | Vesting in years two through four | |||
Stock Options | |||
Vesting period | 36 months | ||
Stock Incentive Plan 2018 | |||
Stock Options | |||
Number of shares reserved for issuance (in shares) | 2,126,440 | 1,386,809 | |
Number of additional shares reserved for issuance, maximum (in shares) | 739,631 | ||
Number of additional shares reserved for issuance, percentage, maximum | 4.00% | ||
Number of shares available for issuance (in shares) | 1,220,020 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | |
Options | |||
Outstanding at beginning of the year (in shares) | 2,745,156 | ||
Granted (in shares) | 113,552 | ||
Exercised (in shares) | (478,579) | ||
Forfeited (in shares) | (15,070) | ||
Outstanding at ending of the year (in shares) | 2,365,059 | 2,745,156 | |
Exercisable (in shares) | 1,143,974 | ||
Weighted Average Exercise Price | |||
Outstanding, beginning of the period (in dollars per share) | $ 12.64 | ||
Granted (in dollars per share) | 53.44 | ||
Exercised (in dollars per share) | 1.61 | ||
Forfeited (in dollars per share) | 35.01 | ||
Outstanding, end of the period (in dollars per share) | 16.69 | $ 12.64 | |
Exercisable (in dollars per share) | $ 3.65 | ||
Weighted average remaining contractual term | |||
Outstanding | 7 years 7 months 6 days | 7 years 4 months 24 days | |
Exercisable | 6 years 2 months 12 days | ||
Aggregate intrinsic value | |||
Outstanding | $ 103,976 | ||
Exercisable | $ 65,204 |
Stock-Based Compensation - Amou
Stock-Based Compensation - Amounts Recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Stock Options | ||||
Total stock-based compensation | $ 1,389 | $ 269 | $ 2,780 | $ 324 |
Unearned stock-based compensation | 15,700 | $ 15,700 | ||
Weighted average recognition period | 2 years 10 months 24 days | |||
Cost of goods sold | ||||
Stock Options | ||||
Total stock-based compensation | 26 | 1 | $ 52 | 3 |
Research and development | ||||
Stock Options | ||||
Total stock-based compensation | 161 | 5 | 324 | 11 |
Selling, general and administrative | ||||
Stock Options | ||||
Total stock-based compensation | $ 1,202 | $ 263 | $ 2,404 | $ 310 |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions Used to Calculate Fair Value of Options (Details) - $ / shares | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Weighted average assumptions | ||
Dividend yield | 0.00% | |
Options | ||
Weighted average assumptions | ||
Expected life | 5 years 6 months | 6 years 3 months |
Dividend yield | 0.00% | 0.00% |
Weighted average fair value (in dollars per share) | $ 26.55 | $ 6.10 |
Options | Minimum | ||
Weighted average assumptions | ||
Expected volatility | 47.70% | 37.50% |
Risk-free interest rate | 1.87% | 2.38% |
Options | Maximum | ||
Weighted average assumptions | ||
Expected volatility | 50.60% | 49.80% |
Risk-free interest rate | 2.63% | 2.84% |
Stock-Based Compensation - Empl
Stock-Based Compensation - Employee Stock Purchase Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jan. 01, 2019 | Dec. 31, 2018 | |
Stock Options | ||||||
Issuance of common stock for employee stock purchase plan | $ 637 | $ 637 | ||||
Common stock, issued (in shares) | 23,900,730 | 23,900,730 | 23,401,675 | |||
Total stock-based compensation | $ 1,389 | $ 269 | $ 2,780 | $ 324 | ||
Employee Stock Purchase Plan | ||||||
Stock Options | ||||||
Number of shares reserved for issuance (in shares) | 444,083 | 444,083 | 277,362 | |||
Number of additional shares reserved for issuance, maximum (in shares) | 184,908 | |||||
Number of additional shares reserved for issuance, percentage, maximum | 1.00% | |||||
Issuance of common stock for employee stock purchase plan | $ 600 | |||||
Common stock, issued (in shares) | 18,187 | 18,187 | ||||
Total stock-based compensation | $ 100 | $ 0 | $ 200 | $ 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Operating Loss Carryforwards [Line Items] | ||
Unrecognized tax benefits | $ 0 | $ 0 |
Federal | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | 124,700,000 | |
State | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | 115,300,000 | |
R&D credit | ||
Operating Loss Carryforwards [Line Items] | ||
Credit carryforwards | $ 1,900,000 |
Segment Reporting and Revenue_3
Segment Reporting and Revenue Disaggregation (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)segment | Jun. 30, 2018USD ($) | |
Segment Reporting [Abstract] | ||||
Number of reporting segments | segment | 1 | |||
Segment Reporting and Significant Customers | ||||
Revenue | $ 18,032 | $ 10,938 | $ 34,282 | $ 20,980 |
United States | ||||
Segment Reporting and Significant Customers | ||||
Revenue | 15,754 | 9,529 | 30,109 | 18,272 |
Europe | ||||
Segment Reporting and Significant Customers | ||||
Revenue | $ 2,278 | $ 1,409 | $ 4,173 | $ 2,708 |
Loss Per Share (Details)
Loss Per Share (Details) - shares | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Loss Per Share | ||
Antidilutive securities excluded from computation of diluted weighted average shares outstanding (in shares) | 2,371,654 | 2,295,891 |
Common stock warrants | ||
Loss Per Share | ||
Antidilutive securities excluded from computation of diluted weighted average shares outstanding (in shares) | 6,595 | 100,558 |
Common stock options outstanding | ||
Loss Per Share | ||
Antidilutive securities excluded from computation of diluted weighted average shares outstanding (in shares) | 2,365,059 | 2,195,333 |