Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 28, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-38593 | ||
Entity Registrant Name | Establishment Labs Holdings Inc. | ||
Entity Incorporation, State or Country Code | D8 | ||
Entity Address, Address Line One | Building B15 and 25 | ||
Entity Address, Address Line Two | Coyol Free Zone | ||
Entity Address, City or Town | Alajuela | ||
Entity Address, Country | CR | ||
Country Region | 506 | ||
City Area Code | 24 | ||
Local Phone Number | 34 2400 | ||
Title of 12(b) Security | Common Shares, No Par Value | ||
Trading Symbol | ESTA | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 976,531,406 | ||
Entity Common Stock, Shares Outstanding | 24,418,129 | ||
Documents Incorporated by Reference | Portions of the Registrant’s definitive proxy statement relating to its 2023 annual meeting of shareholders (the “2023 Proxy Statement”) are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. The 2023 Proxy Statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates. | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001688757 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | Marcum LLP |
Auditor Firm ID | 688 |
Auditor Location | Los Angeles, CA |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash | $ 66,355 | $ 53,415 |
Accounts receivable, net of allowance for doubtful accounts of $741 and $1,221 | 35,423 | 24,437 |
Inventory, net | 36,583 | 28,407 |
Prepaid expenses and other current assets | 11,543 | 7,012 |
Total current assets | 149,904 | 113,271 |
Long-term assets: | ||
Property and equipment, net of accumulated depreciation | 51,092 | 18,658 |
Goodwill | 465 | 465 |
Intangible assets, net of accumulated amortization | 4,608 | 4,371 |
Right-of-use operating lease assets, net | 3,702 | 2,206 |
Other non-current assets | 1,290 | 558 |
Total assets | 211,061 | 139,529 |
Current liabilities: | ||
Accounts payable | 20,034 | 14,475 |
Accrued liabilities | 17,237 | 16,236 |
Other liabilities, short-term | 1,688 | 1,178 |
Total current liabilities | 38,959 | 31,889 |
Long-term liabilities: | ||
Note payable, Oaktree, net of debt discount and issuance costs | 175,461 | 0 |
Note payable, Madryn, net of debt discount and issuance costs | 0 | 51,906 |
Madryn put option | 0 | 703 |
Operating lease liabilities, non-current | 3,200 | 1,900 |
Other liabilities, long-term | 1,626 | 2,392 |
Total liabilities | 219,246 | 88,790 |
Commitments and contingencies (Note 15) | ||
Shareholders’ (deficit) equity: | ||
Common shares - zero par value, unlimited amount of shares authorized at December 31, 2022 and 2021; 24,815,908 and 24,488,335 shares issued at December 31, 2022 and 2021, respectively; 24,407,838 and 24,080,265 shares outstanding at December 31, 2022 and 2021, respectively | 223,637 | 219,737 |
Additional paid-in-capital | 49,911 | 36,584 |
Treasury shares, at cost, 408,070 shares held at December 31, 2022 and 2021 | (2,854) | (2,854) |
Accumulated deficit | (281,594) | (206,385) |
Accumulated other comprehensive income | 2,715 | 3,657 |
Total shareholders’ (deficit) equity | (8,185) | 50,739 |
Total liabilities and shareholders’ equity | $ 211,061 | $ 139,529 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||||
Allowance for doubtful accounts | $ 741 | $ 1,221 | $ 1,143 | $ 1,026 |
Common stock, shares issued (in shares) | 24,815,908 | 24,488,335 | ||
Common stock, shares outstanding (in shares) | 24,407,838 | 24,080,265 | ||
Treasury stock, shares held (in shares) | 408,070 | 408,070 |
Consolidated Statement of Opera
Consolidated Statement of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
Revenue | $ 161,700 | $ 126,682 | $ 84,676 |
Cost of revenue | 55,105 | 41,278 | 32,174 |
Gross profit | 106,595 | 85,404 | 52,502 |
Operating expenses: | |||
Sales, general and administrative | 125,984 | 92,229 | 66,625 |
Research and development | 20,269 | 18,315 | 13,793 |
Total operating expenses | 146,253 | 110,544 | 80,418 |
Loss from operations | (39,658) | (25,140) | (27,916) |
Interest income | 87 | 23 | 15 |
Interest expense | (11,760) | (9,062) | (9,373) |
Change in fair value of derivative instruments | 703 | 737 | 1,632 |
Change in fair value of contingent consideration | 0 | 0 | 304 |
Loss on extinguishment of debt | (19,019) | 0 | 0 |
Other expense, net | (3,177) | (6,270) | (2,679) |
Loss before income taxes | (72,824) | (39,712) | (38,017) |
Provision for income taxes | (2,385) | (1,427) | (104) |
Net loss | $ (75,209) | $ (41,139) | $ (38,121) |
Basic net loss per share (in dollars per share) | $ (3.08) | $ (1.72) | $ (1.63) |
Diluted net loss per share (in dollars per share) | $ (3.08) | $ (1.72) | $ (1.63) |
Weighted average common shares outstanding, basic (in shares) | 24,457,793 | 23,972,722 | 23,316,102 |
Weighted average common shares outstanding, diluted (in shares) | 24,457,793 | 23,972,722 | 23,316,102 |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (75,209) | $ (41,139) | $ (38,121) |
Other comprehensive income: | |||
Foreign currency translation gain (loss) | (942) | 784 | 2,182 |
Other comprehensive gain (loss) | (942) | 784 | 2,182 |
Comprehensive loss | $ (76,151) | $ (40,355) | $ (35,939) |
Consolidated Statements of Shar
Consolidated Statements of Shareholders’ Equity - USD ($) $ in Thousands | Total | Common Shares | Treasury Shares | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income |
Beginning balance, common stock (in shares) at Dec. 31, 2019 | 21,057,040 | |||||
Beginning balance at Dec. 31, 2019 | $ 39,614 | $ 147,688 | $ (2,854) | $ 21,214 | $ (127,125) | $ 691 |
Beginning balance, treasury stock (in shares) at Dec. 31, 2019 | (408,070) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock, net of underwriters' discount and issuance costs (in shares) | 2,628,571 | |||||
Issuance of common stock, net of underwriters’ discount and issuance costs | 63,855 | $ 63,855 | ||||
Issuance of common shares in settlement of contingent consideration (in shares) | 33,334 | |||||
Issuance of common shares in settlement of contingent consideration | 618 | $ 618 | ||||
Stock option exercises (in shares) | 143,402 | |||||
Stock option exercises | 1,246 | $ 1,246 | ||||
Share-based compensation (in shares) | 70,910 | |||||
Share-based compensation | 5,721 | $ 71 | 5,650 | |||
Shares withheld to cover income tax obligation upon vesting of restricted stock (in shares) | (7,468) | |||||
Shares withheld to cover income tax obligation upon vesting of restricted stock | (154) | $ (7) | (147) | |||
Foreign currency translation gain (loss) | 2,182 | 2,182 | ||||
Net loss | (38,121) | (38,121) | ||||
Ending balance, common stock (in shares) at Dec. 31, 2020 | 23,925,789 | |||||
Ending balance at Dec. 31, 2020 | 74,961 | $ 213,471 | $ (2,854) | 26,717 | (165,246) | 2,873 |
Ending balance, treasury stock (in shares) at Dec. 31, 2020 | (408,070) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock option exercises (in shares) | 521,316 | |||||
Stock option exercises | 6,085 | $ 6,226 | (141) | |||
Shares withheld to cover strike price upon cashless option exercise (in shares) | (1,879) | |||||
Shares withheld to cover strike price upon cashless option exercise | (3) | $ (3) | ||||
Share-based compensation (in shares) | 48,124 | |||||
Share-based compensation | 10,407 | $ 48 | 10,359 | |||
Shares withheld to cover income tax obligation upon vesting of restricted stock (in shares) | (5,015) | |||||
Shares withheld to cover income tax obligation upon vesting of restricted stock | (356) | $ (5) | (351) | |||
Foreign currency translation gain (loss) | 784 | 784 | ||||
Net loss | $ (41,139) | (41,139) | ||||
Ending balance, common stock (in shares) at Dec. 31, 2021 | 24,488,335 | 24,488,335 | ||||
Ending balance at Dec. 31, 2021 | $ 50,739 | $ 219,737 | $ (2,854) | 36,584 | (206,385) | 3,657 |
Ending balance, treasury stock (in shares) at Dec. 31, 2021 | 408,070 | (408,070) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock option exercises (in shares) | 301,412 | 301,412 | ||||
Stock option exercises | $ 3,873 | $ 3,873 | 0 | |||
Share-based compensation (in shares) | 21,537 | |||||
Share-based compensation | 13,358 | $ 22 | 13,336 | |||
Shares withheld to cover income tax obligation upon vesting of restricted stock (in shares) | (79) | |||||
Shares withheld to cover income tax obligation upon vesting of restricted stock | (4) | (4) | ||||
Foreign currency translation gain (loss) | (942) | (942) | ||||
Net loss | $ (75,209) | (75,209) | ||||
Ending balance, common stock (in shares) at Dec. 31, 2022 | 24,815,908 | 24,815,908 | ||||
Ending balance at Dec. 31, 2022 | $ (8,185) | $ 223,637 | $ (2,854) | $ 49,911 | $ (281,594) | $ 2,715 |
Ending balance, treasury stock (in shares) at Dec. 31, 2022 | 408,070 | (408,070) |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Net loss | $ (75,209) | $ (41,139) | $ (38,121) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 3,870 | 3,718 | 3,348 |
Provision for doubtful accounts | 111 | 200 | 375 |
Provision for inventory obsolescence | 1,577 | 338 | 1,180 |
Provision for fixed asset obsolescence | 341 | 0 | 0 |
Provision for deferred income taxes | 86 | 7 | (274) |
Share-based compensation | 13,358 | 10,407 | 5,721 |
Loss from disposal of property and equipment | 229 | 170 | 170 |
Unrealized foreign currency loss, net | 1,732 | 4,200 | 2,386 |
Loss on extinguishment of debt | 19,019 | 0 | 0 |
Amortization of right-to-use asset | 469 | 406 | 363 |
Gain from write-off of liability | (1,866) | (736) | 0 |
Change in fair value of derivative instruments | (703) | (737) | (1,632) |
Change in fair value of contingent consideration | 0 | 0 | (304) |
Interest capitalized for construction in progress | (1,762) | 0 | 0 |
Amortization of debt discount | 8,124 | 2,074 | 1,690 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (12,333) | (6,695) | 3,805 |
Inventory | (10,900) | (7,644) | 4,786 |
Prepaid expenses and other current assets | (4,489) | (1,611) | 1,130 |
Other assets | (750) | 90 | (277) |
Accounts payable | 4,376 | 4,959 | (636) |
Accrued liabilities | 2,815 | 4,726 | 3,108 |
Operating lease liabilities | (378) | (408) | (318) |
Other liabilities | 117 | 143 | 990 |
Net cash used in operating activities | (52,166) | (27,532) | (12,510) |
Cash flows from investing activities: | |||
Purchases of property and equipment | (2,851) | (2,425) | (2,106) |
Cash used in asset acquisitions | (525) | (434) | (1,652) |
Cost incurred for intangible assets | (1,491) | (1,447) | (1,484) |
Capital expenditures on construction in progress | (29,924) | (2,857) | (317) |
Net cash used in investing activities | (34,791) | (7,163) | (5,559) |
Cash flows from financing activities: | |||
Borrowings under Oaktree debt agreement, net of debt discount and issuance costs | 168,093 | 0 | 0 |
Repayment of Madryn debt agreement | (71,681) | 0 | 0 |
Repayments on finance leases | (26) | (175) | (277) |
Proceeds from issuance of common shares, net of underwriters’ discount and issuance costs | 0 | 0 | 63,855 |
Proceeds from stock option exercises | 3,873 | 4,583 | 1,246 |
Tax payments related to shares withheld upon vesting of restricted stock | (4) | (356) | (154) |
Net cash provided by financing activities | 100,255 | 4,052 | 64,670 |
Effect of exchange rate changes on cash | (358) | (465) | 267 |
Net (decrease)/increase in cash | 12,940 | (31,108) | 46,868 |
Cash at beginning of period | 53,415 | 84,523 | 37,655 |
Cash at end of period | 66,355 | 53,415 | 84,523 |
Supplemental disclosures: | |||
Cash paid for interest | 5,363 | 6,927 | 6,962 |
Cash paid for income taxes | 2,125 | 652 | 316 |
Supplemental disclosures of non-cash investing and financing activities: | |||
Unpaid balance for property and equipment | 1,129 | 22 | 210 |
Consideration payable related to asset acquisition | 0 | 546 | 858 |
Inventory acquired in an asset acquisition | 0 | 0 | 1,009 |
Issuance of common shares in settlement of contingent consideration | 0 | 0 | 618 |
Intangible assets acquired in an asset acquisition | 0 | 0 | 138 |
Cashless option exercises | 0 | 1,640 | 0 |
Interest capitalized for construction in progress | $ 1,762 | $ 0 | $ 0 |
Formation and Business of the C
Formation and Business of the Company | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Formation and Business of the Company | Formation and Business of the Company Formation and Business of the Company Establishment Labs Holdings Inc. and its wholly owned subsidiaries, or the Company, is a global company that manufactures and markets innovative medical devices for aesthetic and reconstructive plastic surgery. The Company was established in the British Virgin Islands on October 9, 2013, at which time Establishment Labs, S.A., the Costa Rican manufacturing company, was reincorporated as a wholly-owned subsidiary. As of December 31, 2022, the Company also has wholly-owned subsidiaries in the United States (JAMM Technologies, Inc. and Motiva USA LLC), Brazil (Establishment Labs Produtos para Saude Ltda), Belgium (European Distribution Center Motiva BVBA), France (Motiva Implants France SAS), Sweden (Motiva Nordica AB), Switzerland (JEN-Vault AG), the United Kingdom (Motiva Implants UK Limited), Italy (Motiva Italy S.R.L), Spain (Motiva Implants Spain, S.L.), Austria (Motiva Austria GmbH), Germany (Motiva Germany GmbH) and Argentina (Motiva Argentina S.R.L). Substantially all of the Company’s revenues are derived from the sale of silicone gel-filled breast implants, branded as Motiva Implants. The main manufacturing activities are conducted at two manufacturing facilities in Costa Rica. In 2010, the Company began operating under the Costa Rica free zone regime (Régimen de Zona Franca), which provides for reduced income tax and other tax obligations pursuant to an agreement with the Costa Rican authorities. The Company’s products are approved for sale in Europe, the Middle East, Latin America, and Asia. The Company sells its products internationally through a combination of distributors and direct sales to customers. The Company is pursuing regulatory approval to commercialize its products in the United States. The Company received approval for an investigational device exemption, or IDE, from the United States Food and Drug Administration, or FDA, in March 2018 to initiate a clinical trial in the United States for its Motiva Implants. In August 2019, the Company completed all patient surgeries for the IDE aesthetic cohorts, which include primary augmentation and revision. In the fourth quarter of 2021, the Company initiated a modular pre-market approval, or PMA, submission process with FDA and submitted the first of four expected modules. In April 2022, the Company released preliminary results of the two-year patient follow-up data for the primary augmentation cohort of its IDE clinical trial. The second module was submitted in May 2022. In June 2022, full enrollment of the IDE clinical trial was complete, and all surgeries in the primary reconstruction cohort were performed. In August 2022, the third module was submitted to the FDA. By June 30, 2022, the Company completed the three-year study subject follow-up for the aesthetic cohort. The final fourth module was submitted to the FDA in February 2023. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation and Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, and the applicable rules and regulations of the Securities and Exchange Commission, or SEC. The consolidated financial statements include the Company’s accounts and those of its wholly owned subsidiaries as of December 31, 2022 as follows: Subsidiary Incorporation/Acquisition Date Establishment Labs, S.A. (Costa Rica) January 18, 2004 Motiva USA, LLC (USA) February 20, 2014 JAMM Technologies, Inc. (USA) October 27, 2015 Establishment Labs Produtos par Saude Ltda (Brazil) January 4, 2016 European Distribution Center Motiva BVBA (Belgium) March 4, 2016 Motiva Implants France SAS (France) September 12, 2016 JEN-Vault AG (Switzerland) November 22, 2016 Motiva Nordica AB (Sweden) November 2, 2017 Motiva Implants UK Limited (the United Kingdom) July 31, 2018 Motiva Italy S.R.L (Italy) July 31, 2018 Motiva Implants Spain, S.L. (Spain) January 3, 2019 Motiva Austria GmbH (Austria) January 14, 2019 Motiva Germany GmbH (Germany) August 1, 2019 Motiva Argentina S.R.L. (Argentina) February 7, 2020 All intercompany accounts and transactions have been eliminated in consolidation. Segments The chief operating decision maker for the Company is the Chief Executive Officer. The Chief Executive Officer reviews financial information presented on a consolidated basis, accompanied by information about revenue by geographic region, for purposes of allocating resources and evaluating financial performance. The Company has one business activity and there are no segment managers who are held accountable for operations, operating results or plans for levels or components below the consolidated unit level. Accordingly, the Company has determined that it has a single reportable and operating segment structure. The Company and its Chief Executive Officer evaluate performance based primarily on revenue in the geographic regions in which the Company operates. Geographic Concentrations The Company derives all its revenues from sales to customers in Europe, the Middle East, Latin America, and Asia, and has not yet received approval to sell its products in the United States. For the years ended December 31, 2022, 2021 and 2020, Brazil accounted for 16.6%, 11.6% and 10.9%, respectively, of consolidated revenue and no other individual country exceeded 10% of consolidated revenue, on a ship-to destination basis. The majority of the Company’s consolidated total assets, including cash and tangible assets, is held in the United States. The Company’s long-lived assets, which primarily consist of property and equipment and intangible assets located in Costa Rica represented 88% and 84% of the total long-lived assets as of December 31, 2022 and 2021 , respectively. Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant accounting estimates and management judgments reflected in the consolidated financial statements include items such as accounts receivable valuation and allowances, inventory valuation and allowances, valuation of acquired intangible assets, valuation of derivatives and valuation of deferred income tax assets, including tax valuation allowances. Estimates are based on historical experience, where applicable, and other assumptions believed to be reasonable by management. Actual results may differ from those estimates under different assumptions or conditions. Concentration of Credit Risk and Other Risks and Uncertainties Financial instruments that potentially subject the Company to a concentration of credit risk consist principally of cash and accounts receivable. The majority of the Company’s cash is held at two financial institutions in the United States. Balances in the Company’s cash accounts exceed the Federal Deposit Insurance Corporation, or FDIC, limit of $250,000. The Company has not experienced any losses to its deposits of cash. All of the Company’s revenue has been derived from sales of its products in international markets, principally Europe, the Middle East, Latin America, and Asia. In the international markets in which the Company operates, the Company uses a combination of distributors and makes direct sales to customers. The Company performs ongoing credit evaluations of its distributors and customers, does not require collateral, and maintains allowances for potential credit losses on customer accounts when deemed necessary. Substantially all of the Company’s revenues were derived from the sale of Motiva Implants. During the years ended December 31, 2022, 2021 and 2020, no customer accounted for more than 10% of the Company’s revenue. One customer accounted for 11.5% and 11.8% of the Company’s trade accounts receivable balance as of December 31, 2022 and 2021, respectively. The Company relies on Avantor, Inc. (formerly NuSil Technology, LLC) as the sole supplier of medical-grade silicone used in Motiva Implants. During the years ended December 31, 2022, 2021 and 2020, the Company had purchases of $32.1 million, or 38.2% of total purchases, $23.1 million, or 51.4% of total purchases, and $15.3 million or 66.7% of total purchases, respectively, from Avantor. As of December 31, 2022 and 2021, the Company had an outstanding balance owed to this vendor of $5.6 million and $2.5 million, respectively. The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, unfavorable economic conditions, uncertainty of regulatory approval of the Company’s current and potential future products, uncertainty of market acceptance of the Company’s products, competition from substitute products and larger companies, securing and protecting proprietary technology, access to capital, strategic relationships and dependence on key individuals and sole source suppliers. Products developed by the Company require clearances from the FDA or other international regulatory agencies prior to commercial sales. There can be no assurance that the products will receive the necessary clearances. If the Company is denied clearance, clearance is delayed, or the Company is unable to maintain its existing clearances, these developments could have a material adverse impact on the Company. The COVID-19 outbreak caused a material disruption of the operations of the Company and its suppliers and customers in fiscal 2020, and to a lesser degree, 2021 and resulted in delayed clinical trial enrollment within the reconstruction cohort of its IDE clinical trial in the United States. However, to date, the impact from the COVID-19 outbreak has not had a material effect on the Company’s liquidity or financial position. The full extent of any future impact of the continuing outbreak, related business and travel restrictions, and changes to behavior intended to reduce its spread is uncertain and continues to evolve globally. Management continues to monitor the impact that the COVID-19 pandemic is having on the Company, the breast aesthetics and reconstruction market and the economies in which the Company operates. Cash The Company’s cash consists of cash maintained in checking and interest-bearing accounts. The majority of the Company’s cash is held at two financial institutions in the United States. The Company accounts for financial instruments with original maturities of three months or less at the date of purchase as cash equivalents. The Company held no cash equivalents as of December 31, 2022 and 2021. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable is stated at invoice value less estimated allowances for returns and doubtful accounts. The Company continually monitors customer payments and maintains an allowance for estimated losses resulting from customers’ inability to make required payments. In evaluating the Company’s ability to collect outstanding receivable balances, the Company considers various factors including the age of the balance, the creditworthiness of the customer, which is assessed based on ongoing credit evaluations and payment history, and the customer’s current financial condition. In cases where there are circumstances that may impair a specific customer’s ability to meet its financial obligations, an allowance is recorded against amounts due, which reduces the net recognized receivable to the amount reasonably believed to be collectible. A roll-forward of the allowance for doubtful accounts is as follows: Year Ended December 31, 2022 2021 2020 Beginning balance $ 1,221 $ 1,143 $ 1,026 Provision for doubtful accounts 111 200 375 Write-offs (591) (122) (258) Ending balance $ 741 $ 1,221 $ 1,143 Inventory and Cost of Revenue Inventory is stated at the lower of cost to purchase or manufacture the inventory or the net realizable value of such inventory. Cost is determined using the standard cost method which approximates actual costs using the first-in, first-out basis. The Company regularly reviews inventory quantities considering actual losses, projected future demand, and remaining shelf life to record a provision for excess and slow-moving inventory. A roll-forward of the inventory reserve is as follows: Year Ended December 31, 2022 2021 2020 Beginning balance $ 1,167 $ 1,625 $ 347 Provision for inventory obsolescence 1,577 338 1,180 Write-offs (95) (796) 98 Ending balance $ 2,649 $ 1,167 $ 1,625 The Company recognizes the cost of inventory transferred to the customer in cost of revenue when revenue is recognized. Leases The Company determines if an arrangement is, or contains, a lease at the inception date of the contract. The Company has elected an expedient to account for each separate lease component and its associated non-lease components as a single lease component for the majority of its asset classes. The lease term may include periods covered by options to extend or terminate the lease when it is reasonably certain that the Company will exercise a renewal option, or reasonably certain it will not exercise an early termination option. The Company recognizes lease liabilities and right-of-use, or ROU, assets upon commencement for all material leases with a term greater than 12 months. The Company has elected an expedient not to recognize leases with a lease term of 12 months or less on the balance sheet. These short-term leases are expensed on a straight-line basis over the lease term. Shipping and Handling Costs Shipping and handling costs are expensed as incurred and are included in selling, general and administrative, or SG&A, expenses. For the years ended December 31, 2022 , 2021 and 2020 , shipping and handling costs were $9.0 million, $5.3 million and $3.2 million, respectively. Revenue Recognition The Company recognizes revenue related to sales of products to distributors or directly to customers in markets where it has regulatory approval, net of discounts and allowances. The Company recognizes revenue in accordance with Accounting Standards Codification, or ASC, Revenue from Contracts with Customers (Topic 606) . ASC 606 requires the Company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The Company recognizes revenue related to the sales of products to distributors at the time of shipment of the product, which represents the point in time when the distributor has taken ownership and assumed the risk of loss, and the required revenue recognition criteria are satisfied. The Company’s distributors are obligated to pay within specified terms regardless of when, or if, they sell the products. The Company’s contracts with distributors typically do not contain right of return or price protection and have no post-delivery obligations. The Company recognizes revenue when title to the product and risk of loss transfer to customers, provided there are no remaining performance obligations required of the Company or any written matters requiring customer acceptance. The Company allows for the return of product from direct customers in certain regions in limited instances within fifteen days after the original sale and records estimated sales returns as a reduction of sales in the same period revenue is recognized. Appropriate reserves are established for anticipated sales returns based on historical experience, recent gross sales and any notification of pending returns. Actual sales returns in any future period are inherently uncertain and thus may differ from the estimates. If actual sales returns differ significantly from the estimates, an adjustment to revenue in the current or subsequent period is recorded. As of December 31, 2022, 2021 and 2020, allowance for product returns was de minimis. A portion of the Company’s revenue is generated from the sale of consigned inventory maintained at physician, hospital, or clinic locations. For these products, revenue is recognized at the time the Company is notified by the consignee that the product has been implanted, not when the consigned products are delivered to the consignee’s warehouse. Revenue was generated in these primary geographic markets: Year Ended December 31, 2022 2021 2020 (in thousands) Europe $ 48,702 $ 51,912 $ 37,667 Latin America 52,442 38,226 21,512 Asia-Pacific/Middle East 59,561 35,679 24,986 Other 994 865 511 $ 161,700 $ 126,682 $ 84,676 The Company has a limited warranty for the shelf life of breast implants, which is five years from the time of manufacture. Estimated warranty obligations are recorded at the time of sale. The Company also offers a warranty to patients in the event of rupture and a replacement program for capsular contracture events, provided certain registration requirements are met. Revenue for extended warranties is recognized ratably over the term of the agreement. To date, these warranty and program costs have been de minimis. The Company will continue to evaluate the warranty reserve policies for adequacy considering claims history. Deferred revenue primarily consists of payments received in advance of meeting revenue recognition criteria. The Company has received payments from distributors to provide distribution exclusivity within a geographic area and recognizes deferred revenue on a ratable basis over the term of such contractual distribution relationship. Additionally, the Company has received payments from customers in direct markets prior to surgical implantation and recognizes deferred revenue at the time the Company is notified by the customer that the product has been implanted. For all arrangements, any revenue that has been deferred and is expected to be recognized beyond one year is classified as long-term deferred revenue and included in “Other liabilities, long-term” on the consolidated balance sheets (see Note 3). Research and Development Costs related to research and development, or R&D, activities are expensed as incurred. R&D costs primarily include personnel costs, materials, clinical expenses, regulatory expenses, product development, consulting services, and outside research activities, all of which are directly related to research and development activities. The Company estimates IDE clinical trial expenses based on the services performed, pursuant to contracts with research institutions and clinical research organizations that conduct and manage clinical trials on its behalf. In accruing service fees, the Company estimates the time period over which services will be performed and the level of patient enrollment and activity expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, the Company will adjust the accrual accordingly. Selling, General and Administrative Expenses SG&A expenses include sales and marketing costs, payroll and related benefit costs, insurance expenses, shipping and handling costs, legal and professional fees and administrative overhead. Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Following the exercise of its option to purchase its manufacturing facility in June 2019, the Company depreciates the owned building on a straight-line basis over 50 years of useful life. Depreciation of property and equipment is computed using the straight-line method over the assets’ estimated useful lives of five Goodwill and Intangible Assets The Company records the excess of the acquisition purchase price over the net fair value of the tangible and identifiable intangible assets acquired and liabilities assumed as goodwill. In accordance with ASC 350, Intangibles - Goodwill and Other, the Company tests goodwill for impairment annually during the fourth quarter of each year and whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. In connection with the annual impairment test for goodwill, the Company elected the option to perform a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If the Company determines that it was more likely than not that the fair value of the reporting unit is less than its carrying amount, then the impairment test is performed. Consistent with the Company's assessment that it has only one reporting segment, the Company has determined that it has only one reporting unit and tests goodwill for impairment at the entity level using the two-step process required by ASC 350. In the first step, the Company compares the carrying amount of the reporting unit to the fair value of the enterprise. If the fair value of the enterprise exceeds the carrying value, goodwill is not considered impaired and no further testing is required. If the carrying value of the enterprise exceeds the fair value, goodwill is potentially impaired, and the second step of the impairment test must be performed. In the second step, the Company compares the implied fair value of the goodwill, as defined by ASC 350, to its carrying amount to determine the impairment loss, if any. The Company capitalizes certain costs related to intangible assets, such as patents, trademarks and software development costs. The Company follows the provisions of ASC 350-40, Internal Use Software for determining whether computer software is internal-use software and on accounting for the proceeds of computer software originally developed or obtained for internal use. The Company expenses all costs incurred during the preliminary project stage of software development and capitalizes the costs incurred during the application development stage. Costs incurred relating to upgrades and enhancements to the software are capitalized if it is determined that these upgrades or enhancements add additional functionality to the software. Costs incurred to improve and support products after they become available are charged to expense as incurred. The Company records purchased intangible assets at their respective estimated fair values at the date of acquisition. Purchased finite-lived intangible assets are being amortized using the straight-line method over their remaining estimated useful lives, which range from two During the years ended December 31, 2022, 2021 and 2020, there has been no impairment of goodwill or intangible assets based on the qualitative assessments performed by the Company. Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable. When such an event occurs, management determines whether there has been impairment by comparing the anticipated undiscounted future net cash flows to the related asset group’s carrying value. If an asset is considered impaired, the asset is written down to fair value, which is determined based either on discounted cash flows or appraised value, depending on the nature of the asset. There were no impairment charges, or changes in estimated useful lives recorded d uring the years ended December 31, 2022, 2021 and 2020. Debt and Embedded Derivatives The Company applies the accounting standards for derivatives and for distinguishing liabilities from equity when accounting for hybrid contracts. The Company accounts for convertible debt instruments when the Company has determined that the embedded conversion options should not be bifurcated from their host instruments in accordance with ASC 470-20 Debt with Conversion and Other Options (see Note 6). Prior to the extinguishment of debt outstanding under the Madryn Credit Agreement (as defined below), the Company used option pricing valuation models to determine the fair value of embedded derivatives and recorded any change in fair value in the consolidated statements of operations (see Note 5). Debt Issuance Costs and Debt Discounts Costs incurred in connection with the issuance of new debt are capitalized. Capitalizable debt issuance costs paid to third parties and debt discounts, net of amortization, are recorded as a reduction to the long-term debt balance on the consolidated balance sheets. Amortization expense on capitalized debt issuance costs and debt discounts related to loans are calculated using the effective interest method over the term of the loan commitment and is recorded as interest expense in the consolidated statements of operations. Income Taxes The Company records income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s consolidated financial statements or income tax returns. In estimating future tax consequences, expected future events, enactments or changes in the tax law or rates are considered. Valuation allowances are provided when necessary to reduce deferred tax assets to the amount expected to be realized. The Company operates in various tax jurisdictions and is subject to audit by various tax authorities. The Company records uncertain tax positions based on a two-step process whereby (1) a determination is made as to whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold the Company recognizes the largest amount of tax benefit that is greater than 50% likely to be realized upon ultimate settlement with the related tax authority. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. Significant judgment is required in the identification of uncertain tax positions and in the estimation of penalties and interest on uncertain tax positions. There were no material uncertain tax positions in the years ended December 31, 2022, 2021 and 2020. Foreign Currency The financial statements of the Company’s foreign subsidiaries whose functional currencies are the local currencies are translated into U.S. dollars for consolidation as follows: assets and liabilities at the exchange rate as of the balance sheet date, stockholders’ equity at the historical rates of exchange, and income and expense amounts at the average exchange rate for the period. Translation adjustments resulting from the translation of the subsidiaries’ accounts are included in “Accumulated other comprehensive income” as equity in the consolidated balance sheet. Transactions denominated in currencies other than the applicable functional currency are converted to the functional currency at the exchange rate on the transaction date. At period end, monetary assets and liabilities are remeasured to the functional currency using exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are remeasured at historical exchange rates. Gains and losses resulting from foreign currency transactions are included within “Other expense, net” in the consolidated statement of operations. For the years ended December 31, 2022, 2021 and 2020, foreign currency transaction loss amounted to $3.0 million, $5.6 million and $1.7 million, respectively. Comprehensive Loss The Company’s comprehensive loss consists of net loss and foreign currency translation adjustments arising from the consolidation of the Company’s foreign subsidiaries. Share-Based Compensation The Company measures and recognizes compensation expense for all share-based awards in accordance with the provisions of ASC 718, Stock Compensation . Share-based awards granted include stock options, restricted stock units, or RSUs, and restricted stock awards, or RSAs. Share-based compensation expense for RSUs and RSAs granted to employees is measured at the grant date based on the fair value of the awards and is recognized as an expense ratably on a straight-line basis over the requisite service period. The fair value of options to purchase shares is estimated on the grant date using the Black-Scholes option valuation model. The calculation of share-based compensation expense requires the Company to make assumptions and judgments about the variables used in the Black-Scholes model, including the expected term, expected volatility of the underlying common shares, risk-free interest rate and dividends. Net Income (Loss) Per Share Basic net income (loss) per share is calculated by dividing the net income (loss) attributable to shareholders by the weighted-average number of shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net income (loss) per share is computed by dividing the net income (loss) by the weighted-average number of shares and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, any shares issuable upon exercise of warrants, stock options and non-vested RSUs or RSAs outstanding under the Company’s equity plan are potentially dilutive securities. Diluted net loss per share is the same as basic net loss per share for periods where the Company reported a net loss because including the dilutive securities would be anti-dilutive. Recent Accounting Standards Periodically, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s consolidated financial statements upon adoption. Previously, under the Jumpstart Our Business Startups Act of 2012, or JOBS Act, the Company met the definition of an emerging growth company, and previously elected the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. The Company ceased to be an emerging growth company on December 31, 2021. The following recent accounting pronouncements issued by the FASB, could have a material effect on the Company’s financial statements: Recently Adopted Accounting Standards In August 2020, the FASB issued ASU No. 2020-06, Debt with Conversion and other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) . The new guidance eliminates the beneficial conversion and cash conversion accounting models for convertible instruments. It also amends the accounting for certain contracts in an entity’s own equity that are currently accounted for as derivatives because of specific settlement provisions. In addition, the new guidance modifies how particular convertible instruments and certain contracts that may be settled in cash or shares impact the diluted EPS computation. The Company adopted ASU No. 2020-06 as of January 1, 2022 and the adoption did not have a material impact on its consolidated financial statements and related disclosures. Recently Issued Accounting Standards There were no recently issued accounting standards not yet adopted which would have a material effect on the Company’s financial statements and related disclosures. |
Balance Sheet Accounts
Balance Sheet Accounts | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Accounts | Balance Sheet Accounts Inventory, Net December 31, 2022 2021 (in thousands) Raw materials $ 12,549 $ 8,519 Work in process 1,666 1,396 Finished goods 22,368 18,492 $ 36,583 $ 28,407 As of December 31, 2022 and 2021 , $2.0 million and $3.5 million of inventory was on consignment, respectively. Prepaid Expenses and Other Current Assets December 31, 2022 2021 (in thousands) Prepaid insurance $ 2,598 $ 2,315 Prepaid construction in process 2,240 330 Prepaid services 685 381 Prepaid taxes 1,400 551 Prepaid assets 991 158 Prepaid raw materials and accessories 433 577 Prepaid U.S. clinical trial costs 300 412 Prepaid warranty and distribution rights 238 516 Other 2,658 1,772 $ 11,543 $ 7,012 Property and Equipment, Net December 31, 2022 2021 (in thousands) Machinery and equipment $ 11,118 $ 10,240 Building improvements 7,006 6,713 Furniture and fixtures 5,645 4,761 Building 2,472 2,472 Leasehold improvements 2,233 2,118 Land 802 802 Vehicles 176 268 Construction in process 35,261 3,174 Total 64,713 30,548 Less: Accumulated depreciation and amortization (13,621) (11,890) $ 51,092 $ 18,658 For the years ended December 31, 2022, 2021 and 2020 , depreciation and amortization expense related to property and equipment was $2.5 million, $2.5 million and $2.4 million , respectively. In August 2021, the Company entered into a contract with the Zona Franca Coyol, S.A., or CFZ, to begin construction of a new manufacturing facility in Costa Rica. The costs for improvement of the land and construction of a cold shell building are being paid for by CFZ while the Company is paying for internal improvements and customization. Upon completion, the Company had the option to purchase the title to the land and cold shell building for approximately $12.6 million or to lease the facility at a to be determined price. Subject to purchase of Accrued Liabilities Accrued liabilities consisted of the following: December 31, 2022 2021 (in thousands) Performance bonus $ 5,245 $ 3,346 Payroll and related expenses 4,097 3,904 Bonus feature of stock option grants 4,500 5,570 Operating lease liabilities - current 688 402 Commissions 712 1,138 Professional and legal services 1,203 819 Warranty reserve 130 167 Cash payable for asset acquisitions - contingent consideration — 137 Other 662 753 $ 17,237 $ 16,236 Other Liabilities, Short-Term Other liabilities, short-term consisted of the following: December 31, 2022 2021 (in thousands) Deferred revenue 1,688 769 Cash payable for asset acquisitions — 409 $ 1,688 $ 1,178 Other Liabilities, Long-Term Other liabilities, long-term consisted of the following: December 31, 2022 2022 (in thousands) Deferred revenue $ 1,670 $ 2,392 Other (44) — $ 1,626 $ 2,392 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. Intangible assets resulting from the acquisitions of entities accounted for using the acquisition method of accounting are recorded at the estimated fair value of the assets acquired. Purchased intangibles include certain patents and license rights, 510(k) authorization by the FDA to sell a medical device and other intangible assets. The Company’s goodwill and most intangibles at December 31, 2022 are the result of previous asset and business acquisitions. Finite-lived intangibles are amortized over their estimated useful lives based on expected future benefit. In addition to the intangibles acquired, the Company capitalized certain patent and license rights as identified intangibles based on patent and license rights agreements entered into over the past several years. Additionally, the Company capitalized certain software development costs. There were no changes in the carrying amount of goodwill during the year ended December 31, 2022: Balance as of January 1, 2022 Additions Accumulated Impairment Losses Balance as of December 31, 2022 (in thousands) Goodwill $ 465 $ — $ — $ 465 The carrying amounts of these intangible assets other than goodwill as of December 31, 2022 were as follows: Gross Carrying Amount Accumulated Amortization Net Carrying Amount Estimated Useful Lives (in thousands) (in years) Patents and license rights $ 1,757 $ (1,321) $ 436 7-12 Customer relationships 2,033 (1,967) 66 4-10 510(k) authorization 567 (269) 298 15 Developed technology 62 (58) 4 10 Capitalized software development costs 5,001 (1,630) 3,371 2-5 Other 183 (41) 142 2-5 Capitalized patents and license rights not yet amortized 291 — 291 $ 9,894 $ (5,286) $ 4,608 The carrying amounts of intangible assets other than goodwill as of December 31, 2021 were as follows: Gross Carrying Amount Accumulated Amortization Net Carrying Amount Estimated Useful Lives (in thousands) (in years) Patents and license rights $ 1,736 $ (1,136) $ 600 7-12 Customer relationships 2,033 (1,799) 234 4-10 510(k) authorization 567 (232) 335 15 Developed technology 62 (52) 10 10 Capitalized software development costs 3,648 (791) 2,857 2-5 Other 75 (31) 44 2-5 Capitalized patents and license rights not yet amortized 291 — 291 $ 8,412 $ (4,041) $ 4,371 The amortization expense associated with intangible assets was $1.2 million, $1.2 million and $0.9 million for the years ended December 31, 2022, 2021 and 2020, respectively. Non-product related amortization is recorded in SG&A while product related amortization is recorded in cost of revenue. As of December 31, 2022, the amortization expense related to identifiable intangible assets, with definite useful lives, in future periods is expected to be as follows: Year Ending December 31, (in thousands) 2023 $ 1,160 2024 1,071 2025 943 2026 481 2027 285 Thereafter 377 Total $ 4,317 The Company evaluates the recoverability of goodwill and indefinite-lived intangible assets annually and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. As of December 31, 2022, there has been no impairment of goodwill or intangible assets based on the qualitative assessments performed by the Company. As of December 31, 2022, no triggering events have occurred which would indicate that the acquired intangible asset values may not be recoverable. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The carrying value of the Company’s cash, accounts receivable and accounts payable approximate fair value due to the short-term nature of these items. Embedded derivatives that qualify for liability treatment are carried at fair value and re-measured at each reporting period. Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy defines a three-level valuation hierarchy for disclosure of fair value measurements as follows: ▪ Level I Unadjusted quoted prices in active markets for identical assets or liabilities; ▪ Level II Inputs other than quoted prices included within Level I that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and ▪ Level III Unobservable inputs that are supported by little or no market activity for the related assets or liabilities. The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy at period end: Fair Value Measurements at December 31, 2022 Total Level 1 Level 2 Level 3 (in thousands) Liabilities Madryn put option liability $ — $ — $ — $ — $ — $ — $ — $ — Fair Value Measurements at December 31, 2021 Total Level 1 Level 2 Level 3 (in thousands) Liabilities Madryn put option liability $ 703 $ — $ — $ 703 $ 703 $ — $ — $ 703 The fair value measurement of derivatives is based on significant inputs not observed in the market and thus represents a Level 3 measurement. In August 2017, the Company entered into a credit agreement, or the Madryn Credit Agreement, with Madryn Health Partners, LP, or Madryn, as administrative agent, and a syndicate of lenders (see Note 6). The Company determined that the Madryn Credit Agreement contained put options related to early redemption mandatory prepayment terms in case of change in control or an event of default and a call option related to voluntary repayment option. The Company allocated a fair value of $15.1 million for these identified embedded derivatives as a debt discount on the original commitment date. An additional $5.0 million and $1.6 million debt discount was recorded on respective borrowing dates when the Company met the required milestones and borrowed an additional $10.0 million in 2017 and $25.0 million in 2019. The Company revalued the options as of each reporting period and recorded the change in the fair value in the consolidated statement of operations as other income or expense. On April 26, 2022, the Company repaid in full the $65.0 million in aggregate principal amount outstanding under the Madryn Credit Agreement, and the Madryn Credit Agreement, including the corresponding derivatives, was terminated. Valuation of the embedded derivatives is complex and requires interest rate simulation, capturing optimal decision-making process as interest rate fluctuates, and estimating the resultant bond valuation and the resultant pay-off to the option holder. Prior to the repayment and termination of the Madryn debt, the Company estimated the fair value of the embedded redemption options based on a “with” and “without” approach using the Black-Derman-Toy model, a form of the Binomial Lattice Model that captures interest rate variability and the prepayment optionality. The Binomial Lattice Model allows for the possibility of exercise before the end of the option’s life and considers future interest rates, volatility and other data with regards to the Company’s credit rating and credit spread. The value of the embedded derivatives was based on the difference between the “with” and “without” analysis. The probability of a change in control occurring was determined to be 50% (cumulative probability through the maturity date) at December 31, 2021. The Company used the following assumptions to value the Madryn derivatives: Madryn Put Option Liability December 31, 2022 2021 Interest rate volatility —% 25.8% Market yield rate —% 6.8% Term (in years) — 3.75 Dividend yield —% —% The estimates were based, in part, on subjective assumptions. During the periods presented, the Company has not changed the manner in which it values liabilities that are measured at fair value using Level 3 inputs. The Company recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers within the hierarchy during the years ended December 31, 2022 and 2021. The fair value of the debt redemption feature liability included the estimated market rate (credit spread and risk-free rate) and volatility. The higher/lower the estimated volatility, the higher/lower the value of the debt redemption feature liability. The higher/lower the estimated market rate, the higher/lower the value of the debt redemption feature liability. The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial instruments as follows: Madryn Put Option Liability Balance at December 31, 2020 $ 1,440 Change in fair value (737) Balance at December 31, 2021 703 Change in fair value 396 Settlement (1,099) Balance at December 31, 2022 $ — |
Debt
Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt Oaktree Debt On April 26, 2022, or the Closing Date, the Company entered into a Credit Agreement and Guaranty, or the Credit Agreement, together with certain of its subsidiaries party thereto as guarantors, the lenders from time to time party thereto, or the Lenders, and Oaktree Fund Administration, LLC, as administrative agent for the Lenders, or the Administrative Agent, pursuant to which the Lenders agreed to make term loans to the Company in an aggregate principal amount of up to $225 million, or collectively, the Term Loans. Pursuant to the terms of the Credit Agreement, the Term Loans will be advanced in four tranches: • The first tranche, or the Tranche A Term Loan, was advanced in the amount of $150 million on the Closing Date. A portion of the first tranche was used to repay the outstanding principal and interest under the Madryn Credit Agreement in full, including the early repayment penalty of $6.5 million. • The second tranche, or the Tranche B Term Loan, of $25 million was advanced in December 2022 at the Company’s election upon satisfaction of specified gross sales thresholds and subject to the other terms and conditions of the Credit Agreement. • The third tranche, or the Tranche C Term Loan, of $25 million will be advanced at the Company’s election prior to March 31, 2024, subject to the Administrative Agent having received either (a) evidence that specified FDA approvals have been issued or (b) evidence that specified gross sales thresholds have been met, and subject to the other terms and conditions of the Credit Agreement. • The fourth tranche, or the Tranche D Term Loan, of $25 million will be advanced at the Company’s election prior to December 31, 2024, subject to the Administrative Agent having received both (a) evidence that specified FDA approvals have been issued and (b) evidence that specified gross sales thresholds have been met, or the Tranche D Funding Milestone, and subject to the other terms and conditions of the Credit Agreement. The Term Loans will mature on the 5-year anniversary of the Closing Date, or the Maturity Date. The Term Loans accrue interest at a rate equal to 9% per annum or, at any time following the Tranche D Funding Milestone, 8.25% per annum. Accrued interest is due and payable in cash on the last business day of March, June, September, and December of each year; provided, however, that prior to the second anniversary of the Closing Date, the Company may pay an amount of interest on the outstanding Term Loans corresponding to 600 basis points of the interest rate in kind, or PIK, on each applicable payment date, subject to prior written notice delivered to the Administrative Agent, which has been delivered. Each of the Term Loans will be subject to original issue discount of 2% of the principal amount thereof upon the drawing of each applicable tranche. Upon any payment or prepayment in full or in part of the Term Loans, whether voluntary or involuntary, the Company is required to pay an exit fee equal to 3% of the principal amount of the Term Loan paid, or the Exit Fee. The Company may elect to prepay all or any portion of the amounts owed prior to the Maturity Date, provided that the Company provides notice to the Administrative Agent, the amount is not less than $5 million, and the amount is accompanied by all accrued and unpaid interest thereon through the date of prepayment, plus the applicable yield protection premium and the applicable Exit Fee. Prepayments of the Term Loans prior to the second anniversary of the Closing Date will be accompanied by a yield protection premium equal to the sum of all interest that would have accrued through such second anniversary plus 4% of the principal amount so prepaid. Prepayments of the Term Loans after the second anniversary will be accompanied by a yield protection premium equal to 4% of the principal amount so prepaid if made prior to the 3rd anniversary of the Closing Date, 2% if made on or after the 3rd anniversary of the Closing Date but prior to the 4th anniversary of the Closing Date, and 0% if made on or after the 4th anniversary of the Closing Date. If the Term Loans are accelerated following the occurrence of an event of default, the Company shall immediately pay to Lenders the sum of all obligations for principal, accrued interest, the applicable yield maintenance premium and the applicable Exit Fee. Pursuant to the Credit Agreement, the obligations of the Company are guaranteed by its subsidiaries that are party thereto as guarantors. On the Closing Date, the Company and such subsidiaries entered into a U.S. Security Agreement in favor of the Administrative Agent on behalf of Lenders, or the U.S. Security Agreement. Pursuant to the U.S. Security Agreement, the Company and its subsidiaries party thereto granted the Administrative Agent a security interest in substantially all of its personal property, rights and assets to secure the payment of all amounts owed to Lenders under the Credit Agreement. The Credit Agreement contains customary affirmative and restrictive covenants and representations and warranties. The Company and its subsidiaries are bound by certain affirmative covenants setting forth actions that are required during the term of the Credit Agreement, including, without limitation, certain information delivery requirements, obligations to maintain certain insurance, and certain notice requirements. Additionally, the Company and its subsidiaries are bound by certain restrictive covenants setting forth actions that are not permitted to be taken during the term of the Credit Agreement without prior written consent, including, without limitation, incurring certain additional indebtedness, consummating certain mergers, acquisitions or other business combination transactions, or incurring any non- permitted lien or other encumbrance on the assets of the Company or any of its subsidiaries. The Credit Agreement also contains other customary provisions, such as confidentiality obligations and indemnification rights for the benefit of Lenders. The Credit Agreement contains financial covenants requiring (a) the Company to maintain minimum liquidity of at least $20 million from and after the Closing Date or $25 million from and after the funding of the Tranche B Term Loans, and (b) for each fiscal quarter until gross sales of the Company and its subsidiaries for any 12-consecutive month period are no less than $200 million, minimum gross sales of the Company and its subsidiaries for each consecutive 12-month period ending on the last day of each fiscal quarter in excess of 50% of specified target gross sales for such period. The Credit Agreement provides for a customary equity cure right in the event the Company fails to comply with the minimum gross sales covenant. The effective interest rate under the Credit Agreement is 10.4%, and the weighted average interest rate is 9.0%. The Company elected to pay interest in kind on up to two-thirds of cash interest payments prior to the second anniversary of the Closing Date, resulting in a minimum initial cash interest rate of 3.00%. The Company incurred $9.4 million in interest expense in connection with the Credit Agreement during the year ended December 31, 2022. No principal payments are due on the Term Loans until the final maturity date on April 26, 2027. As of December 31, 2022, $181.3 million was outstanding under the Credit Agreement representing the initial principal of $150 million for the Tranche A Term Loan and $25 million for the Tranche B Term Loan and $6.3 million of interest accrued into the principal balance. The Company recorded Oaktree debt on the consolidated balance sheets as follows: December 31, 2022 2021 (in thousands) Principal $ 181,314 $ — Net unamortized debt discount and issuance costs (5,853) — Net carrying value of Oaktree debt $ 175,461 $ — As of December 31, 2022, the Company was in compliance with all financial debt covenants under the Credit Agreement. Madryn Debt In August 2017, the Company entered into the Madryn Credit Agreement with Madryn and a syndicate of lenders that was scheduled to mature on September 30, 2025. After an amendment in August 2020, the Madryn Credit Agreement provided for term loans in a maximum aggregate principal amount of $65.0 million. In connection with the Madryn Credit Agreement, the Company and certain of its subsidiaries granted a security interest in substantially all of their respective assets, including, without limitation, intellectual property, and pledges of certain shares of the Company’s subsidiaries, subject to certain excluded collateral exceptions. Borrowings under the Madryn Credit Agreement bore interest at a rate equal to 3-month LIBOR plus 8.0% per annum provided that no default had occurred. The effective interest rate under the amended Madryn Credit Agreement was 18.4%, and the weighted average interest rate was approximately 10.6% until extinguishment. The Company incurred $2.2 million, $6.9 million and $7.6 million in interest expense in connection with Madryn Credit Agreement during the years ended December 31, 2022, 2021 and 2020, respectively, including $0.7 million of direct costs to amend the Madryn Credit Agreement in August 2020. No principal payments were due on the term loans until the final maturity date on September 30, 2025. The Company also determined that the Madryn Credit Agreement contained put options which were mandatory repayment provisions related to liquidity events or an event of default and a call option related to voluntary repayment option. The Company allocated a fair value of $15.1 million for these embedded derivatives as a debt discount on the original commitment date in August 2017. An additional $5.0 million and $1.6 million debt discount was recorded on respective borrowing dates when the Company met the required milestones and borrowed an additional $10.0 million in the fourth quarter of fiscal 2017 and $25.0 million in August 2019. The Company revalued the embedded derivatives as of each reporting period and recorded the change in the fair value in the consolidated statement of operations (see Note 5). On April 26, 2022 the Company repaid in full the $65.0 million in aggregate principal amount outstanding under the Madryn Credit Agreement and the agreement was terminated. The Company recorded a loss on the extinguishment of debt in the amount of $19.0 million, which represents the difference between the carrying value of debt and the cash outflows to extinguish the debt including $6.5 million of the early repayment penalty. The Company recorded Madryn debt on the balance sheet as follows: December 31, 2022 2021 (in thousands) Principal $ — $ 65,000 Net unamortized debt discount and issuance costs — (13,094) Net carrying value of Madryn debt $ — $ 51,906 As of December 31, 2022, the Company is in compliance with all financial debt covenants. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases The Company recognizes lease liabilities and ROU assets upon commencement for all material leases with a term greater than 12 months. The Company has elected an expedient not to recognize leases with a lease term of 12 months or less on the balance sheet. These short-term leases are expensed on a straight-line basis over the lease term. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date of the lease based on the present value of lease payments over the lease term. When the rate implicit to the lease cannot be readily determined, the Company utilizes its incremental borrowing rate in determining the present value of the future lease payments. Lease liabilities are accreted each period and reduced for payments. The ROU asset also includes other adjustments, such as for the effects of escalating rents, rent abatement or initial lease costs. The lease term may include periods covered by options to extend or terminate the lease when it is reasonably certain that the Company will exercise a renewal option, or reasonably certain it will not exercise an early termination option. For operating leases, lease expense for minimum lease payments is recognized on a straight-line basis over the expected lease term. For finance leases, the ROU asset depreciates on a straight-line basis over the shorter of the lease term or useful life of the ROU asset and the lease liability accretes interest based on the interest method using the discount rate determined at lease commencement. The Company has operating leases for facilities and office space. As of December 31, 2022 , the Company’s finance leases are immaterial. Operating lease assets and the related lease liabilities are included within the ROU operating lease assets on the consolidated balance sheets. The determination of whether an arrangement is, or contains, a lease is performed at the inception of the arrangement. The Company has operating leases for certain facilities and office spaces to be used in its operations, with remaining lease terms ranging from monthly to 7 years. These leases require monthly lease payments that may be subject to annual increases throughout the lease term. Certain of these leases also include renewal options at the election of the Company to renew or extend the lease for additional years. These optional periods have not been considered in the determination of the ROU or lease liabilities associated with these leases as management did not consider it reasonably certain it would exercise the options. Short-term leases, which have an initial term of 12 months or less, are not recorded in the balance sheet and expense for these leases is recognized on a straight-line basis over the lease term. The Company’s lease agreements do not contain any termination options, material residual value guarantees, material bargain purchase options or material restrictive covenants. The Company does not have any lease transactions with related parties. Total lease cost includes the following components for the years ended December 31, 2022 and 2021 : December 31, 2022 2021 (in thousands) Operating lease expense cost $ 740 $ 656 December 31, 2022 2021 Supplemental balance sheet information (in thousands) Operating leases Operating lease right-of-use assets $ 3,702 $ 2,206 Operating lease liabilities - short-term 688 402 Operating lease liabilities - long-term 3,200 1,900 Total operating lease liabilities $ 3,888 $ 2,302 Weighted-average remaining lease term (years) 5.4 5.5 Weighted-average discount rate (%) 9.5 % 10.4 % December 31, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities (in thousands) Operating cash outflows from operating leases $ 648 $ 639 ROU assets obtained in exchange for new lease liabilities Operating leases $ 1,962 $ — Maturities of lease liabilities as of December 31, 2022 were as follows: Years Ending December 31, Operating Leases (in thousands) 2023 $ 970 2024 931 2025 792 2026 710 2027 600 Thereafter 801 Total future minimum lease payments 4,804 Less: Amount of lease payments representing interest (916) Present value of future minimum lease payments $ 3,888 |
Leases | Leases The Company recognizes lease liabilities and ROU assets upon commencement for all material leases with a term greater than 12 months. The Company has elected an expedient not to recognize leases with a lease term of 12 months or less on the balance sheet. These short-term leases are expensed on a straight-line basis over the lease term. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date of the lease based on the present value of lease payments over the lease term. When the rate implicit to the lease cannot be readily determined, the Company utilizes its incremental borrowing rate in determining the present value of the future lease payments. Lease liabilities are accreted each period and reduced for payments. The ROU asset also includes other adjustments, such as for the effects of escalating rents, rent abatement or initial lease costs. The lease term may include periods covered by options to extend or terminate the lease when it is reasonably certain that the Company will exercise a renewal option, or reasonably certain it will not exercise an early termination option. For operating leases, lease expense for minimum lease payments is recognized on a straight-line basis over the expected lease term. For finance leases, the ROU asset depreciates on a straight-line basis over the shorter of the lease term or useful life of the ROU asset and the lease liability accretes interest based on the interest method using the discount rate determined at lease commencement. The Company has operating leases for facilities and office space. As of December 31, 2022 , the Company’s finance leases are immaterial. Operating lease assets and the related lease liabilities are included within the ROU operating lease assets on the consolidated balance sheets. The determination of whether an arrangement is, or contains, a lease is performed at the inception of the arrangement. The Company has operating leases for certain facilities and office spaces to be used in its operations, with remaining lease terms ranging from monthly to 7 years. These leases require monthly lease payments that may be subject to annual increases throughout the lease term. Certain of these leases also include renewal options at the election of the Company to renew or extend the lease for additional years. These optional periods have not been considered in the determination of the ROU or lease liabilities associated with these leases as management did not consider it reasonably certain it would exercise the options. Short-term leases, which have an initial term of 12 months or less, are not recorded in the balance sheet and expense for these leases is recognized on a straight-line basis over the lease term. The Company’s lease agreements do not contain any termination options, material residual value guarantees, material bargain purchase options or material restrictive covenants. The Company does not have any lease transactions with related parties. Total lease cost includes the following components for the years ended December 31, 2022 and 2021 : December 31, 2022 2021 (in thousands) Operating lease expense cost $ 740 $ 656 December 31, 2022 2021 Supplemental balance sheet information (in thousands) Operating leases Operating lease right-of-use assets $ 3,702 $ 2,206 Operating lease liabilities - short-term 688 402 Operating lease liabilities - long-term 3,200 1,900 Total operating lease liabilities $ 3,888 $ 2,302 Weighted-average remaining lease term (years) 5.4 5.5 Weighted-average discount rate (%) 9.5 % 10.4 % December 31, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities (in thousands) Operating cash outflows from operating leases $ 648 $ 639 ROU assets obtained in exchange for new lease liabilities Operating leases $ 1,962 $ — Maturities of lease liabilities as of December 31, 2022 were as follows: Years Ending December 31, Operating Leases (in thousands) 2023 $ 970 2024 931 2025 792 2026 710 2027 600 Thereafter 801 Total future minimum lease payments 4,804 Less: Amount of lease payments representing interest (916) Present value of future minimum lease payments $ 3,888 |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Under the Memorandum of Association and Articles of Association, or Articles, in effect as of December 31, 2022 and 2021, the Company had authorized an unlimited number of common shares with no par value. As of December 31, 2022 and 2021 , 24,815,908 and 24,488,335 common shares, respectively, were issued and 24,407,838 and 24,080,265 common shares, respectively, were outstanding. During the year ended December 31, 2022, the Company granted stock options and restricted stock to employees and contractors (see Note 10). The Company had reserved common shares for future issuances at December 31: 2022 2021 Warrants to purchase common shares — 5,500 Options to purchase common shares 1,873,165 2,098,087 Remaining shares available under the 2018 Equity Incentive Plan 2,271,999 1,780,687 Shares issuable on vesting of grants of RSUs 164,643 3,982 Remaining shares available under the 2018 ESPP 848,000 661,000 Total 5,157,807 4,549,256 In March 2017, the Company issued warrants for the purchase of 145,000 Class B ordinary shares to parties related to Rockport Ventures, with a fixed exercise price of $3.80 per share. During the year ended December 31, 2022, warrants to purchase 5,000 shares were net exercised to obtain 4,703 shares. As of December 31, 2022, no warrants were outstanding and exercisable. As of December 31, 2021, 5,500 warrants to purchase the Company’s common shares were outstanding and exercisable: Warrant Holder Issue Date In Connection With Warrant to Shares Exercise Expiration Date Rockport 3/3/2017 Loan agreement Common — $ 3.80 8/28/2022 |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Warrants | Shareholders’ Equity Under the Memorandum of Association and Articles of Association, or Articles, in effect as of December 31, 2022 and 2021, the Company had authorized an unlimited number of common shares with no par value. As of December 31, 2022 and 2021 , 24,815,908 and 24,488,335 common shares, respectively, were issued and 24,407,838 and 24,080,265 common shares, respectively, were outstanding. During the year ended December 31, 2022, the Company granted stock options and restricted stock to employees and contractors (see Note 10). The Company had reserved common shares for future issuances at December 31: 2022 2021 Warrants to purchase common shares — 5,500 Options to purchase common shares 1,873,165 2,098,087 Remaining shares available under the 2018 Equity Incentive Plan 2,271,999 1,780,687 Shares issuable on vesting of grants of RSUs 164,643 3,982 Remaining shares available under the 2018 ESPP 848,000 661,000 Total 5,157,807 4,549,256 In March 2017, the Company issued warrants for the purchase of 145,000 Class B ordinary shares to parties related to Rockport Ventures, with a fixed exercise price of $3.80 per share. During the year ended December 31, 2022, warrants to purchase 5,000 shares were net exercised to obtain 4,703 shares. As of December 31, 2022, no warrants were outstanding and exercisable. As of December 31, 2021, 5,500 warrants to purchase the Company’s common shares were outstanding and exercisable: Warrant Holder Issue Date In Connection With Warrant to Shares Exercise Expiration Date Rockport 3/3/2017 Loan agreement Common — $ 3.80 8/28/2022 |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation In 2015, the Board of Directors approved and adopted the 2015 Equity Incentive Plan, or 2015 Plan. Pursuant to the 2015 Plan, the Company granted RSAs and stock options to members of the Board of Directors, employees and consultants. In 2018, the Board of Directors terminated the 2015 Plan and approved the 2018 Equity Incentive Plan, or the 2018 Plan, with an initial reserve of 1,500,000 common shares. Under the 2018 Plan, the Company may grant stock options, equity appreciation rights, RSUs and RSAs. If an award granted under the 2018 Plan expires, terminates, is unexercised, or is forfeited, or if any shares are surrendered in connection with an incentive award, the shares subject to such award and the surrendered shares become available for further awards under the 2018 Plan. Pursuant to the “evergreen” provision contained in the 2018 Plan, the number of common shares reserved for issuance under the 2018 Plan automatically increases on first day of each fiscal year, commencing on January 1, 2019, in an amount equal to the least of (1) 750,000 shares, (2) 4% of the total number of the Company’s common shares outstanding on the last day of the preceding fiscal year, or (3) a number of common shares as may be determined by the Company’s Board of Directors prior to any such increase date. On each of January 1, 2019 through 2022 the number of common shares authorized for issuance increased automatically by 750,000 shares in accordance with the “evergreen” provision, increasing the number of common shares reserved under the 2018 Plan to 4,500,000 as of December 31, 2022. During the periods presented, the Company recorded the following share-based compensation expense for stock options and restricted stock awards: Year Ended December 31, 2022 2021 2020 (in thousands) Sales, general and administrative $ 11,154 $ 7,908 $ 4,203 Research and development 2,204 2,499 1,518 Total $ 13,358 $ 10,407 $ 5,721 Stock Options Number of Options Outstanding Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Balances at December 31, 2021 2,098,087 $ 37.49 7.67 $ 67,357 Granted (weighted-average fair value of $38.66 per share) 327,500 64.73 Exercised (301,412) 12.85 Forfeited/canceled (251,010) 63.47 Balances at December 31, 2022 1,873,165 $ 42.73 7.06 $ 47,273 As of December 31, 2022, 999,388 options were vested and exercisable with weighted-average exercise price of $29.80 per share and a total aggregate intrinsic value of $37.5 million. During the year ended December 31, 2022, 301,412 options were exercised at a weighted-average price of $12.85 per share. The intrinsic value of the options exercised during the years ended December 31, 2022, 2021, and 2020 was $15.0 million, $28.7 million, and $1.9 million, respectively. Upon the exercise of stock options, the Company issued new shares from its authorized shares. At December 31, 2022, unrecognized compensation expense was $20.9 million related to stock options granted to employees and members of the Board of Directors and $1.3 million related to stock options granted to consultants. The weighted-average period over which such compensation expense will be recognized is 2.3 years. Stock Options Granted to Employees Share-based compensation expense for employees is based on the grant date fair value. The Company recognizes compensation expense for all share-based awards ratably on a straight-line basis over the requisite service period of the awards, which is generally the vesting term of four years. During the year ended December 31, 2022, 2021 and 2020, the Company recognized $9.9 million, $8.2 million and $2.8 million, respectively, of share-based compensation expense for stock options granted to employees. The Company uses the Black-Scholes option valuation model to value options granted to employees and consultants, which requires the use of highly subjective assumptions to determine the fair value of share-based awards. The assumptions used in the Company’s option-pricing model represent management’s best estimates. These estimates are complex, involve a number of variables, uncertainties and assumptions and the application of management’s judgment. If factors change and different assumptions are used, the Company’s share-based compensation expense could be materially different in the future. The assumptions and estimates that the Company uses in the Black-Scholes model are as follows: ▪ Fair Value of Common Shares. The closing price of the Company’s publicly-traded common shares on the date of grant is used as the fair value of the shares. The Board of Directors intended all options granted to be exercisable at a price per share not less than the estimated per share fair value of the shares underlying those options on the date of grant. ▪ Risk-Free Interest Rate. The Company bases the risk-free interest rate used in the Black-Scholes valuation model on the implied yield available on U.S. Treasury zero-coupon issues with a term equivalent to that of the term of the options for each option group on the measurement date. ▪ Term. For employee stock options, the expected term represents the period that the Company’s share-based awards are expected to be outstanding. Because of the limitations on the sale or transfer of the Company’s shares during the period the Company was a privately held company, the Company does not believe its historical exercise pattern is indicative of the pattern it experiences as a publicly traded company. The Company consequently uses the Staff Accounting Bulletin 110, or SAB 110, simplified method to calculate the expected term of employee stock options, which is the average of the contractual term and vesting period. The Company plans to continue to use the SAB 110 simplified method until it has sufficient trading history as a publicly traded company. For consultant stock options, the term used is equal to the remaining contractual term on the measurement date. ▪ Volatility. The Company determines the price volatility based on the historical volatilities of industry peers as it does not have sufficient trading history for its shares. Industry peers consist of several public companies in the medical device industry with comparable characteristics, including revenue growth, operating model and working capital requirements. The Company intends to continue to consistently apply this process using the same or a similar peer group of public companies until a sufficient amount of historical information regarding the volatility of its own shares becomes available, or unless circumstances change such that the identified peer companies are no longer similar, in which case other suitable peer companies whose common share prices are publicly available would be utilized in the calculation. The volatility is calculated based on the term on the measurement date. ▪ Dividend Yield. The expected dividend assumption is based on the Company’s current expectations about its anticipated dividend policy. The Company has no expectation that it will declare dividends on its common shares, and therefore has used an expected dividend yield of zero. The fair value of stock options granted to employees was estimated using the following assumptions: Year Ended December 31, 2022 2021 2020 Volatility 56% - 62% 60% 55% - 60% Risk-free interest rate 1.6% - 3.8% 0.7% - 1.4% 0.4% - 1.5% Term (in years) 6.25 6.25 6.25 Dividend yield — — — Stock Options Granted to Non-Employees Share-based compensation expense related to stock options granted to non-employees is recognized as the stock options are earned using an accelerated attribution method. The Company believes that the estimated fair value of the stock options is more readily measurable than the fair value of the services rendered. For the years ended December 31, 2022, 2021 and 2020, the Company recognized expense of $0.4 million, $1.8 million and $2.3 million, respectively, for stock options granted to consultants. The fair value of stock options granted to consultants was estimated using the following assumptions during the following periods presented: Year Ended December 31, 2022 2021 2020 Volatility 56% - 60% 60% 56% - 60% Risk-free interest rate 2.4% - 3.6% 1.6% 0.6% - 1.6% Term (in years) 10 10 10 Dividend yield — — — Restricted Stock Each vested RSU entitles the holder to be issued one common share. These awards vest according to a vesting schedule determined by the Board of Directors or the Compensation Committee of the Company’s Board of Directors, generally over a one The following table represents RSU activity for fiscal 2022: Restricted Stock Weighted- Outstanding unvested at December 31, 2021 3,982 $ 69.05 Granted 203,051 63.41 Vested (21,537) 53.72 Forfeited/canceled (20,853) 65.93 Outstanding unvested at December 31, 2022 164,643 $ 69.49 The fair value of RSUs is the grant date market value of common shares. The Company recognizes share-based compensation expense related to RSUs using a straight-line method over the vesting term of the awards. The share-based compensation expense for RSUs that vested during the years ended December 31, 2022, 2021 and 2020 was $3.0 million, $0.4 million and $0.6 million, respectively, which was calculated based on the market value of the Company’s common shares on the applicable grant date. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the year ended December 31, loss before income tax consisted of the following: 2022 2021 2020 (in thousands) Costa Rica operations $ (9,721) $ 4,027 $ (8,872) Non-Costa Rica operations (63,103) (43,739) (29,145) $ (72,824) $ (39,712) $ (38,017) For the year ended December 31, the income tax provision consisted of the following: 2022 2021 2020 (in thousands) Current Costa Rica $ 114 $ 289 $ — Non-Costa Rica 2,185 1,131 378 Total current 2,299 1,420 378 Deferred Costa Rica — — — Non-Costa Rica 86 7 (274) Total deferred 86 7 (274) Total provision $ 2,385 $ 1,427 $ 104 The items accounting for the difference between income taxes computed at the Costa Rica statutory income tax rate and the income tax provision (benefit) consisted of the following for the year ended December 31: 2022 2021 2020 (in thousands) Tax benefit at Costa Rica statutory rate $ (21,847) 30 % $ (11,914) 30 % $ (11,405) 30 % Foreign tax rate differential 15,978 (22) 9,430 (24) 5,252 (14) Tax rate changes 104 — 2 — 4 — Return to provision adjustment 2,651 (4) 384 (1) (559) 2 Tax credits (52) — (53) — (82) — Change in valuation allowance 3,573 (5) 7,043 (18) 4,071 (11) Tax holiday adjustment (benefit) 3,030 (4) (918) 2 2,636 (7) U.S. Stock Compensation (1,353) 2 (2,681) 7 — — Other 301 — 134 — 187 — Total provision for income taxes $ 2,385 (3) % $ 1,427 (4) % $ 104 — % The Company's tax holiday benefit was related to the Company’s subsidiary in Costa Rica which enjoyed a zero percent tax rate, with the exception of extended warranty income, for the years ended December 31, 2022, 2021 and 2020. The zero percent tax holiday, as extended, is effective for a period of 12 years through the year 2030. As of December 31, the components of the Company's deferred tax assets and liabilities are as follows: 2022 2021 (in thousands) Accruals and reserves $ 348 $ 301 Deferred revenue 1,198 — Intangibles 143 130 Stock compensation 1,404 775 Net operating loss 19,933 18,208 R&D credits 232 169 Other (144) 44 Valuation allowance (22,942) (19,369) Total net deferred tax assets (included in “Other non-current assets”) $ 172 $ 258 As of December 31, 2022, the Company assessed that it is more-likely-than-not that it will not realize its deferred tax assets based on the absence of sufficient positive objective evidence that it would generate sufficient taxable income in its Brazil and U.S. tax jurisdiction (Motiva USA, LLC) to realize the deferred tax assets. The Company intends to continue maintaining a full valuation allowance on its deferred tax assets in these jurisdictions until there is sufficient evidence to support the reversal of all or some portion of these allowances. As of December 31, 2022, the Company has U.S. and California tax credit carryforwards of approximately $0.3 million in total. The federal research credits begin to expire in 2037. However, the California research credits can be carried forward indefinitely. As of December 31, 2022, the Company had U.S. federal, state, U.K. and Brazil net operating losses of approximately $76.1 million, $8.9 million, $0.1 million and $11.3 million, respectively. The U.S. federal net operating losses of $3.3 million generated prior to 2018, and state net operating losses will begin to expire on December 31, 2030. The U.S. federal net operating losses generated in 2018 and future years will be carried forward indefinitely. Brazil net operating losses can be carried forward indefinitely. The United States federal and California laws impose restrictions on the utilization of net operating loss carryforwards and R&D credit carryforwards in the event of a change in ownership of the Company, which constitutes an “ownership change” as defined by Internal Revenue Code Sections 382 and 383. Generally, an ownership change occurs if the percentage of the value of the shares that are owned by one or more direct or indirect “five percent shareholders” increases by more than 50% over their lowest ownership percentage at any time during the applicable testing period. If the Company has experienced an “ownership change” at any time since its formation, it would already be subject to limitations on its ability to utilize its existing net operating losses and other tax attributes. The Company did not experience an ownership change in the past that would materially impact the availability of its net operating losses and tax credits. Nevertheless, future changes in the Company’s share ownership, which may be outside of the Company’s control, may trigger an “ownership change” and, consequently, Section 382 and 383 limitations. The Company has not completed a Section 382 and 383 analysis to determine if an ownership change has occurred. Until such analysis is completed, the Company cannot be sure that the full amount of the existing net operating loss carryforwards will be available, even if the Company does generate taxable income before their expiration. In addition, under the newly enacted U.S. federal income tax law, federal net operating losses incurred in 2018 and in future years may be carried forward indefinitely, but the deductibility of such federal net operating losses is limited. Discontinuation of preferential tax treatment the Company currently enjoys or other unfavorable changes in tax law could result in additional compliance obligations and costs. The Company is currently the beneficiary of a tax holiday in Costa Rica pursuant to which it is subject to a tax at a 0% rate, with the exception of the extended warranty sales income that is subject to 30% income tax. However, there can be no assurance that the Company will continue to qualify for or receive such favorable tax treatment. If the Company fails to maintain such favorable tax treatment it may be subject to tax in Costa Rica at a significantly higher rate. A tax authority may disagree with tax positions that the Company has taken, which could result in increased tax liabilities. For example, the U.S. Internal Revenue Service or another tax authority could challenge the amounts paid between the Company and its subsidiaries pursuant to the Company’s intercompany arrangements and transfer pricing policies. A tax authority may take the position that material income tax liabilities, interest and penalties are payable by the Company, in which case, the Company expects that it might contest such assessment. Contesting such an assessment may be lengthy and costly and, if the Company is unsuccessful in disputing the assessment, the implications could increase its anticipated effective tax rate, where applicable. In addition, the Company may be subject to additional tax liabilities, which could materially and adversely affect its business, financial condition and results of operations. The application, interpretation and enforcement of the value-added tax, or VAT, and other taxes and related regulations applicable to medical device companies are complex and evolving. The Company conducts operations in multiple jurisdictions and is subject to certain taxes, including income, sales and use, employment, value added and other taxes, in the United States and other jurisdictions in which the Company does business. A change in the tax laws in the jurisdictions in which the Company does business, including an increase in tax rates or an adverse change in the treatment of an item of income or expense, possibly with retroactive effect, could result in a material increase in the amount of taxes incurred. The Company’s determination of its tax liability is subject to review by applicable U.S. and foreign tax authorities. Any adverse outcome of such a review could harm the Company’s operating results and financial condition. The determination of the Company’s worldwide provision for income taxes and other tax liabilities requires significant judgment and, in the ordinary course of business, there are many transactions and calculations where the ultimate tax determination is complex and uncertain. Moreover, as a multinational business, the Company has subsidiaries that engage in many intercompany transactions in a variety of tax jurisdictions where the ultimate tax determination is complex and uncertain. The taxing authorities of the jurisdictions in which the Company operates may challenge the Company’s methodologies, which could impact its financial position and operating results. Historically, the Company has allocated some of its employees’ and contractors’ time across multiple business entities in the international jurisdictions in which the Company operates. If the Company determined that it had misclassified the employees’ or contractors’ employment status or certain of its expenditures under local laws, the Company may be subjected to penalties or be required to pay withholding taxes for, extend employee benefits to, provide compensation for unpaid overtime to, or otherwise incur substantially greater expenses with respect to such employees and contractors. Any of the foregoing circumstances could have a material adverse impact on the Company’s operating results and financial condition. The Company is periodically reviewed and audited by tax authorities with respect to income and non-income taxes. Tax authorities may disagree with certain positions the Company has taken, and the Company may have exposure to additional income and non-income tax liabilities which could have an adverse effect on the Company’s operating results and financial condition. Such authorities could impose additional taxes, interest and penalties, claim that various withholding requirements apply to the Company or its subsidiaries or assert that benefits of tax treaties are not available to the Company or its subsidiaries. In addition, the Company’s future effective tax rates could be favorably or unfavorably affected by changes in tax rates, changes in the valuation of the Company’s deferred tax assets or liabilities, the effectiveness of its tax planning strategies, or changes in tax laws or their interpretation. Such changes could have an adverse impact on the Company’s financial condition. As a result of these and other factors, the ultimate amount of tax obligations may differ from the amounts recorded in the Company’s financial statements and any such difference may harm its operating results in future periods in which the Company changes the estimates of such tax obligations or in which the ultimate tax outcome is determined. A non-U.S. corporation is classified as a passive foreign investment company, or PFIC, for U.S. federal income tax purposes, in any taxable year in which either (1) at least 75% of its gross income is passive income; or (2) at least 50% of the average quarterly value of its total gross assets is attributable to assets that produce “passive income” or are held for the production of passive income. Based on the project composition of the Company’s income and valuation of its assets, the Company does not believe it is a PFIC in 2021, and the Company does not expect to be a PFIC for the current taxable year or to become one in the future. However, because the PFIC status is subject to a number of uncertainties, neither the Company nor its tax advisors can provide any assurances regarding the PFIC status. If the Company is a PFIC for any taxable year during which a U.S. holder holds the Company’s common shares, the U.S. holder may be subject to adverse tax consequences. The Company records income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or income tax returns. In estimating future tax consequences, expected future events, enactments or changes in the tax law or rates are considered. Valuation allowances are provided when necessary to reduce deferred tax assets to the amount expected to be realized. Accounting for Uncertainty in Income Taxes The Company records uncertain tax positions based on a two-step process whereby (1) a determination is made as to whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold the Company recognizes the largest amount of tax benefit that is greater than 50% likely to be realized upon ultimate settlement with the related tax authority. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. Significant judgment is required in the identification of uncertain tax positions and in the estimation of penalties and interest on uncertain tax positions. The Company has adopted ASC 740-10 Accounting for Uncertainty in Income Taxes (formerly FIN 48). ASC 740-10 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of uncertain tax positions taken or expected to be taken in the Company's income tax return, and provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. For the years ended December 31, 2022 and 2021 the Company has no material uncertain tax positions. The Company has R&D credits in the United States and has recorded reserves of $54,000 which offsets R&D credit deferred tax assets. The Company does not expect any significant increases or decreases to its unrecognized tax benefits within the next 12 months. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. As of December 31, 2022, the Company is subject to taxation in Costa Rica, Belgium, France, Brazil, the United Kingdom, Sweden, Italy, Germany, Austria, Spain, Argentina, Switzerland and the United States and the Company’s fiscal tax years 2018 through 2022 are subject to examination by the tax authorities. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share The following table summarizes the computation of basic and diluted net loss per share for the periods presented: Year Ended December 31, 2022 2021 2020 (in thousands, except share and per share data) Numerator: Net loss $ (75,209) $ (41,139) $ (38,121) Denominator: Weighted average common shares used for basic and diluted earnings per share 24,457,793 23,972,722 23,316,102 Net loss per share: Basic and diluted $ (3.08) $ (1.72) $ (1.63) Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares outstanding for the period. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of shares and dilutive share equivalents outstanding for the period, determined using the treasury-share method and the as-if converted method, for convertible securities, if inclusion of these is dilutive . If the Company reports a net loss , diluted net loss per share is the same as basic net loss per share for those periods because including the dilutive securities would be anti-dilutive. The following potentially dilutive securities outstanding at the end of the periods presented have been excluded from the computation of diluted shares: Year Ended December 31, 2022 2021 2020 Options to purchase common shares 1,623,165 1,873,087 1,752,620 Shares issuable on vesting of grants of RSUs 164,643 3,982 48,624 Warrants to purchase common shares — 5,500 5,500 Total 1,787,808 1,882,569 1,806,744 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party TransactionsDuring the years ended December 31, 2022, 2021 and 2020, the Company recorded revenue of $1.2 million, $1.4 million and $0.9 million, respectively, for product sales to Herramientas Medicas, S.A., a distribution company owned by a family member of the Chief Executive Officer of the Company. Accounts receivable owed to the Company from this distribution company amounted to approximately $0.4 million and $0.4 million as of December 31, 2022 and 2021, respectively. In 2016, the Company also entered into a separate agreement with Dr. Chacón Quirós, the brother of the Company’s Chief Executive Officer Juan José Chacón Quirós, to maintain his clinic in Costa Rica as a MotivaImagine Excellence Center and to host and train physicians in the use of the Company products in relevant procedures, among other services, in exchange for cash reimbursement of up to $4,500 per day that such services are rendered. In August 2022, the Company entered into a new agreement with Dr. Chacón Quirós, replacing the original agreement, to continue the training services in exchange for cash reimbursement of his hourly rate of $531 when such services are rendered. In December 2020, Dr. Chacón Quirós was granted options to purchase 22,068 common shares vesting over four years in equal annual installments, provided that he continues to provide these services at such times. During the years ended December 31, 2022, 2021 and 2020, the Company paid Dr. Chacón Quirós approximately $0.2 million, $0.4 million and $0.1 million, respectively, for services rendered. On December 12, 2022, the Company granted to Nicholas Lewin, a member of the board of directors, a stock option award for 7,829 options with a grant date fair value of $0.4 million as a compensation for consulting services he performs for the Company in addition to his services as a non-employee director. On April 1, 2022, the Company entered into a consulting agreement with Lisa Gersh, who served on our Board of Directors until March 31, 2022. Pursuant to the consulting agreement, Ms. Gersh will perform consulting services as requested by the Company, with the expectation that she will advise our Board on elements of corporate leadership and governance. As payment for Ms. Gersh’s consulting services, the Company paid Ms. Gersh a consulting fee of $0.1 million during the year ended December 31, 2022. In addition, her outstanding equity awards granted during her term as a member of the Board of Directors will continue to vest in accordance with their terms. The consulting agreement terminates on March 31, 2024. |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2022 | |
Postemployment Benefits [Abstract] | |
Employee Benefits | Employee Benefits Short-term employee benefits, including vacation (paid absences) and year-end bonuses (also known as 13th month salary), are current liabilities included in accrued liabilities on the consolidated balance sheets and are calculated at the non-discounted amount that the Company expects to pay as a result of uncharged employee salaries or retentions. Regarding employee termination benefits, Costa Rica labor laws establish the payment of benefits in case of death, retirement or termination without cause. This compensation is calculated according to time served in the Company and the corresponding salary in the last six months of employment and is equal to between 19.5 and 22 days’ salary for each year served, up to a maximum of 8 years. Company policy recognizes termination benefits as expenses of the period during which the termination occurs, when the legal obligation is assumed due to the aforementioned events. The 49 employees in Brazil are represented by a labor union. |
Commitment and Contingencies
Commitment and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Contingencies Periodically, the Company may have certain contingent liabilities that arise in the ordinary course of business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated. As of December 31, 2022 and 2021, contingent liabilities were not material, individually or in the aggregate, to the Company's financial condition, results of operations or cash flows. However, any monetary liability or financial impact to the Company from these contingent liabilities could differ materially from the Company's expectations. Indemnification The Company enters into standard indemnification arrangements in the ordinary course of business. Pursuant to these arrangements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, patent or other intellectual property infringement claim by any third party with respect to the Company’s technology. The term of these indemnification agreements is generally perpetual. The maximum potential amount of future payments the Company could be required to make under these agreements is not determinable because it involves claims that may be made against the Company in the future that have not yet been made. The Company has entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct of the individual. The Company has not incurred costs to defend lawsuits or settle claims related to these indemnification agreements. No liability associated with such indemnifications has been recorded to date. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, and the applicable rules and regulations of the Securities and Exchange Commission, or SEC. |
Consolidation | The consolidated financial statements include the Company’s accounts and those of its wholly owned subsidiaries as of December 31, 2022 as follows: Subsidiary Incorporation/Acquisition Date Establishment Labs, S.A. (Costa Rica) January 18, 2004 Motiva USA, LLC (USA) February 20, 2014 JAMM Technologies, Inc. (USA) October 27, 2015 Establishment Labs Produtos par Saude Ltda (Brazil) January 4, 2016 European Distribution Center Motiva BVBA (Belgium) March 4, 2016 Motiva Implants France SAS (France) September 12, 2016 JEN-Vault AG (Switzerland) November 22, 2016 Motiva Nordica AB (Sweden) November 2, 2017 Motiva Implants UK Limited (the United Kingdom) July 31, 2018 Motiva Italy S.R.L (Italy) July 31, 2018 Motiva Implants Spain, S.L. (Spain) January 3, 2019 Motiva Austria GmbH (Austria) January 14, 2019 Motiva Germany GmbH (Germany) August 1, 2019 Motiva Argentina S.R.L. (Argentina) February 7, 2020 |
Segments | Segments The chief operating decision maker for the Company is the Chief Executive Officer. The Chief Executive Officer reviews financial information presented on a consolidated basis, accompanied by information about revenue by geographic region, for purposes of allocating resources and evaluating financial performance. The Company has one business activity and there are no segment managers who are held accountable for operations, operating results or plans for levels or components below the consolidated unit level. Accordingly, the Company has determined that it has a single reportable and operating segment structure. The Company and its Chief Executive Officer evaluate performance based primarily on revenue in the geographic regions in which the Company operates. |
Geographic Concentrations | Geographic Concentrations The Company derives all its revenues from sales to customers in Europe, the Middle East, Latin America, and Asia, and has not yet received approval to sell its products in the United States. |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant accounting estimates and management judgments reflected in the consolidated financial statements include items such as accounts receivable valuation and allowances, inventory valuation and allowances, valuation of acquired intangible assets, valuation of derivatives and valuation of deferred income tax assets, including tax valuation allowances. Estimates are based on historical experience, where applicable, and other assumptions believed to be reasonable by management. Actual results may differ from those estimates under different assumptions or conditions. |
Concentration of Credit Risk and Other Risks and Uncertainties | Concentration of Credit Risk and Other Risks and Uncertainties Financial instruments that potentially subject the Company to a concentration of credit risk consist principally of cash and accounts receivable. The majority of the Company’s cash is held at two financial institutions in the United States. Balances in the Company’s cash accounts exceed the Federal Deposit Insurance Corporation, or FDIC, limit of $250,000. The Company has not experienced any losses to its deposits of cash. All of the Company’s revenue has been derived from sales of its products in international markets, principally Europe, the Middle East, Latin America, and Asia. In the international markets in which the Company operates, the Company uses a combination of distributors and makes direct sales to customers. The Company performs ongoing credit evaluations of its distributors and customers, does not require collateral, and maintains allowances for potential credit losses on customer accounts when deemed necessary. Substantially all of the Company’s revenues were derived from the sale of Motiva Implants. During the years ended December 31, 2022, 2021 and 2020, no customer accounted for more than 10% of the Company’s revenue. One customer accounted for 11.5% and 11.8% of the Company’s trade accounts receivable balance as of December 31, 2022 and 2021, respectively. The Company relies on Avantor, Inc. (formerly NuSil Technology, LLC) as the sole supplier of medical-grade silicone used in Motiva Implants. During the years ended December 31, 2022, 2021 and 2020, the Company had purchases of $32.1 million, or 38.2% of total purchases, $23.1 million, or 51.4% of total purchases, and $15.3 million or 66.7% of total purchases, respectively, from Avantor. As of December 31, 2022 and 2021, the Company had an outstanding balance owed to this vendor of $5.6 million and $2.5 million, respectively. The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, unfavorable economic conditions, uncertainty of regulatory approval of the Company’s current and potential future products, uncertainty of market acceptance of the Company’s products, competition from substitute products and larger companies, securing and protecting proprietary technology, access to capital, strategic relationships and dependence on key individuals and sole source suppliers. Products developed by the Company require clearances from the FDA or other international regulatory agencies prior to commercial sales. There can be no assurance that the products will receive the necessary clearances. If the Company is denied clearance, clearance is delayed, or the Company is unable to maintain its existing clearances, these developments could have a material adverse impact on the Company. The COVID-19 outbreak caused a material disruption of the operations of the Company and its suppliers and customers in fiscal 2020, and to a lesser degree, 2021 and resulted in delayed clinical trial enrollment within the reconstruction cohort of its IDE clinical trial in the United States. However, to date, the impact from the COVID-19 outbreak has not had a material effect on the Company’s liquidity or financial position. The full extent of any future impact of the continuing outbreak, related business and travel restrictions, and changes to behavior intended to reduce its spread is uncertain and continues to evolve globally. Management continues to monitor the impact that the COVID-19 pandemic is having on the Company, the breast aesthetics and reconstruction market and the economies in which the Company operates. |
Cash | Cash The Company’s cash consists of cash maintained in checking and interest-bearing accounts. The majority of the Company’s cash is held at two financial institutions in the United States. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable is stated at invoice value less estimated allowances for returns and doubtful accounts. The |
Inventory and Cost of Revenue | Inventory and Cost of RevenueInventory is stated at the lower of cost to purchase or manufacture the inventory or the net realizable value of such inventory. Cost is determined using the standard cost method which approximates actual costs using the first-in, first-out basis. The Company regularly reviews inventory quantities considering actual losses, projected future demand, and remaining shelf life to record a provision for excess and slow-moving inventory. |
Leases | Leases The Company determines if an arrangement is, or contains, a lease at the inception date of the contract. The Company has elected an expedient to account for each separate lease component and its associated non-lease components as a single lease component for the majority of its asset classes. |
Shipping and Handling Costs and Revenue Recognition | Shipping and Handling Costs Shipping and handling costs are expensed as incurred and are included in selling, general and administrative, or SG&A, expenses. For the years ended December 31, 2022 , 2021 and 2020 , shipping and handling costs were $9.0 million, $5.3 million and $3.2 million, respectively. Revenue Recognition The Company recognizes revenue related to sales of products to distributors or directly to customers in markets where it has regulatory approval, net of discounts and allowances. The Company recognizes revenue in accordance with Accounting Standards Codification, or ASC, Revenue from Contracts with Customers (Topic 606) . ASC 606 requires the Company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The Company recognizes revenue related to the sales of products to distributors at the time of shipment of the product, which represents the point in time when the distributor has taken ownership and assumed the risk of loss, and the required revenue recognition criteria are satisfied. The Company’s distributors are obligated to pay within specified terms regardless of when, or if, they sell the products. The Company’s contracts with distributors typically do not contain right of return or price protection and have no post-delivery obligations. The Company recognizes revenue when title to the product and risk of loss transfer to customers, provided there are no remaining performance obligations required of the Company or any written matters requiring customer acceptance. The Company allows for the return of product from direct customers in certain regions in limited instances within fifteen days after the original sale and records estimated sales returns as a reduction of sales in the same period revenue is recognized. Appropriate reserves are established for anticipated sales returns based on historical experience, recent gross sales and any notification of pending returns. Actual sales returns in any future period are inherently uncertain and thus may differ from the estimates. If actual sales returns differ significantly from the estimates, an adjustment to revenue in the current or subsequent period is recorded. As of December 31, 2022, 2021 and 2020, allowance for product returns was de minimis. A portion of the Company’s revenue is generated from the sale of consigned inventory maintained at physician, hospital, or clinic locations. For these products, revenue is recognized at the time the Company is notified by the consignee that the product has been implanted, not when the consigned products are delivered to the consignee’s warehouse. |
Research and Development | Research and Development Costs related to research and development, or R&D, activities are expensed as incurred. R&D costs primarily include personnel costs, materials, clinical expenses, regulatory expenses, product development, consulting services, and outside research activities, all of which are directly related to research and development activities. |
Selling, General and Administrative Expenses | Selling, General and Administrative ExpensesSG&A expenses include sales and marketing costs, payroll and related benefit costs, insurance expenses, shipping and handling costs, legal and professional fees and administrative overhead. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. five |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The Company records the excess of the acquisition purchase price over the net fair value of the tangible and identifiable intangible assets acquired and liabilities assumed as goodwill. In accordance with ASC 350, Intangibles - Goodwill and Other, the Company tests goodwill for impairment annually during the fourth quarter of each year and whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. In connection with the annual impairment test for goodwill, the Company elected the option to perform a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If the Company determines that it was more likely than not that the fair value of the reporting unit is less than its carrying amount, then the impairment test is performed. Consistent with the Company's assessment that it has only one reporting segment, the Company has determined that it has only one reporting unit and tests goodwill for impairment at the entity level using the two-step process required by ASC 350. In the first step, the Company compares the carrying amount of the reporting unit to the fair value of the enterprise. If the fair value of the enterprise exceeds the carrying value, goodwill is not considered impaired and no further testing is required. If the carrying value of the enterprise exceeds the fair value, goodwill is potentially impaired, and the second step of the impairment test must be performed. In the second step, the Company compares the implied fair value of the goodwill, as defined by ASC 350, to its carrying amount to determine the impairment loss, if any. The Company capitalizes certain costs related to intangible assets, such as patents, trademarks and software development costs. The Company follows the provisions of ASC 350-40, Internal Use Software for determining whether computer software is internal-use software and on accounting for the proceeds of computer software originally developed or obtained for internal use. The Company expenses all costs incurred during the preliminary project stage of software development and capitalizes the costs incurred during the application development stage. Costs incurred relating to upgrades and enhancements to the software are capitalized if it is determined that these upgrades or enhancements add additional functionality to the software. Costs incurred to improve and support products after they become available are charged to expense as incurred. two |
Long-Lived Assets | Long-Lived AssetsThe Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable. When such an event occurs, management determines whether there has been impairment by comparing the anticipated undiscounted future net cash flows to the related asset group’s carrying value. If an asset is considered impaired, the asset is written down to fair value, which is determined based either on discounted cash flows or appraised value, depending on the nature of the asset. There were no impairment charges, or changes in estimated useful lives recorded during the years ended December 31, 2022, 2021 and 2020. |
Debt and Embedded Derivatives | Debt and Embedded Derivatives The Company applies the accounting standards for derivatives and for distinguishing liabilities from equity when accounting for hybrid contracts. The Company accounts for convertible debt instruments when the Company has determined that the embedded conversion options should not be bifurcated from their host instruments in accordance with ASC 470-20 Debt with Conversion and Other Options (see Note 6). Prior to the extinguishment of debt outstanding under the Madryn Credit Agreement (as defined below), the Company used option pricing valuation models to determine the fair value of embedded derivatives and recorded any change in fair value in the consolidated statements of operations (see Note 5). |
Debt Issuance Costs and Debt Discounts | Debt Issuance Costs and Debt Discounts Costs incurred in connection with the issuance of new debt are capitalized. Capitalizable debt issuance costs paid to third parties and debt discounts, net of amortization, are recorded as a reduction to the long-term debt balance on the consolidated balance sheets. Amortization expense on capitalized debt issuance costs and debt discounts related to loans are calculated using the effective interest method over the term of the loan commitment and is recorded as interest expense in the consolidated statements of operations. |
Income Taxes | Income Taxes The Company records income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s consolidated financial statements or income tax returns. In estimating future tax consequences, expected future events, enactments or changes in the tax law or rates are considered. Valuation allowances are provided when necessary to reduce deferred tax assets to the amount expected to be realized. The Company operates in various tax jurisdictions and is subject to audit by various tax authorities. The Company records uncertain tax positions based on a two-step process whereby (1) a determination is made as to whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold the Company recognizes the largest amount of tax benefit that is greater than 50% likely to be realized upon ultimate settlement with the related tax authority. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. Significant judgment is required in the identification of uncertain tax positions and in the estimation of penalties and interest on uncertain tax positions. |
Foreign Currency | Foreign Currency The financial statements of the Company’s foreign subsidiaries whose functional currencies are the local currencies are translated into U.S. dollars for consolidation as follows: assets and liabilities at the exchange rate as of the balance sheet date, stockholders’ equity at the historical rates of exchange, and income and expense amounts at the average exchange rate for the period. Translation adjustments resulting from the translation of the subsidiaries’ accounts are included in “Accumulated other comprehensive income” as equity in the consolidated balance sheet. Transactions denominated in currencies other than the applicable functional currency are converted to the functional currency at the exchange rate on the transaction date. At period end, monetary assets and liabilities are remeasured to the functional currency using exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are remeasured at historical exchange rates. Gains and losses resulting from foreign currency transactions are included within “Other expense, net” in the consolidated statement of operations. |
Comprehensive Loss | Comprehensive LossThe Company’s comprehensive loss consists of net loss and foreign currency translation adjustments arising from the consolidation of the Company’s foreign subsidiaries. |
Share-based Compensation | Share-Based Compensation The Company measures and recognizes compensation expense for all share-based awards in accordance with the provisions of ASC 718, Stock Compensation . Share-based awards granted include stock options, restricted stock units, or RSUs, and restricted stock awards, or RSAs. Share-based compensation expense for RSUs and RSAs granted to employees is measured at the grant date based on the fair value of the awards and is recognized as an expense ratably on a straight-line basis over the requisite service period. The fair value of options to purchase shares is estimated on the grant date using the Black-Scholes option valuation model. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic net income (loss) per share is calculated by dividing the net income (loss) attributable to shareholders by the weighted-average number of shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net income (loss) per share is computed by dividing the net income (loss) by the weighted-average number of shares and potentially dilutive |
Recent Accounting Standards | Recent Accounting Standards Periodically, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s consolidated financial statements upon adoption. Previously, under the Jumpstart Our Business Startups Act of 2012, or JOBS Act, the Company met the definition of an emerging growth company, and previously elected the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. The Company ceased to be an emerging growth company on December 31, 2021. The following recent accounting pronouncements issued by the FASB, could have a material effect on the Company’s financial statements: Recently Adopted Accounting Standards In August 2020, the FASB issued ASU No. 2020-06, Debt with Conversion and other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) . The new guidance eliminates the beneficial conversion and cash conversion accounting models for convertible instruments. It also amends the accounting for certain contracts in an entity’s own equity that are currently accounted for as derivatives because of specific settlement provisions. In addition, the new guidance modifies how particular convertible instruments and certain contracts that may be settled in cash or shares impact the diluted EPS computation. The Company adopted ASU No. 2020-06 as of January 1, 2022 and the adoption did not have a material impact on its consolidated financial statements and related disclosures. Recently Issued Accounting Standards There were no recently issued accounting standards not yet adopted which would have a material effect on the Company’s financial statements and related disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Consolidated Entities | The consolidated financial statements include the Company’s accounts and those of its wholly owned subsidiaries as of December 31, 2022 as follows: Subsidiary Incorporation/Acquisition Date Establishment Labs, S.A. (Costa Rica) January 18, 2004 Motiva USA, LLC (USA) February 20, 2014 JAMM Technologies, Inc. (USA) October 27, 2015 Establishment Labs Produtos par Saude Ltda (Brazil) January 4, 2016 European Distribution Center Motiva BVBA (Belgium) March 4, 2016 Motiva Implants France SAS (France) September 12, 2016 JEN-Vault AG (Switzerland) November 22, 2016 Motiva Nordica AB (Sweden) November 2, 2017 Motiva Implants UK Limited (the United Kingdom) July 31, 2018 Motiva Italy S.R.L (Italy) July 31, 2018 Motiva Implants Spain, S.L. (Spain) January 3, 2019 Motiva Austria GmbH (Austria) January 14, 2019 Motiva Germany GmbH (Germany) August 1, 2019 Motiva Argentina S.R.L. (Argentina) February 7, 2020 |
Allowance for Doubtful Accounts | A roll-forward of the allowance for doubtful accounts is as follows: Year Ended December 31, 2022 2021 2020 Beginning balance $ 1,221 $ 1,143 $ 1,026 Provision for doubtful accounts 111 200 375 Write-offs (591) (122) (258) Ending balance $ 741 $ 1,221 $ 1,143 |
Schedule of Inventory Reserves | A roll-forward of the inventory reserve is as follows: Year Ended December 31, 2022 2021 2020 Beginning balance $ 1,167 $ 1,625 $ 347 Provision for inventory obsolescence 1,577 338 1,180 Write-offs (95) (796) 98 Ending balance $ 2,649 $ 1,167 $ 1,625 |
Disaggregation of Revenue | Revenue was generated in these primary geographic markets: Year Ended December 31, 2022 2021 2020 (in thousands) Europe $ 48,702 $ 51,912 $ 37,667 Latin America 52,442 38,226 21,512 Asia-Pacific/Middle East 59,561 35,679 24,986 Other 994 865 511 $ 161,700 $ 126,682 $ 84,676 |
Balance Sheet Accounts (Tables)
Balance Sheet Accounts (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Inventory, Net | Inventory, Net December 31, 2022 2021 (in thousands) Raw materials $ 12,549 $ 8,519 Work in process 1,666 1,396 Finished goods 22,368 18,492 $ 36,583 $ 28,407 |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets December 31, 2022 2021 (in thousands) Prepaid insurance $ 2,598 $ 2,315 Prepaid construction in process 2,240 330 Prepaid services 685 381 Prepaid taxes 1,400 551 Prepaid assets 991 158 Prepaid raw materials and accessories 433 577 Prepaid U.S. clinical trial costs 300 412 Prepaid warranty and distribution rights 238 516 Other 2,658 1,772 $ 11,543 $ 7,012 |
Property and Equipment, Net | Property and Equipment, Net December 31, 2022 2021 (in thousands) Machinery and equipment $ 11,118 $ 10,240 Building improvements 7,006 6,713 Furniture and fixtures 5,645 4,761 Building 2,472 2,472 Leasehold improvements 2,233 2,118 Land 802 802 Vehicles 176 268 Construction in process 35,261 3,174 Total 64,713 30,548 Less: Accumulated depreciation and amortization (13,621) (11,890) $ 51,092 $ 18,658 |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following: December 31, 2022 2021 (in thousands) Performance bonus $ 5,245 $ 3,346 Payroll and related expenses 4,097 3,904 Bonus feature of stock option grants 4,500 5,570 Operating lease liabilities - current 688 402 Commissions 712 1,138 Professional and legal services 1,203 819 Warranty reserve 130 167 Cash payable for asset acquisitions - contingent consideration — 137 Other 662 753 $ 17,237 $ 16,236 |
Schedule of Short-term Debt | Other liabilities, short-term consisted of the following: December 31, 2022 2021 (in thousands) Deferred revenue 1,688 769 Cash payable for asset acquisitions — 409 $ 1,688 $ 1,178 |
Schedule of Long-term Debt | Other liabilities, long-term consisted of the following: December 31, 2022 2022 (in thousands) Deferred revenue $ 1,670 $ 2,392 Other (44) — $ 1,626 $ 2,392 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | There were no changes in the carrying amount of goodwill during the year ended December 31, 2022: Balance as of January 1, 2022 Additions Accumulated Impairment Losses Balance as of December 31, 2022 (in thousands) Goodwill $ 465 $ — $ — $ 465 |
Schedule of Finite-Lived Intangible Assets | The carrying amounts of these intangible assets other than goodwill as of December 31, 2022 were as follows: Gross Carrying Amount Accumulated Amortization Net Carrying Amount Estimated Useful Lives (in thousands) (in years) Patents and license rights $ 1,757 $ (1,321) $ 436 7-12 Customer relationships 2,033 (1,967) 66 4-10 510(k) authorization 567 (269) 298 15 Developed technology 62 (58) 4 10 Capitalized software development costs 5,001 (1,630) 3,371 2-5 Other 183 (41) 142 2-5 Capitalized patents and license rights not yet amortized 291 — 291 $ 9,894 $ (5,286) $ 4,608 The carrying amounts of intangible assets other than goodwill as of December 31, 2021 were as follows: Gross Carrying Amount Accumulated Amortization Net Carrying Amount Estimated Useful Lives (in thousands) (in years) Patents and license rights $ 1,736 $ (1,136) $ 600 7-12 Customer relationships 2,033 (1,799) 234 4-10 510(k) authorization 567 (232) 335 15 Developed technology 62 (52) 10 10 Capitalized software development costs 3,648 (791) 2,857 2-5 Other 75 (31) 44 2-5 Capitalized patents and license rights not yet amortized 291 — 291 $ 8,412 $ (4,041) $ 4,371 |
Schedule of Indefinite-Lived Intangible Assets | The carrying amounts of these intangible assets other than goodwill as of December 31, 2022 were as follows: Gross Carrying Amount Accumulated Amortization Net Carrying Amount Estimated Useful Lives (in thousands) (in years) Patents and license rights $ 1,757 $ (1,321) $ 436 7-12 Customer relationships 2,033 (1,967) 66 4-10 510(k) authorization 567 (269) 298 15 Developed technology 62 (58) 4 10 Capitalized software development costs 5,001 (1,630) 3,371 2-5 Other 183 (41) 142 2-5 Capitalized patents and license rights not yet amortized 291 — 291 $ 9,894 $ (5,286) $ 4,608 The carrying amounts of intangible assets other than goodwill as of December 31, 2021 were as follows: Gross Carrying Amount Accumulated Amortization Net Carrying Amount Estimated Useful Lives (in thousands) (in years) Patents and license rights $ 1,736 $ (1,136) $ 600 7-12 Customer relationships 2,033 (1,799) 234 4-10 510(k) authorization 567 (232) 335 15 Developed technology 62 (52) 10 10 Capitalized software development costs 3,648 (791) 2,857 2-5 Other 75 (31) 44 2-5 Capitalized patents and license rights not yet amortized 291 — 291 $ 8,412 $ (4,041) $ 4,371 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of December 31, 2022, the amortization expense related to identifiable intangible assets, with definite useful lives, in future periods is expected to be as follows: Year Ending December 31, (in thousands) 2023 $ 1,160 2024 1,071 2025 943 2026 481 2027 285 Thereafter 377 Total $ 4,317 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Liabilities Measured on Recurring Basis | The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy at period end: Fair Value Measurements at December 31, 2022 Total Level 1 Level 2 Level 3 (in thousands) Liabilities Madryn put option liability $ — $ — $ — $ — $ — $ — $ — $ — Fair Value Measurements at December 31, 2021 Total Level 1 Level 2 Level 3 (in thousands) Liabilities Madryn put option liability $ 703 $ — $ — $ 703 $ 703 $ — $ — $ 703 |
Fair Value Measurement Inputs and Valuation Techniques | The Company used the following assumptions to value the Madryn derivatives: Madryn Put Option Liability December 31, 2022 2021 Interest rate volatility —% 25.8% Market yield rate —% 6.8% Term (in years) — 3.75 Dividend yield —% —% |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial instruments as follows: Madryn Put Option Liability Balance at December 31, 2020 $ 1,440 Change in fair value (737) Balance at December 31, 2021 703 Change in fair value 396 Settlement (1,099) Balance at December 31, 2022 $ — |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | The Company recorded Oaktree debt on the consolidated balance sheets as follows: December 31, 2022 2021 (in thousands) Principal $ 181,314 $ — Net unamortized debt discount and issuance costs (5,853) — Net carrying value of Oaktree debt $ 175,461 $ — The Company recorded Madryn debt on the balance sheet as follows: December 31, 2022 2021 (in thousands) Principal $ — $ 65,000 Net unamortized debt discount and issuance costs — (13,094) Net carrying value of Madryn debt $ — $ 51,906 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Lease, Cost | Total lease cost includes the following components for the years ended December 31, 2022 and 2021 : December 31, 2022 2021 (in thousands) Operating lease expense cost $ 740 $ 656 December 31, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities (in thousands) Operating cash outflows from operating leases $ 648 $ 639 ROU assets obtained in exchange for new lease liabilities Operating leases $ 1,962 $ — |
Assets And Liabilities, Lessee | December 31, 2022 2021 Supplemental balance sheet information (in thousands) Operating leases Operating lease right-of-use assets $ 3,702 $ 2,206 Operating lease liabilities - short-term 688 402 Operating lease liabilities - long-term 3,200 1,900 Total operating lease liabilities $ 3,888 $ 2,302 Weighted-average remaining lease term (years) 5.4 5.5 Weighted-average discount rate (%) 9.5 % 10.4 % |
Lessee, Operating Lease, Liability, Maturity | Maturities of lease liabilities as of December 31, 2022 were as follows: Years Ending December 31, Operating Leases (in thousands) 2023 $ 970 2024 931 2025 792 2026 710 2027 600 Thereafter 801 Total future minimum lease payments 4,804 Less: Amount of lease payments representing interest (916) Present value of future minimum lease payments $ 3,888 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Reserved Ordinary Shares for Future Issuances | The Company had reserved common shares for future issuances at December 31: 2022 2021 Warrants to purchase common shares — 5,500 Options to purchase common shares 1,873,165 2,098,087 Remaining shares available under the 2018 Equity Incentive Plan 2,271,999 1,780,687 Shares issuable on vesting of grants of RSUs 164,643 3,982 Remaining shares available under the 2018 ESPP 848,000 661,000 Total 5,157,807 4,549,256 |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Stockholders' Equity Note, Warrants or Rights | As of December 31, 2021, 5,500 warrants to purchase the Company’s common shares were outstanding and exercisable: Warrant Holder Issue Date In Connection With Warrant to Shares Exercise Expiration Date Rockport 3/3/2017 Loan agreement Common — $ 3.80 8/28/2022 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share-based Compensation Expense | During the periods presented, the Company recorded the following share-based compensation expense for stock options and restricted stock awards: Year Ended December 31, 2022 2021 2020 (in thousands) Sales, general and administrative $ 11,154 $ 7,908 $ 4,203 Research and development 2,204 2,499 1,518 Total $ 13,358 $ 10,407 $ 5,721 |
Schedule of Stock Options | Stock Options Number of Options Outstanding Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Balances at December 31, 2021 2,098,087 $ 37.49 7.67 $ 67,357 Granted (weighted-average fair value of $38.66 per share) 327,500 64.73 Exercised (301,412) 12.85 Forfeited/canceled (251,010) 63.47 Balances at December 31, 2022 1,873,165 $ 42.73 7.06 $ 47,273 |
Schedule of Employee Stock Options Valuation Assumptions | The fair value of stock options granted to employees was estimated using the following assumptions: Year Ended December 31, 2022 2021 2020 Volatility 56% - 62% 60% 55% - 60% Risk-free interest rate 1.6% - 3.8% 0.7% - 1.4% 0.4% - 1.5% Term (in years) 6.25 6.25 6.25 Dividend yield — — — The fair value of stock options granted to consultants was estimated using the following assumptions during the following periods presented: Year Ended December 31, 2022 2021 2020 Volatility 56% - 60% 60% 56% - 60% Risk-free interest rate 2.4% - 3.6% 1.6% 0.6% - 1.6% Term (in years) 10 10 10 Dividend yield — — — |
Schedule of Restricted Stock | The following table represents RSU activity for fiscal 2022: Restricted Stock Weighted- Outstanding unvested at December 31, 2021 3,982 $ 69.05 Granted 203,051 63.41 Vested (21,537) 53.72 Forfeited/canceled (20,853) 65.93 Outstanding unvested at December 31, 2022 164,643 $ 69.49 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | For the year ended December 31, loss before income tax consisted of the following: 2022 2021 2020 (in thousands) Costa Rica operations $ (9,721) $ 4,027 $ (8,872) Non-Costa Rica operations (63,103) (43,739) (29,145) $ (72,824) $ (39,712) $ (38,017) |
Schedule of Components of Income Tax Expense (Benefit) | For the year ended December 31, the income tax provision consisted of the following: 2022 2021 2020 (in thousands) Current Costa Rica $ 114 $ 289 $ — Non-Costa Rica 2,185 1,131 378 Total current 2,299 1,420 378 Deferred Costa Rica — — — Non-Costa Rica 86 7 (274) Total deferred 86 7 (274) Total provision $ 2,385 $ 1,427 $ 104 |
Schedule of Effective Income Tax Rate Reconciliation | The items accounting for the difference between income taxes computed at the Costa Rica statutory income tax rate and the income tax provision (benefit) consisted of the following for the year ended December 31: 2022 2021 2020 (in thousands) Tax benefit at Costa Rica statutory rate $ (21,847) 30 % $ (11,914) 30 % $ (11,405) 30 % Foreign tax rate differential 15,978 (22) 9,430 (24) 5,252 (14) Tax rate changes 104 — 2 — 4 — Return to provision adjustment 2,651 (4) 384 (1) (559) 2 Tax credits (52) — (53) — (82) — Change in valuation allowance 3,573 (5) 7,043 (18) 4,071 (11) Tax holiday adjustment (benefit) 3,030 (4) (918) 2 2,636 (7) U.S. Stock Compensation (1,353) 2 (2,681) 7 — — Other 301 — 134 — 187 — Total provision for income taxes $ 2,385 (3) % $ 1,427 (4) % $ 104 — % |
Schedule of Deferred Tax Assets and Liabilities | As of December 31, the components of the Company's deferred tax assets and liabilities are as follows: 2022 2021 (in thousands) Accruals and reserves $ 348 $ 301 Deferred revenue 1,198 — Intangibles 143 130 Stock compensation 1,404 775 Net operating loss 19,933 18,208 R&D credits 232 169 Other (144) 44 Valuation allowance (22,942) (19,369) Total net deferred tax assets (included in “Other non-current assets”) $ 172 $ 258 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | The following table summarizes the computation of basic and diluted net loss per share for the periods presented: Year Ended December 31, 2022 2021 2020 (in thousands, except share and per share data) Numerator: Net loss $ (75,209) $ (41,139) $ (38,121) Denominator: Weighted average common shares used for basic and diluted earnings per share 24,457,793 23,972,722 23,316,102 Net loss per share: Basic and diluted $ (3.08) $ (1.72) $ (1.63) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following potentially dilutive securities outstanding at the end of the periods presented have been excluded from the computation of diluted shares: Year Ended December 31, 2022 2021 2020 Options to purchase common shares 1,623,165 1,873,087 1,752,620 Shares issuable on vesting of grants of RSUs 164,643 3,982 48,624 Warrants to purchase common shares — 5,500 5,500 Total 1,787,808 1,882,569 1,806,744 |
Formation and Business of the_2
Formation and Business of the Company (Details) | Dec. 31, 2022 facility |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of manufacturing facilities | 2 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2022 USD ($) financial_institution unit segment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||
Number of financial institutions holding cash | financial_institution | 2 | ||
Cash equivalents | $ 0 | $ 0 | |
Sales, general and administrative | $ 125,984,000 | 92,229,000 | $ 66,625,000 |
Product return period | 15 days | ||
Product shelf life | 5 years | ||
Number of reportable segments | segment | 1 | ||
Number of reporting units | unit | 1 | ||
Goodwill and intangible asset impairment | $ 0 | 0 | 0 |
Asset impairment charges | 0 | 0 | 0 |
Foreign currency transaction loss | $ 3,000,000 | 5,600,000 | 1,700,000 |
Number of operating segments | segment | 1 | ||
Shipping and Handling | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Sales, general and administrative | $ 9,000,000 | 5,300,000 | 3,200,000 |
Product Concentration Risk | Avantor | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Purchases from suppliers | 32,100,000 | 23,100,000 | $ 15,300,000 |
Outstanding balance owed | $ 5,600,000 | $ 2,500,000 | |
Minimum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Estimated useful lives | 5 years | ||
Estimated useful lives | 2 years | ||
Maximum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Estimated useful lives | 10 years | ||
Estimated useful lives | 15 years | ||
Revenue | Brazil | Geographic Concentration Risk | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 16.60% | 11.60% | 10.90% |
Revenue | Customer One | Customer Concentration Risk | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 11.50% | 11.80% | |
Purchases | Product Concentration Risk | Avantor | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 38.20% | 51.40% | 66.70% |
Long-lived Assets | COSTA RICA | Geographic Concentration Risk | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 88% | 84% | |
Building | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Estimated useful lives | 50 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance | $ 1,221 | $ 1,143 | $ 1,026 |
Provision for doubtful accounts | 111 | 200 | 375 |
Write-offs | (591) | (122) | (258) |
Ending balance | $ 741 | $ 1,221 | $ 1,143 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Inventory Reserves (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Inventory, Valuation Reserves [Roll Forward] | |||
Beginning balance | $ 1,167 | $ 1,625 | $ 347 |
Provision for inventory obsolescence | 1,577 | 338 | 1,180 |
Write-offs | (95) | (796) | 98 |
Ending balance | $ 2,649 | $ 1,167 | $ 1,625 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 161,700 | $ 126,682 | $ 84,676 |
Europe | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 48,702 | 51,912 | 37,667 |
Latin America | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 52,442 | 38,226 | 21,512 |
Asia-Pacific/Middle East | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 59,561 | 35,679 | 24,986 |
Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 994 | $ 865 | $ 511 |
Balance Sheet Accounts - Invent
Balance Sheet Accounts - Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 12,549 | $ 8,519 |
Work in process | 1,666 | 1,396 |
Finished goods | 22,368 | 18,492 |
Inventory, gross | $ 36,583 | $ 28,407 |
Balance Sheet Accounts - Narrat
Balance Sheet Accounts - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
May 26, 2022 | Oct. 31, 2022 | Aug. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | ||||||
Inventory on consignment | $ 2,000 | $ 3,500 | ||||
Depreciation and amortization expense | $ 2,500 | $ 2,500 | $ 2,400 | |||
Zona Franca Coyol, S.A. | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Option to purchase land and buildings, payment | $ 9,500 | $ 3,100 | ||||
Land, Buildings and Improvements | Zona Franca Coyol, S.A. | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Option to purchase land and buildings | $ 12,600 | |||||
Land | Zona Franca Coyol, S.A. | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Option to purchase land and buildings | $ 2,800 |
Balance Sheet Accounts - Prepai
Balance Sheet Accounts - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid insurance | $ 2,598 | $ 2,315 |
Prepaid construction in process | 2,240 | 330 |
Prepaid services | 685 | 381 |
Prepaid taxes | 1,400 | 551 |
Prepaid assets | 991 | 158 |
Prepaid raw materials and accessories | 433 | 577 |
Prepaid U.S. clinical trial costs | 300 | 412 |
Prepaid warranty and distribution rights | 238 | 516 |
Other | 2,658 | 1,772 |
Prepaid expenses and other current assets | $ 11,543 | $ 7,012 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Prepaid expenses and other current assets | Prepaid expenses and other current assets |
Balance Sheet Accounts - Proper
Balance Sheet Accounts - Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 64,713 | $ 30,548 |
Less: Accumulated depreciation and amortization | (13,621) | (11,890) |
Property, plant and equipment, net | 51,092 | 18,658 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 11,118 | 10,240 |
Building improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 7,006 | 6,713 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 5,645 | 4,761 |
Building | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,472 | 2,472 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,233 | 2,118 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 802 | 802 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 176 | 268 |
Construction in process | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 35,261 | $ 3,174 |
Balance Sheet Accounts - Accrue
Balance Sheet Accounts - Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Performance bonus | $ 5,245 | $ 3,346 |
Payroll and related expenses | 4,097 | 3,904 |
Bonus feature of stock option grants | 4,500 | 5,570 |
Operating lease liabilities - current | 688 | 402 |
Commissions | 712 | 1,138 |
Professional and legal services | 1,203 | 819 |
Warranty reserve | 130 | 167 |
Cash payable for asset acquisitions - contingent consideration | 0 | 137 |
Other | 662 | 753 |
Accrued liabilities | $ 17,237 | $ 16,236 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued liabilities | Accrued liabilities |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued liabilities | Accrued liabilities |
Balance Sheet Accounts - Other
Balance Sheet Accounts - Other Liabilities, Short Term (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Deferred revenue | $ 1,688 | $ 769 |
Cash payable for asset acquisitions | 0 | 409 |
Other liabilities | $ 1,688 | $ 1,178 |
Balance Sheet Accounts - Othe_2
Balance Sheet Accounts - Other Liabilities, Long-term (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Deferred revenue | $ 1,670 | $ 2,392 |
Other | (44) | 0 |
Other liabilities | $ 1,626 | $ 2,392 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other liabilities | Other liabilities |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Goodwill (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Goodwill [Roll Forward] | |
Beginning Balance | $ 465 |
Additions | 0 |
Accumulated Impairment Losses | 0 |
Ending Balance | $ 465 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Accumulated Amortization | $ (5,286) | $ (4,041) |
Net Carrying Amount | 4,317 | |
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract] | ||
Indefinite-lived capitalized patents and license rights | 291 | 291 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Amount | 9,894 | 8,412 |
Net book value | $ 4,608 | 4,371 |
Minimum | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Estimated Useful Lives | 2 years | |
Maximum | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Estimated Useful Lives | 15 years | |
Patents and license rights | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | $ 1,757 | 1,736 |
Accumulated Amortization | (1,321) | (1,136) |
Net Carrying Amount | $ 436 | $ 600 |
Patents and license rights | Minimum | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Estimated Useful Lives | 7 years | 7 years |
Patents and license rights | Maximum | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Estimated Useful Lives | 12 years | 12 years |
Customer relationships | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | $ 2,033 | $ 2,033 |
Accumulated Amortization | (1,967) | (1,799) |
Net Carrying Amount | $ 66 | $ 234 |
Customer relationships | Minimum | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Estimated Useful Lives | 4 years | 4 years |
Customer relationships | Maximum | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Estimated Useful Lives | 10 years | 10 years |
510(k) authorization | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | $ 567 | $ 567 |
Accumulated Amortization | (269) | (232) |
Net Carrying Amount | $ 298 | $ 335 |
Estimated Useful Lives | 15 years | 15 years |
Developed technology | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | $ 62 | $ 62 |
Accumulated Amortization | (58) | (52) |
Net Carrying Amount | $ 4 | $ 10 |
Estimated Useful Lives | 10 years | 10 years |
Capitalized software development costs | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | $ 5,001 | $ 3,648 |
Accumulated Amortization | (1,630) | (791) |
Net Carrying Amount | $ 3,371 | $ 2,857 |
Capitalized software development costs | Minimum | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Estimated Useful Lives | 2 years | 2 years |
Capitalized software development costs | Maximum | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Estimated Useful Lives | 5 years | 5 years |
Other | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | $ 183 | $ 75 |
Accumulated Amortization | (41) | (31) |
Net Carrying Amount | $ 142 | $ 44 |
Other | Minimum | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Estimated Useful Lives | 2 years | 2 years |
Other | Maximum | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Estimated Useful Lives | 5 years | 5 years |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of intangible assets | $ 1,200,000 | $ 1,200,000 | $ 900,000 |
Goodwill and intangible asset impairment | $ 0 | $ 0 | $ 0 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Amortization Expense (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 1,160 |
2024 | 1,071 |
2025 | 943 |
2026 | 481 |
2027 | 285 |
Thereafter | 377 |
Net Carrying Amount | $ 4,317 |
Fair Value Measurements - FV on
Fair Value Measurements - FV on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Madryn put option liability | $ 0 | $ 703 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Madryn put option liability | 0 | 703 |
Liabilities | 0 | 703 |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Madryn put option liability | 0 | 0 |
Liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Madryn put option liability | 0 | 0 |
Liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Madryn put option liability | 0 | 703 |
Liabilities | $ 0 | $ 703 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Millions | 1 Months Ended | 12 Months Ended | ||||
Apr. 26, 2022 USD ($) | Aug. 31, 2019 USD ($) | Dec. 31, 2019 USD ($) | Dec. 31, 2017 USD ($) | Dec. 31, 2021 | Aug. 31, 2017 USD ($) | |
Line of Credit | Madryn Credit Agreement | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fair value of options | $ 15.1 | |||||
Debt discount | $ 1.6 | $ 5 | ||||
Additional amount borrowed | $ 25 | $ 25 | $ 10 | |||
Debt repayment | $ 65 | |||||
Measurement Input, Probability of Change in Control | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Change in control | 0.50 |
Fair Value Measurements - Deriv
Fair Value Measurements - Derivatives (Details) - Madryn Put Option Liability | Dec. 31, 2022 | Dec. 31, 2021 |
Interest rate volatility | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Derivative liability | 0 | 0.258 |
Market yield rate | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Derivative liability | 0 | 0.068 |
Term (in years) | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Derivative liability | 0 | 3.75 |
Dividend yield | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Derivative liability | 0 | 0 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3 Financial Instruments (Details) - Madryn Put Option Liability - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | $ 703 | $ 1,440 |
Change in fair value | 396 | (737) |
Settlement | (1,099) | |
Ending Balance | $ 0 | $ 703 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 8 Months Ended | 12 Months Ended | |||||||||
Apr. 26, 2022 | Jun. 17, 2019 | Aug. 31, 2020 | Aug. 31, 2019 | Dec. 31, 2017 | Dec. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2017 | Aug. 05, 2020 | Aug. 31, 2017 | |
Debt Instrument [Line Items] | |||||||||||||
Loss on extinguishment of debt | $ 19,019,000 | $ 0 | $ 0 | ||||||||||
Line of Credit | Madryn Credit Agreement | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Maximum borrowing capacity | $ 65,000,000 | ||||||||||||
Early repayment amount | $ 6,500,000 | ||||||||||||
Effective interest rate | 18.40% | 18.40% | |||||||||||
Weighted average interest rate | 10.60% | 10.60% | |||||||||||
Interest expense | $ 700,000 | $ 2,200,000 | 6,900,000 | $ 7,600,000 | |||||||||
Principal | $ 0 | $ 0 | 65,000,000 | ||||||||||
Fair value of options | $ 15,100,000 | ||||||||||||
Debt discount | $ 1,600,000 | $ 5,000,000 | $ 5,000,000 | ||||||||||
Borrowings on credit facility | $ 10,000,000 | ||||||||||||
Additional amount borrowed | $ 25,000,000 | $ 25,000,000 | $ 10,000,000 | ||||||||||
Debt repayment | 65,000,000 | ||||||||||||
Line of Credit | Madryn Credit Agreement | London Interbank Offered Rate (LIBOR) | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Credit agreement interest rate | 8% | ||||||||||||
Line of Credit | Oaktree Credit Agreement | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Maximum borrowing capacity | 225,000,000 | ||||||||||||
Early repayment amount | $ 5,000,000 | ||||||||||||
Debt term | 5 years | ||||||||||||
Effective interest rate | 9% | 10.40% | 10.40% | ||||||||||
Debt instrument, interest rate paid in kind, percentage | 60,000% | ||||||||||||
Original discount rate | 2% | ||||||||||||
Exit fee | 3% | ||||||||||||
Minimum liquidity requirement | $ 20,000,000 | ||||||||||||
Gross sales requirement, period | 12 months | ||||||||||||
Minimum gross sales | $ 200,000,000 | ||||||||||||
Minimum gross sales percentage | 50% | ||||||||||||
Weighted average interest rate | 9% | 9% | |||||||||||
Minimum initial cash interest rate | 0.0300 | ||||||||||||
Interest expense | $ 9,400,000 | ||||||||||||
Principal | $ 181,314,000 | 181,314,000 | $ 0 | ||||||||||
Interest accrued | 6,300,000 | ||||||||||||
Line of Credit | Oaktree Credit Agreement | Debt Instrument, Redemption, Period One | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Yield protection premium fee | 4% | ||||||||||||
Line of Credit | Oaktree Credit Agreement | Debt Instrument, Redemption, Period Two | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Yield protection premium fee | 4% | ||||||||||||
Line of Credit | Oaktree Credit Agreement | Debt Instrument, Redemption, Period Three | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Yield protection premium fee | 2% | ||||||||||||
Line of Credit | Oaktree Credit Agreement | Debt Instrument, Redemption, Period Four | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Yield protection premium fee | 0% | ||||||||||||
Line of Credit | Credit Agreement, Tranche A Term Loan | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Maximum borrowing capacity | $ 150,000,000 | 150,000,000 | 150,000,000 | ||||||||||
Line of Credit | Credit Agreement, Tranche B Term Loan | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Maximum borrowing capacity | 25,000,000 | $ 25,000,000 | $ 25,000,000 | ||||||||||
Minimum liquidity requirement | 25,000,000 | ||||||||||||
Line of Credit | Credit Agreement, Tranche C Term Loan | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Maximum borrowing capacity | 25,000,000 | ||||||||||||
Line of Credit | Credit Agreement, Tranche D Term Loan | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Maximum borrowing capacity | $ 25,000,000 | ||||||||||||
Effective interest rate | 8.25% | ||||||||||||
Line of Credit | Amended Madryn Credit Agreement | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt repayment | $ 65,000,000 | ||||||||||||
Loss on extinguishment of debt | $ 19,000,000 |
Debt - Oaktree Debt (Details)
Debt - Oaktree Debt (Details) - Oaktree Credit Agreement - Line of Credit - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Line of Credit Facility [Line Items] | ||
Principal | $ 181,314 | $ 0 |
Net unamortized debt discount and issuance costs | (5,853) | 0 |
Net carrying value of debt | $ 175,461 | $ 0 |
Debt - Madryn Debt (Details)
Debt - Madryn Debt (Details) - Madryn Credit Agreement - Line of Credit - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Line of Credit Facility [Line Items] | ||
Principal | $ 0 | $ 65,000 |
Net unamortized debt discount and issuance costs | 0 | (13,094) |
Net carrying value of debt | $ 0 | $ 51,906 |
Leases - Narrative (Details)
Leases - Narrative (Details) - Maximum | Dec. 31, 2022 |
Lessee, Lease, Description [Line Items] | |
Operating lease, term of contract | 7 years |
Finance lease, term of contract | 7 years |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Operating lease expense cost | $ 740 | $ 656 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating leases | ||
Right-of-use operating lease assets, net | $ 3,702 | $ 2,206 |
Operating lease liabilities - current | 688 | 402 |
Operating lease liabilities, non-current | 3,200 | 1,900 |
Operating lease liabilities | $ 3,888 | $ 2,302 |
Weighted-average remaining lease term (years) | ||
Operating lease, weighted average remaining lease term | 5 years 4 months 24 days | 5 years 6 months |
Weighted-average discount rate (%) | ||
Operating lease, weighted average discount rate | 9.50% | 10.40% |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating cash outflows from operating leases | $ 648 | $ 639 |
ROU assets obtained in exchange for new lease liabilities | ||
Operating leases | $ 1,962 | $ 0 |
Leases - Lease Maturity (Detail
Leases - Lease Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating Leases | ||
2023 | $ 970 | |
2024 | 931 | |
2025 | 792 | |
2026 | 710 | |
2027 | 600 | |
Thereafter | 801 | |
Total future minimum lease payments | 4,804 | |
Less: Amount of lease payments representing interest | (916) | |
Present value of future minimum lease payments | $ 3,888 | $ 2,302 |
Shareholders' Equity - Narrativ
Shareholders' Equity - Narrative (Details) - shares | Dec. 31, 2022 | Dec. 31, 2021 |
Equity [Abstract] | ||
Common stock, shares issued (in shares) | 24,815,908 | 24,488,335 |
Common stock, shares outstanding (in shares) | 24,407,838 | 24,080,265 |
Shareholders' Equity - Reserved
Shareholders' Equity - Reserved Ordinary Shares (Details) - shares | Dec. 31, 2022 | Dec. 31, 2021 |
Class of Stock [Line Items] | ||
Shares reserved for future issuance (in shares) | 5,157,807 | 4,549,256 |
Remaining shares available under the 2018 Equity Incentive Plan | ||
Class of Stock [Line Items] | ||
Shares reserved for future issuance (in shares) | 2,271,999 | 1,780,687 |
Options to purchase common shares | ||
Class of Stock [Line Items] | ||
Shares reserved for future issuance (in shares) | 1,873,165 | 2,098,087 |
Shares issuable on vesting of grants of RSUs | ||
Class of Stock [Line Items] | ||
Shares reserved for future issuance (in shares) | 164,643 | 3,982 |
Remaining shares available under the 2018 ESPP | ||
Class of Stock [Line Items] | ||
Shares reserved for future issuance (in shares) | 848,000 | 661,000 |
Warrants to purchase common shares | ||
Class of Stock [Line Items] | ||
Shares reserved for future issuance (in shares) | 0 | 5,500 |
Warrants - Narrative (Details)
Warrants - Narrative (Details) - Warrants to purchase common shares - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2017 | |
Class of Stock [Line Items] | |||
Exercise price of warrants (in dollars per share) | $ 3.80 | $ 3.80 | |
Warrant exercises (in shares) | 0 | 5,500 | |
Warrants outstanding (in shares) | 0 | 5,500 | |
Common Class B | |||
Class of Stock [Line Items] | |||
Number of shares called by warrants (in shares) | 4,703 | 145,000 | |
Warrant net exercises (in shares) | 5,000 |
Warrants - Warrant (Details)
Warrants - Warrant (Details) - Warrants to purchase common shares - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2017 |
Class of Stock [Line Items] | |||
Shares (in shares) | 0 | 5,500 | |
Exercise Price (in dollars per share) | $ 3.80 | $ 3.80 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||||
Jan. 01, 2019 shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) shares | Dec. 31, 2020 USD ($) | Jan. 01, 2022 shares | Jan. 01, 2021 shares | Jan. 01, 2020 shares | Dec. 31, 2018 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares reserved for future issuance (in shares) | shares | 5,157,807 | 4,549,256 | ||||||
Number of options vested and exercisable (in shares) | shares | 999,388 | |||||||
Weighted average exercise price vested and exercisable (in dollars per share) | $ / shares | $ 29.80 | |||||||
Aggregate intrinsic value of options vested and exercisable | $ 37,500 | |||||||
Number of options exercised in period (in shares) | shares | 301,412 | |||||||
Weighted average exercise price of options exercised (in dollars per share) | $ / shares | $ 12.85 | |||||||
Intrinsic value of options exercised in period | $ 15,000 | $ 28,700 | $ 1,900 | |||||
Unrecognized compensation expense of stock options granted | $ 20,900 | |||||||
Unrecognized compensation expense period for recognition | 2 years 3 months 18 days | |||||||
Unrecognized share-based compensation cost of unvested RSAs | $ 13,358 | $ 10,407 | 5,721 | |||||
Employee Stock Option | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares reserved for future issuance (in shares) | shares | 1,873,165 | 2,098,087 | ||||||
Vesting period | 4 years | |||||||
Unrecognized share-based compensation cost of unvested RSAs | $ 9,900 | $ 8,200 | 2,800 | |||||
Restricted Stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares reserved for future issuance (in shares) | shares | 164,643 | 3,982 | ||||||
Restricted stock conversion ratio | 1 | |||||||
RSAs vested in period | $ 3,000 | $ 400 | 600 | |||||
Unrecognized share-based compensation cost | $ 8,800 | |||||||
Employee unrecognized compensation expense, period for recognition | 3 years 1 month 6 days | |||||||
Minimum | Restricted Stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting period | 1 year | |||||||
Maximum | Restricted Stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting period | 4 years | |||||||
Consultant | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Unrecognized compensation expense of stock options to non-employees | $ 1,300 | |||||||
Issuance of stock and warrants for services or claims | $ 400 | $ 1,800 | $ 2,300 | |||||
Equity Incentive Plan, 2018 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares reserved for future issuance (in shares) | shares | 4,500,000 | 1,500,000 | ||||||
Common stock, shares authorized (in shares) | shares | 750,000 | 750,000 | 750,000 | 750,000 | ||||
Capital shares reserved for future issuance, increase (decrease), percent | 4% |
Share-Based Compensation - Stoc
Share-Based Compensation - Stock Options and Restricted Stock (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | $ 13,358 | $ 10,407 | $ 5,721 |
Sales, general and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | 11,154 | 7,908 | 4,203 |
Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | $ 2,204 | $ 2,499 | $ 1,518 |
Share-Based Compensation - St_2
Share-Based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Options Outstanding | ||
Beginning balance, options outstanding (in shares) | 2,098,087 | |
Granted (in shares) | 327,500 | |
Exercised (in shares) | (301,412) | |
Forfeited/canceled (in shares) | (251,010) | |
Ending balance, options outstanding (in shares) | 1,873,165 | 2,098,087 |
Weighted average fair value (in dollars per share) | $ 38.66 | |
Weighted-Average Exercise Price | ||
Beginning balance (in dollars per share) | 37.49 | |
Granted (in dollars per share) | 64.73 | |
Exercised (in dollars per share) | 12.85 | |
Forfeited/canceled (in dollars per share) | 63.47 | |
Ending balance (in dollars per share) | $ 42.73 | $ 37.49 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Weighted-Average Remaining Contractual Term (in years) | 7 years 21 days | 7 years 8 months 1 day |
Aggregate intrinsic value | $ 47,273 | $ 67,357 |
Share-Based Compensation - St_3
Share-Based Compensation - Stock Option Granted to Employees (Details) - Employee - Employee Stock Option | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Volatility | 62% | 60% | |
Volatility, minimum | 56% | 55% | |
Volatility, maximum | 60% | ||
Risk free interest rate, minimum | 1.60% | 0.70% | 0.40% |
Risk-free interest rate, maximum | 3.80% | 1.40% | 1.50% |
Term (in years) | 6 years 3 months | 6 years 3 months | 6 years 3 months |
Dividend yield | 0% | 0% | 0% |
Share-Based Compensation - St_4
Share-Based Compensation - Stock Options Granted to Non-employees (Details) - Employee Stock Option - Nonemployee - Consultant | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Volatility | 60% | 60% | |
Volatility, minimum | 56% | 56% | |
Volatility, maximum | 60% | ||
Risk-free interest rate | 3.60% | 1.60% | |
Risk free interest rate, minimum | 2.40% | 0.60% | |
Risk-free interest rate, maximum | 1.60% | ||
Term (in years) | 10 years | 10 years | 10 years |
Dividend yield | 0% | 0% | 0% |
Share-Based Compensation - Rest
Share-Based Compensation - Restricted Stock Activity (Details) - Restricted Stock | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Restricted Stock | |
Outstanding balance (in shares) | shares | 3,982 |
Granted (in shares) | shares | 203,051 |
Vested (in shares) | shares | (21,537) |
Forfeited/canceled (in shares) | shares | (20,853) |
Outstanding balance (in shares) | shares | 164,643 |
Weighted- Average Grant Date Fair Value | |
Balance outstanding (in dollars per share) | $ / shares | $ 69.05 |
Granted (in dollars per share) | $ / shares | 63.41 |
Vested (in dollars per share) | $ / shares | 53.72 |
Forfeited/canceled (in dollars per share) | $ / shares | 65.93 |
Balance outstanding (in dollars per share) | $ / shares | $ 69.49 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income before Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Costa Rica operations | $ (9,721) | $ 4,027 | $ (8,872) |
Non-Costa Rica operations | (63,103) | (43,739) | (29,145) |
Loss before income taxes | $ (72,824) | $ (39,712) | $ (38,017) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current | |||
Costa Rica | $ 114 | $ 289 | $ 0 |
Non-Costa Rica | 2,185 | 1,131 | 378 |
Total current | 2,299 | 1,420 | 378 |
Deferred | |||
Costa Rica | 0 | 0 | 0 |
Non-Costa Rica | 86 | 7 | (274) |
Total deferred | 86 | 7 | (274) |
Income tax expense (benefit) | $ 2,385 | $ 1,427 | $ 104 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||
Tax benefit at Costa Rica statutory rate | $ (21,847) | $ (11,914) | $ (11,405) |
Foreign tax rate differential | 15,978 | 9,430 | 5,252 |
Tax rate changes | 104 | 2 | 4 |
Return to provision adjustment | 2,651 | 384 | (559) |
Tax credits | (52) | (53) | (82) |
Change in valuation allowance | 3,573 | 7,043 | 4,071 |
Tax holiday adjustment (benefit) | 3,030 | (918) | 2,636 |
U.S. Stock Compensation | (1,353) | (2,681) | 0 |
Other | 301 | 134 | 187 |
Income tax expense (benefit) | $ 2,385 | $ 1,427 | $ 104 |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Tax benefit at Costa Rica statutory rate | 30% | 30% | 30% |
Foreign tax rate differential | (22.00%) | (24.00%) | (14.00%) |
Tax rate changes | 0% | 0% | 0% |
Return to provision adjustment | (4.00%) | (1.00%) | 2% |
Tax credits | 0% | 0% | 0% |
Change in valuation allowance | (5.00%) | (18.00%) | (11.00%) |
Tax holiday benefit | (4.00%) | 2% | (7.00%) |
U.S. Stock Compensation | 2% | 7% | 0% |
Other | 0% | 0% | 0% |
Effective income tax rate reconciliation, percent | (3.00%) | (4.00%) | 0% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Aug. 31, 2018 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | ||||
Tax holiday benefit | (4.00%) | 2% | (7.00%) | |
Tax credit carryforwards | $ 300 | |||
Income tax rate on extended warranty sales | 30% | 30% | 30% | |
Tax deferred expense, reversals and accruals, reserves | $ 54 | |||
Internal Revenue Service (IRS) | ||||
Operating Loss Carryforwards [Line Items] | ||||
Operating loss carryforwards | 76,100 | |||
Net operating loss, subject to expiration | 3,300 | |||
State and Local Jurisdiction | ||||
Operating Loss Carryforwards [Line Items] | ||||
Operating loss carryforwards | 8,900 | |||
Brazil | ||||
Operating Loss Carryforwards [Line Items] | ||||
Operating loss carryforwards | 11,300 | |||
UNITED KINGDOM | ||||
Operating Loss Carryforwards [Line Items] | ||||
Operating loss carryforwards | $ 100 | |||
Subsidiaries | ||||
Operating Loss Carryforwards [Line Items] | ||||
Tax holiday benefit | 0% | 0% | 0% | 0% |
Tax holiday, length of term | 12 years |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Components of Deferred Tax Assets and Liabilities [Abstract] | ||
Accruals and reserves | $ 348 | $ 301 |
Deferred revenue | 1,198 | 0 |
Intangibles | 143 | 130 |
Stock compensation | 1,404 | 775 |
Net operating loss | 19,933 | 18,208 |
R&D credits | 232 | 169 |
Other | (144) | 44 |
Valuation allowance | (22,942) | (19,369) |
Total net deferred tax assets (included in “Other non-current assets”) | $ 172 | $ 258 |
Net Loss Per Share - Basic and
Net Loss Per Share - Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | |||
Net loss | $ (75,209) | $ (41,139) | $ (38,121) |
Denominator: | |||
Weighted average common shares outstanding, basic (in shares) | 24,457,793 | 23,972,722 | 23,316,102 |
Weighted average common shares outstanding, diluted (in shares) | 24,457,793 | 23,972,722 | 23,316,102 |
Net loss per share: | |||
Basic net loss per share (in dollars per share) | $ (3.08) | $ (1.72) | $ (1.63) |
Diluted net loss per share (in dollars per share) | $ (3.08) | $ (1.72) | $ (1.63) |
Net Loss Per Share- Dilutive Se
Net Loss Per Share- Dilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 1,787,808 | 1,882,569 | 1,806,744 |
Options to purchase common shares | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 1,623,165 | 1,873,087 | 1,752,620 |
Shares issuable on vesting of grants of RSUs | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 164,643 | 3,982 | 48,624 |
Warrants to purchase common shares | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 5,500 | 5,500 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||||
Dec. 12, 2022 | Dec. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Aug. 31, 2022 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||||||
Grants in period (in shares) | 327,500 | ||||||
Consulting fee | $ 100,000 | ||||||
Options to purchase common shares | |||||||
Related Party Transaction [Line Items] | |||||||
Vesting period | 4 years | ||||||
Immediate Family Member of Management or Principal Owner | |||||||
Related Party Transaction [Line Items] | |||||||
Revenue from related parties | $ 1,200,000 | $ 1,400,000 | $ 900,000 | ||||
Accounts receivable | 400,000 | 400,000 | |||||
Cash reimbursement per day for services | $ 4,500 | ||||||
Cash reimbursement per hour of services | $ 531 | ||||||
Grants in period (in shares) | 22,068 | ||||||
Vesting period | 4 years | ||||||
Purchases from related party | $ 200,000 | $ 400,000 | $ 100,000 | ||||
Board of Directors | Options to purchase common shares | |||||||
Related Party Transaction [Line Items] | |||||||
Grants in period (in shares) | 7,829 | ||||||
Grant date fair value | $ 400,000 |
Employee Benefits (Details)
Employee Benefits (Details) | 12 Months Ended |
Dec. 31, 2022 employee | |
Postemployment Benefits [Abstract] | |
Number of employees represented by a labor union | 49 |
Uncategorized Items - esta-2022
Label | Element | Value |
Stock Issued During Period, Value, Warrant Exercises | esta_StockIssuedDuringPeriodValueWarrantExercises | $ 0 |
Additional Paid-in Capital [Member] | ||
Stock Issued During Period, Value, Warrant Exercises | esta_StockIssuedDuringPeriodValueWarrantExercises | (5,000) |
Common Stock [Member] | ||
Stock Issued During Period, Value, Warrant Exercises | esta_StockIssuedDuringPeriodValueWarrantExercises | $ 5,000 |
Stock Issued During Period, Shares, Warrant Exercises | esta_StockIssuedDuringPeriodSharesWarrantExercises | 4,703 |