Annual report pursuant to Section 13 and 15(d)

Summary of Significant Accounting Policies (Tables)

v3.22.4
Summary of Significant Accounting Policies (Tables)
12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
Sales Revenue Disaggregated by Sales Channel and Geographic Region The following table sets forth the Company’s sales revenue disaggregated by sales channel and geographic region:

(amounts in thousands)

 

Years ended December 31,

 

Revenue by region and category

 

2022

 

 

2021

 

 

2020

 

Business-to-business domestic sales

 

$

86,049

 

 

$

91,371

 

 

$

96,423

 

Business-to-business international sales

 

 

101,163

 

 

 

79,460

 

 

 

62,147

 

Direct-to-consumer domestic sales

 

 

133,337

 

 

 

140,899

 

 

 

121,619

 

Total sales revenue

 

$

320,549

 

 

$

311,730

 

 

$

280,189

 

Summary of Fair Value Assets Measured on Recurring Basis for Cash, Cash Equivalents and Marketable Securities

The following table summarizes fair value measurements by level for the assets measured at fair value on a recurring basis for cash, cash equivalents and marketable securities:

 

 

 

As of December 31, 2022

 

 

 

 

 

 

 

 

 

Gross

 

 

 

 

 

Cash

 

 

 

 

 

 

Adjusted

 

 

unrealized

 

 

 

 

 

and cash

 

 

 

 

(amounts in thousands)

 

cost

 

 

gains

 

 

Fair value

 

 

equivalents

 

 

 

 

Cash

 

$

27,970

 

 

$

 

 

$

27,970

 

 

$

27,970

 

 

 

 

Level 1:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market accounts

 

 

113,534

 

 

 

 

 

 

113,534

 

 

 

113,534

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Level 2:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

 

6,474

 

 

 

 

 

 

6,474

 

 

 

6,474

 

 

 

 

U.S. Treasury securities

 

 

18,913

 

 

 

26

 

 

 

18,939

 

 

 

18,939

 

 

 

 

Institutional Insured Liquidity Deposit Savings

 

 

20,097

 

 

 

 

 

 

20,097

 

 

 

20,097

 

 

 

 

Total

 

$

186,988

 

 

$

26

 

 

$

187,014

 

 

$

187,014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2021

 

 

 

 

 

 

Gross

 

 

 

 

 

Cash

 

 

 

 

 

 

Adjusted

 

 

unrealized

 

 

 

 

 

and cash

 

 

Marketable

 

(amounts in thousands)

 

cost

 

 

gains

 

 

Fair value

 

 

equivalents

 

 

securities

 

Cash

 

$

48,817

 

 

$

 

 

$

48,817

 

 

$

48,817

 

 

$

 

Level 1:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market accounts

 

 

186,707

 

 

 

 

 

 

186,707

 

 

 

186,707

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Level 2:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

 

9,988

 

 

 

1

 

 

 

9,989

 

 

 

 

 

 

9,989

 

Total

 

$

245,512

 

 

$

1

 

 

$

245,513

 

 

$

235,524

 

 

$

9,989

 

Summary of Components of Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss) were as follows:

 

 

As of December 31, 2022

 

 

Foreign

 

 

Unrealized

 

 

Unrealized

 

 

Accumulated

 

 

currency

 

 

gains

 

 

gains (losses)

 

 

other

 

 

translation

 

 

on debt

 

 

on cash

 

 

comprehensive

 

(amounts in thousands)

adjustments

 

 

securities

 

 

flow hedges

 

 

income (loss)

 

Balance as of December 31, 2021

$

328

 

 

$

1

 

 

$

1,140

 

 

$

1,469

 

Other comprehensive income (loss)

 

(597

)

 

 

25

 

 

 

(1,140

)

 

 

(1,712

)

Balance as of December 31, 2022

$

(269

)

 

$

26

 

 

$

 

 

$

(243

)

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2021

 

 

Foreign

 

 

Unrealized

 

 

Unrealized

 

 

Accumulated

 

 

currency

 

 

gains

 

 

gains (losses)

 

 

other

 

 

translation

 

 

on marketable

 

 

on cash

 

 

comprehensive

 

(amounts in thousands)

adjustments

 

 

securities

 

 

flow hedges

 

 

income

 

Balance as of December 31, 2020

$

1,128

 

 

$

 

 

$

(653

)

 

$

475

 

Other comprehensive income (loss)

 

(800

)

 

 

1

 

 

 

1,793

 

 

 

994

 

Balance as of December 31, 2021

$

328

 

 

$

1

 

 

$

1,140

 

 

$

1,469

 

Summary of Quantitative Information about Level 3 Inputs for Fair Value Measurement of Earnout Liability The following table provides quantitative information about Level 3 inputs for fair value measurement of the earnout liability as of December 31, 2021.

 

 

 

As of

 

Simulation input

 

December 31, 2021

 

Revenue volatility

 

 

15.00

%

WACC

 

 

10.50

%

20-year risk free rate

 

 

2.02

%

Market price of risk

 

 

2.68

%

Summary of Reconciliation of Earnout Liability Measured and Carried Fair Value on a Recurring Basis

The reconciliation of the earnout liability measured and carried at fair value on a recurring basis is as follows:

 

(amounts in thousands)

 

 

 

Balance as of December 31, 2020

 

$

27,612

 

Change in fair value

 

 

(11,596

)

Balance as of December 31, 2021

 

$

16,016

 

Change in fair value

 

 

(16,016

)

Balance as of December 31, 2022

 

$

 

Summary of Cash, Cash Equivalents and Short-term Investments

Cash, cash equivalents, and marketable securities consist of the following:

 

(amounts in thousands)

 

December 31,

 

Cash and cash equivalents

 

2022

 

 

2021

 

Cash

 

$

27,970

 

 

$

48,817

 

Money market accounts

 

 

113,534

 

 

 

186,707

 

Corporate bonds

 

 

6,474

 

 

 

 

U. S. Treasury securities

 

 

18,939

 

 

 

 

Institutional Insured Liquidity Deposit Savings

 

 

20,097

 

 

 

 

Total cash and cash equivalents

 

$

187,014

 

 

$

235,524

 

Marketable securities

 

 

 

 

 

 

Corporate bonds

 

$

 

 

$

9,989

 

Total marketable securities

 

$

 

 

$

9,989

 

Schedule of Net Accounts Receivable Balance Concentrations by Major Category

Net accounts receivable (gross accounts receivable, net of allowances) balance concentrations by major category as of December 31, 2022 and December 31, 2021 were as follows:

 

 

 

As of

 

 

As of

 

(amounts in thousands)

 

December 31, 2022

 

 

December 31, 2021

 

Net accounts receivable

 

$

 

 

%

 

 

$

 

 

%

 

Rental (1)

 

$

5,246

 

 

 

8.4

%

 

$

6,011

 

 

 

24.6

%

Business-to-business and other receivables (2)

 

 

57,479

 

 

 

91.6

%

 

 

18,441

 

 

 

75.4

%

Total net accounts receivable

 

$

62,725

 

 

 

100.0

%

 

$

24,452

 

 

 

100.0

%

 

(1)
Rental includes Medicare, Medicaid/other government, private insurance and patient pay.
(2)
Business-to business receivables included extended terms for two customers: 1) one customer with accounts receivable balances of $9,861 and $5,945 as of December 31, 2022 and December 31, 2021, respectively. The customer received extended payment terms through a direct financing plan offered. The Company also has a credit insurance policy in place, which allocated up to $12,000 and $10,000 in coverage as of December 31, 2022 and December 31, 2021, respectively, for this customer with a $400 deductible and 10% retention, and 2) one customer with accounts receivable balance of $22,641 as of December 31, 2022. The customer received extended payment terms of eight equal monthly payments on the December 31, 2022 balance.
Schedule of Percentage Breakdown of Net Accounts Receivable by Aging Category by Invoice Due Date

The following table sets forth the percentage breakdown of the Company’s net accounts receivable by aging category and invoice due date as of December 31, 2022 and December 31, 2021.

 

 

 

As of

 

 

As of

 

(amounts in thousands)

 

December 31, 2022

 

 

December 31, 2021

 

Net accounts receivable by aging category

 

$

 

 

%

 

 

$

 

 

%

 

Held and Unbilled

 

$

303

 

 

 

0.5

%

 

$

848

 

 

 

3.5

%

Aged 0-90 days

 

 

61,556

 

 

 

98.1

%

 

 

22,194

 

 

 

90.8

%

Aged 91-180 days

 

 

565

 

 

 

0.9

%

 

 

888

 

 

 

3.6

%

Aged 181-365 days

 

 

287

 

 

 

0.5

%

 

 

450

 

 

 

1.8

%

Aged over 365 days

 

 

14

 

 

 

0.0

%

 

 

72

 

 

 

0.3

%

Total net accounts receivable

 

$

62,725

 

 

 

100.0

%

 

$

24,452

 

 

 

100.0

%

 

Schedule of Allowances for Accounts Receivable

The following table sets forth the accounts receivable allowances as of December 31, 2022 and December 31, 2021:

 

 

 

As of

 

 

As of

 

(amounts in thousands)

 

December 31, 2022

 

 

December 31, 2021

 

Allowances - accounts receivable

 

$

 

 

%

 

 

$

 

 

%

 

Doubtful accounts

 

$

77

 

 

 

0.1

%

 

$

52

 

 

 

0.2

%

Sales returns

 

 

483

 

 

 

0.8

%

 

 

810

 

 

 

3.1

%

Total allowances - accounts receivable

 

$

560

 

 

 

0.9

%

 

$

862

 

 

 

3.3

%

Breakdown of Company's Revenue from U.S. and Non-U.S. Sources

A portion of revenue is earned from sales outside the United States. Approximately 70.9%, 74.1% and 73.6% of the non-U.S. revenue for the years ended December 31, 2022, 2021 and 2020, respectively, were invoiced in Euros. A breakdown of the Company’s revenue from U.S. and non-U.S. sources for the years ended December 31, 2022, 2021 and 2020, respectively, is as follows:

 

 

Years ended December 31,

 

(amounts in thousands)

2022

 

 

2021

 

 

2020

 

U.S. revenue

$

276,078

 

 

$

278,543

 

 

$

246,340

 

Non-U.S. revenue

 

101,163

 

 

 

79,460

 

 

 

62,147

 

Total revenue

$

377,241

 

 

$

358,003

 

 

$

308,487

 

Schedule of Inventories Inventories that are considered current consist of the following:

 

 

December 31,

 

(amounts in thousands)

2022

 

 

2021

 

Raw materials and work-in-progress

$

26,496

 

 

$

21,909

 

Finished goods

 

9,324

 

 

 

12,116

 

Less: reserves

 

(1,727

)

 

 

(2,152

)

Inventories, net

$

34,093

 

 

$

31,873

 

Computation of Depreciation and Amortization using Straight Line Method Over Estimated Useful Lives of Assets

Property and equipment are stated at cost. Depreciation and amortization are calculated using the straight-line method over the assets’ estimated useful lives as follows:

 

Rental equipment

1.5-5 years

Manufacturing equipment and tooling

3-5 years

Computer equipment and software

2-3 years

Furniture and equipment

3-5 years

Leasehold improvements

Lesser of estimated useful life or remaining lease term

Summary of Depreciation and Amortization Expense of Rental Equipment and Other Property and Equipment

Depreciation and amortization expense related to rental equipment and other property and equipment are summarized below for the years ended December 31, 2022, 2021 and 2020, respectively.

 

 

Years ended December 31,

 

(amounts in thousands)

2022

 

 

2021

 

 

2020

 

Rental equipment

$

11,103

 

 

$

8,860

 

 

$

5,695

 

Other property and equipment

 

3,942

 

 

 

3,993

 

 

 

3,882

 

Total depreciation and amortization

$

15,045

 

 

$

12,853

 

 

$

9,577

 

Summary of Property Plant and Equipment and Rental Equipment with Associated Accumulated Depreciation

Property and equipment and rental equipment with associated accumulated depreciation is summarized below as of December 31, 2022 and 2021, respectively.

 

(amounts in thousands)

 

December 31,

 

Property and equipment

 

2022

 

 

2021

 

Rental equipment, net of allowances of $2,255 and $1,290, respectively

 

$

61,679

 

 

$

59,073

 

Other property and equipment

 

 

33,434

 

 

 

31,522

 

Property and equipment

 

 

95,113

 

 

 

90,595

 

 

 

 

 

 

 

 

Accumulated depreciation

 

 

 

 

 

 

Rental equipment

 

 

31,320

 

 

 

33,355

 

Other property and equipment

 

 

20,524

 

 

 

18,314

 

Accumulated depreciation

 

 

51,844

 

 

 

51,669

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

 

 

 

 

Rental equipment, net of allowances of $2,255 and $1,290, respectively

 

 

30,359

 

 

 

25,718

 

Other property and equipment

 

 

12,910

 

 

 

13,208

 

Property and equipment, net

 

$

43,269

 

 

$

38,926

 

Computation of Earnings Per Share

The computation of EPS is as follows:

 

 

Years ended December 31,

 

(amounts in thousands, except share and per share amounts)

2022

 

 

2021

 

 

2020

 

Numerator—basic and diluted:

 

 

 

 

 

 

 

 

Net loss

$

(83,772

)

 

$

(6,333

)

 

$

(5,829

)

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

Weighted-average common shares - basic common stock (1)

 

22,852,571

 

 

 

22,490,027

 

 

 

21,980,326

 

Weighted-average common shares - diluted common stock

 

22,852,571

 

 

 

22,490,027

 

 

 

21,980,326

 

 

 

 

 

 

 

 

 

 

Net loss per share - basic common stock

$

(3.67

)

 

$

(0.28

)

 

$

(0.27

)

Net loss per share - diluted common stock (2)

$

(3.67

)

 

$

(0.28

)

 

$

(0.27

)

 

 

 

 

 

 

 

 

 

Denominator calculation from basic to diluted:

 

 

 

 

 

 

 

 

Weighted-average common shares - basic common stock (1)

 

22,852,571

 

 

 

22,490,027

 

 

 

21,980,326

 

Stock options and other dilutive awards

 

115,155

 

 

 

166,258

 

 

 

64,471

 

Weighted-average common shares - diluted common stock

 

22,967,726

 

 

 

22,656,285

 

 

 

22,044,797

 

Shares excluded from diluted weighted-average shares:

 

 

 

 

 

 

 

 

Stock options

 

329,586

 

 

 

151,344

 

 

 

467,378

 

Restricted stock units and restricted stock awards

 

528,398

 

 

 

167,237

 

 

 

292,795

 

Shares excluded from diluted weighted-average shares

 

857,984

 

 

 

318,581

 

 

 

760,173

 

 

(1)
Unvested restricted stock units and restricted stock awards are not included as shares outstanding in the calculation of basic earnings per share. Vested restricted stock units and restricted stock awards are included in basic earnings per share if all vesting and performance criteria have been met. Performance-based restricted stock units and restricted stock awards are included in the number of shares used to calculate diluted earnings per share as long as all applicable performance criteria are met, and their effect is dilutive. Restricted stock awards are eligible to receive all dividends declared on the Company’s common shares during the vesting period; however, such dividends are not paid until the restrictions lapse.
(2)
Due to net losses for the years ended December 31, 2022, 2021 and 2020, diluted loss per share is the same as basic.