UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the Quarterly Period Ended
or
For the transition period from ______ to ______
Commission file number:
(Exact name of registrant as specified in its charter)
| 3841 |
|
(
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
There were
TABLE OF CONTENTS
2
Senseonics Holdings, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
March 31, | December 31, |
| |||||
2022 | 2021 | ||||||
(unaudited) | |||||||
Assets |
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| |||||
Current assets: | |||||||
Cash and cash equivalents | $ | | $ | | |||
Short term investments, net | | | |||||
Accounts receivable, net | | | |||||
Accounts receivable, net - related parties | | | |||||
Inventory, net | | | |||||
Prepaid expenses and other current assets |
| |
| | |||
Total current assets |
| |
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Option | | | |||||
Deposits and other assets |
| |
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Long term investments, net | | | |||||
Property and equipment, net |
| |
| | |||
Total assets | $ | | $ | | |||
Liabilities and Stockholders’ Deficit | |||||||
Current liabilities: | |||||||
Accounts payable | $ | | $ | | |||
Accrued expenses and other current liabilities |
| |
| | |||
Accrued expenses and other current liabilities- related parties | | | |||||
Note payable, current portion, net | | — | |||||
Derivative liability, current portion | | — | |||||
Term Loans, net | | | |||||
Total current liabilities |
| |
| | |||
Long-term debt and notes payables, net | | | |||||
Derivative liabilities |
| |
| | |||
Option | | | |||||
Other liabilities | | | |||||
Total liabilities |
| |
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Commitments and contingencies | |||||||
Stockholders’ deficit: | |||||||
Common stock, $ |
| |
| | |||
Additional paid-in capital |
| |
| | |||
Accumulated other comprehensive loss | ( | ( | |||||
Accumulated deficit |
| ( |
| ( | |||
Total stockholders' deficit |
| ( |
| ( | |||
Total liabilities and stockholders’ deficit | $ | | $ | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
Senseonics Holdings, Inc.
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
(in thousands, except share and per share data)
Three Months Ended | ||||||
March 31, | ||||||
| 2022 |
| 2021 | |||
Revenue, net | $ | | $ | | ||
Revenue, net - related parties | | | ||||
Total revenue | | | ||||
Cost of sales | | | ||||
Gross profit | | | ||||
Expenses: | ||||||
Sales and marketing expenses | | | ||||
Research and development expenses | | | ||||
General and administrative expenses | | | ||||
Operating loss | ( |
| ( | |||
Other income (expense), net: | ||||||
Interest income | | | ||||
Gain (Loss) on fair value adjustment of option | | ( | ||||
Gain on extinguishment of debt and option | — | | ||||
Interest expense | ( | ( | ||||
Gain (Loss) on change in fair value of derivatives | | ( | ||||
Impairment cost, net | | ( | ||||
Other expense | ( | ( | ||||
Total other income (expense), net | | ( | ||||
Net Income (Loss) | | ( | ||||
Other comprehensive loss | ||||||
Unrealized loss on marketable securities | ( | — | ||||
Total other comprehensive loss | ( | — | ||||
Total comprehensive income (loss) | $ | | $ | ( | ||
Basic net income (loss) per common share | $ | | $ | ( | ||
Basic weighted-average shares outstanding | | | ||||
Diluted net income (loss) per common share | $ | ( | $ | ( | ||
Diluted weighted-average shares outstanding | | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
Senseonics Holdings, Inc.
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Deficit
(in thousands)
Additional | Accumulated | Total |
| Series A | |||||||||||||||||
Common Stock | Paid-In | Other | Accumulated | Stockholders' |
| Convertible | |||||||||||||||
| Shares |
| Amount |
| Capital |
| Comprehensive Loss | Deficit | Deficit |
| Preferred Stock Temporary Equity |
| |||||||||
Three months ended March 31, 2021: | |||||||||||||||||||||
Balance, December 31, 2020 |
| | | | — | ( | ( | $ | | ||||||||||||
Issuance of convertible preferred stock, net | — | — | | ||||||||||||||||||
Conversion of preferred stock | | | | — | — | | ( | ||||||||||||||
Issuance of common stock, net | | | | |
| — | |||||||||||||||
Exercise of stock options and ESPP purchases |
| | | | |
| — | ||||||||||||||
Exchange and conversion of convertible notes, net | | | | |
| — | |||||||||||||||
Stock-based compensation expense and vesting of RSU's | | — | | | — | ||||||||||||||||
Net loss |
| ( | ( |
| — | ||||||||||||||||
Balance, March 31, 2021 |
| | $ | | $ | |
| $ | — | $ | ( | $ | ( | $ | — | ||||||
Three months ended March 31, 2022: | |||||||||||||||||||||
Balance, December 31, 2021 | | | | ( | ( | ( | — | ||||||||||||||
Issuance of common stock |
| | | | — | — | | — | |||||||||||||
Exercise of stock options and warrants |
| | | | — | — | | — | |||||||||||||
Issuance of common stock for vested RSUs and ESPP purchase | | | | — | — | | — | ||||||||||||||
Stock-based compensation expense |
| — | — | | — | — | | — | |||||||||||||
Net income | — | — | — | — | | | — | ||||||||||||||
Other comprehensive loss |
| — | — | — | ( | — | ( | — | |||||||||||||
Balance, March 31, 2022 |
| | $ | | $ | |
| $ | ( | $ | ( | $ | ( | $ | — |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
Senseonics Holdings, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
Three Months Ended | |||||
March 31, | |||||
2022 | 2021 | ||||
Cash flows from operating activities |
|
| |||
Net income (loss) | $ | | ( | ||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||
Depreciation and amortization expense |
| | | ||
Non-cash interest expense (debt discount and deferred costs) |
| | | ||
Change in fair value of derivatives | ( | | |||
(Gain) Loss on fair value adjustment of option | ( | | |||
Gain on extinguishment of debt and option | — | ( | |||
Impairment of option, net | ( | | |||
Stock-based compensation expense |
| | | ||
Changes in assets and liabilities: | |||||
Accounts receivable | ( | | |||
Prepaid expenses and other current assets |
| ( | ( | ||
Inventory | ( | ( | |||
Deposits and other assets | | ( | |||
Accounts payable |
| | ( | ||
Accrued expenses and other liabilities | ( | ( | |||
Accrued interest | ( | | |||
Net cash used in operating activities |
| ( | ( | ||
Cash flows from investing activities | |||||
Capital expenditures |
| ( | ( | ||
Proceeds from sale and maturity of marketable securities | | — | |||
Net cash provided by (used in) investing activities |
| |
| ( | |
Cash flows from financing activities | |||||
Issuance of common stock, net | | | |||
Proceeds from exercise of stock options, stock warrants and ESPP purchases | | | |||
Proceeds from issuance of Masters preferred stock, net |
| — | | ||
Repayment of term loans | ( | — | |||
Net cash provided by financing activities |
| |
| | |
Net increase in cash and cash equivalents |
| |
| | |
Cash and cash equivalents, at beginning of period |
| | | ||
Cash and cash equivalents, at ending of period | $ | | $ | | |
Supplemental disclosure of cash flow information | |||||
Cash paid during the period for interest | $ | | $ | | |
Supplemental disclosure of non-cash investing and financing activities | |||||
Issuance of common stock converted from preferred shares | — | | |||
Issuance of common stock converted from notes payables | — | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6
Senseonics Holdings, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
1. | Organization and Nature of Operations |
Senseonics Holdings, Inc., a Delaware corporation, is a medical technology company focused on the development and commercialization of long-term, implantable continuous glucose monitoring (“CGM”) systems to improve the lives of people with diabetes by enhancing their ability to manage their disease with relative ease and accuracy.
Senseonics, Incorporated is a wholly owned subsidiary of Senseonics Holdings, Inc. and was originally incorporated on October 30, 1996 and commenced operations on January 15, 1997. Senseonics Holdings, Inc. and Senseonics, Incorporated are hereinafter collectively referred to as the “Company” unless otherwise indicated or the context otherwise requires.
2. | Liquidity and Capital Resources |
From its founding in 1996 until 2010, the Company has devoted substantially all of its resources to researching various sensor technologies and platforms. Beginning in 2010, the Company narrowed its focus to developing and refining a commercially viable glucose monitoring system. However, to date, the Company has not generated any significant revenue from product sales. The Company has incurred substantial losses and cumulative negative cash flows from operations since its inception in October 1996. The Company has never been profitable from operations, and its net losses were $
In November 2021, the Company entered into an Open Market Sale Agreement, (the “2021 Sales Agreement”) with Jefferies LLC (“Jefferies”), under which the Company could offer and sell, from time to time, at its sole discretion, shares of its common stock having an aggregate offering price of up to $
In November 2019, the Company entered into an Open Market Sale Agreement (the “2019 Sales Agreement”) with Jefferies, under which the Company could offer and sell, from time to time at its sole discretion, shares of its common stock having an aggregate offering price of up to $
On January 21, 2021, the Company entered into an underwriting agreement, which was subsequently amended and restated on the same day (the “Underwriting Agreement”) with H.C. Wainwright & Co., LLC, as representative of the underwriters (the “Underwriters”), to issue and sell
Total net proceeds from the Offering were $
7
On January 17, 2021, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional purchasers (the “Purchasers”), pursuant to which the Company sold to the Purchasers, in a registered direct offering (the “Registered Direct Offering”), an aggregate of
On November 9, 2020, the Company entered into an equity line agreement (the “Equity Line Agreement”) with Energy Capital, LLC, a Florida limited liability company (“Energy Capital”), which provides that, upon the terms and subject to the conditions and limitations set forth therein, Energy Capital is committed to purchase up to an aggregate of $
On August 9, 2020, the Company entered into a financing agreement with the parent company of Ascensia Diabetes Care Holdings AG (“Ascensia”), PHC Holdings Corporation (“PHC”), pursuant to which the Company issued $
Additionally, on August 9, 2020, the Company entered into a Stock Purchase Agreement with Masters Special Solutions, LLC and certain affiliates thereof (“Masters”), pursuant to which the Company issued and sold to Masters
8
3. | Summary of Significant Accounting Policies |
Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Although the Company considers the disclosures in these unaudited consolidated financial statements to be adequate to make the information presented not misleading, certain information or footnote information normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted as permitted under the rules and regulations of the United States Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of financial position at March 31, 2022, and December 31, 2021, results of operations, comprehensive income (loss), and changes in stockholder’s deficit for the three months ended March 31, 2022, and 2021 and cash flows for the three months ended March 31, 2022, and 2021 have been included. The unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on March 1, 2022. The interim results for March 31, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022, or for any future interim periods.
The consolidated financial statements reflect the accounts of Senseonics Holdings, Inc. and its wholly owned operating subsidiary Senseonics, Incorporated.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenue and expenses during the reporting period. In the accompanying unaudited consolidated financial statements, estimates are used for, but not limited to, stock-based compensation, recoverability of long-lived assets, deferred taxes and valuation allowances, derivative assets and liabilities, obsolete inventory, warranty obligations, variable consideration related to revenue, depreciable lives of property and equipment, and accruals for clinical study costs, which are accrued based on estimates of work performed under contract. The Company considered COVID-19 related impacts to its estimates, as appropriate, within its unaudited condensed consolidated financial statements and there may be changes to those estimates in future periods due to the uncertainties surrounding the severity and duration of the COVID-19 pandemic. Actual results could differ from those estimates.
Segment Information
The Company views its operations and manages its business in
Comprehensive Loss
Comprehensive income (loss) comprises of net income (loss) and other changes in equity that are excluded from net income (loss). For the three months ended March 31, 2022, the Company’s comprehensive income included $
9
Cash and Cash Equivalents
The Company considers highly liquid investments with original maturities of three months or less from the date of purchase to be cash equivalents.
March 31, | December 31, | ||||||||||||||||
|
| 2022 |
| 2021 |
| ||||||||||||
Cash ⁽¹⁾ | $ | | $ | | |||||||||||||
Money market funds | | | |||||||||||||||
Cash and cash equivalents | $ | | $ | |
(1) | Includes overnight repurchase agreements |
Long-lived Assets
Management reviews long-lived assets, including property and equipment and right-of-use assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the long-lived asset is measured by a comparison of the carrying amount of the asset to future undiscounted net cash flows expected to be generated by the asset. If the undiscounted cash flows are less than the carrying amount, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. There was
Warranty Obligation
The Company provides a warranty of
At March 31, 2022, and December 31, 2021, the warranty reserve was $
March 31, | December 31, | |||||
| 2022 |
| 2021 | |||
Balance at beginning of the period | $ | | $ | | ||
Provision for warranties during the period | | | ||||
Settlements made during the period | ( | ( | ||||
Balance at end of the period | $ | | $ | |
Revenue Recognition
The Company generates product revenue from sales of the Eversense system and related components and supplies to Ascensia, through a collaboration and commercialization agreement (the “Commercialization Agreement”), third-party distributors in the European Union and to strategic fulfillment partners in the United States (collectively, “Customers”), who then resell the products to health care providers and patients. The Company is paid for its sales directly to the Customers, regardless of whether or not the Customers resell the products to health care providers and patients.
10
Revenue from product sales is recognized at a point in time when the Customers obtain control of the Company’s product based upon the delivery terms as defined in the contract at an amount that reflects the consideration which the Company expects to receive in exchange for the product. Contracts with the Company’s distributors contain performance obligations, mostly for the supply of goods, and is typically satisfied upon transfer of control of the product. Customer contracts do not include the right to return unless there is a product issue, in which case the Company may provide replacement product. Product conformity guarantees do not create additional performance obligations and are accounted for as warranty obligations in accordance with guarantee and loss contingency accounting guidance.
The Company’s contracts may contain some form of variable consideration such as prompt-pay discounts, tier-volume price discounts and for the Ascensia commercial agreement, revenue share. Variable consideration, such as discounts and prompt-pay incentives, are treated as a reduction in revenue and variable consideration, such as revenue share, is treated as an addition in revenue when the product sale is recognized. The amount of variable consideration that is included in the transaction price may be constrained and is included in revenue only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period, when the uncertainty associated with the variable consideration is subsequently resolved. Estimating variable consideration and the related constraint requires the use of management judgment. Depending on the variable consideration, the Company develops estimates for the expected value based on the terms of the agreements, historical data, geographic mix, reimbursement rates, Ascensia’s ability to sell through the inventory and market conditions.
Contract assets consist of unbilled receivables from customers and are recorded at net realizable value and relate to the revenue share variable consideration from the Ascensia commercial agreement.
Concentration of Revenue and Customers
For the three months ended March 31, 2022 and 2021, the Company derived
Revenue by Geographic Region
The following table sets forth net revenue derived from the Company’s
March 31, 2022 | March 31, 2021 | |||||||||||
% | % | |||||||||||
(Dollars in thousands) | Amount | of Total | Amount | of Total | ||||||||
Revenue, net: | ||||||||||||
Outside of the United States | $ | | % | $ | | % | ||||||
United States | | | ||||||||||
Total | $ | | % | $ | | % |
Marketable Securities
Marketable securities consist of commercial paper, corporate debt securities, asset backed securities and government and agency securities. The Company’s investments are classified as available for sale. Such securities are carried at fair value, with any unrealized holding gains or losses reported, net of any tax effects reported, as accumulated other comprehensive income or loss. Realized gains and losses and declines in value judged to be other-than-temporary, if any, are included in consolidated results of operations. A decline in the market value of any available for sale security below cost that is deemed to be other-than-temporary results in a reduction in fair value, which is charged to earnings in that period, and a new cost basis for the security is established. Dividend and interest income is recognized when earned. The cost of securities sold is calculated using the specific identification method. The Company classifies all available-for-sale marketable securities with maturities greater than one year from the balance sheet date as non-current assets. The Company does not generally intend to sell these investments, and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be at maturity.
11
Accounts Receivable
Accounts receivable consist of amounts due from the Company’s Customers and are recorded at net realizable value, which may include reductions for allowances for doubtful accounts at the time potential collection risk is identified or for promotional or prompt-pay discounts offered. The Company does not have a history of collectability concerns and
Net Income (Loss) per Share
Basic net income per share attributable to common stockholders is calculated by dividing the net income attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed using the weighted average number of common shares outstanding during the period and, when dilutive, potential common share equivalents. Basic net loss per share is computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding during the period.
Potentially dilutive common shares consist of shares issuable from restricted stock units, warrants and the Company’s convertible notes. Potentially dilutive common shares issuable upon vesting of restricted stock units and exercise of stock options and warrants are determined using the average share price for each period under the treasury stock method. Potentially dilutive common shares issuable upon conversion of the Company’s convertible notes are determined using the if converted method. In periods of net loss, all potentially dilutive common shares are excluded from the computation of the diluted net loss per share for those periods, as the effect would be anti-dilutive.
The following table sets forth the computation of basic and diluted net income per share for the periods shown:
Three Months Ended March 31, | ||||
2022 |
| 2021 | ||
Net income (loss) | | ( | ||
Impact of conversion of dilutive securities | ( | - | ||
Dilutive Net income (loss) | ( | ( | ||
Net income (loss) per share | ||||
Basic | | ( | ||
Diluted | ( | ( | ||
Basic weighted average shares outstanding | | | ||
Dilutive potential common stock outstanding | ||||
Stock-based awards | | - | ||
2023 Notes | | - | ||
2025 Notes | | - | ||
PHC Notes | | - | ||
Energy Capital Option | | - | ||
Warrants | | - | ||
Diluted weighted average shares outstanding | | |
12
For the three months ended March 31, 2021, the Company operated at a loss. Accordingly, all potentially dilutive shares were considered antidilutive, and basic and diluted EPS are the same.
Outstanding anti-dilutive securities not included in the diluted net income per share attributable to common stockholders calculations were as follows:
Three Months Ended March 31, | ||||
| 2022 | 2021 | ||
Stock-based awards | | | ||
2023 Notes | — | | ||
2025 Notes | — | | ||
PHC Notes | — | | ||
PHC Option | | — | ||
Warrants | | | ||
Total anti-dilutive shares outstanding | | |
Recent Accounting Pronouncements
Recently Adopted
In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contract in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”). This new guidance is intended to reduce the complexity of accounting for convertible instruments. The guidance also addresses how convertible instruments are accounted for in the diluted earnings per share calculation and requires enhanced disclosures about the terms of convertible instruments. Entities may adopt ASU 2020-06 using either partial retrospective or fully retrospective method of transition. ASU 2020-06 is effective for public business entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The Company has adopted this guidance as of January 1, 2022 and its adoption did not have a material impact on the consolidated financial statements and related disclosures.
Not Yet Adopted
In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, which requires entities to record expected credit losses for certain financial instruments, including trade receivables, as an allowance that reflects the entity's current estimate of credit losses expected to be incurred. For available-for-sale debt securities in unrealized loss positions, the new standard requires allowances to be recorded instead of reducing the amortized cost of the investment. The Company currently holds investments in available-for-sale securities. The Company has not historically experienced collection issues or bad debts with trade receivables. Accordingly, the Company does not expect this to have a significant impact on its consolidated financial statements and related disclosures at this time. Since the Company qualified as a smaller reporting company as of June 28, 2019, it maintains its status as a smaller reporting company for the adoption of this standard. As such, the Company will adopt this guidance on the effective date for smaller reporting companies, January 1, 2023.
13
4. | Marketable Securities |
Marketable securities available for sale, were as follows (in thousands):
March 31, 2022 | ||||||||||||
Gross | Gross | Estimated | ||||||||||
Amortized | Unrealized | Unrealized | Market | |||||||||
| Cost |
| Gains |
| Losses |
| Value | |||||
Commercial Paper | $ | | — | — | $ | | ||||||
Corporate debt securities | $ | | — | ( | $ | | ||||||
Asset backed securities | $ | | — | ( | $ | | ||||||
Government and agency securities | $ | | — | ( | $ | | ||||||
Total | $ | | $ | — | $ | ( | $ | |
December 31, 2021 | ||||||||||||
Gross | Gross | Estimated | ||||||||||
Amortized | Unrealized | Unrealized | Market | |||||||||
| Cost |
| Gains |
| Losses |
| Value | |||||
Commercial Paper | $ | | — | — | $ | | ||||||
Corporate debt securities | $ | | — | ( | $ | | ||||||
Asset backed securities | $ | | — | ( | $ | | ||||||
Government and agency securities | $ | | — | ( | $ | | ||||||
Total | $ | | $ | — | $ | ( | $ | |
The following are the scheduled maturities as of March 31, 2022 (in thousands):
2022 (remaining nine months) |
| $ | |
2023 |
| | |
2024 | | ||
Thereafter | | ||
Total |
| $ | |
The Company periodically reviews its portfolio of debt securities to determine if any investment is impaired due to credit loss or other potential valuation concerns. For debt securities where the fair value of the investment is less than the amortized cost basis, the Company assesses at the individual security level, for various quantitative factors including, but not limited to, the nature of the investments, changes in credit ratings, interest rate fluctuations, industry analyst reports, and the severity of impairment. Unrealized losses on available-for-sale securities at March 31, 2022 were not significant and were primarily due to changes in interest rates and not due to increased credit risk associated with specific securities. The Company does not intend to sell these impaired investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be at maturity.
5. Inventory, net
Inventory, net of reserves, consisted of the following (in thousands):
| March 31, |
| December 31, | |||
2022 |
| 2021 | ||||
Finished goods |
| $ | |
| $ | |
Work-in-process |
| |
| | ||
Raw materials |
| |
| | ||
Total | $ | | $ | |
14
The Company charged less than $
6. Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following (in thousands):
March 31, | December 31, | |||||
2022 |
| 2021 | ||||
Contract manufacturing⁽¹⁾ | $ | | $ | | ||
Insurance | | | ||||
Clinical and Preclinical | | | ||||
Interest receivable |
| |
| | ||
IT and software |
| |
| | ||
Other | | | ||||
Rent | | | ||||
Total prepaid expenses and other current assets | $ | | $ | |
(1) | Includes deposits to contract manufacturers for manufacturing process. |
7. | Accrued Expenses and Other Current Liabilities |
Accrued expenses and other current liabilities consisted of the following (in thousands):
March 31, | December 31, | |||||
2022 |
| 2021 | ||||
Compensation and benefits |