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Delaware
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56-2463152
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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600 Technology Park Drive
Billerica, MA
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01821
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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o
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Accelerated filer
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x
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
|
o
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Emerging growth company
|
x
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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.
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x
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Page
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June 30, 2018
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|
December 31, 2017
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||||
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(unaudited)
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|
|
||||
Assets
|
|
|
|
||||
Current Assets
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
29,122
|
|
|
$
|
18,348
|
|
Investments
|
17,459
|
|
|
26,880
|
|
||
Accounts receivable, net
|
12,215
|
|
|
13,200
|
|
||
Inventories
|
9,060
|
|
|
9,184
|
|
||
Prepaid expenses and other current assets
|
2,039
|
|
|
2,246
|
|
||
Total current assets
|
69,895
|
|
|
69,858
|
|
||
Property and equipment, net
|
16,955
|
|
|
16,514
|
|
||
Other Assets
|
|
|
|
|
|
||
Restricted cash
|
462
|
|
|
462
|
|
||
Intangible assets, net
|
159
|
|
|
210
|
|
||
Goodwill
|
6,731
|
|
|
6,731
|
|
||
Other long-term assets
|
23
|
|
|
23
|
|
||
Total assets
|
$
|
94,225
|
|
|
$
|
93,798
|
|
|
|
|
|
||||
Liabilities and stockholders' equity
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Accounts payable
|
$
|
5,995
|
|
|
$
|
4,891
|
|
Accrued expenses
|
8,674
|
|
|
7,720
|
|
||
Deferred revenue
|
—
|
|
|
305
|
|
||
Total current liabilities
|
14,669
|
|
|
12,916
|
|
||
Other long-term liabilities
|
638
|
|
|
651
|
|
||
Deferred tax liabilities
|
28
|
|
|
37
|
|
||
Deferred revenue
|
—
|
|
|
4,014
|
|
||
Long-term debt, less debt issuance costs
|
29,721
|
|
|
29,667
|
|
||
Total liabilities
|
45,056
|
|
|
47,285
|
|
||
Commitments and contingencies
|
—
|
|
|
—
|
|
||
Stockholders’ equity
|
|
|
|
|
|
||
Preferred stock, $0.00001 par value:
|
|
|
|
|
|
||
Authorized: 5,000,000 shares authorized at June 30, 2018 and December 31, 2017; no shares issued and outstanding as of June 30, 2018 and December 31, 2017
|
—
|
|
|
—
|
|
||
Common stock, $0.00001 par value:
|
|
|
|
|
|
||
Authorized: 200,000,000 shares authorized at June 30, 2018 and December 31, 2017; 63,113,630 and 45,528,519 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively
|
1
|
|
|
—
|
|
||
Additional paid-in capital
|
509,790
|
|
|
486,570
|
|
||
Accumulated deficit
|
(458,360
|
)
|
|
(436,821
|
)
|
||
Accumulated other comprehensive loss
|
(2,262
|
)
|
|
(3,236
|
)
|
||
Total stockholders’ equity
|
49,169
|
|
|
46,513
|
|
||
Total liabilities and stockholders’ equity
|
$
|
94,225
|
|
|
$
|
93,798
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
||||
Product
|
$
|
18,908
|
|
|
$
|
18,046
|
|
|
$
|
38,391
|
|
|
$
|
38,425
|
|
Royalty
|
192
|
|
|
438
|
|
|
365
|
|
|
514
|
|
||||
Total revenue
|
19,100
|
|
|
18,484
|
|
|
38,756
|
|
|
38,939
|
|
||||
Cost of revenue
|
9,989
|
|
|
12,236
|
|
|
20,858
|
|
|
26,196
|
|
||||
Gross profit
|
9,111
|
|
|
6,248
|
|
|
17,898
|
|
|
12,743
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales and marketing
|
9,809
|
|
|
9,375
|
|
|
20,220
|
|
|
20,191
|
|
||||
Research and development
|
4,850
|
|
|
4,335
|
|
|
9,544
|
|
|
8,895
|
|
||||
General and administrative
|
5,802
|
|
|
6,444
|
|
|
11,942
|
|
|
14,902
|
|
||||
Total operating expenses
|
20,461
|
|
|
20,154
|
|
|
41,706
|
|
|
43,988
|
|
||||
Loss from operations
|
(11,350
|
)
|
|
(13,906
|
)
|
|
(23,808
|
)
|
|
(31,245
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Other income and expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest income
|
171
|
|
|
127
|
|
|
311
|
|
|
230
|
|
||||
Interest expense
|
(766
|
)
|
|
(372
|
)
|
|
(1,501
|
)
|
|
(679
|
)
|
||||
Foreign currency exchange transaction (loss)/income
|
(2,098
|
)
|
|
2,117
|
|
|
(1,013
|
)
|
|
2,507
|
|
||||
Total other income (expenses), net
|
(2,693
|
)
|
|
1,872
|
|
|
(2,203
|
)
|
|
2,058
|
|
||||
Loss before income taxes
|
(14,043
|
)
|
|
(12,034
|
)
|
|
(26,011
|
)
|
|
(29,187
|
)
|
||||
Income tax provision
|
14
|
|
|
56
|
|
|
47
|
|
|
63
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(14,057
|
)
|
|
$
|
(12,090
|
)
|
|
$
|
(26,058
|
)
|
|
$
|
(29,250
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net loss per share - basic and diluted
|
$
|
(0.24
|
)
|
|
$
|
(0.28
|
)
|
|
$
|
(0.46
|
)
|
|
$
|
(0.68
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding - basic and diluted
|
59,763,259
|
|
|
43,193,065
|
|
|
57,208,114
|
|
|
43,035,672
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net loss
|
$
|
(14,057
|
)
|
|
$
|
(12,090
|
)
|
|
$
|
(26,058
|
)
|
|
$
|
(29,250
|
)
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
1,885
|
|
|
(1,926
|
)
|
|
946
|
|
|
(2,280
|
)
|
||||
Change in unrealized gain (loss) on available-for-sale securities, net of tax
|
21
|
|
|
(9
|
)
|
|
28
|
|
|
(18
|
)
|
||||
Comprehensive loss
|
$
|
(12,151
|
)
|
|
$
|
(14,025
|
)
|
|
$
|
(25,084
|
)
|
|
$
|
(31,548
|
)
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net loss
|
$
|
(26,058
|
)
|
|
$
|
(29,250
|
)
|
|
|
|
|
||||
Adjustments to reconcile net loss to net cash used by operating activities:
|
|
|
|
|
|
||
Depreciation and amortization expense
|
1,953
|
|
|
1,748
|
|
||
Stock-based compensation expense
|
1,784
|
|
|
2,741
|
|
||
Provision for bad debts on trade receivables
|
(22
|
)
|
|
(4
|
)
|
||
Disposal of long term-assets
|
(2
|
)
|
|
—
|
|
||
Non-cash interest expense
|
55
|
|
|
46
|
|
||
Amortization/accretion on investments
|
51
|
|
|
117
|
|
||
Deferred taxes
|
(17
|
)
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable
|
1,207
|
|
|
2,811
|
|
||
Inventories
|
124
|
|
|
(64
|
)
|
||
Prepaid expenses and other assets
|
207
|
|
|
1,406
|
|
||
Accounts payable and accrued liabilities
|
2,066
|
|
|
(703
|
)
|
||
Deferred royalty revenue
|
—
|
|
|
(153
|
)
|
||
Other long-term liabilities
|
(12
|
)
|
|
287
|
|
||
Net cash used in operating activities
|
(18,664
|
)
|
|
(21,018
|
)
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
||
Acquisition of property and equipment
|
(2,342
|
)
|
|
(3,032
|
)
|
||
Decrease in restricted cash
|
—
|
|
|
(462
|
)
|
||
Purchase of investments
|
(14,196
|
)
|
|
(20,487
|
)
|
||
Maturity of investments
|
23,595
|
|
|
16,625
|
|
||
Net cash provided/(used) in investing activities
|
7,057
|
|
|
(7,356
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
||
Proceeds from exercise of common stock options
|
112
|
|
|
2,015
|
|
||
Debt issuance costs
|
—
|
|
|
(434
|
)
|
||
Proceeds from issuance of debt
|
—
|
|
|
30,000
|
|
||
Net proceeds from issuance of common stock
|
21,324
|
|
|
1,023
|
|
||
Net cash provided by financing activities
|
21,436
|
|
|
32,604
|
|
||
Foreign exchange effect on cash and cash equivalents
|
945
|
|
|
(2,280
|
)
|
||
Increase in cash and cash equivalents
|
10,774
|
|
|
1,950
|
|
||
Cash and cash equivalents, beginning of period
|
18,348
|
|
|
37,257
|
|
||
Cash and cash equivalents, end of period
|
$
|
29,122
|
|
|
$
|
39,207
|
|
|
|
|
|
||||
Supplemental information:
|
|
|
|
|
|
||
Cash paid for interest
|
1,234
|
|
|
368
|
|
|
|
As Reported December 31, 2017
|
|
Balance at January 1, 2018
|
|
ASC 606 Adjustment
|
|
||||||
Current Assets
|
|
|
|
|
|
|
|
||||||
Accounts receivable, net
|
|
$
|
13,200
|
|
|
$
|
13,400
|
|
|
$
|
200
|
|
(1)
|
Current liabilities
|
|
|
|
|
|
|
|
|
|||||
Deferred revenue
|
|
305
|
|
|
—
|
|
|
(305
|
)
|
(2)
|
|||
Long-term liabilities
|
|
|
|
|
|
|
|
||||||
Deferred revenue
|
|
4,014
|
|
|
—
|
|
|
(4,014
|
)
|
(2)
|
|||
Stockholders’ equity
|
|
|
|
|
|
|
|
|
|||||
Accumulated deficit
|
|
(436,821
|
)
|
|
(432,302
|
)
|
|
4,519
|
|
(1),(2)
|
Balance Sheet as of June 30, 2018
|
|
As Reported
|
|
Pro-forma
(1)
|
|
Effect
|
|
||||||
Current Assets
|
|
|
|
|
|
|
|
||||||
Accounts receivable, net
|
|
$
|
12,215
|
|
|
$
|
12,037
|
|
|
$
|
178
|
|
(2)
|
Current liabilities
|
|
|
|
|
|
|
|
|
|||||
Deferred revenue
|
|
—
|
|
|
305
|
|
|
(305
|
)
|
(3)
|
|||
Long-term Liabilities
|
|
|
|
|
|
|
|
||||||
Deferred revenue
|
|
—
|
|
|
3,862
|
|
|
(3,862
|
)
|
(3)
|
|||
Stockholders’ equity
|
|
|
|
|
|
|
|
|
|||||
Accumulated deficit
|
|
(458,360
|
)
|
|
(462,691
|
)
|
|
4,345
|
|
(2),(3)
|
Statement of Operations for the three months ended June 30, 2018
|
|
As Reported
|
|
Pro-forma (1)
|
|
Effect
|
|
||||||
Revenue
|
|
|
|
|
|
|
|
||||||
Royalty
|
|
$
|
192
|
|
|
$
|
263
|
|
|
$
|
(71
|
)
|
(2),(3)
|
Net loss
|
|
(14,057
|
)
|
|
(13,986
|
)
|
|
(71
|
)
|
(2),(3)
|
|||
Net loss per share - basic and diluted
|
|
$
|
(0.24
|
)
|
|
$
|
(0.23
|
)
|
|
$
|
—
|
|
|
Statement of Operations for the six months ended June 30, 2018
|
|
As Reported
|
|
Pro-forma (1)
|
|
Effect
|
|
||||||
Royalty
|
|
$
|
365
|
|
|
$
|
539
|
|
|
$
|
(174
|
)
|
(2),(3)
|
Net loss
|
|
(26,058
|
)
|
|
(25,884
|
)
|
|
(174
|
)
|
(2),(3)
|
|||
Net loss per share - basic and diluted
|
|
$
|
(0.46
|
)
|
|
$
|
(0.45
|
)
|
|
$
|
—
|
|
|
Cash Flows for the six months ended June 30, 2018
|
|
As Reported
|
|
Pro-forma (1)
|
|
Effect
|
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
||||||
Net loss
|
|
$
|
(26,058
|
)
|
|
$
|
(25,884
|
)
|
|
$
|
(174
|
)
|
(2),(3)
|
Changes in operating assets and liabilities
|
|
(18,664
|
)
|
|
(18,838
|
)
|
|
174
|
|
(2),(3)
|
|
|
June 30, 2018
|
||
Beginning Balance
|
|
$
|
119
|
|
Provision related to current period sales
|
|
92
|
|
|
Adjustment related to prior period sales
|
|
40
|
|
|
Payments or credits issued to customer
|
|
(58
|
)
|
|
Ending Balance
|
|
$
|
193
|
|
|
|
Foreign currency translation adjustments
|
|
Change in unrealized gain (loss) on available-for-sale securities, net of tax
|
|
Accumulated other comprehensive income (loss)
|
||||||
Balance December 31, 2017
|
|
$
|
(3,203
|
)
|
|
$
|
(33
|
)
|
|
$
|
(3,236
|
)
|
Change in period
|
|
946
|
|
|
28
|
|
|
974
|
|
|||
Balance June 30, 2018
|
|
$
|
(2,257
|
)
|
|
$
|
(5
|
)
|
|
$
|
(2,262
|
)
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(in thousands, except share and per share data)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Numerator for basic and diluted loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss
|
|
$
|
(14,057
|
)
|
|
$
|
(12,090
|
)
|
|
$
|
(26,058
|
)
|
|
$
|
(29,250
|
)
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Denominator for basic loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares
|
|
59,763,259
|
|
|
43,193,065
|
|
|
57,208,114
|
|
|
43,035,672
|
|
||||
Basic loss per share attributable to Conformis, Inc. stockholders
|
|
$
|
(0.24
|
)
|
|
$
|
(0.28
|
)
|
|
$
|
(0.46
|
)
|
|
$
|
(0.68
|
)
|
Diluted loss per share attributable to Conformis, Inc. stockholders
|
|
$
|
(0.24
|
)
|
|
$
|
(0.28
|
)
|
|
$
|
(0.46
|
)
|
|
$
|
(0.68
|
)
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Stock options and restricted stock awards
|
|
50,158
|
|
|
355,741
|
|
|
110,009
|
|
|
589,122
|
|
|
June 30, 2018
|
|||||||||||||||||
|
Amortized Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Estimated Fair Value
|
Cash and cash equivalents
|
Short-term (1) investments
|
||||||||||||
Cash
|
$
|
14,936
|
|
$
|
—
|
|
$
|
—
|
|
$
|
14,936
|
|
$
|
14,936
|
|
$
|
—
|
|
Level 1 securities:
|
|
|
|
|
|
|
||||||||||||
Money market funds
|
12,195
|
|
—
|
|
—
|
|
12,195
|
|
12,195
|
|
—
|
|
||||||
U.S. treasury bonds
|
14,201
|
|
2
|
|
(1
|
)
|
14,202
|
|
1,991
|
|
12,212
|
|
||||||
Level 2 securities:
|
|
|
|
|
|
|
||||||||||||
Commercial paper
|
1,249
|
|
—
|
|
—
|
|
1,249
|
|
—
|
|
1,249
|
|
||||||
Agency bond
|
4,004
|
|
—
|
|
(6
|
)
|
3,998
|
|
—
|
|
3,998
|
|
||||||
Total
|
$
|
46,585
|
|
$
|
2
|
|
$
|
(7
|
)
|
$
|
46,580
|
|
$
|
29,122
|
|
$
|
17,459
|
|
|
December 31, 2017
|
|||||||||||||||||
|
Amortized Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Estimated Fair Value
|
Cash and cash equivalents
|
Short-term (1) investments
|
||||||||||||
Cash
|
$
|
9,849
|
|
$
|
—
|
|
$
|
—
|
|
$
|
9,849
|
|
$
|
9,849
|
|
$
|
—
|
|
Level 1 securities:
|
|
|
|
|
|
|
||||||||||||
Money market funds
|
3,499
|
|
—
|
|
—
|
|
3,499
|
|
3,499
|
|
—
|
|
||||||
U.S. treasury bonds
|
9,243
|
|
—
|
|
(4
|
)
|
9,239
|
|
—
|
|
9,239
|
|
||||||
Level 2 securities:
|
|
|
|
|
|
|
||||||||||||
Corporate bonds
|
4,935
|
|
—
|
|
(6
|
)
|
4,929
|
|
—
|
|
4,929
|
|
||||||
Agency bonds
|
12,734
|
|
—
|
|
(22
|
)
|
12,712
|
|
—
|
|
12,712
|
|
||||||
Repurchase agreement
|
5,000
|
|
—
|
|
—
|
|
5,000
|
|
5,000
|
|
—
|
|
||||||
Total
|
$
|
45,260
|
|
$
|
—
|
|
$
|
(32
|
)
|
$
|
45,228
|
|
$
|
18,348
|
|
$
|
26,880
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
Total receivables
|
$
|
12,698
|
|
|
$
|
13,835
|
|
Allowance for doubtful accounts and returns
|
(483
|
)
|
|
(635
|
)
|
||
Accounts receivable, net
|
$
|
12,215
|
|
|
$
|
13,200
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
Beginning balance
|
(635
|
)
|
|
(681
|
)
|
||
Provision for bad debts on trade receivables
|
20
|
|
|
15
|
|
||
Other allowances
|
67
|
|
|
(61
|
)
|
||
Accounts receivable write offs
|
65
|
|
|
92
|
|
||
Ending balance
|
$
|
(483
|
)
|
|
$
|
(635
|
)
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
Raw Material
|
$
|
4,205
|
|
|
$
|
2,905
|
|
Work in process
|
1,642
|
|
|
1,718
|
|
||
Finished goods
|
3,213
|
|
|
4,561
|
|
||
Total Inventories
|
$
|
9,060
|
|
|
$
|
9,184
|
|
|
Estimated
Useful Life (Years) |
|
June 30, 2018
|
|
December 31, 2017
|
||||
Equipment
|
5-7
|
|
$
|
20,420
|
|
|
$
|
19,331
|
|
Furniture and fixtures
|
5-7
|
|
955
|
|
955
|
||||
Computer and software
|
3
|
|
8,453
|
|
7,877
|
||||
Leasehold improvements
|
2-8
|
|
1,909
|
|
1,830
|
||||
Reusable instruments
|
5
|
|
563
|
|
|
—
|
|
||
Total property and equipment
|
|
|
32,300
|
|
29,993
|
||||
Accumulated depreciation
|
|
|
(15,345
|
)
|
|
(13,479
|
)
|
||
Property and equipment, net
|
|
|
$
|
16,955
|
|
|
$
|
16,514
|
|
|
|
|
|
|
|
|
Estimated
Useful Life
(Years)
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
|
|
|
|
|
|
||||
Developed technology
|
10
|
|
$
|
979
|
|
|
$
|
979
|
|
Accumulated amortization
|
|
|
(832
|
)
|
|
(783
|
)
|
||
Developed technology, net
|
|
|
147
|
|
|
196
|
|
||
|
|
|
|
|
|
||||
Acquired favorable lease
|
5
|
|
15
|
|
|
15
|
|
||
Accumulated amortization
|
|
|
(3
|
)
|
|
(1
|
)
|
||
Acquired favorable lease, net
|
|
|
12
|
|
|
14
|
|
||
|
|
|
|
|
|
||||
Intangible assets, net
|
|
|
$
|
159
|
|
|
$
|
210
|
|
|
Amortization
expense
|
||
2018 (remainder of the year)
|
$
|
50
|
|
2019
|
101
|
|
|
2020
|
3
|
|
|
2021
|
3
|
|
|
2022
|
2
|
|
|
|
$
|
159
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
Accrued employee compensation
|
$
|
4,325
|
|
|
$
|
2,989
|
|
Deferred rent
|
124
|
|
|
115
|
|
||
Accrued legal expense
|
655
|
|
|
1,231
|
|
||
Accrued consulting expense
|
21
|
|
|
115
|
|
||
Accrued vendor charges
|
1,281
|
|
|
912
|
|
||
Accrued revenue share expense
|
891
|
|
|
968
|
|
||
Accrued clinical trial expense
|
195
|
|
|
196
|
|
||
Accrued other
|
1,182
|
|
|
1,194
|
|
||
|
$
|
8,674
|
|
|
$
|
7,720
|
|
Year
|
Minimum lease Payments
|
||
2018 remainder of year
|
$
|
765
|
|
2019
|
1,558
|
|
|
2020
|
1,595
|
|
|
2021
|
1,633
|
|
|
2022
|
1,397
|
|
|
2023-2025
|
2,939
|
|
|
|
$
|
9,887
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Oxford Finance, LLC, Term A Loan
|
$
|
15,000
|
|
|
$
|
15,000
|
|
Oxford Finance, LLC, Term B Loan
|
15,000
|
|
|
15,000
|
|
||
|
30,000
|
|
|
30,000
|
|
||
Less unamortized debt issuance costs
|
(279
|
)
|
|
(333
|
)
|
||
Long-term debt, less debt issuance costs
|
$
|
29,721
|
|
|
$
|
29,667
|
|
|
Principal
Payment
|
||
2018 (remainder of the year)
|
$
|
—
|
|
2019
|
—
|
|
|
2020
|
13,750
|
|
|
2021
|
15,000
|
|
|
2022
|
1,250
|
|
|
Total
|
$
|
30,000
|
|
|
|
Shares
|
|
Outstanding December 31, 2017
|
|
45,528,519
|
|
Issuance of common stock - option exercises
|
|
80,000
|
|
Issuance of restricted common stock
|
|
2,288,217
|
|
Forfeiture of unvested restricted stock
|
|
(116,439
|
)
|
Issuance of common stock - Secondary offering
|
|
15,333,333
|
|
Outstanding June 30, 2018
|
|
63,113,630
|
|
|
|
Number of
Warrants |
|
Weighted
Average Exercise Price Per Share |
|
Weighted Average Remaining Contractual Life
|
|
Number of
Warrants Exercisable |
|
Weighted
Average Price Per Share |
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Outstanding December 31, 2017
|
|
28,926
|
|
|
$
|
9.80
|
|
|
5.66
|
|
28,926
|
|
|
$
|
9.80
|
|
Outstanding June 30, 2018
|
|
28,926
|
|
|
$
|
9.80
|
|
|
5.16
|
|
28,926
|
|
|
$
|
9.80
|
|
|
|
Number of
Options
|
|
Weighted
Average
Exercise Price
per Share
|
|
Aggregate Intrinsic Value (in Thousands)
|
|||||
Outstanding December 31, 2017
|
|
3,627,995
|
|
|
$
|
6.48
|
|
|
|
||
Granted
|
|
165,219
|
|
|
1.36
|
|
|
|
|||
Exercised
|
|
(80,000
|
)
|
|
1.40
|
|
|
8
|
|
||
Expired
|
|
(373,278
|
)
|
|
6.23
|
|
|
|
|||
Cancelled/Forfeited
|
|
(76,435
|
)
|
|
5.58
|
|
|
|
|||
Outstanding June 30, 2018
|
|
3,263,501
|
|
|
$
|
6.40
|
|
|
$
|
—
|
|
Total vested and exercisable
|
|
2,409,811
|
|
|
$
|
6.95
|
|
|
$
|
—
|
|
|
|
Number of Shares
|
|
Weighted Average Fair Value
|
|||
Unvested December 31, 2017
|
|
1,339,121
|
|
|
$
|
6.06
|
|
Granted
|
|
2,288,217
|
|
|
1.39
|
|
|
Vested
|
|
(271,755
|
)
|
|
6.06
|
|
|
Forfeited
|
|
(116,439
|
)
|
|
6.00
|
|
|
Unvested June 30, 2018
|
|
3,239,144
|
|
|
$
|
2.76
|
|
|
||||||||
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Risk-free interest rate
|
|
2.75%
|
|
2.14%
|
|
2.75% - 2.90%
|
|
2.14%
|
Expected term (in years)
|
|
6.25
|
|
6.02
|
|
6.25
|
|
6.05
|
Dividend yield
|
|
—%
|
|
—%
|
|
—%
|
|
—%
|
Expected volatility
|
|
52.81%
|
|
50.95%
|
|
52.81% - 56.44%
|
|
50.95%
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Cost of revenues
|
|
$
|
47
|
|
|
$
|
117
|
|
|
$
|
85
|
|
|
$
|
215
|
|
Sales and marketing
|
|
157
|
|
|
224
|
|
|
282
|
|
|
482
|
|
||||
Research and development
|
|
274
|
|
|
405
|
|
|
564
|
|
|
897
|
|
||||
General and administrative
|
|
434
|
|
|
703
|
|
|
853
|
|
|
1,147
|
|
||||
|
|
$
|
912
|
|
|
$
|
1,449
|
|
|
$
|
1,784
|
|
|
$
|
2,741
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||
Product Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
||
United States
|
|
$
|
16,356
|
|
|
$
|
15,219
|
|
|
32,383
|
|
|
31,183
|
|
Germany
|
|
2,186
|
|
|
2,428
|
|
|
5,273
|
|
|
6,393
|
|
||
Rest of World
|
|
366
|
|
|
399
|
|
|
735
|
|
|
849
|
|
||
|
|
$
|
18,908
|
|
|
$
|
18,046
|
|
|
38,391
|
|
|
38,425
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Property and equipment, net
|
|
|
|
|
|
|
||
United States
|
|
$
|
16,872
|
|
|
$
|
16,424
|
|
Germany
|
|
83
|
|
|
90
|
|
||
|
|
$
|
16,955
|
|
|
$
|
16,514
|
|
•
|
our estimates regarding the potential market opportunity and timing of estimated commercialization for our current and future products, including our iUni, iDuo, iTotal CR, iTotal PS and Conformis Hip System, which we previously referred to as our iTotal Hip system;
|
•
|
our expectations regarding our sales, expenses, gross margin and other results of operations;
|
•
|
our strategies for growth and sources of new sales;
|
•
|
maintaining and expanding our customer base and our relationships with our independent sales representatives and distributors;
|
•
|
our current and future products and plans to promote them;
|
•
|
the anticipated trends and challenges in our business and in the markets in which we operate;
|
•
|
the implementation of our business model, strategic plans for our business, products, product candidates and technology;
|
•
|
the anticipated timing of our product launches;
|
•
|
the future availability of raw materials used to manufacture, and finished components for, our products from third-party suppliers, including single source suppliers;
|
•
|
product liability claims;
|
•
|
patent infringement claims;
|
•
|
our ability to retain and hire necessary employees and to staff our operations appropriately;
|
•
|
our ability to compete in our industry and with innovations by our competitors;
|
•
|
potential reductions in reimbursement levels by third-party payors and cost containment efforts of accountable care organizations;
|
•
|
our ability to protect proprietary technology and other intellectual property and potential claims against us for infringement of the intellectual property rights of third parties;
|
•
|
potential challenges relating to changes in and compliance with governmental laws and regulations affecting our U.S. and international businesses, including regulations of the U.S. Food and Drug Administration and foreign government regulators, such as more stringent requirements for regulatory clearance of our products;
|
•
|
the anticipated adequacy of our capital resources to meet the needs of our business or our ability to raise any additional capital; and
|
•
|
our expectations regarding the time during which we will be an emerging growth company under the JOBS Act.
|
•
|
iFit Design
, our proprietary algorithms and computer software that we use to design customized implants and associated single-use patient-specific instrumentation, which we refer to as iJigs, based on computed tomography, or CT scans of the patient and to prepare a surgical plan customized for the patient that we call iView.
|
•
|
iFit Printing
, a three-dimensional, or 3D, printing technology that we use to manufacture iJigs and that we may extend to manufacture certain components of our customized knee replacement implants.
|
•
|
iFit Just-in-Time Delivery
, our just-in-time manufacturing and delivery capabilities.
|
•
|
absorbing overhead costs across a larger volume of product sales;
|
•
|
obtaining more favorable pricing for the materials used in the manufacture of our products;
|
•
|
obtaining more favorable pricing of certain component of our products manufactured for us by third parties;
|
•
|
increasing the proportion of certain components of our products that we manufacture in-house, which we believe we can manufacture at a lower unit cost than vendors we currently use;
|
•
|
developing new versions of our software used in the design of our customized joint replacement implants, which we believe will reduce costs associated with the design process; and
|
•
|
expanding our CAD labor in India, which we believe will reduce labor costs required to design our products.
|
|
|
2018
|
|
2017
|
|
2018 vs 2017
|
|||||||||||||||
Three Months Ended June 30,
|
|
Amount
|
|
As a % of
Product
Revenue
|
|
Amount
|
|
As a % of
Product
Revenue
|
|
$
Change
|
|
%
Change
|
|||||||||
United States
|
|
$
|
16,356
|
|
|
87
|
%
|
|
$
|
15,219
|
|
|
84
|
%
|
|
$
|
1,137
|
|
|
7
|
%
|
Germany
|
|
2,186
|
|
|
12
|
|
|
2,428
|
|
|
13
|
|
|
(242
|
)
|
|
(10
|
)
|
|||
Rest of world
|
|
366
|
|
|
1
|
|
|
399
|
|
|
3
|
|
|
(33
|
)
|
|
(8
|
)
|
|||
Product revenue
|
|
$
|
18,908
|
|
|
100
|
%
|
|
$
|
18,046
|
|
|
100
|
%
|
|
$
|
862
|
|
|
5
|
%
|
|
|
2018
|
|
2017
|
|
2018 vs 2017
|
|||||||||||||||
Six Months Ended June 30,
|
|
Amount
|
|
As a % of
Product
Revenue
|
|
Amount
|
|
As a % of
Product
Revenue
|
|
$
Change
|
|
%
Change
|
|||||||||
United States
|
|
$
|
32,383
|
|
|
84
|
%
|
|
$
|
31,183
|
|
|
81
|
%
|
|
$
|
1,200
|
|
|
4
|
%
|
Germany
|
|
5,273
|
|
|
14
|
|
|
6,393
|
|
|
17
|
|
|
$
|
(1,120
|
)
|
|
(18
|
)
|
||
Rest of world
|
|
735
|
|
|
2
|
|
|
849
|
|
|
2
|
|
|
(114
|
)
|
|
(13
|
)
|
|||
Product revenue
|
|
$
|
38,391
|
|
|
100
|
%
|
|
$
|
38,425
|
|
|
100
|
%
|
|
$
|
(34
|
)
|
|
—
|
%
|
•
|
expansion of our sales and marketing efforts;
|
•
|
expansion of our manufacturing capacity;
|
•
|
funding research, development and clinical activities related to our existing products and product platform, including iFit design software and product support;
|
•
|
funding research, development and clinical activities related to new products that we may develop, including other joint replacement products;
|
•
|
pursuing and maintaining appropriate regulatory clearances and approvals for our existing products and any new products that we may develop; and
|
•
|
preparing, filing and prosecuting patent applications, and maintaining and enforcing our intellectual property rights and position.
|
|
|
Six Months Ended June 30,
|
|||||||||||||
|
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
Net cash (used in) provided by:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Operating activities
|
|
$
|
(18,664
|
)
|
|
$
|
(21,018
|
)
|
|
$
|
2,354
|
|
|
11
|
%
|
Investing activities
|
|
7,057
|
|
|
(7,356
|
)
|
|
14,413
|
|
|
196
|
|
|||
Financing activities
|
|
21,436
|
|
|
32,604
|
|
|
(11,168
|
)
|
|
(34
|
)
|
|||
Effect of exchange rate on cash
|
|
945
|
|
|
(2,280
|
)
|
|
3,225
|
|
|
141
|
|
|||
Total
|
|
$
|
10,774
|
|
|
$
|
1,950
|
|
|
$
|
8,824
|
|
|
453
|
%
|
Exhibit
Number
|
|
Description of Exhibit
|
|
|
|
|
|
|
|
||
|
||
|
||
|
||
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Database
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
*
|
Filed herewith.
|
†
|
Indicates management contract or plan.
|
#
|
This certification will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent specifically incorporated by reference into such filing.
|
|
|
CONFORMIS, INC.
|
||
|
|
|
||
|
|
By:
|
|
/s/ Mark A. Augusti
|
|
|
|
|
Mark A. Augusti
President and Chief Executive Officer
|
|
|
|
|
|
|
|
CONFORMIS, INC.
|
||
|
|
By:
|
|
/s/ Paul Weiner
|
|
|
|
|
Paul Weiner
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
|
13.
|
Severance Benefits
: Notwithstanding the foregoing, in the event that the Company terminates your employment without “Cause” or you resign from employment with “Good Reason” (each term as defined below and in either case a “Qualifying Termination”), you will be eligible for the benefits outlined in sub-sections A, B, or C (the “Severance Benefits”), subject to the terms set forth in this letter agreement:
|
A.
|
If a Qualifying Termination occurs (x) prior to three (3) months before or (y) more than twenty-four (24) months following, a Change in Control Transaction (as defined below), and the Qualifying Termination occurs prior to the two-year anniversary of the Effective Date: (i) The Company will provide you with severance pay in the form of continuation of your base salary for a total of eighteen (18) months, such amount to be paid in accordance with the Company’s then current payroll practices, except as otherwise specified in this letter agreement, beginning on the Company’s first regular payroll date that occurs after the Payment Date (as defined below); (ii) the Company will pay to you (a) the bonus accrued by the Company for you for the calendar year that is prior to the year in which the Qualifying Termination occurs, provided the Company has not already paid you a Target Bonus (or other annual bonus) for the prior year, and (b) an amount equal to 1.5 times a bonus of seventy-five percent (75%) of your base salary for the calendar year in which the Qualifying Termination occurs;
and (iii) subject to the terms and conditions provided for in COBRA, and subject to your timely election of COBRA, the Company shall pay the premium payments for you and your eligible dependents for group health and dental insurance after the date on which your employment terminates through (1) the end of the period during which you are receiving base salary continuation, or (2) the date you become employed with benefits substantially comparable to the benefits provided under the corresponding Company plan, or (3) the date you become ineligible for COBRA benefits (the “COBRA Period”);
provided, however
, that such Company-paid premiums may be recorded as additional income pursuant to Section 6041 of the Internal Revenue Code of 1986, as amended (the “Code”) and not entitled to any tax qualified treatment to the extent necessary to comply with or avoid the discriminatory treatment prohibited by the Patient Protection and Affordable Care Act of 2010 and the Health Care and Education Reconciliation Act of 2010 or Section 105(h) of the Code; and (iv)
the vesting of your then outstanding unvested equity grants, if any, shall be accelerated in a number of shares that would have become vested had you continued as an employee of the Company for eighteen (18) months following a Qualifying Termination. You shall be responsible for the entire COBRA premium should you elect to maintain this coverage after the earlier of the dates specified in Sections 13.A.iii(1)-(3) above.
|
B.
|
If a Qualifying Termination occurs (x) prior to three (3) months before or (y) more than twenty-four (24) months following, a Change in Control Transaction, and the Qualifying Termination occurs on or after the two-year anniversary of the Effective Date: (i) The Company will provide you with severance pay in the form of continuation of your base salary for a total of twelve (12) months, such amount to be paid in accordance with the Company’s then current payroll practices, except as otherwise specified in this letter agreement, beginning on the Company’s first regular payroll date that occurs after the Payment Date; (ii) the Company will pay to you (a) the bonus accrued by the Company for you for the calendar year that is prior to the year in which the Qualifying Termination occurs, provided the Company has not already paid you a Target Bonus (or other annual bonus) for the prior year, and (b) a bonus of seventy-five percent (75%) of your base salary for the calendar year in which the Qualifying Termination occurs;
and (iii) you will be eligible for the same COBRA premium assistance as set forth in Section 13.A.iii above, subject to the same terms, conditions, and limitations as described therein; and (iv)
the vesting of your then outstanding unvested equity grants, if any, shall be accelerated in a number of shares that would have become vested had you continued as an employee of the Company for twelve (12) months following a Qualifying Termination.
|
C.
|
If a Qualifying Termination occurs within three (3) months prior or twenty-four (24) months following a Change in Control Transaction, and regardless of whether the Qualifying Termination occurs prior to, on, or after the two-year anniversary of the Effective Date: (i) The Company will provide you with severance pay in the form of continuation of your base salary for a total of eighteen (18) months, such amount to be paid in accordance with the Company’s then current payroll practices, except as otherwise specified in this letter agreement, beginning on the Company’s first regular payroll date that occurs after the Payment Date; (ii) the Company will pay to you the greater of (a) the bonus accrued by the Company for you for the calendar year that is prior to the year in which the Qualifying Termination occurs, provided the Company has not already paid you a Target Bonus (or other annual bonus) for the prior year, and a bonus of seventy-five percent (75%) of your base salary for the calendar year in which the Qualifying termination occurs and (b) an amount equal to
1.5 times the Target Bonus, to be paid in one lump sum on the Company’s first regular payroll date that occurs after the Payment Date; (iii) you will be eligible for the same COBRA premium assistance as set forth in Section 13.A.iii above, subject to the same terms, conditions, and limitations as described therein; and (iv) the vesting of 100% of your then outstanding unvested equity grants shall be accelerated, such that all unvested equity grants vest and become fully exercisable or non-forfeitable as of the date your employment terminates.
|
D.
|
The Severance Benefits will be subject to the following terms and conditions:
|
i.
|
Solely for purposes of Section 409A of the Code, each salary continuation payment is considered a separate payment.
|
ii.
|
Any severance or other benefits under this letter agreement will begin only upon the date of your “separation from service” (as defined under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h)) which occurs on or after the date of termination of the employment. To the extent that the termination of your employment does not constitute a separation from service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) (as the result of further services that are reasonably anticipated to be provided by you to the Company, or any of its parents, subsidiaries or affiliates, at the time your employment terminates), any severance benefits payable that constitute deferred compensation under Section 409A of the Code shall be delayed until after the date of a subsequent event constituting a separation from service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h). For purposes of clarification, this Section shall not cause any forfeiture of benefits on your part, but shall only act as a delay until such time as a “separation from service” occurs.
|
iii.
|
The Company’s obligation to provide the Severance Benefits will be contingent upon your entering into and complying with a separation and release of claims agreement in a form to be provided by the Company (which will include a release of all releasable claims and non-disparagement and cooperation obligations) (the “Release”), which Release must be signed and any applicable revocation period with respect thereto must have expired by the sixtieth (60
th
) day following your termination of employment. The Severance Benefits shall be paid or commence on the first payroll period following the date the Release becomes effective (the “Payment Date”). Notwithstanding the foregoing, if the 60
th
day following the date of termination occurs in the calendar year following the date on which your employment terminates, then the Payment Date shall be no earlier than January 1 of such subsequent calendar year. In addition, to remain eligible for the Severance Benefits you must comply with all post-employment obligations, including those in the Restrictive Covenant Agreement that you shall sign as a condition of employment.
|
iv.
|
The Company’s obligations to pay or provide the Severance Benefits will be contingent upon your having tendered your resignation from the Board and all offices you hold in the Company (and any other boards on which you serve or offices that you hold at the request of the Company), effective as of the date of termination.
|
v.
|
You agree to give prompt written notice of any subsequent employment you obtain during the COBRA Period that results in your eligibility for comparable medical and dental benefits. If the Company makes any overpayment of COBRA premium amounts, you agree to promptly return any such overpayment to the Company. The foregoing shall not create any obligation on your part to seek reemployment after the date of termination of your employment.
|
14.
|
Benefits in the Event of a Termination that is Not a Qualifying Termination
: In the event of any termination of your employment that is not a Qualifying Termination, including without limitation, your termination by the Company for Cause, your resignation without Good reason, or termination due to your death or Disability, the Company’s obligations under this letter agreement shall immediately cease and you shall be entitled only to the Accrued Compensation (as defined below). You shall not be entitled to any other compensation or consideration, including any bonus not yet awarded for which you may have been eligible had your employment not ended. However, in the event your employment terminates due to your death or Disability (i) the vesting of your then outstanding unvested equity grants, if any, shall be accelerated in a number of shares that would have become vested had you continued as an employee of the Company for twelve (12) months following your death or disability; and (ii), provided such termination occurs between the end of a calendar year and the Bonus Payment Date, you (or your estate, as applicable) will be paid any bonus you would have received for the prior calendar year had you remained employed by the Company on the Bonus Payment Date (any such bonus to be paid on the Bonus Payment Date). In addition, in the event your employment terminates due to your death, the Company will provide you with severance pay in the form of continuation of your base salary for a total of twelve (12) months, such amount to be paid in accordance with the Company’s then current payroll practices, except as otherwise specified in this letter agreement, beginning on the Company’s first regular payroll date that occurs after the Payment Date.
|
Company:
|
|
|
|
/s/
Kenneth P. Fallon, III
|
|
|
Kenneth P. Fallon, III, Chairman
|
|
|
|
|
|
|
|
Executive:
|
|
|
|
/s/
Mark A. Augusti
|
|
|
Mark A. Augusti
|
|
BORROWER:
|
|
|
|
CONFORMIS, INC.
|
|
|
|
|
|
By
|
/s/Mark Augusti
|
Name:
|
Mark Augusti
|
Title:
|
CEO
|
|
|
|
|
IMATX, INC.
|
|
|
|
|
|
By
|
/s/Mark Augusti
|
Name:
|
Mark Augusti
|
Title:
|
CEO
|
|
|
|
|
CONFORMIS CARES LLC
|
|
|
|
|
|
By
|
/s/Mark Augusti
|
Name:
|
Mark Augusti
|
Title:
|
CEO
|
COLLATERAL AGENT AND LENDER:
|
|
||
|
|
||
|
|
||
|
|
||
By
|
/s/Colette H. Featherly
|
|
|
Name:
|
Colette H. Featherly
|
|
|
Title:
|
Senior Vice President
|
|
|
|
|
BORROWER:
|
|
|
|
|
|
CONFORMIS, INC.
|
|
|
|
|
|
|
|
|
By
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
|
|
|
|
IMATX, INC.
|
|
|
|
|
|
|
|
|
By
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
|
|
|
|
CONFORMIS CARES LLC
|
|
|
|
|
|
|
|
|
By
|
|
|
Name:
|
|
|
Title:
|
|
|
|
Date
|
Principal
Amount
|
Interest Rate
|
Scheduled
Payment
Amount
|
Notation By
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BORROWER:
|
|
|
|
|
|
CONFORMIS, INC.
|
|
|
|
|
|
|
|
|
By
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
|
|
|
|
IMATX, INC.
|
|
|
|
|
|
|
|
|
By
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
|
|
|
|
CONFORMIS CARES LLC
|
|
|
|
|
|
|
|
|
By
|
|
|
Name:
|
|
|
Title:
|
|
|
|
Date
|
Principal
Amount
|
Interest Rate
|
Scheduled
Payment
Amount
|
Notation By
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BORROWER:
|
|
|
|
|
|
CONFORMIS, INC.
|
|
|
|
|
|
|
|
|
By
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
|
|
|
|
IMATX, INC.
|
|
|
|
|
|
|
|
|
By
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
|
|
|
|
CONFORMIS CARES LLC
|
|
|
|
|
|
|
|
|
By
|
|
|
Name:
|
|
|
Title:
|
|
|
|
Date
|
Principal
Amount
|
Interest Rate
|
Scheduled
Payment
Amount
|
Notation By
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BORROWER:
|
|
|
|
|
|
CONFORMIS, INC.
|
|
|
|
|
|
|
|
|
By
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
|
|
|
|
IMATX, INC.
|
|
|
|
|
|
|
|
|
By
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
|
|
|
|
CONFORMIS CARES LLC
|
|
|
|
|
|
|
|
|
By
|
|
|
Name:
|
|
|
Title:
|
|
|
|
Date
|
Principal
Amount
|
Interest Rate
|
Scheduled
Payment
Amount
|
Notation By
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BORROWER:
|
|
|
|
|
|
CONFORMIS, INC.
|
|
|
|
|
|
|
|
|
By
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
|
|
|
|
IMATX, INC.
|
|
|
|
|
|
|
|
|
By
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
|
|
|
|
CONFORMIS CARES LLC
|
|
|
|
|
|
|
|
|
By
|
|
|
Name:
|
|
|
Title:
|
|
|
|
Date
|
Principal
Amount
|
Interest Rate
|
Scheduled
Payment
Amount
|
Notation By
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TO:
|
OXFORD FINANCE LLC, as Collateral Agent and Lender
|
FROM:
|
CONFORMIS, INC., for itself, and on behalf of all Borrowers
|
|
Reporting Covenant
|
Requirement
|
Actual
|
Complies
|
||
1)
|
Financial statements
|
Quarterly within 45 days
|
|
Yes
|
No
|
N/A
|
2)
|
Annual (CPA Audited) statements
|
Within 120 days after FYE
|
|
Yes
|
No
|
N/A
|
3)
|
Annual Financial Projections/Budget (prepared on a monthly basis)
|
Annually (no later than 3/31 of each calendar year (with any material changes within 10 days of Board approval)), and when revised
|
|
Yes
|
No
|
N/A
|
4)
|
Monthly Revenue report
|
Monthly within 30 days
|
|
Yes
|
Non
|
N/A
|
5)
|
8‑K, 10‑K and 10‑Q Filings
|
If applicable, within 5 days of filing
|
|
Yes
|
No
|
N/A
|
6)
|
Compliance Certificate
|
Quarterly within 45 days
|
|
Yes
|
No
|
N/A
|
7)
|
IP Report of any new copyrights, trademarks and patents
|
To accompany Compliance Certificate
|
|
Yes
|
No
|
N/A
|
8)
|
Total amount of
Borrower’s
cash and cash equivalents at the last day of the measurement period
|
|
$________
|
Yes
|
No
|
N/A
|
9)
|
Total amount of
Borrower’s
Subsidiaries’ cash and cash equivalents at the last day of the measurement period
|
|
$________
|
Yes
|
No
|
N/A
|
|
Institution Name
|
Account Number
|
New Account?
|
Account Control Agreement in place?
|
||
1)
|
|
|
Yes
|
No
|
Yes
|
No
|
2)
|
|
|
Yes
|
No
|
Yes
|
No
|
3)
|
|
|
Yes
|
No
|
Yes
|
No
|
4)
|
|
|
Yes
|
No
|
Yes
|
No
|
|
Covenant
|
Requirement
|
Actual
|
Compliance
|
|
1)
|
Minimum Product Revenue
(trailing six months)
|
See Section 6.8(a)
|
$
|
Yes
|
No
|
2)
|
Minimum cash
|
$10,000,000.00 in Deposit Accounts subject to Control Agreements
|
$
|
Yes
|
No
|
|
|
|
|
|
|
1)
|
Have there been any changes in a Key Person since the last Compliance Certificate?
|
Yes
|
No
|
|
|
|
|
2)
|
Have there been any transfers/sales/disposals/retirement of Collateral or IP prohibited by the Loan Agreement?
|
Yes
|
No
|
|
|
|
|
3)
|
Have there been any new pending or, to the knowledge of the Responsible Officer’s
, threatened in writing, or has Borrower received notice of any new governmental investigations pending or threatened, by or against Borrower or any of its Subsidiaries, involving
more
than Five Hundred Thousand Dollars ($500,000.00)?
|
Yes
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No
|
|
|
|
|
4)
|
Have there been any amendments or other changes to the Operating Documents of Borrower or any of its Subsidiaries? If yes, provide copies of any such amendments or changes with this Compliance Certificate if requested by Collateral Agent or any Lender.
|
Yes
|
No
|
LENDER USE ONLY
|
|
|
|
Received by:
|
Date:
|
|
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Verified by:
|
Date:
|
|
|
Compliance Status: Yes No
|
BORROWER:
|
CONFORMIS, INC.
|
DATE
: July 31, 2018
|
|
Lender:
|
OXFORD FINANCE LLC, as Collateral Agent and Lender
|
|
|
|
By:
|
|
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Name: Patricia A. Davis
|
|
|
Title: Chief Legal Officer, General Counsel and Corporate Secretary
|
|
|
By:
|
|
|
Name: Paul Weiner
|
|
|
Title: Chief Financial Officer
|
BORROWER:
|
IMATX, INC.
|
DATE
: July 31, 2018
|
|
Lender:
|
OXFORD FINANCE LLC, as Collateral Agent and Lender
|
|
Name
|
Title
|
Signature
|
Authorized to Add or Remove
Signatories
|
Mark Augusti
|
Chief Executive Officer and President
|
____________________________
|
□
|
Paul Weiner
|
Chief Financial Officer
|
____________________________
|
|
|
|
|
□
|
|
|
|
|
|
|
By:
|
|
|
Name: Mark Augusti
|
|
|
Title: President and Chief Executive Officer
|
|
|
By:
|
|
|
Name: Paul Weiner
|
|
|
Title: Chief Financial Officer
|
BORROWER:
|
CONFORMIS CARES LLC
|
DATE
: July 31, 2018
|
|
Lender:
|
OXFORD FINANCE LLC, as Collateral Agent and Lender
|
|
|
|
By:
|
|
|
Name: Patricia A. Davis
|
|
|
Title: Secretary
|
|
|
By:
|
|
|
Name: Paul Weiner
|
|
|
Title: Chief Financial Officer
|
Date:
|
August 2, 2018
|
|
By:
|
/s/Mark A. Augusti
|
|
|
|
|
Mark A. Augusti
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
(Principal Executive Officer)
|
Date:
|
August 2, 2018
|
By:
|
/s/Paul Weiner
|
|
|
|
Paul Weiner
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial and Accounting Officer)
|
Date:
|
August 2, 2018
|
|
By:
|
/s/Mark A. Augusti
|
|
|
|
|
Mark A. Augusti
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
(Principal Executive Officer)
|
Date:
|
August 2, 2018
|
By:
|
/s/Paul Weiner
|
|
|
|
Paul Weiner
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial and Accounting Officer)
|