|
|
|
|
|
Delaware
|
56-2463152
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification Number)
|
600 Technology Park Drive
Billerica, MA
|
01821
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer
|
o
|
Accelerated filer
|
x
|
|
|
|
|
Non-accelerated filer
|
o
|
Smaller reporting company
|
x
|
|
|
|
|
|
|
Emerging growth company
|
x
|
|
|
|
|
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.
|
x
|
|
|
Page
|
|
|
|
|
|
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
|
(unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Current Assets
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
21,685
|
|
|
$
|
18,348
|
|
Investments
|
15,248
|
|
|
26,880
|
|
||
Accounts receivable, net
|
11,664
|
|
|
13,200
|
|
||
Royalty receivable
|
10,634
|
|
|
—
|
|
||
Inventories
|
10,059
|
|
|
9,184
|
|
||
Prepaid expenses and other current assets
|
1,830
|
|
|
2,246
|
|
||
Total current assets
|
71,120
|
|
|
69,858
|
|
||
Property and equipment, net
|
14,582
|
|
|
16,514
|
|
||
Other Assets
|
|
|
|
|
|
||
Restricted cash
|
462
|
|
|
462
|
|
||
Intangible assets, net
|
134
|
|
|
210
|
|
||
Goodwill
|
—
|
|
|
6,731
|
|
||
Other long-term assets
|
23
|
|
|
23
|
|
||
Total assets
|
$
|
86,321
|
|
|
$
|
93,798
|
|
|
|
|
|
||||
Liabilities and stockholders' equity
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Accounts payable
|
$
|
4,457
|
|
|
$
|
4,891
|
|
Accrued expenses
|
7,997
|
|
|
7,720
|
|
||
Deferred revenue
|
—
|
|
|
305
|
|
||
Total current liabilities
|
12,454
|
|
|
12,916
|
|
||
Other long-term liabilities
|
627
|
|
|
651
|
|
||
Deferred tax liabilities
|
36
|
|
|
37
|
|
||
Deferred revenue
|
—
|
|
|
4,014
|
|
||
Long-term debt, less debt issuance costs
|
29,749
|
|
|
29,667
|
|
||
Total liabilities
|
42,866
|
|
|
47,285
|
|
||
Commitments and contingencies
|
—
|
|
|
—
|
|
||
Stockholders’ equity
|
|
|
|
|
|
||
Preferred stock, $0.00001 par value:
|
|
|
|
|
|
||
Authorized: 5,000,000 shares authorized at September 30, 2018 and December 31, 2017; no shares issued and outstanding as of September 30, 2018 and December 31, 2017
|
—
|
|
|
—
|
|
||
Common stock, $0.00001 par value:
|
|
|
|
|
|
||
Authorized: 200,000,000 shares authorized at September 30, 2018 and December 31, 2017; 63,638,018 and 45,528,519 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively
|
1
|
|
|
—
|
|
||
Additional paid-in capital
|
511,249
|
|
|
486,570
|
|
||
Accumulated deficit
|
(465,797
|
)
|
|
(436,821
|
)
|
||
Accumulated other comprehensive loss
|
(1,998
|
)
|
|
(3,236
|
)
|
||
Total stockholders’ equity
|
43,455
|
|
|
46,513
|
|
||
Total liabilities and stockholders’ equity
|
$
|
86,321
|
|
|
$
|
93,798
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
||||
Product
|
$
|
18,332
|
|
|
$
|
18,176
|
|
|
$
|
56,723
|
|
|
$
|
56,601
|
|
Royalty
|
10,652
|
|
|
249
|
|
|
11,017
|
|
|
763
|
|
||||
Total revenue
|
28,984
|
|
|
18,425
|
|
|
67,740
|
|
|
57,364
|
|
||||
Cost of revenue
|
9,265
|
|
|
11,111
|
|
|
30,123
|
|
|
37,307
|
|
||||
Gross profit
|
19,719
|
|
|
7,314
|
|
|
37,617
|
|
|
20,057
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales and marketing
|
9,053
|
|
|
8,741
|
|
|
29,273
|
|
|
28,932
|
|
||||
Research and development
|
3,867
|
|
|
4,081
|
|
|
13,411
|
|
|
12,976
|
|
||||
General and administrative
|
6,582
|
|
|
7,402
|
|
|
18,524
|
|
|
22,304
|
|
||||
Goodwill impairment
|
6,731
|
|
|
—
|
|
|
6,731
|
|
|
—
|
|
||||
Total operating expenses
|
26,233
|
|
|
20,224
|
|
|
67,939
|
|
|
64,212
|
|
||||
Loss from operations
|
(6,514
|
)
|
|
(12,910
|
)
|
|
(30,322
|
)
|
|
(44,155
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Other income and expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest income
|
164
|
|
|
137
|
|
|
475
|
|
|
367
|
|
||||
Interest expense
|
(788
|
)
|
|
(718
|
)
|
|
(2,289
|
)
|
|
(1,397
|
)
|
||||
Foreign currency exchange transaction (loss) income
|
(272
|
)
|
|
1,099
|
|
|
(1,285
|
)
|
|
3,606
|
|
||||
Total other income (expenses), net
|
(896
|
)
|
|
518
|
|
|
(3,099
|
)
|
|
2,576
|
|
||||
Loss before income taxes
|
(7,410
|
)
|
|
(12,392
|
)
|
|
(33,421
|
)
|
|
(41,579
|
)
|
||||
Income tax provision
|
27
|
|
|
80
|
|
|
74
|
|
|
143
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(7,437
|
)
|
|
$
|
(12,472
|
)
|
|
$
|
(33,495
|
)
|
|
$
|
(41,722
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net loss per share
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
$
|
(0.12
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
(0.58
|
)
|
|
$
|
(0.97
|
)
|
Weighted average common shares outstanding
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
60,225,504
|
|
|
43,468,559
|
|
|
58,224,963
|
|
|
43,182,090
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net loss
|
$
|
(7,437
|
)
|
|
$
|
(12,472
|
)
|
|
$
|
(33,495
|
)
|
|
$
|
(41,722
|
)
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
261
|
|
|
(1,006
|
)
|
|
1,206
|
|
|
(3,286
|
)
|
||||
Change in unrealized gain (loss) on available-for-sale securities, net of tax
|
3
|
|
|
9
|
|
|
32
|
|
|
(9
|
)
|
||||
Comprehensive loss
|
$
|
(7,173
|
)
|
|
$
|
(13,469
|
)
|
|
$
|
(32,257
|
)
|
|
$
|
(45,017
|
)
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net loss
|
$
|
(33,495
|
)
|
|
$
|
(41,722
|
)
|
|
|
|
|
||||
Adjustments to reconcile net loss to net cash used by operating activities:
|
|
|
|
|
|
||
Depreciation and amortization expense
|
3,015
|
|
|
2,698
|
|
||
Stock-based compensation expense
|
2,744
|
|
|
4,149
|
|
||
Provision for bad debts on trade receivables
|
(16
|
)
|
|
5
|
|
||
Impairment of goodwill
|
6,731
|
|
|
—
|
|
||
Impairment of long-term assets
|
1,940
|
|
|
805
|
|
||
Disposal of long term-assets
|
(2
|
)
|
|
—
|
|
||
Non-cash interest expense
|
82
|
|
|
73
|
|
||
Amortization/accretion on investments
|
17
|
|
|
159
|
|
||
Deferred taxes
|
(1
|
)
|
|
42
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable
|
1,552
|
|
|
2,071
|
|
||
Royalty receivable
|
(10,434
|
)
|
|
—
|
|
||
Inventories
|
(875
|
)
|
|
1,143
|
|
||
Prepaid expenses and other assets
|
416
|
|
|
1,504
|
|
||
Accounts payable and accrued liabilities
|
(156
|
)
|
|
(1,368
|
)
|
||
Deferred royalty revenue
|
—
|
|
|
(229
|
)
|
||
Other long-term liabilities
|
(23
|
)
|
|
488
|
|
||
Net cash used in operating activities
|
(28,505
|
)
|
|
(30,182
|
)
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
||
Acquisition of property and equipment
|
(2,946
|
)
|
|
(4,114
|
)
|
||
Business acquisition, net of cash acquired
|
—
|
|
|
(5,780
|
)
|
||
Decrease in restricted cash
|
—
|
|
|
(162
|
)
|
||
Purchase of investments
|
(19,449
|
)
|
|
(23,002
|
)
|
||
Maturity of investments
|
31,095
|
|
|
23,125
|
|
||
Net cash provided/(used) in investing activities
|
8,700
|
|
|
(9,933
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
||
Proceeds from exercise of common stock options
|
112
|
|
|
2,102
|
|
||
Debt issuance costs
|
—
|
|
|
(434
|
)
|
||
Proceeds from issuance of debt
|
—
|
|
|
30,000
|
|
||
Net proceeds from issuance of common stock
|
21,824
|
|
|
1,023
|
|
||
Net cash provided by financing activities
|
21,936
|
|
|
32,691
|
|
||
Foreign exchange effect on cash and cash equivalents
|
1,206
|
|
|
(3,286
|
)
|
||
Increase in cash and cash equivalents
|
3,337
|
|
|
(10,710
|
)
|
||
Cash and cash equivalents, beginning of period
|
18,348
|
|
|
37,257
|
|
||
Cash and cash equivalents, end of period
|
$
|
21,685
|
|
|
$
|
26,547
|
|
|
|
|
|
||||
Supplemental information:
|
|
|
|
|
|
||
Cash paid for interest
|
1,887
|
|
|
860
|
|
||
Non cash investing activities:
|
|
|
|
||||
Issuance of common stock for business acquisition
|
—
|
|
|
594
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Beginning Balance
|
|
$
|
6,731
|
|
|
$
|
753
|
|
Acquired
|
|
—
|
|
|
5,978
|
|
||
Impairment
|
|
(6,731
|
)
|
|
—
|
|
||
Ending Balance
|
|
$
|
—
|
|
|
$
|
6,731
|
|
|
|
As Reported December 31, 2017
|
|
Balance at January 1, 2018
|
|
ASC 606 Adjustment
|
|
||||||
Current Assets
|
|
|
|
|
|
|
|
||||||
Royalty receivable
|
|
$
|
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 September 30, 2018
|
|
As Reported
|
|
Pro-forma
(1)
|
|
Effect
|
|
||||||
Current Assets
|
|
|
|
|
|
|
|
||||||
Royalty receivable
|
|
$
|
10,634
|
|
|
$
|
10,500
|
|
|
$
|
134
|
|
(2)
|
Current liabilities
|
|
|
|
|
|
|
|
|
|||||
Deferred revenue
|
|
—
|
|
|
305
|
|
|
(305
|
)
|
(3)
|
|||
Long-term Liabilities
|
|
|
|
|
|
|
|
||||||
Deferred revenue
|
|
—
|
|
|
3,786
|
|
|
(3,786
|
)
|
(3)
|
|||
Stockholders’ equity
|
|
|
|
|
|
|
|
|
|||||
Accumulated deficit
|
|
(465,797
|
)
|
|
(461,572
|
)
|
|
4,225
|
|
(2),(3)
|
Statement of Operations for the three months ended September 30, 2018
|
|
As Reported
|
|
Pro-forma (1)
|
|
Effect
|
|
||||||
Revenue
|
|
|
|
|
|
|
|
||||||
Royalty
|
|
$
|
10,652
|
|
|
$
|
10,772
|
|
|
$
|
(120
|
)
|
(2),(3)
|
Net loss
|
|
(7,437
|
)
|
|
(7,317
|
)
|
|
(120
|
)
|
(2),(3)
|
|||
Net loss per share - basic and diluted
|
|
$
|
(0.12
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
—
|
|
|
Statement of Operations for the nine months ended September 30, 2018
|
|
As Reported
|
|
Pro-forma (1)
|
|
Effect
|
|
||||||
Royalty
|
|
$
|
11,017
|
|
|
$
|
11,311
|
|
|
$
|
(294
|
)
|
(2),(3)
|
Net loss
|
|
(33,495
|
)
|
|
(33,201
|
)
|
|
(294
|
)
|
(2),(3)
|
|||
Net loss per share - basic and diluted
|
|
$
|
(0.58
|
)
|
|
$
|
(0.57
|
)
|
|
$
|
(0.01
|
)
|
|
Cash Flows for the nine months ended September 30, 2018
|
|
As Reported
|
|
Pro-forma (1)
|
|
Effect
|
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
||||||
Net loss
|
|
$
|
(33,495
|
)
|
|
$
|
(33,201
|
)
|
|
$
|
(294
|
)
|
(2),(3)
|
Changes in operating assets and liabilities
|
|
(28,505
|
)
|
|
(28,799
|
)
|
|
294
|
|
(2),(3)
|
|
|
September 30, 2018
|
||
Beginning Balance
|
|
$
|
119
|
|
Provision related to current period sales
|
|
124
|
|
|
Adjustment related to prior period sales
|
|
40
|
|
|
Payments or credits issued to customer
|
|
(188
|
)
|
|
Ending Balance
|
|
$
|
95
|
|
|
|
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
|
|
1,206
|
|
|
32
|
|
|
1,238
|
|
|||
Balance September 30, 2018
|
|
$
|
(1,997
|
)
|
|
$
|
(1
|
)
|
|
$
|
(1,998
|
)
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(in thousands, except share and per share data)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Numerator for basic and diluted loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss
|
|
$
|
(7,437
|
)
|
|
$
|
(12,472
|
)
|
|
$
|
(33,495
|
)
|
|
$
|
(41,722
|
)
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted weighted average shares
|
|
60,225,504
|
|
|
43,468,559
|
|
|
58,224,963
|
|
|
43,182,090
|
|
||||
Loss per share attributable to Conformis, Inc. stockholders:
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
|
$
|
(0.12
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
(0.58
|
)
|
|
$
|
(0.97
|
)
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Stock options and restricted stock awards
|
|
27,919
|
|
|
322,450
|
|
|
92,378
|
|
|
466,646
|
|
|
September 30, 2018
|
|||||||||||||||||
|
Amortized Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Estimated Fair Value
|
Cash and cash equivalents
|
Short-term (1) investments
|
||||||||||||
Cash
|
$
|
13,613
|
|
$
|
—
|
|
$
|
—
|
|
$
|
13,613
|
|
$
|
13,613
|
|
$
|
—
|
|
Level 1 securities:
|
|
|
|
|
|
|
||||||||||||
Money market funds
|
7,077
|
|
—
|
|
—
|
|
7,077
|
|
7,077
|
|
—
|
|
||||||
U.S. treasury bonds
|
11,989
|
|
—
|
|
—
|
|
11,989
|
|
—
|
|
11,988
|
|
||||||
Level 2 securities:
|
|
|
|
|
|
|
||||||||||||
Corporate bonds
|
2,268
|
|
—
|
|
(1
|
)
|
2,267
|
|
—
|
|
2,267
|
|
||||||
Commercial paper
|
1,988
|
|
—
|
|
—
|
|
1,988
|
|
995
|
|
993
|
|
||||||
Total
|
$
|
36,935
|
|
$
|
—
|
|
$
|
(1
|
)
|
$
|
36,934
|
|
$
|
21,685
|
|
$
|
15,248
|
|
|
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
|
|
|
Level 1
|
Level 2
|
Level 3
|
Total Losses
|
Estimated Fair Value
|
|||
Goodwill
|
|
|
6,731
|
|
(6,731
|
)
|
—
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
Total receivables
|
$
|
12,157
|
|
|
$
|
13,835
|
|
Allowance for doubtful accounts and returns
|
(493
|
)
|
|
(635
|
)
|
||
Accounts receivable, net
|
$
|
11,664
|
|
|
$
|
13,200
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
Beginning balance
|
(635
|
)
|
|
(681
|
)
|
||
Provision for bad debts on trade receivables
|
15
|
|
|
15
|
|
||
Other allowances
|
60
|
|
|
(61
|
)
|
||
Accounts receivable write offs
|
67
|
|
|
92
|
|
||
Ending balance
|
$
|
(493
|
)
|
|
$
|
(635
|
)
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
Raw Material
|
$
|
4,572
|
|
|
$
|
2,905
|
|
Work in process
|
1,599
|
|
|
1,718
|
|
||
Finished goods
|
3,888
|
|
|
4,561
|
|
||
Total Inventories
|
$
|
10,059
|
|
|
$
|
9,184
|
|
|
Estimated
Useful Life (Years) |
|
September 30, 2018
|
|
December 31, 2017
|
||||
Equipment
|
5-7
|
|
$
|
18,552
|
|
|
$
|
19,331
|
|
Furniture and fixtures
|
5-7
|
|
954
|
|
|
955
|
|||
Computer and software
|
3
|
|
8,619
|
|
|
7,877
|
|||
Leasehold improvements
|
2-8
|
|
1,922
|
|
|
1,830
|
|||
Total property and equipment
|
|
|
30,967
|
|
29,993
|
||||
Accumulated depreciation
|
|
|
(16,385
|
)
|
|
(13,479
|
)
|
||
Property and equipment, net
|
|
|
$
|
14,582
|
|
|
$
|
16,514
|
|
|
|
|
|
|
|
|
Estimated
Useful Life
(Years)
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
|
|
|
|
|
|
||||
Developed technology
|
10
|
|
$
|
979
|
|
|
$
|
979
|
|
Accumulated amortization
|
|
|
(856
|
)
|
|
(783
|
)
|
||
Developed technology, net
|
|
|
123
|
|
|
196
|
|
||
|
|
|
|
|
|
||||
Acquired favorable lease
|
5
|
|
15
|
|
|
15
|
|
||
Accumulated amortization
|
|
|
(4
|
)
|
|
(1
|
)
|
||
Acquired favorable lease, net
|
|
|
11
|
|
|
14
|
|
||
|
|
|
|
|
|
||||
Intangible assets, net
|
|
|
$
|
134
|
|
|
$
|
210
|
|
|
Amortization
expense
|
||
2018 (remainder of the year)
|
$
|
25
|
|
2019
|
101
|
|
|
2020
|
3
|
|
|
2021
|
3
|
|
|
2022
|
2
|
|
|
|
$
|
134
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
Accrued employee compensation
|
$
|
4,039
|
|
|
$
|
2,989
|
|
Deferred rent
|
128
|
|
|
115
|
|
||
Accrued legal expense
|
310
|
|
|
1,231
|
|
||
Accrued consulting expense
|
21
|
|
|
115
|
|
||
Accrued vendor charges
|
1,190
|
|
|
912
|
|
||
Accrued revenue share expense
|
919
|
|
|
968
|
|
||
Accrued clinical trial expense
|
398
|
|
|
196
|
|
||
Accrued other
|
992
|
|
|
1,194
|
|
||
|
$
|
7,997
|
|
|
$
|
7,720
|
|
Year
|
Minimum lease Payments
|
||
2018 remainder of year
|
$
|
382
|
|
2019
|
1,558
|
|
|
2020
|
1,595
|
|
|
2021
|
1,633
|
|
|
2022
|
1,397
|
|
|
2023-2025
|
2,939
|
|
|
|
$
|
9,504
|
|
|
September 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
|
(251
|
)
|
|
(333
|
)
|
||
Long-term debt, less debt issuance costs
|
$
|
29,749
|
|
|
$
|
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
|
|
2,372,832
|
|
Forfeiture of unvested restricted stock
|
|
(233,000
|
)
|
Issuance of common stock - ATM offering
|
|
556,334
|
|
Issuance of common stock - Secondary offering
|
|
15,333,333
|
|
Outstanding September 30, 2018
|
|
63,638,018
|
|
|
|
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 September 30, 2018
|
|
28,926
|
|
|
$
|
9.80
|
|
|
4.91
|
|
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
|
|
(403,269
|
)
|
|
6.31
|
|
|
|
|||
Cancelled/Forfeited
|
|
(96,858
|
)
|
|
5.48
|
|
|
|
|||
Outstanding September 30, 2018
|
|
3,213,087
|
|
|
$
|
6.40
|
|
|
$
|
—
|
|
Total vested and exercisable
|
|
2,451,579
|
|
|
$
|
6.92
|
|
|
$
|
—
|
|
|
|
Number of Shares
|
|
Weighted Average Fair Value
|
|||
Unvested December 31, 2017
|
|
1,339,121
|
|
|
$
|
6.06
|
|
Granted
|
|
2,372,832
|
|
|
1.37
|
|
|
Vested
|
|
(346,699
|
)
|
|
5.60
|
|
|
Forfeited
|
|
(233,000
|
)
|
|
4.43
|
|
|
Unvested September 30, 2018
|
|
3,132,254
|
|
|
$
|
2.68
|
|
|
||||||||
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Risk-free interest rate
|
|
N/A
|
|
2.1%
|
|
2.75% - 2.90%
|
|
2.10%-2.14%
|
Expected term (in years)
|
|
N/A
|
|
6.25
|
|
6.25
|
|
6.02-6.25
|
Dividend yield
|
|
N/A
|
|
—%
|
|
—%
|
|
—%
|
Expected volatility
|
|
N/A
|
|
52%
|
|
52.81% - 56.44%
|
|
50.59%-52.00%
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Cost of revenues
|
|
$
|
55
|
|
|
$
|
133
|
|
|
$
|
141
|
|
|
$
|
348
|
|
Sales and marketing
|
|
174
|
|
|
130
|
|
|
455
|
|
|
611
|
|
||||
Research and development
|
|
286
|
|
|
444
|
|
|
850
|
|
|
1,341
|
|
||||
General and administrative
|
|
444
|
|
|
702
|
|
|
1,298
|
|
|
1,849
|
|
||||
|
|
$
|
959
|
|
|
$
|
1,409
|
|
|
$
|
2,744
|
|
|
$
|
4,149
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||
Product Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
||
United States
|
|
$
|
16,271
|
|
|
$
|
15,519
|
|
|
48,654
|
|
|
46,702
|
|
Germany
|
|
1,684
|
|
|
2,335
|
|
|
6,957
|
|
|
8,727.5
|
|
||
Rest of World
|
|
377
|
|
|
322
|
|
|
1,112
|
|
|
1,171
|
|
||
|
|
$
|
18,332
|
|
|
$
|
18,176
|
|
|
56,723
|
|
|
56,601
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Property and equipment, net
|
|
|
|
|
|
|
||
United States
|
|
$
|
14,505
|
|
|
$
|
16,424
|
|
Germany
|
|
77
|
|
|
90
|
|
||
|
|
$
|
14,582
|
|
|
$
|
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
|
•
|
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;
|
•
|
our ability to continue as a going concern; 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 hip and 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 September 30,
|
|
Amount
|
|
As a % of
Product
Revenue
|
|
Amount
|
|
As a % of
Product
Revenue
|
|
$
Change
|
|
%
Change
|
|||||||||
United States
|
|
$
|
16,271
|
|
|
89
|
%
|
|
$
|
15,519
|
|
|
85
|
%
|
|
$
|
752
|
|
|
5
|
%
|
Germany
|
|
1,684
|
|
|
9
|
|
|
2,335
|
|
|
13
|
|
|
(651
|
)
|
|
(28
|
)
|
|||
Rest of world
|
|
377
|
|
|
2
|
|
|
322
|
|
|
2
|
|
|
55
|
|
|
17
|
|
|||
Product revenue
|
|
$
|
18,332
|
|
|
100
|
%
|
|
$
|
18,176
|
|
|
100
|
%
|
|
$
|
156
|
|
|
1
|
%
|
|
|
2018
|
|
2017
|
|
2018 vs 2017
|
|||||||||||||||
Nine Months Ended September 30,
|
|
Amount
|
|
As a % of
Product
Revenue
|
|
Amount
|
|
As a % of
Product
Revenue
|
|
$
Change
|
|
%
Change
|
|||||||||
United States
|
|
$
|
48,654
|
|
|
86
|
%
|
|
$
|
46,702
|
|
|
83
|
%
|
|
$
|
1,952
|
|
|
4
|
%
|
Germany
|
|
6,957
|
|
|
12
|
|
|
8,728
|
|
|
15
|
|
|
$
|
(1,771
|
)
|
|
(20
|
)
|
||
Rest of world
|
|
1,112
|
|
|
2
|
|
|
1,171
|
|
|
2
|
|
|
(59
|
)
|
|
(5
|
)
|
|||
Product revenue
|
|
$
|
56,723
|
|
|
100
|
%
|
|
$
|
56,601
|
|
|
100
|
%
|
|
$
|
122
|
|
|
—
|
%
|
•
|
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.
|
|
|
Nine Months Ended September 30,
|
|||||||||||||
|
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
Net cash (used in) provided by:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Operating activities
|
|
$
|
(28,505
|
)
|
|
$
|
(30,182
|
)
|
|
$
|
1,677
|
|
|
6
|
%
|
Investing activities
|
|
8,700
|
|
|
(9,933
|
)
|
|
18,633
|
|
|
188
|
|
|||
Financing activities
|
|
21,936
|
|
|
32,691
|
|
|
(10,755
|
)
|
|
(33
|
)
|
|||
Effect of exchange rate on cash
|
|
1,206
|
|
|
(3,286
|
)
|
|
4,492
|
|
|
137
|
|
|||
Total
|
|
$
|
3,337
|
|
|
$
|
(10,710
|
)
|
|
$
|
14,047
|
|
|
131
|
%
|
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.
|
^
|
Confidential treatment has been requested as to certain portions, which portions in each case have been omitted and separately filed with the Securities and Exchange Commission.
|
#
|
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)
|
Date:
|
11/5/2018
|
|
By:
|
/s/Mark A. Augusti
|
|
|
|
|
Mark A. Augusti
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
(Principal Executive Officer)
|
Date:
|
11/5/2018
|
By:
|
/s/Paul Weiner
|
|
|
|
Paul Weiner
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial and Accounting Officer)
|
Date:
|
11/5/2018
|
|
By:
|
/s/Mark A. Augusti
|
|
|
|
|
Mark A. Augusti
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
(Principal Executive Officer)
|
Date:
|
11/5/2018
|
By:
|
/s/Paul Weiner
|
|
|
|
Paul Weiner
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial and Accounting Officer)
|