|
|
|
|
|
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
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock
|
CFMS
|
Nasdaq
|
|
|
Page
|
|
|
|
|
|
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
|
(unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Current Assets
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
21,518
|
|
|
$
|
26,394
|
|
Accounts receivable, net
|
8,163
|
|
|
11,066
|
|
||
Royalty receivable
|
150
|
|
|
165
|
|
||
Inventories, net
|
11,857
|
|
|
12,074
|
|
||
Prepaid expenses and other current assets
|
1,863
|
|
|
2,815
|
|
||
Total current assets
|
43,551
|
|
|
52,514
|
|
||
Property and equipment, net
|
13,756
|
|
|
13,356
|
|
||
Operating lease right-of-use assets
|
5,565
|
|
|
5,853
|
|
||
Other Assets
|
|
|
|
|
|
||
Restricted cash
|
462
|
|
|
462
|
|
||
Other long-term assets
|
200
|
|
|
211
|
|
||
Total assets
|
$
|
63,534
|
|
|
$
|
72,396
|
|
|
|
|
|
||||
Liabilities and stockholders' equity
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Accounts payable
|
$
|
6,191
|
|
|
$
|
6,920
|
|
Accrued expenses
|
6,285
|
|
|
7,135
|
|
||
Operating lease liabilities
|
1,479
|
|
|
1,469
|
|
||
Advance on research and development
|
2,020
|
|
|
2,331
|
|
||
Total current liabilities
|
15,975
|
|
|
17,855
|
|
||
Other long-term liabilities
|
1,500
|
|
|
1,500
|
|
||
Contract liability
|
12,000
|
|
|
12,000
|
|
||
Long-term debt, less debt issuance costs
|
19,787
|
|
|
19,623
|
|
||
Operating lease liabilities
|
4,757
|
|
|
5,071
|
|
||
Total liabilities
|
54,019
|
|
|
56,049
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Stockholders’ equity
|
|
|
|
|
|
||
Preferred stock, $0.00001 par value:
|
|
|
|
|
|
||
Authorized: 5,000,000 shares authorized at March 31, 2020 and December 31, 2019; no shares issued and outstanding as of March 31, 2020 and December 31, 2019
|
—
|
|
|
—
|
|
||
Common stock, $0.00001 par value:
|
|
|
|
|
|
||
Authorized: 200,000,000 shares authorized at March 31, 2020 and December 31, 2019; 71,505,724 and 70,427,400 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively
|
1
|
|
|
1
|
|
||
Additional paid-in capital
|
523,265
|
|
|
521,356
|
|
||
Accumulated deficit
|
(513,498
|
)
|
|
(504,145
|
)
|
||
Accumulated other comprehensive loss
|
(253
|
)
|
|
(865
|
)
|
||
Total stockholders’ equity
|
9,515
|
|
|
16,347
|
|
||
Total liabilities and stockholders’ equity
|
$
|
63,534
|
|
|
$
|
72,396
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Revenue
|
|
|
|
|
|
||
Product
|
$
|
16,290
|
|
|
$
|
20,469
|
|
Royalty
|
185
|
|
|
175
|
|
||
Total revenue
|
16,475
|
|
|
20,644
|
|
||
Cost of revenue
|
9,261
|
|
|
10,813
|
|
||
Gross profit
|
7,214
|
|
|
9,831
|
|
||
|
|
|
|
||||
Operating expenses
|
|
|
|
|
|
||
Sales and marketing
|
6,563
|
|
|
8,181
|
|
||
Research and development
|
2,990
|
|
|
2,912
|
|
||
General and administrative
|
5,736
|
|
|
5,329
|
|
||
Total operating expenses
|
15,289
|
|
|
16,422
|
|
||
Loss from operations
|
(8,075
|
)
|
|
(6,591
|
)
|
||
|
|
|
|
||||
Other income and expenses
|
|
|
|
|
|
||
Interest income
|
35
|
|
|
107
|
|
||
Interest expense
|
(574
|
)
|
|
(453
|
)
|
||
Foreign currency exchange transaction loss
|
(714
|
)
|
|
(653
|
)
|
||
Total other expenses
|
(1,253
|
)
|
|
(999
|
)
|
||
Loss before income taxes
|
(9,328
|
)
|
|
(7,590
|
)
|
||
Income tax provision
|
25
|
|
|
(9
|
)
|
||
|
|
|
|
||||
Net loss
|
$
|
(9,353
|
)
|
|
$
|
(7,581
|
)
|
|
|
|
|
||||
Net loss per share
|
|
|
|
||||
Basic and diluted
|
$
|
(0.14
|
)
|
|
$
|
(0.12
|
)
|
Weighted average common shares outstanding
|
|
|
|
||||
Basic and diluted
|
67,274,391
|
|
|
62,849,335
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net loss
|
$
|
(9,353
|
)
|
|
$
|
(7,581
|
)
|
Other comprehensive income
|
|
|
|
|
|
||
Foreign currency translation adjustments
|
612
|
|
|
620
|
|
||
Comprehensive loss
|
$
|
(8,741
|
)
|
|
$
|
(6,961
|
)
|
|
Three Months Ended March 31, 2020
|
|||||||||||||||||||||
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
|
|||||||||||||
|
Shares
|
|
Par Value
|
|
|
|
|
Total
|
||||||||||||||
Balance, December 31, 2019
|
70,427,400
|
|
|
$
|
1
|
|
|
$
|
521,356
|
|
|
$
|
(504,145
|
)
|
|
$
|
(865
|
)
|
|
$
|
16,347
|
|
Issuance of common stock—restricted stock
|
78,324
|
|
|
—
|
|
|
2
|
|
|
|
|
|
|
2
|
|
|||||||
Issuance of common stock—LPC offering
|
1,000,000
|
|
|
—
|
|
|
1,143
|
|
|
|
|
|
|
1,143
|
|
|||||||
Issuance of common stock— ATM offering
|
|
|
|
|
(2
|
)
|
|
|
|
|
|
(2
|
)
|
|||||||||
Compensation expense related to issued stock options and restricted stock awards
|
|
|
|
|
766
|
|
|
|
|
|
|
766
|
|
|||||||||
Net loss
|
|
|
|
|
|
|
(9,353
|
)
|
|
|
|
(9,353
|
)
|
|||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
612
|
|
|
612
|
|
|||||||||
Balance, March 31, 2020
|
71,505,724
|
|
|
$
|
1
|
|
|
$
|
523,265
|
|
|
$
|
(513,498
|
)
|
|
$
|
(253
|
)
|
|
$
|
9,515
|
|
|
Three Months Ended March 31, 2019
|
|||||||||||||||||||||
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
|
|||||||||||||
|
Shares
|
|
Par Value
|
|
|
|
|
Total
|
||||||||||||||
Balance, December 31, 2018
|
65,290,879
|
|
|
$
|
1
|
|
|
$
|
513,336
|
|
|
$
|
(475,667
|
)
|
|
$
|
(1,470
|
)
|
|
$
|
36,200
|
|
Issuance of common stock—restricted stock
|
2,589,785
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|||||||
Compensation expense related to issued stock options and restricted stock awards
|
|
|
|
|
1,148
|
|
|
|
|
|
|
1,148
|
|
|||||||||
Net loss
|
|
|
|
|
|
|
(7,581
|
)
|
|
|
|
(7,581
|
)
|
|||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
620
|
|
|
620
|
|
|||||||||
Balance, March 31, 2019
|
67,880,664
|
|
|
$
|
1
|
|
|
$
|
514,484
|
|
|
$
|
(483,248
|
)
|
|
$
|
(850
|
)
|
|
$
|
30,387
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net loss
|
$
|
(9,353
|
)
|
|
$
|
(7,581
|
)
|
|
|
|
|
||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||
Depreciation and amortization expense
|
1,077
|
|
|
1,065
|
|
||
Stock-based compensation expense
|
766
|
|
|
1,148
|
|
||
Unrealized foreign exchange loss
|
675
|
|
|
639
|
|
||
Non-cash lease expense
|
288
|
|
|
310
|
|
||
Provision for bad debts on trade receivables
|
23
|
|
|
—
|
|
||
Non-cash interest expense
|
175
|
|
|
26
|
|
||
Amortization/accretion on investments
|
—
|
|
|
(4
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable
|
2,881
|
|
|
252
|
|
||
Royalty receivable
|
15
|
|
|
(3
|
)
|
||
Inventories
|
216
|
|
|
(27
|
)
|
||
Prepaid expenses and other assets
|
952
|
|
|
(69
|
)
|
||
Accounts payable, accrued expenses and other liabilities
|
(1,883
|
)
|
|
330
|
|
||
Advance on research and development
|
(310
|
)
|
|
(324
|
)
|
||
Net cash used in operating activities
|
(4,478
|
)
|
|
(4,238
|
)
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
||
Acquisition of property and equipment
|
(1,477
|
)
|
|
(757
|
)
|
||
Maturity of investments
|
—
|
|
|
7,250
|
|
||
Net cash (used in) provided by investing activities
|
(1,477
|
)
|
|
6,493
|
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
||
Net proceeds from issuance of common stock
|
1,141
|
|
|
—
|
|
||
Net cash provided by financing activities
|
1,141
|
|
|
—
|
|
||
Foreign exchange effect on cash and cash equivalents
|
(62
|
)
|
|
(19
|
)
|
||
(Decrease) increase in cash, cash equivalents and restricted cash
|
(4,876
|
)
|
|
2,236
|
|
||
Cash, cash equivalents and restricted cash beginning of period
|
26,856
|
|
|
16,842
|
|
||
Cash, cash equivalents and restricted cash end of period
|
$
|
21,980
|
|
|
$
|
19,078
|
|
|
|
|
|
||||
Supplemental information:
|
|
|
|
|
|
||
Cash paid for interest
|
346
|
|
|
331
|
|
||
Non cash investing and financing activities:
|
|
|
|
||||
Operating leases right-of-use assets obtained in exchange for lease obligations
|
—
|
|
|
6,988
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
Cash and cash equivalents
|
$
|
21,518
|
|
|
$
|
26,394
|
|
Restricted cash
|
462
|
|
|
462
|
|
||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows
|
$
|
21,980
|
|
|
$
|
26,856
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Beginning Balance
|
|
$
|
127
|
|
|
$
|
96
|
|
Provision related to current period sales
|
|
48
|
|
|
145
|
|
||
Adjustment related to prior period sales
|
|
—
|
|
|
20
|
|
||
Payments or credits issued to customer
|
|
(14
|
)
|
|
(134
|
)
|
||
Ending Balance
|
|
$
|
161
|
|
|
$
|
127
|
|
|
|
Three Months Ended March 31,
|
||||||
(in thousands, except share and per share data)
|
|
2020
|
|
2019
|
||||
Numerator:
|
|
|
|
|
|
|
||
Basic and diluted loss per share
|
|
|
|
|
|
|
||
Net loss
|
|
$
|
(9,353
|
)
|
|
$
|
(7,581
|
)
|
Denominator:
|
|
|
|
|
|
|
||
Basic and diluted weighted average shares
|
|
67,274,391
|
|
|
62,849,335
|
|
||
Loss per share attributable to Conformis, Inc. stockholders:
|
|
|
|
|
||||
Basic and diluted
|
|
$
|
(0.14
|
)
|
|
$
|
(0.12
|
)
|
|
|
Three Months Ended March 31,
|
||||
|
|
2020
|
|
2019
|
||
Stock options and restricted stock awards
|
|
1,099,413
|
|
|
2,538,495
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
Total receivables
|
$
|
8,495
|
|
|
$
|
11,401
|
|
Allowance for doubtful accounts and returns
|
(332
|
)
|
|
(335
|
)
|
||
Accounts receivable, net
|
$
|
8,163
|
|
|
$
|
11,066
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
Beginning balance
|
$
|
(335
|
)
|
|
$
|
(390
|
)
|
Provision for bad debts on trade receivables
|
(23
|
)
|
|
(106
|
)
|
||
Other allowances
|
31
|
|
|
(26
|
)
|
||
Accounts receivable write offs
|
(5
|
)
|
|
187
|
|
||
Ending balance
|
$
|
(332
|
)
|
|
$
|
(335
|
)
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
Raw Material
|
$
|
5,373
|
|
|
$
|
6,171
|
|
Work in process
|
1,498
|
|
|
1,717
|
|
||
Finished goods
|
4,986
|
|
|
4,186
|
|
||
Total Inventories
|
$
|
11,857
|
|
|
$
|
12,074
|
|
|
Estimated
Useful Life (Years) |
|
March 31, 2020
|
|
December 31, 2019
|
||||
Equipment
|
5-7
|
|
$
|
19,210
|
|
|
$
|
19,011
|
|
Furniture and fixtures
|
5-7
|
|
864
|
|
|
864
|
|
||
Computer and software
|
3
|
|
9,535
|
|
|
9,561
|
|
||
Leasehold improvements
|
3-7
|
|
2,047
|
|
|
2,008
|
|
||
Reusable instruments
|
5
|
|
4,667
|
|
|
3,402
|
|
||
Total property and equipment
|
|
|
36,323
|
|
|
34,846
|
|
||
Accumulated depreciation
|
|
|
(22,567
|
)
|
|
(21,490
|
)
|
||
Property and equipment, net
|
|
|
$
|
13,756
|
|
|
$
|
13,356
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
Accrued employee compensation
|
$
|
2,329
|
|
|
$
|
3,198
|
|
Accrued legal expense
|
569
|
|
|
310
|
|
||
Accrued consulting expense
|
21
|
|
|
21
|
|
||
Accrued vendor charges
|
1,296
|
|
|
1,037
|
|
||
Accrued revenue share expense
|
564
|
|
|
1,050
|
|
||
Accrued clinical trial expense
|
325
|
|
|
394
|
|
||
Accrued other
|
1,181
|
|
|
1,125
|
|
||
|
$
|
6,285
|
|
|
$
|
7,135
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Rent expense
|
|
$
|
381
|
|
|
$
|
381
|
|
Variable lease cost (1)
|
|
89
|
|
|
101
|
|
||
|
|
$
|
470
|
|
|
$
|
482
|
|
Year
|
Minimum Lease Payments
|
||
2020 remainder of year
|
1,218
|
|
|
2021
|
1,633
|
|
|
2022
|
1,399
|
|
|
2023
|
1,053
|
|
|
After 2023
|
1,885
|
|
|
Total lease payments
|
$
|
7,188
|
|
Present value adjustment
|
(952
|
)
|
|
Present value of lease liabilities
|
$
|
6,236
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
Innovatus, Term Loan
|
20,000
|
|
|
20,000
|
|
||
Innovatus, Term Loan accrued payment-in-kind interest
|
388
|
|
|
262
|
|
||
Less unamortized debt issuance costs
|
(601
|
)
|
|
(639
|
)
|
||
Long-term debt, less debt issuance costs
|
$
|
19,787
|
|
|
$
|
19,623
|
|
|
Principal
Payment
|
||
2020 (remainder of the year)
|
—
|
|
|
2021
|
—
|
|
|
2022
|
—
|
|
|
2023
|
8,986
|
|
|
2024
|
12,580
|
|
|
Total
|
$
|
21,566
|
|
|
|
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, 2019
|
|
28,926
|
|
|
$
|
9.80
|
|
|
3.66
|
|
28,926
|
|
|
$
|
9.80
|
|
Outstanding March 31, 2020
|
|
28,926
|
|
|
$
|
9.80
|
|
|
3.41
|
|
28,926
|
|
|
$
|
9.80
|
|
|
|
Number of
Options
|
|
Weighted
Average
Exercise Price
per Share
|
|
Aggregate Intrinsic Value (in Thousands)
|
|||||
Outstanding December 31, 2019
|
|
1,802,463
|
|
|
$
|
6.75
|
|
|
|
||
Granted
|
|
191,667
|
|
|
0.98
|
|
|
|
|||
Expired
|
|
(317,992
|
)
|
|
8.19
|
|
|
|
|||
Outstanding March 31, 2020
|
|
1,676,138
|
|
|
$
|
5.81
|
|
|
$
|
—
|
|
Total vested and exercisable
|
|
1,266,859
|
|
|
$
|
6.72
|
|
|
$
|
—
|
|
|
|
Number of Shares
|
|
Weighted Average Fair Value
|
|||
Unvested December 31, 2019
|
|
4,436,928
|
|
|
$
|
1.54
|
|
Granted
|
|
225,000
|
|
|
1.39
|
|
|
Vested
|
|
(593,644
|
)
|
|
0.69
|
|
|
Forfeited
|
|
(146,676
|
)
|
|
1.30
|
|
|
Unvested March 31, 2020
|
|
3,921,608
|
|
|
$
|
1.67
|
|
|
||||
|
|
Three Months Ended March 31,
|
||
|
|
2020
|
|
2019
|
Risk-free interest rate
|
|
1.49% - 1.63%
|
|
N/A
|
Expected term (in years)
|
|
6.25
|
|
N/A
|
Dividend yield
|
|
—%
|
|
N/A
|
Expected volatility
|
|
55.92%
|
|
N/A
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Cost of revenues
|
|
$
|
11
|
|
|
$
|
166
|
|
Sales and marketing
|
|
112
|
|
|
81
|
|
||
Research and development
|
|
134
|
|
|
257
|
|
||
General and administrative
|
|
509
|
|
|
644
|
|
||
|
|
$
|
766
|
|
|
$
|
1,148
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Property and equipment, net
|
|
|
|
|
|
|
||
United States
|
|
$
|
13,707
|
|
|
$
|
13,303
|
|
Germany
|
|
49
|
|
|
53
|
|
||
|
|
$
|
13,756
|
|
|
$
|
13,356
|
|
•
|
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, iTotal Identity, 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;
|
•
|
our ability to achieve anticipated milestones under our collaborations;
|
•
|
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 obtain reimbursement or direct payment for our products and services;
|
•
|
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;
|
•
|
anticipated negative impacts related to the COVID-19 pandemic and the actions that we are taking and planning in response, including our ability to continue production, the reliability of our supply chain, our ability to meet obligations under our loan agreements, the duration of decreased demand for our products, our ability to recall employees, and whether or when the demand for procedures will increase;
|
•
|
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 personalized 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 personalized 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 personalized 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 components 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; and
|
•
|
developing new versions of our software used in the design of our personalized joint replacement implants, which we believe will reduce costs associated with the design process.
|
|
|
2020
|
|
2019
|
|
2020 vs 2019
|
|||||||||||||||
Three Months Ended March 31,
|
|
Amount
|
|
As a% of
Total
Revenue
|
|
Amount
|
|
As a% of
Total
Revenue
|
|
$
Change
|
|
%
Change
|
|||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Product revenue
|
|
$
|
16,290
|
|
|
99
|
%
|
|
$
|
20,469
|
|
|
99
|
%
|
|
$
|
(4,179
|
)
|
|
(20
|
)%
|
Royalty
|
|
185
|
|
|
1
|
|
|
175
|
|
|
1
|
|
|
10
|
|
|
6
|
|
|||
Total revenue
|
|
16,475
|
|
|
100
|
|
|
20,644
|
|
|
100
|
|
|
(4,169
|
)
|
|
(20
|
)
|
|||
Cost of revenue
|
|
9,261
|
|
|
56
|
|
|
10,813
|
|
|
52
|
|
|
(1,552
|
)
|
|
(14
|
)
|
|||
Gross profit
|
|
7,214
|
|
|
44
|
|
|
9,831
|
|
|
48
|
|
|
(2,617
|
)
|
|
(27
|
)
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Sales and marketing
|
|
$
|
6,563
|
|
|
40
|
%
|
|
$
|
8,181
|
|
|
40
|
%
|
|
$
|
(1,618
|
)
|
|
(20
|
)%
|
Research and development
|
|
2,990
|
|
|
18
|
|
|
2,912
|
|
|
14
|
|
|
78
|
|
|
3
|
|
|||
General and administrative
|
|
5,736
|
|
|
35
|
|
|
5,329
|
|
|
26
|
|
|
407
|
|
|
8
|
|
|||
Total operating expenses
|
|
15,289
|
|
|
93
|
|
|
16,422
|
|
|
80
|
|
|
(1,133
|
)
|
|
(7
|
)
|
|||
Loss from operations
|
|
(8,075
|
)
|
|
(49
|
)
|
|
(6,591
|
)
|
|
(32
|
)
|
|
(1,484
|
)
|
|
(23
|
)
|
|||
Total other income (expenses), net
|
|
(1,253
|
)
|
|
(8
|
)
|
|
(999
|
)
|
|
(5
|
)
|
|
(254
|
)
|
|
(25
|
)
|
|||
Loss before income taxes
|
|
(9,328
|
)
|
|
(57
|
)
|
|
(7,590
|
)
|
|
(37
|
)
|
|
(1,738
|
)
|
|
(23
|
)
|
|||
Income tax provision
|
|
25
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
34
|
|
|
378
|
|
|||
Net loss
|
|
$
|
(9,353
|
)
|
|
(57
|
)%
|
|
$
|
(7,581
|
)
|
|
(37
|
)%
|
|
$
|
(1,772
|
)
|
|
(23
|
)%
|
|
|
2020
|
|
2019
|
|
2020 vs 2019
|
|||||||||||||||
Three Months Ended March 31,
|
|
Amount
|
|
As a % of
Product
Revenue
|
|
Amount
|
|
As a % of
Product
Revenue
|
|
$
Change
|
|
%
Change
|
|||||||||
United States
|
|
$
|
13,827
|
|
|
85
|
%
|
|
$
|
17,601
|
|
|
86
|
%
|
|
$
|
(3,774
|
)
|
|
(21
|
)%
|
Germany
|
|
1,970
|
|
|
12
|
|
|
2,464
|
|
|
12
|
|
|
(494
|
)
|
|
(20
|
)
|
|||
Rest of world
|
|
493
|
|
|
3
|
|
|
404
|
|
|
2
|
|
|
89
|
|
|
22
|
|
|||
Product revenue
|
|
$
|
16,290
|
|
|
100
|
%
|
|
$
|
20,469
|
|
|
100
|
%
|
|
$
|
(4,179
|
)
|
|
(20
|
)%
|
•
|
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.
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
|
2020
|
|
2019
|
|
$ Change
|
|
% Change
|
|||||||
Net cash (used in) provided by:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Operating activities
|
|
$
|
(4,478
|
)
|
|
$
|
(4,238
|
)
|
|
$
|
(240
|
)
|
|
(6
|
)%
|
Investing activities
|
|
(1,477
|
)
|
|
6,493
|
|
|
(7,970
|
)
|
|
(123
|
)
|
|||
Financing activities
|
|
1,141
|
|
|
—
|
|
|
1,141
|
|
|
100
|
|
|||
Effect of exchange rate on cash
|
|
(62
|
)
|
|
(19
|
)
|
|
(43
|
)
|
|
(226
|
)
|
|||
Total
|
|
$
|
(4,876
|
)
|
|
$
|
2,236
|
|
|
$
|
(7,112
|
)
|
|
(318
|
)%
|
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.
|
#
|
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/ Robert Howe
|
|
|
|
|
Robert Howe
Chief Financial Officer (Principal Financial Officer)
|
1.
|
Capitalized terms used herein but not otherwise defined shall have the respective meanings given to them in the Loan Agreement.
|
2.
|
Section 6.2 of the Loan Agreement is hereby amended by amending and restating clause (d) thereof as follows:
|
3.
|
Section 7.2 of the Loan Agreement is hereby amended by amending and restating Section 7.2 as follows:
|
4.
|
Notwithstanding Item 5 set forth on Exhibit A to the Post Closing Letter Agreement, dated June 25, 2019, Borrower shall not be obligated to deliver Collateral Agent the UK Pledge Agreement for so long as (i) the aggregate value of assets of ConforMIS UK Limited does not exceed $50,000.00 and (ii) ConforMIS UK Limited has no operations or employees. Any Event of Default resulting from Borrower’s failure to deliver the UK Pledge Agreement prior to the date hereof is hereby waived.
|
5.
|
Limitation of Amendment.
|
a.
|
The amendments and waivers set forth above are effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition of any Loan Document, or (b) otherwise prejudice any right, remedy or obligation which Lenders or Borrower may now have or may have in the future under or in connection with any Loan Document, as amended hereby.
|
b.
|
This Amendment shall be construed in connection with and as part of the Loan Documents and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents, are hereby ratified and confirmed and shall remain in full force and effect.
|
6.
|
To induce Collateral Agent and Lenders to enter into this Amendment, Borrower hereby represents and warrants to Collateral Agent and Lenders as follows:
|
a.
|
Immediately after giving effect to this Amendment (a) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (b) no Event of Default (other than the Existing Defaults) has occurred and is continuing;
|
b.
|
Borrower has the power and due authority to execute and deliver this Amendment and to perform its obligations under the Loan Agreement, as amended by this Amendment;
|
c.
|
The organizational documents of Borrower delivered to Collateral Agent on the Effective Date, and updated pursuant to subsequent deliveries by or on behalf of the Borrower to the Collateral Agent, remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect;
|
d.
|
The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not contravene (i) any material law or regulation binding on or affecting Borrower, (ii) any material contractual restriction with a Person binding on Borrower, (iii) any material order, judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (iv) the organizational documents of Borrower;
|
e.
|
The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration
|
f.
|
This Amendment has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights.
|
7.
|
Except as expressly set forth herein, the Loan Agreement shall continue in full force and effect without alteration or amendment. This Amendment and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements.
|
8.
|
The Borrower hereby remises, releases, acquits, satisfies and forever discharges the Lenders and Collateral Agent, their agents, employees, officers, directors, predecessors, attorneys and all others acting or purporting to act on behalf of or at the direction of the Lenders and Collateral Agent (“Releasees”), of and from any and all manner of actions, causes of action, suit, debts, accounts, covenants, contracts, controversies, agreements, variances, damages, judgments, claims and demands whatsoever, in law or in equity, which any of such parties ever had, now has or, to the extent arising from or in connection with any act, omission or state of facts taken or existing on or prior to the date hereof, may have after the date hereof against the Releasees, for, upon or by reason of any matter, cause or thing whatsoever relating to or arising out of the Loan Agreement or the other Loan Documents on or prior to the date hereof through the date hereof. Without limiting the generality of the foregoing, the Borrower waives and affirmatively agrees not to allege or otherwise pursue any defenses, affirmative defenses, counterclaims, claims, causes of action, setoffs or other rights they do, shall or may have as of the date hereof, including the rights to contest: (a) the right of Collateral Agent and each Lender to exercise its rights and remedies described in the Loan Documents; (b) any provision of this Amendment or the Loan Documents; or (c) any conduct of the Lenders or other Releasees relating to or arising out of the Loan Agreement or the other Loan Documents on or prior to the date hereof.
|
9.
|
This Amendment shall be deemed effective as of the date first set forth above upon the due execution and delivery to Collateral Agent of this Amendment by each party hereto.
|
10.
|
This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, and all of which, taken together, shall constitute one and the same instrument.
|
11.
|
This Amendment and the rights and obligations of the parties hereto shall be governed by and construed in accordance with the laws of the State of New York.
|
BORROWER:
|
||
|
||
CONFORMIS, INC.
|
||
|
||
|
||
By:
|
|
/s/ Mark Augusti
|
Name:
|
|
Mark Augusti
|
Title:
|
|
President & Chief Executive Officer
|
|
|
|
BORROWER:
|
||
|
||
IMATX, INC.
|
||
|
||
|
||
By:
|
|
/s/ Mark Augusti
|
Name:
|
|
Mark Augusti
|
Title:
|
|
President & Treasurer
|
BORROWER:
|
||
|
||
CONFORMIS CARES LLC
|
||
|
||
|
||
By:
|
|
/s/ Mark Augusti
|
Name:
|
|
Mark Augusti
|
Title:
|
|
President & Chief Financial Officer
|
COLLATERAL AGENT AND LENDER:
|
||
|
||
INNOVATUS LIFE SCIENCES LENDING FUND I, LP
|
||
|
||
By: Innovatus Life Sciences GP, LP
|
||
Its: General Partner
|
||
|
||
|
By:
|
/s/ Andrew Hobson
|
|
Name:
|
Andrew Hobson
|
|
Title:
|
Authorized Signatory
|
EAST WEST BANK:
|
||
|
||
EAST WEST BANK
|
||
|
||
|
||
By:
|
|
/s/ James Tai
|
Name:
|
|
James Tai
|
Title:
|
|
Managing Director / Head of Life Sciences
|
1.
|
Capitalized terms used herein but not otherwise defined shall have the respective meanings given to them in the Loan Agreement.
|
2.
|
The following terms shall have the following meanings for the purposes of this Consent:
|
3.
|
Subject to the terms and conditions set forth herein, Collateral Agent and Required Lenders hereby consent to Borrower’s entry into, and incurrence of Indebtedness under, the SBA PPP Loan.
|
4.
|
Reporting Obligations.
|
a.
|
Borrower shall promptly (but no later than within two Business Days) notify Collateral Agent of execution, consummation, filing, delivery or receipt, of any agreement, instrument, application, document, amendment, modification, waiver, supplement, consent or notice with respect to the SBA PPP Loan (including, without limitation, forgiveness thereof), and with such notification provide to Collateral Agent a copy thereof; provided, further, if such notification is regarding any portion of the SBA PPP Loan not being forgiven, along, with such notification, Borrower shall also provide Collateral Agent with the amounts and scheduled dates of all payments of principal and interest that Borrower will be obligated to make with respect to the SBA PPP Loan.
|
b.
|
Along with the quarterly Compliance Certificate to be delivered pursuant to Section 6.2(b) of the Loan Agreement, Borrower shall deliver to each Lender and Collateral Agent a written summary stating (A) the amount of the SBA PPP Loan outstanding as of the end of the immediately preceding quarter, (B) the amount of the SBA PPP Loan used in the immediately preceding quarter by Borrower and (C) the purposes for which the SBA PPP Loan was used in the immediately preceding quarter.
|
5.
|
SBA PPP Loan. Borrower shall, subject to the provisions of Section 6 below, (i) comply with all terms and conditions of the SBA PPP Loan and all requirements of the SBA and Small Business Act related thereto, (ii) use the proceeds of the SBA PPP Loan solely for CARES Allowable Uses, (iii) keep proper records in which full, true, timely and correct entries are made of all dealings and transactions related to the SBA PPP Loan and, upon Collateral Agent’s request, provide such records to Collateral Agent, (iv) not make any misrepresentations or omissions in its application (or any document related to such application) for the SBA PPP Loan and only draw the SBA PPP Loan if it fulfills the applicable eligibility requirements and (v) promptly following the SBA PPP Loan Date (but in any event no later than 45 days after the eight week period immediately following the SBA PPP Loan Date), apply for forgiveness of the maximum amount of SBA PPP Loan possible in accordance with Section 1106 of the CARES Act and provide notice of the status of and any documentation related to such application for forgiveness to Collateral Agent.
|
6.
|
SBA PPP Loan Payment.
|
a.
|
Borrower shall not: (i) make or permit any payment of principal or interest on the SBA PPP Loan, until after Borrower has received the decision from SBA regarding the amount of the SBA PPP Loan that is not being forgiven and complied with its obligations set forth in Section 6(b) below, or (ii) amend any provision in any document relating to the SBA PPP Loan.
|
b.
|
If the Borrower becomes obligated to make any payment of principal or interest with respect to the SBA PPP Loan, Borrower shall promptly and no later than the earlier of (i) the date of the first such payment and (ii) the date that is at least sixty (60) days prior to the first scheduled or required date of such payment raise net cash proceeds from the sale and issuance of its equity securities and/or unsecured convertible Subordinated Debt equal to the SBA PPP Loan Cure Amount (such date, the “Equity Raise Date”). If the Borrower is unable to raise the net cash proceeds as specified in the preceding sentence on or prior to the Equity Raise Date, then the Borrower shall provide a written notice to the Collateral Agent stating the reason the Equity Raise Date for the delay and, upon delivery of such written notice, the Equity Raise Date shall be extended thirty (30) days (the
|
7.
|
The parties hereby agree that no portion of the proceeds of the SBA PPP Loan (other than such amount as has been forgiven by the SBA) shall be used for the purposes of Borrower’s compliance with its obligations under Section 6.13 of the Loan Agreement. The parties hereby further agree that no portion of the SBA PPP Loan Cure Amount shall be used towards satisfying any other obligation of Borrower under the Loan Agreement with respect to raising capital. Furthermore, no portion of the proceeds of the SBA PPP Loan may be used to satisfy any covenant with respect to the Revolving Line without the prior written consent of the Bank.
|
8.
|
The parties hereby agree that any one of the following shall constitute and immediate Event of Default for the purposes of the Loan Agreement: (i) any default by Borrower of its obligations hereunder; and (ii) any default under the SBA PPP Loan which allows any creditor party thereto a right, whether or not exercised, to accelerate the maturity of any Indebtedness under the SBA PPP Loan.
|
9.
|
Exhibit C-1 to the Loan Agreement is hereby amended and restated in its entirety as set forth on Exhibit A hereto.
|
10.
|
Limitation of Consent.
|
a.
|
The consents set forth above are effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition of any Loan Document, or (b) otherwise prejudice any right, remedy or obligation which Lenders or Borrower may now have or may have in the future under or in connection with any Loan Document, as amended hereby.
|
b.
|
This Consent constitutes a Loan Document and shall be construed in connection with and as part of the Loan Documents and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents, are hereby ratified and confirmed and shall remain in full force and effect.
|
11.
|
To induce Collateral Agent and Required Lenders to enter into this Consent, Borrower hereby represents and warrants to Collateral Agent and Lenders as follows:
|
a.
|
Immediately after giving effect to this Consent (a) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (b) no Event of Default (other than the Existing Defaults) has occurred and is continuing;
|
b.
|
Borrower has the power and due authority to execute and deliver this Consent and to perform its obligations under the Loan Agreement, as amended by this Consent;
|
c.
|
The organizational documents of Borrower delivered to Collateral Agent on the Effective Date, and updated pursuant to subsequent deliveries by or on behalf of the Borrower to the Collateral
|
d.
|
The execution and delivery by Borrower of this Consent and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Consent, do not contravene (i) any material law or regulation binding on or affecting Borrower, (ii) any material contractual restriction with a Person binding on Borrower, (iii) any material order, judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (iv) the organizational documents of Borrower;
|
e.
|
The execution and delivery by Borrower of this Consent and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Consent, do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any governmental or public body or authority, or subdivision thereof, binding on Borrower, except as already has been obtained or made; and
|
f.
|
This Consent has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights.
|
12.
|
Except as expressly set forth herein, the Loan Agreement shall continue in full force and effect without alteration or amendment. This Consent and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements.
|
13.
|
The Borrower hereby remises, releases, acquits, satisfies and forever discharges the Lenders and Collateral Agent, their agents, employees, officers, directors, predecessors, attorneys and all others acting or purporting to act on behalf of or at the direction of the Lenders and Collateral Agent (“Releasees”), of and from any and all manner of actions, causes of action, suit, debts, accounts, covenants, contracts, controversies, agreements, variances, damages, judgments, claims and demands whatsoever, in law or in equity, which any of such parties ever had, now has or, to the extent arising from or in connection with any act, omission or state of facts taken or existing on or prior to the date hereof, may have after the date hereof against the Releasees, for, upon or by reason of any matter, cause or thing whatsoever relating to or arising out of the Loan Agreement or the other Loan Documents on or prior to the date hereof through the date hereof. Without limiting the generality of the foregoing, the Borrower waives and affirmatively agrees not to allege or otherwise pursue any defenses, affirmative defenses, counterclaims, claims, causes of action, setoffs or other rights they do, shall or may have as of the date hereof, including the rights to contest: (a) the right of Collateral Agent and each Lender to exercise its rights and remedies described in the Loan Documents; (b) any provision of this Consent or the Loan Documents; or (c) any conduct of the Lenders or other Releasees relating to or arising out of the Loan Agreement or the other Loan Documents on or prior to the date hereof.
|
14.
|
This Consent shall be deemed effective as of the date first set forth above upon the due execution and delivery to Collateral Agent of this Consent by each party hereto.
|
15.
|
This Consent may be executed in any number of counterparts, each of which shall be deemed an original, and all of which, taken together, shall constitute one and the same instrument.
|
16.
|
This Consent and the rights and obligations of the parties hereto shall be governed by and construed in accordance with the laws of the State of New York.
|
BORROWER:
|
||
|
||
CONFORMIS, INC.
|
||
|
||
|
||
By:
|
|
/s/ Mark Augusti
|
Name:
|
|
Mark Augusti
|
Title:
|
|
President & Chief Executive Officer
|
|
|
|
BORROWER:
|
||
|
||
IMATX, INC.
|
||
|
||
|
||
By:
|
|
/s/ Mark Augusti
|
Name:
|
|
Mark Augusti
|
Title:
|
|
President
|
BORROWER:
|
||
|
||
CONFORMIS CARES LLC
|
||
|
||
|
||
By:
|
|
/s/ Mark Augusti
|
Name:
|
|
Mark Augusti
|
Title:
|
|
President & Chief Financial Officer
|
COLLATERAL AGENT AND REQUIRED LENDERS:
|
|||
|
|||
INNOVATUS LIFE SCIENCES LENDING FUND I, LP
|
|||
|
|
||
By: Innovatus Life Sciences GP, LP
|
|
||
Its: General Partner
|
|
||
|
|
||
|
By:
|
/s/ Andrew Hobson
|
|
|
Name:
|
Andrew Hobson
|
|
|
Title:
|
Authorized Signatory
|
|
TO:
|
INNOVATUS LIFE SCIENCES LENDING FUND I, LP, as Collateral Agent and Lender
EAST WEST BANK, as Lender |
FROM:
|
CONFORMIS, INC., as Borrower
|
|
Reporting Covenant
|
Requirement
|
Actual
|
Complies
|
||
1)
|
Financial statements
|
Summary within 30 days of month end and 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 (within earlier 10 days of approval or 60 days of FYE), and when revised (no later than 10 business days of approval)
|
|
Yes
|
No
|
N/A
|
4)
|
8‑K, 10‑K and 10‑Q Filings
|
If applicable, within 5 days of filing
|
|
Yes
|
No
|
N/A
|
5)
|
Month-end account statements
|
Monthly within 30 days
|
|
Yes
|
No
|
N/A
|
6)
|
Compliance Certificate
|
Quarterly within 45days
|
|
Yes
|
No
|
N/A
|
7)
|
IP Report
|
When required
|
|
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
|
10)
|
Loan confirmation submitted to the fund administrator for Innovatus Life Sciences Lending Fund I, LP (see Exhibit C-2 to the Loan Agreement)
|
Quarterly within 45 days
|
|
Yes
|
No
|
N/A
|
11)
|
Borrowing Base Certificate
|
Monthly within 30 days
|
|
Yes
|
No
|
N/A
|
|
|
|
|
|
|
|
12)
|
A/R & A/P agings
|
If applicable
|
|
Yes
|
No
|
N/A
|
13)
|
Material Agreements (§ 7.13)
|
Yes
|
No
|
N/A
|
13)
|
Material Agreements (§ 7.13)
|
|
Negative Covenant
|
Complies
|
||
1)
|
Dispositions (§ 7.1)
|
Yes
|
No
|
N/A
|
2)
|
Changes in Business, Management, Ownership, or Business Locations (§ 7.2)
|
Yes
|
No
|
N/A
|
3)
|
Mergers or Acquisitions (§ 7.3)
|
Yes
|
No
|
N/A
|
4)
|
Indebtedness (§ 7.4)
|
Yes
|
No
|
N/A
|
5)
|
Encumbrance (§ 7.5)
|
Yes
|
No
|
N/A
|
6)
|
Maintenance of Collateral Accounts (§ 7.6)
|
Yes
|
No
|
N/A
|
7)
|
Restricted Payments (§ 7.7)
|
Yes
|
No
|
N/A
|
8)
|
Investments (§ 7.8)
|
Yes
|
No
|
N/A
|
9)
|
Transactions with Affiliates (§ 7.9)
|
Yes
|
No
|
N/A
|
10)
|
Subordinated Debt (§ 7.10)
|
Yes
|
No
|
N/A
|
11)
|
Compliance (§ 7.11)
|
Yes
|
No
|
N/A
|
12)
|
Compliance with Anti-Terrorism Laws (§ 7.12)
|
Yes
|
No
|
N/A
|
|
Financial Covenant
|
Requirement
|
Actual
|
Complies
|
||
1)
|
Minimum TTM Revenue
|
T6M Product Revenue (Section 6.12)
|
$______
|
Yes
|
No
|
N/A
|
2)
|
Minimum Cash Balance
|
Set forth in Section 6.13
|
$______
|
Yes
|
No
|
N/A
|
3)
|
Minimum Cash Balance
|
Set forth in Section 6.14
|
$
|
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
|
1)
|
Have there been any changes in any 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 or pending claims or causes of action by or against Borrower required to be disclosed under Section 5.3?
|
Yes
|
No
|
|
|
|
|
4)
|
Have there been any amendments of 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 the Compliance Certificate.
|
Yes
|
No
|
|
|
|
|
|
|
|
|
5)
|
Has Borrower provided the Collateral Agent with all notices required to be delivered under Sections 6.2(a) and 6.2(b) of the Loan Agreement?
|
Yes
|
No
|
|
|
|
|
6)
|
Has Borrower or any Subsidiary terminated any Material Agreement? If yes, please explain and provide a copy of the Material Agreement(s) and/or amendment(s).
|
Yes
|
No
|
|
|
|
|
7)
|
Have there been any material updates to the contents of the Perfection Certificate last delivered? If yes, please explain.
|
Yes
|
No
|
|
|
|
|
8)
|
Since the last Compliance Certificate, do you anticipate any impending product shortages or supply chain disruptions? If yes, please explain.
|
Yes
|
No
|
|
|
|
|
9)
|
Are there major components from suppliers that are single sourced? If yes, please explain.
|
Yes
|
No
|
|
|
|
|
10)
|
Does the Borrower’s Business Continuity Plan address potential business interruptions and provide a plan to resume business operations?
|
Yes
|
No
|
|
|
|
|
11)
|
Have there been any changes to insurance policies providing coverage for business interruption since the last Compliance Certificate? If yes, please explain.
|
Yes
|
No
|
|
|
|
|
CONFORMIS, INC., on behalf of all Borrowers
|
|
By:
|
|
Name:
|
|
Title:
|
|
|
|
Date:
|
|
COLLATERAL AGENT USE ONLY
|
||||
|
|
|
|
|
Received by:
|
|
|
Date:
|
|
|
|
|
|
|
Verified by:
|
|
|
Date:
|
|
|
|
|
|
|
Compliance Status: Yes No
|
|
|
Date:
|
5/11/2020
|
|
By:
|
/s/Mark A. Augusti
|
|
|
|
|
Mark A. Augusti
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
(Principal Executive Officer)
|
Date:
|
5/11/2020
|
By:
|
/s/ Robert Howe
|
|
|
|
Robert Howe
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
Date:
|
5/11/2020
|
|
By:
|
/s/Mark A. Augusti
|
|
|
|
|
Mark A. Augusti
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
(Principal Executive Officer)
|
Date:
|
5/11/2020
|
By:
|
/s/ Robert Howe
|
|
|
|
Robert Howe
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|