|
|
|
|
|
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
|
o
|
|
|
|
|
Non-accelerated filer
|
x
|
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
|
|
|
|
|
|
|
|
|
|
September 30, 2020
|
|
December 31, 2019
|
||||
|
(unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Current Assets
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
32,888
|
|
|
$
|
26,394
|
|
Accounts receivable, net
|
8,980
|
|
|
11,066
|
|
||
Royalty and licensing receivable
|
3,751
|
|
|
165
|
|
||
Inventories, net
|
12,909
|
|
|
12,074
|
|
||
Prepaid expenses and other current assets
|
2,800
|
|
|
2,815
|
|
||
Total current assets
|
61,328
|
|
|
52,514
|
|
||
Property and equipment, net
|
13,065
|
|
|
13,356
|
|
||
Operating lease right-of-use assets
|
4,977
|
|
|
5,853
|
|
||
Other Assets
|
|
|
|
|
|
||
Restricted cash
|
462
|
|
|
462
|
|
||
Other long-term assets
|
179
|
|
|
211
|
|
||
Total assets
|
$
|
80,011
|
|
|
$
|
72,396
|
|
|
|
|
|
||||
Liabilities and stockholders' equity
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Accounts payable
|
$
|
5,414
|
|
|
$
|
6,920
|
|
Accrued expenses
|
7,722
|
|
|
7,135
|
|
||
Operating lease liabilities
|
1,498
|
|
|
1,469
|
|
||
Advance on research and development
|
3,636
|
|
|
2,331
|
|
||
Contract liability
|
14,000
|
|
|
—
|
|
||
Total current liabilities
|
32,270
|
|
|
17,855
|
|
||
Other long-term liabilities
|
—
|
|
|
1,500
|
|
||
Contract liability
|
—
|
|
|
12,000
|
|
||
Long-term debt, less debt issuance costs
|
24,833
|
|
|
19,623
|
|
||
Operating lease liabilities
|
4,103
|
|
|
5,071
|
|
||
Total liabilities
|
61,206
|
|
|
56,049
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Stockholders’ equity
|
|
|
|
|
|
||
Preferred stock, $0.00001 par value:
|
|
|
|
|
|
||
Authorized: 5,000,000 shares authorized at September 30, 2020 and December 31, 2019; no shares issued and outstanding as of September 30, 2020 and December 31, 2019
|
—
|
|
|
—
|
|
||
Common stock, $0.00001 par value:
|
|
|
|
|
|
||
Authorized: 200,000,000 shares authorized at September 30, 2020 and December 31, 2019; 86,173,070 and 70,427,400 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively
|
1
|
|
|
1
|
|
||
Additional paid-in capital
|
542,986
|
|
|
521,356
|
|
||
Accumulated deficit
|
(521,816
|
)
|
|
(504,145
|
)
|
||
Accumulated other comprehensive loss
|
(2,366
|
)
|
|
(865
|
)
|
||
Total stockholders’ equity
|
18,805
|
|
|
16,347
|
|
||
Total liabilities and stockholders’ equity
|
$
|
80,011
|
|
|
$
|
72,396
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
||||
Product
|
$
|
15,975
|
|
|
$
|
17,112
|
|
|
$
|
42,008
|
|
|
$
|
56,918
|
|
Royalty and licensing
|
146
|
|
|
191
|
|
|
10,056
|
|
|
622
|
|
||||
Total revenue
|
16,121
|
|
|
17,303
|
|
|
52,064
|
|
|
57,540
|
|
||||
Cost of revenue
|
8,437
|
|
|
9,675
|
|
|
26,148
|
|
|
30,459
|
|
||||
Gross profit
|
7,684
|
|
|
7,628
|
|
|
25,916
|
|
|
27,081
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales and marketing
|
5,755
|
|
|
6,153
|
|
|
16,420
|
|
|
21,231
|
|
||||
Research and development
|
2,866
|
|
|
3,162
|
|
|
8,594
|
|
|
9,402
|
|
||||
General and administrative
|
6,134
|
|
|
5,165
|
|
|
18,344
|
|
|
15,783
|
|
||||
Total operating expenses
|
14,755
|
|
|
14,480
|
|
|
43,358
|
|
|
46,416
|
|
||||
Loss from operations
|
(7,071
|
)
|
|
(6,852
|
)
|
|
(17,442
|
)
|
|
(19,335
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Other income and expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest income
|
8
|
|
|
58
|
|
|
66
|
|
|
256
|
|
||||
Interest expense
|
(611
|
)
|
|
(573
|
)
|
|
(1,769
|
)
|
|
(2,363
|
)
|
||||
Foreign currency exchange transaction income (loss)
|
1,511
|
|
|
(1,313
|
)
|
|
1,491
|
|
|
(1,568
|
)
|
||||
Total other income (expenses)
|
908
|
|
|
(1,828
|
)
|
|
(212
|
)
|
|
(3,675
|
)
|
||||
Loss before income taxes
|
(6,163
|
)
|
|
(8,680
|
)
|
|
(17,654
|
)
|
|
(23,010
|
)
|
||||
Income tax provision
|
20
|
|
|
21
|
|
|
17
|
|
|
35
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(6,183
|
)
|
|
$
|
(8,701
|
)
|
|
$
|
(17,671
|
)
|
|
$
|
(23,045
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net loss per share
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
$
|
(0.09
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
(0.25
|
)
|
|
$
|
(0.36
|
)
|
Weighted average common shares outstanding
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
71,224,786
|
|
|
64,750,275
|
|
|
69,799,495
|
|
|
63,651,412
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Net loss
|
$
|
(6,183
|
)
|
|
$
|
(8,701
|
)
|
|
$
|
(17,671
|
)
|
|
$
|
(23,045
|
)
|
Other comprehensive (loss) income
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(1,450
|
)
|
|
1,227
|
|
|
(1,501
|
)
|
|
1,445
|
|
||||
Comprehensive loss
|
$
|
(7,633
|
)
|
|
$
|
(7,474
|
)
|
|
$
|
(19,172
|
)
|
|
$
|
(21,600
|
)
|
|
Nine Months Ended September 30, 2019
|
|||||||||||||||||||||
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive (Loss) Income
|
|
|
|||||||||||||
|
Shares
|
|
Par Value
|
|
|
|
|
Total
|
||||||||||||||
Balance, December 31, 2018
|
65,290,879
|
|
|
$
|
1
|
|
|
$
|
513,336
|
|
|
$
|
(475,667
|
)
|
|
$
|
(1,470
|
)
|
|
$
|
36,200
|
|
Issuance of common stock—option exercise
|
34,669
|
|
|
—
|
|
|
121
|
|
|
—
|
|
|
—
|
|
|
121
|
|
|||||
Issuance of common stock—restricted stock
|
2,278,322
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Issuance of common stock—Innovatus
|
775,194
|
|
|
—
|
|
|
3,000
|
|
|
—
|
|
|
—
|
|
|
3,000
|
|
|||||
Compensation expense related to issued stock options and restricted stock awards
|
—
|
|
|
—
|
|
|
2,179
|
|
|
—
|
|
|
—
|
|
|
2,179
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,045
|
)
|
|
—
|
|
|
(23,045
|
)
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,445
|
|
|
1,445
|
|
|||||
Balance, September 30, 2019
|
68,379,064
|
|
|
$
|
1
|
|
|
$
|
518,636
|
|
|
$
|
(498,712
|
)
|
|
$
|
(25
|
)
|
|
$
|
19,900
|
|
|
Nine Months Ended September 30,
|
||||||
|
2020
|
|
2019
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net loss
|
$
|
(17,671
|
)
|
|
$
|
(23,045
|
)
|
|
|
|
|
||||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
|
|
|
|
|
|
||
Depreciation and amortization expense
|
3,292
|
|
|
3,192
|
|
||
Stock-based compensation expense
|
2,583
|
|
|
2,179
|
|
||
Unrealized foreign exchange (gain) loss
|
(1,513
|
)
|
|
1,506
|
|
||
Non-cash lease expense
|
875
|
|
|
863
|
|
||
Provision for bad debts on trade receivables
|
72
|
|
|
58
|
|
||
Impairment of long-term assets
|
—
|
|
|
60
|
|
||
Loss on extinguishment of debt
|
—
|
|
|
1,085
|
|
||
Non-cash interest expense
|
531
|
|
|
225
|
|
||
Amortization/accretion on investments
|
—
|
|
|
(4
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable
|
2,015
|
|
|
2,708
|
|
||
Royalty and licensing receivable
|
(3,586
|
)
|
|
(25
|
)
|
||
Inventories
|
(836
|
)
|
|
(2,023
|
)
|
||
Prepaid expenses and other assets
|
16
|
|
|
(254
|
)
|
||
Accounts payable, accrued expenses and other liabilities
|
(3,358
|
)
|
|
976
|
|
||
Contract liability
|
2,000
|
|
|
11,500
|
|
||
Advance on research and development
|
1,305
|
|
|
2,500
|
|
||
Net cash (used in) provided by operating activities
|
(14,275
|
)
|
|
1,501
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
||
Acquisition of property and equipment
|
(3,001
|
)
|
|
(2,102
|
)
|
||
Maturity of investments
|
—
|
|
|
7,250
|
|
||
Net cash (used in) provided by investing activities
|
(3,001
|
)
|
|
5,148
|
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
||
Proceeds from exercise of common stock options
|
—
|
|
|
121
|
|
||
Debt issuance costs
|
(10
|
)
|
|
(737
|
)
|
||
Loss on extinguishment of debt
|
—
|
|
|
(919
|
)
|
||
Proceeds from issuance of debt
|
4,720
|
|
|
20,000
|
|
||
Payments on long-term debt
|
—
|
|
|
(15,000
|
)
|
||
Net proceeds from issuance of common stock
|
3,151
|
|
|
3,000
|
|
||
Issuance of common stock and pre-funded warrants under registered direct offering, net
|
15,896
|
|
|
—
|
|
||
Net cash provided by financing activities
|
23,757
|
|
|
6,465
|
|
||
Foreign exchange effect on cash and cash equivalents
|
13
|
|
|
(61
|
)
|
||
Increase in cash, cash equivalents and restricted cash
|
6,494
|
|
|
13,053
|
|
||
Cash, cash equivalents and restricted cash beginning of period
|
26,856
|
|
|
16,842
|
|
||
Cash, cash equivalents and restricted cash end of period
|
$
|
33,350
|
|
|
$
|
29,895
|
|
|
|
|
|
||||
Supplemental information:
|
|
|
|
|
|
||
Cash paid for interest
|
1,056
|
|
|
1,772
|
|
||
Non cash investing and financing activities:
|
|
|
|
||||
Operating leases right-of-use assets obtained in exchange for lease obligations
|
—
|
|
|
6,988
|
|
|
September 30,
2020 |
|
December 31,
2019 |
||||
Cash and cash equivalents
|
$
|
32,888
|
|
|
$
|
26,394
|
|
Restricted cash
|
462
|
|
|
462
|
|
||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows
|
$
|
33,350
|
|
|
$
|
26,856
|
|
|
|
September 30, 2020
|
|
December 31, 2019
|
||||
Beginning Balance
|
|
$
|
127
|
|
|
$
|
96
|
|
Provision related to current period sales
|
|
113
|
|
|
145
|
|
||
Adjustment related to prior period sales
|
|
(1
|
)
|
|
20
|
|
||
Payments or credits issued to customer
|
|
(80
|
)
|
|
(134
|
)
|
||
Ending Balance
|
|
$
|
159
|
|
|
$
|
127
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(in thousands, except share and per share data)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted loss per share
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss
|
|
$
|
(6,183
|
)
|
|
$
|
(8,701
|
)
|
|
$
|
(17,671
|
)
|
|
$
|
(23,045
|
)
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted weighted average shares
|
|
71,224,786
|
|
|
64,750,275
|
|
|
69,799,495
|
|
|
63,651,412
|
|
||||
Loss per share attributable to Conformis, Inc. stockholders:
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
|
$
|
(0.09
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
(0.25
|
)
|
|
$
|
(0.36
|
)
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||
Stock options and restricted stock awards
|
|
694,817
|
|
|
2,588,330
|
|
|
993,012
|
|
|
3,340,154
|
|
|
September 30,
2020 |
|
December 31,
2019 |
||||
Total receivables
|
$
|
9,308
|
|
|
$
|
11,401
|
|
Allowance for doubtful accounts and returns
|
(328
|
)
|
|
(335
|
)
|
||
Accounts receivable, net
|
$
|
8,980
|
|
|
$
|
11,066
|
|
|
September 30,
2020 |
|
December 31,
2019 |
||||
Beginning balance
|
$
|
(335
|
)
|
|
$
|
(390
|
)
|
Provision for bad debts on trade receivables
|
(72
|
)
|
|
(106
|
)
|
||
Other allowances
|
8
|
|
|
(26
|
)
|
||
Accounts receivable write offs
|
71
|
|
|
187
|
|
||
Ending balance
|
$
|
(328
|
)
|
|
$
|
(335
|
)
|
|
September 30,
2020 |
|
December 31,
2019 |
||||
Raw Material
|
$
|
6,270
|
|
|
$
|
6,171
|
|
Work in process
|
1,196
|
|
|
1,717
|
|
||
Finished goods
|
5,443
|
|
|
4,186
|
|
||
Total Inventories
|
$
|
12,909
|
|
|
$
|
12,074
|
|
|
Estimated
Useful Life (Years) |
|
September 30, 2020
|
|
December 31, 2019
|
||||
Equipment
|
5-7
|
|
$
|
19,362
|
|
|
$
|
19,011
|
|
Furniture and fixtures
|
5-7
|
|
864
|
|
|
864
|
|
||
Computer and software
|
3
|
|
9,801
|
|
|
9,561
|
|
||
Leasehold improvements
|
3-7
|
|
2,081
|
|
|
2,008
|
|
||
Reusable instruments
|
5
|
|
5,739
|
|
|
3,402
|
|
||
Total property and equipment
|
|
|
37,847
|
|
|
34,846
|
|
||
Accumulated depreciation
|
|
|
(24,782
|
)
|
|
(21,490
|
)
|
||
Property and equipment, net
|
|
|
$
|
13,065
|
|
|
$
|
13,356
|
|
|
September 30,
2020 |
|
December 31,
2019 |
||||
Accrued employee compensation
|
$
|
3,413
|
|
|
$
|
3,198
|
|
Accrued legal expense
|
1,578
|
|
|
310
|
|
||
Accrued consulting expense
|
21
|
|
|
21
|
|
||
Accrued vendor charges
|
641
|
|
|
1,037
|
|
||
Accrued revenue share expense
|
597
|
|
|
1,050
|
|
||
Accrued clinical trial expense
|
251
|
|
|
394
|
|
||
Accrued other
|
1,221
|
|
|
1,125
|
|
||
|
$
|
7,722
|
|
|
$
|
7,135
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Rent expense
|
|
$
|
381
|
|
|
$
|
381
|
|
|
$
|
1,144
|
|
|
$
|
1,145
|
|
Variable lease cost (1)
|
|
88
|
|
|
90
|
|
|
265
|
|
|
289
|
|
||||
|
|
$
|
469
|
|
|
$
|
471
|
|
|
$
|
1,409
|
|
|
$
|
1,434
|
|
Year
|
Minimum Lease Payments
|
||
2020 remainder of year
|
406
|
|
|
2021
|
1,633
|
|
|
2022
|
1,399
|
|
|
2023
|
1,053
|
|
|
After 2023
|
1,885
|
|
|
Total lease payments
|
$
|
6,376
|
|
Present value adjustment
|
(776
|
)
|
|
Present value of lease liabilities
|
$
|
5,600
|
|
|
September 30,
2020 |
|
December 31,
2019 |
||||
PPP "Term Loan"
|
4,720
|
|
|
—
|
|
||
Innovatus, Term Loan
|
20,000
|
|
|
20,000
|
|
||
Innovatus, Term Loan accrued payment-in-kind interest
|
645
|
|
|
262
|
|
||
Less unamortized debt issuance costs
|
(532
|
)
|
|
(639
|
)
|
||
Long-term debt, less debt issuance costs
|
$
|
24,833
|
|
|
$
|
19,623
|
|
|
Principal
Payment
|
||
2020 (remainder of the year)
|
—
|
|
|
2021
|
—
|
|
|
2022
|
4,720
|
|
|
2023
|
8,986
|
|
|
2024
|
12,580
|
|
|
Total
|
$
|
26,286
|
|
|
|
Number of Common
Warrants |
|
Number of
Pre-funded 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
|
|
Granted
|
|
18,005,041
|
|
|
—
|
|
|
$
|
0.88
|
|
|
4.98
|
|
|
18,005,041
|
|
|
$
|
0.88
|
|
Granted- pre-funded warrants
|
|
—
|
|
|
9,492,953
|
|
|
$
|
0.0001
|
|
|
—
|
|
|
9,492,953
|
|
|
$
|
0.0001
|
|
Exercised
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Cancelled/expired
|
|
(8,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,000
|
)
|
|
—
|
|
||
Outstanding September 30, 2020
|
|
18,025,967
|
|
|
9,492,953
|
|
|
$
|
0.89
|
|
|
4.98
|
|
|
27,518,920
|
|
|
$
|
0.89
|
|
|
|
Number of
Options
|
|
Weighted
Average
Exercise Price
per Share
|
|
Aggregate Intrinsic Value (in Thousands)
|
|||||
Outstanding December 31, 2019
|
|
1,802,463
|
|
|
$
|
6.75
|
|
|
|
||
Granted
|
|
291,667
|
|
|
0.90
|
|
|
|
|||
Expired
|
|
(421,135
|
)
|
|
7.48
|
|
|
|
|||
Cancelled/Forfeited
|
|
(12,433
|
)
|
|
1.39
|
|
|
|
|||
Outstanding September 30, 2020
|
|
1,660,562
|
|
|
$
|
5.57
|
|
|
$
|
—
|
|
Total vested and exercisable
|
|
1,260,040
|
|
|
$
|
6.73
|
|
|
$
|
—
|
|
|
|
Number of Shares
|
|
Weighted Average Fair Value
|
|||
Unvested December 31, 2019
|
|
4,436,928
|
|
|
$
|
1.54
|
|
Granted
|
|
4,166,296
|
|
|
0.96
|
|
|
Vested
|
|
(1,562,132
|
)
|
|
1.41
|
|
|
Forfeited
|
|
(325,645
|
)
|
|
1.19
|
|
|
Unvested September 30, 2020
|
|
6,715,447
|
|
|
$
|
1.23
|
|
|
||||||||
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Risk-free interest rate
|
|
0.38%
|
|
1.89%
|
|
1.14%
|
|
1.89%
|
Expected term (in years)
|
|
6
|
|
6.00
|
|
6.16
|
|
6.00
|
Dividend yield
|
|
—%
|
|
—%
|
|
—%
|
|
—%
|
Expected volatility
|
|
52.92%
|
|
55.80%
|
|
54.89%
|
|
55.80%
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Cost of revenues
|
|
$
|
29
|
|
|
$
|
(23
|
)
|
|
$
|
43
|
|
|
$
|
276
|
|
Sales and marketing
|
|
136
|
|
|
(11
|
)
|
|
364
|
|
|
119
|
|
||||
Research and development
|
|
166
|
|
|
(19
|
)
|
|
480
|
|
|
440
|
|
||||
General and administrative
|
|
641
|
|
|
126
|
|
|
1,696
|
|
|
1,344
|
|
||||
|
|
$
|
972
|
|
|
$
|
73
|
|
|
$
|
2,583
|
|
|
$
|
2,179
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Product revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
United States
|
|
$
|
14,139
|
|
|
$
|
15,144
|
|
|
$
|
36,298
|
|
|
$
|
49,924
|
|
Germany
|
|
1,536
|
|
|
1,527
|
|
|
4,852
|
|
|
5,677
|
|
||||
Rest of world
|
|
300
|
|
|
441
|
|
|
858
|
|
|
1,317
|
|
||||
|
|
$
|
15,975
|
|
|
$
|
17,112
|
|
|
$
|
42,008
|
|
|
$
|
56,918
|
|
|
|
September 30, 2020
|
|
December 31, 2019
|
||||
Property and equipment, net
|
|
|
|
|
|
|
||
United States
|
|
$
|
13,023
|
|
|
$
|
13,303
|
|
Germany
|
|
42
|
|
|
53
|
|
||
|
|
$
|
13,065
|
|
|
$
|
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, Conformis Hip System, and the planned launch of a new knee replacement offering to be targeted at hospital outpatient and ambulatory surgery centers;
|
•
|
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;
|
•
|
our ability to successfully develop and commercialize planned products;
|
•
|
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 have taken and are 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, 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 September 30,
|
|
Amount
|
|
As a% of
Total
Revenue
|
|
Amount
|
|
As a% of
Total
Revenue
|
|
$
Change
|
|
%
Change
|
|||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Product revenue
|
|
$
|
15,975
|
|
|
99
|
%
|
|
$
|
17,112
|
|
|
99
|
%
|
|
$
|
(1,137
|
)
|
|
(7
|
)%
|
Royalty and licensing
|
|
146
|
|
|
1
|
|
|
191
|
|
|
1
|
|
|
(45
|
)
|
|
(24
|
)
|
|||
Total revenue
|
|
16,121
|
|
|
100
|
|
|
17,303
|
|
|
100
|
|
|
(1,182
|
)
|
|
(7
|
)
|
|||
Cost of revenue
|
|
8,437
|
|
|
52
|
|
|
9,675
|
|
|
56
|
|
|
(1,238
|
)
|
|
(13
|
)
|
|||
Gross profit
|
|
7,684
|
|
|
48
|
|
|
7,628
|
|
|
44
|
|
|
56
|
|
|
1
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Sales and marketing
|
|
$
|
5,755
|
|
|
36
|
%
|
|
$
|
6,153
|
|
|
36
|
%
|
|
$
|
(398
|
)
|
|
(6
|
)%
|
Research and development
|
|
2,866
|
|
|
18
|
|
|
3,162
|
|
|
18
|
|
|
(296
|
)
|
|
(9
|
)
|
|||
General and administrative
|
|
6,134
|
|
|
38
|
|
|
5,165
|
|
|
30
|
|
|
969
|
|
|
19
|
|
|||
Total operating expenses
|
|
14,755
|
|
|
92
|
|
|
14,480
|
|
|
84
|
|
|
275
|
|
|
2
|
|
|||
Loss from operations
|
|
(7,071
|
)
|
|
(44
|
)
|
|
(6,852
|
)
|
|
(40
|
)
|
|
(219
|
)
|
|
(3
|
)
|
|||
Total other income (expenses), net
|
|
908
|
|
|
6
|
|
|
(1,828
|
)
|
|
(11
|
)
|
|
2,736
|
|
|
150
|
|
|||
Loss before income taxes
|
|
(6,163
|
)
|
|
(38
|
)
|
|
(8,680
|
)
|
|
(50
|
)
|
|
2,517
|
|
|
29
|
|
|||
Income tax provision
|
|
20
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
(1
|
)
|
|
(5
|
)
|
|||
Net loss
|
|
$
|
(6,183
|
)
|
|
(38
|
)%
|
|
$
|
(8,701
|
)
|
|
(50
|
)%
|
|
$
|
2,518
|
|
|
29
|
%
|
|
|
2020
|
|
2019
|
|
2020 vs 2019
|
|||||||||||||||
Three Months Ended September 30,
|
|
Amount
|
|
As a % of
Product
Revenue
|
|
Amount
|
|
As a % of
Product
Revenue
|
|
$
Change
|
|
%
Change
|
|||||||||
United States
|
|
$
|
14,139
|
|
|
89
|
%
|
|
$
|
15,144
|
|
|
88
|
%
|
|
$
|
(1,005
|
)
|
|
(7
|
)%
|
Germany
|
|
1,536
|
|
|
10
|
|
|
1,527
|
|
|
9
|
|
|
9
|
|
|
1
|
|
|||
Rest of world
|
|
300
|
|
|
1
|
|
|
441
|
|
|
3
|
|
|
(141
|
)
|
|
(32
|
)
|
|||
Product revenue
|
|
$
|
15,975
|
|
|
100
|
%
|
|
$
|
17,112
|
|
|
100
|
%
|
|
$
|
(1,137
|
)
|
|
(7
|
)%
|
|
|
2020
|
|
2019
|
|
2020 vs 2019
|
|||||||||||||||
Nine Months Ended September 30,
|
|
Amount
|
|
As a % of
Product
Revenue
|
|
Amount
|
|
As a % of
Product
Revenue
|
|
$
Change
|
|
%
Change
|
|||||||||
United States
|
|
$
|
36,298
|
|
|
86
|
%
|
|
$
|
49,924
|
|
|
88
|
%
|
|
$
|
(13,626
|
)
|
|
(27
|
)%
|
Germany
|
|
4,852
|
|
|
12
|
|
|
5,677
|
|
|
10
|
|
|
$
|
(825
|
)
|
|
(15
|
)
|
||
Rest of world
|
|
858
|
|
|
2
|
|
|
1,317
|
|
|
2
|
|
|
(459
|
)
|
|
(35
|
)
|
|||
Product revenue
|
|
$
|
42,008
|
|
|
100
|
%
|
|
$
|
56,918
|
|
|
100
|
%
|
|
$
|
(14,910
|
)
|
|
(26
|
)%
|
•
|
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,
|
|||||||||||||
|
|
2020
|
|
2019
|
|
$ Change
|
|
% Change
|
|||||||
Net cash (used in) provided by:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Operating activities
|
|
$
|
(14,275
|
)
|
|
$
|
1,501
|
|
|
$
|
(15,776
|
)
|
|
(1,051
|
)%
|
Investing activities
|
|
(3,001
|
)
|
|
5,148
|
|
|
(8,149
|
)
|
|
(158
|
)
|
|||
Financing activities
|
|
23,757
|
|
|
6,465
|
|
|
17,292
|
|
|
267
|
|
|||
Effect of exchange rate on cash
|
|
13
|
|
|
(61
|
)
|
|
74
|
|
|
121
|
|
|||
Total
|
|
$
|
6,494
|
|
|
$
|
13,053
|
|
|
$
|
(6,559
|
)
|
|
(50
|
)%
|
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.
|
The following Section 7.14 is hereby added to the Loan Agreement:
|
3.
|
Section 13 of the Loan Agreement is hereby amended by amending and restating the following definitions therein as follows:
|
4.
|
Section 13 of the Loan Agreement is hereby further amended by adding the following definition thereto in alphabetical order:
|
5.
|
Without limiting the generality of the provisions of Section 4.3 of the Loan Agreement, Borrower hereby pledges, assigns and grants to Collateral Agent, for the ratable benefit of the Lenders, a security interest in the Shares of the Indian Subsidiary, together with all proceeds and substitutions thereof, all cash, stock and other moneys and property paid thereon, all rights to subscribe for securities declared or granted in connection therewith, and all other cash and noncash proceeds of the foregoing, as security for the performance of the Obligations. No later than four weeks after the formation of the Indian Subsidiary, Borrower shall provide evidence to Collateral Agent, in such form and substance as are reasonably acceptable to Collateral Agent, that the limited liability partnership agreement (or similar governing agreement) of the Indian Subsidiary notes such pledge of the Shares of the Indian Subsidiary.
|
6.
|
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.
|
7.
|
To induce Collateral Agent and Required Lenders to enter into this Amendment, Borrower hereby represents and warrants to Collateral Agent and Required 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 Potential Event of Default) 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 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 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.
|
8.
|
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.
|
9.
|
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
|
10.
|
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.
|
11.
|
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.
|
12.
|
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 REQUIRED LENDER:
|
||
|
||
INNOVATUS LIFE SCIENCES LENDING FUND I, LP
|
||
|
||
By: Innovatus Life Sciences GP, LP
|
||
Its: General Partner
|
||
|
||
|
By:
|
/s/ Andrew Dym
|
|
Name:
|
Andrew Dym
|
|
Title:
|
Authorized Signatory
|
Name of optionee (the “Participant”):
|
|
Date of this option grant:
|
|
Number of shares of the Company’s Common Stock subject to this option (“Shares”):
|
|
Option exercise price per Share:
|
|
Vesting Start Date:
|
|
Final Exercise Date:
|
|
See Attachment 1
|
|
|
|
|
|
All vesting is dependent on the Participant remaining an Eligible Participant, as provided herein.
|
|
CONFORMIS, INC.
|
Signature of Participant |
|
Street Address |
By:
Name of Officer
Title:
|
City/State/Zip Code |
Date:
|
11/4/2020
|
|
By:
|
/s/Mark A. Augusti
|
|
|
|
|
Mark A. Augusti
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
(Principal Executive Officer)
|
Date:
|
11/4/2020
|
By:
|
/s/ Robert Howe
|
|
|
|
Robert Howe
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
Date:
|
11/4/2020
|
|
By:
|
/s/Mark A. Augusti
|
|
|
|
|
Mark A. Augusti
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
(Principal Executive Officer)
|
Date:
|
11/4/2020
|
By:
|
/s/ Robert Howe
|
|
|
|
Robert Howe
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|