0001397702-22-000067 | 10-Q | XBRL Viewer

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Stockholders' Equity (Details) - USD ($)	9 Months Ended	12 Months Ended
Stockholders' Equity (Details) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Stockholders’ Equity [Abstract]
Preferred shares authorized (in shares)	5,000,000	5,000,000
Preferred shares (in USD per share)	$ 0.001	$ 0.001
Preferred stock, shares outstanding (in shares)	0
Preferred stock, shares issued (in shares)	0
Shares authorized (in shares)	100,000,000	100,000,000
Par value (in USD per share)	$ 0.001	$ 0.001
Shares issued (in shares)	35,381,085	34,980,896
Shares outstanding (in shares)	35,381,085	34,980,896
Dividends declared	$ 0
Stockholder Short Swing Profits		$ 32,000

Stock-Based Compensation Plans (Activity Under Compensation Plan) (Details) - 2019 Equity Incentive Plan [Member]	9 Months Ended
	Sep. 30, 2022 shares
Shares Available for Grant
Beginning balance (in shares)	2,477,212
Authorized (in shares)	1,399,235
Granted/Awarded (in shares)	(1,339,931)
Canceled (in shares)	130,168
Ending balance (in shares)	2,666,684

Stock-Based Compensation Plans (Stock-based Compensation) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 6,339	$ 3,686	$ 17,478	$ 10,628
Cost of Goods Sold [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	303	144	802	452
Research and Development Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	1,392	695	3,763	2,020
Selling, General and Administrative Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 4,644	$ 2,847	$ 12,913	$ 8,156

Commitments and Contingencies (Operating Lease Maturities) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021	May 31, 2021
Commitments and Contingencies [Abstract]
2022	$ 483
2023	1,967
2024	1,764
2025	1,079
2026	1,173
Thereafter	3,593
Total lease payments	10,059
Less: interest	(1,867)
Total lease liabilities	$ 8,192	$ 7,041	$ 3,307

Stock-Based Compensation Plans (RSUs) (Details) - Restricted Stock Units [Member]	9 Months Ended
	Sep. 30, 2022 $ / shares shares
Number of Restricted Stock Units
Beginning balance (in shares) \| shares	530,274
Restricted stock granted (in shares) \| shares	773,069
Restricted stock vested (in shares) \| shares	(96,320)
Restricted stock forfeited (in shares) \| shares	(59,203)
Ending balance (in shares) \| shares	1,147,820
Expected to vest (in shares) \| shares	1,147,820
Weighted Average Grant Date Fair Value
Beginning balance (in USD per share) \| $ / shares	$ 53.01
Restricted stock granted (in USD per share) \| $ / shares	37.40
Restricted stock vested (in USD per share) \| $ / shares	50.27
Restricted stock forfeited (in USD per share) \| $ / shares	44.53
Ending balance (in USD per share) \| $ / shares	43.16
Expected to vest (in USD per share) \| $ / shares	$ 43.16

Summary of Significant Accounting Policies - Segment and Geographical Information (Narrative) (Details)	9 Months Ended
	Sep. 30, 2022 segment
Summary of Significant Accounting Policies [Abstract]
Number of reportable segments	1
Number of operating segments	1

Commitments and Contingencies - Purchase Obligation and Contingencies (Narrative) (Details) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Commitments and Contingencies [Abstract]
Purchase obligation	$ 16,645,000
Contingent liabilities requiring accrual	$ 0	$ 0

Condensed Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
Preferred stock, $0.001 par value
Preferred shares (in USD per share)	$ 0.001	$ 0.001
Preferred shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0
Preferred stock, shares outstanding (in shares)	0
Common stock, $0.001 par value
Common stock, par value (in USD per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	35,381,085	34,980,896
Shares outstanding (in shares)	35,381,085	34,980,896

Balance Sheet Components (Tables)

9 Months Ended

Sep. 30, 2022

Balance Sheet Components [Abstract]

Fair Value of the Available-For-Sale Investments


	September 30, 2022
			Gross Unrealized				Estimated
	Amortized Cost		Gains		Losses		Fair Value
Money market funds	$	51,457	$	—	$	—	$	51,457
Commercial paper		14,643		—		—		14,643
U.S. government securities		35,862		—		(173)		35,689
Corporate bonds/notes		1,515		—		(13)		1,502
Asset-backed securities		1,997		—		(5)		1,992
	$	105,474	$	—	$	(191)	$	105,283
Classified as:
Cash equivalents							$	51,457
Short-term investments								53,826
							$	105,283

Available-For-Sale Investments in Unrealized Loss Position

	September 30, 2022
	Less than 12 months
Assets:	Fair Value		Unrealized Loss
U.S. government securities	$	35,569	$	(173)
Corporate bonds/notes		1,492		(13)
Asset-backed securities		1,989		(5)
	$	39,050	$	(191)

Schedule of Inventories


	September 30,		December 31,
	2022		2021
Raw materials	$	4,178	$	2,447
Finished products		16,126		15,437
		20,304		17,884
Less: Reserve for excess and obsolete		(11)		(33)
	$	20,293	$	17,851

Schedule of Accrued Liabilities



	September 30,		December 31,
	2022		2021
Accrued payroll and related expenses	$	12,865	$	13,898
Provision for sales returns		531		359
Accrued professional services		1,144		2,039
Operating lease liability		1,814		1,294
Accrued interest payable		504		14
Accrued royalty expense		911		687
Deferred revenue		298		157
Accrued travel expenses		785		590
Accrued clinical expenses		38		99
Accrued other expenses		731		665
Total	$	19,621	$	19,802

Long-term Debt (Future Maturities Under the Term Loan) (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Long-term Debt [Abstract]
2022	$ 1,437
2023	5,703
2024	5,719
2025	5,703
2026	45,699
2027	34,517
Long-term debt, gross before accretion of closing fees	98,778
Accretion Of CLosing Costs	333
Long-Term Debt, Gross, After Accretion Of Closing Fees	99,111
Less: Amount representing interest	(23,779)
Less: Amount representing debt discount and debt issuance costs	(992)
Present value of minimum payments	$ 74,340

Balance Sheet Components (Narrative) (Details) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Balance Sheet Components [Abstract]
Weighted average days to maturity	180 days
Work-in-process inventories	$ 0	$ 0
Short-term Investments	53,826,000
Estimated Fair Value	$ 105,283,000	$ 0

401(k) Plan

9 Months Ended

Sep. 30, 2022

401(k) Plan [Abstract]

401(k) Plan

10. 401(k) Plan

The Company has a qualified retirement plan under section 401(k) of the Internal Revenue Code, or the IRC, under which participants may contribute up to 90% of their eligible compensation, subject to maximum deferral limits specified by the IRC. The Company may make a discretionary matching contribution to the 401(k) plan and may make a discretionary employer contribution to each eligible employee each year. Beginning in January 2020, the Company started matching employees' contributions to the 401(k) plan at 50% of the first 5% of compensation deferred to the 401(k) plan and at 50% of the first 6% of compensation deferred effective January 1, 2022. The Company's matching contributions were

$352,000 and $308,000 for the three months ended September 30, 2022 and 2021, respectively, and $1,394,000 and $1,003,000 for the nine months ended September 30, 2022 and 2021, respectively.

Formation and Business of the Company	9 Months Ended
Formation and Business of the Company	Sep. 30, 2022
Balance Sheet Components [Abstract]
Formation and Business of the Company	1. Formation and Business of the Company The Company Silk Road Medical, Inc., or the Company, was incorporated in the state of Delaware on March 21, 2007. The Company has developed a technologically advanced, minimally-invasive solution for patients with carotid artery disease who are at risk for stroke. The Company's portfolio of products enable a procedure, referred to as transcarotid artery revascularization, or TCAR, that combines the benefits of endovascular techniques and surgical principles. The Company manufactures and sells in the United States its portfolio of TCAR products which are designed to provide direct access to the carotid artery, effective reduction in stroke risk throughout the procedure, and long-term restraint of carotid plaque. The Company commercialized its products in the United States beginning in late 2015.

Stock-Based Compensation Plans

9 Months Ended

Sep. 30, 2022

Stock Option Plans [Abstract]

Stock Option Plans

9. Stock-Based Compensation Plans

As of September 30, 2022, the Company has reserved 6,417,317 shares of common stock for issuance under the 2019 Equity Incentive Plan, or the 2019 Plan.

A summary of the shares available for issuance under the 2019 Plan is as follows:


		Number of Shares
Balances, December 31, 2021		2,477,212
Authorized		1,399,235
Granted / Awarded		(1,339,931)
Cancelled		130,168
Balances, September 30, 2022		2,666,684

The exercise price of Incentive Stock Options, or ISOs, and Non-Statutory Stock Options, or NSOs, shall not be less than 100% and 85%, respectively, of the estimated fair value of the shares on the date of grant as determined by the Board of Directors. The exercise price of ISOs and NSOs granted to a 10% stockholder shall not be less than 110% of the estimated fair value of the shares on the date of grant as determined by the Board of Directors. To date, options have a term of ten years and generally vest over 4 years from the date of grant.

Stock option activity under the Company’s 2007 Stock Option Plan, 2015 Equity Incentive Plan and 2019 Plan is set forth below:


	Options Outstanding
	Number of	Weighted Average		Weighted Average ‎Remaining ‎Contractual Term		Aggregate Intrinsic
	Shares	Exercise Price		(Years)		Value
Balances, December 31, 2021	3,780,939	$	20.45		6.71	$	91,900
Options granted	566,862		37.37
Options exercised	(253,318)		7.22
Options cancelled	(70,965)		40.60
Balances, September 30, 2022	4,023,518	$	23.31		6.50	$	93,818
Vested and exercisable at September 30, 2022	2,951,426	$	17.27		5.78	$	84,891
Vested and expected to vest at September 30, 2022	4,023,518	$	23.31		6.50	$	93,818

The aggregate intrinsic value of options exercised during the nine months ended September 30, 2022 was $8,999,000. The aggregate intrinsic value was calculated as the difference between the exercise prices of the underlying options and the estimated fair value of the common stock on the date of exercise.

Restricted Stock Units

Restricted stock units, or RSUs, are granted under the 2019 Plan and generally vest over four years in annual equal increments. The fair value of RSUs is based on the Company’s closing stock price on the date of grant. A summary of RSUs activity for the nine months ended September 30, 2022 is as follows:


	Number of ‎Restricted ‎Stock Units		Weighted Average ‎Grant Date ‎Fair Value
Balances, December 31, 2021		530,274	$	53.01
Awards granted		773,069		37.40
Awards vested		(96,320)		50.27
Awards canceled		(59,203)		44.53
Balances, September 30, 2022		1,147,820	$	43.16
Expected to vest at September 30, 2022		1,147,820	$	43.16

2019 Employee Stock Purchase Plan

As of September 30, 2022, 217,502 shares of common stock have been issued to employees participating in the 2019 Employee Stock Purchase Plan, or the ESPP, and 1,221,354 shares were available for future issuance under the ESPP.

Stock-Based Compensation

The Company estimated the fair value of stock options using the Black–Scholes option pricing model. The fair value of stock options is being amortized on a straight–line basis over the requisite service period of the awards. The fair value of stock options was estimated using the following assumptions for the three and nine months ended September 30, 2022 and 2021:



	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2022	2021	2022	2021
Expected term (in years)	6.25	5.25 - 6.00	5.25 - 6.25	5.25 - 6.25
Expected volatility	49.8%	46.7% - 47.3%	48.2% - 51.4%	45.0% - 50.4%
Risk-free interest rate	2.88%	0.75% - 0.82%	1.60% - 3.07%	0.41% - 1.08%
Dividend yield	—%	—%	—%	—%

The fair value of the shares to be issued under the ESPP was estimated using the Black-Scholes valuation model with the following assumptions for the three and nine months ended September 30, 2022 and 2021:



	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2022	2021	2022	2021
Expected term (in years)	0.50	0.50	0.50	0.50
Expected volatility	74.5%	51.5%	51.6% - 74.5%	44.4% - 76.4%
Risk-free interest rate	1.51%	0.03%	0.07% - 1.51%	0.03% - 1.58%
Dividend yield	—%	—%	—%	—%

The following table summarizes the total stock-based compensation expense included in the condensed statements of operations and comprehensive loss for all periods presented (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Cost of goods sold	$	303	$	144	$	802	$	452
Research and development expenses		1,392		695		3,763		2,020
Selling, general and administrative expenses		4,644		2,847		12,913		8,156
	$	6,339	$	3,686	$	17,478	$	10,628

As of September 30, 2022, there was total unrecognized compensation costs of $18,882,000 related to stock options expected to be recognized over a period of approximately 2.46 years, a total of $41,198,000 of unrecognized compensation costs related to unvested RSUs expected to be recognized over a period of approximately 3.00 years and $143,000 of unrecognized compensation costs related to the ESPP, which the Company will recognize over 0.13 years.

Summary of Significant Accounting Policies - Revenue Recognition (Narrative) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Summary of Significant Accounting Policies [Abstract]
Unbilled receivables	$ 229	$ 87

Summary of Significant Accounting Policies (Schedule of Potentially Dilutive Securities Not Included in Calculation of Earnings per Share) (Details) - shares	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	5,171,338	4,280,389
Common Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	4,023,518	3,930,140
Restricted Stock Units [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	1,147,820	350,249

Stock-Based Compensation Plans (Fair Value of Stock Options) (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Common Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)	6 years 3 months
Expected volatility	49.80%
Expected volatility, minimum		46.70%	48.20%	45.00%
Expected volatility, maximum		47.30%	51.40%	50.40%
Risk-free interest rate	2.88%
Risk-free interest rate, minimum		0.75%	1.60%	0.41%
Risk-free interest rate, maximum		0.82%	3.07%	1.08%
Common Stock Options [Member] \| Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)		5 years 3 months	5 years 3 months	5 years 3 months
Common Stock Options [Member] \| Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)		6 years	6 years 3 months	6 years 3 months
ESPP [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)	6 months		6 months	6 months
Expected volatility	74.50%			51.50%
Expected volatility, minimum			51.60%	44.40%
Expected volatility, maximum			74.50%	76.40%
Risk-free interest rate	1.51%			0.03%
Risk-free interest rate, minimum			0.07%	0.03%
Risk-free interest rate, maximum			1.51%	1.58%

Subsequent Events (Narrative) (Details) $ / shares in Units, $ in Thousands	1 Months Ended
	Oct. 31, 2022 USD ($) $ / shares shares
Subsequent Event [Line Items]
Number of additional shares purchase	348,837
Subsequent Event \| Public offering
Subsequent Event [Line Items]
Issuance of common stock (in shares)	2,674,419
Initial price per share \| $ / shares	$ 43.00
Cash proceeds from public offerings, net of underwriting discount and commissions \| $	$ 108,703

Balance Sheet Components (Schedule of Inventory) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Balance Sheet Components [Abstract]
Raw materials	$ 4,178	$ 2,447
Finished products	16,126	15,437
Inventory, gross	20,304	17,884
Less: Reserve for excess and obsolete	(11)	(33)
Inventories	$ 20,293	$ 17,851

Stock-Based Compensation Plans (Narrative) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($) shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expensed not yet recognized	$ 18,882
Compensation expensed not yet recognized, period for recognition	2 years 5 months 15 days
ISO and NSO [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise threshold as a percentage of fair value of shares	10.00%
Option term	10 years
Option vesting term	4 years
ISO [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise threshold as a percentage of fair value of shares	100.00%
NSO [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise threshold as a percentage of fair value of shares	85.00%
2019 ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expensed not yet recognized, period for recognition	1 month 17 days
Common Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate intrinsic value of options exercised	$ 8,999
Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Option vesting term	4 years
Compensation expensed not yet recognized, period for recognition	3 years
Unrecognized compensation costs of unvested RSUs	$ 41,198
Maximum [Member] \| ISO and NSO [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise threshold as a percentage of fair value of shares	110.00%
2019 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock reserved for issuance (in shares) \| shares	6,417,317
Unrecognized compensation costs related to the ESPP	$ 143
2019 Equity Incentive Plan [Member] \| Common Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Issuance of common stock under employee stock purchase plan (in shares) \| shares	217,502
Shares available for future issuance (in shares) \| shares	1,221,354

Commitments and Contingencies (Balance Sheet Information) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021	May 31, 2021
Commitments and Contingencies [Abstract]
Operating lease right-of-use asset in other non-current assets	$ 5,356	$ 5,219	$ 3,307
Operating lease liability in accrued liabilities	1,814	1,294
Operating lease liability in other liabilities	6,378	5,747
Total operating lease liabilities	$ 8,192	$ 7,041	$ 3,307

Summary of Significant Accounting Policies - Voluntary Recall (Narrative) (Details) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Inventory [Line Items]
Inventories	$ 20,293,000	$ 17,851,000
Contingent liabilities requiring accrual	0	0
ENROUTE [Member]
Inventory [Line Items]
Contingent liabilities requiring accrual	11,000	11,000
Voluntary Recall
Inventory [Line Items]
Inventories	$ 0	$ 335,000

Summary of Significant Accounting Policies (Schedule of Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Summary of Significant Accounting Policies [Abstract]
Net loss	$ (10,319)	$ (13,885)	$ (42,396)	$ (35,118)
Weighted average common stock outstanding used to compute net loss per share, basic and diluted (in shares)	35,303,958	34,736,015	35,157,840	34,536,980
Net loss per share, basic	$ (0.29)	$ (0.40)	$ (1.21)	$ (1.02)
Net loss per share, diluted	$ (0.29)	$ (0.40)	$ (1.21)	$ (1.02)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

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The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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+ Details

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2022

Fair Value Measurements [Abstract]

Financial Liabilities Measure on a Recurring Basis



	September 30, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	51,457	$	—	$	—	$	51,457
Commercial paper		—		14,643		—		14,643
U.S. government securities		—		35,689		—		35,689
Corporate bonds/notes		—		1,502		—		1,502
Asset-backed securities		—		1,992		—		1,992
	$	51,457	$	53,826	$	—	$	105,283



	December 31, 2021
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	21,062	$	—	$	—	$	21,062
	$	21,062	$	—	$	—	$	21,062

Long-term Debt

9 Months Ended

Sep. 30, 2022

Long-term Debt [Abstract]

Long-term Debt

6. Long-term Debt

Stifel Bank

In October 2020, the Company entered into a Loan and Security Agreement with Stifel Bank which provided for a $50,000,000 loan facility, comprised of a $50,000,000 secured revolving credit facility, with a $2,000,000 subfacility for the issuance of letters of credit and other ancillary banking services, and a $50,000,000 secured term loan facility, provided that amounts outstanding under both facilities may not exceed an aggregate principal amount of $50,000,000 at any time. Interest under the revolving credit facility was the greater of a) 0.5% above the "Prime Rate" as published by The Wall Street Journal or b) 4.75%.

The Company drew down $49,000,000 under the term loan facility in October 2020. Interest under the term loan facility was the greater of a) 0.75% above the "Prime Rate" as published by The Wall Street Journal or b) 4.75%. The term loan may not be reborrowed once repaid, but the Company may prepay the term loan at any time without premium or penalty.

The Company also concurrently entered in a Success Fee Agreement in October 2020 with Stifel Bank, which requires that the Company pay Stifel Bank the lesser of 0.75% of the original principal amount of all credit extensions made under the Loan and Security Agreement or $375,000 in the event the Company completes a Liquidity Event (liquidation, merger, sale of the Company or change in control). The Success Fee Agreement terminates on October 29, 2025. The Company has determined the probability of a Liquidity Event to be remote and accordingly, has not recognized a liability as of September 30, 2022.

On May 27, 2022, in connection with the consummation of the Loan and Security Agreement with Oxford Finance, as noted below, the Company repaid all amounts outstanding under the term loan with Stifel Bank. The Success Fee Agreement obligations, of $367,500, survive the Stifel Bank debt repayment and terminate on October 29, 2025.

Oxford Finance

In May 2022, the Company entered into a Loan and Security Agreement, or Loan Agreement, with Oxford Finance LLC and its agents, or Oxford Finance, which provides for a $225,000,000 loan facility, comprised of a $25,000,000 secured revolving credit facility and a $200,000,000 secured term loan facility. The term loans are available in three tranches. The first $75,000,000 tranche of term loans was available at closing in May 2022. A second tranche of $75,000,000 of term loans is available through December 31, 2024. A third tranche of $50,000,000 would be available through December 31, 2024 so long as, at the time of draw, the Company has consolidated trailing 12-month revenues equal to at least 90% of the sum of the outstanding term loans plus the amount of any requested third tranche term loans.

Upon request of the Company, the revolving credit facility will be increased from $25,000,000 to $50,000,000. The revolving loans are available subject to a borrowing base equal to 85% of eligible receivables plus 50% of eligible inventory, up to the lesser of 40% of the borrowing base or $10,000,000, in the case of eligible inventory. The revolving facility will be available to the Company upon completion of an initial collateral audit.

The revolving loans and the term loans mature on May 1, 2027. The principal amount of outstanding revolving loans, together with accrued and unpaid interest, is due on the maturity date. The term loans begin to amortize in equal monthly installments beginning on July 1, 2026. However, if the Company achieves specified consolidated trailing twelve-month revenues, the Company may exercise its option to extend the first amortization date for the term loans to July 1, 2027. Such election may be made no earlier than June 30, 2023 and no later than thirty (30) days prior to July 1, 2026. If the Company exercises this option, then the maturity date for both the revolving loans and the term loans will be May 1, 2028.

The revolving loans accrue interest at the greater of 1-month Secured Overnight Financing Rate (SOFR), or the Index Rate, and 0.85%, plus a margin of 3.00%. The term loans accrue interest at the greater of the Index Rate and 0.85%, plus a margin of 5.00%. The Index Rate is capped at 2.50% for purposes of the Loan Agreement. Interest on both revolving loans and term loans is payable monthly in arrears. The Company may borrow, prepay and reborrow revolving loans, without premium or penalty. The term loans once repaid or prepaid may not be reborrowed. Term loans may be prepaid in full, or in part in increments of $10,000,000. The Company is required to pay a prepayment fee of 3.0% for prepayments of term loans made in the first year after closing, 2.0% for prepayments of term loans made in the second year after closing, 1.0% for prepayments of term loans made in the third year after closing and no prepayment fees

thereafter. Upon the earlier of prepayment or maturity of the term loans, the Company is required to pay a fee of 5.0% of the aggregate original principal amount of the funded term loans, which fee increases to 6.75% if the Company exercises its option to extend the amortization date and maturity date. The Company is also obligated to pay other customary fees for a loan facility of this size and type.

Also in May 2022, the Company borrowed the first $75,000,000 tranche of the term loan and used a portion of the proceeds to pay off and terminate the prior term loan agreement with Stifel Bank totaling $49,181,000, which included a final interest payment of $181,000. The Company recognized a loss on debt extinguishment of $245,000 in connection with the early termination of its prior term loan agreement with Stifel Bank.

Obligations under the Loan Agreement are secured by substantially all of the Company's assets. The Loan Agreement requires the Company to maintain consolidated trailing twelve-month revenues of at least 75% of the outstanding principal amount of the term loans, measured as of the last day of each fiscal quarter; or if the revenue target is not achieved, the Company must have maintained unrestricted cash and cash equivalents (net of outstanding revolving loans) subject to control agreements in favor of Oxford Finance equal to at least 50% of the outstanding principal amount of the term loans. Additionally, the Loan Agreement contains customary affirmative and negative covenants, including covenants limiting the Company's ability and the ability of the Company's subsidiaries to, among other things, dispose of assets, effect certain mergers, incur debt, grant liens, pay dividends and distributions on capital stock, make investments and acquisitions, and enter into transactions with affiliates, in each case subject to customary exceptions for a loan facility of this size and type.

The events of default under the Loan Agreement include, among others, payment defaults, material misrepresentations, breaches of covenants, cross defaults with certain other material indebtedness, bankruptcy and insolvency events, and judgment defaults. The occurrence of an event of default could result in the acceleration of the Company’s obligations under the Loan Agreement, the termination of the lender’s commitments, a 5% increase in the applicable rate of interest and the exercise by the lender of other rights and remedies provided for under the Loan Agreement.

As of September 30, 2022, the aggregate outstanding principal balance under the Loan Agreement was $75,000,000 and the variable interest rate was 7.50%. As of September 30, 2022, the Company was in compliance with all applicable financial covenants.

Future maturities under the Oxford Finance term loan agreement as of September 30, 2022 are as follows (in thousands):



Period Ending December 31:	Amount
2022	$	1,437
2023		5,703
2024		5,719
2025		5,703
2026		45,699
2027		34,517
		98,778
Add: Accretion of closing fees		333
		99,111
Less: Amount representing interest		(23,779)
Less: Amount representing debt discount and debt issuance costs		(992)
Present value of minimum payments	$	74,340

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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+ Details

Balance Sheet Components (Fair Value of Available-For-Sale Investments) (Details) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 105,474,000
Gross Unrealized Losses	(191,000)
Estimated Fair Value	105,283,000	$ 0
Money Market Funds [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	51,457,000
Estimated Fair Value	51,457,000
Commercial Paper [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	14,643,000
Estimated Fair Value	14,643,000
Corporate Bonds/Notes [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	1,515,000
Gross Unrealized Losses	(13,000)
Estimated Fair Value	1,502,000
U.S. Government Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	35,862,000
Gross Unrealized Losses	(173,000)
Estimated Fair Value	35,689,000
Asset-Backed Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	1,997,000
Gross Unrealized Losses	(5,000)
Estimated Fair Value	1,992,000
Cash Equivalents [Member]
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	51,457,000
Short-Term Investments [Member]
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	$ 53,826,000

Stock-Based Compensation Plans (Tables)

9 Months Ended

Sep. 30, 2022

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Summary of Shares Available for Issuance


		Number of Shares
Balances, December 31, 2021		2,477,212
Authorized		1,399,235
Granted / Awarded		(1,339,931)
Cancelled		130,168
Balances, September 30, 2022		2,666,684

Stock Option Activity


	Options Outstanding
	Number of	Weighted Average		Weighted Average ‎Remaining ‎Contractual Term		Aggregate Intrinsic
	Shares	Exercise Price		(Years)		Value
Balances, December 31, 2021	3,780,939	$	20.45		6.71	$	91,900
Options granted	566,862		37.37
Options exercised	(253,318)		7.22
Options cancelled	(70,965)		40.60
Balances, September 30, 2022	4,023,518	$	23.31		6.50	$	93,818
Vested and exercisable at September 30, 2022	2,951,426	$	17.27		5.78	$	84,891
Vested and expected to vest at September 30, 2022	4,023,518	$	23.31		6.50	$	93,818

Summary of RSU Activity


	Number of ‎Restricted ‎Stock Units		Weighted Average ‎Grant Date ‎Fair Value
Balances, December 31, 2021		530,274	$	53.01
Awards granted		773,069		37.40
Awards vested		(96,320)		50.27
Awards canceled		(59,203)		44.53
Balances, September 30, 2022		1,147,820	$	43.16
Expected to vest at September 30, 2022		1,147,820	$	43.16

Stock-Based Compensation Expense Relating to Stock Options to Employees and Nonemployees


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Cost of goods sold	$	303	$	144	$	802	$	452
Research and development expenses		1,392		695		3,763		2,020
Selling, general and administrative expenses		4,644		2,847		12,913		8,156
	$	6,339	$	3,686	$	17,478	$	10,628

Common Stock Options [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of Fair Value Assumptions



	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2022	2021	2022	2021
Expected term (in years)	6.25	5.25 - 6.00	5.25 - 6.25	5.25 - 6.25
Expected volatility	49.8%	46.7% - 47.3%	48.2% - 51.4%	45.0% - 50.4%
Risk-free interest rate	2.88%	0.75% - 0.82%	1.60% - 3.07%	0.41% - 1.08%
Dividend yield	—%	—%	—%	—%

ESPP [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of Fair Value Assumptions



	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2022	2021	2022	2021
Expected term (in years)	0.50	0.50	0.50	0.50
Expected volatility	74.5%	51.5%	51.6% - 74.5%	44.4% - 76.4%
Risk-free interest rate	1.51%	0.03%	0.07% - 1.51%	0.03% - 1.58%
Dividend yield	—%	—%	—%	—%

Summary of Significant Accounting Policies - Deferred Initial Public Offering Costs (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Summary of Significant Accounting Policies [Abstract]
Deferred initial public offering costs	$ 170	$ 0

Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies [Abstract]

Balance Sheet Information


	September 30,		December 31,
Operating Lease:	2022		2021
Operating lease right-of-use assets in other non-current assets	$	5,356	$	5,219
Operating lease liabilities in accrued liabilities	$	1,814	$	1,294
Operating lease liabilities in other liabilities		6,378		5,747
Total operating lease liabilities	$	8,192	$	7,041

Operating Lease Maturities



Period Ending December 31:	Amount
2022	$	483
2023		1,967
2024		1,764
2025		1,079
2026		1,173
2027 and thereafter		3,593
Total lease payments	$	10,059
Less: interest		(1,867)
Total lease liabilities	$	8,192

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2022

Summary of Significant Accounting Policies [Abstract]

Net Loss Per Share Determination


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Net loss	$	(10,319)	$	(13,885)	$	(42,396)	$	(35,118)
Weighted average common stock outstanding used to compute net loss per share, basic and diluted		35,303,958		34,736,015		35,157,840		34,536,980
Net loss, basic and diluted	$	(0.29)	$	(0.40)	$	(1.21)	$	(1.02)

Schedule of Potentially Dilutive Securities Outstanding Excluded from Diluted Weighted Average Shares Outstanding



	September 30,
	2022	2021
Common stock options	4,023,518	3,930,140
Restricted stock units	1,147,820	350,249
	5,171,338	4,280,389

401(k) Plan (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
401(k) Plan (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
401(k) Plan [Abstract]
Percentage employee contribution			90.00%
Employer discretionary contribution	$ 352	$ 308	$ 1,394	$ 1,003
Employer contribution match percentage			50.00%		50.00%
Percent of matching contribution of the employee's pay			6.00%		5.00%

Condensed Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 51,306	$ 110,231
Short-term investments	53,826
Accounts receivable, net	17,019	11,832
Inventories	20,293	17,851
Prepaid expenses and other current assets	4,543	3,412
Total current assets	146,987	143,326
Property and equipment, net	9,671	7,697
Restricted cash	155	232
Other non-current assets	5,731	5,370
Total assets	162,544	156,625
Current liabilities:
Accounts payable	4,312	2,379
Accrued liabilities	19,621	19,802
Short-term debt		3,905
Total current liabilities	23,933	26,086
Long-term debt	74,340	44,786
Other liabilities	7,073	6,513
Total liabilities	105,346	77,385
Commitments and contingencies (Note 7)
Stockholders’ equity):
Preferred stock, $0.001 par value Shares authorized: 5,000,000 at September 30, 2022 and December 31, 2021 Shares issued and outstanding: none at September 30, 2022 and December 31, 2021
Common stock, $0.001 par value Shares authorized: 100,000,000 at September 30, 2022 and December 31, 2021 Shares issued and outstanding: 35,381,085 and 34,980,896 at September 30, 2022 and December 31, 2021, respectively	35	35
Additional paid-in capital	388,452	367,907
Accumulated other comprehensive income (loss)	(191)
Accumulated deficit	(331,098)	(288,702)
Total stockholders’ equity	57,198	79,240
Total liabilities and stockholders’ equity	$ 162,544	$ 156,625

Stockholders’ Equity

9 Months Ended

Sep. 30, 2022

Stockholders’ Equity [Abstract]

Stockholders’ Equity

8. Stockholders’ Equity

Preferred Stock

At September 30, 2022, the Company’s certificate of incorporation, as amended and restated, authorizes the Company to issue up to 5,000,000 shares of preferred stock with $0.001 par value per share, of which no shares were issued and outstanding.

Common Stock

At September 30, 2022, the Company’s certificate of incorporation, as amended and restated, authorizes the Company to issue up to 100,000,000 shares of common stock with $0.001 par value per share, of which 35,381,085 shares were issued and outstanding. The holders of common stock are also entitled to receive dividends whenever funds are legally available, when and if declared by the Board of Directors. As of September 30, 2022, no dividends have been declared to date. Each share of common stock is entitled to one vote.

Disgorgement Proceeds

During the year ended December 31, 2021, the Company received net proceeds of $32,000 related to the disgorgement of short-swing profits under Section 16(b) of the Exchange Act. The amount was recorded as an increase to additional paid-in capital on the balance sheet.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-URI https://asc.fasb.org/topic&trid=2208762

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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+ Details

Long-term Debt (Tables)

9 Months Ended

Sep. 30, 2022

Long-term Debt [Abstract]

Future Maturities Under the Term Loan Agreement



Period Ending December 31:	Amount
2022	$	1,437
2023		5,703
2024		5,719
2025		5,703
2026		45,699
2027		34,517
		98,778
Add: Accretion of closing fees		333
		99,111
Less: Amount representing interest		(23,779)
Less: Amount representing debt discount and debt issuance costs		(992)
Present value of minimum payments	$	74,340

Summary of Significant Accounting Policies - Income Taxes (Narrative) (Details)	Sep. 30, 2022 USD ($)
Summary of Significant Accounting Policies [Abstract]
Provision for income taxes	$ 0

Balance Sheet Components (Accrued Liabilities) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Balance Sheet Components [Abstract]
Accrued payroll and related expenses	$ 12,865	$ 13,898
Provision for sales returns	531	359
Accrued professional services	1,144	2,039
Operating lease liability	1,814	1,294
Accrued interest payable	504	14
Accrued royalty expense	911	687
Deferred revenue	298	157
Accrued travel expenses	785	590
Accrued clinical expenses	38	99
Accrued other expenses	731	665
Total	$ 19,621	$ 19,802

Cover Page - shares	9 Months Ended
Cover Page - shares	Sep. 30, 2022	Oct. 31, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity File Number	001-38847
Entity Registrant Name	SILK ROAD MEDICAL, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-8777622
Entity Address, Address Line One	1213 Innsbruck Dr.
Entity Address, City or Town	Sunnyvale
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94089
City Area Code	408
Local Phone Number	720-9002
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Title of 12(b) Security	Common Stock
Trading Symbol	SILK
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding		38,122,549
Entity Central Index Key	0001397702
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Amendment Flag	false

Condensed Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Condensed Statements of Operations and Comprehensive Loss [Abstract]
Revenue	$ 37,374	$ 24,701	$ 98,567	$ 73,210
Cost of goods sold	9,308	6,076	26,897	18,213
Gross profit	28,066	18,625	71,670	54,997
Operating expenses:
Research and development	8,471	6,867	27,249	19,611
Selling, general and administrative	28,821	25,049	83,795	68,792
Total operating expenses	37,292	31,916	111,044	88,403
Loss from operations	(9,226)	(13,291)	(39,374)	(33,406)
Interest income	617	42	751	183
Interest expense	(1,714)	(633)	(3,366)	(1,884)
Loss on debt extinguishment			(245)
Other income (expense), net	4	(3)	(162)	(11)
Net loss	(10,319)	(13,885)	(42,396)	(35,118)
Other comprehensive loss:
Change in unrealized gain (loss) on investments, net	(189)	(2)	(191)	(38)
Net change in other comprehensive loss	(189)	(2)	(191)	(38)
Net loss and comprehensive loss	$ (10,508)	$ (13,887)	$ (42,587)	$ (35,156)
Net loss per share, basic	$ (0.29)	$ (0.40)	$ (1.21)	$ (1.02)
Net loss per share, diluted	$ (0.29)	$ (0.40)	$ (1.21)	$ (1.02)
Weighted average common shares used to compute net loss per share, basic and diluted	35,303,958	34,736,015	35,157,840	34,536,980

Long-term Debt - (Narrative) (Details) - USD ($)		1 Months Ended		9 Months Ended	12 Months Ended
Long-term Debt - (Narrative) (Details) - USD ($)	May 27, 2022	May 31, 2022	Oct. 31, 2020	Sep. 30, 2022	Dec. 31, 2021
Subsequent Event [Line Items]
Loss on debt extinguishment				$ (245,000)
Stifel Bank [Member]
Subsequent Event [Line Items]
Repayment of outstanding loan amount	$ 367,500
Percent of original principal threshold					0.75%
Redemption amount					$ 375,000
Oxford Finance [Member]
Subsequent Event [Line Items]
Debt. Default, Rate Increase				5.00%
Secured Debt [Member] \| Stifel Bank [Member]
Subsequent Event [Line Items]
Facility amount		$ 200,000,000
Term Loan [Member]
Subsequent Event [Line Items]
Percentage of revenue for debt repayment				90.00%
Term Loan [Member] \| Stifel Bank [Member]
Subsequent Event [Line Items]
Repayment of outstanding loan amount		49,181,000
Debt interest		181,000
Loss on debt extinguishment		$ 245,000
Term Loan [Member] \| Oxford Finance [Member]
Subsequent Event [Line Items]
Percentage of prepayment fees				3.00%
Percentage of prepayment fees in second year				2.00%
Percentage of prepayment fees in third year				1.00%
Percent aggregate original principal amount				5.00%
Term loan prepaid in increments				$ 10,000,000
Letter of Credit [Member] \| Stifel Bank [Member]
Subsequent Event [Line Items]
Facility amount				$ 50,000,000
Amount drawn on facility			$ 49,000,000
Stated interest rate				4.75%
Letter of Credit [Member] \| Oxford Finance [Member]
Subsequent Event [Line Items]
Aggregate outstanding principal balance				$ 75,000,000
Annual interest rate				7.50%
Secured Revolving Credit Facility [Member] \| Stifel Bank [Member]
Subsequent Event [Line Items]
Facility amount				$ 50,000,000
Secured Revolving Credit Facility [Member] \| Oxford Finance [Member]
Subsequent Event [Line Items]
Annual interest rate				2.50%
Maturity date				May 01, 2027
Percent of borrowing base of eligible receivables				85.00%
Percent of eligible inventory				50.00%
Percent of borrowing base in case eligible inventory				40.00%
Borrowing base amount in case eligible inventory				$ 10,000,000
Debt instrument margin rate		5.00%
Secured Revolving Credit Facility [Member] \| Index Rate [Member] \| Oxford Finance [Member]
Subsequent Event [Line Items]
Variable interest rate		0.85%		0.85%
Debt instrument margin rate				3.00%
Secured Revolving Credit Facility [Member] \| Secured Debt [Member] \| Oxford Finance [Member]
Subsequent Event [Line Items]
Facility amount		$ 25,000,000
Secured Revolving Credit Facility [Member] \| Term Loan [Member] \| Oxford Finance [Member]
Subsequent Event [Line Items]
Facility amount		25,000,000		$ 50,000,000
Secured Revolving Credit Facility, Subfacility [Member] \| Stifel Bank [Member]
Subsequent Event [Line Items]
Facility amount				$ 2,000,000
Loan Agreement [Member] \| Oxford Finance [Member]
Subsequent Event [Line Items]
Facility amount		$ 225,000,000
Loan Agreement [Member] \| Term Loan [Member] \| Oxford Finance [Member]
Subsequent Event [Line Items]
Percentage of revenue for debt repayment		75.00%
Percent aggregate original principal amount		50.00%
Term Loan, First Tranche [Member] \| Term Loan [Member]
Subsequent Event [Line Items]
Debt, face amount		$ 75,000,000
Term Loan, Second Tranche [Member] \| Term Loan [Member]
Subsequent Event [Line Items]
Debt, face amount		75,000,000
Term Loan, Third Tranche [Member] \| Term Loan [Member]
Subsequent Event [Line Items]
Debt, face amount		$ 50,000,000
Minimum [Member] \| Letter of Credit [Member] \| Prime Rate [Member] \| Stifel Bank [Member]
Subsequent Event [Line Items]
Variable interest rate				0.50%
Maximum [Member] \| Letter of Credit [Member] \| Prime Rate [Member] \| Stifel Bank [Member]
Subsequent Event [Line Items]
Variable interest rate				0.75%

Fair Value Measurements

9 Months Ended

Sep. 30, 2022

Fair Value Measurements [Abstract]

Fair Value Measurements

4. Fair Value Measurements

The Company measures certain financial assets and liabilities at fair value on a recurring basis, including cash equivalents and investments. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value:

•Level 1 – quoted prices in active markets are identical assets and liabilities;

•Level 2 – observable inputs other than quoted prices in active markets for identical assets and liabilities;

•Level 3 – unobservable inputs.

Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. The Company’s cash equivalents are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. Any corporate bonds/notes, commercial paper, asset-backed securities and U.S. government securities are classified as Level 2 as they are valued based upon quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all

significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets.

The following tables sets forth by level within the fair value hierarchy the Company’s assets that are reported at fair value as of September 30, 2022 and December 31, 2021, using the inputs defined above (in thousands):



	September 30, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	51,457	$	—	$	—	$	51,457
Commercial paper		—		14,643		—		14,643
U.S. government securities		—		35,689		—		35,689
Corporate bonds/notes		—		1,502		—		1,502
Asset-backed securities		—		1,992		—		1,992
	$	51,457	$	53,826	$	—	$	105,283



	December 31, 2021
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	21,062	$	—	$	—	$	21,062
	$	21,062	$	—	$	—	$	21,062

There were no transfers between fair value hierarchy levels during the three and nine months ended September 30, 2022 and 2021.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2022

Recent Accounting Pronouncements [Abstract]

Recent Accounting Pronouncements

3. Recent Accounting Pronouncements

Recently Adopted Accounting Standards

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, or ASU 2021-08, which creates an exception to the general recognition and measurement principle in ASC 805 by requiring companies to apply ASC 606 to recognize and measure contract assets and contract liabilities from contracts with customers acquired in a business combination. The guidance additionally clarifies that companies should apply the definition of a performance obligation in ASC 606 when recognizing contract liabilities assumed in a business combination. The Company early adopted ASU 2021-08 as of January 1, 2022, on a prospective basis. The adoption of ASU 2021-08 did not have a material impact on the Company’s financial statements and related disclosures.

- Definition

The entire disclosure for change in accounting principle. Includes, but is not limited to, nature, reason, and method of adopting amendment to accounting standards or other change in accounting principle.

+ References

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+ Details

Stock-Based Compensation Plans (Stock Option Activity) (Details) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022 USD ($) $ / shares shares	Dec. 31, 2021 USD ($) $ / shares shares
Number of Shares
Beginning balance (in shares) \| shares	3,780,939
Options granted (in shares) \| shares	566,862
Options exercised (in shares) \| shares	(253,318)
Options cancelled (in shares) \| shares	(70,965)
Ending balance (in shares) \| shares	4,023,518	3,780,939
Vested and exercisable (in shares) \| shares	2,951,426
Vested and expect to vest (in shares) \| shares	4,023,518
Weighted Average Exercise Price
Beginning balance (in USD per share) \| $ / shares	$ 20.45
Options granted (in USD per share) \| $ / shares	37.37
Options exercised (in USD per share) \| $ / shares	7.22
Options cancelled (in USD per share) \| $ / shares	40.60
Ending balance (in USD per share) \| $ / shares	23.31	$ 20.45
Vested and exercisable (in USD per share) \| $ / shares	17.27
Vested and expected to vest (in USD per share) \| $ / shares	$ 23.31
Weighted Average Remaining Contractual Term (in Years)
Awards outstanding	6 years 6 months	6 years 8 months 15 days
Vested and exercisable	5 years 9 months 10 days
Vested and expected to vest	6 years 6 months
Aggregate Intrinsic Value (in thousands)
Awards outstanding \| $	$ 93,818	$ 91,900
Vested and exercisable \| $	84,891
Vested and expected to vest \| $	$ 93,818

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2022

Summary of Significant Accounting Policies [Abstract]

Basis of Preparation

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, or U.S. GAAP, and applicable rules and regulations of the Securities and Exchange Commission, or SEC, regarding interim financial reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP have been condensed or omitted, and accordingly the balance sheet as of December 31, 2021, and related disclosures, have been derived from the audited financial statements at that date but does not include all of the information required by U.S. GAAP for complete financial statements. These unaudited condensed financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for the fair statement of the Company’s condensed financial information. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any other interim period or for any other future year.

The accompanying interim unaudited condensed financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2021 included in the Company's annual report on Form 10-K filed with the SEC on March 1, 2022.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts and disclosures reported in the financial statements. Management uses judgment when making estimates related to provisions for accounts receivable and excess and obsolete inventories, the valuation of deferred tax assets, the reserves for sales returns, and stock-based compensation. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may ultimately differ from these estimates and assumptions.

Due to the coronavirus, or COVID-19, pandemic, there has been continued uncertainty and disruption in the global economy, supply chain, financial markets and labor markets. New virus variants and varying infection rates continue to make the current COVID-related environment highly volatile and uncertain. These challenges continued to impact the number of TCAR procedures in the first half of 2022, with procedure volumes impacted by increased COVID-19 hospitalizations and hospital capacity and staffing constraints due to COVID-19 and its variants. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of September 30, 2022. The Company has also considered information available to it as of the date of issuance of these financial statements and is not aware of any specific events or circumstances that would require an update to its estimates or judgments, or a revision to the carrying value of its assets or liabilities. These estimates may change as new events occur and additional information becomes available. Actual results could differ materially from these estimates.

Fair Value of Financial Instruments

The Company has evaluated the estimated fair value of its financial instruments as of September 30, 2022 and December 31, 2021. The carrying amounts of certain of the Company’s financial instruments, which include cash equivalents, short-term investments, restricted cash, accounts receivable, accounts payable and accrued liabilities approximate their respective fair values because of the short-term nature of these instruments. Management believes that its debt bears interest at the prevailing market rates for instruments with similar characteristics (Level 2 within the fair value hierarchy); accordingly, the carrying value of this instrument approximates its fair value.

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents. Cash equivalents are recorded at fair value, based on quoted market prices. As of September 30, 2022 and December 31, 2021, the Company’s cash equivalents are entirely comprised of investments in money market funds.

Restricted cash as of September 30, 2022 and December 31, 2021 consists of a letter of credit of $155,000 and $232,000, respectively, representing collateral for the Company's facility lease in California.

Investments

Short-term investments consist of debt securities classified as available-for-sale and have original maturities greater than 90 days, but less than one year as of the balance sheet date. Long-term investments have maturities greater than one year as of the balance sheet date. All investments are recorded at fair value based on the fair value hierarchy. Money market funds are classified within Level 1 of the fair value hierarchy, and commercial paper, corporate bonds/notes, United States Government securities, and asset-backed securities are classified within Level 2 of the fair value hierarchy. Unrealized gains and losses, deemed temporary in nature, are reported as a separate component of accumulated other comprehensive income (loss). Realized gains and losses are included in earnings and are derived based on the specific-identification method for determining the costs of investments sold and were insignificant for the three and nine months ended September 30, 2022 and 2021. Amortization of premiums and accretion of discounts are reported as a component of interest income.

A decline in the fair value of any security below cost that is deemed other than temporary results in a charge to earnings and the corresponding establishment of a new cost basis for the investment. The Company evaluates the securities in an unrealized loss position for expected credit losses by considering factors such as historical experience, market data, issuer-specific factors, current economic conditions and credit ratings.

Concentration of Credit Risk, and Other Risks and Uncertainties

The Company is subject to risks related to public health crises such as the global pandemic associated with COVID-19. The COVID-19 outbreak has negatively impacted, and may continue to negatively impact the Company’s operations, its revenue and overall financial condition by significantly decreasing the expected number of TCAR procedures performed. The total number of TCAR procedures performed, similar to other surgical procedures, has been significantly depressed during certain periods of time as health care organizations globally prioritized the treatment of patients with COVID-19 and managed through capacity and staffing issues. In the past governmental or hospital authorities have recommended, and in certain cases required, that elective, specialty and other procedures and appointments, be suspended or canceled to focus limited resources and personnel and hospital capacity toward the treatment of COVID-19 and to avoid exposing patients and certain staff to COVID-19. These measures and challenges will likely continue for the duration of the pandemic, which is uncertain, and may continue to negatively impact the Company’s revenue while the pandemic continues. New virus variants, and varying infection rates continue to make the current COVID-related environment highly volatile and uncertain.

Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents, investments and accounts receivable to the extent of the amounts recorded on the balance sheet. Cash, cash equivalents, and investments are deposited in financial institutions which, at times, may be in excess of federally insured limits. Cash

equivalents are invested in highly rated money market funds. The Company invests in a variety of financial instruments, such as, but not limited to, commercial paper, corporate bonds/notes, United States Government securities, asset-backed securities and, by policy, limits the amount of credit exposure with any one financial institution or commercial issuer. The Company has not experienced any material losses on its deposits of cash and cash equivalents or investments during the three and nine months ended September 30, 2022 and 2021.

The Company’s accounts receivable are due from a variety of hospitals and medical centers in the United States. At September 30, 2022 and December 31, 2021, no customer represented 10% or more of the Company’s accounts receivable. For the three and nine months ended September 30, 2022 and 2021, there were no customers that represented 10% or more of revenue.

The Company provides for uncollectible amounts when specific credit problems are identified. In doing so, the Company analyzes historical bad debt trends, customer credit worthiness, current economic trends and changes in customer payment patterns when evaluating the adequacy of the allowance for expected credit losses on customer accounts.

The Company manufactures certain of its commercial products in-house. Certain of the Company’s product components and sub-assemblies continue to be manufactured by sole suppliers, the most significant of which is the ENROUTE Transcarotid Stent System, manufactured by Cordis Corporation, or Cordis. Disruption in component or sub-assembly supply from these manufacturers or from in-house production would have a negative impact on the Company’s financial position and results of operations.

The Company is subject to certain risks, including that its devices may not be approved or cleared for marketing by governmental authorities or be successfully marketed. There can be no assurance that the Company’s products will achieve widespread adoption in the marketplace, nor can there be any assurance that existing devices or any future devices can be developed or manufactured at an acceptable cost and with appropriate performance characteristics. The Company is also subject to risks common to companies in the medical device industry, including, but not limited to, new technological innovations, dependence upon government and third-party payers to provide adequate coverage and reimbursement, dependence on key personnel and suppliers, protection of proprietary technology, product liability claims, and compliance with government regulations.

Existing or future devices developed by the Company may require approvals or clearances from the U.S. Food and Drug Administration, or the FDA, or international regulatory agencies. In addition, in order to continue the Company’s operations, compliance with various federal and state laws is required. If the Company were denied or delayed in receiving such approvals or clearances, it may be necessary to adjust operations to align with the Company’s currently approved portfolio. If clearance for the products in the current portfolio were withdrawn by the FDA, this would have a material adverse impact on the Company.

Voluntary Recall

In January and February 2021, the Company announced the voluntary recall of certain lots of its ENROUTE Transcarotid Stent System, manufactured by one of its third-party suppliers, Cordis. The decision to recall these lots was based on complaints received about tips detaching from the stent delivery system as well as internal testing that the Company conducted. The Company believes the root cause of the detachment was a single operator at Cordis, who, over a specific timeframe, produced lots in which a small number of units were not reliably manufactured to specification.

As a result of the voluntary recall the Company reflected a current asset of $335,000 and $0 on its balance sheet as of December 31, 2021 and September 30, 2022, relating to other direct costs contractually owed by Cordis. The amount was fully paid in January 2022. In addition, as of September 30, 2022 and December 31, 2021, the Company has a remaining accrual of $11,000 relating to its obligation to provide replacement ENROUTE stent delivery systems to its customers.

Deferred Public Offering Costs

Specific incremental legal, accounting and other fees and costs directly attributable to a proposed or actual offering of securities may properly be deferred and charged against the gross proceeds of the offering. As of September 30, 2022

and December 31, 2021, there were $170,000 and $0, respectively, of offering costs primarily consisting of legal fees that were capitalized in other non-current assets on the condensed balance sheet.

Leases

The Company accounts for its leasing arrangements in accordance with Accounting Standards Codification, or ASC 842, “Leases.” The Company considers if an arrangement is a lease at inception if it obtains the right to control the use of an identified asset under a leasing arrangement with an initial term greater than twelve months. The Company determines whether a contract conveys the right to control the use of an identified asset for a period of time if the contract contains both the right to obtain substantially all of the economic benefits from the use of the identified asset and the right to direct the use of the identified asset. The Company also evaluates the nature of each lease to determine whether it is an operating or financing lease and recognizes the right-of-use asset and lease liabilities based on the present value of future minimum lease payments over the expected lease term. The Company’s leases do not generally contain an implicit interest rate and therefore the Company uses the incremental borrowing rate it would expect to pay to borrow on a similar collateralized basis over a similar term in order to determine the present value of its lease payments. The Company considers renewal options in the determination of the lease term if the option to renew is reasonably certain. Variable lease costs represent payments that are dependent on usage, a rate or index. Variable lease costs, which consists primarily of taxes, insurance and common area maintenance costs, are expensed as incurred. The Company elected to account for contracts that contain lease and non-lease components as a single component, consistent with its historical practice. The Company does not have any finance leases.

Revenue Recognition and Cost of Goods Sold

Revenue Recognition

The Company recognizes revenue in accordance with ASC Topic 606, "Revenue from Contracts with Customers." Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps:

(i) identify the contract(s) with a customer;

(ii) identify the performance obligations in the contract;

(iii) determine the transaction price;

(iv) allocate the transaction price to the performance obligations in the contract; and

(v) recognize revenue when (or as) the entity satisfies a performance obligation.

As of September 30, 2022 and December 31, 2021, the Company recorded $229,000 and $87,000, respectively, of unbilled receivables, which are included in accounts receivable, net on the condensed balance sheet, as the Company has an unconditional right to payment as of the end of the applicable period.

The Company’s revenue is generated from the sale of its products to hospitals and medical centers in the United States through direct sales representatives. Revenue is recognized when obligations under the terms of a contract with customers are satisfied, which occurs with the transfer of control of the Company’s products to its customers, either upon shipment of the product or delivery of the product to the customer under the Company’s standard terms and conditions. The Company’s products are readily available for usage as soon as the customer possesses it. Upon receipt, the customer controls the economic benefits of the product, has significant risks and rewards, and the legal title. The Company has present right to payment; therefore, the transfer of control is deemed to happen at a point in time. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring the goods.

For sales where the Company’s sales representative hand delivers product directly to the hospital or medical center from the sales representative’s trunk stock inventory, the Company recognizes revenue upon delivery, which represents the point in time when control transfers to the customer. Upon delivery there are legally-enforceable rights and obligations

between the parties which can be identified, commercial substance exists and collectability is probable. For sales which are sent directly from the Company to hospitals and medical centers, the transfer of control occurs at the time of shipment or delivery of the product. There are no further performance obligations by the Company or the sales representative to the customer after delivery under either method of sale. As allowed under the practical expedient, the Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which it recognizes revenue at the amount to which it has the right to invoice for services performed.

The Company is entitled to the total consideration for the products ordered by customers as product pricing is fixed according to the terms of customer contracts and payment terms are short. Payment terms fall within the one-year guidance for the practical expedient which allows the Company to forgo adjustment of the promised amount of consideration for the effects of a significant financing component. The Company excludes taxes assessed by governmental authorities on revenue-producing transactions from the measurement of the transaction price.

Costs associated with product sales include commissions and royalties. The Company applies the practical expedient and recognizes commissions and royalties as expense when incurred because the expense is incurred at a point in time and the amortization period is less than one year. Commissions are recorded as selling expense and royalties are recorded as cost of goods sold in the condensed statements of operations and comprehensive loss.

The Company accepts product returns at its discretion or if the product is defective as manufactured. The Company establishes estimated provisions for returns based on historical experience and considers other factors that it believes could significantly impact its expected returns, which provisions are classified within accrued liabilities on the condensed balance sheet. The Company elected to expense shipping and handling costs as incurred and includes them in the cost of goods sold. In those cases where the Company bills shipping and handling costs to customers, it will classify the amounts billed as a component of revenue.

Cost of Goods Sold

The Company manufactures certain of its portfolio of TCAR products at its California and Minnesota facilities and purchases other products from third-party manufacturers. Cost of goods sold consists primarily of costs related to materials, components and sub-assemblies, manufacturing overhead costs, direct labor, reserves for excess, obsolete and non-sellable inventories as well as distribution-related expenses. A significant portion of the Company’s cost of goods sold currently consists of manufacturing overhead costs. These overhead costs include the cost of quality control, material procurement, inventory control, facilities, equipment and operations supervision and management. Cost of goods sold also includes depreciation expense for production equipment and certain direct costs such as shipping costs and royalties. In May 2021, the Company entered into a lease for an additional facility in Minnesota and began commercial production of the ENROUTE Neuroprotection System in the third quarter of 2022. The Company experienced additional overhead expenses related to the start-up phase of its manufacturing capacity expansion, which were recorded as a period expense during the three and nine months ended September 30, 2022.

Stock-Based Compensation

Stock–Based Compensation

The Company accounts for stock-based compensation in accordance with Financial Accounting Standards Board, or FASB, ASC 718, "Compensation-Stock Compensation." ASC 718 requires the recognition of compensation expense, using a fair-value based method, for costs related to all share-based payments including stock options, restricted stock units and shares issued under its employee stock purchase plan. ASC 718 requires companies to estimate the fair value of all share-based payment option awards on the date of grant using an option pricing model. The fair value of stock options is recognized over the period during which an optionee is required to provide services in exchange for the option award, known as the requisite service period (usually the vesting period), on a straight-line basis. For performance-based stock options, the Company will assess the probability of performance conditions being achieved in each reporting period. The amount of stock-based compensation expense recognized in any one period related to performance-based stock options can vary based on the achievement or anticipated achievement of the performance conditions. The Company accounts for option forfeitures as they occur.

The Company accounts for stock-based compensation for restricted stock units at their fair value, based on the closing market price of the Company's common stock on the date of grant. These costs are recognized on a straight-line basis over the requisite service period, which is usually the vesting period.

The Company accounts for stock-based compensation for its employee stock purchase plan based on the estimated fair value of the options on the date of grant. The Company estimates the grant date fair value using an option pricing model for each purchase period. These costs are recognized on a straight-line basis over the offering period.

Income Taxes

The Company accounts for income taxes under the liability method, whereby deferred tax assets and liabilities are determined based on the difference between the condensed financial statements and tax bases of assets and liabilities using the enacted tax rates in effect for the year in which the differences are expected to affect taxable income. A valuation allowance is established when necessary to reduce deferred tax assets to the amounts expected to be realized. As the Company has historically incurred operating losses, it has established a full valuation allowance against its net deferred tax assets, and there is no provision for income taxes.

The Company also follows the provisions of ASC 740-10, "Accounting for Uncertainty in Income Taxes." ASC 740-10 prescribes a comprehensive model for the recognition, measurement, presentation and disclosure in financial statements of any uncertain tax positions that have been taken or expected to be taken on a tax return. No liability related to uncertain tax positions is recorded on the condensed financial statements. It is the Company's policy to include penalties and interest expense related to income taxes as part of the provision for income taxes.

Comprehensive Loss

Comprehensive loss consists of net loss and changes in unrealized gains and losses on investments classified as available-for-sale. For the three and nine months ended September 30, 2022 and 2021, the Company’s unrealized gains and losses on available-for-sale investments represent the only component of other comprehensive loss that are excluded from the reported net loss and that are presented in the condensed statements of operations and comprehensive loss. Accumulated other comprehensive loss is presented in the accompanying condensed balance sheets as a component of stockholders' equity.

Net Loss per Share

Basic net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding during the period, without consideration for potential dilutive common shares. Diluted net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, common stock options, and restricted stock units are considered to be potentially dilutive securities. Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share as the inclusion of all potential dilutive common shares would have been anti-dilutive.

Net loss per share was determined as follows (in thousands, except share and per share data):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Net loss	$	(10,319)	$	(13,885)	$	(42,396)	$	(35,118)
Weighted average common stock outstanding used to compute net loss per share, basic and diluted		35,303,958		34,736,015		35,157,840		34,536,980
Net loss, basic and diluted	$	(0.29)	$	(0.40)	$	(1.21)	$	(1.02)

The following potentially dilutive securities outstanding have been excluded from the computation of diluted weighted average shares outstanding because such securities have an antidilutive impact due to the Company's net loss:



	September 30,
	2022	2021
Common stock options	4,023,518	3,930,140
Restricted stock units	1,147,820	350,249
	5,171,338	4,280,389

Segment and Geographical Information

The Company operates and manages its business as one reportable and operating segment. The Company’s chief executive officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance. Primarily all of the Company’s long-lived assets are based in the United States. Long-lived assets are comprised of property and equipment. All of the Company’s revenue was in the United States for the three and nine months ended September 30, 2022 and 2021, based on the shipping location of the external customer.

Commitments and Contingencies - Lease (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	May 31, 2021
Lessee, Lease, Description [Line Items]
Operating Lease, Right-of-Use Asset	$ 5,356		$ 5,356		$ 5,219	$ 3,307
Operating Lease, Liability	8,192		8,192		$ 7,041	$ 3,307
Operating lease costs	$ 408	$ 369	$ 1,151	$ 875
Weighted average discount rate	6.56%		6.56%
Weighted average remaining lease term	5 years 8 months 23 days		5 years 8 months 23 days
Operating Lease, Cash Paid	$ 310	$ (1,043)	$ (248)	$ (650)
Headquarters [Member]
Lessee, Lease, Description [Line Items]
Renewal term	5 years		5 years
Additional Office, Laboratory And Manufacturing Space [Member]
Lessee, Lease, Description [Line Items]
Renewal term	5 years		5 years
Minnesota Facility [Member]
Lessee, Lease, Description [Line Items]
Operating Lease, Liability	$ 903		$ 903

Commitments and Contingencies

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies [Abstract]

Commitments and Contingencies

7. Commitments and Contingencies

Operating Lease and Rights-of-Use

The Company’s operating lease obligation at its corporate headquarters in California consists of leased office, laboratory, and manufacturing space under a non-cancellable operating lease that expires in October 2024. The lease agreement includes a renewal provision allowing the Company to extend this lease for an additional period of five years.

In May 2021, the Company entered into a new, non-cancelable operating lease for additional office, laboratory and manufacturing space in Minnesota that expires in November 2029. The lease agreement includes a renewal provision allowing the Company to extend this lease for two additional five year terms. In connection with the lease, the Company recognized a right-of-use asset and lease liability of $3,307,000. In June 2022, the Company leased the remaining right-of-first refusal space at its Minnesota facility and recognized a right-of-use asset and lease liability of $903,000 for the additional space.

Operating lease costs were $408,000 and $369,000 for the three months ended September 30, 2022 and 2021, respectively, and $1,151,000 and $875,000 for the nine months ended September 30, 2022 and 2021, respectively. Cash paid (net of tenant improvement allowances received) for amounts included in the measurement of operating lease liabilities was $310,000 and $(1,043,000) for the three months ended September 30, 2022 and 2021, respectively, and $(248,000) and $(650,000) for the nine months ended September 30, 2022 and 2021, respectively. As of September 30, 2022, the weighted average discount rate was approximately 6.56% and the weighted average remaining lease term was 5.73 years. Balance sheet information as of September 30, 2022 and December 31, 2021 consists of the following (in thousands):


	September 30,		December 31,
Operating Lease:	2022		2021
Operating lease right-of-use assets in other non-current assets	$	5,356	$	5,219
Operating lease liabilities in accrued liabilities	$	1,814	$	1,294
Operating lease liabilities in other liabilities		6,378		5,747
Total operating lease liabilities	$	8,192	$	7,041

The following table summarizes the Company’s operating lease maturities as of September 30, 2022 (in thousands):



Period Ending December 31:	Amount
2022	$	483
2023		1,967
2024		1,764
2025		1,079
2026		1,173
2027 and thereafter		3,593
Total lease payments	$	10,059
Less: interest		(1,867)
Total lease liabilities	$	8,192

Purchase Obligations

Purchase obligations consist of agreements to purchase goods and services entered into in the ordinary course of business. As of September 30, 2022, the Company had non-cancellable purchase obligations to suppliers of $16,645,000.

Indemnification

In the normal course of business, the Company enters into contracts and agreements with suppliers and other parties that contain a variety of representations and warranties and may provide for indemnification of the counterparty. The Company’s exposure under these agreements is unknown because it involves claims that may be made against it in the

future but have not yet been made. To date, the Company has not been subject to any claims or been required to defend any action related to its indemnification obligations.

The Company indemnifies each of its directors and officers for certain events or occurrences, subject to certain limits, while the director or officer is or was serving at the Company’s request in such capacity, as permitted under Delaware law and in accordance with its certificate of incorporation and bylaws. The term of the indemnification period lasts as long as a director or officer may be subject to any proceeding arising out of acts or omissions of such director or officer in such capacity. The maximum amount of potential future indemnification is unlimited; however, the Company currently holds director and officer liability insurance. The Company believes that the fair value of these indemnification obligations is minimal. Accordingly, the Company has not recognized any liabilities relating to these obligations as of September 30, 2022.

Contingencies

The Company is not involved in any pending legal proceedings that it believes could have a material adverse effect on its financial condition, results of operations or cash flows. From time to time, the Company may pursue litigation to assert its legal rights and such litigation may be costly and divert the efforts and attention of its management and technical personnel which could adversely affect its business. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. There were no contingent liabilities requiring accrual at September 30, 2022 and December 31, 2021.

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2022

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Preparation

Use of Estimates

Fair Value of Financial Instruments

Cash, Cash Equivalents and Restricted Cash

Investments

Concentration of Credit Risk, and Other Risks and Uncertainties

Voluntary Recall

Deferred Public Offering Costs

and December 31, 2021, there were $170,000 and $0, respectively, of offering costs primarily consisting of legal fees that were capitalized in other non-current assets on the condensed balance sheet.

Leases

Revenue Recognition

(i) identify the contract(s) with a customer;

(ii) identify the performance obligations in the contract;

(iii) determine the transaction price;

(iv) allocate the transaction price to the performance obligations in the contract; and

(v) recognize revenue when (or as) the entity satisfies a performance obligation.

Cost of Goods Sold

Stock–Based Compensation

Income Taxes

Comprehensive Loss

Net Loss per Share

Net loss per share was determined as follows (in thousands, except share and per share data):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Net loss	$	(10,319)	$	(13,885)	$	(42,396)	$	(35,118)
Weighted average common stock outstanding used to compute net loss per share, basic and diluted		35,303,958		34,736,015		35,157,840		34,536,980
Net loss, basic and diluted	$	(0.29)	$	(0.40)	$	(1.21)	$	(1.02)



	September 30,
	2022	2021
Common stock options	4,023,518	3,930,140
Restricted stock units	1,147,820	350,249
	5,171,338	4,280,389

Segment and Geographical Information

Condensed Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
Condensed Statements of Cash Flows - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities
Net loss	$ (42,396)	$ (35,118)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense	1,465	723
Stock-based compensation expense	17,478	10,628
Amortization of premiums (accretion of discounts) on investments, net	(338)	451
Amortization of debt discount and debt issuance costs	160	119
Amortization of right-of-use asset	766	627
Non-cash interest expense	823	193
Loss on extinguishment of debt	245
Loss on disposal of property and equipment	175
Change in provision for doubtful accounts receivable	(3)
Provision for excess and obsolete inventories	5	56
Changes in assets and liabilities:
Accounts receivable	(5,184)	(1,906)
Inventories	(2,446)	(3,744)
Prepaid expenses and other current assets	(1,132)	(2,014)
Other assets	(52)	(107)
Accounts payable	1,665	1,304
Accrued liabilities	(744)	629
Other liabilities	(344)	656
Net cash used in operating activities	(29,857)	(27,503)
Cash flows from investing activities
Purchases of property and equipment	(3,438)	(2,006)
Purchases of investments	(53,679)
Proceeds from maturity of investments		60,400
Net cash provided by (used in) investing activities	(57,117)	58,394
Cash flows from financing activities
Proceeds from issuance of common stock	3,067	5,207
Proceeds from long-term debt	75,000
Principal repayment of debt	(49,000)
Payments of debt issuance costs	(1,086)
Payments of deferred offering costs	(9)
Net cash provided by financing activities	27,972	5,207
Net change in cash, cash equivalents and restricted cash	(59,002)	36,098
Cash, cash equivalents and restricted cash, beginning of period	110,463	69,776
Cash, cash equivalents and restricted cash, end of period	51,461	105,874
Supplemental disclosure of cash flow information
Cash paid for interest	2,383	1,571
Noncash investing and financing activities:
Accounts payable and accrued liabilities for purchases of property and equipment	176	1,298
Right-of-use asset obtained in exchange for lease obligation	903	$ 3,398
Unpaid debt issuance costs	3
Unpaid deferred offering costs	$ 162

Balance Sheet Components

9 Months Ended

Sep. 30, 2022

Balance Sheet Components [Abstract]

Balance Sheet Components

5. Balance Sheet Components

Investments

The Company had no investments as of December 31, 2021. The fair value of the Company’s available-for-sale investments as of September 30, 2022 are as follows (in thousands):


	September 30, 2022
			Gross Unrealized				Estimated
	Amortized Cost		Gains		Losses		Fair Value
Money market funds	$	51,457	$	—	$	—	$	51,457
Commercial paper		14,643		—		—		14,643
U.S. government securities		35,862		—		(173)		35,689
Corporate bonds/notes		1,515		—		(13)		1,502
Asset-backed securities		1,997		—		(5)		1,992
	$	105,474	$	—	$	(191)	$	105,283
Classified as:
Cash equivalents							$	51,457
Short-term investments								53,826
							$	105,283

All of the Company’s cash equivalents mature within one year as of September 30, 2022 and December 31, 2021. All of the Company’s short-term investments mature within one year as of September 30, 2022. Available-for-sale investments held as of September 30, 2022 had a weighted average days to maturity of 180 days.

The following table presents the Company’s available-for-sale investments that were in an unrealized loss position as of September 30, 2022 (in thousands):

	September 30, 2022
	Less than 12 months
Assets:	Fair Value		Unrealized Loss
U.S. government securities	$	35,569	$	(173)
Corporate bonds/notes		1,492		(13)
Asset-backed securities		1,989		(5)
	$	39,050	$	(191)

Inventories

Components of inventories were as follows (in thousands):


	September 30,		December 31,
	2022		2021
Raw materials	$	4,178	$	2,447
Finished products		16,126		15,437
		20,304		17,884
Less: Reserve for excess and obsolete		(11)		(33)
	$	20,293	$	17,851

As of September 30, 2022 and December 31, 2021, there were no work-in-process inventories.

Accrued Liabilities

Accrued liabilities consist of the following (in thousands):



	September 30,		December 31,
	2022		2021
Accrued payroll and related expenses	$	12,865	$	13,898
Provision for sales returns		531		359
Accrued professional services		1,144		2,039
Operating lease liability		1,814		1,294
Accrued interest payable		504		14
Accrued royalty expense		911		687
Deferred revenue		298		157
Accrued travel expenses		785		590
Accrued clinical expenses		38		99
Accrued other expenses		731		665
Total	$	19,621	$	19,802

Subsequent Events

9 Months Ended

Sep. 30, 2022

Subsequent Events [Abstract]

Subsequent Events

11. Subsequent Events

Public Offering of Common Stock

In October 2022, the Company completed an underwritten public offering of 2,674,419 shares of its common stock at a public offering price of $43.00 per share through a registration statement on Form S-3/ASR (File No. 333-238007). The shares include the full exercise of the underwriters’ option to purchase an additional 348,837 shares pursuant to the underwriting agreement. From the offering, the Company received cash proceeds of approximately $108,703,000, net of underwriting discounts and commissions and estimated offering costs which will be paid by the Company.

Fair Value Measurements (Details) - Recurring [Member] - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	$ 105,283	$ 21,062
Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	51,457	21,062
Commercial Papers [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	14,643
Corporate Bonds/Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	1,502
U.S. Government Securitie [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	35,689
Asset-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	1,992
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	51,457	21,062
Level 1 [Member] \| Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	51,457	$ 21,062
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	53,826
Level 2 [Member] \| Commercial Papers [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	14,643
Level 2 [Member] \| Corporate Bonds/Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	1,502
Level 2 [Member] \| U.S. Government Securitie [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	35,689
Level 2 [Member] \| Asset-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	$ 1,992

Condensed Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Income	Total
Beginning balance (in shares) at Dec. 31, 2020	34,249,649
Beginning balance at Dec. 31, 2020	$ 34	$ 346,318	$ (238,891)	$ 39	$ 107,500
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options		848			848
Exercise of stock options (in shares)	163,151
Issuance of common stock upon release of restricted stock units (in shares)	25,490
Stock-based compensation		3,533			3,533
Net loss			(10,694)		(10,694)
Unrealized loss on investments, net				(33)	(33)
Ending balance (in shares) at Mar. 31, 2021	34,438,290
Ending balance at Mar. 31, 2021	$ 34	350,699	(249,585)	6	101,154
Beginning balance (in shares) at Dec. 31, 2020	34,249,649
Beginning balance at Dec. 31, 2020	$ 34	346,318	(238,891)	39	107,500
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss					(35,118)
Ending balance (in shares) at Sep. 30, 2021	34,854,822
Ending balance at Sep. 30, 2021	$ 35	362,152	(274,009)	1	88,179
Beginning balance (in shares) at Mar. 31, 2021	34,438,290
Beginning balance at Mar. 31, 2021	$ 34	350,699	(249,585)	6	101,154
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options	$ 1	1,030			1,031
Exercise of stock options (in shares)	155,443
Issuance of common stock upon release of restricted stock units (in shares)	2,792
Issuance of common stock under employee stock purchase plan		1,086			1,086
Issuance of common stock under employee stock purchase plan (in shares)	26,884
Stock-based compensation		3,409			3,409
Net loss			(10,539)		(10,539)
Unrealized loss on investments, net				(3)	(3)
Ending balance (in shares) at Jun. 30, 2021	34,623,409
Ending balance at Jun. 30, 2021	$ 35	356,224	(260,124)	3	96,138
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options		2,242			2,242
Exercise of stock options (in shares)	230,105
Issuance of common stock upon release of restricted stock units (in shares)	1,308
Stock-based compensation		3,686			3,686
Net loss			(13,885)		(13,885)
Unrealized loss on investments, net				(2)	(2)
Ending balance (in shares) at Sep. 30, 2021	34,854,822
Ending balance at Sep. 30, 2021	$ 35	362,152	(274,009)	1	88,179
Beginning balance (in shares) at Dec. 31, 2021	34,980,896
Beginning balance at Dec. 31, 2021	$ 35	367,907	(288,702)		79,240
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options		168			168
Exercise of stock options (in shares)	35,453
Issuance of common stock upon release of restricted stock units (in shares)	57,253
Stock-based compensation		4,978			4,978
Net loss			(16,679)		(16,679)
Ending balance (in shares) at Mar. 31, 2022	35,073,602
Ending balance at Mar. 31, 2022	$ 35	373,053	(305,381)		67,707
Beginning balance (in shares) at Dec. 31, 2021	34,980,896
Beginning balance at Dec. 31, 2021	$ 35	367,907	(288,702)		$ 79,240
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)					253,318
Net loss					$ (42,396)
Ending balance (in shares) at Sep. 30, 2022	35,381,085
Ending balance at Sep. 30, 2022	$ 35	388,452	(331,098)	(191)	57,198
Beginning balance (in shares) at Mar. 31, 2022	35,073,602
Beginning balance at Mar. 31, 2022	$ 35	373,053	(305,381)		67,707
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options		322			322
Exercise of stock options (in shares)	55,941
Issuance of common stock upon release of restricted stock units (in shares)	13,075
Issuance of common stock under employee stock purchase plan		1,239			1,239
Issuance of common stock under employee stock purchase plan (in shares)	50,551
Stock-based compensation		6,161			6,161
Net loss			(15,398)		(15,398)
Unrealized loss on investments, net				(2)	(2)
Ending balance (in shares) at Jun. 30, 2022	35,193,169
Ending balance at Jun. 30, 2022	$ 35	380,775	(320,779)	(2)	60,029
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options		1,338			1,338
Exercise of stock options (in shares)	161,924
Issuance of common stock upon release of restricted stock units (in shares)	25,992
Stock-based compensation		6,339			6,339
Net loss			(10,319)		(10,319)
Unrealized loss on investments, net				(189)	(189)
Ending balance (in shares) at Sep. 30, 2022	35,381,085
Ending balance at Sep. 30, 2022	$ 35	$ 388,452	$ (331,098)	$ (191)	$ 57,198

Balance Sheet Components (Available-for-Sale Investments in Unrealized Loss Position) (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Debt Securities, Available-for-sale [Line Items]
Fair Value, Less than 12 months	$ 39,050
Unrealized Loss, Less than 12 months	(191)
Corporate Bonds/Notes [Member]
Debt Securities, Available-for-sale [Line Items]
Fair Value, Less than 12 months	1,492
Unrealized Loss, Less than 12 months	(13)
U.S. Government Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Fair Value, Less than 12 months	35,569
Unrealized Loss, Less than 12 months	(173)
Asset-Backed Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Fair Value, Less than 12 months	1,989
Unrealized Loss, Less than 12 months	$ (5)