You should read the following discussion and analysis of our financial condition and results of operations together with the section entitled "Selected Financial Data" and our audited financial statements and related notes included elsewhere in this report. This discussion and other parts of this report contain forward-looking statements that involve risks and uncertainties, such as our plans, objectives, expectations, intentions and beliefs. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section entitled "Risk Factors" included elsewhere in this report.
Overview
We are a commercial-stage medical technology Company focused on developing, manufacturing, and commercializing minimally invasive solutions to meet the distinct uterine healthcare needs of women. We have established a broad product line of commercially available, minimally invasive alternatives to hysterectomy, which are designed to address the most common causes of abnormal uterine bleeding (AUB) in most uterine anatomies. Our solutions can be used in a variety of medical treatment settings and aim to address the drawbacks associated with alternative treatment methods and to preserve the uterus by avoiding unnecessary hysterectomies.
We offer a broad suite of products for the treatment of structural and non-structural causes of AUB in most uterine anatomies. Our devices are utilized by obstetrician-gynecologists (OB/GYNs) across a variety of medical treatment settings, including hospitals, ambulatory surgical centers (ASCs), and physician offices.
Prior to
We utilize contract manufacturers for a significant portion of our products. This includes all of our controllers and significant subcomponents of our disposable devices. BSC manufactured the Genesys HTA and its ProCerva procedure set at its facility. In connection with the BSC product acquisition, we entered into a supply agreement with BSC relating to the Genesys HTA system and certain of its components. Pursuant to the supply agreement, BSC supplied us with systems and procedure sets until we had successfully transferred manufacturing to a third-party manufacturer, which occurred in 2022. The Symphion and Resectr products were previously manufactured for BSC by various third-party manufacturers. We continued to rely on the same manufacturers to supply us with these products and we have assumed those relationships directly.
We market and sell our products through a direct sales force in
In 2022, we generated revenue of
As of
Impact of the COVID-19 pandemic
The global COVID-19 pandemic presents significant volatility, uncertainty and risks to us and has had, and continues to have, far reaching impacts on our business, operations, and financial results and condition, directly and indirectly. The access to many hospitals and other customer sites may be or may periodically be, depending on the current COVID-19 infection rates in the applicable location, restricted to essential personnel, which negatively impacts our ability to promote the use of our products with physicians. Additionally, many hospitals and other surgery centers have in the past suspended, and may suspend or continue to suspend in the future, many elective procedures, resulting in a reduced volume of procedures using our products. Our customer behavior is impacted by the prevalence of COVID-19 and changes in the infection rates in the locations where our customers are located.
Quarantines, shelter-in-place and similar government orders have also impacted
and may continue to impact, our third-party manufacturers and suppliers, and
could in turn adversely impact the availability or cost of materials, which
could disrupt our supply chain. We have taken a variety of steps to address the
impact of the COVID-19 pandemic, while attempting to minimize business
disruption. Essential staff in manufacturing and limited support functions
continued to work from our
76
--------------------------------------------------------------------------------
following appropriate hygiene and social distancing protocols. To reduce the
risk to our other employees and their families from potential exposure to
COVID-19, until recently all other staff in our
Certain of these other employees had begun to return to our headquarters full or part-time during the third quarter of 2021, although we are reviewing the impact of COVID-19 on employee safety.
We are continuing to monitor the impact of the COVID-19 pandemic on our employees and customers and on the markets in which we operate and will take further actions that we consider prudent to address the COVID-19 pandemic, while ensuring that we can support our customers and continue to develop our products.
The Company continued to experience a lower than expected revenue in the twelve
months ended
The ultimate extent of the impact of the COVID-19 pandemic on us is highly uncertain and subject to change. This impact may result in a material, adverse impact on liquidity, capital resources, supply chain, operations, revenue and may affect third parties on which the Company relies, and could worsen over time. The extent of the continuing resurgence of COVID-19, the efficacy and extent of distribution of vaccines, and the impact of mutations of COVID-19 is unpredictable. Most of these developments and factors are outside of our control and could exist for an extended period of time even after the pandemic might end.
Key Financial Data
We measure out business using both financial and operating data and use the following metrics and measures to assess the performance of our overall business, including identifying trends affecting our business, formulating business plans, making strategic decisions and assessing operational efficiencies.
Components of our results of operations
Revenue
We currently derive substantially all our revenue from the sale of our products
to hospitals, ASCs, and physician offices in
Cost of goods sold
Cost of goods sold consists primarily of costs related to materials, components and subassemblies, payroll, and personnel-related expenses for our manufacturing and quality assurance employees, including expenses related to stock-based compensation, manufacturing overhead, charges for excess, obsolete and non-sellable inventories, and royalties. Overhead costs include the cost of quality assurance, testing, material procurement, inventory control, operations supervision, and management personnel, an allocation of facilities and information technology expenses, including rent and utilities, and equipment depreciation. We record adjustments to our inventory valuation for estimated excess, obsolete, and non-sellable inventories based on assumptions about future demand, past usage, changes to manufacturing processes, and overall market conditions. We expect cost of goods sold to increase in absolute dollars as more of our products are sold.
Gross margin
We calculate gross margin as gross profit divided by revenue. Our gross margin has been, and will continue to be, affected by a variety of factors, including production volumes, the cost of direct materials, product mix, manufacturing costs, product yields, headcount, and cost-reduction strategies. We expect our gross margin percentage to increase over the long term to the extent we are successful in increasing our sales volume and are therefore able to leverage our fixed costs. However, we expect our gross margin to fluctuate from period to period based upon the factors described above and seasonality.
Operating expenses
Our operating expenses consist of sales and marketing costs, general and administrative costs, and research and development costs. We expect to continue to invest in these activities.
77
--------------------------------------------------------------------------------
Sales and marketing
We have made significant investments in building our commercial field organization and intend to make significant investments in sales and marketing activities in the future. Sales and marketing expense consist primarily of payroll and personnel-related costs for our sales and marketing personnel, including sales variable compensation, stock-based compensation expense, travel expenses, consulting, direct marketing, customer education, trade shows, and promotional expenses. Sales and marketing expense also includes expenses related to the amortization of the value of customer relationships acquired from BSC.
We anticipate that our sales and marketing expenses will increase as we strategically invest to expand our business. We expect to hire additional sales personnel and related account management and sales support personnel to capture an increasing amount of our market opportunity. We also expect to continue our brand awareness and targeted marketing campaigns. As we scale our sales and marketing activities, we expect these expenses to increase.
General and administrative expenses
General and administrative expenses consist primarily of payroll and personnel-related expenses, including salaries, employee benefit costs and stock-based compensation expense, professional fees for legal, patent, consulting, accounting and tax services, allocated overhead, including rent, equipment, depreciation, information technology costs and utilities, and other general operating expenses not otherwise classified as research and development expenses. We also recognize the change in value of the contingent consideration liability due to BSC for the potential future milestone payments in general and administrative expenses.
We anticipate that our general and administrative expenses will increase as a
result of being a public company, as a result of increased personnel costs,
including salaries, benefits and stock-based compensation expense, expanded
infrastructure and higher consulting, legal, and accounting services associated
with maintaining compliance with stock exchange listing, and requirements of the
Research and development expenses
Research and development expenses have included clinical studies to demonstrate
the safety and efficacy of our products, as well as obtain and retain FDA
approval. Current research and development expenses consist primarily of costs
incurred for the development of our products. These costs consist of engineering
and research programs associated with our products under development and
improvements to our existing products. These costs include prototype materials,
laboratory supplies, regulatory expenses, and an allocation of facility overhead
costs. Research and development expenses also include payroll and
personnel-related costs and stock-based compensation expense for our research
and development employees and consultants and acquisition of technology with no
alternative future uses. We also recognize the amortization cost of intangible
assets acquired from BSC for developed technology and patents and trademarks in
research and development expenses beginning in
Interest expense and income
Interest expense consists primarily of interest expense related to our term loan facilities and convertible notes, including amortization of debt discount and issuance costs. Interest income is predominately derived from investing surplus cash in money market funds.
Other income and expenses
Other income and expenses had primarily consisted of changes in the fair value of derivative liabilities and redeemable convertible preferred stock warrant liability and gain/loss in loan extinguishment of debt. Upon exercise or expiration of the warrants, the final fair value of the warrant liability was reclassified to stockholders' equity and we will no longer record any related periodic fair value adjustment. Upon the resolution in 2021 of the derivative liabilities and the conversion of the convertible notes, no further changes in fair value were recognized during 2022 in the statements of operations.
78
--------------------------------------------------------------------------------
Results of operations
Comparison of the years ended
The following table summarizes our results of operations for the periods indicated (in thousands, except percentage figures):
For the Year Ended December 31, 2022 2021 Change % Change Revenue$ 50,294 $ 52,103 $ (1,809) (3.5%) Cost of goods sold 23,052 21,580 1,472 6.8% Gross profit 27,242 30,523 (3,281) (10.7%) Operating expenses Sales and marketing 38,328 32,193 6,135 19.1% General and administrative 14,370 22,183 (7,813) (35.2)% Research and development 5,443 5,292 151 2.9% Total operating expenses 58,141 59,668 (1,527) (2.6%) Loss from operations (30,899) (29,145) (1,754) (6.0%) Interest income 89 10 79 (790.0%) Interest expense (3,222) (11,728) 8,506 72.5% Change in fair value of derivative liabilities - 38,007 (38,007) (100.0%) Loss on extinguishment of convertible notes - (21,295) 21,295 (100.0%) Gain on extinguishment of PPP loan - 3,036 (3,036) (100.0)% Other expense, net (69) (340) 271 79.7% Net loss before income taxes (34,101) (21,455) (12,646) (58.9%) Income tax expense (11) (9) (2) (22.2%) Net loss$ (34,112) $ (21,464) $ (12,648) (58.9%) Revenue
Revenue decreased by
For 2022 and 2021, sales of Minerva ES contributed 45.9% and 46.8% of revenue, respectively; sales of the Genesys HTA contributed 29.3% and 31.6% of revenue, respectively; sales of Symphion contributed 24.1% and 20.6% of revenue, respectively; and sales of other products and warranties contributed 0.7% and 1.0% of revenue, respectively.
Revenue was significantly impacted in 2021 by government and hospital restrictions on elective surgeries as a result of the COVID-19 pandemic. This trend continued in 2022 due to ongoing hospital constraints on elective surgeries and negatively impacted revenue during 2022. Additionally, recent inflation and negative economic outlook together with a nationwide staffing shortage in the hospital work environment had a negative impact on the numbers of procedures scheduled and contributed to a negative result on the Company's revenue in 2022 compared to the prior year period.
Cost of goods sold
Cost of goods sold increased by
Gross margin
Our gross margin decreased from 58.6% in 2021 to 54.2% in 2022. The decrease in gross margin was primarily due to a shift in products sold towards Symphion products, which contributes to a lower gross margin compared to Minerva ES and Genesys HTA products. Further, fixed overhead costs spread over a smaller base of product revenue resulting in a negative impact on the gross margin.
Sales and marketing expenses
Sales and marketing expenses increased by
79
--------------------------------------------------------------------------------
General and administrative expenses
General and administrative expenses decreased by
Research and development expenses
Research and development expenses increased by
Interest expense and income
Interest expense decreased by
Other income and expenses
For the Year Ended December 31, (in thousands, except percentage figures) 2022 2021 Change % Change Change in fair value of derivative liabilities $ -$ 38,007 $ (38,007) (100.0%) Loss on extinguishment of convertible notes - (21,295) 21,295 100.0% Gain on extinguishment of PPP loan - 3,036 (3,036) (100.0%) Change in fair value of redeemable convertible preferred stock warrant liability - (535) 535 100.0% Other income (expense), net (69) 195 (264) (135.4)% Total$ (69) $ 19,408 $ (19,477) (100.4)%
Changes in fair value of derivative liabilities in 2021 resulted from the
conversion of the convertible notes in the fourth quarter of 2021. During 2021,
the fair value of the single derivative liability was determined to be zero
primarily due to management's view on the key assumptions that changed the
probabilities of a qualified financing, change of control and non-qualified
financing which resulted in the derecognition of fair value of derivative
liabilities of
Loss on extinguishment of convertible notes relates to the amendment of the 2018
Note Agreements and the 2019 Note Agreements and was accounted for as a debt
extinguishment, which resulted in a
Gain on extinguishment of PPP loan of
Change in fair value of redeemable convertible preferred stock warrant liability
of
Non-GAAP financial measures
Adjusted EBITDA and Adjusted EBITDA Margin
EBITDA and Adjusted EBITDA are key performance measures that our management uses to assess our financial performance and are also used for internal planning and forecasting purposes. We believe that these non-GAAP financial measures are useful to investors and other interested parties in analyzing our financial performance because they provide a comparable overview of our operations across historical periods. In addition, we believe that providing EBITDA and Adjusted EBITDA, together with a reconciliation of net loss to each such measure, helps investors make comparisons between the Company and other companies that may have different capital structures, different tax rates, and/or different forms of employee compensation.
EBITDA and Adjusted EBITDA are used by our management team as an additional measure of our performance for purposes of business decision-making, including managing expenditures, and evaluating potential acquisitions. Period-to-period comparisons of EBITDA and Adjusted EBITDA help our management identify additional trends in our financial results that may not be shown solely by period-to-period comparisons of net income or income from continuing operations. EBITDA and Adjusted EBITDA have inherent limitations because of the excluded items, and may not be directly comparable to similarly titled metrics used by other companies.
80
--------------------------------------------------------------------------------
We calculate EBITDA as net income (loss) adjusted to exclude depreciation and
amortization, interest (income) expense, net and income tax expense. We
calculate Adjusted EBITDA by further excluding stock-based compensation
expenses, loss on extinguishment of long-term debt and convertible notes, gain
on extinguishment of PPP loan, change in fair value of redeemable convertible
preferred stock warrant liability, change in fair value of contingent
consideration liability and change in fair value of derivative liabilities.
EBITDA margin represents EBITDA as a percentage of Revenues. Adjusted EBITDA
margin represents Adjusted EBITDA as a percentage of Revenues. EBITDA and
Adjusted EBITDA should be viewed as measures of operating performance that are
supplements to, and not substitutes for, other measures of profitability under
The following table provides a reconciliation of these non-GAAP metrics to net loss, which is the nearest GAAP number:
Years Ended December 31, (in thousands, except percentage figures) 2022 2021 Net loss$ (34,112) $ (21,464) Depreciation and amortization 10,806 10,620 Interest (income) expense, net 3,133 11,718 Income tax expense 11 9 EBITDA (20,162) 883 EBITDA margin (40.1%) 1.7%
Adjustments:
Loss on extinguishment of convertible notes - 21,295 Gain on extinguishment of PPP loan - (3,036) Stock-based compensation expense 6,978 6,817 Change in fair value of redeemable convertible preferred stock warrant liability - 328 Change in fair value of contingent consideration liability (9,094) 427 Change in fair value of derivative liabilities - (38,007) Adjusted EBITDA$ (22,278) $ (11,293) Adjusted EBITDA margin (44.3%) (21.7%) 81
--------------------------------------------------------------------------------
Liquidity and capital resources
Prior to our IPO in
On
We prepared an internal forecast that includes alternatives to refinance our
outstanding term loan and to potentially raise additional capital as needed over
the next twelve months. As discussed above, on
As of
Management is considering raising additional capital through debt, equity or a combination financing in the future. However, such additional financings may not be available to us on acceptable terms, or at all. If we are unable obtain adequate financing on acceptable terms, we may terminate or delay the development of one or more of our products, delay sales and marketing efforts or other activities necessary to commercialize our products or modify our operations to operate within available resources. Failure to manage discretionary spending or raise additional financing as needed, may adversely impact our ability to achieve our intended business objectives. While we believe our plans will alleviate the conditions that raise substantial doubt, these plans are not entirely within our control and cannot be assessed as being probable of occurring.
CIBC
On
The CIBC Loan provides for 24 months of interest-only payments followed by 36
equal monthly payments of principal, plus accrued and unpaid interest, with the
final obligations due and payable in full on
Future funding requirements
We expect to incur continued expenditures in the future in support of our
commercialization efforts in
As of
82
--------------------------------------------------------------------------------
We have based our projections of operating capital requirements on assumptions that may prove to be incorrect and we may use all our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with product sales, we are unable to estimate the exact amount of our operating capital requirements. Our future funding requirements will depend on many factors, including, but not limited to:
•
the timing, receipt and amount of sales from our current and future products;
•
the cost and timing of establishing and growing sales, marketing and distribution capabilities;
•
the cost of preparing, filing, prosecuting, maintaining, defending and enforcing any patent claims and other intellectual property rights;
•
the terms and timing of any other collaborative, licensing and other arrangements that we may establish;
•
the degree of success we experience in commercializing future products;
•
the cost, timing and results of our clinical trials and regulatory reviews;
•
the emergence of competing or complementary technologies.
•
restructuring, refinancing, or repayment of debt
Summary Statements of Cash Flows
The following table sets forth the primary sources and uses of cash and cash equivalents for the periods presented below (in thousands):
For the Year Ended December 31, 2022 2021 Net cash (used in) provided by: Operating activities$ (35,567) $ (22,379) Investing activities (73) (584) Financing activities (4,964) 46,212
Net (decrease) increase in cash and cash equivalents
Cash flows used in operating activities
Net cash used in operating activities was
Net cash used in operating activities was
Cash flows used in investing activities
Net cash used in investing activities was
Net cash used in investing activities was
83
--------------------------------------------------------------------------------
Cash flows provided by financing activities
Net cash used in financing activities was
Net cash provided by financing activities was
Contractual Obligations and Commitments
Our contractual obligations and commitments relate primarily to our CIBC Loan
and operating leases. In 2019, we entered into a lease agreement for our
corporate headquarters, research and development facilities, and manufacturing
and distribution centers, located in
Critical accounting policies, significant judgments and use of estimates
Our financial statements have been prepared in accordance with GAAP. The preparation of our financial statements requires us to make assumptions, estimates, and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses incurred during the reporting periods. Our estimates are based on our knowledge of current events and actions we may undertake in the future and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. We evaluate our assumptions, estimates and judgments on an ongoing basis. Our actual results may materially differ from these estimates under different assumptions, judgments or conditions. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management's judgments, and estimates. For more detail on our significant accounting policies, refer to Note 2 to our audited financial statements.
Revenue recognition
We generate revenue primarily from the sale of disposable devices and controllers that treat the root causes of abnormal uterine bleeding (AUB). We invoice hospitals, ambulatory surgical centers, and physician offices for the disposable products and pay commissions to the sales representatives.
We also provide controllers to customers under evaluation and long-term placement agreements. Under these agreements, we deliver the controller to the customer's facility without a fee and the customer agrees to purchase disposable products at a stated price over the term of the agreement. We retain title to the controllers. We, in general, do not enforce a minimum purchase requirement under these agreements. Terms range from several months to multiple years and may be extended or terminated upon mutual agreement. These types of agreements include an embedded lease, which is generally an operating lease, for the right to use a controller that is cancellable by either party with 30 days' notice. We recognize a portion of the revenue allocated to the embedded lease concurrent with the sale of disposable devices. We also offer extended warranty agreements to customers for controller defects, malfunctions, or system failures.
Revenue is recognized when the customer obtains controls of promised goods or services, in an amount that reflects 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 Financial Accounting Standard Board (FASB) Accounting Standards Codification (ASC) 606, Revenue From Contracts With Customers (ASC 606), we perform the following five steps as prescribed by ASC 606:
(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 performance obligations.
A contract with a customer exists when (i) we enter into a legally enforceable contract with a customer that defines each party's rights regarding the products to be transferred and identifies the payment terms related to these products, (ii) the contract has commercial substance, and (iii) we determine that collection of substantially all consideration for products that are transferred is probable based on the customer's intent and ability to pay the promised consideration.
84
--------------------------------------------------------------------------------
We identify performance obligations in contracts with customers, which may include our products and implied promise to provide free controllers. The transaction price is determined based on the amount expected to be entitled to in exchange for transferring the promised product to the customer.
We are entitled to the total consideration for the products ordered by customers, net of other transaction price adjustments. Our payment terms to customers are generally net 30 days. Payment terms fall within the one-year guidance for the practical expedient which allows us to forgo adjustment of the promised amount of consideration for the effects of a significant financing component. We exclude taxes assessed by governmental authorities on revenue-producing transactions from the measurement of the transaction price.
Assuming all other revenue recognition criteria are met, revenue is recognized when control of our products transfers to the customer. For sales in which our sales representative hand-delivers product directly to the hospital or ambulatory surgical center, control transfers to the customer upon this delivery. For sales in which products are shipped, control is transferred either upon shipment of the products to the customer, depending on the shipping terms and conditions. We recognize revenue relating to free controllers concurrent with the sale of disposable devices, as the lease is cancellable by either party with 30 days' notice. The amounts attributed to the leased controllers are insignificant. As permitted under the practical expedient, we do not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less.
We accept product returns at our discretion or if the product is defective as manufactured. Historically, the actual product returns have been insignificant to our financial statements. We elected to treat shipping and handling costs as a fulfillment cost and include them in the cost of goods sold as incurred. In those cases in which we bill shipping and handling costs to customers, we classify the amounts billed within revenue.
Derivative instruments
Embedded derivatives that are required to be bifurcated from their host contract are evaluated and valued separately from the debt instrument. Under the Ares Agreement, upon the occurrence of specified prepayment trigger events, including a default or a change in control, we may have been required to make mandatory prepayments of the borrowings. The prepayment premium was considered an embedded derivative, as the holder of the loan may exercise the option to require prepayment by us. The mandatory prepayment derivative liability was recorded at fair value upon entering into the Ares Agreement and was subject to remeasurement to fair value at each balance sheet date, with any changes in fair value recognized in the prior year statements of operations. See Note 7, "Debt" to our financial statements for further information.
The convertible notes contained embedded features, including a Qualified Financing put, Non-Qualified Financing put, and change of control put features that were bifurcated and accounted as derivative liabilities and recorded as a debt discount in 2018, 2019, and 2020 at each issue date. Debt discount was reported as a direct deduction to the carrying amount of the convertible notes and amortized using the effective interest rate over the life of convertible notes as interest expense. The embedded derivative features was recorded at fair value upon entering into the convertible notes and were subject to remeasurement to fair value at each balance sheet date, with any changes in fair values recognized in the statements of operations. See Note 7, "Debt" to our financial statements for further information.
Redeemable convertible preferred stock
We record all shares of redeemable convertible preferred stock at their respective fair values on the dates of issuance, net of issuance costs. The redeemable convertible preferred stock is recorded outside of permanent equity because while it is not mandatorily redeemable, in certain events considered not solely within our control, such as a merger, acquisition, or sale of all or substantially all of our assets (each, a deemed liquidation event), the redeemable convertible preferred stock will become redeemable at the option of the holders of at least a majority of the then outstanding preferred shares.
Redeemable convertible preferred stock warrants
Freestanding preferred stock warrants are accounted for in accordance with Financial Accounting Standard Board (FASB) Accounting Standards Codification (ASC) 480, Distinguishing Liabilities from Equity (ASC 480) and classified as liabilities on the balance sheet because the underlying preferred stock shares are redeemable upon occurrence of a deemed liquidation event. The warrants are subject to re-measurement at each balance sheet date with the change in fair value, if any, recognized in other income (expense), net in the statements of operations. We will continue to adjust the redeemable convertible preferred stock warrant liability for changes in fair value until the earlier of (i) exercise of the warrants, (ii) conversion into warrants to purchase common stock, or (iii) expiration of the warrants.
Recent accounting pronouncements
See Note 2 to our Financial Statements "Summary of Significant Accounting Policies" for information.
Emerging growth company status
In
85
--------------------------------------------------------------------------------
accounting standards. Thus, an EGC can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to use the extended transition period for new or revised accounting standards during the period in which we remain an emerging growth company; however, we may adopt certain new or revised accounting standards early.
We will remain an emerging growth company until the earliest to occur of: (i)
the last day of the fiscal year in which we have more than
JOBS Act accounting election
The JOBS Act permits an "emerging growth company" such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have elected to use this extended transition period under the JOBS Act until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies.
© Edgar Online, source