nari-20230930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________to ___________

Commission File Number: 001-39293

Inari Medical, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware			45-2902923
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

6001 Oak Canyon, Suite 100 Irvine, California			92618
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (877) 923-4747

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
Symbol(s)

Name of each exchange on which registered

Common stock, $0.001 par value per share

NARI

The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 27, 2023, the registrant had 57,590,463 shares of common stock, $0.001 par value per share, outstanding.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)	4
	Condensed Consolidated Statements of Stockholders’ Equity	5
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	30
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities	32
Item 3.	Defaults Upon Senior Securities	32
Item 4.	Mine Safety Disclosures	32
Item 5.	Other Information	32
Item 6.	Exhibits	33
Signatures		34

Table of Contents

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. We intend the forward-looking statements contained in this Quarterly Report to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical facts contained in this Quarterly Report are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “would,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words. Forward-looking statements contained in this Quarterly Report include, without limitation, statements regarding our business model and strategic plans for our products, anticipated closing of the acquisition of LimFlow, S.A., technologies and business, including our implementation thereof, the impact of macroeconomic conditions on our business, financial condition and results of operations, industry and business trends, our expectations regarding stock compensation, business strategy, plans, market growth, regulatory climate, competitive landscape and our objectives for future operations.

The forward-looking statements in this Quarterly Report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations. Forward-looking statements involve known and unknown risks and uncertainties, and are subject to other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, those discussed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022, as such risks and uncertainties may be amended, supplemented or superseded from time to time by our subsequent reports on Forms 10-Q and 10-K we file with the United States Securities and Exchange Commission. We qualify all of our forward-looking statements by these cautionary statements. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make.

The forward-looking statements in this Quarterly Report on Form 10-Q are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits to this Quarterly Report on Form 10-Q with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

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PART I — FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (Unaudited)

INARI MEDICAL, INC.

Condensed Consolidated Balance Sheets

(in thousands, except share data and par value)

(unaudited)


	September 30, 2023		December 31, 2022
Assets
Current assets
Cash and cash equivalents	$	89,182	$	60,222
Short-term investments in debt securities	262,113		266,179
Accounts receivable, net	69,595		58,611
Inventories, net	40,227		32,581
Prepaid expenses and other current assets	7,944		5,312
Total current assets	469,061		422,905
Property and equipment, net	21,243		21,655
Operating lease right-of-use assets	49,065		50,703
Deposits and other assets	9,466		8,889

Total assets	$	548,835	$	504,152
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	10,091	$	7,659
Payroll-related accruals	41,305		38,955
Accrued expenses and other current liabilities	13,040		8,249
Operating lease liabilities, current portion	1,630		1,311
Total current liabilities	66,066		56,174
Operating lease liabilities, noncurrent portion	30,627		30,976

Total liabilities	96,693		87,150
Commitments and contingencies (Note 7)
Stockholders' equity
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of September 30, 2023 and December 31, 2022	—		—
Common stock, $0.001 par value, 300,000,000 shares authorized as of September 30, 2023 and December 31, 2022; 57,506,462 and 54,021,656 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively	58		54
Additional paid in capital	497,063		462,949
Accumulated other comprehensive (loss) income	(1,158)		849
Accumulated deficit	(43,821)		(46,850)
Total stockholders' equity	452,142		417,002
Total liabilities and stockholders' equity	$	548,835	$	504,152

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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INARI MEDICAL, INC.

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(in thousands, except share and per share data)

(unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenue	$	126,366	$	96,204	$	361,538	$	275,700
Cost of goods sold	14,477		11,064		42,062		31,378
Gross profit	111,889		85,140		319,476		244,322
Operating expenses
Research and development	21,492		19,105		64,641		53,809
Selling, general and administrative	88,284		75,833		259,570		212,721
Total operating expenses	109,776		94,938		324,211		266,530
Income (loss) from operations	2,113		(9,798)		(4,735)		(22,208)
Other income (expense)
Interest income	4,202		618		12,899		882
Interest expense	(43)		(74)		(127)		(220)
Other (expense) income	(682)		(59)		(617)		169
Total other income	3,477		485		12,155		831
Income (loss) before income taxes	5,590		(9,313)		7,420		(21,377)
Provision for income taxes	2,428		840		4,391		2,092
Net income (loss)	$	3,162	$	(10,153)	$	3,029	$	(23,469)
Other comprehensive income (loss)
Foreign currency translation adjustments	(68)		(406)		(138)		(814)
Unrealized gain (loss) on available-for-sale debt securities	91		644		(1,869)		271
Total other comprehensive income (loss)	23		238		(2,007)		(543)
Comprehensive income (loss)	$	3,185	$	(9,915)	$	1,022	$	(24,012)
Net income (loss) per share
Basic	$	0.06	$	(0.19)	$	0.05	$	(0.45)
Diluted	$	0.05	$	(0.19)	$	0.05	$	(0.45)
Weighted average common shares used to compute net income (loss) per share
Basic	57,384,884		53,491,625		56,478,317		52,552,662
Diluted	58,588,452		53,491,625		58,495,921		52,552,662

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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INARI MEDICAL, INC.

Condensed Consolidated Statements Stockholders’ Equity

(in thousands, except share data)

(unaudited)


	Common Stock			Additional Paid In Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
Balance, December 31, 2022	54,021,656	$	54	$	462,949	$	849	$	(46,850)	$	417,002
Options exercised for common stock	209,966	—		226		—		—		226
Shares issued under Employee Stock Purchase Plan	86,051	—		4,172		—		—		4,172
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for taxes	2,766,043	3		(1,932)		—		—		(1,929)
Share-based compensation expense	—	—		10,339		—		—		10,339
Other comprehensive loss	—	—		—		(856)		—		(856)
Net loss	—	—		—		—		(2,218)		(2,218)
Balance, March 31, 2023	57,083,716	57		475,754		(7)		(49,068)		426,736
Options exercised for common stock	81,712	—		214		—		—		214
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for taxes	101,027	—		(2,569)		—		—		(2,569)
Share-based compensation expense	—	—		10,353		—		—		10,353
Other comprehensive loss	—	—		—		(1,174)		—		(1,174)
Net income	—	—		—		—		2,085		2,085
Balance, June 30, 2023	57,266,455	57		483,752		(1,181)		(46,983)		435,645
Options exercised for common stock	43,547	—		107		—		—		107
Shares issued under Employee Stock Purchase Plan	118,494	1		5,748		—		—		5,749
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for taxes	77,966	—		(2,388)		—		—		(2,388)
Share-based compensation expense	—	—		9,844		—		—		9,844
Other comprehensive income	—	—		—		23		—		23
Net income	—	—

SEC Form 10-Q filed by Inari Medical Inc.