optn-20210331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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 March 31, 2021


			☐			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: 001-38241

OPTINOSE, INC.

(Exact name of registrant as specified in its charter)


Delaware			42-1771610
(State of other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)

1020 Stony Hill Road, Suite 300

Yardley, Pennsylvania 19067

(Address of principal executive offices, including zip code)

(267) 364-3500

(Registrant’s telephone number including area code)

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, par value $0.001 per share

OPTN

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 Act).Yes ☐ No ☒

The number of shares of the registrant's common stock outstanding at April 30, 2021 was 53,112,574 shares.


	NOTE REGARDING FORWARD-LOOKING STATEMENTS	1
	PART I — FINANCIAL INFORMATION

Item 1.		4
	Consolidated Balance Sheets as of March 31, 202 1 and December 31, 20 20	4
	Consolidated Statements of Operations for Consolidated Statements of Operations for the three months ended March 31, 20 2 1 and 20 20	5
	Consolidated Statements of Comprehensive Loss for the three months ended March 31, 202 1 and 20 20	6
	Consolidated Statements of Changes in Stockholders' Equity for the three months ended March 31, 202 1 and 20 20	7
	Consolidated Statements of Cash Flows for the three months ended March 31, 202 1 and 20 20	8
	Notes to Unaudited Interim Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Qualitative and Quantitative Disclosure About Market Risk	30
Item 4.	Controls and Procedures	30
	PART II — OTHER INFORMATION	32






Item 6.	Exhibits	32
	Signatures	33


	March 31, 2021		December 31, 2020
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	115,984	$	144,156
Accounts receivable, net	17,958		23,394
Inventory	12,703		9,042
Prepaid expenses and other current assets	3,671		4,060
Total current assets	150,316		180,652
Property and equipment, net	1,885		2,028
Other assets	5,745		6,133
Total assets	$	157,946	$	188,813
Liabilities and stockholders' (deficit) equity
Current liabilities:
Accounts payable	$	7,973	$	5,489
Accrued expenses and other current liabilities	36,808		46,683
Total current liabilities	44,781		52,172
Long-term debt, net	125,584		125,202
Other liabilities	4,248		4,651
Total liabilities	174,613		182,025
Stockholders' (deficit) equity:
Common stock, $0.001 par value; 200,000,000 shares authorized at March 31, 2021 and December 31, 2020; 53,112,574 shares issued and outstanding at March 31, 2021 and 52,945,865 shares issued and outstanding at December 31, 2020	53		53
Additional paid-in capital	537,181		534,585
Accumulated deficit	(553,818)		(527,765)
Accumulated other comprehensive loss	(83)		(85)
Total stockholders' (deficit) equity	(16,667)		6,788
Total liabilities and stockholders' (deficit) equity	$	157,946	$	188,813


	Three Months Ended March 31,
	2021		2020
Revenues:
Net product revenues	$	10,960	$	7,062
Licensing revenues	1,000		—
Total revenues	11,960		7,062
Costs and expenses:
Cost of product sales	1,740		1,356
Research and development	5,225		4,932
Selling, general and administrative	27,184		27,060
Total operating expenses	34,149		33,348
Loss from operations	(22,189)		(26,286)
Other (income) expense:
Interest income	(20)		(332)
Interest expense	3,876		2,863
Foreign currency losses	8		39
Net loss	$	(26,053)	$	(28,856)
Net loss per share of common stock, basic and diluted	$	(0.49)	$	(0.63)
Weighted average common shares outstanding, basic and diluted	52,997,730		45,906,162


Three Months Ended March 31, 2021
	Stockholders' (Deficit) Equity
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders' (Deficit) Equity
	Shares	Amount
Balance at December 31, 2020	52,945,865	$	53	$	534,585	$	(527,765)	$	(85)	$	6,788
Stock compensation expense	—	—		2,596		—		—		2,596
Vesting of restricted stock units	166,709	—								—
Foreign currency translation adjustment	—	—		—		—		2		2
Net loss	—	—		—		(26,053)		—		(26,053)
Balance at March 31, 2021	53,112,574	$	53	$	537,181	$	(553,818)	$	(83)	$	(16,667)


Three Months Ended March 31, 2020
	Stockholders' Equity
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
	Shares	Amount
Balance at December 31, 2019	45,906,162	$	46	$	489,565	$	(427,980)	$	(48)	$	61,583
Stock compensation expense	—	—		2,429		—		—		2,429


Foreign currency translation adjustment	—	—		—		—		(25)		(25)
Net loss	—	—		—		(28,856)		—		(28,856)
Balance at March 31, 2020	45,906,162	$	46	$	491,994	$	(456,836)	$	(73)	$	35,131


	March 31,
	2021	2020
Stock options	8,296,492	8,373,040
Restricted stock units	2,282,204	1,287,986
Common stock warrants	810,357	2,677,188
Employee stock purchase plan	114,463	43,900
Total	11,503,516	12,382,114


	March 31, 2021		December 31, 2020
Raw materials	3,643		$	2,669
Work-in-process	3,216		$	2,676
Finished goods	5,844		3,697
Total inventory	$	12,703	$	9,042


	March 31, 2021		December 31, 2020
Computer equipment and software	$	1,143	$	1,128
Furniture and fixtures	366		366
Machinery and equipment	3,443		3,440
Leasehold improvements	609		609
Construction in process	314		271
	5,875		5,814
Less: accumulated depreciation	(3,990)		(3,786)
	$	1,885	$	2,028


	March 31, 2021		December 31, 2020
Accrued expenses:
Selling, general and administrative expenses	$	7,659	$	7,385
Research and development expenses	3,448		5,202
Payroll expenses	4,079		9,063
Product revenue allowances	16,167		20,917
Other	3,324		2,008
Total accrued expenses	34,677		44,575
Other current liabilities:
Lease liability	2,131		2,108
Total other current liabilities	2,131		2,108
Total accrued expenses and other current liabilities	$	36,808	$	46,683



	March 31, 2021		December 31, 2020
Face amount	$	130,000	$	130,000
Front end fees	(844)		(855)
Debt issuance costs	(4,872)		(3,943)
Back end fees	$	1,300	$	—
Long-term debt, net	$	125,584	$	125,202


	Three Months Ended March 31,
	2021		2020
Operating activities:
Net loss	$	(26,053)	$	(28,856)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization	165		309
Stock-based compensation	2,610		2,460
Amortization of debt discount and issuance costs	382		268
Changes in operating assets and liabilities:
Accounts receivable	5,435		1,910

Prepaid expenses and other assets	894		425
Inventory	(3,634)		(2,225)
Accounts payable	2,587		2,131
Accrued expenses and other liabilities	(10,410)		(4,390)
Cash used in operating activities	(28,024)		(27,968)
Investing activities:
Purchases of property and equipment	(91)		(70)

Cash used in investing activities	(91)		(70)
Financing activities:
Proceeds from long-term debt	—		30,000
Cash paid for financing costs	(71)		(622)


Cash (used in) provided by financing activities	(71)		29,378
Effects of exchange rate changes on cash and cash equivalents	—		(5)
Net (decrease) increase in cash, cash equivalents and restricted cash	(28,186)		1,335
Cash, cash equivalents and restricted cash at beginning of period	144,179		147,165
Cash, cash equivalents and restricted cash at end of period	$	115,993	$	148,500
Supplemental disclosure of noncash activities:
Fixed asset purchases within accounts payable and accrued expenses	$	19	$	218
Recognition of right-of-use assets	$	133	$	405
Recognition of lease liabilities	$	133	$	405


Number of Shares	Exercise Price Per Share		Expiration Date
810,357	$	6.72	September 12, 2022


	Shares	Weighted average exercise price per share		Weighted average remaining contractual life
Outstanding at December 31, 2020	6,852,733	$	10.34	6.84
Granted	1,458,501	3.52
Exercised	—	—
Expired	—	—
Forfeited	(14,742)	11.07
Outstanding at March 31, 2021	8,296,492	$	9.14	7.18
Exercisable at March 31, 2021	4,819,267	$	11.33	5.88
Vested and expected to vest at March 31, 2021	8,296,492	$	9.14	7.18


	Three Months Ended March 31,
	2021			2020
Risk free interest rate	1.00		%	0.75		%
Expected term (in years)	6.08			6.08
Expected volatility	74.37		%	68.34		%
Annual dividend yield	0.00		%	0.00		%
Fair value of common stock	$	3.52		$	5.65


			Shares
Balance at December 31, 2020			1,491,589
Granted			957,990
Vested and settled			(166,709)
Expired/ forfeited/ canceled			(666)
Balance at March 31, 2021			2,282,204
Expected to vest at March 31, 2021			2,282,204


	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
	(in thousands)
Operating leases(1)	$	3,775	$	1,617	$	1,990	$	168	$	—
Long-term debt(2)	168,537		14,169		119,234		35,134		—
Total	$	172,312	$	15,786	$	121,224	$	35,302	$	—

SEC Form 10-Q filed by OptiNose, Inc.