0001494650-24-000154 | 10-Q | XBRL Viewer

Debt

9 Months Ended

Sep. 30, 2024

On September 12, 2019 (the Closing Date), the Company entered into a Note Purchase Agreement with funds managed by Pharmakon Advisors, LP (Pharmakon), the investment manager of BioPharma Credit Funds (BioPharma). The Note Purchase Agreement provided the Company with $130,000 in debt financing, of which $80,000 of senior secured notes (the Pharmakon Senior Secured Notes) was issued on the Closing Date, $30,000 was issued on February 13, 2020 and $20,000 was issued on December 1, 2020.

On November 23, 2022, the Company amended and restated the Note Purchase Agreement, initially entered into on September 12, 2019 and amended through November 9, 2022, among the Company, its subsidiaries, OptiNose US, Inc., OptiNose AS and OptiNose UK, Ltd., and BioPharma Credit PLC, as collateral agent, and the purchasers party thereto from time to time (the A&R Note Purchase Agreement). Pursuant to the A&R Note Purchase Agreement, certain modifications to the affirmative and negative covenants, events of default and other provisions were made, including, without limitation, (i) the requirement for the Company to deliver quarterly and annual financial statements that, commencing with the Company's consolidated financial statements for the year ending December 31, 2023 and subject to certain exceptions, are not subject to a “going concern” statement (the Going Concern Covenant) and (ii) the removal of certain exceptions to the negative covenants which previously permitted the Company to enter into certain transactions without the consent of the holders of the Pharmakon Senior Secured Notes, including permitted acquisitions, swap contracts, convertible bonds and revolving credit facilities. The

financial covenants requiring the Company to achieve minimum trailing twelve-month consolidated XHANCE net product sales and royalties were amended to be pushed back to March 31, 2024.

The A&R Note Purchase Agreement extended the maturity date of the Pharmakon Senior Secured Notes from September 12, 2024 to June 30, 2027 (New Maturity Date), extended the interest-only period from September 2023 to September 2025, after which principal repayments will commence starting on September 30, 2025 and will be made in eight equal quarterly installments of principal and interest through the New Maturity Date. As part of the A&R Note Purchase Agreement the Pharmakon Senior Secured Notes now bear an amended interest rate through the New Maturity Date equal to the 3-month Secured Overnight Financing Rate (subject to a 2.50% floor), determined as of the date that is two business days prior to the commencement of each quarter, plus 8.50% per annum, which interest rate shall be increased by an additional 3.00% per annum upon the occurrence and during the continuation of any event of default. The effective interest rate as of September 30, 2024 is 14.53%.

As an inducement for the holders of the Pharmakon Senior Secured Notes to enter into the A&R Note Purchase Agreement, the Company was required to pay the holders of the Pharmakon Senior Secured Notes an amendment fee of $3,900 (representing 3.00% of the then outstanding principal balance of such notes) due on the New Maturity Date or the earlier repayment of the Pharmakon Senior Secured Notes, which amendment fee shall be reduced to $2,600 in the event that the Company repays the Pharmakon Senior Secured Notes in full on or after the one-year anniversary of the date of the A&R Note Purchase Agreement and prior to second anniversary of the date of the A&R Note Purchase Agreement. Additionally, the $1,300 fee payable under the Fourth Amendment to the Note Purchase Agreement that the Company entered into on November 9, 2022 will be credited against the amendment fee payable in connection with the A&R Note Purchase Agreement.

On March 5, 2024, the Company entered into a first amendment and waiver (the First Amendment) to the A&R note Purchase Agreement. The First Amendment provided for a waiver of Going Concern Covenant for the audited financial statements for the year ended December 31, 2023 and unaudited quarterly financial statements for the quarter ending March 31, 2024.

On March 8, 2024, the Company entered into a second amendment (the Second Amendment) to the A&R Note Purchase Agreement. Pursuant to the Second Amendment, the financial covenants requiring the Company to achieve minimum trailing twelve-month consolidated XHANCE net product sales and royalties was modified as follows (amounts in thousands):


Trailing Twelve-Months Ending			As Revised Pursuant to Second Amendment
March 31, 2024			$70,000
June 30, 2024			$70,000
September 30, 2024			$72,500
December 31, 2024			$75,000
March 31, 2025			$80,000
June 30, 2025			$87,500
September 30, 2025			$95,000
December 31, 2025			$105,500
March 31, 2026			$120,000
June 30, 2026			$130,000
September 30, 2026			$145,000
December 31, 2026			$150,000
March 31, 2027			$155,000
June 30, 2027			$160,000

In addition, the "make-whole" premium payment due in connection with any principal prepayments (whether mandatory or voluntary) was modified as part of the Second Amendment to provide that the Company will be required to pay a make-whole premium in the amount of (i) for any prepayment occurring up to and including November 21, 2024 (which represents the 24th-month anniversary of the effective date of the A&R Note Purchase Agreement), the sum of all interest that would have accrued on the principal amount of the notes prepaid or required to be prepaid from the date of such prepayment through and including the 18th-month anniversary of such prepayment date; and (b) for any prepayment occurring after November 21, 2024 (which represents the 24th-month anniversary of the effective date of the A&R Note Purchase Agreement) but prior to May 21, 2026 (which represents the 42nd-month anniversary of the effective date of the A&R Note Purchase Agreement), the sum of all interest that would have accrued on the principal amount of the notes prepaid or required to be prepaid from the date of such prepayment through and including May 21, 2026 (which represents the 42nd-month anniversary of the effective date of the A&R Note Purchase Agreement); provided, however, that in no event shall all make-whole amounts payable by the Company exceed $24,000 in the aggregate.

On May 8, 2024, the Company entered into a third amendment (the Third Amendment) to the A&R Note Purchase Agreement. The Third Amendment provided for a further waiver of the Going Concern Covenant for the Company’s quarterly and annual financial statements through the fiscal quarter ending September 30, 2025. The Going Concern Covenant will continue to apply to the Company’s financial statements for the fiscal year ending December 31, 2025 and each fiscal quarter and fiscal year thereafter. In addition, pursuant to the Third Amendment the minimum amount of cash and cash equivalents that the Company is required to maintain at all times under the A&R Note Purchase Agreement (the Liquidity Covenant) will be reduced from $30,000 to $20,000 following the date of the first quarterly payment of principal due on September 30, 2025.

As part of the Third Amendment, the Company issued an aggregate of 4,680,000 shares of common stock to the holders of the Pharmakon Senior Secured Notes in satisfaction of $4,680 of outstanding amendment and waiver fees owed under the A&R Note Purchase Agreement for prior amendments and waivers, which shares were calculated based on the offering price of each share of common stock sold in the registered direct offering completed on May 10, 2024. Additionally, the common stock warrants, dated November 18, 2021, issued to the holders of the Pharmakon Senior Secured Notes for the purchase of an aggregate of 2,500,000 shares of Company common stock (the Pharmakon Warrants) were amended to (i) reduce the exercise price of the Pharmakon Warrants from $1.60 per share to $1.00, which is the offering price of each share of common stock sold in the registered direct offering completed by the Company on May 10, 2024, and (ii) extend the expiration date of the Pharmakon Warrants from November 18, 2024 to November 18, 2026.

The Pharmakon Senior Secured Notes are secured by a pledge of substantially all of the assets of the Company and the Guarantors and the A&R Note Purchase Agreement contains affirmative and negative covenants customary for financings of this type, including limitations on the Company’s and its subsidiaries’ ability, among other things, to incur additional debt, grant or permit additional liens, make investments and acquisitions, merge or consolidate with others, dispose of assets, pay dividends and distributions, repay junior indebtedness, incur a material adverse change and enter into affiliate transactions, in each case, subject to certain exceptions. In addition, the A&R Note Purchase Agreement contains financial covenants requiring the Company to maintain certain minimum trailing twelve-month consolidated XHANCE net sales and royalties, tested on a quarterly basis, and to maintain compliance with the Liquidity Covenant. As of September 30, 2024, the Company was in compliance with the covenants. The A&R Note Purchase Agreement also includes events of default customary for financings of this type, in certain cases subject to customary periods to cure, following which the holders of the Pharmakon Senior Secured Notes may accelerate all amounts outstanding under such notes.

The Company believes that it is probable that it will not maintain compliance with the required trailing twelve-month minimum consolidated XHANCE net sales and royalties thresholds for the entire one year period after the date these consolidated financial statements are issued. As a result, in accordance with FASB Accounting Standards Codification 470, the Company has classified all outstanding principal and the payment of additional fees upon maturity as a current liability in the accompanying consolidated balance sheet as of September 30, 2024. The Company classified the Pharmakon debt as a current liability at December 31, 2023 as it believed that, without additional capital, it was unlikely to comply with certain covenants in the A&R Note Purchase Agreement.

The Company recorded interest expense of $5,294 and $4,940 during the three months ended September 30, 2024 and 2023, respectively. The Company recorded interest expense of $15,212 and $14,436 during the nine months ended September 30, 2024 and 2023, respectively. Interest expense included total coupon interest and the amortization of debt issuance costs.

The Pharmakon debt balance is comprised of the following:



	September 30, 2024		December 31, 2023
Face amount	$	130,000	$	130,000
Front end fees	(477)		(518)
Debt issuance costs	(4,838)		(5,235)
Back end fees	1,300		5,980
Debt, net	$	125,985	$	130,227

- 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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
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-Publisher FASB
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2024

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment, net, consisted of the following:


	September 30, 2024		December 31, 2023
Computer equipment and software	$	1,465	$	1,443
Furniture and fixtures	366		366
Machinery and equipment	3,150		3,146
Leasehold improvements	655		609
Construction in process	115		115
	5,751		5,679
Less: accumulated depreciation	(5,081)		(4,864)
	$	670	$	815

Consolidated Statements of Changes in Stockholders' Deficit - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss
Beginning balance at Dec. 31, 2022	$ (56,624)	$ 111	$ 628,242	$ (684,893)	$ (84)
Beginning balance (in shares) at Dec. 31, 2022		111,492,761
Increase (Decrease) in Stockholders' Equity
Stock compensation expense	1,520		1,520
Vesting of restricted stock units	1	$ 1
Vesting of restricted stock units and exercise of options (in shares)		343,406
Issuance of common stock under employee stock purchase plan	164		164
Issuance of common stock under employee stock purchase plan (in shares)		119,727
Net (loss) income	(18,847)			(18,847)
Ending balance at Mar. 31, 2023	(73,785)	$ 112	629,927	(703,740)	(84)
Ending balance (in shares) at Mar. 31, 2023		111,955,894
Beginning balance at Dec. 31, 2022	(56,624)	$ 111	628,242	(684,893)	(84)
Beginning balance (in shares) at Dec. 31, 2022		111,492,761
Increase (Decrease) in Stockholders' Equity
Net (loss) income	(25,516)
Ending balance at Sep. 30, 2023	(77,615)	$ 112	632,765	(710,408)	(84)
Ending balance (in shares) at Sep. 30, 2023		112,311,983
Beginning balance at Mar. 31, 2023	(73,785)	$ 112	629,927	(703,740)	(84)
Beginning balance (in shares) at Mar. 31, 2023		111,955,894
Increase (Decrease) in Stockholders' Equity
Stock compensation expense	1,499		1,499
Vesting of restricted stock units and exercise of options (in shares)		135,840
Net (loss) income	2,626			2,626
Ending balance at Jun. 30, 2023	(69,660)	$ 112	631,426	(701,114)	(84)
Ending balance (in shares) at Jun. 30, 2023		112,091,734
Increase (Decrease) in Stockholders' Equity
Stock compensation expense	1,204		1,204
Vesting of restricted stock units and exercise of options (in shares)		88,667
Issuance of common stock under employee stock purchase plan	135		135
Issuance of common stock under employee stock purchase plan (in shares)		131,582
Net (loss) income	(9,294)			(9,294)
Ending balance at Sep. 30, 2023	(77,615)	$ 112	632,765	(710,408)	(84)
Ending balance (in shares) at Sep. 30, 2023		112,311,983
Beginning balance at Dec. 31, 2023	$ (86,606)	$ 112	633,742	(720,376)	(84)
Beginning balance (in shares) at Dec. 31, 2023	112,399,495	112,399,495
Increase (Decrease) in Stockholders' Equity
Stock compensation expense	$ 1,456		1,456
Vesting of restricted stock units	1	$ 1
Vesting of restricted stock units and exercise of options (in shares)		478,520
Issuance of common stock under employee stock purchase plan (in shares)		160,711
Net (loss) income	(14,067)			(14,067)
Ending balance at Mar. 31, 2024	(99,215)	$ 113	635,198	(734,443)	(84)
Ending balance (in shares) at Mar. 31, 2024		113,038,726
Beginning balance at Dec. 31, 2023	$ (86,606)	$ 112	633,742	(720,376)	(84)
Beginning balance (in shares) at Dec. 31, 2023	112,399,495	112,399,495
Increase (Decrease) in Stockholders' Equity
Net (loss) income	$ (21,181)
Ending balance at Sep. 30, 2024	$ (41,097)	$ 151	700,393	(741,557)	(84)
Ending balance (in shares) at Sep. 30, 2024	150,829,507	150,829,507
Beginning balance at Mar. 31, 2024	$ (99,215)	$ 113	635,198	(734,443)	(84)
Beginning balance (in shares) at Mar. 31, 2024		113,038,726
Increase (Decrease) in Stockholders' Equity
Stock compensation expense	2,735		2,735
Issuance of stock per amended debt agreement	5,750	$ 5	5,745
Issuance of stock per amended debt agreement (in shares)		4,680,000
Proceeds from sales of common stock and warrants, net	55,294	$ 32	55,262
Proceeds from sales of common stock and warrants, net (in shares)		31,800,000
Vesting of restricted stock units and exercise of options (in shares)		159,684
Issuance of common stock under employee stock purchase plan	165		165
Net (loss) income	(7,581)			(7,581)
Ending balance at Jun. 30, 2024	(42,853)	$ 150	699,105	(742,024)	(84)
Ending balance (in shares) at Jun. 30, 2024		149,678,410
Increase (Decrease) in Stockholders' Equity
Stock compensation expense	1,288		1,288
Vesting of restricted stock units	1	$ 1
Vesting of restricted stock units and exercise of options (in shares)		1,039,080
Issuance of common stock under employee stock purchase plan (in shares)		112,017
Net (loss) income	467			467
Ending balance at Sep. 30, 2024	$ (41,097)	$ 151	$ 700,393	$ (741,557)	$ (84)
Ending balance (in shares) at Sep. 30, 2024	150,829,507	150,829,507

Basis of Presentation and Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Computation of Basic and Diluted Shares

The following table sets forth the computation of basic and diluted shares outstanding for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Basic net income (loss) per common share calculation:
Net income (loss)	$	467	(9,294)		$	(21,181)	$	(25,516)
Less: undistributed earnings to participating shareholders	(74)		—		—		—
Net income (loss) – basic	393		(9,294)		(21,181)		(25,516)
Weighted-average shares of common stock outstanding – basic	174,328,570		112,230,155		144,900,726		111,996,456
Net income (loss) per share of common stock - basic	$	—	$	(0.08)	$	(0.15)	$	(0.23)



Net income (loss) – basic	$	393	$	(9,294)	$	(21,181)	$	(25,516)
Add: Unrealized gain on fair value of warrants	—		—		(8,700)		—
Net income (loss) - diluted	$	393	$	(9,294)	$	(29,881)	$	(25,516)
Weighted average shares of common stock outstanding - diluted	174,369,875		112,230,155		149,634,133		111,996,456
Net income (loss) per share of common stock - diluted	$	—	$	(0.08)	$	(0.20)	$	(0.23)

Computation of basic and diluted shares:
Weighted average shares of common stock outstanding - basic	174,328,570		112,230,155		144,900,726		111,996,456
Potential common shares:

Restricted stock units	41,305		—		—		—

Dilutive warrants	—		—		4,733,407		—
Weighted average shares of common stock outstanding - diluted	174,369,875		112,230,155		149,634,133		111,996,456

Schedule of Antidilutive Shares Excluded From Computation of Net Loss Per Common Share

Diluted net loss per share for these periods presented on the statement of operations do not reflect the potential common shares noted below as their effect would be antidilutive.


	September 30,
	2024	2023
Stock options	9,108,884	10,153,661
Restricted stock units	3,518,338	2,012,552
Common stock warrants	28,034,593	32,768,000
Employee stock purchase plan	115,834	190,186
Total	40,777,649	45,124,399

Fair Value Measurements - Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Liabilities
Warrant Liability	$ 8,500	$ 17,200
Total Liabilities	8,500	17,200
Level 1
Liabilities
Warrant Liability	0	0
Total Liabilities	0	0
Level 2
Liabilities
Warrant Liability	0	0
Total Liabilities	0	0
Level 3
Liabilities
Warrant Liability	8,500	17,200
Total Liabilities	$ 8,500	$ 17,200

Stockholders' Equity

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

Stockholders' Equity

As of September 30, 2024, the Company had the following warrants outstanding to purchase shares of Common Stock:

Number of warrants

Classification

Exercise Price Per Share

Expiration Date

2,500,000

Equity

$1.00

November 18, 2026

30,268,000

Liability

$1.00

November 23, 2027

23,700,000

Equity

$0.0001

No Expiration

On May 10, 2024, the Company completed a registered direct offering pursuant to which it issued an aggregate of 31,800,000 shares of common stock at a purchase price of $1.00 per share and, in lieu of shares of common stock to certain investors, pre-funded warrants to purchase an aggregate of 23,700,000 shares of common stock at a price of $0.999 per pre-funded warrant, which represents the per share offering price for common stock less the $0.0001 per share exercise price for each such pre-funded warrant.

Upon the completion of the registered direct offering on May 10, 2024, the exercise price of the 30,268,000 liability classified warrants was reduced from $2.565 to $1.00 (which was the offering price of each share sold in the registered direct offering) pursuant to the anti-dilution price protection provisions of such warrants. All other terms of the liability classified warrants remained unchanged.

Additionally, on May 10, 2024, pursuant to the Third Amendment to the A&R Note Purchase Agreement, the 2,500,000 equity classified common stock warrants listed above were amended to reduce the exercise price from $1.60 per share to $1.00 per share, and to extend the expiration date from November 18, 2024 to November 18. 2026.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Section 50
-Paragraph 13
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-13

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Accrued expenses:
Product revenue allowances	$ 19,911	$ 20,145
Selling, general and administrative expenses	4,976	6,229
Research and development expenses	262	644
Payroll expenses	5,481	6,801
Accrued interest	0	4,666
Other	1,034	3,015
Total accrued expenses	31,664	41,500
Other current liabilities:
Lease liability	1,004	911
Total other current liabilities	1,004	911
Total accrued expenses and other current liabilities	$ 32,668	$ 42,411

Accrued Expenses and Other Current Liabilities

9 Months Ended

Sep. 30, 2024

Payables and Accruals [Abstract]

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of:


	September 30, 2024		December 31, 2023
Accrued expenses:
Product revenue allowances	$	19,911	$	20,145
Selling, general and administrative expenses	4,976		6,229
Research and development expenses	262		644
Payroll expenses	5,481		6,801
Accrued interest	—		4,666
Other	1,034		3,015
Total accrued expenses	$	31,664	$	41,500
Other current liabilities:
Lease liability	$	1,004	$	911
Total other current liabilities	1,004		911
Total accrued expenses and other current liabilities	$	32,668	$	42,411

Stock-based Compensation - Restricted Stock Units Activity (Details) - Restricted stock units	9 Months Ended
	Sep. 30, 2024 shares
Shares
Beginning balance (in shares)	1,897,421
Granted (in shares)	3,574,200
Vested and settled (in shares)	(1,677,284)
Expired/forfeited/canceled (in shares)	(275,999)
Ending balance (in shares)	3,518,338
Expected to vest at end of period (in shares)	3,518,338

Basis of Presentation and Summary of Significant Accounting Policies - Concentration of Credit Risk (Details) - Customer Concentration Risk - Five Customers - customer	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Accounts Receivable
Concentration Risk
Number of customers (customer)	5	5	5	5
Concentration risk (as a percent)			78.00%	73.00%
Sales Revenue, Net
Concentration Risk
Number of customers (customer)	5	5	5	5
Concentration risk (as a percent)	74.00%	50.00%	73.00%	40.00%

Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

Schedule of Warrants Outstanding

As of September 30, 2024, the Company had the following warrants outstanding to purchase shares of Common Stock:

Number of warrants

Classification

Exercise Price Per Share

Expiration Date

2,500,000

Equity

$1.00

November 18, 2026

30,268,000

Liability

$1.00

November 23, 2027

23,700,000

Equity

$0.0001

No Expiration

Liquidity	9 Months Ended
Liquidity	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Liquidity	Liquidity Since inception, the Company's operations have focused on organization and staffing, business planning, raising capital, establishing an intellectual property portfolio, conducting preclinical studies and clinical trials, pursuing regulatory approvals and commercializing XHANCE in the US. As of September 30, 2024, the Company had cash and cash equivalents of $82,497 and a working capital deficit of $34,215. The Company is subject to a number of risks similar to other life sciences companies, including successful discovery, development and commercialization of its products and product candidates, raising additional capital, the development by its competitors of new technological innovations, protection of proprietary technology and market acceptance of the Company's products. The Company has incurred recurring net losses since its inception and has accumulated a deficit of $741,557 as of September 30, 2024. On May 10, 2024, the Company completed a registered direct offering pursuant to which it issued an aggregate of 31,800,000 shares of common stock at a purchase price of $1.00 per share and, in lieu of shares of common stock to certain investors, pre-funded warrants to purchase an aggregate of 23,700,000 shares of common stock at a price of $0.999 per pre-funded warrant, which represents the per share offering price for common stock less the $0.0001 per share exercise price for each such pre-funded warrant. The net proceeds from the offering were $55.3 million. The Company entered into a Note Purchase Agreement (the Note Purchase Agreement) on September 12, 2019 with funds managed by Pharmakon Advisors, LP (Pharmakon), the investment manager of the BioPharma Credit Funds (BioPharma) which was subsequently amended on August 13, 2020, March 2, 2021, November 16, 2021, August 10, 2022, and November 9, 2022. On November 23, 2022, the Company amended and restated the Note Purchase Agreement (the A&R Note Purchase Agreement). Pursuant to the A&R Note Purchase Agreement, the financial covenants requiring the Company to achieve minimum trailing twelve-month consolidated XHANCE net product sales and royalties were modified. The Company entered into the first amendment to the A&R Note Purchase Agreement (the First Amendment) on March 5, 2024, which waived certain covenants. The Company entered into the second amendment to the A&R Note Purchase Agreement (the Second Amendment) on March 8, 2024, which further modified the financial covenants. On May 8, 2024, the Company entered into the third amendment to the A&R Note Purchase Agreement (the Third Amendment), which provided for a further waiver to the requirement that the Company's annual and quarterly consolidated financial statements not be subject to any statement as to "going concern" (the "going concern covenant") through the fiscal quarter ending September 30, 2025, and modified the minimum amount of cash and cash equivalents that the Company is required to maintain at all times under the A&R Note Purchase Agreement (see Note 8). The principal balance outstanding under the A&R Note Purchase Agreement was $130,000 at September 30, 2024. The Company’s continuation as a going concern is dependent on its ability to maintain compliance with the covenants under the A&R Note Purchase Agreement, including minimum trailing twelve-month consolidated XHANCE net sales and royalties the Company is required to achieve and its ability to generate sufficient cash flows from operations to meet its obligations and/or obtain additional capital through equity or debt financings, partnerships, collaborations, or other sources, as may be required. The A&R Note Purchase Agreement includes events of default, in certain cases subject to customary periods to cure, following which Pharmakon may accelerate all amounts outstanding pursuant to the Note Purchase Agreement. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. Additionally, commencing on September 30, 2025, the Company will be required to begin making principal repayments on its debt in eight quarterly installments of $16.3 million each through maturity in June 2027. The Company believes that it is probable that, absent additional capital, it will not be able to maintain compliance with the minimum cash covenant under the A&R Note Purchase Agreement once it makes the second principal repayment, which is due on December 31, 2025. The Company believes it is probable that it will not be able to maintain compliance with the trailing twelve-month minimum consolidated XHANCE net sales and royalties thresholds under the A&R Note Purchase Agreement for the entire one year period after the date these consolidated financial statements are issued, which will constitute a default under the A&R Note Purchase Agreement if the Company is unable to obtain a modification or waiver of such minimum consolidated XHANCE net sales and royalties thresholds. In the event of the foregoing default, the holders of the Pharmakon Senior Secured Notes may declare an event of default under the A&R Note Purchase Agreement and may elect to accelerate the repayment of all unpaid principal, accrued interest and other amounts due, which may require the Company to delay or curtail its operations until additional funding is received. The terms of the A&R Note Purchase Agreement and the Pharmakon Senior Secured Notes, including applicable covenants, are described in Note 8. Management’s plans to mitigate these risks include enhancing its commercial performance to accelerate growth in net revenues, seeking out partnership and collaboration opportunities to expand the market for XHANCE, and, if required, requesting a modification or waiver of the covenants under the A&R Note Purchase Agreement, or refinancing the debt. However, there can be no assurance that the Company will be successful in accelerating growth in net revenues, expanding the market for XHANCE through partnerships or collaborations, obtaining a modification or waiver of the covenants under the A&R Note Purchase Agreement, and/or refinancing the debt. If the Company is unable to accelerate growth in net revenues, expand the market for XHANCE through partnerships or collaborations, obtain a modification or waiver of the covenants under the A&R Note Purchase Agreement, or refinance the debt, the Company may need to delay or curtail its operations. As a result of these factors, management has concluded that substantial doubt exists about the Company’s ability to continue as a going concern within one year after the date these consolidated financial statements are issued.

Debt - Long Term Debt (Details) - Senior Notes - Note Purchase Agreement - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Debt Instrument
Face amount	$ 130,000	$ 130,000
Front end fees	(477)	(518)
Debt issuance costs	(4,838)	(5,235)
Back end fees	1,300	5,980
Debt, net	$ 125,985	$ 130,227

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

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+ Details

- Definition

Amount, after deduction of unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

Fair Value Measurements - Fair Value Liabilities Measured on Recurring Basis Using Unobservable Inputs (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2024 USD ($)
Warrant Liability
Balance, December 31, 2023	$ 17,200
Warrants issued	0
Change in fair value of liability	(8,700)
Balance, September 30, 2024	$ 8,500
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Change in fair value of warrant liability

Debt - Narrative (Details)			3 Months Ended		9 Months Ended
Debt - Narrative (Details)	May 10, 2024 USD ($) $ / shares shares	Nov. 23, 2022 USD ($) installment	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	May 09, 2024 $ / shares shares	May 08, 2024 USD ($)	May 07, 2024 USD ($)	Dec. 01, 2020 USD ($)	Feb. 13, 2020 USD ($)	Sep. 12, 2019 USD ($)
Debt Instrument
Warrants outstanding (in shares) \| shares	30,268,000
Interest expense			$ 5,294,000	$ 4,940,000	$ 15,212,000	$ 14,436,000
Warrants Expiring November 18, 2024
Debt Instrument
Warrants outstanding (in shares) \| shares							2,500,000
Warrants exercise price (in dollars per share) \| $ / shares	$ 1.00						$ 1.60
Note Purchase Agreement
Debt Instrument
Number of installment payments (installment) \| installment		8
Note Purchase Agreement \| Senior Notes
Debt Instrument
Debt maximum borrowing capacity												$ 130,000,000
Debt face amount												$ 80,000,000
Number of installment payments (installment) \| installment		8
Debt term		3 months
Variable rate (as a percent)		2.50%
Stated interest rate (as a percent)		8.50%
Increase in interest rate (as a percent)		3.00%
Effective rate (as a percent)			14.53%		14.53%
Amendment fee (as a percent)		3.00%
Amendment fee payable		$ 1,300,000
Make whole premium payment		24,000,000
Debt covenant, cash and cash equivalents								$ 20,000,000	$ 30,000,000
Shares issued to settle debt (in shares) \| shares	4,680,000
Value of debt settled with shares	$ 4,680,000
Note Purchase Agreement \| Senior Notes \| Debt Instrument, Redemption, Period One
Debt Instrument
Amendment fee		$ 3,900,000
Debt instrument, make-whole provision, payment accrual period		18 months
Note Purchase Agreement \| Senior Notes \| Debt Instrument, Redemption, Period Three
Debt Instrument
Amendment fee		$ 2,600,000
Debt instrument, make-whole provision, payment accrual period		42 months
Note Purchase Agreement \| Senior Notes \| Debt Instrument, Redemption, Period Two
Debt Instrument
Debt instrument, make-whole provision, payment accrual period		24 months
Note Purchase Agreement - First Delayed Draw Notes \| Senior Notes
Debt Instrument
Debt face amount											$ 30,000,000
Note Purchase Agreement - Third Delayed Draw Notes \| Senior Notes
Debt Instrument
Debt face amount										$ 20,000,000

Stock-based Compensation (Tables)

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Schedule of Allocated Stock-Based Compensation Expense

The Company recorded total stock-based compensation expense related to stock options, restricted stock units and it's employee stock purchase plan awarded under the Company's 2010 Stock Incentive Plan, as amended and restated effective as of October 12, 20217 (the 2010 Plan), 2017 Employee Stock Purchase Plan (2017 Plan) and grants made pursuant to the Nasdaq inducement grant exception in accordance with Nasdaq Listing Rule 5635(c)(4) (the "Nasdaq Inducement Grant Exception") in the following expense categories in the accompanying consolidated statements of operations as follows:


	Three Months Ended September 30,			Nine Months Ended September 30,
		2024		2023		2024		2023
Cost of product sales		$	15	$	9	$	66	$	27
Research and development		10		129		42		410
General and administrative		1,265		1,067		5,373		3,793
		$	1,290	$	1,205	$	5,481	$	4,230

Schedule of Stock Option Activity

The following table summarizes the activity related to stock option grants to employees and non-employees for the nine months ended September 30, 2024:


	Shares	Weighted average exercise price per share		Weighted average remaining contractual life
Outstanding at December 31, 2023	8,527,626	$	5.03	6.55
Granted	1,703,101	1.56
Exercised	—	—
Expired	(853,327)	9.68
Forfeited	(268,516)	1.66
Outstanding at September 30, 2024	9,108,884	$	4.04	6.7
Exercisable at September 30, 2024	5,194,658	$	5.79	5.5

Schedule of Fair Value Options using Black-Scholes Pricing Model

The Company calculated the fair value of the stock option grants using the following weighted average assumptions:


	Nine Months Ended September 30,
	2024
Risk free interest rate	4.26	%
Expected term (in years)	5.9
Expected volatility	75.03	%
Annual dividend yield	0.00	%

The Company calculated the fair value of each grant under the 2017 Employee Stock Purchase Plan using the following weighted average assumptions:


	Nine Months Ended September 30,
	2024
Risk free interest rate	0.05	%
Expected term (in years)	0.5
Expected volatility	67.93	%

Schedule of Nonvested Restricted Stock Units Activity

The following table summarizes the activity related to RSUs granted to employees for the nine months ended September 30, 2024:


			Shares
Balance at December 31, 2023			1,897,421
Granted			3,574,200
Vested and settled			(1,677,284)
Expired/forfeited/canceled			(275,999)
Balance at September 30, 2024			3,518,338
Expected to vest at September 30, 2024			3,518,338

Inventory

9 Months Ended

Sep. 30, 2024

Inventory Disclosure [Abstract]

Inventory

Inventory consisted of the following:


	September 30, 2024		December 31, 2023
Raw materials	$	2,272	$	2,400
Work-in-process	6,211		3,281
Finished goods	2,818		2,371
Total inventory	$	11,301	$	8,052

Inventories are stated at the lower of cost or net realizable value, as determined on a first-in, first-out, basis.

Basis of Presentation and Summary of Significant Accounting Policies - Net income (loss) per common share (Details)	May 10, 2024 $ / shares
Antidilutive Securities Excluded from Computation of Earnings Per Share
Purchase price (in dollars per share)	$ 1.00
Prefunded Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share
Purchase price (in dollars per share)	0.999
Common Stock \| Prefunded Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share
Purchase price (in dollars per share)	$ 0.0001

Stockholders' Equity - Narrative (Details)	May 10, 2024 $ / shares shares	Sep. 30, 2024 $ / shares shares	May 09, 2024 $ / shares shares	Dec. 31, 2023
Class of Stock
Sale of common stock, net of issuance costs (in shares) \| shares	31,800,000
Purchase price (in dollars per share) \| $ / shares	$ 1.00
Warrants outstanding (in shares) \| shares	30,268,000
Warrants Expiring November 18, 2024
Class of Stock
Warrants outstanding (in shares) \| shares			2,500,000
Warrants exercise price (in dollars per share) \| $ / shares	$ 1.00		$ 1.60
Warrants Expiring November 18, 2026
Class of Stock
Warrants outstanding (in shares) \| shares		2,500,000
Warrants exercise price (in dollars per share) \| $ / shares	$ 1.00	$ 1.00
Strike price \| Monte Carlo Simulation
Class of Stock
Warrants outstanding, measurement input	1.00	1.00	2.565	2.57
Prefunded Warrants
Class of Stock
Sale of common stock, net of issuance costs (in shares) \| shares	23,700,000
Purchase price (in dollars per share) \| $ / shares	$ 0.999
Prefunded Warrants \| Common Stock
Class of Stock
Purchase price (in dollars per share) \| $ / shares	$ 0.0001

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Liabilities Measured on Recurring Basis

The table below presents the liabilities (in thousands) measured and recorded in the financial statements at fair value on a recurring basis at September 30, 2024 categorized by the level of inputs used in the valuation of each liability.


	September 30, 2024
	Total		Level 1		Level 2		Level 3
Liabilities
Warrant Liability	$	8,500	$	—	$	—	$	8,500
Total Liabilities	$	8,500	$	—	$	—	$	8,500

	December 31, 2023
Liabilities
Warrant Liability	$	17,200	$	—	$	—	$	17,200
Total Liabilities	$	17,200	$	—	$	—	$	17,200

Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Inputs Reconciliation

The reconciliation of the Company's warrant liability measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows (in thousands):



	Warrant Liability
Balance, December 31, 2023	$	17,200
Warrants issued	—
Change in fair value of liability	(8,700)
Balance, September 30, 2024	$	8,500

Schedule of Significant Unobservable Inputs in Valuation of Warrants

The estimated fair value of the warrant liability is determined using Level 3 inputs. The inputs and values were as follows:



	September 30, 2024			December 31, 2023
Stock price	$	0.67		$	1.29
Strike price	$	1.00		$	2.57
Expected volatility	65.0		%	60.0		%
Risk-free interest rate	3.5		%	3.9		%
Expected dividend yield	—		%	—		%
Expected life (years)	3.1			3.9
Fair value per warrant	$	0.28		$	0.57

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	350,000,000	350,000,000
Common stock, shares issued (in shares)	150,829,507	112,399,495
Common stock, shares outstanding (in shares)	150,829,507	112,399,495

Stock-based Compensation - Stock Option Activity (Details) - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Shares
Granted (in shares)	1,703,101
Service Based Stock Options
Shares
Beginning balance (in shares)	8,527,626
Granted (in shares)	1,703,101
Exercised (in shares)	0
Expired (in shares)	(853,327)
Forfeited (in shares)	(268,516)
Ending balance (in shares)	9,108,884	8,527,626
Exercisable (in shares)	5,194,658
Weighted average exercise price per share
Beginning balance (in dollars per share)	$ 5.03
Granted (in dollars per share)	1.56
Exercised (in dollars per share)	0
Expired (in dollars per share)	9.68
Forfeited (in dollars per share)	1.66
Ending balance (in dollars per share)	4.04	$ 5.03
Exercisable (in dollars per share)	$ 5.79
Weighted average remaining contractual life
Options outstanding, weighted average remaining contractual life (in years)	6 years 8 months 12 days	6 years 6 months 18 days
Options exercisable, weighted average remaining contractual life (in years)	5 years 6 months

Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Total revenues	$ 20,437	$ 19,823	$ 55,807	$ 51,122
Costs and expenses:
Cost of product sales	2,065	2,225	5,277	6,502
Research and development	949	1,281	3,083	4,017
Selling, general and administrative	19,475	18,011	64,121	60,839
Total costs and expenses	22,489	21,517	72,481	71,359
Loss from operations	(2,052)	(1,694)	(16,674)	(20,236)
Other (income) expense:
Unrealized (gain) loss on fair value of warrants	(6,900)	3,200	(8,700)	(7,190)
Interest income	(913)	(545)	(2,018)	(1,974)
Interest expense	5,294	4,940	15,212	14,436
Foreign currency loss	0	5	13	8
Net income (loss)	467	(9,294)	(21,181)	(25,516)
Less: undistributed earnings to participating shareholders	(74)	0	0	0
Net income (loss) - basic	$ 393	$ (9,294)	$ (21,181)	$ (25,516)
Net income (loss) per share of common stock, basic (in dollars per share)	$ 0	$ (0.08)	$ (0.15)	$ (0.23)
Weighted average common shares outstanding, basic (in shares)	174,328,570	112,230,155	144,900,726	111,996,456
Add: Unrealized gain on fair value of warrants	$ 0	$ 0	$ (8,700)	$ 0
Net income (loss) - diluted	$ 393	$ (9,294)	$ (29,881)	$ (25,516)
Net (loss) per share of common stock - diluted (in dollars per share)	$ 0	$ (0.08)	$ (0.20)	$ (0.23)
Weighted average common shares outstanding - diluted (in shares)	174,369,875	112,230,155	149,634,133	111,996,456
Revenue from Contract with Customer, Product and Service [Extensible Enumeration]	Net product revenues	Net product revenues	Net product revenues	Net product revenues
Net product revenues
Total revenues	$ 20,437	$ 19,823	$ 55,807	$ 51,122

Stockholders' Equity - Warrants Outstanding (Details) - $ / shares	Sep. 30, 2024	May 10, 2024
Class of Stock
Number of warrants (in shares)		30,268,000
Warrants Expiring November 18, 2026
Class of Stock
Number of warrants (in shares)	2,500,000
Exercise Price Per Share (in dollars per share)	$ 1.00	$ 1.00
Warrants Expiring November 23, 2027
Class of Stock
Number of warrants (in shares)	30,268,000
Exercise Price Per Share (in dollars per share)	$ 1.00
No Expiration
Class of Stock
Number of warrants (in shares)	23,700,000
Exercise Price Per Share (in dollars per share)	$ 0.0001

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-13

Reference 2: http://www.xbrl.org/2003/role/recommendedDisclosureRef
-Topic 272
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483014/272-10-45-3

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 272
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482987/272-10-50-1

Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 235
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-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(d))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-13

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Name Accounting Standards Codification
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-13

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Section 50
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-14

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Name Accounting Standards Codification
-Section 50
-Paragraph 18
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-18

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 210
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-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(27)(b))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480566/210-10-S99-1

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 210
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(28))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480566/210-10-S99-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 210
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(29))
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-URI https://asc.fasb.org/1943274/2147480566/210-10-S99-1

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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Reference 16: http://www.xbrl.org/2003/role/disclosureRef
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Subparagraph (SX 210.6-03(i)(2)(i))
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-URI https://asc.fasb.org/1943274/2147479886/946-10-S99-3

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 3
-Subparagraph (SX 210.6-03(i)(2)(ii))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479886/946-10-S99-3

+ Details

Basis of Presentation and Summary of Significant Accounting Policies - Computation of Basic and Diluted Shares Outstanding (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2024	Sep. 30, 2023
Basic net income (loss) per common share calculation:
Net income (loss)	$ 467	$ (7,581)	$ (14,067)	$ (9,294)	$ 2,626	$ (18,847)	$ (21,181)	$ (25,516)
Less: undistributed earnings to participating shareholders	(74)			0			0	0
Net income (loss) - basic	$ 393			$ (9,294)			$ (21,181)	$ (25,516)
Weighted-average shares of common stock outstanding - basic (in shares)	174,328,570			112,230,155			144,900,726	111,996,456
Net income (loss) per share of common stock - basic (in dollars per share)	$ 0			$ (0.08)			$ (0.15)	$ (0.23)
Diluted net income (loss) per common share calculation:
Add: Unrealized gain on fair value of warrants	$ 0			$ 0			$ (8,700)	$ 0
Net income (loss) - diluted	$ 393			$ (9,294)			$ (29,881)	$ (25,516)
Weighted average common shares outstanding - diluted (in shares)	174,369,875			112,230,155			149,634,133	111,996,456
Net income (loss) per share of common stock - diluted (in dollars per share)	$ 0			$ (0.08)			$ (0.20)	$ (0.23)
Potential common shares:
Restricted stock units (in shares)	41,305			0			0	0
Dilutive warrants (in shares)	0			0			4,733,407	0
Weighted-average shares of common stock outstanding - diluted (in shares)	174,369,875			112,230,155			149,634,133	111,996,456

Fair Value Measurements - Valuation of Warrants (Details) - Monte Carlo Simulation	Sep. 30, 2024 $ / shares	May 10, 2024	May 09, 2024	Dec. 31, 2023 $ / shares
Fair Value Measurement Inputs and Valuation Techniques
Expected life (years)	3 years 1 month 6 days			3 years 10 months 24 days
Fair value per warrant (in dollars per share)	$ 0.28			$ 0.57
Stock price
Fair Value Measurement Inputs and Valuation Techniques
Warrants outstanding, measurement input	0.67			1.29
Strike price
Fair Value Measurement Inputs and Valuation Techniques
Warrants outstanding, measurement input	1.00	1.00	2.565	2.57
Expected volatility
Fair Value Measurement Inputs and Valuation Techniques
Warrants outstanding, measurement input	0.650			0.600
Risk-free interest rate
Fair Value Measurement Inputs and Valuation Techniques
Warrants outstanding, measurement input	0.035			0.039
Expected dividend yield
Fair Value Measurement Inputs and Valuation Techniques
Warrants outstanding, measurement input	0			0

Stock-based Compensation - Narrative (Details) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2024 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award
Granted (in shares)	1,703,101
Service Based Stock Options
Share-based Compensation Arrangement by Share-based Payment Award
Award vesting period (in years)	4 years
Granted (in shares)	1,703,101
Fair value of common stock (in dollars per share) \| $ / shares	$ 1.56
Intrinsic value of options outstanding \| $	$ 0
Intrinsic value of exercisable options \| $	0
Unrecognized cost related to unvested RSUs expected to vest \| $	$ 3,513
Estimated weighted-average amortization period (in years)	2 years 4 months 24 days
Market Based Stock Options
Share-based Compensation Arrangement by Share-based Payment Award
Award vesting period (in years)	4 years
Granted (in shares)	569,345
Service period (in years)	2 years
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award
Award vesting period (in years)	4 years
Granted (in shares)	3,574,200
Restricted shares fair value at grant date (in dollars per share) \| $ / shares	$ 1.82
Restricted Stock Units, Service-Based
Share-based Compensation Arrangement by Share-based Payment Award
Unrecognized cost related to unvested RSUs expected to vest \| $	$ 5,569
Estimated weighted-average amortization period (in years)	3 years 2 months 23 days
Amended and Restated 2010 Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award
Plan options contractual life (up to) (in years)	10 years
NASDAQ Inducement Grant Exception \| Service Based Stock Options
Share-based Compensation Arrangement by Share-based Payment Award
Granted (in shares)	674,167
NASDAQ Inducement Grant Exception \| Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award
Granted (in shares)	41,250
2017 Plan \| Employee Stock
Share-based Compensation Arrangement by Share-based Payment Award
ESPP purchase price of common stock (as a percent)	85.00%
Shares issued (in shares)	272,728

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2024	Oct. 31, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2024
Document Transition Report	false
Entity File Number	001-38241
Entity Registrant Name	OPTINOSE, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	42-1771610
Entity Address, Address Line One	777 Township Line Road
Entity Address, Address Line Two	Suite 300
Entity Address, City or Town	Yardley
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	19067
City Area Code	267
Local Phone Number	364-3500
Title of 12(b) Security	Common stock, par value $0.001 per share
Trading Symbol	OPTN
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		150,829,507
Entity Central Index Key	0001494650
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Amendment flag	false

Basis of Presentation and Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Use of estimates	Use of estimates The preparation of the unaudited interim consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited interim consolidated financial statements and reported amounts of expenses during the reporting period. Due to the uncertainty of factors surrounding the estimates or judgments used in the preparation of the unaudited interim consolidated financial statements, actual results may materially vary from these estimates. Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the unaudited interim consolidated financial statements in the period they are determined to be necessary.
Concentration of credit risk and Customer and supplier concentration	Concentration of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and accounts receivable. The Company generally invests its cash in deposits with high credit quality financial institutions. Additionally, the Company performs periodic evaluations of the relative credit standing of these financial institutions. Customer and supplier concentration The Company has exposure to credit risk in accounts receivable from sales of product. XHANCE is sold to wholesale pharmaceutical distributors and preferred pharmacy network (PPN) partners, who, in turn, sell XHANCE to pharmacies, hospitals and other customers.
Fair value of financial instruments	Fair value of financial instruments The Company measures certain assets and liabilities at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability (the exit price) in an orderly transaction between market participants at the measurement date. The FASB accounting guidance outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. In determining fair value, the Company uses quoted prices and observable inputs. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. The fair value hierarchy is broken down into three levels based on the source of the inputs as follows: •Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities. •Level 2 — Valuations based on observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. •Level 3 — Valuations based on inputs that are unobservable and models that are significant to the overall fair value measurement. At September 30, 2024 and December 31, 2023, the Company's financial instruments included cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and certain liability classified warrants. The carrying amounts reported in the Company's financial statements for cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximates their respective fair values because of the short-term nature of these instruments. In addition, at September 30, 2024, the Company believed the carrying value of debt approximates fair value as the interest rates were reflective of the rate the Company could obtain on debt with similar terms and conditions. At September 30, 2024, there were no financial assets or liabilities measured at fair value on a recurring basis other than the liability classified warrants. In November 2022, the Company issued warrants in connection with a public offering. Pursuant to the terms of the warrant agreement, the Company could be required to settle the warrants in cash in the event of an acquisition of the Company and, as a result, the warrants are required to be measured at fair value and reported as liability in the consolidated balance sheet. The Company recorded the fair value of the warrants upon issuance using a Monte Carlo simulation and is required to revalue the warrants at each reporting date with any changes in fair value recorded on our statement of operations. The valuation of the warrants is considered under Level 3 of the fair value hierarchy due to the need to use assumptions in the valuation that are both significant to the fair value measurement and unobservable. The change in the fair value of the Level 3 warrants liabilities is reflected in the statement of operations.
Net product revenues	Net product revenues The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (ASC 606). The Company recognizes revenue from XHANCE sales at the point customers obtain control of the product, which generally occurs upon delivery. The transaction price that is recognized as revenue for products includes an estimate of variable consideration. The Company’s estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of its anticipated performance and all information (historical, current and forecasted) that is reasonably available. The components of the Company’s variable consideration include the following: Provider Chargebacks and Discounts. Chargebacks for fees and discounts to providers represent the estimated obligations resulting from contractual commitments to sell products to qualified healthcare providers at prices lower than the list prices charged to customers who directly purchase the product from the Company. Customers charge the Company for the difference between what they pay for the product and the ultimate selling price to the qualified healthcare providers. These components of variable consideration are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and accounts receivable. Trade Discounts and Allowances. The Company generally provides customers with discounts that include incentive fees which are explicitly stated in the Company’s contracts. These discounts are recorded as a reduction of revenue and accounts receivable in the period in which the related product revenue is recognized. Product Returns. Consistent with industry practice, the Company has a product returns policy that provides customers a right of return for product purchased within a specified period prior to and subsequent to the product’s expiration date. The Company estimates the amount of its product that may be returned and presents this amount as a reduction of revenue in the period the related product revenue is recognized, in addition to establishing a liability. The Company considers several factors in the estimation process, including expiration dates of product shipped to customers, inventory levels within the distribution channel, product shelf life, prescription trends and other relevant factors. Government Rebates. The Company is subject to discount obligations under state Medicaid programs and Medicare. Reserves related to these discount obligations are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability. The Company’s liability for these rebates consists of estimates of claims for the current quarter and estimated future claims that will be made for product that has been recognized as revenue but remains in the distribution channel inventories at the end of the reporting period. Payor Rebates. The Company contracts with certain third-party payors, primarily health insurance companies and pharmacy benefit managers, for the payment of rebates with respect to utilization of its products. These rebates are based on contractual percentages applied to the amount of product prescribed to patients who are covered by the plan or the organization with which it contracts. The Company estimates these rebates and records such estimates in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability. Patient Assistance. Other programs that the Company offers include voluntary co-pay patient assistance programs intended to provide financial assistance to eligible patients with prescription drug co-payments required by payors and coupon programs for cash payors. The calculation of the current liability for this assistance is based on an estimate of claims and the cost per claim that the Company expects to receive associated with product that has been recognized as revenue but remains in the distribution channel inventories at the end of each reporting period. Distribution and Other Fees. The Company pays distribution and other fees to certain customers in connection with the sales of its products. The Company records distribution and other fees paid to its customers as a reduction of revenue, unless the payment is for a distinct good or service from the customer and the Company can reasonably estimate the fair value of the goods or services received. If both conditions are met, the Company records the consideration paid to the customer as an operating expense. These costs are typically known at the time of sale, resulting in minimal adjustments subsequent to the period of sale.
Net income (loss) per common share	Net income (loss) per common share Basic and diluted net income (loss) per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities, which include restricted stock units. Under the two-class method, net income (loss) is allocated to common stock and each restricted stock unit to the extent that each restricted stock unit may share in earnings as if all of the earnings for the period had been distributed. The two-class method is not applicable during periods with a net loss, as is the case in the quarter ended, September 30, 2023, and the nine month periods ended September 30, 2023 and 2024. Basic net income (loss) per share of common stock, (Basic), is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding during each period. In the 2024 periods presented, the Basic weighted average share calculation also includes the weighted average of the pre-funded warrants to purchase shares of common stock at $0.0001 per share that were issued in the registered direct offering on May 10, 2024. Diluted income (loss) per common share, (Diluted), also includes the weighted average of common stock equivalents, if the inclusion of such common stock equivalents would be dilutive. Dilutive common stock equivalents potentially include warrants, stock options and non-vested restricted stock awards using the treasury stock method. As occurred in the nine month periods ended September 30, 2024, the Diluted calculation was further adjusted by the unrealized gains on the liability classified warrants under the assumption that the gains would not have been recorded if the warrants had been exercised.
Income taxes	Income taxes In accordance with ASC 270, Interim Reporting, and ASC 740, Income Taxes, the Company is required at the end of each interim period to determine the best estimate of its annual effective tax rate and then apply that rate in providing for income taxes on a current year-to-date (interim period) basis. For the nine months ended September 30, 2024 and 2023, the Company recorded no tax expense or benefit due to the expected current year loss and its historical losses. As of September 30, 2024 and December 31, 2023, the Company concluded that a full valuation allowance would be necessary for all of its net deferred tax assets. The Company had no amounts recorded for uncertain tax positions, interest or penalties in the accompanying consolidated financial statements.
Recent accounting pronouncements	Recent accounting pronouncements In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. FASB is issuing the amendments in this Update to enhance the transparency and decision usefulness of income tax disclosures. Investors, lenders, creditors, and other allocators of capital (collectively, “investors”) indicated that the existing income tax disclosures should be enhanced to provide information to better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. Investors currently rely on the rate reconciliation table and other disclosures, including total income taxes paid, to evaluate income tax risks and opportunities. While investors find these disclosures helpful, they suggested possible enhancements to better (1) understand an entity’s exposure to potential changes in jurisdictional tax legislation and the ensuing risks and opportunities, (2) assess income tax information that affects cash flow forecasts and capital allocation decisions, and (3) identify potential opportunities to increase future cash flows. The amendments in this Update address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This Update also includes certain other amendments to improve the effectiveness of income tax disclosures. The new standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating ASU No. 2023-09 and its impact on results of operations, financial position and cash flows and related disclosures. In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses. ASU No. 2024-03 requires new financial statement disclosures that disaggregate information, in a tabular format, about prescribed categories of relevant income statement captions. ASU No. 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating ASU No. 2024-03 and its impact on the Company's related disclosures.
Fair Value Measurements	Fair Value Measurements Assets and Liabilities Measured at Fair Value on a Recurring Basis The Company applies the guidance in ASC 820, Fair Value Measurements, to account for financial assets and liabilities measured on a recurring basis. Fair value is measured as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. The Company uses a fair value hierarchy, which distinguishes between assumptions based on market data (observable inputs) and an entity's own assumptions (unobservable inputs). The guidance requires that fair value measurements be classified and disclosed in one of the following 3 categories: Level l: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each reporting period. There were no transfers between Level I, 2 and 3 during the three months ended September 30, 2024.

- Definition

Disclosure of accounting policy for income taxes, which may include its accounting policies for recognizing and measuring deferred tax assets and liabilities and related valuation allowances, recognizing investment tax credits, operating loss carryforwards, tax credit carryforwards, and other carryforwards, methodologies for determining its effective income tax rate and the characterization of interest and penalties in the financial statements.

+ References + Details

- Definition

Disclosure of accounting policy for revenue from contract with customer.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-17

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-Name Accounting Standards Codification
-Section 50
-Paragraph 19
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-19

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-Section 50
-Paragraph 18
-Subparagraph (a)
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-URI https://asc.fasb.org/1943274/2147479806/606-10-50-18

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/exampleRef
-Name Accounting Standards Codification
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org/606/tableOfContent

+ Details

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and ContingenciesThe Company is a party to a manufacture and supply agreement pursuant to which it has agreed to make minimum purchases of finished XHANCE units of $2.0 million in 2024, and $2.4 million in both 2025 and 2026. If the Company fails to achieve the minimum purchase commitments, the Company must pay the supplier 50% of the amount of any shortfall and must reimburse the supplier for certain non-cancellable costs and expenses. The Company's minimum purchase commitments are subject to certain exceptions and reductions. The Company has made$1.2 million in purchases during the nine months ended September 30, 2024 under the Supply Agreement.

Inventory (Tables)

9 Months Ended

Sep. 30, 2024

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventory consisted of the following:


	September 30, 2024		December 31, 2023
Raw materials	$	2,272	$	2,400
Work-in-process	6,211		3,281
Finished goods	2,818		2,371
Total inventory	$	11,301	$	8,052

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Operating activities:
Net loss	$ (21,181)	$ (25,516)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization	218	282
Stock-based compensation	5,481	4,219
Change in fair value of warrant liability	(8,700)	(7,190)
Amortization of debt discount and issuance costs	1,531	1,242
Changes in operating assets and liabilities:
Accounts receivable	(9,847)	12,559
Prepaid expenses and other assets	(128)	2,432
Inventory	(3,249)	1,348
Accounts payable	(109)	(346)
Accrued expenses and other liabilities	(10,568)	(16,471)
Cash used in operating activities	(46,552)	(27,441)
Investing activities:
Purchases of property and equipment	(72)	(255)
Cash used in investing activities	(72)	(255)
Financing activities:
Proceeds from sale of common stock and warrants	55,476	0
Proceeds from the exercise of stock options		1
Proceeds from issuance of common stock under employee stock purchase plan	166	299
Cash paid for financing costs	(206)	(4)
Cash provided by financing activities	55,436	296
Net increase (decrease) in cash and cash equivalents	8,812	(27,400)
Cash and cash equivalents at beginning of period	73,684	94,244
Cash and cash equivalents at end of period	82,496	66,844
Supplemental disclosure of cash flow information:
Cash paid for interest	18,340	13,194
Supplemental disclosure of noncash activities:
Recognition of right-of-use assets and lease liabilities	$ 1,402	$ 890

Stock-based Compensation - Allocated Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Share-based Payment Arrangement, Expensed and Capitalized, Amount
Stock-based compensation expense	$ 1,290	$ 1,205	$ 5,481	$ 4,230
Cost of product sales
Share-based Payment Arrangement, Expensed and Capitalized, Amount
Stock-based compensation expense	15	9	66	27
Research and development
Share-based Payment Arrangement, Expensed and Capitalized, Amount
Stock-based compensation expense	10	129	42	410
General and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount
Stock-based compensation expense	$ 1,265	$ 1,067	$ 5,373	$ 3,793

Commitments and Contingencies (Details) - Hikma $ in Millions	9 Months Ended
	Sep. 30, 2024 USD ($)
Purchase Commitment, Excluding Long-Term Commitment [Line Items]
Minimum purchases in remainder of 2024	$ 2.0
Minimum purchases in 2025	2.4
Minimum purchases in 2026	$ 2.4
Shortfall reimbursement rate (as a percent)	50.00%
Payments to purchase supplies	$ 1.2

Fair Value Measurements - Narrative (Details)	9 Months Ended
Fair Value Measurements - Narrative (Details)	Sep. 30, 2024 $ / shares shares	May 10, 2024	May 09, 2024	Dec. 31, 2023
Fair Value Measurement Inputs and Valuation Techniques
Class of warrant or right restriction, common shares maximum ownership (as a percent)	4.99%
Class of warrant or right restriction, common shares maximum ownership prior to execution (as a percent)	9.99%
Class of warrant or right restriction, common shares maximum ownership after effective waiting period (as a percent)	19.99%
Strike price \| Monte Carlo Simulation
Fair Value Measurement Inputs and Valuation Techniques
Warrants outstanding, measurement input	1.00	1.00	2.565	2.57
Warrant
Fair Value Measurement Inputs and Valuation Techniques
Price per share (in dollars per share)	$ 1.00
Warrant \| Public Offering
Fair Value Measurement Inputs and Valuation Techniques
Number of shares issued (in shares) \| shares	30,268,000
Warrants exercise price (in dollars per share)	$ 0.01

Basis of Presentation and Summary of Significant Accounting Policies - Antidilutive Shares Excluded From Computation of Net Loss Per Share (Details) - shares	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share
Securities excluded from computation of net loss per common share (in shares)	40,777,649	45,124,399
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share
Securities excluded from computation of net loss per common share (in shares)	9,108,884	10,153,661
Restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share
Securities excluded from computation of net loss per common share (in shares)	3,518,338	2,012,552
Common stock warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share
Securities excluded from computation of net loss per common share (in shares)	28,034,593	32,768,000
Employee stock purchase plan
Antidilutive Securities Excluded from Computation of Earnings Per Share
Securities excluded from computation of net loss per common share (in shares)	115,834	190,186

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 82,497	$ 73,684
Accounts receivable, net	29,772	19,926
Inventory	11,301	8,052
Prepaid expenses and other current assets	4,645	3,671
Total current assets	128,215	105,333
Property and equipment, net	670	815
Other assets	2,135	1,581
Total assets	131,020	107,729
Current liabilities:
Accounts payable	3,777	3,886
Accrued expenses and other current liabilities	32,668	42,411
Short term debt, net	125,985	130,227
Total current liabilities	162,430	176,524
Warrant liability	8,500	17,200
Other liabilities	1,187	611
Total liabilities	172,117	194,335
Stockholders' deficit
Preferred stock, no par value; 5,000,000 shares authorized; no shares issued in 2024 or 2023	0	0
Common stock, $0.001 par value; 350,000,000 shares authorized;150,829,507 and 112,399,495 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively.	151	112
Additional paid-in capital	700,393	633,742
Accumulated deficit	(741,557)	(720,376)
Accumulated other comprehensive loss	(84)	(84)
Total stockholders' deficit	(41,097)	(86,606)
Total liabilities and stockholders' deficit	$ 131,020	$ 107,729

Debt - A&R Note Purchase Agreement (Details) - Senior Notes $ in Thousands	Sep. 30, 2024 USD ($)
March 31, 2024
Debt Instrument
XHANCE net product sales and royalties	$ 70,000
June 30, 2024
Debt Instrument
XHANCE net product sales and royalties	70,000
September 30, 2024
Debt Instrument
XHANCE net product sales and royalties	72,500
December 31, 2024
Debt Instrument
XHANCE net product sales and royalties	75,000
March 31, 2025
Debt Instrument
XHANCE net product sales and royalties	80,000
June 30, 2025
Debt Instrument
XHANCE net product sales and royalties	87,500
September 30, 2025
Debt Instrument
XHANCE net product sales and royalties	95,000
December 31, 2025
Debt Instrument
XHANCE net product sales and royalties	105,500
March 31, 2026
Debt Instrument
XHANCE net product sales and royalties	120,000
June 30, 2026
Debt Instrument
XHANCE net product sales and royalties	130,000
September 30, 2026
Debt Instrument
XHANCE net product sales and royalties	145,000
December 31, 2026
Debt Instrument
XHANCE net product sales and royalties	150,000
March 31, 2027
Debt Instrument
XHANCE net product sales and royalties	155,000
June 30, 2027
Debt Instrument
XHANCE net product sales and royalties	$ 160,000

Inventory (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Inventory Disclosure [Abstract]
Raw materials	$ 2,272	$ 2,400
Work-in-process	6,211	3,281
Finished goods	2,818	2,371
Total inventory	$ 11,301	$ 8,052

Employee Benefit Plans (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Employee Benefit Plans (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Retirement Benefits [Abstract]
Expense related to the company match	$ 223	$ 201	$ 872	$ 677

Property and Equipment

9 Months Ended

Sep. 30, 2024

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and equipment, net, consisted of the following:


	September 30, 2024		December 31, 2023
Computer equipment and software	$	1,465	$	1,443
Furniture and fixtures	366		366
Machinery and equipment	3,150		3,146
Leasehold improvements	655		609
Construction in process	115		115
	5,751		5,679
Less: accumulated depreciation	(5,081)		(4,864)
	$	670	$	815

Depreciation expense was $65 and $102 for the three months ended September 30, 2024 and 2023, respectively. Depreciation expense was $217 and $281 for the nine months ended September 30, 2024 and 2023, respectively.

Stock-based Compensation - Black-Scholes Pricing Model Options (Details) - 2017 Employee Stock Purchase Plan	9 Months Ended
	Sep. 30, 2024
Share-based Compensation Arrangement by Share-based Payment Award
Risk free interest rate	0.05%
Expected term (in years)	6 months
Expected volatility	67.93%
Service Based Stock Options
Share-based Compensation Arrangement by Share-based Payment Award
Risk free interest rate	4.26%
Expected term (in years)	5 years 10 months 24 days
Expected volatility	75.03%
Annual dividend yield	0.00%

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 35
-Paragraph 1D
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480483/718-10-35-1D

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Debt (Tables)

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Schedule of A&R Note Purchase Agreement and Long Term Balance

Pursuant to the Second Amendment, the financial covenants requiring the Company to achieve minimum trailing twelve-month consolidated XHANCE net product sales and royalties was modified as follows (amounts in thousands):


Trailing Twelve-Months Ending			As Revised Pursuant to Second Amendment
March 31, 2024			$70,000
June 30, 2024			$70,000
September 30, 2024			$72,500
December 31, 2024			$75,000
March 31, 2025			$80,000
June 30, 2025			$87,500
September 30, 2025			$95,000
December 31, 2025			$105,500
March 31, 2026			$120,000
June 30, 2026			$130,000
September 30, 2026			$145,000
December 31, 2026			$150,000
March 31, 2027			$155,000
June 30, 2027			$160,000

The Pharmakon debt balance is comprised of the following:



	September 30, 2024		December 31, 2023
Face amount	$	130,000	$	130,000
Front end fees	(477)		(518)
Debt issuance costs	(4,838)		(5,235)
Back end fees	1,300		5,980
Debt, net	$	125,985	$	130,227

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

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+ Details

Property and Equipment - Property and Equipment (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Property, Plant and Equipment
Property and equipment, gross	$ 5,751	$ 5,679
Less: accumulated depreciation	(5,081)	(4,864)
Property and equipment, net	670	815
Computer equipment and software
Property, Plant and Equipment
Property and equipment, gross	1,465	1,443
Furniture and fixtures
Property, Plant and Equipment
Property and equipment, gross	366	366
Machinery and equipment
Property, Plant and Equipment
Property and equipment, gross	3,150	3,146
Leasehold improvements
Property, Plant and Equipment
Property and equipment, gross	655	609
Construction in process
Property, Plant and Equipment
Property and equipment, gross	$ 115	$ 115

Property and Equipment - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Property, Plant and Equipment [Abstract]
Depreciation	$ 65	$ 102	$ 217	$ 281

Organization and Description of Business	9 Months Ended
Organization and Description of Business	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Description of Business	Organization and Description of Business OptiNose, Inc. (the Company) was incorporated in Delaware in May 2010 (inception) and has facilities in Yardley, Pennsylvania and Ewing, New Jersey. The Company's predecessor entity, OptiNose AS, was formed under the laws of Norway in September 2000. In 2010, OptiNose AS became a wholly-owned subsidiary of the Company as part of an internal reorganization. Optinose AS was liquidated in October 2023. During 2022, the Company's board of directors also approved the liquidation of Optinose UK, in order to simplify the corporate structure. Optinose UK was liquidated in July 2024. The Company is a specialty pharmaceutical company focused on the development and commercialization of products for patients treated by ear, nose and throat (ENT) and allergy specialists. The Company's first commercial product, XHANCE® (fluticasone propionate) nasal spray, 93 microgram (mcg), is a therapeutic utilizing the Company's proprietary Exhalation Delivery System™ (EDS®) that delivers a topically-acting corticosteroid for the treatment of chronic rhinosinusitis with and without nasal polyps.

Accrued Expenses and Other Current Liabilities (Tables)

9 Months Ended

Sep. 30, 2024

Payables and Accruals [Abstract]

Schedule of Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of:


	September 30, 2024		December 31, 2023
Accrued expenses:
Product revenue allowances	$	19,911	$	20,145
Selling, general and administrative expenses	4,976		6,229
Research and development expenses	262		644
Payroll expenses	5,481		6,801
Accrued interest	—		4,666
Other	1,034		3,015
Total accrued expenses	$	31,664	$	41,500
Other current liabilities:
Lease liability	$	1,004	$	911
Total other current liabilities	1,004		911
Total accrued expenses and other current liabilities	$	32,668	$	42,411

Stock-based Compensation

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Stock-based Compensation


	Three Months Ended September 30,			Nine Months Ended September 30,
		2024		2023		2024		2023
Cost of product sales		$	15	$	9	$	66	$	27
Research and development		10		129		42		410
General and administrative		1,265		1,067		5,373		3,793
		$	1,290	$	1,205	$	5,481	$	4,230

Stock Options

The Company issues stock-based awards pursuant to the 2010 Plan and the Nasdaq Inducement Grant Exception. The Company has issued service-based, performance-based, and market-based stock options that generally have a contractual life of up to 10 years and may be exercisable in cash or as otherwise determined by the Company's board of directors or committee thereof. Vesting generally occurs over a period of not greater than four years. Performance-based options may vest upon the achievement of certain milestones. As of September 30, 2024, all of the performance conditions related to performance-based stock options issued by the Company had been achieved. Market-based options may vest upon the achievement of certain market-based objectives relating to the trading price of the Company's common stock.

The following table summarizes the activity related to stock option grants to employees and non-employees for the nine months ended September 30, 2024:


	Shares	Weighted average exercise price per share		Weighted average remaining contractual life
Outstanding at December 31, 2023	8,527,626	$	5.03	6.55
Granted	1,703,101	1.56
Exercised	—	—
Expired	(853,327)	9.68
Forfeited	(268,516)	1.66
Outstanding at September 30, 2024	9,108,884	$	4.04	6.7
Exercisable at September 30, 2024	5,194,658	$	5.79	5.5

During the nine months ended September 30, 2024, service-based stock options to purchase 1,703,101 shares of common stock were granted to employees and generally vest over four years. The stock options had an estimated weighted average grant date fair value of $1.56. The grant date fair value of each service-based and performance-based option grant was estimated at the time of grant using the Black-Scholes option-pricing model. The grant date fair value of each market-based stock option grant was estimated at the time of grant using a Monte Carlo simulation.

The aggregate intrinsic value of stock options outstanding and stock options exercisable, other than market-based stock options, as of September 30, 2024 was $0 and $0, respectively. At September 30, 2024, the unrecognized compensation cost related to unvested stock options, other than market-based stock options, expected to vest was $3,513. This unrecognized compensation will be recognized over an estimated weighted-average amortization period of 2.4 years.

Included in the table above are 569,345 market-based options outstanding granted in 2022. These options generally become eligible to vest over four years, subject to the achievement of certain market-based objectives relating to the trading price of the common stock. Stock-based compensation for these awards is recognized over the derived service period of approximately 2 years. The grant date fair value of each stock option grant, as well as the derived service period for these awards, was estimated at the time of grant using a Monte Carlo simulation. During the nine months ended September 30, 2024, no market-based options vested upon the achievement of certain market-based objectives relating to the trading price of the Company's common stock.

Included in the table above are 674,167 inducement options outstanding granted outside the 2010 Plan. The grants were made pursuant to the Nasdaq Inducement Grant Exception.

The Company calculated the fair value of the stock option grants using the following weighted average assumptions:


	Nine Months Ended September 30,
	2024
Risk free interest rate	4.26	%
Expected term (in years)	5.9
Expected volatility	75.03	%
Annual dividend yield	0.00	%

Restricted Stock Units

The Company has issued service-based and performance-based restricted stock units (RSUs). Vesting generally occurs over a period not greater than four years. Vesting of the performance-based RSUs is subject to the achievement of certain milestones in connection with the Company's development programs.

The following table summarizes the activity related to RSUs granted to employees for the nine months ended September 30, 2024:


			Shares
Balance at December 31, 2023			1,897,421
Granted			3,574,200
Vested and settled			(1,677,284)
Expired/forfeited/canceled			(275,999)
Balance at September 30, 2024			3,518,338
Expected to vest at September 30, 2024			3,518,338

During the nine months ended September 30, 2024, the Company granted 3,574,200 RSUs at a weighted-average grant date fair value of $1.82, all of which were service-based RSUs, provided, that, in the event certain financial metrics are achieved any then unvested RSUs shall become fully-vested subject to the recipients continued service through such date. No performance-based RSUs were granted in the nine months ended September 30, 2024. As of December 31, 2023, the milestone associated with the previously granted performance based-RSUs was achieved. At September 30, 2024, the unrecognized compensation cost related to unvested service-based RSUs expected to vest was $5,569, to be recognized over an estimated weighted-average amortization period of 3.23 years.

Included in the table above are 41,250 RSUs granted outside the 2010 Plan. The grants were made pursuant to the Nasdaq Inducement Grant Exception.

2017 Employee Stock Purchase Plan

Under the 2017 Plan, shares of Common Stock may be purchased by eligible employees who elect to participate in the 2017 Plan at 85% of the lower of the fair market value of Common Stock on the first or last day of designated offering periods. During the nine months ended September 30, 2024, the Company issued 272,728 shares of Common Stock to employees.

The Company calculated the fair value of each grant under the 2017 Employee Stock Purchase Plan using the following weighted average assumptions:


	Nine Months Ended September 30,
	2024
Risk free interest rate	0.05	%
Expected term (in years)	0.5
Expected volatility	67.93	%

Liquidity (Details) $ / shares in Units, $ in Thousands	May 10, 2024 USD ($) $ / shares shares	Nov. 23, 2022 USD ($) installment	Sep. 30, 2024 USD ($)	Dec. 31, 2023 USD ($)
Subsidiary, Sale of Stock
Cash and cash equivalents			$ 82,497	$ 73,684
Working capital deficiency			34,215
Accumulated deficit			(741,557)	$ (720,376)
Sale of common stock, net of issuance costs (in shares) \| shares	31,800,000
Purchase price (in dollars per share) \| $ / shares	$ 1.00
Consideration received on transaction	$ 55,300
Note Purchase Agreement
Subsidiary, Sale of Stock
Number of installment payments (installment) \| installment		8
Periodic scheduled payments		$ 16,300
Senior Notes
Subsidiary, Sale of Stock
Principal balance outstanding			$ 130
Senior Notes \| Note Purchase Agreement
Subsidiary, Sale of Stock
Number of installment payments (installment) \| installment		8
Prefunded Warrants
Subsidiary, Sale of Stock
Sale of common stock, net of issuance costs (in shares) \| shares	23,700,000
Purchase price (in dollars per share) \| $ / shares	$ 0.999
Prefunded Warrants \| Common Stock
Subsidiary, Sale of Stock
Purchase price (in dollars per share) \| $ / shares	$ 0.0001

Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 467	$ (9,294)	$ (21,181)	$ (25,516)
Other comprehensive income (loss):
Foreign currency translation adjustment	0	0		0
Comprehensive income (loss)	$ 467	$ (9,294)	$ (21,181)	$ (25,516)

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income and other comprehensive income, attributable to parent entity. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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Reference 36: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Basis of Presentation and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation and Summary of Significant Accounting Policies

The accompanying unaudited interim consolidated financial statements have been prepared in conformity with US generally accepted accounting principles (GAAP). Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Updates (ASU) of the Financial Accounting Standards Board (FASB).

In the opinion of management, the accompanying unaudited interim financial statements include all normal and recurring adjustments (which consist primarily of accruals and estimates that impact the financial statements) considered necessary to present fairly the Company's financial position as of September 30, 2024 and its results of operations for the three and nine months ended September 30, 2024 and 2023 and cash flows for the nine months ended September 30, 2024 and 2023. Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. The

unaudited interim financial statements, presented herein, do not contain the required disclosures under GAAP for annual financial statements. The accompanying unaudited interim financial statements should be read in conjunction with the annual audited financial statements and related notes as of and for the year ended December 31, 2023 contained in the Company’s annual report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 7, 2024.

Use of estimates

The preparation of the unaudited interim consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited interim consolidated financial statements and reported amounts of expenses during the reporting period. Due to the uncertainty of factors surrounding the estimates or judgments used in the preparation of the unaudited interim consolidated financial statements, actual results may materially vary from these estimates. Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the unaudited interim consolidated financial statements in the period they are determined to be necessary.

Concentration of credit risk

Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and accounts receivable. The Company generally invests its cash in deposits with high credit quality financial institutions. Additionally, the Company performs periodic evaluations of the relative credit standing of these financial institutions.

Customer and supplier concentration

The Company has exposure to credit risk in accounts receivable from sales of product. XHANCE is sold to wholesale pharmaceutical distributors and preferred pharmacy network (PPN) partners, who, in turn, sell XHANCE to pharmacies, hospitals and other customers. Five customers represented approximately 78% and 73% of the Company's accounts receivable at September 30, 2024 and 2023, respectively. Five customers represented approximately 74% and 50% of the Company's net product sales for the three months ended September 30, 2024 and 2023, respectively. Five customers represented approximately 73% and 40% of the Company's net product sales for the nine months ended September 30, 2024 and 2023, respectively.

The Company purchases XHANCE and its components from several third-party suppliers and manufacturing partners, certain of which are only available through a single source. Although the Company could obtain each of these components from alternative third-party suppliers, it would need to qualify and obtain FDA approval for another supplier as a source for each such component.

Fair value of financial instruments

The Company measures certain assets and liabilities at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability (the exit price) in an orderly transaction between market participants at the measurement date. The FASB accounting guidance outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. In determining fair value, the Company uses quoted prices and observable inputs. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. The fair value hierarchy is broken down into three levels based on the source of the inputs as follows:

•Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities.

•Level 2 — Valuations based on observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

•Level 3 — Valuations based on inputs that are unobservable and models that are significant to the overall fair value measurement.

At September 30, 2024 and December 31, 2023, the Company's financial instruments included cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and certain liability classified warrants. The carrying amounts reported in the Company's financial statements for cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximates their respective fair values because of the short-term nature of these instruments. In addition, at September 30, 2024, the Company believed the carrying value of debt approximates fair value as the interest rates were reflective of the rate the Company could obtain on debt with similar terms and conditions. At September 30, 2024, there were no financial assets or liabilities measured at fair value on a recurring basis other than the liability classified warrants.

In November 2022, the Company issued warrants in connection with a public offering. Pursuant to the terms of the warrant agreement, the Company could be required to settle the warrants in cash in the event of an acquisition of the Company and, as a result, the warrants are required to be measured at fair value and reported as liability in the consolidated balance sheet. The Company recorded the fair value of the warrants upon issuance using a Monte Carlo simulation and is required to revalue the warrants at each reporting date with any changes in fair value recorded on our statement of operations. The valuation of the warrants is considered under Level 3 of the fair value hierarchy due to the need to use assumptions in the valuation that are both significant to the fair value measurement and unobservable. The change in the fair value of the Level 3 warrants liabilities is reflected in the statement of operations.

Net product revenues

The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (ASC 606). The Company recognizes revenue from XHANCE sales at the point customers obtain control of the product, which generally occurs upon delivery. The transaction price that is recognized as revenue for products includes an estimate of variable consideration. The Company’s estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of its anticipated performance and all information (historical, current and forecasted) that is reasonably available. The components of the Company’s variable consideration include the following:

Provider Chargebacks and Discounts. Chargebacks for fees and discounts to providers represent the estimated obligations resulting from contractual commitments to sell products to qualified healthcare providers at prices lower than the list prices charged to customers who directly purchase the product from the Company. Customers charge the Company for the difference between what they pay for the product and the ultimate selling price to the qualified healthcare providers. These components of variable consideration are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and accounts receivable.

Trade Discounts and Allowances. The Company generally provides customers with discounts that include incentive fees which are explicitly stated in the Company’s contracts. These discounts are recorded as a reduction of revenue and accounts receivable in the period in which the related product revenue is recognized.

Product Returns. Consistent with industry practice, the Company has a product returns policy that provides customers a right of return for product purchased within a specified period prior to and subsequent to the product’s expiration date. The Company estimates the amount of its product that may be returned and presents this amount as a reduction of revenue in the period the related product revenue is recognized, in addition to establishing a liability. The Company considers several factors in the estimation process, including expiration dates of product shipped to customers, inventory levels within the distribution channel, product shelf life, prescription trends and other relevant factors.

Government Rebates. The Company is subject to discount obligations under state Medicaid programs and Medicare. Reserves related to these discount obligations are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability. The Company’s liability for these rebates consists of estimates of claims for the current quarter and estimated future claims that will

be made for product that has been recognized as revenue but remains in the distribution channel inventories at the end of the reporting period.

Payor Rebates. The Company contracts with certain third-party payors, primarily health insurance companies and pharmacy benefit managers, for the payment of rebates with respect to utilization of its products. These rebates are based on contractual percentages applied to the amount of product prescribed to patients who are covered by the plan or the organization with which it contracts. The Company estimates these rebates and records such estimates in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability.

Patient Assistance. Other programs that the Company offers include voluntary co-pay patient assistance programs intended to provide financial assistance to eligible patients with prescription drug co-payments required by payors and coupon programs for cash payors. The calculation of the current liability for this assistance is based on an estimate of claims and the cost per claim that the Company expects to receive associated with product that has been recognized as revenue but remains in the distribution channel inventories at the end of each reporting period.

Distribution and Other Fees. The Company pays distribution and other fees to certain customers in connection with the sales of its products. The Company records distribution and other fees paid to its customers as a reduction of revenue, unless the payment is for a distinct good or service from the customer and the Company can reasonably estimate the fair value of the goods or services received. If both conditions are met, the Company records the consideration paid to the customer as an operating expense. These costs are typically known at the time of sale, resulting in minimal adjustments subsequent to the period of sale.

Net income (loss) per common share

Basic and diluted net income (loss) per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities, which include restricted stock units. Under the two-class method, net income (loss) is allocated to common stock and each restricted stock unit to the extent that each restricted stock unit may share in earnings as if all of the earnings for the period had been distributed. The two-class method is not applicable during periods with a net loss, as is the case in the quarter ended, September 30, 2023, and the nine month periods ended September 30, 2023 and 2024.

Basic net income (loss) per share of common stock, (Basic), is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding during each period. In the 2024 periods presented, the Basic weighted average share calculation also includes the weighted average of the pre-funded warrants to purchase shares of common stock at $0.0001 per share that were issued in the registered direct offering on May 10, 2024. Diluted income (loss) per common share, (Diluted), also includes the weighted average of common stock equivalents, if the inclusion of such common stock equivalents would be dilutive. Dilutive common stock equivalents potentially include warrants, stock options and non-vested restricted stock awards using the treasury stock method. As occurred in the nine month periods ended

September 30, 2024, the Diluted calculation was further adjusted by the unrealized gains on the liability classified warrants under the assumption that the gains would not have been recorded if the warrants had been exercised.

The following table sets forth the computation of basic and diluted shares outstanding for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Basic net income (loss) per common share calculation:
Net income (loss)	$	467	(9,294)		$	(21,181)	$	(25,516)
Less: undistributed earnings to participating shareholders	(74)		—		—		—
Net income (loss) – basic	393		(9,294)		(21,181)		(25,516)
Weighted-average shares of common stock outstanding – basic	174,328,570		112,230,155		144,900,726		111,996,456
Net income (loss) per share of common stock - basic	$	—	$	(0.08)	$	(0.15)	$	(0.23)



Net income (loss) – basic	$	393	$	(9,294)	$	(21,181)	$	(25,516)
Add: Unrealized gain on fair value of warrants	—		—		(8,700)		—
Net income (loss) - diluted	$	393	$	(9,294)	$	(29,881)	$	(25,516)
Weighted average shares of common stock outstanding - diluted	174,369,875		112,230,155		149,634,133		111,996,456
Net income (loss) per share of common stock - diluted	$	—	$	(0.08)	$	(0.20)	$	(0.23)

Computation of basic and diluted shares:
Weighted average shares of common stock outstanding - basic	174,328,570		112,230,155		144,900,726		111,996,456
Potential common shares:

Restricted stock units	41,305		—		—		—

Dilutive warrants	—		—		4,733,407		—
Weighted average shares of common stock outstanding - diluted	174,369,875		112,230,155		149,634,133		111,996,456

Diluted net loss per share for these periods presented on the statement of operations do not reflect the potential common shares noted below as their effect would be antidilutive.


	September 30,
	2024	2023
Stock options	9,108,884	10,153,661
Restricted stock units	3,518,338	2,012,552
Common stock warrants	28,034,593	32,768,000
Employee stock purchase plan	115,834	190,186
Total	40,777,649	45,124,399

Income taxes

In accordance with ASC 270, Interim Reporting, and ASC 740, Income Taxes, the Company is required at the end of each interim period to determine the best estimate of its annual effective tax rate and then apply that rate in providing for income taxes on a current year-to-date (interim period) basis. For the nine months ended September 30, 2024 and 2023, the Company recorded no tax expense or benefit due to the expected current year loss and its historical losses. As of September 30, 2024 and December 31, 2023, the Company concluded that a full valuation allowance would be necessary for all of its net deferred tax assets. The Company had no amounts recorded for uncertain tax positions, interest or penalties in the accompanying consolidated financial statements.

Recent accounting pronouncements

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. FASB is issuing the amendments in this Update to enhance the transparency and decision usefulness of income tax disclosures. Investors, lenders, creditors, and other allocators of capital (collectively, “investors”) indicated that the existing income tax disclosures should be enhanced to provide information to better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. Investors currently rely on the rate reconciliation table and other disclosures, including total income taxes paid, to evaluate income tax risks and opportunities. While investors find these disclosures helpful, they suggested possible enhancements to better (1) understand an entity’s exposure to potential changes in jurisdictional tax legislation and the ensuing risks and opportunities, (2) assess income tax information that affects cash flow forecasts and capital allocation decisions, and (3) identify potential opportunities to increase future cash flows. The amendments in this Update address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This Update also includes certain other amendments to improve the effectiveness of income tax disclosures. The new standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating ASU No. 2023-09 and its impact on results of operations, financial position and cash flows and related disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses. ASU No. 2024-03 requires new financial statement disclosures that disaggregate information, in a tabular format, about prescribed categories of relevant income statement captions. ASU No. 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating ASU No. 2024-03 and its impact on the Company's related disclosures.

Employee Benefit Plans	9 Months Ended
Employee Benefit Plans	Sep. 30, 2024
Retirement Benefits [Abstract]
Employee Benefit Plans	Employee Benefit Plans The Company maintains a defined contribution 401(k) retirement plan. For the nine months ended September 30, 2024 and 2023, $872 and $677 respectively, were recorded in expense for the Company match. For the three months ended September 30, 2024 and 2023, the match expense was $223 and $201, respectively. The Company's contributions are made in cash. The Company also maintains a severance benefit plan for employees that is governed by the Employee Retirement Income Security Act of 1974. The severance benefit plan provides severance benefits to eligible employees who are involuntarily terminated from their jobs for reasons other than cause, disability, or death.

- Definition

The entire disclosure for retirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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-SubTopic 70
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-Section 50
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-URI https://asc.fasb.org/1943274/2147480794/715-70-50-1

Reference 2: http://www.xbrl.org/2003/role/exampleRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-Name Accounting Standards Codification
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-URI https://asc.fasb.org/715/tableOfContent

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Fair Value Measurements

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The Company applies the guidance in ASC 820, Fair Value Measurements, to account for financial assets and liabilities measured on a recurring basis. Fair value is measured as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability.

The Company uses a fair value hierarchy, which distinguishes between assumptions based on market data (observable inputs) and an entity's own assumptions (unobservable inputs). The guidance requires that fair value measurements be classified and disclosed in one of the following 3 categories:

Level l: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each reporting period. There were no transfers between Level I, 2 and 3 during the three months ended September 30, 2024.


	September 30, 2024
	Total		Level 1		Level 2		Level 3
Liabilities
Warrant Liability	$	8,500	$	—	$	—	$	8,500
Total Liabilities	$	8,500	$	—	$	—	$	8,500

	December 31, 2023
Liabilities
Warrant Liability	$	17,200	$	—	$	—	$	17,200
Total Liabilities	$	17,200	$	—	$	—	$	17,200

Changes in Level 3 Liabilities Measured at Fair Value on a Recurring Basis

Warrant Liability

The reconciliation of the Company's warrant liability measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows (in thousands):



	Warrant Liability
Balance, December 31, 2023	$	17,200
Warrants issued	—
Change in fair value of liability	(8,700)
Balance, September 30, 2024	$	8,500

Assumptions Used in Determining Fair Value of Liability-Classified Warrants

The Company issued warrants to purchase 30,268,000 shares of Common Stock at a public offering price of $0.01 per warrant (the Warrants). Each Warrant has an exercise price of $1.00 per share of common stock and is exercisable until the expiration date, which is the fifth anniversary of the date of issuance (November 23, 2027). After such date, any unexercised Warrants will expire and have no further value. If the Company issues or sells, or is deemed pursuant to the terms of the Warrants to have issued or sold, any shares of common stock (which includes, among other things, options and securities convertible into shares of common stock), subject to certain exceptions and excluding certain issuances defined in the Warrants as "excluded issuances", for a price per share less than the exercise price of the Warrants in effect immediately prior to such issuance or sale or deemed issuance or sale (such event, a "dilutive issuance"), then immediately after such dilutive issuance the exercise price then in

effect of the Warrants shall be reduced to the price of the shares of common stock issued or sold or deemed to be issued or sold in the dilutive issuance in the manner set forth in the Warrant.

A holder of Warrants will not have the right to exercise any portion of a Warrant if the holder (together with its affiliates) would beneficially own in excess of 4.99% (or on election of such holder, prior to the issuance of any Warrants, 9.99%) of the number of shares of Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Warrants; provided, however, such holder may increase or decrease such percentage to any other percentage not in excess of 19.99%, provided that any increase in such percentage shall not be effective until 61 days after such notice is delivered to the Company.

Pursuant to the terms of the Warrant, the Company could be required to settle the Warrants in cash in the event of a "fundamental transaction" as defined in the Warrant (which includes, among other things, an acquisition of the Company) and, as a result, the Warrants are required to be measured at fair value and reported as liability in the consolidated balance sheet.

The Company utilizes a Monte Carlo simulation valuation model which incorporates assumptions as to the stock price volatility, the expected life of the warrants, a risk-free interest rate, as well as timing and probability of equity financing. The Company values the warrant liability at each reporting period, with changes in fair value recognized in the consolidated statements of operations. The estimated fair value of the warrant liability is determined using Level 3 inputs. The inputs and values were as follows:



	September 30, 2024			December 31, 2023
Stock price	$	0.67		$	1.29
Strike price	$	1.00		$	2.57
Expected volatility	65.0		%	60.0		%
Risk-free interest rate	3.5		%	3.9		%
Expected dividend yield	—		%	—		%
Expected life (years)	3.1			3.9
Fair value per warrant	$	0.28		$	0.57

On May 10, 2024, the Company completed a registered direct offering which resulted in the exercise price of the Warrants being reduced from $2.565 to $1.00 (which was the offering price of each share sold in the registered direct offering) pursuant to the anti-dilution price protection provisions of such Warrants. All other terms of the Warrants remain unchanged.

- 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.

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+ Details