Bioventus Inc 8-K/A, filed Sep 27, 2022

Bioventus Inc. (BVS)

8-K/A 2022-09-27 For: 2022-07-12

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Added on April 07, 2026

About this 8-K/A

Bioventus Inc filed this 8-K/A on September 27, 2022, reporting on events of July 12, 2022.

Items reported

Item 9.01: Financial statements and exhibits

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Exhibit No.						Description
23.1						Consent of Kesselman & Kesselman, a member firm of PricewaterhouseCoopers International Limited
99.1						CartiHeal (2009) Ltd. audited consolidated financial statements as of and for the year ended December 31, 2021 and 2020 and the notes related thereto.
99.2						Unaudited pro forma condensed combined financial information of the Company (giving effect to the CartiHeal Acquisition and other transactions ) as of and for the six months ended July 2, 2022 and for the year ended December 31, 2021 and the notes related thereto.
104						Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document)


	BIOVENTUS INC.

Date: September 27, 2022	By:	/s/ Anthony D’Adamio
		Anthony D’Adamio Senior Vice President and General Counsel


		December 31
	Note	2021	2020
		U.S. dollars in thousands
Assets

CURRENT ASSETS:
Cash and cash equivalents	5	4,871	7,051
Short-term deposits		2,000	10,498
Restricted cash		26	29
Other accounts receivable		104	225
TOTAL CURRENT ASSETS		7,001	17,803

NON-CURRENT ASSETS: Long-term deposit		23	22
Long-term deposit		23	22
Right of use asset	7	688	843
Property and equipment, net	6	337	478
TOTAL NON-CURRENT ASSETS		1,048	1,343
TOTAL ASSETS		8,049	19,146

Liabilities and shareholders' equity

CURRENT LIABILITIES:
Trade payables		57	32
Current maturities of lease liabilities	7	272	241
Employees and payroll accruals		450
Accrued expenses		261	1,975
TOTAL CURRENT LIABILITIES		1,040	2,248

NON-CURRENT LIABILITIES:
Lease liabilities	7	575	683
Royalty bearing government grants	3	1,627	1,582
TOTAL NON-CURRENT LIABILITIES		2,202	2,265
TOTAL LIABILITIES		3,242	4,513

SHAREHOLDERS' EQUITY:	9
Share capital
Ordinary shares		3	3
Preferred shares		31	31
Additional-paid-in capital		69,815	69,815
Share-based compensation		2,613	2,254
Accumulated deficit		(67,655)	(57,470)
TOTAL SHAREHOLDERS' EQUITY		4,807	14,633
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		8,049	19,146


	Year ended December 31
	2021	2020
	U.S. dollars in thousands

OPERATING EXPENSES:
RESEARCH AND DEVELOPMENT	7,797	6,411
GENERAL AND ADMINISTRATIVE	2,229	2,041
OPERATING LOSS	10,026	8,452

FINANCIAL INCOME	(87)	(84)
FINANCIAL EXPENSES	217	297
FINANCIAL EXPENSES, net	130	213
LOSS BEFORE INCOME TAXES	10,156	8,665
INCOME TAXES	29	29
NET LOSS AND COMPREHENSIVE LOSS	10,185	8,694


	Ordinary shares		Preferred shares		Additional paid-in capital	Share-based compensation	Accumulated deficit	Total shareholders' equity
	Number	Amount	Number	Amount
		U.S. dollars in thousands		U.S. dollars in thousands	U.S. dollars in thousands
BALANCE AS OF January 1, 2020	1,482,282	3	9,635,884	27	50,401	2,136	(48,776)	3,791
CHANGES DURING 2020:
Simple Agreement for future equity, net of $10 thousands issuance costs, see Note 8d					4,990			4,990
Issuance of Series G Preferred shares, net of $572 thousands issuance costs and conversion of the Simple Agreement for Future Equity, see Note 8e			1,436,877	4	14,424			14,428
Exercise of options	1,536	*	—	—	—	—	—	*
Share-based compensation	—	—	—	—	—	118	—	118
Net loss	—	—	—	—	—	—	(8,694)	(8,694)
BALANCE AS OF December 31, 2020	1,483,818	3	11,072,761	31	69,815	2,254	(57,470)	14,633
CHANGE DURING 2021:
Share-based compensation	—	—	—	—	—	359	—	359
Total comprehensive loss	—	—	—	—	—	—	(10,185)	(10,185)
BALANCE AS OF December 31, 2021	1,483,818	3	11,072,761	31	69,815	2,613	(67,655)	4,807


			%
Office furniture and equipment			7-15
Lab equipment			15
Computers and software			33
Leasehold improvements			See below


Set forth below is certain data regarding dollar exchange rates:
	Exchange rate of NIS per $1		Exchange rate of Euro per $1
As of December 31:
2020	3.215		0.815
2021	3.196		0.883

Percentage increase (decrease) in USD exchange rate:
2020	(7.0)	%	(8.5)	%
2021	(3.0)	%	8.3	%


Contractual maturities of financial liabilities	Less than 1 year	Between 1 and 2 years	Between 2 and 5 years	Over 5 years	Total contractual cash flows	Carrying amount liabilities
	USD in Thousands
At December 31 2021
Trade payables	57	—	—	—	57	57
Other account payable	711	—	—	—	711	711
Lease liabilities	254	557	150	—	961	847
Royalties bearing government grants	—	294	2,787	—	3,081	1,627
Total	1,022	851	2,937	—	4,810	3,242
At December 31 2020
Trade payables	32	—	—	—	32	32
Other account payable	1,975	—	—	—	1,975	1,975
Lease liabilities	241	254	543	—	1,038	924
Royalties bearing government grants	—	294	2,787	—	3,081	1,582
Total	2,248	548	3,330	—	6,126	4,513


	Cost			Accumulated depreciation			Net book value
	Balance at beginning of year	Additions during year	Balance at end of year	Balance at beginning of year	Additions during year	Balance at end of year	Balance at end of year
Composition in 2021:
Offices	1,104	—	1,104	288	185	473	631
Warehouse	56	43	99	30	12	42	57
	1,160	43	1,203	318	197	515	688

Composition in 2020:
Offices	1,104	—	1,104	101	187	289	815
Warehouse	56	—	56	18	12	30	26
	1,160	—	1,160	119	199	319	841


	Balance at beginning of year	Additions during year	Interest expense during year	Payments during year	Translation adjustment	Balance at end of year
Composition in 2021:
Offices	902	—	85	183	*	804
Warehouse	22	43	6	24	*	47
	924	43	91	207	*	851

Composition in 2020:
Offices	1,062	—	74	234	*	902
Warehouse	42	—	3	23	*	22
	1,104	—	77	257	*	924


	December 31, 2021		December 31, 2020
	Authorized	Issued and outstanding	Authorized	Issued and outstanding
	Number of shares
Ordinary shares of NIS 0.01 par value each	16,289,700	1,483,818	16,289,700	1,483,818
Series A Preferred shares of NIS 0.01 par value *	550,000	416,067	550,000	416,067
Series B Preferred shares of NIS 0.01 par value	500,000	204,666	500,000	204,666
Series C Preferred shares of NIS 0.01 par value	600,000	245,599	600,000	245,599
Series D-1 Preferred shares of NIS 0.01 par value	103,000	102,110	103,000	102,110
Series D-2 Preferred shares of NIS 0.01 par value	3,881,300	3,881,107	3,881,300	3,881,107
Series E Preferred shares of NIS 0.01 par value	2,200,000	1,972,041	2,200,000	1,972,041
Series F Preferred shares of NIS 0.01 par value	4,100,000	2,814,294	4,100,000	2,814,294
Series G Preferred shares of NIS 0.01 par value	1,353,000	1,014,267	1,353,000	1,014,267
Series G-1 Preferred shares of NIS 0.01 par value	423,000	422,610	423,000	422,610
Total	30,000,000	12,556,579	30,000,000	12,556,579


Dividend yield	—
Share price	$ 1.74
Expected volatility of the share prices	63.65	%
Risk-free interest rate	1.69	%
Expected life of share options (years)	5


	Year ended December 31, 2021		Year ended December 31, 2020
	Number of options	Weighted average exercise price	Number of options	Weighted average exercise price

Outstanding at beginning of year	536,644	0.65	340,746	0.641
Granted	139,888	0.12	214,898	1.74
Forfeited	(26,273)	0.66	(19,000)	0.92
Outstanding at end of year	650,259	0.48	536,644	0.65
Exercisable at end of year	498,424	0.387	310,233	0.595


	December 31, 2021	December 31, 2020
	USD
Weighted average fair value of the options outstanding	1.04	1.09
Weighted average fair value of the options granted during the year	1.74	1.74

	Years
Average remaining contractual life for the share options outstanding	5.7	5.18


	Historical Bioventus		Historical CartiHeal		CartiHeal Transaction Accounting Adjustments			Financing Transaction Accounting Adjustments			Noncontrolling Interest Adjustment			Pro Forma
Assets			(Note 4)		(Note 5)			(Note 6)			(Note 7)
Current assets:
Cash and cash equivalents	$	41,001	$	3,758	$	(58,600)	(a)	$	54,972	(a)	$	—		$	41,131
Restricted cash	—		23		—			—			—			23
Accounts receivable, net	143,018		—		—			—			—			143,018
Inventory	69,078		642		—			—			—			69,720
Prepaid and other current assets	24,060		149		—			—			—			24,209
Total current assets	277,157		4,572		(58,600)			54,972			—			278,101

Property and equipment, net	25,112		259		—			—			—			25,371
Goodwill	143,156		—		59,497		(m)	—			—			202,653
Intangible assets, net	666,523		—		408,600		(b)	—			—			1,075,123
Operating lease assets	18,342		—		—			—			—			18,342
Deferred tax assets	—		—		—			—			—			—
Investments and other assets	78,486		721		(66,084)		(a) (f)	101		(b)	—			13,224
Total assets	$	1,208,776	$	5,552	$	343,413		$	55,073		$	—		$	1,612,814

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	25,735	$	18	$	—		$	—		$	—		$	25,753
Accrued liabilities	146,758		—		—			101		(b)	—			146,859
Current portion of long-term debt	22,547		—		—			5,000		(a)	—			27,547
Other current liabilities	3,833		760		43,520		(c)	—			—			48,113
Total current liabilities	198,873		778		43,520			5,101			—			248,272

Long-term debt, less current portion	351,433		—		—			49,972		(a)	—			401,405
Deferred income taxes	98,892		—		79,863		(d)	—			—			178,755
Contingent consideration, less current portion	16,871		—		61,900		(e)	—			—			78,771
Other long-term liabilities	22,517		2,274		137,520		(c)	—			—			162,311
Total liabilities	688,586		3,052		322,803			55,073			—			1,069,514

Commitments and contingencies

Preferred stock
Class A common stock	64		34		(34)		(h)	—			—			64
Class B common stock	16		—		—			—			—			16
Additional paid-in capital	473,796		69,815		(69,815)		(h)	—			(79,682)		(a)	394,114
Accumulated deficit	(25,131)		(67,349)		90,459		(h)	—			—			(2,021)
Shared-based compensation	—		—		—			—			—			—
Accumulated other comprehensive loss	(764)		—		—			—			—			(764)
Total stockholders’ equity attributable to Bioventus Inc.	447,981		2,500		20,610			—			(79,682)			391,409
Noncontrolling interest	72,209		—		—			—			79,682		(a)	151,891
Total stockholders’ equity	520,190		2,500		20,610			—			—			543,300
Total liabilities and stockholders’ equity	$	1,208,776	$	5,552	$	343,413		$	55,073		$	—		$	1,612,814


	Year ended December 31
	2021	2020
	U.S. dollars in thousands

CASH FLOWS FROM OPERATING ACTIVITIES:	(10,185)	(8,694)
Net comprehensive loss
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	323	388
Share-based payments	359	118
Financial expenses	175	276
Revaluation of restricted cash	3	4
Decrease (increase) in other accounts receivable	121	57
Increase (decrease) in trade payables	25	(328)
Increase in other accounts payable	(1,264)	58
Net cash used in operating activities	(10,443)	(8,121)

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from (investment in) short-term deposits	8,498	(10,498)
Investment in long-term deposits	(1)	(17)
Purchase of property and equipment	(27)	(13)
Net cash provided by (used in) financing activities	8,470	(10,528)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of Series G Preferred shares, net	—	19,418
Payments of lease liabilities including interest	(207)	(252)
Net cash provided by (used in) financing activities	(207)	19,166

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(2,180)	517
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD	7,051	6,534
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	4,871	7,051

NON-CASH ACTIVITIES:
Conversion of the SAFE to series G preferred shares	—	4,990

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Tax Payment	85	77
Interest received	87	80


	Year ended December 31
	2021			2020
			in USD thousands			in USD thousands
Loss before taxes	23.0	%	10,185	23.0	%	8,694

Theoretical tax benefit			2,343			2,000
Effect of:
Expenses not deductible for tax			(24)			(33)
Tax assets that were not recorded regarding carryforward tax losses			(2,353)			(1,999)
Tax in a different tax rate			5			3
Tax income recognized in income statement			29			29


	Historical Bioventus		Historical Misonix		Historical CartiHeal		Misonix Transaction Accounting Adjustments			CartiHeal Transaction Accounting Adjustments			Financing Transaction Accounting Adjustments			Pro Forma
			(Note 9)		(Note 3)		(Note 5)			(Note 5)			(Note 6)
Net sales	$	430,898	$	64,774	$	—	$	—		$	—		$	—		$	495,672
Cost of sales (including depreciation and amortization)	128,192		18,967		—		14,470		(o)	—			—			161,629
Gross profit	302,706		45,807		—		(14,470)			—			—			334,043
Selling, general and administrative expense	254,253		—		—		53,167		(o)	2,444		(i)	—			309,864
Selling expense	—		42,901		—		(42,901)		(o)	—			—			—
General and administrative expense	—		33,916		2,229		(33,916)		(o)	(2,229)		(i)	—			—
Research and development expense	19,039		4,665		7,797		(688)		(o)	—			—			30,813
Change in fair value of contingent consideration	829		—		—		—			—			—			829
Restructuring costs	2,487		—		—		—			—			—			2,487
Depreciation and amortization	8,363		—		—		3,316		(o)	24,516		(b)	—			36,195
Impairment of variable interest entity assets	5,674		—		—		—			—			—			5,674
Operating income (loss)	12,061		(35,675)		(10,026)		6,552			(24,731)			—			(51,819)
Interest expense (income)	1,112		3,641		—		—			(91)		(n)	41,809		(c)	46,471
Other expense (income)	3,329		(227)		130		—			(24,978)		(j)	—			(21,746)
Other expense (income)	4,441		3,414		130		—			(25,069)			41,809			24,725
Income (loss) before income taxes	7,620		(39,089)		(10,156)		6,552			338			(41,809)			(76,544)
Income tax (benefit) expense	(1,966)		132		29		(1,644)		(k)	(85)		(k)	10,494			6,960
Net income (loss)	9,586		(39,221)		(10,185)		8,196			423			(52,303)			(83,504)
Loss attributable to noncontrolling interest(1)	9,789		—		—		(1,721)			(89)			10,984			18,963
Net income (loss) attributable to stockholders	$	19,375	$	(39,221)	$	(10,185)	$	6,475		$	334		$	(41,319)		$	(64,541)









Net loss per share of Class A common stock, basic and diluted(2)	$	(0.15)											(Note 8)			$	(1.50)
Weighted-average shares of Class A Common stock outstanding, basic and diluted	45,472,483												(Note 8)			60,179,720
(1) Refer to Note 7. Noncontrolling interest adjustments for further details concerning the pro forma impact to noncontrolling interest.
(2) Per share information for the year ended December 31, 2021 represents loss per share of Class A common stock and weighted-average shares of Class A common stock outstanding from February 16, 2021 through December 31, 2021, the period following Bioventus Inc.’s initial public offering and related transactions. Refer to Note 8. Combined company earnings per share information for further details.


	Historical Bioventus		Historical CartiHeal		CartiHeal Transaction Accounting Adjustments			Financing Transaction Accounting Adjustments			Pro Forma
			(Note 3)		(Note 5)			(Note 6)
Net sales	$	257,621	$	—	$	—		$	—		$	257,621
Cost of sales (including depreciation and amortization)	85,265		—		—			—			85,265
Gross profit	172,356		—		—			—			172,356
Selling, general and administrative expense	175,744		—		520		(i)	—			176,264
General and administrative expense	—		503		(503)		(i)	—			—
Research and development expense	13,294		1,869		—			—			15,163
Restructuring costs	1,584		—		—			—			1,584
Change in fair value of contingent consideration	542		—		—			—			542
Depreciation and amortization	5,950		—		12,257		(b)	—			18,207

Operating loss	(24,758)		(2,372)		(12,274)			—			(39,404)
Interest expense (income)	1,028		—		(46)		(n)	17,876		(c)	18,858
Other expense (income)	922		(27)		(681)		(l)	—			214
Other expense (income)	1,950		(27)		(727)			17,876			19,072
Loss before income taxes	(26,708)		(2,345)		(11,547)			(17,876)			(58,476)
Income tax (benefit) expense	(3,888)		3		1,681		(k)	2,602			398
Net loss	(22,820)		(2,348)		(13,228)			(20,478)			(58,874)
Loss attributable to noncontrolling interest(1)	4,291		—		2,699			4,178			11,168
Net loss attributable to stockholders	$	(18,529)	$	(2,348)	$	(10,529)		$	(16,300)		$	(47,706)

Net loss per share of Class A common stock, basic and diluted	$	(0.30)						(Note 8)			$	(0.78)
Weighted-average shares of Class A Common stock outstanding, basic and diluted	60,977,556							(Note 8)			60,977,556
(1) Refer to Note 7. Noncontrolling interest adjustments for further details concerning the pro forma impact to noncontrolling interest.


Cash consideration	$	100,000
Transaction related costs	8,600
Subtotal cash at closing	108,600
Deferred amount	180,900
Contingent consideration	61,900
Fair value of previously held equity interest	39,200
Total consideration	$	390,600


Fair value of consideration	$	390,600
Assets acquired and liabilities assumed:
Cash and cash equivalents	3,758
Restricted Cash	23
Inventory	642
Prepaid and other current assets	149
Intangible assets	408,600
Property and equipment, net	259
Investment and other assets	727
Account payable	(18)
Other current liabilities	(630)
Deferred tax liability	(79,863)
Other long-term liabilities	(2,544)
Net assets acquired	331,103
Resulting goodwill(1)	$	59,497


	Common Shares	Price per Share		Amount
Cash				$	182,988
Bioventus Class A Common shares	18,340,790	$	14.97	274,562
Value of Misonix Options settled in Bioventus options				27,636
Merger consideration				485,186
Other cash considerations				40,130
Total Misonix consideration				$	525,316


Cash consideration at closing(1)	$	(58,600)
Cash from financing arrangements (see Note 6)	80,000
Payment on revolver (see Note 6)	(25,028)
	$	(3,628)


				Amortization Expense
	Fair value			Six Months Ended July 2, 2022		Year Ended December 31, 2021
Acquired intangible assets	$	408,600	Depreciation and amortization	$	12,356	$	24,713


CartiHeal equity method investment balance as reported July 2, 2022	$	16,090
Adjustments:
Gain resulting from remeasurement of equity method investment at fair value	23,110
Purchase consideration of previously held equity interest	(39,200)
Pro forma balance at July 2, 2022	$	—


Gain resulting from remeasurement of equity method investment at fair value	$	23,110
Removal of equity losses for the year ended December 31, 2021	1,868
Pro forma other income resulting from CartiHeal Acquisition	$	24,978


Cost of Sales	Pro forma Twelve Months Ended December 31, 2021
Remove amortization of inventory fair value step-up recorded in November and December	$	(2,804)
Add full year amortization of inventory fair value step-up	8,411
Remove historical intangible assets amortization	(1,344)
Add full year Misonix intangible assets amortization expense due to fair value adjustment(1)	6,675
Remove pre-acquisition stock-based compensation expense	(58)
Reclass shipping costs from selling, general and administrative expense in order to conform with Bioventus’ presentation methodology	3,590
Total adjustments to historical Misonix cost of sales	$	14,470


Selling, general and administrative	Pro forma Twelve Months Ended December 31, 2021
Remove historical intangible assets amortization	$	(1,242)
Add full year Misonix intangible assets amortization expense due to fair value adjustment(1)	8,066
Remove Misonix pre-acquisition transaction costs	(12,908)
Remove Misonix pre-acquisition stock-based compensation expense for accelerated vesting	(11,338)
Reclassifications of Misonix historical financial information to conform with Bioventus’ presentation:
Reclass shipping costs to cost of sales	(3,590)
Reclass depreciation to depreciation and amortization	(2,656)
Reclass from research and development expense	18
Reclass selling expense to selling, general and administrative expense	42,901
Reclass general and administrative expense to selling, general and administrative expense	33,916
Total adjustments to historical Misonix selling, general and administrative expense	$	53,167


Depreciation and amortization	Pro forma Twelve Months Ended December 31, 2021
Reclass from selling, general and administrative expense in order to conform with Bioventus’ presentation methodology	$	2,656
Remove historical intangible assets amortization	(132)
Add full year Misonix intangible assets amortization expense due to fair value adjustment(1)	792
Total adjustments to depreciation and amortization	$	3,316


Current portion of long-term debt:
Increase in current portion of long-term debt	$	5,000
Long-term debt, less current portion:
Increase in long-term debt	75,000
Payment on Revolver	(25,028)
Increase in long-term debt, less current portion	$	49,972


	Six Months Ended July 2, 2022		Year Ended December 31, 2021
Eliminate historical Bioventus interest expense on long-term debt	$	(4,912)	$	(5,551)
Eliminate historical Misonix interest expense on long-term debt	—		(2,878)
Interest expense on long-term debt pursuant to the Second Amended Credit Agreement	10,464		21,172
Amortization of discount and certain deferred financing fees(1)	447		892
Interest expense on the Deferred Amount	11,877		28,174
	$	17,876	$	41,809


	July 2, 2022			December 31, 2021
	LLC Interests	Ownership %		LLC Interests	Ownership %
Number of LLC Interests owned
Bioventus Inc.	61,656	79.6	%	59,548	79.0	%
Continuing LLC Owner	15,787	20.4	%	15,787	21.0	%
Total	77,443	100.0	%	75,335	100.0	%


	Six Months Ended July 2, 2022						Year Ended December 31, 2021
	Net loss		NCI %		NCI $		Net income (loss)		NCI %		NCI $
Historical noncontrolling interest loss					$	4,291					$	9,789
Accounting transaction adjustments impact on net (loss) income:
Misonix transactions							$	8,196	21.0	%	(1,721)
CartiHeal transactions	$	(13,228)	20.4	%	2,699		423		21.0	%	(89)
Financing transactions	(20,478)		20.4	%	4,178		(52,303)		21.0	%	10,984
Total loss resulting from adjustments attributable noncontrolling interests					6,877						9,174

Pro forma loss attributable to noncontrolling interest					$	11,168					$	18,963


	Six Months Ended July 3, 2022		February 16, 2021 through December 31, 2021
Numerator for basic and diluted earnings per share calculation:(1)
Pro forma net loss	$	(58,874)	$	(109,481)
Pro forma loss attributable to noncontrolling interest	11,168		18,962
Pro forma net loss attributable to the combined company	$	(47,706)	$	(90,519)

Denominator for basic and diluted earnings per share calculation:(1)
Weighted-average Bioventus’outstanding common stock - basic and diluted	60,977,556		60,179,720

Pro forma net loss per share - basic and diluted	$	(0.78)	$	(1.50)


	Six Months Ended July 3, 2022	February 16, 2021 through December 31, 2021
LLC held by Continuing LLC Owner (1)	15,786,737	15,786,737
Stock options	9,396,023	9,105,082
RSUs	769,809	966,673
Universal shares of Class A common stock	—	30,056
Total	25,952,569	25,888,548


	Misonix
	Historical Financial Information for the Period January 1, 2021 through October 29, 2021
	Three Months Ended March 31, 2021		Three Months Ended June 30, 2021		July 1, 2021 to October 29, 2021		Historical Misonix
Net sales	$	18,347	$	19,685	$	26,742	$	64,774
Cost of sales (including depreciation and amortization)	5,403		5,610		7,954		18,967
Gross profit	12,944		14,075		18,788		45,807

Selling expense	10,891		11,803		20,207		42,901
General and administrative expense	3,631		4,553		25,732		33,916
Research and development expense	1,317		1,494		1,854		4,665




Operating loss	(2,895)		(3,775)		(29,005)		(35,675)
Interest expense	867		870		1,904		3,641
Other (income) expense	(5)		(304)		82		(227)
Other expense	862		566		1,986		3,414
Loss before income taxes	(3,757)		(4,341)		(30,991)		(39,089)
Income tax expense	—		132		—		132
Net loss	$	(3,757)	$	(4,473)	$	(30,991)	$	(39,221)