INARI MEDICAL, INC. You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q and our audited financial statements and related notes thereto for the year endedDecember 31, 2019 , included in our prospectus datedMay 21, 2020 filed with theU.S. Securities and Exchange Commission , pursuant to Rule 424(b)(4) under the Securities Act. Overview We are a commercial-stage medical device company focused on developing products to treat and transform the lives of patients suffering from venous diseases. Our initial product offering consists of two minimally-invasive, novel catheter-based mechanical thrombectomy devices. We purpose-built our products for the specific characteristics of the venous system and the treatment of the two distinct manifestations of venous thromboembolism, or VTE - deep vein thrombosis and pulmonary embolism. Our ClotTriever product is FDA-cleared for the removal of clot from peripheral blood vessels and is used to treat patients suffering from deep vein thrombosis, or DVT. Our FlowTriever product is the first thrombectomy system FDA-cleared for the treatment of pulmonary embolism, or PE. We believe the best way to treat VTE and improve the quality of life of patients suffering from this disease is to safely and effectively remove the blood clot. With that in mind, we designed and purpose-built our ClotTriever and FlowTriever products to remove large clots from large vessels and eliminate the need for thrombolytic drugs. We believe our products are transformational and could be the catalyst to drive an evolution of treatment for venous diseases, establishing our products as the standard of care for DVT and PE. We believe our venous-focused commercial organization provides a significant competitive advantage. Our most important relationships are between our sales representatives and our target physicians, which include interventional cardiologists, interventional radiologists and vascular surgeons. We have developed systems and processes to harness the information gained from these relationships and we leverage this information to rapidly iterate products, introduce and execute physician education and training programs and scale our sales organization. We market and sell our products to hospitals, which are reimbursed by various third-party payors. We have dedicated meaningful resources to building a direct sales force inthe United States , and we are actively expanding our sales organization through additional sales representatives and territories. OnMay 27, 2020 , we completed our IPO, which resulted in the issuance and sale of 9,432,949 shares of common stock, including 1,230,384 shares sold pursuant to the exercise of the underwriters' over-allotment option, at the IPO price of$19.00 per share. We received net proceeds of approximately$163.0 million from the IPO, after deducting underwriters' discounts and commissions of$12.6 million and offering costs of$3.7 million . Prior to our IPO, our primary sources of capital were private placements of preferred stock, debt financing arrangements and revenue from sales of our products. Since inception, we have raised a total of approximately$54.2 million in net proceeds from private placements of preferred stock. As ofSeptember 30, 2020 , we had cash and cash equivalents of$168.0 million , no long-term debt outstanding and an accumulated deficit of$34.4 million . For the three months endedSeptember 30, 2020 , we generated revenue of$38.7 million , with a gross margin of 91.7% and net income of$6.5 million , compared to revenue of$14.2 million , with a gross margin of 89.4% and net income of$0.4 million for the three months endedSeptember 30, 2019 . For the nine months endedSeptember 30, 2020 , we generated revenue of$91.1 million , with a gross margin of 89.7% and net income of$6.8 million , compared to revenue of$31.2 million , with a gross margin of 87.9% and net loss of$1.6 million for the nine months endedSeptember 30, 2019 .
COVID-19
InDecember 2019 , a novel strain of coronavirus, SARS-CoV-2, was identified inWuhan, China . Since then, SARS-CoV-2, and the resulting disease, COVID-19, has spread to most countries, including all 50 states inthe United States . In response to the pandemic, numerous state and local jurisdictions imposed, and others in the future may impose, "shelter-in-place" orders, quarantines, executive orders and similar government orders and restrictions for their residents to control the spread of COVID-19. For example, inthe United States , governmental authorities recommended, and in certain cases required, that elective, specialty and other procedures and appointments be suspended or canceled to avoid non-essential patient exposure to medical environments and potential infection with COVID-19 and to focus limited resources and personnel capacity toward the treatment of COVID-19 patients. Similarly, onMarch 19, 2020 , the governor ofCalifornia , where our headquarters are located, issued "stay at home" orders limiting non-essential activities, travel and business operations. Such orders or restrictions resulted in reduced operations at our headquarters (including our manufacturing facility), work stoppages, slowdowns and delays, travel restrictions and cancellation of events. These orders and restrictions significantly decreased the number of procedures performed using our products during March andApril 2020 and otherwise negatively impacted our operations, including new customer procurement and onboarding. 23 -------------------------------------------------------------------------------- In response to the impact of COVID-19, we implemented a variety of measures to help us manage through its impact and position us to resume operations quickly and efficiently once these restrictions were lifted. These measures existed across several operational areas and included: • Continuing to build our team, including identifying and recruiting our next group of new sales representatives; • Enhancing our physician outreach and training with the launch of ourClot Warrior Academy consisting of a series of live webinars and an online education portal;
• Continuing to support procedures using our products both in-person and
virtually;
• Adapting, expanding and improving our sales training
programs and customer engagement to address the current
environment;
• Continuing to expand our engineering infrastructure and focusing on
organic opportunities;
• Producing approximately four months' worth of inventory
before temporarily suspending production in April 2020 ;
• Continuing to protect and support our employees, including no
layoffs, furloughs or compensation reductions to date;
• Executing a successful work-from-home strategy for
administrative functions that includes launching various
efficiency projects in information technology, accounting
and operations;
• Monitoring and reviewing recent case studies of VTE patients suffering
from COVID-19;
• Initiating market assessment and commercial entry planning for our
international expansion; and
• Accessing the remaining $10.0 million on our term loan on March 23,
2020 , which was repaid in full along with all our long term-debt in
August 2020 .
Despite the negative impacts from COVID-19, for the nine months ended September
30, 2020 , approximately 8,600 procedures were performed using our products,
compared to approximately 2,800 procedures in the nine months ended September
30, 2019 . During the second quarter, we experienced disruptions to our procedure
volume beginning in mid-March as a result of COVID-19, and weekly procedure
volumes declined by approximately 40% by mid-April when compared to weekly
procedure volumes in early March. The decrease in procedure volume impacted DVT
procedures and PE procedures relatively equally, with both types of procedures
declining during this period. However, we saw a recovery in procedure volume in
June that was higher than our pre COVID-19 peak. During the third quarter, we
saw continued sequential growth beyond previous quarters.
While we are encouraged by our third quarter results, we are aware that the
actual and perceived impact of COVID-19 is changing and cannot be predicted. As
a result, we cannot assure you that our recent procedure volumes are indicative
of future results or that we will not experience additional negative impacts
associated with COVID-19, which could be significant. The COVID-19 pandemic has
negatively impacted our business, financial condition and results of operations
by significantly decreasing and delaying the number of procedures performed
using our products, and we expect the pandemic could continue to negatively
impact our business, financial condition and results of operations.
Procedure Volume
We regularly review various operating and financial metrics to evaluate our
business, measure our performance, identify trends affecting our business,
formulate our business plan and make strategic decisions. We believe the number
of procedures performed to treat DVT and PE using our products is an indicator
of our ability to drive adoption and generate revenue. We believe this is an
important metric for our business; however, we anticipate that additional
metrics may become important as our business grows. The following table lists
the number of procedures performed in each of the three-month periods as
indicated:
Three Months Ended
Sept 30, March 31, Dec. 31, Sept 30,
Procedures(1) 2020 June 30, 2020 2020 2019 2019 June 30, 2019 March 31, 2019
DVT 2,000 1,400 1,300 1,000 700 500 300
PE 1,700 1,100 1,100 800 600 400 300
3,700 2,500 2,400 1,800 1,300 900 600
(1) We define a procedure as any instance in which a physician treats DVT or PE
using our products. We estimate the number of procedures performed based on
records created by our sales representatives. This metric has limitations as
we only have records for the procedures where our sales representatives have
notice that a procedure has been performed. Revenue is recognized based on
hospital purchase orders, not based on the procedure records created by our
sales representatives. Numbers are rounded to the nearest hundred.
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Components of our Results of Operations
Revenue
We currently derive all our revenue from the sale of our ClotTriever and FlowTriever products to hospitals inthe United States . Our customers typically purchase an initial stocking order of our products and then reorder replenishment product as procedures are performed. No single customer accounted for 10% or more of our revenue during the three and nine months endedSeptember 30, 2020 and 2019. For the three and nine months endedSeptember 30, 2020 , approximately 54% of our customers used both of our products, 34% used ClotTriever only and 12% used FlowTriever only. We expect revenue to increase in absolute dollars as we expand our sales organization and sales territories, add customers, expand the base of physicians that are trained to use our products, expand awareness of our products with new and existing customers and as physicians perform more procedures using our products. Revenue for ClotTriever and FlowTriever products as a percentage of total revenue is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 ClotTriever 37 % 38 % 38 % 38 % FlowTriever 63 % 62 % 62 % 62 % For the nine months endedSeptember 30, 2020 , our blended revenue per procedure was approximately$9,100 . Blended revenue per procedure represents the average of the average selling price per ClotTriever and the average price per FlowTriever procedure.
Cost of Goods Sold and Gross Margin
We manufacture and/or assemble all our products at our facility inIrvine, California . Cost of goods sold consists primarily of the cost of raw materials, components, direct labor and manufacturing overhead. Overhead costs include the cost of quality assurance, material procurement, inventory control, facilities, equipment and operations supervision and management, including stock-based compensation. Cost of goods sold also includes depreciation expense for production equipment and certain direct costs such as shipping costs and royalty expense. Shipping costs billed to customers are reported as a reduction of cost of goods sold. We expect cost of goods sold to increase in absolute dollars as our revenue grows and more of our products are sold. We calculate gross margin as gross profit divided by revenue. Our gross margin has been and will continue to be affected by a variety of factors, including average selling prices, product sales mix, production and ordering volumes, manufacturing costs, product yields, headcount and cost-reduction strategies. Our gross margin could fluctuate from quarter to quarter as we introduce new products, and as we adopt new manufacturing processes and technologies. Treatments using the FlowTriever may involve one or more Triever aspiration catheters and one or more FlowTriever catheters. We charge customers the same price for each FlowTriever procedure, regardless of the number of components used. As a result, changes in the number of components used, the cost of these components and the introduction of additional components can impact our gross margin.
Research and Development Expenses
Research and development, or R&D, expenses consist primarily of engineering,
product development, clinical studies to develop and support our products,
regulatory expenses, and other costs associated with products that are in
development. These expenses include employee compensation, including stock-based
compensation, supplies, consulting, prototyping, testing, materials, travel
expenses, depreciation and an allocation of facility overhead expenses.
Additionally, R&D expenses include costs associated with our clinical trials and
registries, including clinical study design, clinical study site initiation and
study costs, data management, and internal and external costs associated with
our regulatory compliance, including the costs of outside consultants and
contractors that assist in the process of submitting and maintaining regulatory
filings. We expense R&D costs as incurred. We expect R&D expenses as a
percentage of revenue to vary over time depending on the level and timing of our
new product development efforts, as well as our clinical development, clinical
trials and registries and other related activities.
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--------------------------------------------------------------------------------Selling, General and Administrative Expenses
Selling, general and administrative, or SG&A, expenses consist primarily of compensation for personnel, including stock-based compensation, related to selling and marketing functions, physician education programs, commercial operations and analytics, finance, information technology and human resource functions. Other SG&A expenses include sales commissions, travel expenses, promotional activities, marketing initiatives, market research and analysis, conferences and trade shows, physician training, professional services fees (including legal, audit and tax fees), insurance costs, general corporate expenses and facilities-related expenses. We expect SG&A expenses to continue to increase in absolute dollars as we expand our sales and marketing organization and infrastructure to both drive and support the anticipated growth in revenue and due to additional legal, accounting, insurance and other expenses associated with being a public company. Interest Income
Interest income consists primarily of interest income earned on our cash and cash equivalents.
Interest Expense
Interest expense consists primarily of interest incurred on our outstanding indebtedness and non-cash interest related to the amortization of debt discount and issuance costs associated with our indebtedness.
Change in Fair Value of Warrant Liabilities
Change in fair value of warrant liabilities consists of gains and losses resulting from the remeasurement of the fair value of our preferred stock warrant liabilities at each balance sheet date. Upon the closing of our IPO, our outstanding preferred stock warrants automatically converted into warrants to purchase shares of our common stock. At such time, the final fair value of the warrant liability was reclassified to stockholders' equity (deficit). We will no longer record any related periodic fair value adjustments.
Results of Operations
Comparison of the three months ended
The following table sets forth the components of our unaudited statements of
operations in dollars and as percentage of revenue for the periods presented
(dollars in thousands):
Three Months Ended September 30,
2020 % 2019 % Change $
Revenue $ 38,715 100.0 % $ 14,225 100.0 % $ 24,490
Cost of goods sold 3,228 8.3 % 1,510 10.6 % 1,718
Gross profit 35,487 91.7 % 12,715 89.4 % 22,772
Operating expenses:
Research and development 5,217 13.5 % 1,722 12.1 % 3,495
Selling, general and
administrative 23,080 59.6 % 10,100 71.0 % 12,980
Total operating expenses 28,297 73.1 % 11,822 83.1 % 16,475
Income from operations 7,190 18.6 % 893 6.3 % 6,297
Other income (expense)
Interest income 208 0.5 % 19 0.1 % 189
Interest expense (251 ) (0.6 %) (226 ) (1.6 %) (25 )
Other expenses (651 ) (1.7 %) - 0.0 % (651 )
Change in fair value of
warrant liabilities - 0.0 % (320 ) (2.2 %) 320
Total other expenses, net (694 ) (1.8 %) (527 ) (3.7 %) (167 )
Net income and
comprehensive income $ 6,496 16.8 % $ 366 2.6 % $ 6,130
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-------------------------------------------------------------------------------- Revenue. Revenue increased$24.5 million , or 172%, to$38.7 million during the three months endedSeptember 30, 2020 , compared to$14.2 million during the three months endedSeptember 30, 2019 . The increase in revenue was due primarily to an increase in the number of products sold and an increase in the average selling prices of our products. Cost of Goods Sold and Gross Margin. Cost of goods sold increased$1.7 million , or 114%, to$3.2 million during the three months endedSeptember 30, 2020 , compared to$1.5 million during the three months endedSeptember 30, 2019 . This increase was due to the increase in the number of products sold and additional manufacturing overhead costs incurred as we invested significantly in our operational infrastructure to support anticipated future growth. Gross margin for the three months endedSeptember 30, 2020 increased to 91.7%, compared to 89.4% for the three months endedSeptember 30, 2019 , due to an increase in the average selling prices of our products and improved operating leverage. Research and Development Expenses. R&D expenses increased$3.5 million , or 203%, to$5.2 million during the three months endedSeptember 30, 2020 , compared to$1.7 million during the three months endedSeptember 30, 2019 . The increase in R&D expenses was primarily due to increases of$1.6 million of personnel-related expenses,$0.8 million in materials and supplies,$0.8 million of clinical study and registry expenses, and$0.2 million in professional fees. Selling, General and Administrative Expenses. SG&A expenses increased$13.0 million , or 129%, to$23.1 million during the three months endedSeptember 30, 2020 , compared to$10.1 million during the three months endedSeptember 30, 2019 . The increase in SG&A costs was primarily due to an increase of$10.0 million in personnel-related expenses as a result of increased headcount across our organization and increased commissions due to higher revenue, an increase of$1.0 million in professional fees, an increase of$1.0 million in insurance costs, and an increase of$0.3 million in facility costs. Interest Income. Interest income increased by$189,000 to$208,000 during the three months endedSeptember 30, 2020 , compared to$19,000 during the three months endedSeptember 30, 2019 . The increase in interest income was primarily due to an increase in average cash and cash equivalents during the three months endedSeptember 30, 2020 , compared to the three months endedSeptember 30, 2019 . Interest Expense. Interest expense increased by$25,000 or 11% during the three months endedSeptember 30, 2020 , compared to the three months endedSeptember 30, 2019 , due primarily to the higher average borrowings during the three months endedSeptember 30, 2020 . Change in Fair Value of Warrant Liabilities. We recorded no change in fair value of warrant liabilities for the three months endedSeptember 30, 2020 , compared to$0.3 million for three months endedSeptember 30, 2019 . Other expenses. Other expenses for the three months endedSeptember 30, 2020 consisted primarily of a$0.7 million loss on extinguishment of debt related to the payoff of our debt facility with Signature Bank.
Comparison of the nine months ended
The following table sets forth the components of our unaudited statements of
operations in dollars and as percentage of revenue for the periods presented
(dollars in thousands):
Nine Months Ended September 30,
2020 % 2019 % Change $
Revenue $ 91,059 100.0 % $ 31,242 100.0 % $ 59,817
Cost of goods sold 9,420 10.3 % 3,772 12.1 % 5,648
Gross profit 81,639 89.7 % 27,470 87.9 % 54,169
Operating expenses:
Research and development 11,863 13.0 % 4,511 14.4 % 7,352
Selling, general and
administrative 58,353 64.1 % 23,328 74.7 % 35,025
Total operating expenses 70,216 77.1 % 27,839 89.1 % 42,377
Income (loss) from
operations 11,423 12.6 % (369 ) (1.2 %) 11,792
Other income (expense)
Interest income 409 0.4 % 66 0.2 % 343
Interest expense (1,060 ) (1.2 %) (682 ) (2.2 %) (378 )
Other expenses (651 ) (0.7 %) - 0.0 % (651 )
Change in fair value of
warrant liabilities (3,317 ) (3.6 %) (562 ) (1.8 %) (2,755 )
Total other expenses, net (4,619 ) (5.1 %) (1,178 ) (3.8 %) (3,441 )
Net income (loss) and
comprehensive income (loss) $ 6,804 7.5 % $ (1,547 ) (5.0 %) $ 8,351
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-------------------------------------------------------------------------------- Revenue. Revenue increased$59.8 million , or 192%, to$91.1 million during the nine months endedSeptember 30, 2020 , compared to$31.2 million during the nine months endedSeptember 30, 2019 . The increase in revenue was due primarily to an increase in the number of products sold and an increase in the average selling prices of our products. The increase in revenue was offset in part by the negative impact of the COVID-19 pandemic on procedure volume and new orders during the nine months endedSeptember 30, 2020 . Cost of Goods Sold and Gross Margin. Cost of goods sold increased$5.6 million , or 150%, to$9.4 million during the nine months endedSeptember 30, 2020 , compared to$3.8 million during the nine months endedSeptember 30, 2019 . This increase was due to the increase in the number of products sold and additional manufacturing overhead costs incurred as we invested significantly in our operational infrastructure to support anticipated future growth. Cost of goods sold for the nine months endedSeptember 30, 2020 was also impacted by$1.1 million in idle production capacity costs associated with the COVID-19 pandemic. Gross margin for the nine months endedSeptember 30, 2020 increased to 89.7%, compared to 87.9% for the nine months endedSeptember 30, 2019 due to an increase in the average selling prices of our products and improved operating leverage. Research and Development Expenses. R&D expenses increased$7.4 million , or 163%, to$11.9 million during the nine months endedSeptember 30, 2020 , compared to$4.5 million during the nine months endedSeptember 30, 2019 . The increase in R&D expenses was primarily due to increases of$3.1 million of personnel-related expenses,$1.9 million of clinical study and registry expenses,$1.8 million in materials and supplies, and$0.3 million in professional fees. Selling, General and Administrative Expenses. SG&A expenses increased$35.0 million , or 150%, to$58.4 million during the nine months endedSeptember 30, 2020 , compared to$23.3 million during the nine months endedSeptember 30, 2019 . The increase in SG&A costs was primarily due to an increase of$27.8 million in personnel-related expenses as a result of increased headcount across our organization and increased commissions due to higher revenue, an increase of$2.7 million in professional fees, an increase of$1.4 million in insurance costs, an increase of$0.7 million in facility costs, and an increase in$0.6 million in travel costs. Interest Income. Interest income increased by$343,000 to$409,000 during the nine months endedSeptember 30, 2020 , compared to$66,000 during the nine months endedSeptember 30, 2019 . The increase in interest income was primarily due to an increase in average cash and cash equivalents during the nine months endedSeptember 30, 2020 , compared to the nine months endedSeptember 30, 2019 . Interest Expense. Interest expense increased by$0.4 million or 55% during the nine months endedSeptember 30, 2020 , compared to the nine months endedSeptember 30, 2019 . This increase was primarily due to higher average borrowings under our credit facilities during the nine months endedSeptember 30, 2020 . Change in Fair Value of Warrant Liabilities. Change in fair value of warrant liabilities increased$2.7 million to$3.3 million for the nine months endedSeptember 30, 2020 , compared to$0.6 million for nine months endedSeptember 30, 2019 . This increase was due to the fair value remeasurement of our convertible preferred stock warrant liabilities.
Other expenses. Other expenses for the nine months ended
Liquidity and Capital Resources
To date, our primary sources of capital have been the net proceeds we received through private placements of preferred stock, debt financing agreements, the sale of common stock in our IPO, and revenue from the sale of our products. OnMay 27, 2020 , we completed our IPO, including the underwriters full exercise of their over-allotment option, selling 9,432,949 shares of our common stock at$19.00 per share. Upon completion of our IPO, we received net proceeds of approximately$163.0 million , after deducting underwriting discounts and commissions and offering expenses. InAugust 2020 , we repaid in full the$30.0 million of principal owed under the credit facility with Signature Bank. As ofSeptember 30, 2020 , we had cash and cash equivalents of$168 million , and an accumulated deficit of$34.4 million . InSeptember 2020 , we entered into a new revolving Credit Agreement withBank of America which provides for loans up to a maximum of$30 million . As ofSeptember 30, 2020 , we had no principal outstanding under the Credit Agreement and the amount available to borrow was approximately$25.2 million .
Based on our current planned operations, we expect that our cash and cash equivalents and available borrowings will enable us to fund our operating expenses for at least 12 months from the date hereof.
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If our available cash balances and anticipated cash flow from operations are
insufficient to satisfy our liquidity requirements including because of lower
demand for our products as a result of the risks described in this Quarterly
Report, we may seek to sell additional common or preferred equity or convertible
debt securities, enter into an additional credit facility or another form of
third-party funding or seek other debt financing. The sale of equity and
convertible debt securities may result in dilution to our stockholders and, in
the case of preferred equity securities or convertible debt, those securities
could provide for rights, preferences or privileges senior to those of our
common stock. The terms of debt securities issued or borrowings pursuant to a
credit agreement could impose significant restrictions on our operations. If we
raise funds through collaborations and licensing arrangements, we might be
required to relinquish significant rights to our platform technologies or
products or grant licenses on terms that are not favorable to us. Additional
capital may not be available on reasonable terms, or at all.
Cash Flows
The following table summarizes our cash flows for each of the nine-month periods
indicated (in thousands):
Nine Months Ended September 30,
2020 2019
Net Cash (used in) provided by:
Operating activities $ 3,536 $ (4,110 )
Investing activities (3,076 ) (2,062 )
Financing activities 143,889 198
Net increase (decrease) in cash
and cash equivalent $ 144,349 $ (5,974 ) Net cash provided by operating activities for the nine months endedSeptember 30, 2020 was$3.5 million , consisting primarily of net income of$6.8 million and non-cash charges of$7.0 million , offset by an increase in net operating assets of$10.3 million . The increase in net operating assets was primarily due to increases in accounts receivable of$9.6 million and inventories of$3.2 million to support the growth of our operations, an increase in prepaid and other assets of$2.9 million primarily from prepaid insurance, which were partially offset by increases in accounts payable of$1.0 million and accrued liabilities of$4.5 million due to timing of payments and growth of our operations. The non-cash charges primarily consisted of$3.3 million in change in fair value of the preferred stock warrant liabilities, stock-based compensation of$2.0 million ,$0.9 million in depreciation, and$0.6 million in loss on extinguishment of debt. Net cash used in operating activities for the nine months endedSeptember 30, 2019 was$4.1 million , consisting primarily of a net loss of$1.5 million and an increase in net operating assets of$3.9 million , partially offset by non-cash charges of$1.3 million . The increase in net operating assets was primarily due to an increase in accounts receivable of$5.7 million due to increase in sales and inventories of$2.0 million to support the growth of our operations, partially offset by increases in account payable of$1.0 million and accrued liabilities of$3.1 million due to timing of payments and growth of our operations. Non-cash charges consisted primarily of$0.4 million in depreciation, stock-based compensation of$0.3 million , and the change in fair value of the convertible preferred stock warrants of$0.6 million .
Net cash used in investing activities in the nine months endedSeptember 30, 2020 and 2019 was$3.1 million and$2.1 million , respectively, consisting of purchases of property and equipment.
Net Cash Provided by Financing Activities
Net cash provided by financing activities in the nine months endedSeptember 30, 2020 was$143.9 million primarily consisting of net IPO proceeds of$164.4 million and net proceeds of$10.0 million received from additional borrowings under the credit facility with Signature Bank, partially offset by the$30.3 million repayment of the amount outstanding under the credit facility.
There were no significant cash flow financing activities in the nine months
ended
29
--------------------------------------------------------------------------------Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements, as defined by applicable regulations of theU.S. Securities and Exchange Commission , that are reasonably likely to have a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.
Contractual Obligations and Commitments
There have been no material changes outside the ordinary course of business to the Company's contractual obligations from those disclosed in "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in the prospectus datedMay 21, 2020 filed with theU.S. Securities and Exchange Commission pursuant to Rule 424(b)(4) under the Securities Act.
Critical Accounting Policies and Estimates
Management's discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance withU.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions for the reported amounts of assets, liabilities, revenue, expenses and related disclosures. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and any such differences may be material. There were no material changes to our critical accounting policies or in the methodology used for estimates from those described in "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in the Prospectus.
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