ESTABLISHMENT LABS HOLDINGS INC

Previous wording

•Our results of operations has been in the past, and could be in the future, adversely affected by fluctuations in currency rates.

Current wording

•Our results of operations have been in the past, and could be in the future, adversely affected by fluctuations in currency rates.

Previous wording

The main manufacturing activities are conducted attwo manufacturing facilities in Costa Rica. The Company is in the process of finishing the construction for a third facility in Costa Rica. In 2010, the Company began operating under the Costa Rica free zone regime (Régimen de Zona Franca), which provides for reduced income tax and other tax obligations pursuant to an agreement with the Costa Rican authorities.

Current wording

The main manufacturing activities are conducted attwo manufacturing facilities in Costa Rica. The Company completed construction of its third facility in Costa Rica. In 2010, the Company began operating under the Costa Rica free zone regime (Régimen de Zona Franca), which provides for reduced income tax and other tax obligations pursuant to an agreement with the Costa Rican authorities.

Previous wording

The Company is pursuing regulatory approval to commercialize its implants in the United States. The Company received approval for an investigational device exemption, or IDE, from the U.S. Food and Drug Administration, or FDA, in March 2018 to initiate a clinical trial in the United States for its Motiva Implants. In August 2019, the Company completed all patient surgeries for the IDE aesthetic cohorts, which include primary augmentation and revision. In 2021, the Company initiated a modular pre-market approval, or PMA, submission process with the FDA and submitted the first of four modules. In June 2022, full enrollment of the IDE clinical trial was complete, and all surgeries in the primary reconstruction cohort were performed. In August 2022, the third module was submitted to the FDA. By June 30, 2022, the Company completed the three-year study subject follow-up for the aesthetic cohort. The final fourth module was submitted to the FDA in February 2023. The Company presented three-year patient follow-up data for the primary augmentation cohort of the IDE clinical trial at The Aesthetic Meeting in April 2023. In October 2023, the FDA granted 510(k) clearance for the Motiva Flora SmoothSilk Tissue Expander. In January 2024, the Company announced completion of the first commercial procedure of the Motiva Flora SmoothSilk Tissue Expander in the United States and the commercial launch of Motiva Implants in China.

Current wording

The Company is pursuing regulatory approval to commercialize its implants in the United States. The Company received approval for an investigational device exemption, or IDE, from the U.S. Food and Drug Administration, or FDA, in March 2018 to initiate a clinical trial in the United States for its Motiva Implants. In August 2019, the Company completed all patient surgeries for the IDE aesthetic cohorts, which include primary augmentation and revision. In 2021, the Company initiated a modular pre-market approval, or PMA, submission process with the FDA and submitted the first of four modules. In June 2022, full enrollment of the IDE clinical trial was complete, and all surgeries in the primary reconstruction cohort were performed. In August 2022, the third module was submitted to the FDA. By June 30, 2022, the Company completed the three-year study subject follow-up for the aesthetic cohort. The final fourth module was submitted to the FDA in February 2023. The Company presented three-year patient follow-up data for the primary augmentation cohort of the IDE clinical trial at The Aesthetic Meeting in April 2023. In May 2024, the Company released preliminary results of the four-year patient follow-up data for the primary augmentation cohort of its IDE clinical trial. The FDA completed the inspection of the Company’s manufacturing facility in Costa Rica at the end of July 2024. After completion, the FDA issued a Form 483 Notice with three observations, each unrelated to one another. The Company subsequently responded in writing to the FDA about the observations, indicating that it has fully remediated all three of them.

Previous wording

There have been no material changes to the Company’s significant accounting policies during the three months ended March 31, 2024 as compared to the significant accounting policies described in Note 2 of the “Notes to Consolidated Financial Statements” in the Company’s audited consolidated financial statements as of December 31, 2023 and 2022 and for the years ended 2023, 2022 and 2021 presented in the Company’s Form 10-K filed with the Securities and Exchange Commission, or SEC, on March 4, 2024. Below are those policies with current period updates.

Current wording

There have been no material changes to the Company’s significant accounting policies during the six months ended June 30, 2024 as compared to the significant accounting policies described in Note 2 of the “Notes to Consolidated Financial Statements” in the Company’s audited consolidated financial statements as of December 31, 2023 and 2022 and for the years ended 2023, 2022 and 2021 presented in the Company’s Form 10-K filed with the Securities and Exchange Commission, or SEC, on March 4, 2024. Below are those policies with current period updates.

Previous wording

The accompanying interim condensed consolidated financial statements as of March 31, 2024 and for the three months ended March 31, 2024 and 2023, and the related interim information contained within the notes to the condensed consolidated financial statements, are unaudited. The unaudited interim condensed consolidated financial statements have been prepared in accordance with GAAP and on the same basis as the audited consolidated financial statements. In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments which are necessary to state fairly the Company’s financial position as of March 31, 2024, and the results of its operations and cash flows for the three months ended March 31, 2024 and 2023. Such adjustments are of a normal and recurring nature. The results for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the full fiscal year 2024, or for any future period.

Current wording

The accompanying interim condensed consolidated financial statements as of June 30, 2024 and for the three and six months ended June 30, 2024 and 2023, and the related interim information contained within the notes to the condensed consolidated financial statements, are unaudited. The unaudited interim condensed consolidated financial statements have been prepared in accordance with GAAP and on the same basis as the audited consolidated financial statements. In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments which are necessary to state fairly the Company’s financial position as of June 30, 2024, and the results of its operations and cash flows for the six months ended June 30, 2024 and 2023. Such adjustments are of a normal and recurring nature. The results for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the full fiscal year 2024, or for any future period.

Previous wording

The Company derives substantially all its revenues from sales to customers in Europe, the Middle East, Latin America, and Asia, and other than the Motiva Flora SmoothSilk Tissue Expander, has not yet received approval to sell its products in the United States.

Current wording

America, and Asia, and other than the Motiva Flora SmoothSilk Tissue Expander, has not yet received approval to sell its products in the United States.

Previous wording

For the three months ended March 31, 2024 and 2023, Brazil accounted for 10.5% and 12.8%, respectively, of consolidated revenue and no other individual country exceeded 10% of consolidated revenue, on a ship-to destination basis.

Current wording

For the six months ended June 30, 2024 and 2023, Brazil accounted for 8.2% and 13.5%, respectively, of consolidated revenue and no other individual country exceeded 10% of consolidated revenue, on a ship-to destination basis.

Previous wording

The majority of the Company’s consolidated total assets, including cash and tangible assets, is held in the United States. The Company’s long-lived assets, which primarily consist of property and equipment and intangible assets located in Costa Rica, represented 84% and 80%of the total long-lived assets as of March 31, 2024 and December 31, 2023, respectively.

Current wording

The majority of the Company’s consolidated total assets, including cash and tangible assets, is held in the United States. The Company’s long-lived assets, which primarily consist of property and equipment and intangible assets located in Costa Rica, represented 83% and 80%of the total long-lived assets as of June 30, 2024 and December 31, 2023, respectively.

Previous wording

Substantially all of the Company’s revenues were derived from the sale of Motiva Implants. During the three months ended March 31, 2024, no customer accounted for more than 10% of the Company’s revenue. During the three months ended March 31, 2023, one customer accounted for more than 10% of the Company’s revenue. Two customers accounted for 12.5% and 10.7% of the Company’s trade accounts receivable balance as of March 31, 2024. Two customers accounted for 12.7% and 11.6% of the Company’s trade accounts receivable balance as of December 31, 2023.

Current wording

Substantially all of the Company’s revenues were derived from the sale of Motiva Implants. During the six months ended June 30, 2024 and 2023, no customer accounted for more than 10% of the Company’s revenue. One customer accounted for approximately 10.6% of the Company’s trade accounts receivable balance as of June 30, 2024. Two customers accounted for approximately 12.7% and 11.6% of the Company’s trade accounts receivable balance as of December 31, 2023.

Previous wording

The Company relies on Avantor, Inc. (formerly NuSil Technology, LLC), or Avantor, as the sole supplier of medical-grade silicone used in Motiva Implants. During the three months ended March 31, 2024 and 2023, the Company had purchases of $4.9 million, or 54.0% of total purchases, and $13.2 million, or 55.1% of total purchases, respectively, from Avantor. As of March 31, 2024 and December 31, 2023, the Company had an outstanding balance owed to this vendor of $4.1 million and $5.3 million, respectively.

Current wording

The Company relies on Avantor, Inc. (formerly NuSil Technology, LLC), or Avantor, as the sole supplier of medical-grade silicone used in Motiva Implants. During the six months ended June 30, 2024 and 2023, the Company had purchases of $4.9 million, or 26.4% of total purchases, and $26.8 million, or 56.2% of total purchases, respectively, from Avantor. As of June 30, 2024 and December 31, 2023, the Company had an outstanding balance owed to this vendor of $0.9 million and $5.3 million, respectively.

Previous wording

Products developed by the Company require clearances from the FDA or other international regulatory agencies prior to commercial sales. There can be no assurance that the products will receive the necessary clearances. If the Company is denied clearance, clearance is delayed, or the Company is unable to maintain its existing clearances, these developments could have a material adverse impact on the Company.

Current wording

Products developed by the Company require clearance from the FDA or other international regulatory agencies prior to commercial sales. There can be no assurance that the products will receive the necessary clearances. If the Company is denied clearance, clearance is delayed, or the Company is unable to maintain its existing clearances, these developments could have a material adverse impact on the Company.

Previous wording

The Company’s cash consists of cash maintained in checking and interest-bearing accounts. The majority of the Company’s cash is held attwo financial institutions in the United States, with balances in excess of FDIC insurance limits. The Company accounts for financial instruments with original maturities of three months or less at the date of purchase as cash equivalents. The Company held $2.4 million and $2.8 million in cash equivalents as of March 31, 2024 and December 31, 2023, respectively.

Current wording

The Company’s cash consists of cash maintained in checking and interest-bearing accounts. The majority of the Company’s cash is held attwo financial institutions in the United States, with balances in excess of FDIC insurance limits. The Company accounts for financial instruments with original maturities of three months or less at the date of purchase as cash equivalents. The Company held $1.5 million and $2.8 million in cash equivalents as of June 30, 2024 and December 31, 2023, respectively.

Previous wording

Inventory is stated at the lower of cost to purchase or manufacture the inventory or the net realizable value of such inventory. Cost is determined using the standard cost method which approximates actual costs using the first-in, first-out basis. The Company regularly reviews inventory quantities, actual losses, projected future demand, and remaining shelf life to record a provision for obsolete and/or damaged inventory. Provision for inventory obsolescence of $4.3 million and $3.9 million has been recorded as of March 31, 2024 and December 31, 2023, respectively.

Current wording

Inventory is stated at the lower of cost to purchase or manufacture the inventory or the net realizable value of such inventory. Cost is determined using the standard cost method which approximates actual costs using the first-in, first-out basis. The Company regularly reviews inventory quantities, actual losses, projected future demand, and remaining shelf life to record a provision for obsolete and/or damaged inventory. Provision for inventory obsolescence of $3.5 million and $3.9 million has been recorded as of June 30, 2024 and December 31, 2023, respectively.

Previous wording

Shipping and handling costs are expensed as incurred and are included in selling, general and administrative, or SG&A, expenses. For the three months ended March 31, 2024 and 2023, shipping and handling costs were $1.7 million and $2.8 million, respectively.

Current wording

Shipping and handling costs are expensed as incurred and are included in selling, general and administrative, or SG&A, expenses. For the three months ended June 30, 2024 and 2023, shipping and handling costs were $1.4 million and $3.6 million, respectively. For thesix months ended June 30, 2024 and 2023, shipping and handling costs were $3.1 million and $6.4 million, respectively.

Previous wording

The Company recognizes revenue when title to the product and risk of loss transfer to customers, provided there are no remaining performance obligations required of the Company or any written matters requiring customer acceptance. The Company allows for the return of product from direct customers in certain regions in limited instances within fifteen days after the original sale and records estimated sales returns as a reduction of sales in the same period revenue is recognized. Appropriate reserves are established for anticipated sales returns based on historical experience, recent gross sales and any notification of pending returns. Actual sales returns in any future period are inherently uncertain and thus may differ from the estimates. If actual sales returns differ significantly from the estimates, an adjustment to revenue in the current or subsequent period is recorded. An allowance of $0.1 million and $0.3 million was recorded for product returns as of March 31, 2024 and December 31, 2023, respectively. Taxes collected from customers for remittance to governmental authorities are excluded from net sales.

Current wording

The Company recognizes revenue when title to the product and risk of loss transfer to customers, provided there are no remaining performance obligations required of the Company or any written matters requiring customer acceptance. The Company allows for the return of products from direct customers in certain regions in limited instances within fifteen days after the original sale and records estimated sales returns as a reduction of sales in the same period revenue is recognized. Appropriate reserves are established for anticipated sales returns based on historical experience, recent gross sales and any notification of pending returns. Actual sales returns in any future period are inherently uncertain and thus may differ from the estimates. If actual sales returns differ significantly from the estimates, an adjustment to revenue in the current or subsequent period is recorded. An allowance of $1.6 million and $0.3 million was recorded for product returns as of June 30, 2024 and December 31, 2023, respectively. Taxes collected from customers for remittance to governmental authorities are excluded from net sales.

Previous wording

There were no material uncertain tax positions in fiscal year 2023 or for the three months ended March 31, 2024.

Current wording

There were no material uncertain tax positions in fiscal year 2023 or for the six months ended June 30, 2024.

Previous wording

The financial statements of the Company’s foreign subsidiaries whose functional currencies are the local currencies are translated into U.S. dollars for consolidation as follows: assets and liabilities at the exchange rate as of the balance sheet date, stockholders’ equity at the historical rates of exchange, and income and expense amounts at the average exchange rate for the period. Translation adjustments resulting from the translation of the subsidiaries’ accounts are included in “Accumulated other comprehensive income” as equity in the condensed consolidated balance sheet. Transactions denominated in currencies other than the applicable functional currency are converted to the functional currency at the exchange rate on the transaction date. At period end, monetary assets and liabilities are remeasured to the functional currency using exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are remeasured at historical exchange rates. Gains and losses resulting from foreign currency transactions are included within “Other income (expense), net” in the condensed consolidated statements of operations. For the three months ended March 31, 2024, foreign currency transaction loss amounted to $3.0 million as compared to a foreign currency transaction gain of $0.9 million for the three months ended March 31, 2023.

Current wording

The financial statements of the Company’s foreign subsidiaries whose functional currencies are the local currencies are translated into U.S. dollars for consolidation as follows: assets and liabilities at the exchange rate as of the balance sheet date, stockholders’ equity at the historical rates of exchange, and income and expense amounts at the average exchange rate for the period. Translation adjustments resulting from the translation of the subsidiaries’ accounts are included in “Accumulated other comprehensive income” as equity in the condensed consolidated balance sheet. Transactions denominated in currencies other than the applicable functional currency are converted to the functional currency at the exchange rate on the transaction date. At period end, monetary assets and liabilities are remeasured to the functional currency using exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are remeasured at historical exchange rates. Gains and losses resulting from foreign currency transactions are included within “Other income (expense), net” in the condensed consolidated statements of operations. For the three months ended June 30, 2024, foreign currency transaction loss amounted to $2.8 million as compared to a foreign currency transaction gain of $1.5 million for the three months ended June 30, 2023. For the six months ended June 30, 2024, foreign currency transaction loss amounted to $5.8 million as compared to a foreign currency transaction gain of $2.4 million for the six months ended June 30, 2023.

Previous wording

Certain reclassifications have been made to prior year amounts to conform to the current year presentation. These reclassifications had no material impact on the Company’s financial position as of March 31, 2024 or results of operations for the three months ended March 31, 2024.

Current wording

Certain reclassifications have been made to prior year amounts to conform to the current year presentation. These reclassifications had no material impact on the Company’s financial position as of June 30, 2024 or results of operations for the three and six months ended June 30, 2024.

Previous wording

In November 2023, the FASB issued Accounting Standards Update, or ASU, No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands annual and interim disclosure requirements for reportable segments, especially significant segment expenses, and provides new disclosure requirements for entities with a single reportable segment. The new guidance is effective for our annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025. The Company is currently evaluating the potential impact of the updated requirements, but based on current understanding, does not expect a material impact on its consolidated financial statements and related disclosures.

Current wording

In November 2023, the FASB issued Accounting Standards Update, or ASU, No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands annual and interim disclosure requirements for reportable segments, especially significant segment expenses, and provides new disclosure requirements for entities with a single reportable segment. The new guidance is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company is currently evaluating the potential impact of the updated requirements, but based on current understanding, does not expect a material impact on its consolidated financial statements and related disclosures.

Previous wording

As of March 31, 2024 and December 31, 2023, $8.3 million and $7.1 million of inventory was on consignment, respectively.

Current wording

As of June 30, 2024 and December 31, 2023, $10.4 million and $7.1 million of inventory was on consignment, respectively.

Previous wording

For thethree months ended March 31, 2024 and 2023, depreciation and amortization expense related to property and equipment was $0.9 million and $0.6 million, respectively.

Current wording

For each of the three months ended June 30, 2024 and 2023, depreciation and amortization expense related to property and equipment was $0.9 million and $0.6 million, respectively. For thesix months ended June 30, 2024 and 2023, depreciation and amortization expense related to property and equipment was $1.8 million and $1.2 million, respectively.

Previous wording

In August 2021, the Company entered into a contract with the Zona Franca Coyol, S.A., or CFZ, to begin construction of a new manufacturing facility in Costa Rica. The costs for improvement of the land and construction of a cold shell building were being paid for by CFZ while the Company paid for internal improvements and customization. In 2022, the Company exercised its option to purchase the title to the land and cold shell building for approximately $12.6 million. The Company has the option to buy an adjacent lot of land for approximately

Current wording

In August 2021, the Company entered into a contract with the Zona Franca Coyol, S.A., or ZFC, to begin construction of a new manufacturing facility in the Coyol Free Zone in Costa Rica. The costs for improvement of the land and construction of a cold shell building were being paid for by ZFC while the Company paid for internal improvements and customization. In 2022, the Company exercised its option to purchase the title to the land and cold shell building for approximately $12.6 million. The construction for this third facility was completed in June 2024. The Company also has the option to buy an adjacent lot of land for approximately $2.8 million and engage ZFC to construct an additional manufacturing facility.

Previous wording

There were no changes in the carrying amount of goodwill during the three months ended March 31, 2024:

Current wording

There wereno changes in the carrying amount of goodwill during the six months ended June 30, 2024:

Previous wording

The amortization expense associated with intangible assets was $0.3 million for each of thethree months ended March 31, 2024 and 2023. Non-product related amortization is recorded in SG&A while product related amortization is recorded in cost of revenue.

Current wording

For each of the three months ended June 30, 2024 and 2023, amortization expense related to intangible assets was $0.5 million and $0.3 million, respectively. The amortization expense associated with intangible assets was $0.8 million and $0.6 million for each of thesix months ended June 30, 2024 and 2023, respectively. Non-product related amortization is recorded in SG&A while product related amortization is recorded in cost of revenue.

Previous wording

The effective interest rate under the Credit Agreement is 10.4%, and the weighted average interest rate is 9.0%. The Company elected to pay interest in kind on up to two-thirds of cash interest payments prior to the second anniversary of the Closing Date, resulting in a minimum initial cash interest rate of 3.00%. During the three months ended March 31, 2024 and 2023, the Company incurred $4.3 million and $4.1 million in interest expense, respectively, in connection with the Credit Agreement. No principal payments are due on the Term Loans until the final maturity date on April 26, 2027.

Current wording

The effective interest rate under the Credit Agreement is 10.4%, and the weighted average interest rate is 9.0%. The Company elected to pay interest in kind on up to two-thirds of cash interest payments prior to the second anniversary of the Closing Date, resulting in a minimum initial cash interest rate of 3.00%. In connection with the Credit Agreement, the Company incurred $5.2 million and $4.2 million in interest expense during the three months ended June 30, 2024 and 2023, respectively, and $10.1 million and $8.3 million in interest expense during the six months ended June 30, 2024 and 2023, respectively. No principal payments are due on the Term Loans until the final maturity date on April 26, 2027.

Previous wording

As of March 31, 2024, $195.5 million was outstanding under the Credit Agreement representing the initial principal of $150 million for the Tranche A Term Loan, $25 million for the Tranche B Term Loan and $20.5 million of interest accrued into the principal balance.

Current wording

As of June 30, 2024, $196.4 million was outstanding under the Credit Agreement representing the initial principal of $150 million for the Tranche A Term Loan, $25 million for the Tranche B Term Loan and $21.4 million of interest accrued into the principal balance.

Previous wording

During the three months ended March 31, 2024, the Company earned income from subleasing a warehouse facility for the remaining life of an existing master lease. The sublease agreement did not release the Company from its obligations under the master lease, and no modifications were made to the lease agreement. Income from the sublease is recognized on a straight-line basis over the term of the agreement.

Current wording

During the six months ended June 30, 2024, the Company earned income from subleasing a warehouse facility for the remaining life of an existing master lease. The sublease agreement did not release the Company from its obligations under the master lease, and no modifications were made to the lease agreement. Income from the sublease is recognized on a straight-line basis over the term of the agreement.

Previous wording

As of March 31, 2024 and December 31, 2023,27,884,749 and 26,495,250 common shares, respectively, were issued and 27,476,679 and 26,087,180 common shares, respectively, were outstanding.

Current wording

As of June 30, 2024 and December 31, 2023,28,349,936 and 26,495,250 common shares, respectively, were issued and 27,941,866 and 26,087,180 common shares, respectively, were outstanding.

Previous wording

During the three months ended March 31, 2024, the Company granted stock options and RSUs to employees and contractors (see Note 9).

Current wording

During the six months ended June 30, 2024, the Company granted stock options and RSUs to employees and contractors (see Note 9).

Previous wording

On January 9, 2024. the Company entered into a securities purchase agreement with select institutional accredited investors to sell 1,101,565 common shares at a price of $25.00 per share and pre-funded warrants to purchase 898,435 common shares at a price of $24.999 per share. The pre-funded warrants may be exercised immediately at a price of $0.001 per share until exercised in full. Net proceeds to us from the offering, after deducting offering expenses, were approximately $49.7 million.

Current wording

On January 9, 2024, the Company entered into a securities purchase agreement with select institutional accredited investors to sell 1,101,565 common shares at a price of $25.00 per share and pre-funded warrants to purchase 898,435 common shares at a price of $24.999 per share. The pre-funded warrants may be exercised immediately at a price of $0.001 per share until exercised in full. Net proceeds to the Company from the offering, after deducting offering expenses, were approximately $49.7 million.

Previous wording

On April 27, 2023, the Company issued 1,100,000 common shares in an underwritten public offering, at a price to the public of $71.50 per share. The underwriters purchased the shares from the Company at a price of $67.21 per share and exercised the option to purchase additional 165,000 common shares, at the public offering price per share. Net proceeds to the Company after deducting underwriting discounts and offering expenses were approximately $84.6 million.

Current wording

On April 27, 2023, the Company issued 1,100,000 common shares in an underwritten public offering, at a price to the public of $71.50 per share. The underwriters purchased the shares from the Company at a price of $67.21 per share and exercised the option to purchase an additional 165,000 common shares, at the public offering price per share. Net proceeds to the Company after deducting underwriting discounts and offering expenses were approximately $84.6 million.

Previous wording

During the three months ended March 31, 2024, warrants to purchase 223,022 shares were net exercised to obtain 223,019 shares. As of March 31, 2024, warrants to purchase 675,413 common shares were outstanding and exercisable. As of December 31, 2023, no warrants were outstanding and exercisable.

Current wording

During the three and six months ended June 30, 2024, warrants to purchase 376,978 and 600,000 shares were net exercised to obtain 376,972 and 599,991 shares, respectively. As of June 30, 2024, warrants to purchase 298,435 common shares were outstanding and exercisable, as set forth in the table below. As of December 31, 2023, no warrants were outstanding and exercisable.

Previous wording

As of March 31, 2024,975,179 options were vested and exercisable with a weighted-average exercise price of $41.52 per share and a total aggregate intrinsic value of $17.6 million.

Current wording

As of June 30, 2024,954,685 options were vested and exercisable with a weighted-average exercise price of $42.59 per share and a total aggregate intrinsic value of $13.4 million.

Previous wording

During the three months ended March 31, 2024,53,400 options were exercised at a weighted-average price of $26.70 per share. The intrinsic value of the options exercised during the three months ended March 31, 2024 and 2023 was $1.1 million and $2.5 million, respectively. Upon the exercise of stock options, the Company issued new shares from its authorized shares.

Current wording

During the six months ended June 30, 2024,110,178 options were exercised at a weighted-average price of $18.18 per share. The intrinsic value of the options exercised during the six months ended June 30, 2024 and 2023 was $3.5 million and $3.2 million, respectively. Upon the exercise of stock options, the Company issued new shares from its authorized shares.

Previous wording

At March 31, 2024, unrecognized compensation expense was $14.5 million related to stock options granted to employees and members of the Board of Directors and $0.9 million related to stock options granted to consultants. The weighted-average period over which such compensation expense will be recognized is 2.3 years.

Current wording

At June 30, 2024, unrecognized compensation expense was $12.3 million related to stock options granted to employees and members of the Board of Directors and $1.3 million related to stock options granted to consultants. The weighted-average period over which such compensation expense will be recognized is 2.3 years.

Previous wording

Share-based compensation expense for employees is based on the grant date fair value. The Company recognizes compensation expense for all share-based awards ratably on a straight-line basis over the requisite service period of the awards, which is generally the vesting term offour years. During the three months ended March 31, 2024 and 2023, the Company recognized $1.8 million and $2.1 million, respectively, of share-based compensation expense for stock options granted to employees.

Current wording

Share-based compensation expense for employees is based on the grant date fair value. The Company recognizes compensation expense for all share-based awards ratably on a straight-line basis over the requisite service period of the awards, which is generally the vesting term offour years. During the six months ended June 30, 2024 and 2023, the Company recognized $3.7 million and $4.3 million, respectively, of share-based compensation expense for stock options granted to employees.

Previous wording

Share-based compensation expense related to stock options granted to non-employees is recognized as the stock options are earned using an accelerated attribution method. The Company believes that the estimated fair value of the stock options is more readily measurable than the fair value of the services rendered. For the three months ended March 31, 2024 and 2023, the Company recognized expense of $0.1 million and $0.4 million, respectively, for stock options granted to consultants.

Current wording

Share-based compensation expense related to stock options granted to non-employees is recognized as the stock options are earned using an accelerated attribution method. The Company believes that the estimated fair value of the stock options is more readily measurable than the fair value of the services rendered. For the six months ended June 30, 2024 and 2023, the Company recognized expense of $0.3 million and $0.7 million, respectively, for stock options granted to consultants.

Previous wording

The fair value of RSUs is the grant date market value of common shares. The Company recognizes share-based compensation expense related to RSUs using a straight-line method over the vesting term of the awards. The share-based compensation expense for RSUs that vested during the three months ended March 31, 2024 and 2023, was $1.5 million and $0.8 million, respectively, which was calculated based on the market value of the Company’s common shares on the applicable grant date.

Current wording

The fair value of RSUs is the grant date market value of common shares. The Company recognizes share-based compensation expense related to RSUs using a straight-line method over the vesting term of the awards. The share-based compensation expense for RSUs that vested during the six months ended June 30, 2024 and 2023, was $3.2 million and $2.0 million, respectively, which was calculated based on the market value of the Company’s common shares on the applicable grant date.

Previous wording

As of March 31, 2024, the Company had unrecognized share-based compensation cost of approximately $14.9 million associated with unvested awards of RSUs. This cost is expected to be recognized over a weighted-average period of approximately 2.7 years.

Current wording

As of June 30, 2024, the Company had unrecognized share-based compensation cost of approximately $13.6 million associated with unvested awards of RSUs. This cost is expected to be recognized over a weighted-average period of approximately 2.7 years.

Previous wording

During the three months ended March 31, 2024 and 2023, the Company recorded revenue of $0.2 million and $0.5 million, respectively, for product sales to Herramientas Medicas, S.A., a distribution company owned by a family member of the Chief Executive Officer of the Company. Accounts receivable owed to the Company from this distribution company amounted to approximately $0.4 million and $0.6 million as of March 31, 2024 and December 31, 2023, respectively.

Current wording

During the six months ended June 30, 2024 and 2023, the Company recorded revenue of $0.4 million and $0.8 million, respectively, for product sales to Herramientas Medicas, S.A., a distribution company owned by a family member of the Chief Executive Officer of the Company. Accounts receivable owed to the Company from this distribution company amounted to approximately $0.4 million and $0.6 million as of June 30, 2024 and December 31, 2023, respectively.