LENSAR, Inc. (NASDAQ:LNSR) Q4 2022 Earnings Call Transcript March 16, 2023 8:30 AM ET Company Participants Lee Roth - Burns McClellan Nick Curtis - Chief Executive Officer Tom Staab - Chief Financial Officer Conference Call Participants Ryan Zimmerman - BTIG Operator Good morning, and thank you for your participation. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. As a reminder, this conference call will be recorded. I would now like to turn t ...

LENSAR, Inc. (NASDAQ:LNSR) Q3 2022 Results Conference Call November 9, 2022 8:30 AM ET Company Participants Lee Roth - Burns McClellan Nick Curtis - Chief Executive Officer Tom Staab - Chief Financial Officer Conference Call Participants Samuel Brodovsky - BTIG Operator Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the LENSAR Third Quarter 2022 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the con ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2022 or ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number: 001-39473 LENSAR, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2022 or ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number: 001-39473 LENSAR, INC. (Exact name of registrant as specified in its charter) Delaware 32-0125724 (State or other jurisdiction of in ...

LENSAR, Inc. (NASDAQ:LNSR) Q2 2022 Earnings Conference Call August 8, 2022 8:30 AM ET Company Participants Lee Roth - Burns McClellan Nicholas Curtis - Chief Executive Officer Thomas Staab - Chief Financial Officer Conference Call Participants Ryan Zimmerman - BTIG Operator Good morning and thank you for your participation. At this time, all participants are in a listen-only mode. Later, we will conduct question-and-answer session. As a reminder, this conference call will be recorded. I would now like to tu ...

Changing the Cataract Surgery Paradigm Always Surgeon Centric May 2022 Disclaimer This presentation includes estimates regarding market and industry data. Unless otherwise indicated, information concerning the industry and the markets in which LENSAR, Inc. (the "Company," "we," "our" or "us") operates, including management's general expectations, market position, market opportunity and market size, are based on management's knowledge and experience in the markets in which the Company operates, together with ...

[PART I – FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) LENSAR, Inc. presents unaudited condensed financial statements for Q1 2022, reporting a net loss of $6.7 million due to increased operating expenses [Condensed Statements of Operations](index=6&type=section&id=Condensed%20Statements%20of%20Operations) LENSAR's Q1 2022 revenue grew 33% to $9.3 million, but operating loss widened to $6.7 million due to increased R&D expenses Condensed Statements of Operations (Unaudited, in thousands, except per share amounts) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | **Total revenue** | **$9,340** | **$7,043** | | Total cost of revenue | $4,648 | $3,149 | | Selling, general and administrative expenses | $6,278 | $6,035 | | Research and development expenses | $4,788 | $2,746 | | **Operating loss** | **$(6,683)** | **$(5,200)** | | **Net loss** | **$(6,674)** | **$(5,182)** | | **Net loss per share (Basic and diluted)** | **$(0.67)** | **$(0.56)** | [Condensed Balance Sheets](index=7&type=section&id=Condensed%20Balance%20Sheets) Total assets decreased to $60.3 million by March 31, 2022, primarily due to reduced cash, while liabilities and equity also declined Condensed Balance Sheet Highlights (Unaudited, in thousands) | Metric | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $28,984 | $31,637 | | Total current assets | $38,550 | $44,813 | | **Total assets** | **$60,299** | **$66,465** | | Total current liabilities | $7,763 | $8,714 | | **Total liabilities** | **$10,487** | **$11,586** | | **Total stockholders' equity** | **$49,812** | **$54,879** | [Condensed Statements of Cash Flows](index=8&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) Net cash used in operating activities improved to $2.6 million in Q1 2022, resulting in a $2.7 million decrease in cash Condensed Statements of Cash Flows (Unaudited, in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(2,607) | $(4,619) | | Net cash used in investing activities | $(46) | $(114) | | **Net decrease in cash and cash equivalents** | **$(2,653)** | **$(4,733)** | [Notes to the Condensed Financial Statements](index=11&type=section&id=Notes%20to%20the%20Condensed%20Financial%20Statements) Notes detail business, accounting policies, ALLY System FDA status, revenue by geography, purchase commitments, and stock-based compensation - The company's next-generation **ALLY™ Adaptive Cataract Treatment System's** 510(k) submission has been accepted for substantive review by the FDA. Commercialization is expected to begin in the **second half of 2022**, subject to clearance[29](index=29&type=chunk) - Management believes the company's cash and cash equivalents are sufficient to meet projected obligations for at least **twelve months** from the issuance date of the financial statements[31](index=31&type=chunk) Revenue by Geographic Region (in thousands) | Region | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | United States | $3,970 | $3,438 | | South Korea | $1,434 | $998 | | Europe | $1,619 | $889 | | Asia (excluding South Korea) | $780 | $542 | | Other | $138 | $65 | | **Total Product & Service Revenue** | **$7,941** | **$5,932** | - The company has a minimum purchase obligation of approximately **$4.3 million** for manufacturing components, due by **December 31, 2022**. Additionally, it faces potential milestone payments of **$2.4 million** contingent on the regulatory clearance and commercialization of the ALLY system[63](index=63&type=chunk)[64](index=64&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2022 financial performance, noting a 33% revenue increase, a 74% rise in R&D for ALLY, and liquidity sufficient into 2023, with 2022 being a transition year [Overview](index=23&type=section&id=Overview) LENSAR, a medical device company, is preparing to launch its ALLY System in H2 2022, marking 2022 as a transition year - The company is preparing to launch its next-generation **ALLY Adaptive Cataract Treatment System**, which combines femtosecond laser technology with a phacoemulsification system into a single unit[94](index=94&type=chunk) - The FDA has accepted the 510(k) submission for the **ALLY System**, and subject to clearance, commercialization is expected to begin in the **second half of 2022**[94](index=94&type=chunk) - The company views **2022 as a transition year**, shifting focus from manufacturing and selling the LENSAR Laser System to the ALLY System[94](index=94&type=chunk)[131](index=131&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Q1 2022 total revenue increased 33% to $9.3 million, while R&D expenses surged 74% to $4.8 million for the ALLY System Revenue and Cost of Revenue Comparison (in thousands) | Category | Q1 2022 | Q1 2021 | Change (%) | | :--- | :--- | :--- | :--- | | **Total Revenue** | **$9,340** | **$7,043** | **33%** | | Product Revenue | $6,969 | $5,158 | 35% | | Lease Revenue | $1,399 | $1,111 | 26% | | Service Revenue | $972 | $774 | 26% | | **Total Cost of Revenue** | **$4,648** | **$3,149** | **48%** | - Research and development expenses increased by **$2.1 million**, or **74%**, to **$4.8 million** in Q1 2022 compared to Q1 2021. This was primarily due to continued development of the ALLY System and materials purchased for ALLY inventory[121](index=121&type=chunk) Adjusted EBITDA Reconciliation (Non-GAAP, in thousands) | Metric | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Net loss | $(6,674) | $(5,182) | | EBITDA | $(5,833) | $(4,559) | | **Adjusted EBITDA** | **$(4,226)** | **$(2,239)** | [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) LENSAR has an $84.3 million accumulated deficit, with cash sufficient into 2023, but requires additional capital beyond that, facing $7.6 million in contractual obligations - The company expects its cash and cash equivalents to be sufficient to operate through the anticipated clearance and launch of ALLY and **into 2023**[128](index=128&type=chunk) - LENSAR anticipates it will need to raise additional capital through equity or debt financings to continue its operations **beyond 2023**[128](index=128&type=chunk)[132](index=132&type=chunk) - Material contractual obligations at March 31, 2022, include **$3.3 million** in operating lease payments and **$4.3 million** in minimum purchase obligations for inventory components within the **next 12 months**[136](index=136&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) LENSAR faces credit risk concentration with four customers comprising 51% of receivables and holds $29.0 million in cash with minimal interest or foreign currency risk - The company had cash and cash equivalents of **$29.0 million** as of March 31, 2022, held in deposit accounts exceeding FDIC insurance limits[149](index=149&type=chunk) - The company faces credit risk concentration, with **four customers** accounting for **17%**, **14%**, **10%**, and **10%** of its net accounts receivable as of March 31, 2022[150](index=150&type=chunk) - While inflation has not had a material impact to date, a **high rate of inflation** in the future could adversely affect operating results if selling prices do not increase in line with costs[151](index=151&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2022, with no material changes to internal controls - Based on an evaluation as of the end of the period, the CEO and CFO concluded that the company's disclosure controls and procedures were **effective** at the reasonable assurance level as of **March 31, 2022**[154](index=154&type=chunk) - There were **no changes** in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[155](index=155&type=chunk) [PART II – OTHER INFORMATION](index=32&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings, with no expected material adverse effects from ordinary course claims - As of the filing date, the company is **not a party to any material legal proceedings**[158](index=158&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) This section details risks including operating losses, ALLY System launch dependence, COVID-19 impacts, competition, regulation, IP protection, and future capital needs [Risks Related to Our Business](index=32&type=section&id=Risks%20Related%20to%20Our%20Business) Business risks include a history of operating losses ($84.3 million accumulated deficit), ALLY System dependence, COVID-19 disruptions, and intense competition - The company has a history of **operating losses**, with a **net loss of $6.7 million** for Q1 2022 and an **accumulated deficit of $84.3 million** as of March 31, 2022. It expects to incur losses for the foreseeable future[160](index=160&type=chunk) - The **commercial success of the ALLY System is critical** and depends on receiving regulatory clearances and achieving significant market acceptance[161](index=161&type=chunk) - The **COVID-19 pandemic** and related actions have **impeded global supply chains**, **increased costs**, and had an adverse impact on the business, which is expected to continue[166](index=166&type=chunk) - The company's **future capital needs are uncertain**, and while current cash is expected to last **into 2023**, it will likely need to **raise additional funds beyond that point**[174](index=174&type=chunk)[175](index=175&type=chunk) [Risks Related to Government Regulation](index=46&type=section&id=Risks%20Related%20to%20Government%20Regulation) LENSAR faces extensive government regulation, risking delays in ALLY System 510(k) clearance, post-marketing compliance, QSR adherence, and uncertain clinical trial outcomes - The company's products are regulated as medical devices and are subject to **extensive oversight by the FDA** and foreign counterparts, with non-compliance potentially leading to significant enforcement actions[227](index=227&type=chunk) - There is a **risk of not receiving, or being delayed**, in receiving necessary regulatory clearances for future products, including the **ALLY System**. The FDA has significant discretion in the 510(k) clearance process[230](index=230&type=chunk)[233](index=233&type=chunk) - The clinical trial process is **lengthy, expensive, and has uncertain outcomes**. Delays can occur for numerous reasons, including issues with patient enrollment and regulatory disagreements[252](index=252&type=chunk)[254](index=254&type=chunk) [Risks Related to Intellectual Property Matters](index=57&type=section&id=Risks%20Related%20to%20Intellectual%20Property%20Matters) Success depends on protecting intellectual property, facing risks of patent challenges, infringement, costly litigation, and potential competition from jointly-owned ALLY System IP - **Commercial success depends on obtaining and maintaining issued patents, trademarks, and other intellectual property rights**. Failure to do so could allow competitors to use the company's technologies[275](index=275&type=chunk) - As of March 31, 2022, the company owned approximately **42 U.S. patents**, **35 pending U.S. patent applications**, **75 issued foreign patents**, and **65 pending foreign and Patent Cooperation Treaty applications**[280](index=280&type=chunk) - The company may become a party to **costly intellectual property litigation**, which could interfere with its ability to sell products and divert management's attention and resources[289](index=289&type=chunk) [Risks Related to Owning Our Common Stock](index=64&type=section&id=Risks%20Related%20to%20Owning%20Our%20Common%20Stock) Risks for common stock include potential price depression from share sales, reduced disclosure as an emerging growth company, no anticipated dividends, and anti-takeover provisions - The company is an "**emerging growth company**" and a "**smaller reporting company**," which allows it to take advantage of certain exemptions from various reporting requirements, potentially making its stock **less attractive to investors**[312](index=312&type=chunk)[316](index=316&type=chunk) - The company **does not anticipate paying cash dividends** in the foreseeable future, meaning stockholders must rely on stock appreciation for any return on investment[319](index=319&type=chunk) - **Anti-takeover provisions** in the company's charter documents and Delaware law could discourage takeover attempts and may **depress the trading price** of the common stock[320](index=320&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=69&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2022, the company repurchased 8,142 shares at $5.84 each for employee tax withholding, not under a formal program Common Stock Repurchases (Q1 2022) | Period | Total Shares Purchased | Average Price Paid Per Share ($) | | :--- | :--- | :--- | | January 2022 | 8,142 | $5.84 | | February 2022 | — | — | | March 2022 | — | — | | **Total** | **8,142** | **$5.84** | - The repurchased shares were surrendered by employees to satisfy tax withholding obligations on vested restricted stock awards and are **not part of a formal repurchase program**[332](index=332&type=chunk) [Item 3. Defaults Upon Senior Securities](index=69&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - None[333](index=333&type=chunk) [Item 4. Mine Safety Disclosures](index=69&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[334](index=334&type=chunk) [Item 5. Other Information](index=69&type=section&id=Item%205.%20Other%20Information) The company reports no other information to disclose for this period - None[335](index=335&type=chunk) [Item 6. Exhibits](index=70&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including officer certifications and XBRL data files - The report includes a list of exhibits filed, such as the Separation and Distribution Agreement, corporate governance documents, and required **officer certifications** under Sarbanes-Oxley[337](index=337&type=chunk)

LENSAR, Inc. (NASDAQ:LNSR) Q1 2022 Earnings Conference Call May 9, 2022 8:30 AM ET Company Participants Cameron Radinovic - Burns McClellan Nick Curtis - Chief Executive Officer Tom Staab - Chief Financial Officer Conference Call Participants Ryan Zimmerman - BTIG Danielle Antalffy - SVB Operator Good morning, and thank you for your participation. At this time, all participants are in a listen-only mode. Later, we will conduct question-and-answer session. As a reminder, this conference call will be recorded ...

Part I [Business](index=6&type=section&id=Item%201.%20Business) LENSAR is a commercial-stage medical device company specializing in femtosecond laser systems for cataract surgery and developing the integrated ALLY system - LENSAR is a commercial-stage medical device company focused on femtosecond laser systems for cataract treatment and astigmatism management[26](index=26&type=chunk) - The company is developing the ALLY Adaptive Cataract Treatment System, designed to combine a femtosecond laser and a phacoemulsification system into a single, integrated unit. A 510(k) submission for the laser component has been accepted by the FDA, with an expected commercial launch in the second half of 2022, followed by a separate submission for the phacoemulsification features[26](index=26&type=chunk)[42](index=42&type=chunk) - The global market for cataract/refractive lens exchange procedures is projected to grow from **30 million** in 2021 to **37 million** in 2026. In the U.S., procedures are expected to increase from **4.6 million** to **5.3 million** in the same period[27](index=27&type=chunk) - As of December 31, 2021, the company had approximately **255 systems** installed in 16 countries, with **40%** in the U.S. Two customers accounted for **16%** and **13%** of 2021 revenue[57](index=57&type=chunk) - The company manufactures its systems in Orlando, Florida, and relies on some single-source suppliers for components. It has a minimum purchase obligation of approximately **$4.6 million** as of December 31, 2021[59](index=59&type=chunk) - As of December 31, 2021, LENSAR owned approximately **115 issued patents** and **97 pending patent applications** globally, with patents expected to expire between 2026 and 2038[53](index=53&type=chunk)[62](index=62&type=chunk) [Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including operating losses, market acceptance, supply chain disruptions, intense competition, and regulatory compliance challenges - The company has a history of operating losses, with net losses of **$19.6 million** in 2021 and **$19.8 million** in 2020, and an accumulated deficit of **$77.6 million** as of December 31, 2021. Profitability is not assured[120](index=120&type=chunk) - Long-term growth is highly dependent on obtaining regulatory clearance for the ALLY system. The company plans a two-step 510(k) submission process, and failure to get clearance for either the laser or phacoemulsification features could impact future revenue[125](index=125&type=chunk) - The COVID-19 pandemic has adversely impacted the business by reducing elective surgeries, disrupting supply chains, and increasing costs. These impacts are expected to continue[129](index=129&type=chunk)[131](index=131&type=chunk) - The company relies on some single-source suppliers for components and a third party for the phacoemulsification component of ALLY. Supply chain disruptions, such as the global semiconductor shortage, could delay manufacturing and harm operating results[144](index=144&type=chunk) - The company faces intense competition from large, well-established companies like Alcon, Johnson & Johnson, and Bausch + Lomb, which have greater resources and more established products[146](index=146&type=chunk)[147](index=147&type=chunk) - The company is subject to extensive government regulation in the U.S. (FDA) and abroad. Failure to comply with regulations like the FDA's Quality System Regulation (QSR) could result in enforcement actions, recalls, or production shutdowns[193](index=193&type=chunk)[207](index=207&type=chunk) [Unresolved Staff Comments](index=66&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[319](index=319&type=chunk) [Properties](index=66&type=section&id=Item%202.%20Properties) The company leases approximately 35,000 square feet for its corporate headquarters and manufacturing in Orlando, Florida, under a lease expiring in November 2027 - The company leases approximately **35,000 square feet** for its corporate headquarters and manufacturing in Orlando, Florida[320](index=320&type=chunk) - The current lease expires in November 2027 and includes a five-year renewal option[320](index=320&type=chunk) [Legal Proceedings](index=66&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings - The company is not party to any material legal proceedings[321](index=321&type=chunk) [Mine Safety Disclosures](index=67&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's business - Not applicable[323](index=323&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=68&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq under 'LNSR', with no anticipated cash dividends in the foreseeable future - Common stock is traded on Nasdaq under the symbol 'LNSR'[326](index=326&type=chunk) - As of January 31, 2022, there were approximately **118 holders** of record of the common stock[326](index=326&type=chunk) - The company does not anticipate paying any cash dividends in the foreseeable future[328](index=328&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=69&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operation) Total revenue increased **30.6%** in 2021 to **$34.5 million**, driven by procedure volume recovery, while net loss remained stable and R&D expenses rose Financial Performance (2021 vs. 2020) | (In thousands) | 2021 | 2020 | Change (%) | | :--- | :--- | :--- | :--- | | **Total Revenue** | **$34,459** | **$26,382** | **30.6%** | | Product Revenue | $26,246 | $19,831 | 32.3% | | Lease Revenue | $4,966 | $3,601 | 37.9% | | Service Revenue | $3,247 | $2,950 | 10.1% | | **Total Cost of Revenue** | **$16,626** | **$12,307** | **35.1%** | | **Operating Loss** | **($19,652)** | **($18,502)** | **6.2%** | | **Net Loss** | **($19,601)** | **($19,774)** | **-0.9%** | - The increase in 2021 revenue was primarily driven by a **35% increase** in procedure volume compared to 2020, which was significantly impacted by COVID-19 shutdowns[360](index=360&type=chunk) - Research and development expenses increased by **63.6%** to **$12.4 million** in 2021, mainly due to costs for the continued development of the ALLY system, including materials for prototypes and pre-launch inventory[367](index=367&type=chunk) Non-GAAP Financial Measures Reconciliation (2021 vs. 2020) | (In thousands) | 2021 | 2020 | | :--- | :--- | :--- | | **Net loss** | **($19,601)** | **($19,774)** | | Add: Interest expense | — | 1,340 | | Less: Interest income | (51) | (68) | | Add: Depreciation expense | 1,524 | 1,309 | | Add: Amortization expense | 1,240 | 1,256 | | **EBITDA** | **($16,888)** | **($15,937)** | | Add: Stock-based compensation expense | 6,866 | 9,026 | | **Adjusted EBITDA** | **($10,022)** | **($6,911)** | - As of December 31, 2021, the company had cash and cash equivalents of **$31.6 million**. Management expects this to be sufficient to operate the business through the anticipated launch of ALLY and into 2023[380](index=380&type=chunk)[423](index=423&type=chunk) Cash Flow Summary (2021 vs. 2020) | (In thousands) | 2021 | 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | ($8,969) | ($13,791) | | Net cash used in investing activities | ($354) | ($326) | | Net cash provided by financing activities | $361 | $50,001 | [Quantitative and Qualitative Disclosures About Market Risk](index=81&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks include concentrated credit risk, limited interest rate and foreign currency exposure, and potential inflationary pressures - As of December 31, 2021, three customers accounted for **37%**, **13%**, and **10%** of the company's net accounts receivable, indicating a concentration of credit risk[426](index=426&type=chunk) - The company's cash and cash equivalents of **$31.6 million** are held in deposit demand accounts, resulting in minimal exposure to interest rate risk[423](index=423&type=chunk) - Inflationary factors may adversely affect operating results by increasing costs, although the impact to date is not believed to be material[427](index=427&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=82&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting or financial disclosure matters - None[430](index=430&type=chunk) [Controls and Procedures](index=82&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2021 - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2021[432](index=432&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2021, based on the COSO 2013 framework[433](index=433&type=chunk)[434](index=434&type=chunk) - As an emerging growth company, LENSAR is not required to have its independent registered public accounting firm provide an attestation report on its internal control over financial reporting[435](index=435&type=chunk) Part III [Directors, Executive Officers, Corporate Governance, Compensation, and Principal Accountant Fees](index=84&type=section&id=Items%2010-14) Information for Items 10 through 14 is incorporated by reference from the company's definitive proxy statement for its 2022 annual meeting of stockholders - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the company's proxy statement for the 2022 annual meeting of stockholders[441](index=441&type=chunk)[442](index=442&type=chunk)[443](index=443&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=85&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements and a comprehensive list of all exhibits filed, including corporate governance documents and material contracts - This section references the audited financial statements and notes, which are appended to the report[447](index=447&type=chunk)[448](index=448&type=chunk) - A list of exhibits filed with the report is provided, including corporate governance documents, material contracts, and executive certifications[450](index=450&type=chunk)[451](index=451&type=chunk)[452](index=452&type=chunk) [Form 10-K Summary](index=87&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company reports no Form 10-K summary - None[454](index=454&type=chunk) Financial Statements [Report of Independent Registered Public Accounting Firm](index=90&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) PricewaterhouseCoopers LLP issued an unqualified opinion on the company's financial statements for 2021 and 2020, confirming conformity with U.S. GAAP - The independent auditor, PricewaterhouseCoopers LLP, issued an unqualified opinion on the financial statements for the years ended December 31, 2021 and 2020[466](index=466&type=chunk) - The audit was conducted in accordance with the standards of the Public Company Accounting Oversight Board (PCAOB)[468](index=468&type=chunk) - The auditor was not engaged to perform, and did not express an opinion on, the effectiveness of the Company's internal control over financial reporting[468](index=468&type=chunk) [Financial Statements](index=91&type=section&id=Financial_Statements_Tables) The financial statements detail the company's performance, showing a net loss of **$19.6 million** in 2021 and total assets of **$66.5 million** Statements of Operations | (In thousands, except per share amounts) | 2021 | 2020 | | :--- | :--- | :--- | | Total revenue | $34,459 | $26,382 | | Total cost of revenue | 16,626 | 12,307 | | Operating loss | (19,652) | (18,502) | | Net loss attributable to common stockholders | $(19,601) | $(19,774) | | Basic and diluted net loss per share | $(2.09) | $(4.28) | Balance Sheets Summary | (In thousands) | As of Dec 31, 2021 | As of Dec 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $31,637 | $40,599 | | Total current assets | 44,813 | 58,385 | | **Total assets** | **$66,465** | **$79,120** | | **Liabilities and Stockholders' Equity** | | | | Total current liabilities | $8,714 | $8,467 | | **Total liabilities** | **$11,586** | **$11,910** | | **Total stockholders' equity** | **$54,879** | **$67,210** | Statements of Cash Flows Summary | (In thousands) | 2021 | 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | $(8,969) | $(13,791) | | Net cash used in investing activities | (354) | (326) | | Net cash provided by financing activities | 361 | 50,001 | | Net (decrease) increase in cash | (8,962) | 35,884 | [Notes to Financial Statements](index=96&type=section&id=Notes%20to%20Financial%20Statements) The notes provide detailed disclosure on accounting policies, the 2020 Spin-Off, recurring losses, customer concentration, and deferred tax assets - The company completed its Spin-Off from PDL BioPharma, Inc. on October 1, 2020, becoming an independent public company[485](index=485&type=chunk) - For the year ended December 31, 2021, two customers accounted for **16%** and **13%** of total revenue, respectively[535](index=535&type=chunk) - The company has a minimum purchase obligation of approximately **$4.6 million** over the next 12 months and potential future milestone payments of **$2.4 million** contingent on the regulatory approval and commercialization of ALLY[582](index=582&type=chunk)[583](index=583&type=chunk) - As of December 31, 2021, there was **$9.7 million** of total unrecognized stock-based compensation expense, expected to be recognized over a weighted-average period of approximately **1.7 years**[395](index=395&type=chunk)[602](index=602&type=chunk) - The company maintains a full valuation allowance of **$13.0 million** against its deferred tax assets as of December 31, 2021, as it determined it was more likely than not that the assets would not be realized[608](index=608&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2021 or ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number: 001-39473 LENSAR, INC. (Exact name of registrant as specified in its charter) Delaware 32-0125724 (State or other jurisdiction ...