BIOLASE, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Summary of Significant Accounting Policies (Tables)

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of Reconciliation of Cash, Cash Equivalents, and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheets to the same total reported in the consolidated statements of cash flows (in thousands):


	For the years ended December 31,
	2021		2020
Cash and cash equivalents	$	29,972	$	17,564
Restricted cash		203		312
Total cash, cash equivalents, and restricted cash in the consolidated statement of cash flows	$	30,175	$	17,876

Estimated Useful Lives of Property, Plant and Equipment

The cost of property, plant, and equipment is depreciated using the straight-line method over the following estimated useful lives of the respective assets, except for leasehold improvements, which are depreciated over the lesser of the estimated useful lives of the respective assets or the related lease terms.


Building		30 years
Leasehold improvements		3 to 5 years
Equipment and computers		3 to 5 years
Furniture and fixtures		5 years

Summary of Opening and Closing Balances of Contract Liabilities

The Company performs its obligations under a contract with a customer by transferring products and/or services in exchange for consideration from the customer. The Company typically invoices its customers as soon as control of a good and/or service is transferred and a receivable for the Company is established. The Company, however, recognizes a contract liability when a customer prepays for goods and/or services and the Company has not transferred control of the goods and/or services. The opening and closing balances of the Company’s contract liabilities are as follows (in thousands):


	December 31,
	2021			2020
Undelivered elements (training, installation, product and support services)	$	835		$	670
Extended warranty contracts		1,753			1,609
Total deferred revenue		2,588			2,279
Less: long-term portion of deferred revenue		(329	)		(374	)
Deferred revenue – current	$	2,259		$	1,905

Summary of Disaggregation of Revenues Related to Geographic Areas

The Company’s revenues related to the following geographic areas were as follows (in thousands):


	Years Ended December 31,
	2021		2020		2019
United States	$	25,384	$	16,195	$	22,814
International		13,804		6,585		14,985
Net Revenue	$	39,188	$	22,780	$	37,799

Summary of Revenues Disaggregated by Timing of Goods and Services Transferred

Information regarding revenues disaggregated by the timing of when goods and services are transferred is as follows (in thousands):


	Years Ended December 31,
	2021		2020		2019
Revenue recognized over time	$	4,709	$	4,314	$	7,174
Revenue recognized at a point in time		34,479		18,466		30,625
Net Revenue	$	39,188	$	22,780	$	37,799

Summary of Sales by End Market

The Company’s sales by end market is as follows (in thousands):


	Years Ended December 31,
	2021		2020		2019
End-customer	$	25,384	$	16,195	$	25,173
Distributors		13,804		6,585		12,626
Net Revenue	$	39,188	$	22,780	$	37,799

Changes in Initial Product Warranty Accrual and Expenses Under Initial and Extended Warranties

Changes in the initial product warranty accrual and the expenses incurred under the Company’s initial and extended warranties were as follows (in thousands):


	Years Ended December 31,
	2021			2020			2019
Balance, beginning of period	$	1,132		$	1,110		$	1,308
Provision for estimated warranty cost		1,747			1,047			806
Warranty expenditures		(1,793	)		(1,025	)		(1,004	)
Balance, end of period		1,086			1,132			1,110
Less: long-term portion of warranty accrual		521			384			245
Current portion of warranty accrual	$	565		$	748		$	865

Summary of Income Statement Classification of Compensation Expense

The following table summarizes the income statement classification of compensation expense associated with share-based payments (in thousands):


	Years Ended December 31,
	2021		2020		2019
Cost of revenue	$	156	$	297	$	293
Sales and marketing		367		789		557
General and administrative		820		2,042		1,662
Engineering and development		319		242		230
	$	1,662	$	3,370	$	2,742

Assumptions on Estimation of Stock Option Fair Values

The stock option fair values were estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions:


	Years Ended December 31,
	2021			2020			2019
Expected term (years)		6.1			5.5			6.0
Volatility		111	%		103	%		85	%
Annual dividend per share	$	—		$	—		$	—
Risk-free interest rate		1.0	%		0.4	%		2.6	%