SEC Filing | Everspin Technologies Inc.

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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

☐	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 001-37900

Everspin Technologies, Inc.

(Exact name of Registrant as specified in its Charter)

Delaware

26-2640654

(State or other jurisdiction

of incorporation or organization)

(I.R.S. Employer

Identification No.)

5670 W. Chandler Boulevard, Suite 100

Chandler, Arizona 85226

(Address of principal executive offices including zip code)

Registrant’s telephone number, including area code: (480) 347-1111

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001	MRAM	The Nasdaq Stock Market LLC

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). YES ☒ NO ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Small reporting company	☒
		Emerging growth company	☒


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.	☒

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

The number of shares of the Registrant’s Common Stock outstanding as of November 11, 2021 was 19,608,354.

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		Page
	PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Condensed Balance Sheets as of September 30, 2021 (unaudited) and December 31, 2020	3
	Condensed Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2021 and 2020 (unaudited)	4
	Condensed Statements of Stockholders’ Equity for the three and nine months ended September 30, 2021 and 2020 (unaudited)	5
	Condensed Statements of Cash Flows for the nine months ended September 30, 2021 and 2020 (unaudited)	6
	Notes to Condensed Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27

	PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	48
Item 3.	Defaults Upon Senior Securities	48
Item 4.	Mine Safety Disclosures	48
Item 5.	Other Information	48
Item 6.	Exhibits	49
EXHIBIT INDEX		49
SIGNATURES		51

In this Quarterly Report on Form 10-Q, “we,” “our,” “us,” “Everspin Technologies,” and “the Company” refer to Everspin Technologies, Inc. The Everspin logo and other trade names, trademarks or service marks of Everspin Technologies are the property of Everspin Technologies, Inc. This report contains references to our trademarks and to trademarks belonging to other entities. Trade names, trademarks and service marks of other companies appearing in this report are the property of their respective holders. We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

EVERSPIN TECHNOLOGIES, INC.

Condensed Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited)


	September 30,		December 31,
	2021		2020
Assets
Current assets:
Cash and cash equivalents	$	14,558	$	14,599
Accounts receivable, net		10,629		7,607
Inventory		6,668		5,721
Prepaid expenses and other current assets		337		270
Total current assets		32,192		28,197
Property and equipment, net		951		1,946
Right-of-use assets		1,270		2,313
Other assets		488		73
Total assets	$	34,901	$	32,529

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,663	$	2,224
Accrued liabilities		2,523		2,232
Deferred revenue		1,382		—
Current portion of long-term debt		3,364		4,242
Operating lease liabilities		1,011		1,508
Other liabilities		36		31
Total current liabilities		10,979		10,237
Long-term debt, net of current portion		2,100		3,748
Operating lease liabilities, net of current portion		268		903
Long-term income tax liability		229		229
Total liabilities	$	13,576	$	15,117
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value per share; 5,000,000 shares authorized; no shares issued and outstanding as of September 30, 2021 and December 31, 2020		—		—
Common stock, $0.0001 par value per share; 100,000,000 shares authorized; 19,552,125 and 19,031,556 shares issued and outstanding as of September 30, 2021 and December 31, 2020		2		2
Additional paid-in capital		177,821		174,584
Accumulated deficit		(156,498)		(157,174)
Total stockholders’ equity		21,325		17,412
Total liabilities and stockholders’ equity	$	34,901	$	32,529

The accompanying notes are an integral part of these condensed financial statements.

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EVERSPIN TECHNOLOGIES, INC.

Condensed Statements of Operations and Comprehensive Income (Loss)

(In thousands, except share and per share amounts)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Product sales	$	12,037	$	9,577	$	31,292	$	30,139
Licensing, royalty, patent, and other revenue		2,758		543		5,631		1,915
Total revenue		14,795		10,120		36,923		32,054
Cost of product sales		6,043		7,763		14,629		19,009
Cost of licensing, royalty, patent, and other revenue		304		28		665		174
Total cost of sales		6,347		7,791		15,294		19,183
Gross profit		8,448		2,329		21,629		12,871
Operating expenses:¹
Research and development		3,105		2,579		8,901		8,383
General and administrative		2,996		2,549		8,177		7,797
Sales and marketing		1,272		912		3,304		3,071
Total operating expenses		7,373		6,040		20,382		19,251
Income (loss) from operations		1,075		(3,711)		1,247		(6,380)
Interest expense		(165)		(157)		(461)		(501)
Other (expense) income, net		(8)		(3)		(35)		60
Net income (loss) before income taxes		902		(3,871)		751		(6,821)
Income tax expense		(22)		(24)		(75)		(100)
Net income (loss) and comprehensive income (loss)	$	880	$	(3,895)	$	676	$	(6,921)
Net income (loss) per share attributable to common stockholders:
Basic	$	0.05	$	(0.21)	$	0.03	$	(0.37)
Diluted	$	0.04	$	(0.21)	$	0.03	$	(0.37)
Weighted average common shares used to compute net income (loss) per common share attributable to common stockholders:
Basic		19,511,132		18,942,163		19,296,241		18,705,149
Diluted		19,912,918		18,942,163		19,787,889		18,705,149

¹Operating expenses include stock-based compensation as follows:
Research and development	$	428	$	182	$	874	$	538
General and administrative		434		657		1,224		1,888
Sales and marketing		165		71		376		207
Total stock-based compensation	$	1,027	$	910	$	2,474	$	2,633

The accompanying notes are an integral part of these condensed financial statements.

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EVERSPIN TECHNOLOGIES, INC.

Condensed Statements of Stockholders’ Equity

(In thousands, except share and per share amounts)

(Unaudited)


	Nine Months Ended September 30, 2021
				Additional				Total
	Common Stock			Paid-In		Accumulated		Stockholders’
	Shares	Amount		Capital		Deficit		Equity
Balance at December 31, 2020	19,031,556	$	2	$	174,584	$	(157,174)	$	17,412
Exercise of stock options	54,077		—		144		—		144
Issuance of common stock under stock incentive plans	136,709		—		364		—		364
Stock-based compensation expense	—		—		743		—		743
Net loss	—		—		—		(460)		(460)
Balance at March 31, 2021	19,222,342	$	2	$	175,835	$	(157,634)	$	18,203
Exercise of stock options	23,280		—		57		—		57
Issuance of common stock under stock incentive plans	189,652		—		92		—		92
Stock-based compensation expense	—		—		704		—		704
Net income	—		—		—		256		256
Balance at June 30, 2021	19,435,274	$	2	$	176,688	$	(157,378)	$	19,312
Exercise of stock options	27,386		—		106		—		106
Issuance of common stock under stock incentive plans	68,002		—		—		—		—
Stock-based compensation expense	—		—		1,027		—		1,027
Exercise of warrants	21,463				—		—		—
Net income	—		—		—		880		880
Balance at September 30, 2021	19,552,125	$	2	$	177,821	$	(156,498)	$	21,325


	Nine Months Ended September 30, 2020
				Additional				Total
	Common Stock			Paid-In		Accumulated		Stockholders’
	Shares	Amount		Capital		Deficit		Equity
Balance at December 31, 2019	18,081,753	$	2	$	167,149	$	(148,662)	$	18,489
Issuance of common stock under stock incentive plans	88,375		—		315		—		315
Stock-based compensation expense	—		—		805		—		805
Issuance of common stock in at-the-market offering, net of issuance costs	468,427		—		2,084		—		2,084
Net loss	—		—		—		(1,732)		(1,732)
Balance at March 31, 2020	18,638,555	$	2	$	170,353	$	(150,394)	$	19,961
Issuance of common stock under stock incentive plans	231,220		—		827		—		827
Stock-based compensation expense	—		—		918		—		918
Net loss	—		—		—		(1,294)		(1,294)
Balance at June 30, 2020	18,869,775	$	2	$	172,098	$	(151,688)	$	20,412
Issuance of common stock under stock incentive plans	101,016		—		379		—		379
Stock-based compensation expense	—		—		910		—		910
Issuance of warrant	—		—		152		—		152
Net loss	—		—		—		(3,895)		(3,895)
Balance at September 30, 2020	18,970,791	$	2	$	173,539	$	(155,583)	$	17,958

The accompanying notes are an integral part of these condensed financial statements.

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EVERSPIN TECHNOLOGIES, INC.

Condensed Statement of Cash Flows

(In thousands)

(Unaudited)


	Nine Months Ended September 30,
	2021		2020
Cash flows from operating activities
Net income (loss)	$	676	$	(6,921)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		1,117		1,611
Stock-based compensation		2,474		2,633
Non-cash warrant revaluation		5		2
Non-cash interest expense		274		231
Changes in operating assets and liabilities:
Accounts receivable		(3,022)		(2,368)
Inventory		(947)		1,690
Prepaid expenses and other current assets		(67)		440
Other assets		(175)		—
Accounts payable		656		(31)
Accrued liabilities		655		(692)
Deferred revenue		1,382		—
Lease liabilities		(90)		(132)
Net cash provided by (used in) operating activities		2,938		(3,537)
Cash flows from investing activities
Purchases of property and equipment		(578)		(307)
Net cash used in investing activities		(578)		(307)
Cash flows from financing activities
Payments on long-term debt		(2,800)		—
Payments on finance lease obligation		—		(6)
Proceeds from exercise of stock options and purchase of shares in employee stock purchase plan		399		1,206
Proceeds from issuance of common stock in at-the-market offering, net of issuance costs		—		2,084
Net cash (used in) provided by financing activities		(2,401)		3,284
Net decrease in cash and cash equivalents		(41)		(560)
Cash and cash equivalents at beginning of period		14,599		14,487
Cash and cash equivalents at end of period	$	14,558	$	13,927
Supplementary cash flow information:
Interest paid	$	178	$	271
Operating cash flows paid for operating leases	$	1,212	$	1,298
Financing cash flows paid for finance leases	$	—	$	6
Non-cash investing and financing activities:
Increase of right-of-use asset and lease liability due to lease modification	$	—	$	545
Purchases of property and equipment in accounts payable and accrued liabilities	$	—	$	8
Bonus settled in shares of common stock	$	364	$	315
Issuance of warrant with debt	$	—	$	152

The accompanying notes are an integral part of these condensed financial statements.

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EVERSPIN TECHNOLOGIES, INC.

Notes to Unaudited Condensed Financial Statements

1. Organization and Nature of Business

Everspin Technologies, Inc. (the Company) was incorporated in Delaware on May 16, 2008. The Company’s magnetoresistive random-access memory (MRAM) solutions offer the persistence of non-volatile memory with the speed and endurance of random-access memory (RAM) and enable the protection of mission critical data particularly in the event of power interruption or failure. The Company’s MRAM solutions allow its customers in the industrial, medical, automotive/transportation, aerospace and data center markets to design high performance, power efficient and reliable systems without the need for bulky batteries or capacitors.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP) and applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding interim financial reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted, and accordingly the balance sheet as of December 31, 2020 has been derived from the audited financial statements at that date but does not include all of the information required by GAAP for complete financial statements. These unaudited interim condensed financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair statement of the Company’s financial information. The results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any other interim period or for any other future year.

The accompanying condensed financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2020, included in the Company’s Annual Report on Form 10-K filed with the SEC.

The Company believes that its existing cash and cash equivalents as of September 30, 2021, coupled with its anticipated growth and sales levels will be sufficient to meet its anticipated cash requirements for at least the next twelve months from the financial statement issuance date. The Company’s future capital requirements will depend on many factors, including, among other things, its growth rate, the timing and extent of its spending to support research and development activities, the timing and cost of establishing additional sales and marketing capabilities, and the introduction of new products. The Company may be required at some point in the future to seek additional equity or debt financing, to sustain operations beyond that point, and such additional financing may not be available on acceptable terms or at all. If the Company is unable to raise additional capital or generate sufficient cash from operations to adequately fund its operations, it will need to curtail planned activities to reduce costs. Doing so will likely harm its ability to execute on its business plan.

Prior Period Reclassifications

Certain immaterial prior period amounts have been reclassified to conform to the current period presentation.

Use of Estimates

The preparation of the condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, fair value of assets and liabilities, inventory reserves, product warranty reserves, deferred tax assets and

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related valuation allowances, and stock-based compensation. The Company believes its estimates and assumptions are reasonable; however, actual results may differ from the Company’s estimates.

Accounts receivable, net

The Company establishes an allowance for product returns. The Company analyzes historical returns, current economic trends and changes in customer demand and acceptance of products when evaluating the adequacy of sales returns. Returns are processed as credits on future purchases, and as a result, the allowance is recorded against the balance of trade accounts receivable. In addition, the Company establishes an allowance for estimated price concessions related to its distributor agreements. The Company estimates credits to distributors based on the historical rate of credits provided to distributors relative to sales.

Accounts receivable, net consisted of the following (in thousands):


	September 30,		December 31,
	2021		2020
Trade accounts receivable	$	10,500	$	7,590
Unbilled accounts receivable		344		255
Allowance for product returns and price concessions		(215)		(238)
Accounts receivable, net	$	10,629	$	7,607

Concentration of Credit Risk

Financial instruments that potentially expose the Company to a concentration of credit risk consist principally of cash and cash equivalents that are held by a financial institution in the United States and accounts receivable. Amounts on deposit with a financial institution may at times exceed federally insured limits. The Company maintains its cash accounts with high credit quality financial institutions and, accordingly, minimal credit risk exists with respect to the financial institutions.

Significant customers are those which represent more than 10% of the Company’s total revenue or net accounts receivable balance at each respective balance sheet date. For the purposes of this disclosure, the Company defines “customer” as the entity that is purchasing the products or licenses directly from the Company, which includes the distributors of the Company’s products in addition to end customers that the Company sells to directly. For each significant customer, revenue as a percentage of total revenue and accounts receivable as a percentage of total accounts receivable, net are as follows:


	Revenue								Accounts Receivable, net
	Three Months Ended				Nine Months Ended				As of
	September 30,				September 30,				September 30,		December 31,
Customers	2021		2020		2021		2020		2021		2020
Customer A	17	%	38	%	14	%	32	%	21	%	29	%
Customer B	13	%	*		20	%	*		31	%	25	%
Customer C	*		*		*		*		12	%	*

*	Less than 10%

Fair Value of Financial Instruments

Fair value is defined as an exit price, representing the amount that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. The framework for measuring fair value provides a three-tier hierarchy prioritizing inputs to valuation techniques used in measuring fair value as follows:

Level 1— Observable inputs such as quoted prices for identical assets or liabilities in active markets;

Level 2— Inputs, other than quoted prices for identical assets or liabilities in active markets, which are observable either directly or indirectly; and

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Level 3— Unobservable inputs in which there is little or no market data requiring the reporting entity to develop its own assumptions.

As of September 30, 2021, based on Level 2 inputs and the borrowing rates available to the Company for loans with similar terms and consideration of the Company’s credit risk, the carrying value of the Company’s variable interest rate debt, excluding unamortized debt issuance costs, approximates fair value. The Company’s financial instruments consist of Level 1 assets and a Level 3 liability. Level 1 assets consist of highly liquid money market funds that are included in cash equivalents. The Company’s Level 3 liability consists of warrants issued in connection with the Company’s current credit facility (Note 6).

The following tables sets forth the fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis (in thousands):


	September 30, 2021
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	14,657	$	—	$	—	$	14,657
Total assets measured at fair value	$	14,657	$	—	$	—	$	14,657

Liabilities:
Warrant liability	$	—	$	—	$	36	$	36
Total liabilities measured at fair value	$	—	$	—	$	36	$	36


	December 31, 2020
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	14,669	$	—	$	—	$	14,669
Total assets measured at fair value	$	14,669	$	—	$	—	$	14,669

Liabilities:
Warrant liability	$	—	$	—	$	31	$	31
Total liabilities measured at fair value	$	—	$	—	$	31	$	31

Recently Issued Pronouncements

In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which amends the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. As the Company is a smaller reporting company, ASU 2016-13 is effective for the Company’s annual reporting periods, and interim periods within those years, beginning after December 15, 2022, and requires a cumulative effect adjustment to the balance sheet as of the beginning of the first reporting period in which the guidance is effective. In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements Financial Instruments-Credit Losses (Topic 326). The new ASU provides narrow-scope amendments to help apply ASU No. 2016-13. The Company is evaluating the impact of the adoption of ASU 2016-13 and ASU 2019-04 on its financial statements.

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3. Revenue

The Company sells the majority of its products to distributors and original equipment manufacturers (OEMs). The Company also recognizes revenue under manufacturing and engineering service agreements and licensing and royalty agreements with some customers.

The following table presents the Company’s revenues disaggregated by sales channel (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Distributor	$	9,143	$	5,385	$	24,644	$	18,952
Non-distributor		5,652		4,735		12,279		13,102
Total revenue	$	14,795	$	10,120	$	36,923	$	32,054

The following table presents the Company’s revenues disaggregated by timing of recognition (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Point in time	$	13,618	$	9,756	$	34,212	$	30,982
Over time		1,177		364		2,711		1,072
Total revenue	$	14,795	$	10,120	$	36,923	$	32,054

The following table presents the Company’s revenues disaggregated by type (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Product sales	$	12,037	$	9,577	$	31,292	$	30,139
Royalties		274		179		1,612		843
Patents		1,307		—		1,307		—
Other revenue		1,177		364		2,712		1,072
Total revenue	$	14,795	$	10,120	$	36,923	$	32,054

In September 2021, the Company entered into an intellectual property monetization deal to sell five patents to a customer for a total contract value of $5.25 million. Two of the patents were assigned to the customer in September 2021, and the remaining three patents were assigned to the customer subsequent to quarter-end in October 2021. Control is transferred when the patents are assigned to the customer. As a result, $1.30 million of patent revenue was recognized during the quarter ended September 31, 2021, related to the patent sales, with the remaining $3.95 million to be recognized in the fourth quarter of 2021.

The Company recognizes revenue in three primary geographic regions: Asia-Pacific (APAC); North America; and Europe, Middle East and Africa (EMEA). The following table presents the Company’s revenues disaggregated by the geographic region to which the product is delivered or licensee is located (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
APAC	$	8,523	$	7,152	$	23,474	$	22,435
North America		4,197		2,109		8,623		5,033
EMEA		2,075		859		4,826		4,586
Total revenue	$	14,795	$	10,120	$	36,923	$	32,054

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4. Balance Sheet Components

Inventory

Inventory consisted of the following (in thousands):


	September 30,		December 31,
	2021		2020
Raw materials	$	356	$	329
Work-in-process		5,084		4,910
Finished goods		1,228		482
Total inventory	$	6,668	$	5,721

Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):


	September 30,		December 31,
	2021		2020
Payroll-related expenses	$	1,994	$	1,274
Inventory		266		416
Other		263		542
Total accrued liabilities	$	2,523	$	2,232

Deferred Revenue

In the nine months ended September 30, 2021, the Company executed contractual arrangements with a customer for the development of a RAD-Hard product, consisting of a technology license, design license agreement and development subcontract. The Company does not share in the rights to future revenues or royalties. The total arrangements are for $6.5 million in consideration.

The Company concluded these contractual arrangements represent one arrangement and evaluated its promises to the customer and whether the performance obligations granted under the arrangement were distinct. The licenses provided to the customer are not transferable, are of limited value without the promised development services, and the customer cannot benefit from the license agreements without the specific obligated services in the development subcontract, as there is strong interdependency between the licenses and the development subcontract. Accordingly, the Company determined the licenses were not distinct within the context of the contract and combined the license with other performance obligations.

As a result, the Company is recognizing revenue related to the performance obligations over time using the input method based on costs incurred to date relative to the total expected costs of the contract and began recognizing revenue in the second quarter of 2021 over the performance obligation period.

Under the agreements, the Company received a non-refundable, upfront payment of $3.0 million in the first quarter of 2021 and a payment of $0.7 million was received in the third quarter of 2021. As of September 30, 2021, $1.4 million was recorded as deferred revenue, current, with $0.9 million and $2.3 million recognized as revenue during the three and nine months ended September 30, 2021, respectively.

5. Leases

Operating leases consist primarily of office space expiring at various dates through 2023. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

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The undiscounted future non-cancellable lease payments under the Company’s operating leases were as follows (in thousands):


As of September 30, 2021	Amount
2021	$	391
2022		861
2023		68
Total lease payments		1,320
Less: imputed interest		(41)
Total operating lease liabilities		1,279
Less: current portion of operating lease liabilities		(1,011)
Total operating lease liabilities, net of current portion	$	268

Other information related to the Company’s operating lease liabilities was as follows: