Segment Information

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Segment Information

12. Segment Information

The Company operates and reports its results in two business segments, Product and Software. The Company reports segment information based on the management approach. The management approach designates the internal reporting used by CODM for decision making and performance assessment as the basis for determining the Company’s reportable segments. The performance measures of the Company’s reportable segments is primarily

income (loss) from operations. Income (loss) from operations for each segment includes all revenues, related cost of net revenues, gross margin and operating expenses directly attributable to the segment.

The Company’s Product segment includes GentleWave System console and related accessories and instruments. The GentleWave System offers a novel approach to root canal therapy, using advanced fluid dynamics, broad-spectrum acoustic energy and accelerated chemistry to deliver optimal cleaning and disinfection of the root canal system.

The Company’s Software segment includes selling traditional software licenses for practice management software to enable an integrated digital office for endodontists as well as Software-as-a-Service subscriptions for the software.

The following tables present the Company’s segment information as of and for the years ended December 31:

	2021									2020
	(in thousands, except percentage data)
	Product			Software			Total			Product			Software			Total
Revenue	$	25,811		$	7,386		$	33,197		$	17,338		$	6,013		$	23,351
Cost of sales		21,992			2,869			24,861			17,152			2,314			19,466
Gross profit		3,819			4,517			8,336			186			3,699			3,885
Gross margin		15	%		61	%		25	%		1	%		62	%		17	%
Operating expenses:
Selling, general and administrative		31,781			2,132			33,913			24,794			1,901			26,695
Research and development		16,959			1,609			18,568			19,027			1,434			20,461
Change in fair value of contingent earnout		261			—			261			(473	)		—			(473	)
Total operating expenses		49,001			3,741			52,742			43,348			3,335			46,683
Income (loss) from operations	$	(45,182	)	$	776		$	(44,406	)	$	(43,162	)	$	364		$	(42,798	)

Depreciation:

	2021		2020
	(in thousands)
Product	$	1,409	$	2,059
Software		17		20
Total	$	1,426	$	2,079

Segment Assets:

	2021		2020
	(in thousands)
Product	$	104,588	$	64,021
Software		10,911		12,120
Total	$	115,499	$	76,141