Segment Information

6 Months Ended

Jun. 30, 2022

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 the Company's Chief Operating Decision Maker ("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 for the three and six months ended June 30, 2022 and 2021:

	2022									2021
	(in thousands, except percentage data)
	Product			Software			Total			Product			Software			Total
Revenue	$	8,442		$	2,105		$	10,547		$	6,171		$	1,821		$	7,992
Cost of sales		7,385			609			7,994			5,333			566			5,899
Gross profit		1,057			1,496			2,553			838			1,255			2,093
Gross margin		13	%		71	%		24	%		14	%		69	%		26	%
Operating expenses:
Selling, general and administrative		12,243			579			12,822			6,866			515			7,381
Research and development		3,552			466			4,018			4,222			409			4,631
Change in fair value of contingent earnout		—			—			—			(21	)		—			(21	)
Total operating expenses		15,795			1,045			16,840			11,067			924			11,991
(Loss) income from operations	$	(14,738	)	$	451		$	(14,287	)	$	(10,229	)	$	331		$	(9,898	)

	2022									2021
	(in thousands, except percentage data)
	Product			Software			Total			Product			Software			Total
Revenue	$	15,645		$	3,935		$	19,580		$	11,980		$	3,439		$	15,419
Cost of sales		13,463			1,285			14,748			10,408			1,176			11,584
Gross profit		2,182			2,650			4,832			1,572			2,263			3,835
Gross margin		14	%		67	%		25	%		13	%		66	%		25	%
Operating expenses:
Selling, general and administrative		23,770			1,037			24,807			12,932			973			13,905
Research and development		7,983			885			8,868			8,861			816			9,677
Change in fair value of contingent earnout		—			—			—			(7	)		—			(7	)
Total operating expenses		31,753			1,922			33,675			21,786			1,789			23,575
(Loss) income from operations	$	(29,571	)	$	728		$	(28,843	)	$	(20,214	)	$	474		$	(19,740	)

Segment Assets:

	As of
	June 30,		December 31,
	2022		2021
	(in thousands)
Product	$	77,269	$	104,588
Software		10,639		10,911
Total	$	87,908	$	115,499