ReShape Lifesciences Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>ReShape Lifesciences Inc. has filed its 2023 10-K report detailing financial instruments and corporate history.</b>

AI Summary

ReShape Lifesciences Inc. (HIND) filed a Annual Report (10-K) with the SEC on April 1, 2024. ReShape Lifesciences Inc. filed its annual report on Form 10-K for the fiscal year ended December 31, 2023. The company was formerly known as OBALON THERAPEUTICS INC, with a name change on February 20, 2008. The filing includes details on various warrant issuances and their valuation inputs, such as share price, risk-free interest rates, price volatility, and expected term, using the Black-Scholes model. Specific warrant types mentioned include Private Placement Warrants, Representative Warrants (October 2023, February 2023, April 2023), and Pre-Funded Warrants (October 2023, February 2023). The company's principal executive offices are located at 1001 Calle Amanecer, San Clemente, CA 92673.

Why It Matters

For investors and stakeholders tracking ReShape Lifesciences Inc., this filing contains several important signals. This 10-K filing provides a comprehensive overview of the company's financial position and activities for the fiscal year 2023, including detailed information on warrant valuations. Understanding the specifics of warrant issuances and their valuation methodologies is crucial for investors to assess potential dilution and the company's financial structure.

Risk Assessment

Risk Level: medium — ReShape Lifesciences Inc. shows moderate risk based on this filing. The company's financial health and future prospects are subject to the complexities of its financial instruments, including various warrant issuances, which require detailed valuation and could impact equity.

Analyst Insight

Investors should carefully review the detailed warrant valuation data within the 10-K to understand potential equity dilution and the financial implications of these instruments.

Key Numbers

• 20231231 — Fiscal Year End (The period covered by the 10-K report.)
• 20240401 — Filing Date (Date the 10-K was filed.)
• 001-37897 — SEC File Number (SEC file number for ReShape Lifesciences Inc.)

Key Players & Entities

• ReShape Lifesciences Inc. (company) — Filer of the 10-K report.
• OBALON THERAPEUTICS INC (company) — Former name of ReShape Lifesciences Inc.
• 1001 Calle Amanecer, San Clemente, CA 92673 (location) — Business and mailing address of ReShape Lifesciences Inc.
• Black-Scholes Model (other) — Valuation model used for warrants.

FAQ

Risk Factors

• Valuation of Financial Instruments [medium — financial]: The company utilizes complex models like Black-Scholes to value its warrants, involving inputs such as share price, risk-free interest rates, price volatility, and expected term, which can be subject to estimation and change.

Key Dates

• 2023-12-31: Fiscal Year End — Marks the end of the reporting period for the 10-K.
• 2024-04-01: Filing Date — Date the 10-K was officially submitted to the SEC.

Glossary

10-K

An annual report required by the U.S. Securities and Exchange Commission (SEC), which gives a comprehensive summary of a company's financial performance. (Provides a detailed overview of the company's financial condition and operations for the fiscal year.)

Warrants

A type of security that gives the holder the right, but not the obligation, to purchase shares of a company's stock at a specified price within a certain timeframe. (Crucial for understanding potential future share dilution and the company's capital structure.)

Black-Scholes Model

A mathematical model used to determine the theoretical price of European-style options. (Used by the company to estimate the fair value of its outstanding warrants.)

Key Financial Figures

• $0.001 — nge on which Registered Common stock, $0.001 par value per share RSLS The Nasdaq
• $2.0 — omic impact of obesity is approximately $2.0 trillion, or approximately 2.8% of glob
• $1.64 billion — and product candidates could address a $1.64 billion per year and growing global surgical de
• $2.8 billion — ical Device market is projected to be a $2.8 billion worldwide market ($1.8 billion in the U
• $1.8 billion — to be a $2.8 billion worldwide market ($1.8 billion in the U.S.) by 2025, the Virtual Healt
• $95 billion — care Delivery market is projected to be $95 billion worldwide by 2026, and the Global Weigh
• $300 billion — pected to rise to an estimated value of $300 billion with a compound annual growth rate of 6
• $210.0 billion — y in the U.S. are estimated to be up to $210.0 billion per year and nearly 21% of medical cost
• $1.5 billion — be attributed to obesity. Approximately $1.5 billion was spent in 2015 alone in the U.S. on
• $3.8 billion — ty. By 2025, it is estimated that up to $3.8 billion will be spent in the U.S. on approximat
• $44 — ted medical costs could rise by another $44-$66 billion each year in the U.S. by 20
• $66 billion — medical costs could rise by another $44-$66 billion each year in the U.S. by 2030. The medi
• $2,741 — ty payers for people who are obese were $2,741 per year, or 42% higher than those of p
• $6,627 — ht and the average cost to employers is $6,627 to $8,067 per year per obese employee (
• $8,067 — average cost to employers is $6,627 to $8,067 per year per obese employee (BMI of 35

Filing Documents

• rsls-20231231x10k.htm (10-K) — 2446KB
• rsls-20231231xex10d6.htm (EX-10.6) — 191KB
• rsls-20231231xex21d1.htm (EX-21.1) — 3KB
• rsls-20231231xex23d1.htm (EX-23.1) — 3KB
• rsls-20231231xex31d1.htm (EX-31.1) — 8KB
• rsls-20231231xex31d2.htm (EX-31.2) — 9KB
• rsls-20231231xex32d1.htm (EX-32.1) — 5KB
• rsls-20231231xex32d2.htm (EX-32.2) — 6KB
• rsls-20231231xex97d1.htm (EX-97.1) — 46KB
• rsls-20231231x10k003.jpg (GRAPHIC) — 60KB
• rsls-20231231xex97d1001.jpg (GRAPHIC) — 6KB
• rsls-20231231xex97d1002.jpg (GRAPHIC) — 11KB
• 0001558370-24-004559.txt (&nbsp;) — 10347KB
• rsls-20231231.xsd (EX-101.SCH) — 60KB
• rsls-20231231_cal.xml (EX-101.CAL) — 73KB
• rsls-20231231_def.xml (EX-101.DEF) — 291KB
• rsls-20231231_lab.xml (EX-101.LAB) — 539KB
• rsls-20231231_pre.xml (EX-101.PRE) — 458KB
• rsls-20231231x10k_htm.xml (XML) — 1709KB

Business

Business 1 Item 1A.

Risk Factors

Risk Factors 21 Item 1B. Unresolved Staff Comments 38 Item 1C. Cybersecurity 39 Item 2.

Properties

Properties 39 Item 3.

Legal Proceedings

Legal Proceedings 39 Item 4. Mine Safety Disclosures 39 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 39 Item 6. [RESERVED] 40 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 41 Item 7A

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 47 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 48 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 77 Item 9A.

Controls and Procedures

Controls and Procedures 77 Item 9B. Other Information 79 Item 9C . Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 79 PART III Item 10. Directors, Executive Officers and Corporate Governance 80 Item 11.

Executive Compensation

Executive Compensation 83 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 86 Item 13. Certain Relationships and Related Transactions, and Director Independence 88 Item 14. Principal Accounting Fees and Services 88 PART IV Item 15. Exhibit and Financial Statement Schedules 89 Item 16. Form 10-K Summary 89 EXHIBITS 90

SIGNATURES

SIGNATURES 94 2 Table of Contents PART I.

BUSINESS

ITEM 1. BUSINESS Our Company ReShape Lifesciences Inc. is a worldwide premier weight-loss solutions company, offering an integrated portfolio of proven products and services that manage and treat obesity and metabolic disease throughout the care continuum. Our current portfolio includes the FDA-approved and reimbursed Lap-Band system, which provides minimally invasive, long-term treatment of obesity and is a safer surgical alternative to more invasive and extreme surgical stapling procedures such as the gastric bypass or sleeve gastrectomy. 1 1 ReShape's Pillars for Growth In August of 2022, Paul F. Hickey joined ReShape as President and Chief Executive Officer. Under this new leadership, the Company has pivoted its business strategy with the intent of helping to ensure growth and profitability. The Company has executed the following three growth strategies, or pillars for growth: Growth Pillar I: Executing disciplined, metrics-driven business operations. In executing the first growth pillar, the Company is focused on revenue growth and profitability, by the end of 2024. This estimated timeline could be compressed or extended depending on many factors, including revenue growth from new product introductions, or strategic investments not yet foreseen. This first growth pillar remains , in the Company's opinion, paramount for ReShape to deliver shareholder value and , ultimately, profitability . Starting shortly after Mr. Hickey's appointment, ReShape has made several operational changes to help ensure future performance and return on investment by prioritizing investments supporting revenue growth . The Company is prioritizing investments, including marketing automation to support scalable lead acquisition, segmented consumer-centric messaging via an updated website for improved patient engagement, and a frictionless booking system with qualified providers. This is expected to dramatically increase Lap-Band procedures and ultimately 1 Table of Cont

View Full Filing

View this 10-K filing on SEC EDGAR