Form 10-Q Penumbra Inc For: Mar 31

May 3, 2022 4:52 PM EDT

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Washington, D.C. 20549
(Mark One)
For the quarterly period ended March 31, 2022
For the transition period from_____ to _____         
Commission File Number: 001-37557
Penumbra, Inc.
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)

One Penumbra Place
Alameda, CA 94502
(Address of principal executive offices, including zip code)

(510) 748-3200
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, Par value $0.001 per sharePENThe New York Stock Exchange
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 filerAccelerated filer
Non-accelerated filerSmaller 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 accounting standards provided pursuant to Section 13(a) of the Exchange Act. o 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes:    No:  ☒
As of April 19, 2022, the registrant had 37,677,637 shares of common stock, par value $0.001 per share, outstanding.


Penumbra, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
March 31, 2022December 31, 2021
Current assets:
Cash and cash equivalents$68,163 $59,379 
Marketable investments172,178 195,496 
Accounts receivable, net of allowance for credit losses of $759 and $2,092 at March 31, 2022 and December 31, 2021, respectively
143,417 133,940 
Inventories274,349 263,504 
Prepaid expenses and other current assets32,219 29,155 
Total current assets690,326 681,474 
Property and equipment, net60,327 58,856 
Operating lease right-of-use assets176,892 131,955 
Finance lease right-of-use assets35,550 36,276 
Intangible assets, net88,472 90,618 
Goodwill166,232 166,388 
Deferred taxes70,080 65,698 
Other non-current assets13,694 12,985 
Total assets$1,301,573 $1,244,250 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$14,137 $13,421 
Accrued liabilities105,533 99,796 
Current operating lease liabilities8,660 8,267 
Current finance lease liabilities1,769 1,713 
Total current liabilities130,099 123,197 
Non-current operating lease liabilities182,438 137,045 
Non-current finance lease liabilities26,122 26,523 
Other non-current liabilities3,612 3,558 
Total liabilities342,271 290,323 
Commitments and contingencies (Note 10)
Stockholders’ equity:
Common stock38 37 
Additional paid-in capital919,251 910,614 
Accumulated other comprehensive (loss) income(5,972)(2,630)
Retained earnings45,985 45,906 
Total stockholders’ equity959,302 953,927 
Total liabilities and stockholders’ equity$1,301,573 $1,244,250 
See accompanying notes to the unaudited condensed consolidated financial statements

Penumbra, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share amounts)
Three Months Ended March 31,
Revenue$203,895 $169,204 
Cost of revenue76,477 57,867 
Gross profit127,418 111,337 
Operating expenses:
Research and development 20,564 18,076 
Sales, general and administrative 110,900 79,798 
Total operating expenses 131,464 97,874 
(Loss) income from operations(4,046)13,463 
Interest (expense) income, net(47)480 
Other expense, net(1,011)(1,476)
(Loss) income before income taxes(5,104)12,467 
(Benefit from) provision for income taxes(5,183)1,541 
Consolidated net income$79 $10,926 
Net loss attributable to non-controlling interest (910)
Net income attributable to Penumbra, Inc.$79 $11,836 
Net income attributable to Penumbra, Inc. per share:
Basic$0.00 $0.32 
Diluted$0.00 $0.32 
Weighted average shares outstanding:
Basic37,646,122 36,455,712 
Diluted38,708,657 37,533,520 

See accompanying notes to the unaudited condensed consolidated financial statements

Penumbra, Inc.
Condensed Consolidated Statements of Comprehensive (Loss) Income
(in thousands)
Three Months Ended March 31,
Consolidated net income$79 $10,926 
Other comprehensive loss, net of tax:
Foreign currency translation adjustments, net of tax(868)(2,695)
Net change in unrealized losses on available-for-sale securities, net of tax(2,474)(271)
Total other comprehensive loss, net of tax(3,342)(2,966)
Consolidated comprehensive (loss) income$(3,263)$7,960 
Net loss attributable to non-controlling interest (910)
Comprehensive (loss) income attributable to Penumbra, Inc.$(3,263)$8,870 

See accompanying notes to the unaudited condensed consolidated financial statements


Penumbra, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(in thousands, except share amounts)
Common StockAdditional Paid-in CapitalAccumulated Other Comprehensive (Loss) IncomeRetained Earnings Total Penumbra, Inc. Stockholders’ EquityNon-Controlling InterestTotal Stockholders’ Equity
Balance at December 31, 202137,578,483 $37 $910,614 $(2,630)$45,906 $953,927 $ $953,927 
Issuance of common stock103,984 1 1,102 — — 1,103 — 1,103 
Shares held for tax withholdings(14,243)— (3,181)— — (3,181)— (3,181)
Stock-based compensation— — 10,716 — — 10,716 — 10,716 
Other comprehensive loss— — — (3,342)— (3,342)— (3,342)
Net income (loss)— — — — 79 79 — 79 
Balance at March 31, 202237,668,224 $38 $919,251 $(5,972)$45,985 $959,302 $ $959,302 
Penumbra, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(in thousands, except share amounts)
Common StockAdditional Paid-in CapitalAccumulated Other Comprehensive LossRetained Earnings Total Penumbra, Inc. Stockholders’ EquityNon-Controlling InterestTotal Stockholders’ Equity
Balance at December 31, 202036,414,732 $36 $598,299 $2,541 $40,622 $641,498 $(3,710)$637,788 
Issuance of common stock79,080 — 666 — — 666 — 666 
Shares held for tax withholdings(11,955)— (3,036)— — (3,036)— (3,036)
Stock-based compensation— — 7,093 — — 7,093 — 7,093 
Other comprehensive loss— — — (2,966)— (2,966)— (2,966)
Net income— — — — 11,836 11,836 (910)10,926 
Balance at March 31, 202136,481,857 $36 $603,022 $(425)$52,458 $655,091 $(4,620)$650,471 

.See accompanying notes to the unaudited condensed consolidated financial statements


Penumbra, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
 Three Months Ended March 31,
Consolidated net income
$79 $10,926 
Adjustments to reconcile consolidated net income to net cash used in operating activities:
Depreciation and amortization5,726 3,471 
Stock-based compensation8,893 6,395 
Inventory write-downs593 991 
Deferred taxes(4,378)1,223 
Changes in operating assets and liabilities:
Accounts receivable(8,710)(12,943)
Prepaid expenses and other current and non-current assets(3,809)(3,463)
Accounts payable1,389 1,272 
Accrued expenses and other non-current liabilities8,249 8,482 
Proceeds from lease incentives230  
Net cash used in operating activities(4,514)(14,368)
Purchases of marketable investments (12,266)
Proceeds from maturities of marketable investments20,668 19,497 
Purchases of property and equipment(4,957)(3,991)
Other (150)
Net cash provided by investing activities15,711 3,090 
Proceeds from exercises of stock options1,102 666 
Payment of employee taxes related to vested stock(3,181)(3,036)
Payments of finance lease obligations(425)(337)
Net cash used in financing activities(2,641)(2,614)
Effect of foreign exchange rate changes on cash and cash equivalents228 (146)
CASH AND CASH EQUIVALENTS—Beginning of period59,379 69,670 
CASH AND CASH EQUIVALENTS—End of period$68,163 $55,632 
Right-of-use assets obtained in exchange for operating lease obligations$47,678 $803 
Right-of-use assets obtained in exchange for finance lease obligations$81 $428 
Purchase of property and equipment funded through accounts payable and accrued liabilities$1,626 $2,184 
Cash paid for income taxes$1,798 $132 

See accompanying notes to the unaudited condensed consolidated financial statements

Penumbra, Inc.
Notes to Condensed Consolidated Financial Statements

1. Organization and Description of Business
Penumbra, Inc. (the “Company”) is a global healthcare company focused on innovative therapies. The Company designs, develops, manufactures and markets novel products and has a broad portfolio that addresses challenging medical conditions in markets with significant unmet need. The Company focuses on developing, manufacturing and marketing novel products for use by specialist physicians and other healthcare providers to drive improved clinical and health outcomes. The Company believes that the cost-effectiveness of our products is attractive to our customers.
2. Summary of Significant Accounting Policies
Basis of Presentation and Consolidation
The accompanying condensed consolidated balance sheet as of March 31, 2022, the condensed consolidated statements of operations, the condensed consolidated statements of comprehensive (loss) income, and the condensed consolidated statements of stockholders’ equity for the three months ended March 31, 2022 and 2021, and the condensed consolidated statements of cash flows for the three months ended March 31, 2022 and 2021 are unaudited. The unaudited condensed consolidated financial statements included herein have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial information. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. The condensed consolidated balance sheet data as of December 31, 2021 was derived from the audited financial statements as of that date.
The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to state fairly the Company’s financial position as of March 31, 2022, the results of its operations for the three months ended March 31, 2022 and 2021, the changes in comprehensive income (loss) and stockholders’ equity for the three months ended March 31, 2022 and 2021, and the cash flows for the three months ended March 31, 2022 and 2021. The results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022 or for any other future annual or interim period.
The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2021, included in the Company’s Annual Report on Form 10-K. There have been no changes to the Company’s significant accounting policies during the three months ended March 31, 2022, as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and equity accounts; disclosure of contingent assets and liabilities at the date of the financial statements; and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including those related to marketable investments, allowances for credit losses, the amount of variable consideration included in the transaction price, warranty reserve, valuation of inventories, useful lives of property and equipment, operating and financing lease right-of-use (“ROU”) assets and liabilities, income taxes, contingent consideration and other contingencies, among others. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other data. Actual results could differ from those estimates.
The Company determined its operating segment on the same basis that it uses to evaluate its performance internally. The Company has one business activity: the design, development, manufacturing and marketing of innovative medical products, and operates as one operating segment. The Company’s chief operating decision-maker, its Chief Executive Officer, reviews its consolidated operating results for the purpose of allocating resources and evaluating financial performance.

Penumbra, Inc.
Notes to Condensed Consolidated Financial Statements

3. Investments and Fair Value of Financial Instruments
Marketable Investments
The Company’s marketable investments have been classified and accounted for as available-for-sale. The following table presents the Company’s marketable investments as of March 31, 2022 and December 31, 2021 (in thousands):
March 31, 2022
Securities with net gains or losses in accumulated other comprehensive income (loss)    
Amortized CostGross Unrealized GainsGross Unrealized LossesAllowance
 Credit Loss
Fair Value
Commercial paper $9,993 $ $(33)$ $9,960 
U.S. treasury14,468  (392) 14,076 
U.S. agency and government sponsored securities11,552  (153) 11,399 
U.S. states and municipalities39,347 9 (510) 38,846 
Corporate bonds99,886 3 (1,992) 97,897 
Total$175,246 $12 $(3,080)$ $172,178 
December 31, 2021
Securities with net gains or losses in accumulated other comprehensive income (loss)
Amortized CostGross Unrealized GainsGross Unrealized LossesAllowance
 Credit Loss
Fair Value
Commercial paper $20,286 $ $(10)$ $20,276 
U.S. treasury14,464  (77) 14,387 
U.S. agency and government sponsored securities11,553 1 (19) 11,535 
U.S. states and municipalities39,436 39 (89) 39,386 
Corporate bonds110,354 49 (491) 109,912 
Total$196,093 $89 $(686)$ $195,496 
As of March 31, 2022, the total amortized cost basis of the Company’s impaired available-for-sale securities exceeded its fair value by $3.1 million, which was primarily attributable to widening credit spreads and rising interest rates since purchase. The Company reviewed its impaired available-for-sale securities and concluded that the decline in fair value was not related to credit losses and that it is more likely than not that the entire amortized cost of each impaired security will be recoverable before the Company is required to sell them. Accordingly, during the three months ended March 31, 2022, no allowance for credit losses was recorded and instead the unrealized losses are reported as a component of accumulated other comprehensive (loss) income.

Penumbra, Inc.
Notes to Condensed Consolidated Financial Statements
The following tables present the gross unrealized losses and the fair value for those marketable investments that were in an unrealized loss position for less than twelve months or for twelve months or more as of March 31, 2022 and December 31, 2021 (in thousands):
March 31, 2022
Less than 12 months12 months or moreTotal
Fair ValueGross Unrealized LossesFair ValueGross Unrealized LossesFair ValueGross Unrealized Losses
Commercial paper$9,960 $(33)$ $ $9,960 $(33)
U.S. treasury14,076 (392)  14,076 (392)
U.S. agency and government sponsored securities11,399 (153)  11,399 (153)
U.S. states and municipalities34,657 (510)  34,657 (510)
Corporate bonds91,774 (1,893)2,116 (99)93,890 (1,992)
Total$161,866 $(2,981)$2,116 $(99)$163,982 $(3,080)
December 31, 2021
Less than 12 months12 months or moreTotal
Fair ValueGross Unrealized LossesFair ValueGross Unrealized LossesFair ValueGross Unrealized Losses
Commercial paper$16,977 $(10)$ $ $16,977 $(10)
U.S. treasury14,387 (77)  14,387 (77)
U.S. agency and government sponsored securities6,985 (19)  6,985 (19)
U.S. states and municipalities21,924 (89)  21,924 (89)
Corporate bonds85,513 (491)  85,513 (491)
Total$145,786 $(686)$ $ $145,786 $(686)
The following table presents the contractual maturities of the Company’s marketable investments as of March 31, 2022 (in thousands):
March 31, 2022
 Amortized CostFair Value
Due in less than one year$61,123 $60,878 
Due in one to five years114,123 111,300 
Total$175,246 $172,178 
Fair Value of Financial Instruments
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:
Level 1 - Quoted prices in active markets for identical assets or liabilities.
Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The categorization of a financial instrument within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement.

Penumbra, Inc.
Notes to Condensed Consolidated Financial Statements
The Company classifies its cash equivalents and marketable investments within Level 1 and Level 2, as it uses quoted market prices or alternative pricing sources and models utilizing market observable inputs.
The Company determined the fair value of its Level 1 financial instruments, which are traded in active markets, using quoted market prices for identical instruments.
Marketable investments classified within Level 2 of the fair value hierarchy are valued based on other observable inputs, including broker or dealer quotations or alternative pricing sources. When quoted prices in active markets for identical assets or liabilities are not available, the Company relies on non-binding quotes from its investment managers, which are based on proprietary valuation models of independent pricing services. These models generally use inputs such as observable market data, quoted market prices for similar instruments, historical pricing trends of a security as relative to its peers. To validate the fair value determination provided by its investment managers, the Company reviews the pricing movement in the context of overall market trends and trading information from its investment managers. In addition, the Company assesses the inputs and methods used in determining the fair value in order to determine the classification of securities in the fair value hierarchy.
The Company did not hold any Level 3 marketable investments as of March 31, 2022 or December 31, 2021. During the three months ended March 31, 2022 and 2021, the Company did not have any transfers between Level 1, Level 2 or Level 3 of the fair value hierarchy. Additionally, the Company did not have any financial assets and liabilities measured at fair value on a non-recurring basis as of March 31, 2022 or December 31, 2021.
The following tables set forth the Company’s financial assets measured at fair value by level within the fair value hierarchy as of March 31, 2022 and December 31, 2021 (in thousands):
 As of March 31, 2022
 Level 1Level 2Level 3Fair Value
Financial Assets
Cash equivalents:
Money market funds$22,284 $ $ $22,284 
Marketable investments:
Commercial paper 9,960  9,960 
U.S. treasury14,076   14,076 
U.S. agency and government sponsored securities 11,399  11,399 
U.S. states and municipalities 38,846  38,846 
Corporate bonds 97,897  97,897 
Total$36,360 $158,102 $ $194,462 
 As of December 31, 2021
 Level 1Level 2Level 3Fair Value
Financial Assets
Cash equivalents:
Money market funds$10,509 $ $ $10,509 
Marketable investments:
Commercial paper 20,276  20,276 
U.S. treasury14,387   14,387 
U.S. agency and government sponsored securities 11,535  11,535 
U.S. states and municipalities 39,386  39,386 
Corporate bonds 109,912  109,912 
Total$24,896 $181,109 $ $206,005 

Penumbra, Inc.
Notes to Condensed Consolidated Financial Statements
4. Balance Sheet Components
The following table shows the components of inventories as of March 31, 2022 and December 31, 2021 (in thousands):
 March 31, 2022December 31, 2021
Raw materials$73,220 $68,374 
Work in process6,838 18,678 
Finished goods194,291 176,452 
Inventories$274,349 $263,504 
Accrued Liabilities
The following table shows the components of accrued liabilities as of March 31, 2022 and December 31, 2021 (in thousands):
 March 31, 2022December 31, 2021
Payroll and employee-related cost$63,268 $60,015 
Accrued expenses13,053 12,245 
Deferred revenue7,792 5,671 
Other accrued liabilities21,420 21,865 
Total accrued liabilities$105,533 $99,796 
The following table shows the changes in the Company’s estimated product warranty accrual, included in accrued liabilities, for the three months ended March 31, 2022 and December 31, 2021 (in thousands):
 March 31, 2022December 31, 2021
Balance at the beginning of the period$4,310 $2,896 
Accruals of warranties issued753 2,973 
Settlements of warranty claims(386)(1,559)
Balance at the end of the period$4,677 $4,310 
5. Business Combinations
Acquisition of Sixense Enterprises Inc.
Transaction Overview
On October 1, 2021 (the “Closing Date”), the Company closed the acquisition of Sixense Enterprises Inc. (“Sixense”) pursuant to the Agreement and Plan of Merger, dated September 17, 2021 (the “Merger Agreement”), among the Company, Sixense, Seychelles Merger Corporation, a wholly owned subsidiary of the Company, and a stockholders’ agent (the “Merger”). Sixense, a privately held company, specializes in enterprise use of virtual reality hardware and software and has been an integral partner on the development of the Company’s REAL Immersive System portfolio. The Merger allows the Company to streamline its efforts and collaborate more closely on its immersive healthcare offerings.
The Company and Sixense formed a joint venture, MVI Health Inc. (“MVI”), in 2017 for the purpose of exploring healthcare applications of virtual reality technology. At the time of MVI’s formation, the Company contributed cash and in-kind services to MVI and Sixense contributed an exclusive license to use its technology for healthcare applications, each for a 50% equity interest in MVI. In 2018, the Company acquired 40% of the outstanding shares of MVI from Sixense and consolidated the financial results of MVI into the accompanying consolidated financial statements, with the amounts attributable to the non-controlling interest classified separately. As of the Closing Date, the Company and Sixense owned a 90% and 10% equity interest in MVI, respectively.
As a result of the Merger, Sixense became a wholly owned subsidiary of the Company and the Company acquired, among other things, the remaining 10% equity interest in MVI held by Sixense.

Penumbra, Inc.
Notes to Condensed Consolidated Financial Statements
The Company accounted for the acquired assets and liabilities assumed from Sixense in accordance with ASC 805 and for its change in ownership interest in MVI as an equity transaction in accordance with ASC 810. The carrying amount of the noncontrolling interest was adjusted to zero, and the difference between the acquisition date fair value of the equity interest acquired of $4.2 million and its carrying amount of $(6.2) million was recognized within additional paid in capital.
Fair Value of Consideration Transferred
The following table summarizes the Closing Date fair value of the consideration transferred (in thousands):
Fair value of common stock issued (1)
Fair value of replacement stock options(2)
Consideration for settlement of pre-existing liabilities due to Sixense(3)
Total purchase price$251,016 
(1) The fair value of the 661,877 shares of common stock issued as part of consideration transferred was determined based on the acquisition date closing market price of the Company’s common stock of $263.09.
(2) Per ASC 805, the replacement of stock options or other share-based payment awards in conjunction with a business combination represents a modification of share-based payment awards that must be accounted for in accordance with ASC 718. As a result of the Company’s obligation to issue replacement awards, a portion of the fair-value-based measure of replacement awards is included in measuring the purchase consideration transferred in the business combination. To determine the portion of the replacement awards that is part of the purchase consideration, the Company measured the fair value of both the replacement awards and the historical awards as of the Closing Date, in accordance with ASC 718. The fair value of the replacement awards, whether vested or unvested, was included in the purchase consideration to the extent that pre-acquisition services had been rendered. The fair value of replacement stock options assumed for which pre-acquisition services were rendered of $80.7 million was allocated to the purchase consideration and $25.8 million was recognized immediately in the post-combination financial statements during the three months ended December 31, 2021, as pre-acquisition services were not rendered but the vesting of all stock options was accelerated in connection with the Merger.
(3) In the connection with the Merger, the Company effectively settled pre-existing liabilities due to or on behalf of Sixense.

Penumbra, Inc.
Notes to Condensed Consolidated Financial Statements
Fair Value of Consideration Transferred
The preliminary allocation of the purchase price was based upon a third party valuation and the Company’s estimates and assumptions are subject to change within the measurement period (generally one year from the Closing Date).
The following table presents the preliminary allocation of the purchase price for Sixense as of March 31, 2022 (in thousands):
Acquisition-Date Fair ValueEstimated Useful Life of Finite-Lived Intangible Assets
Tangible assets acquired and (liabilities) assumed:
Cash and cash equivalents$2,919 
Prepaid expenses and other current and non-current assets2,063 
Deferred tax assets20,678 
Deferred tax liabilities(19,398)
Accrued liabilities and other current liabilities(1,341)
Intangible assets acquired:
Developed technology62,466 8.75 years
In-process research and development20,823 
Net assets acquired88,210 
Fair value of subsidiary stock indirectly acquired through the Merger4,161 
Total net assets acquired92,371 
Total purchase price$251,016 
Further adjustments may be necessary as additional information related to the fair values of assets acquired and liabilities assumed is assessed during the measurement period, which may be up to one year from the acquisition date. The Company will reflect measurement period adjustments, if any, in the period in which the adjustments are recognized with the corresponding offset to goodwill. Any adjustments required after the measurement period are recorded in the consolidated statement of operations. No measurement period adjustments were recorded during the three months ended March 31, 2022.
The intangible assets acquired and the fair value of the privately-held subsidiary stock indirectly acquired are Level 3 fair value measurements for which fair value is derived from valuations using inputs that are unobservable and significant to the overall fair value measurement.
6. Intangible Assets
Acquired Intangible Assets
The following tables present details of the Company’s acquired finite-lived intangible assets as of March 31, 2022 and December 31, 2021 (in thousands, except weighted-average amortization period):

Penumbra, Inc.
Notes to Condensed Consolidated Financial Statements
As of March 31, 2022Weighted-Average Amortization PeriodGross Carrying AmountAccumulated AmortizationNet
Finite-lived intangible assets:
Developed technology8.8 years$62,466 $(3,570)$58,896 
Customer relationships15.0 years$6,626 $(2,099)$4,527 
Trade secrets and processes20.0 years5,256 (1,117)4,139 
Other5.0 years1,709 (1,622)87 
Total intangible assets subject to amortization9.8 years$76,057 $(8,408)$67,649 
Indefinite-lived intangible assets:
In-process research and development$20,823 $— $20,823 
Total intangible assets$96,880 $(8,408)$88,472 
As of December 31, 2021Weighted-Average
Amortization Period
Gross Carrying AmountAccumulated AmortizationNet
Finite-lived intangible assets:
Developed technology8.8 years$62,466 $(1,784)$60,682 
Customer relationships15.0 years$6,762 $(2,029)$4,733 
Trade secrets and processes20.0 years5,256 (1,051)4,205 
Other5.0 years1,744 (1,569)175 
Total intangible assets subject to amortization9.8 years$76,228 $(6,433)$69,795 
Indefinite-lived intangible assets:
In-process research and development20,823 — 20,823 
Total intangible assets$97,051 $(6,433)$