Axogen Inc
For the period ended Mar 31, 2025. Filed May 8, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 8, 2025
AXGN$50.02+2.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0000805928-24-000137
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0000805928-25-000064
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 83 previous paragraphs and 62 current paragraphs.
26 unchanged; 19 reworded; 17 added; 34 removed; 4 previous and 0 current paragraphs rearranged.
Tables are not compared: 4 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
Our platform for peripheral nerve repair features a comprehensive portfolio of products, including:
Current report
We derive substantially all of our revenues from sales of our nerve repair products to customers in the U.S.
Current report
Business Outlook
Current report
We are subject to risks and exposures from the evolving macroeconomic environment, including financial market volatility, geopolitical tensions and escalating trade disputes with U.S. trading partners. While our direct exposure to current tariffs is limited, risk lies in the potential for these disputes to cause a broader trade war, resulting in general economic instability and uncertainty that could cause our net revenue to fluctuate. We are actively assessing steps to mitigate potential adverse effects; however, if these measures are not effective in addressing wider economic disruption, our business, financial condition, results of operations and liquidity could be materially adversely affected.
Current report
•The U.S. Food and Drug Administration (“FDA”) accepted the filing of the Company’s Biologics License Application (“BLA”) for Avance® Nerve Graft on November 1, 2024, and assigned a Prescription Drug User Fee Act (“PDUFA”) goal date of September 5, 2025. During the first quarter 2025, we successfully completed the following regulatory milestones to support our anticipated approval in September 2025: a mid-cycle meeting with the FDA, clinical trial site inspections, and sponsor inspection under the FDA’s Bioresearch Monitoring program.
Current report
Gross profit for the three months ended March 31, 2025 increased $2,313, or 7.1%, to $34,933, as compared to $32,620 for the three months ended March 31, 2024. Gross margin as a percentage of revenues was 71.9% and 78.8% for the three months ended March 31, 2025 and 2024, respectively. Lower margins on products sold, driven by higher product costs, lowered the gross margin by 4.5% and an increase in inventory write-offs lowered the gross margin by 2.8%.
Current report
Total costs and expenses for the three months ended March 31, 2025 decreased $586, or 1.6%, to $36,594, as compared to $37,180 for the three months ended March 31, 2024. The decrease in total costs and expenses was due to decreases of (i) $956 in research and development project costs; (ii) $317 in occupancy related costs; and (iii) $242 in compensation costs, partially offset by increases of (i) $365 in travel costs; (ii) $255 in marketing program costs; (iii) $201 in professional services fees and expenses; and (iv) $108 in other costs and expenses.
Current report
Sales and marketing costs and expenses for the three months ended March 31, 2025 increased $1,230, or 6.2%, to $21,045, as compared to $19,815 for the three months ended March 31, 2024. The increase in sales and marketing costs and expenses was due to increases of (i) $689 in compensation costs; (ii) $310 in travel costs; (iii) $255 in marketing program costs; (iv) $84 in other costs and expenses; and (v) $19 in professional services fees and expenses, partially offset by a decrease of $127 in occupancy related costs.
Current report
Research and development costs and expenses for thethree months ended March 31, 2025 decreased $1,318, or 17.8%, to $6,091, as compared to $7,409 for the three months ended March 31, 2024. The decrease in research and developments costs and expenses was primarily due to product development and clinical expenses. Product development costs include spending for a number of specific programs, including the non-clinical expenses related to the BLA for Avance Nerve Graft. Product development costs and expenses represented approximately 57% and 59% of total research and development costs and expenses for the three months ended March 31, 2025 and 2024, respectively. Clinical trial costs and expenses represented approximately 43% and 41% of total research and development costs and expenses for the three months ended March 31, 2025 and 2024, respectively. The decrease in research and development costs and expenses was due to decreases of (i) $956 in research and development project costs; (ii) $419 in compensation costs; (iii) $89 in occupancy related costs; and (iv) $13 in other costs and expenses, partially offset by increases of (i) $103 in professional services fees and expenses and (ii) $56 in travel costs.
Current report
General and administrative costs and expenses for the three months ended March 31, 2025 decreased $498, or 5.0%, to $9,458, as compared to $9,956 for the three months ended March 31, 2024. The decrease in general and administrative costs and expenses was due to decreases of (i) $512 in compensation costs and (ii) $101 in occupancy related costs, partially offset by increases of (i) $79 in professional services fees and expenses and (ii) $36 in net other costs.
Current report
Other Expense, Net
Current report
Other expense, net for the three months ended March 31, 2025 increased $98, or 4.7%, to $2,173, as compared to $2,075 for the three months ended March 31, 2024. The increase in other expense, net was primarily due to increases of (i) $223 in the change in fair value of the debt derivative liabilities and (ii)$21 in investment income, partially offset by decreases of(i)$76 in interest expense and (ii) $70 in other expense.
Current report
In preparing our financial statements in accordance with generally accepted accounting principles, there are certain accounting policies, which may require substantial judgment or estimation in their application. We believe our accounting policies for Inventories, Derivative Instruments and Stock-based Compensation, as well as the others set forth in Note 2 - Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements in our 2024 Annual Report on Form 10-K, are critical to understanding our results of operations and financial condition. See Critical Accounting Estimates in our 2024 Annual Report on Form 10-K. Actual results could differ from our estimates and assumptions, and any such differences could be material to our results of operations and financial condition. During the quarter covered by this report, there have been no material changes to the accounting estimates and assumptions previously disclosed.
Current report
Net Cash Provided by (Usedin) Investing Activities
Current report
(2)Calculated using the forecasted interest rates used in the valuation of the debt derivative liabilities. See Note 6 - Fair Value Measurement inthe Notes to the Condensed Consolidated Financial Statements in this Form 10-Q.
Current report
(3)See Note 8 - Long-Term Debt, Net of Debt Discount and Financing Feesin the Notes to the Condensed Consolidated Financial Statements in this Form 10-Q.
Current report
(4)See Note 7 - Leases inthe Notes to the Condensed Consolidated Financial Statements in this Form 10-Q.
Removed paragraphs (34)
Previous report
Financial information for prior periods has been reclassified to reflect the retrospective application of voluntary changes in the Company’s accounting policy for shipping and handling costs, as discussed under “Note 2 – Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements in this Form 10-Q.
Previous report
•Axotouch® Two-Point Discriminator, used to measure the innervation density of any surface area of the skin.
Previous report
Revenue from the distribution of our nerve repair products, Avance® Nerve Graft, Axoguard Nerve Connector®, Axoguard Nerve Protector®, Axoguard HA+ Nerve Protector™, Axoguard Nerve Cap®and Avive+ Soft Tissue Matrix™, in the United States ("U.S.") is the main contributor to our total reported sales and have been the key component of our growth to date.
Previous report
On June 24, 2024, we announced the full launch of Avive+ Soft Tissue Matrix. Avive+ is processed and distributed in accordance with U.S. Food and Drug Administration ("FDA") requirements for Human Cellular and Tissue-based Products (HCT/P) under 21 CFR Part 1271 regulations and U.S. State regulations as a 361 human tissue product. Products regulated solely under Section 361 of the Public Health Service Act are a product category under close scrutiny by the FDA for compliance with the regulatory requirements and potentially subject to regulatory change in the future. Failure to comply with applicable regulatory requirements could expose us to potential compliance actions by the FDA or state regulators and could risk the commercial availability of the product.
Previous report
•We completed the BLA submission for Avance® Nerve Graft on September 6, 2024. On November 1, 2024 the FDA informed us that they had accepted the BLA for filing and assigned a Prescription Drug User Fee Act (“PDUFA”) goal date of September 5, 2024. The FDA further indicated that it does not currently plan to hold an advisory committee meeting for the application.
Previous report
Gross profit for the three months ended September 30, 2024, increased by $4,734 or 14.9% to $36,438 as compared to $31,704 for the three months ended September 30, 2023. Gross margin was 74.9% and 76.8% for the three months ended September 30, 2024, and 2023, respectively. The decrease in gross margin is due to the change in our product mix.
Previous report
Total costs and expenses increased by $1,025 or 2.9% to $36,754 for the three months ended September 30, 2024, as compared to $35,729 for the three months ended September 30, 2023. Thenet increase in total costs and expenses was primarily due tocompensation costs of $3,552 partially offset by a reduction in royalty fees of $930, R&D projects of $874, and marketing programs of $770.
Previous report
Sales and marketing expenses decreased by $241 or 1.3% to $18,924 for the three months ended September 30, 2024, as compared to $19,165 for the three months ended September 30, 2023. This decrease was primarily attributable to royalty fees of $930, marketing programs of $770 and travel cost of $80, partially offset by increase in compensation costs of $1,495.
Previous report
Research and development expenses increased $302 or 4.5% to $6,996 for the three months ended September 30, 2024, as compared to $6,694 for the three months ended September 30, 2023. The increase was primarily due to product development, clinical expenses, as well as non-clinical expenses related to the BLA for Avance Nerve Graft. Product development expenses represented approximately 52% and 62% of total research and development expense for the three months ended September 30, 2024, and 2023, respectively. Clinical trial expenses represented approximately 48% and 38% of total research and development expense the three months ended September 30, 2024, and 2023, respectively.
Previous report
General and administrative expenses increased by $964 or 9.8% to $10,834 for the three months ended September 30, 2024, as compared to $9,870 for the three months ended September 30, 2023. The increasewas primarily due tocompensation costs of $1,281 of which $695 was stock compensation related to the departure of the former CEO, bad debt expense of $350, and certain other cost of $133, partially offset by a decrease in professional services of $800.
Previous report
Other Income and Expense
Previous report
Other expense, net increased by $1,478 to $1,542 for the three months ended September 30, 2024, as compared to other expense, net of $64 for the three months ended September 30, 2023. The net increase in other expense was due to an increase in interest expense of $1,066, and the change in the fair value of derivatives of $389.
Previous report
Interest expense increased by $1,066 to $1,893 for the three months ended September 30, 2024, as compared to $827 for the three months ended September 30, 2023. The increase was due to the completion of the APC facility in 2023 resulting in no additional interest expense being capitalized for that facility during 2024. We recognized total interest expense of $1,877 and $1,866 in connection with the Credit Facility for the three months ended September 30, 2024, and 2023, respectively, of which $0 and $1,043 of this interest was capitalized to the construction costs of the APC Facility during the third quarter of 2024 and 2023, respectively.
Previous report
Comparison of the Nine Months Ended September 30, 2024, and 2023
Previous report
Revenues
Previous report
Revenues fornine months ended September 30, 2024, increased by$21,843 or 18.8% to$137,933 as compared to$116,090 for thenine months ended September 30, 2023. The increase in revenue was driven by an increase in unit volume of 9.4%, product mix of 6.0% and a 3.4% increase in prices.
Previous report
Gross Profit
Previous report
Gross profit for thenine months ended September 30, 2024, increased by$14,554 or 16% to 104,402 as compared to$89,848 for thenine months ended September 30, 2023. Gross margin was 75.7% and 77.4% for thenine months ended September 30, 2024, and 2023, respectively.
Previous report
Costs and Expenses
Previous report
Total costs and expenses increased by$1,590 or 1% to$109,706 for thenine months ended September 30, 2024, as compared to$108,116 for thenine months ended September 30, 2023. The net increase in total costs and expenses was primarily the result of increased compensation costs of $5,118, professional services of $1,892 and bad debt expense of $915, partially offset by the reduction in royalty fees of $2,632, research projects of $2,079, marketing programs of $982 and other operating expense totaling $645.
Previous report
Sales and marketing expenses increased by $966 or 2% to$58,437 for thenine months ended September 30, 2024, as compared to$57,471 for thenine months ended September 30, 2023. This increase was primarily attributable to compensation costs of $4,425, professional services of $272, and occupancy costs of $184, partially offset by the reduction in royalty fees of $2,632, marketing programs of $982, and other costs of $352.
Previous report
Research and development expenses increased by$899 or 4% to$21,063 for thenine months ended September 30, 2024, as compared to$20,164 for thenine months ended September 30, 2023. The increase was primarily due to product development and clinical expensesas well as non-clinical expenses related to the BLA for Avance Nerve Graft. Product development expenses represented approximately 54% and 60%of total research and development expense for the nine months ended September 30, 2024, and 2023, respectively. Clinical trial expenses represented approximately 46% and 40%of total research and development expense for the nine months ended September 30, 2024, and 2023, respectively.
Previous report
General and administrative expenses decreased by $275 or 1% to$30,206 for thenine months ended September 30, 2024, as compared to $30,481 for thenine months ended September 30, 2023. The decrease was primarily due to a reduction in net compensation costs of $1,935 of which $695 was stock compensation related to the departure of the former CEO, partially offset by an increase in bad debt of $915, professional service costs of $542, and other costs of $203.
Previous report
Other Income and Expense
Previous report
Other (expense), net was$5,110 for thenine months ended September 30, 2024, as compared to other income, net of$445 for thenine months ended September 30, 2023. The decrease was driven by an increase in interest expense of $5,413, a decrease in investment income of$335, and the change in fair value of derivatives of $107, partially offset by the decrease in other expense of $210 and rental income of $90.
Previous report
Investment income decreased by$335 or 29% to $816 for thenine months ended September 30, 2024, as compared to investment income of$1,151 for thenine months ended September 30, 2023. This change was primarily due to the decrease in investments.
Previous report
Interest expense increased by $5,413 to $6,405 for the nine months ended September 30, 2024, as compared to $992 for the nine months ended September 30, 2023. We recognized total interest expense of$6,342 and $5,442 in connection with the Credit Facility for the nine months ended September 30, 2024, and 2023, respectively, of which $0 and $5,240 of this interest was capitalized to the construction costs of the APC Facility during the nine months ended September 30, 2024, and 2023, respectively.
Previous report
Income Taxes
Previous report
In preparing financial statements, we follow accounting principles generally accepted in the United States, which require us to make certain estimates and apply judgments that affect our financial position and results of operations. Management regularly reviews our accounting policies and financial information disclosures. A summary of significant accounting estimates that require the use of estimates and judgments in preparing the financial statements was provided in our 2023 Annual Report on Form 10-K. During the quarter covered by this report, there have been no material changes to the accounting estimates and assumptions previously disclosed.
Previous report
Reclassification of Financial Information
Previous report
Effective as of the first quarter of 2024, we voluntarily changed our accounting policy for shipping and handling costs. Although the prior method of accounting continues to be an accepted alternative, the new accounting policy is more widely used in the industry and provides improved comparability of the Company’s financial statements to its peers. Accordingly, the financial information for prior periods has been reclassified to reflect retrospective application of the new policy. Effective as of the first quarter of 2024, we ceased allocating certain costs to and from certain departments. Previously such costs had been allocated based on our estimate of the proportionate share of total expense to each line item. We determined that these changes would better reflect industry practice and would provide more meaningful information as well as increased transparency of our operations. See “Note 2 - Summary of Significant Accounting Policies” for additional discussion.
Previous report
(2)Calculated at 12.92%, the interest rate as of September 30, 2024.
Previous report
(3)See Note 7 - Leases in Part I, Item I of this Form 10-Q.
Previous report
(5)See Note 12 - Commitments and Contingenciesin Part I, Item 1 in this Form 10-Q.
Reworded paragraphs (19)
Previous wording
The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the related notes thereto appearing elsewhere in this report and our consolidated financial statements for the year ended December 31, 2023, included in our Annual Report on Form 10-K. All dollar amounts in the discussion and analysis, unless noted otherwise, are presented in thousands.
Current wording
The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the related notes thereto appearing elsewhere in this report and our consolidated financial statements for the year ended December 31, 2024, included in our 2024 Annual Report on Form 10-K. All dollar amounts in the discussion and analysis, unless noted otherwise, are presented in thousands.
Previous wording
•Axoguard Nerve Protector®, a porcine submucosa ECM product used to wrap and protect damaged peripheral nerves and reinforce the nerve reconstruction while preventing soft tissue attachments.
Current wording
•Axoguard Nerve Protector®, a porcine submucosa ECM product used to wrap and protect damaged peripheral nerves and reinforce the nerve reconstruction while minimizing soft tissue attachments.
Previous wording
•Axoguard HA+ Nerve Protector™, is comprised of a processed porcine submucosa ECM base layer with a hyaluronate-alginate gel coating designed to provide short- and long-term protection for peripheral nerve injuries. The gel layer facilitates enhanced nerve gliding to aid in minimizing soft tissue attachments, while the base layer is remodeled into a long-term protective tissue layer.
Current wording
•Axoguard HA+ Nerve Protector™, a porcine submucosa ECM base layer coated with a proprietary hyaluronate-alginate gel, a next-generation technology designed to enhance nerve gliding and provide short- and long-term protection for peripheral nerve injuries.
Previous wording
Our portfolio of products is currently available in the United States ("U.S."), Canada, Germany, United Kingdom, Spain and several other European, Asian and Latin American countries.
Current wording
Our portfolio of products is currently available in the United States (“U.S.”), Canada, Germany, the United Kingdom, Spain, South Korea and several other countries.
Previous wording
Our strategy remains focused on deepening our presence in high-potential accounts specifically, Level 1 trauma centers and academic-affiliated hospitals with a high number of trained micro-surgeons. We will drive growth in these accounts through targeted expansion of nerve repair indications, and driving deeper adoption of our Nerve Repair Algorithm across multiple surgical specialties.
Current wording
Our strategy remains focused on deepening our presence in high-potential accounts, specifically Level 1 trauma centers and academic-affiliated hospitals with a high number of trained microsurgeons. We will drive growth in these accounts through targeted expansion of nerve repair indications and driving deeper adoption of our nerve repair algorithm across multiple surgical specialties.
Previous wording
•Revenues were $48,644 for the quarter ended September 30, 2024, an increase of $7,373 or 17.9%compared to the quarter ended September 30, 2023.
Current wording
•Revenues were $48,560 for the quarter ended March 31, 2025, an increase of $7,182 or 17.4%compared to the quarter ended March 31, 2024.
Previous wording
•Gross profit was $36,438 for the quarter ended September 30, 2024, an increase of $4,734 or 14.9% compared to the quarter ended September 30, 2023.
Current wording
•Gross profit was $34,933 for the quarter ended March 31, 2025, an increase of $2,313 or 7.1% compared to the quarter ended March 31, 2024.
Previous wording
Revenues for the three months ended September 30, 2024, increased by $7,373 or 17.9% to $48,644 as compared to $41,271 for the three months ended September 30, 2023. The increase in revenue was driven by anincrease in unit volume of 7.7%, product mix of 6.0% and a 4.2% increase in prices.
Current wording
Revenues for the three months ended March 31, 2025 increased $7,182, or 17.4%, to $48,560, as compared to $41,378 for the three months ended March 31, 2024. The increase in revenues was driven by anincrease in unit volume of approximately 12.0%, as well as the net impact of changes in price and product mix of approximately 3.2% and 2.1%, respectively.
Previous wording
We had no income tax expense or benefit during the three months ended September 30, 2024, and 2023, due to the incurrence of net operating losses in each of these periods, the benefits of which have a full valuation allowance. From time to time, we receive notices of examination of prior tax filings from federal and state authorities. We do not believe that there are currently any material outstanding tax expenses or benefits.
Current wording
We had no income tax expense or benefit during the three months ended March 31, 2025 and 2024 due to the incurrence of net operating losses in both periods, the benefits of which have a full valuation allowance. From time to time, we receive notices of examination of prior tax filings from federal and state authorities. The Internal Revenue Service is currently examining our 2021 federal income tax return. We do not believe that there are any material additional tax expenses or benefits.
Previous wording
As of September 30, 2024, our principal sources of liquidity were our cash and cash equivalents and investments totaling $24,530. Our cash equivalents are comprised primarily of a money market mutual fund and our investments consist of U.S.
Current wording
As of March 31, 2025, our principal sources of liquidity were our cash and cash equivalents and investments totaling $22,069. Our cash equivalent is comprised of a money market mutual fund and our investments consist of U.S. Treasuries. Our cash and cash equivalents and investments decreased$11,413 to $22,069 from $33,482 at December 31, 2024, primarily as a result of paying annual bonuses and the expenses incurred in connection with conducting our national sales meeting in the first quarter of 2025.
Previous wording
We had working capital of $63,219 and a current ratio of 3.7x at September 30, 2024, compared to working capital of $57,574 and a current ratio of 2.9x at December 31, 2023. The increase in our working capital at September 30, 2024, as compared to December 31, 2023, was primarily due to a decrease in accounts payable and accrued expenses. Based on current estimates, we believe that our existing cash and cash equivalents and investments, as well as cash provided by sales of our products will allow us to fund our operations through at least the next 12 months from the date of the accompanying financial statements.
Current wording
On March 31, 2025 and December 31, 2024, our current assets exceeded our current liabilities by $71,325 and $68,607, respectively, and we had a current ratio of 4.3x and 3.2x, respectively. Based on current estimates, we believe that our existing cash and cash equivalents and investments, as well as cash provided by sales of our products, will allow us to fund our operations through at least the next twelve months from the date of issuance of the accompanying financial statements.
Previous wording
Net cash used in operating activities was $4,200 and $5,505 during the nine months ended September 30, 2024, and 2023, respectively. The unfavorable change in net cash used in operating activities of $1,305, or 24%, is due to the net unfavorable change of $9,656 in working capital accounts partially offset by the decrease in the net loss of $7,409 and noncash changes of $3,552.
Current wording
Net cash used in operating activities was $13,179 and $12,266 during the three months ended March 31, 2025 and 2024, respectively. The increase in net cash used in operating activities of $913, or 7.4%, was due to the net unfavorable change of $2,777 in working capital accounts and noncash charges of $906, partially offset by the decrease in net loss of $2,801.
Previous wording
Net cash used in investing activities for the nine months ended September 30, 2024, was $9,484 as compared to net cash provided by investing activities of $19,530 for the nine months ended September 30, 2023, a net increase of $29,014, or 149% of net cash used in investing activities. The increase of net cash used in investing activities is principally due to the decrease in the net proceeds from the sale and purchase of investments totaling $38,444, and the increase in purchases of intangible assets of $548, partially offset by the reduction in purchases of property and equipment of $9,978 during the nine months ended September 30, 2024.
Current wording
Net cash provided by investing activities for the three months ended March 31, 2025 was $1,339 compared to net cash used in investing activities of $3,251 for the three months ended March 31, 2024. The favorable change in net cash provided by investing activities of $4,590 was principally due to the sale of $2,000 of investments during the three months ended March 31, 2025 compared to purchases of $1,910 of investments during the three months ended March 31, 2024 and the decrease in purchases of property and equipment of $668.
Previous wording
Net cash provided by financing activities was $1,320 and $1,536 for the nine months ended September 30, 2024, and 2023, respectively, a decrease of $216. The unfavorable change in net cash provided by financing activities was primarily due to the decrease in proceeds from the exercise of stock options of $217 during the nine months ended September 30, 2024.
Current wording
Net cash provided by financing activities was $2,382 and $204 for the three months ended March 31, 2025 and 2024, respectively, an increase of $2,178 due primarily to the increase in proceeds from the exercise of stock options.
Previous wording
As of September 30, 2024, we had $50,000 outstanding in indebtedness under a credit facility $35,000 maturing on June 30, 2027, and $15,000 maturing on June 30, 2028. Quarterly interest only and revenue participation payments are due through each of the maturity dates. Interest is calculated as 7.5% plus the greater of three-month SOFR plus 0.1% ("Adjusted SOFR") or 2.0% (12.92% as of September 30, 2024). Revenue participation payments are calculated as a percentage of our net revenues, up to $70,000 in any given year, adding approximately 1.5% per year of additional interest payments on the outstanding indebtedness. Upon each maturity date or upon such date earlier repayment occurs, we will repay the principal balance and provide a make-whole payment calculated to generate an internal rate of return to the lender equal to 11.5%, less the total of all quarterly interest and revenue participation payments previously paid. See Note 8 - Long-Term Debt, Net of Debt Discount and Financing Fees and Note 12 - Commitments and Contingencies.
Current wording
As of March 31, 2025, we had $50,000 outstanding in indebtedness under a credit facility with $35,000 maturing on June 30, 2027 and $15,000 maturing on June 30, 2028. Quarterly interest only and revenue participation payments are due through each of the maturity dates. Interest is calculated as 7.5% plus the greater of the forward-looking term rate based on the secured overnight financing rate as set by the Federal Reserve Bank of New York plus 0.10% (“Adjusted SOFR”) or 2.0% (11.91% as of March 31, 2025). Revenue participation payments are calculated as a percentage of our net revenues, up to $70,000 in any given year, adding approximately 1.5% per year of additional interest payments on the outstanding indebtedness. Upon each maturity date or upon such date earlier repayment occurs, we will repay the principal balance and provide a make-whole payment calculated to generate an internal rate of return to the lender equal to 11.5%, less the total of all quarterly interest and revenue participation payments previously paid. See Note 8 - Long-Term Debt, Net of Debt Discount and Financing Fees and Note 13 - Commitments and Contingenciesin the Notes to the Condensed Consolidated Financial Statements in this Form 10-Q.
Previous wording
Our expected future capital requirements may depend on many factors including expanding our customer base and sales force and timing and extent of spending in obtaining regulatory approval and introduction of new products. Additional sources of liquidity available to us include issuance of additional equity securities through public or private equity offerings, debt financings or from other sources. The sale of additional equity may result in dilution to our shareholders. Although we have an effective shelf registration statement, there is no assurance that we will be able to secure funding on terms acceptable to us, or at all. The increasing need for capital could also make it more difficult to obtain funding through either equity or debt. Should additional capital not become available to us as needed, we may be required to take certain actions, such as slowing sales and marketing expansion, delaying regulatory approvals, or reducing headcount.
Current wording
Our expected future capital requirements may depend on many factors including expanding our customer base and sales force and timing and extent of spending in obtaining regulatory approval and introduction of new products. Additional sources of liquidity available to us include issuance of additional equity securities through public or private equity offerings, debt financings or from other sources. The sale of additional equity may result in dilution to our shareholders. There is no assurance that we will be able to secure funding on terms acceptable to us, or at all. The increasing need for capital could also make it more difficult to obtain funding through either equity or debt. Should additional capital not become available to us as needed, we may be required to take certain actions, such as slowing sales and marketing expansion, delaying regulatory approvals, or reducing headcount.
Previous wording
(1)See Note 8 - Long-Term Debt, Net of Debt Discount and Financing Fees and Note 12 - Commitments and Contingenciesin Part I, Item 1 in this Form 10-Q.
Current wording
(1)See Note 8 - Long-Term Debt, Net of Debt Discount and Financing Fees and Note 13 - Commitments and Contingenciesin the Notes to the Condensed Consolidated Financial Statements in this Form 10-Q.
Previous wording
See Note 7 - Leases and Note 12 - Commitments and Contingencies in the Notes to the Consolidated Financial Statements in this Form 10-Q, for further information.
Current wording
(5)See Note 13 - Commitments and Contingencies in the Notes to the Condensed Consolidated Financial Statements in this Form 10-Q.
Previous wording
(4)Includes former CEO's 2024 bonus to be paid in March of 2025, senior advisory fees through May 2025, and eighteen months of COBRA payments. See Note 12 - Commitments and Contingencies in Part I, Item 1 in this Form 10-Q.
Current wording
(6)Includes our former CEO’s senior advisory fees through May 2025 and fifteen months of COBRA payments. See Note 13 - Commitments and Contingencies in the Notes to the Condensed Consolidated Financial Statements in this Form 10-Q.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
The following table sets forth, for the periods indicated, our results of operations expressed as dollar amounts and percentage of total revenue:
Previous report — wording carried elsewhere
We had no income tax expense or benefit during thenine months ended September 30, 2024, and 2023, due to the incurrence of net operating losses in each of these periods, the benefits of which have a full valuation allowance. From time to time, we receive notices of examination of prior tax filings from federal and state authorities. We do not believe that there are any additional tax expenses or benefits currently available.
Previous report — wording carried elsewhere
Treasuries. Our cash and cash equivalents and investments decreased by$6,494 to $24,530 from $31,024 at December 31, 2023, primarily as a result of operating activities.
Previous report — wording carried elsewhere
Net Cash (Usedin) Provided by Investing Activities