TransMedics Group Inc

Previous wording

Since our inception, we have incurred significant operating losses. Our ability to generate revenue sufficient to achieve sustained profitability will depend on the continued growth in customer utilization of our products and services. We generated total revenue of $96.9 million and net income of $12.2 million for the three months ended March 31, 2024. We generated total revenue of $241.6 million and incurred a net loss of $25.0 million for the year ended December 31, 2023. As of March 31, 2024, we had an accumulated deficit of $491.5 million. We expect our operating and capital expenditures will continue to increase as we focus on growing commercial sales of our products in both the United States and select non-U.S. markets, including growing our commercial team, which will pursue increasing commercial sales of our OCS products; growing our NOP, including by maintaining and growing our logistics capabilities, including aviation transportation, to support our NOP and reduce dependence on third party transportation, including by means of the acquisition of fixed-wing aircraft or other acquisitions, joint ventures or strategic investments; scaling our manufacturing and sterilization operations; developing the next generation OCS; continuing research, development and clinical trial efforts; seeking regulatory clearance for new products and product enhancements, including additional indications or other organs, in both the United States and select non-U.S. markets; and operating as a public company.

Current wording

From our inception through December 31, 2023, we incurred significant operating losses. Our ability to generate revenue sufficient to achieve sustained profitability will depend on the continued growth in customer utilization of our products and services. We generated total revenue of $114.3 million and $211.2 million, and net income of $12.2 million and $24.4 million, for the three and six months ended June 30, 2024, respectively. We generated total revenue of $241.6 million and incurred a net loss of $25.0 million for the year ended December 31, 2023. As of June 30, 2024, we had an accumulated deficit of $479.3 million. We expect our operating and capital expenditures will continue to increase as we focus on growing commercial sales of our products in both the United States and select non-U.S. markets, including growing our commercial team, which will pursue increasing commercial sales of our OCS products; growing our NOP, including by maintaining and growing our logistics capabilities, including hiring and training of pilots to scale our aviation transportation, to support our NOP and reduce dependence on third party transportation, including by means of the acquisition, maintenance or replacement of fixed-wing aircraft or other acquisitions, joint ventures or strategic investments; scaling our manufacturing and sterilization operations; developing the next generation OCS; continuing research, development and clinical trial efforts; seeking regulatory clearance for new products and product enhancements, including additional indications or other organs, in both the United States and select non-U.S. markets; and operating as a public company.

Previous wording

Prior to the acquisition, Summit derived its revenue primarily from charter flight services. To a lesser extent, Summit also derived revenue from providing flight school training, managing aircraft and other related services. As part of the Summit integration, we have transitioned Summit's charter flight and aircraft management customers to third parties. We do not anticipate generating revenue from charter flights or aircraft management and related services. We are continuing to offer flight school training services. During the three months ended March 31, 2024, service revenue of $0.9 million of flight school training revenue is from Summit's legacy operations and is unrelated to the NOP and organ transplant.

Current wording

Prior to the acquisition, Summit derived its revenue primarily from charter flight services. To a lesser extent, Summit also derived revenue from providing flight school training, managing aircraft and other related services. As part of the Summit integration, we have transitioned Summit's charter flight and aircraft management customers to third parties. We do not anticipate generating revenue from charter flights or aircraft management and related services. We are continuing to offer flight school training services. During the three and six months ended June 30, 2024, service revenue of $1.1 million and $2.0 million, respectively, of flight school training revenue is from Summit's legacy operations and is unrelated to the NOP and organ transplant.

Previous wording

Cost of net product revenue consists of costs of components of our OCS Consoles and disposable sets, costs of direct materials, labor and the manufacturing overhead that directly supports production and depreciation of OCS Consoles. Included in the cost of OCS disposable sets are the costs of our OCS Lung, OCS Heart and OCS Liver Solutions. Cost of service revenue primarily consists of labor and overhead that directly support organ retrieval and OCS organ management services and transportation and logistics costs, including labor costs for pilots, aircraft depreciation, aircraft costs, fuel, crew travel, maintenance and third-party flight costs and ground transportation that support organ delivery. Cost of service revenue also includes $0.8 million of costs from Summit's legacy operations unrelated to the NOP and organ transplant.

Current wording

Cost of net product revenue consists of costs of components of our OCS Consoles and disposable sets, costs of direct materials, labor and the manufacturing overhead that directly supports production and depreciation of OCS Consoles. Included in the cost of OCS disposable sets are the costs of our OCS Lung, OCS Heart and OCS Liver Solutions. Cost of service revenue primarily consists of labor and overhead that directly support organ retrieval and OCS organ management services and transportation and logistics costs, including labor costs for pilots, aircraft depreciation, aircraft costs, fuel, crew travel, maintenance and third-party flight costs and ground transportation that support organ delivery. Cost of service revenue for the three and six months ended June 30, 2024 also includes $0.9 million and $1.7 million, respectively, of costs from Summit's legacy operations unrelated to the NOP and organ transplant.

Previous wording

Gross profit is the amount by which revenue exceeds cost of revenue in each reporting period and gross margin is gross profit divided by revenue. Our overall gross margin will be impacted by the relative mix of product and service revenue, as product and service revenue have different margin profiles, and we expect our overall gross margin will decrease as service revenue increases as a proportion of overall revenue. Product and service gross margins are also affected by a variety of factors, primarily production volumes, the cost of components and direct materials, manufacturing overhead costs, direct labor, the cost of services provided under the NOP and the selling price of our OCS products and NOP services.

Current wording

Gross profit is the amount by which revenue exceeds cost of revenue in each reporting period and gross margin is gross profit divided by revenue. Our overall gross margin will be impacted by the relative mix of product and service revenue, as product and service revenue have different margin profiles, and we expect our overall gross margin will decrease as service revenue increases as a proportion of overall revenue in 2024 as compared to 2023. Product and service gross margins are also affected by a variety of factors, primarily production volumes, the cost of components and direct materials, manufacturing overhead costs, direct labor, the cost of services provided under the NOP and the selling price of our OCS products and NOP services.

Previous wording

Selling, general and administrative expenses consist primarily of salaries and related costs, including stock-based compensation, for personnel in our commercial team and personnel in executive, marketing, finance and administrative functions, and recruiting and temporary service fees for such personnel. Selling, general and administrative expenses also include direct and allocated facility-related costs, costs to support the NOP, promotional activities, marketing, conferences and trade show costs as well as professional fees for legal, patent, consulting, investor and public relations, accounting and audit services and amortization of sales and marketing-related intangible assets. We expect to continue to increase headcount in our commercial team and increase marketing efforts as we continue to grow commercial sales of our OCS products in both U.S. and select non-U.S. markets.

Current wording

Selling, general and administrative expenses consist primarily of salaries and related costs, including stock-based compensation, for personnel in our commercial team and personnel in executive, marketing, finance and administrative functions, and recruiting and temporary service fees for such personnel. We expect to continue to increase headcount in our commercial team and increase marketing efforts as we continue to grow commercial sales of our OCS products in both U.S. and select non-U.S. markets.

Previous wording

Interest income and other income (expense) includes interest income, realized and unrealized foreign currency transaction gains and losses and other non-operating income and expense items unrelated to our core operations. Interest income consists of interest earned on our invested cash balances. Foreign currency transaction gains and losses result from intercompany transactions as well as transactions with customers or vendors denominated in currencies other than the functional currency of the legal entity in which the transaction is recorded.

Current wording

Interest income and other income (expense) includes interest income, realized and unrealized foreign currency transaction gains and losses and other non-operating income and expense items unrelated to our core operations. Interest income consists of interest earned on our cash balances. Foreign currency transaction gains and losses result from intercompany transactions as well as transactions with customers or vendors denominated in currencies other than the functional currency of the legal entity in which the transaction is recorded.

Previous wording

We also had service revenue unrelated to OCS transplant of $0.9 million for the three months ended March 31, 2024, which consisted of flight school training revenue from Summit's legacy operations.

Current wording

We also had service revenue unrelated to OCS transplant of $1.1 million for the three months ended June 30, 2024, which consisted of flight school training revenue from Summit's legacy operations.

Previous wording

Revenue from customers in the United States related to OCS transplant was $91.9 million in the three months ended March 31, 2024 and increased by $54.4 million compared to the three months ended March 31, 2023, due to higher sales volumes of our OCS Liver, OCS Heart and OCS Lung disposable sets. Revenue for each organ in the table above includes net product revenue from sales of disposable sets as well as service revenue for organ retrieval, OCS organ management and logistics services under the NOP in the United States. Establishing the NOP, which launched in late 2021, has allowed us to broaden our customer base and increase utilization of the OCS in organ transplantation. Substantially all of our customers in the United States now participate in the NOP. By adding logistics to our NOP offering in late 2023, we have been able to further increase product and service revenue.

Current wording

Revenue from customers in the United States related to OCS transplant was $108.5 million in the three months ended June 30, 2024 and increased by $59.5 million compared to the three months ended June 30, 2023, due to higher sales volumes of our OCS Liver, OCS Heart and OCS Lung disposable sets and increased usage of the NOP. Revenue for each organ in the table above includes net product revenue from sales of disposable sets as well as service revenue for organ retrieval, OCS organ management and logistics services under the NOP in the United States. Establishing the NOP, which launched in late 2021, has allowed us to broaden our customer base and increase utilization of the OCS in organ transplantation. Substantially all of our customers in the United States now participate in the NOP. By adding logistics to our NOP offering in late 2023, we have been able to further increase product and service revenue.

Previous wording

Revenue from customers outside the United States was $4.1 million in each of the three months ended March 31, 2024 and 2023.

Current wording

Revenue from customers outside the United States was $4.7 million and $3.5 million for the three months ended June 30, 2024 and 2023, respectively.

Previous wording

Cost of net product revenue increased by $6.8 million in the three months ended March 31, 2024 compared to the three months ended March 31, 2023. Cost of service revenue increased by $17.3 million in the three months ended March 31, 2024 compared to the three months ended March 31, 2023 as we increased utilization of the NOP. Gross profit increased by $31.2 million in the three months ended March 31, 2024 compared to the three months ended March 31, 2023.

Current wording

Cost of net product revenue increased by $5.9 million in the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Cost of service revenue increased by $23.4 million in the three months ended June 30, 2024 compared to the three months ended June 30, 2023 as we increased utilization of the NOP. Gross profit increased by $32.5 million in the three months ended June 30, 2024 compared to the three months ended June 30, 2023.

Previous wording

Interest expense was $3.6 million and $1.1 million for the three months ended March 31, 2024 and 2023, respectively. The increase was due primarily to interest expense on the $460.0 million principal amount of the Notes, which were issued in May 2023.

Current wording

Interest expense was $3.6 million and $2.5 million for the three months ended June 30, 2024 and 2023, respectively. The increase was due primarily to interest expense on the $460.0 million principal amount of the Notes, which were issued in May 2023.

Previous wording

Overall gross margin was 62% and 69% for the three months ended March 31, 2024 and 2023, respectively. The decrease in gross margin from 2023 to 2024 was driven primarily by an increase in service revenue, which has a lower gross margin than product revenue. Gross margin from net product revenue was 77% and 79% for the three months ended March 31, 2024 and 2023, respectively. The decrease in gross margin was primarily a result of increased costs of certain parts. Gross margin from service revenue was 36% and 27% for the three months ended March 31, 2024 and 2023, respectively, and consisted primarily of organ retrieval, OCS organ management and logistics services under our NOP. The increase in gross margin from services was due primarily to improved efficiency in our NOP service model as a result of the addition of our logistics offering and increased scale.

Current wording

Overall gross margin was 61% and 70% for the six months ended June 30, 2024 and 2023, respectively. The decrease in gross margin from 2023 to 2024 was driven primarily by an increase in service revenue, which has a lower gross margin than product revenue. Gross margin from net product revenue was 79% for each of the six months ended June 30, 2024 and 2023. Gross margin from service revenue was 32% and 28% for the six months ended June 30, 2024 and 2023, respectively, and consisted primarily of organ retrieval, OCS organ management and logistics services under our NOP. The increase in gross margin from services was due primarily to improved efficiency in our NOP service model as a result of the addition of our logistics offering and increased scale.

Previous wording

Total research, development and clinical trials expenses increased by $5.5 million from $5.9 million in the three months ended March 31, 2023 to $11.4 million in the three months ended March 31, 2024. Personnel related costs increased by $2.6 million primarily due to increased headcount to support development efforts for our next generation OCS program and overall compensation increases. Personnel related costs included stock-based compensation expense of $0.9 million and $0.5 million for the three months ended March 31, 2024 and 2023, respectively. Laboratory supplies and research materials costs increased by $1.2 million from the three months ended March 31, 2023 to the three months ended March 31, 2024 primarily due to our increased need for supplies and materials used for development of our next generation OCS and other product development. Consulting and third-party services costs increased by $1.1 million due to development efforts for our next generation OCS program, other product development and digital tools by our external development consultants. Facility related and other costs increased by $0.6 million from the three months ended March 31, 2023 to the three months ended March 31, 2024 due primarily to the increased costs of supporting a larger group of research and development personnel and their development efforts.

Current wording

Total research, development and clinical trials expenses increased by $11.1 million from $14.2 million in the six months ended June 30, 2023 to $25.2 million in the six months ended June 30, 2024. Personnel related costs increased by $4.2 million primarily due to increased headcount to support development efforts for our next generation OCS program and overall compensation increases. Personnel related costs included stock-based compensation expense of $2.0 million and $1.2 million for the six months ended June 30, 2024 and 2023, respectively. Laboratory supplies and research materials costs increased by $3.8 million from the six months ended June 30, 2023 to the six months ended June 30, 2024, primarily due to our increased need for supplies and materials used for development of our next generation OCS and other product development. Consulting and third-party services costs increased by $2.4 million due to development efforts by our external development consultants for our next generation OCS program, other product development and digital tools. Facility related and other costs increased by $0.9 million from the six months ended June 30, 2023 to the six months ended June 30, 2024 due primarily to the increased costs of supporting a larger group of research and development personnel and their development efforts.

Previous wording

Total selling, general and administrative expenses increased by $11.2 million from $25.0 million in the three months ended March 31, 2023 to $36.2 million in the three months ended March 31, 2024 due primarily to increases in personnel related costs and facility related and other costs. Personnel related costs increased by $9.6 million primarily due to the continued expansion of our team to support the growth in our business, as well as an increase in stock-based compensation expense of $2.3 million, due primarily to additional grants to new and existing employees. NOP support costs decreased due to improved efficiency in our NOP service model as a result of the addition of our logistics offering and increased scale. Facility related and other costs increased by $2.4 million due primarily to increased facilities costs and depreciation and amortization expense due to the growth in our business.

Current wording

Total selling, general and administrative expenses increased by $24.7 million from $54.3 million in the six months ended June 30, 2023 to $79.1 million in the six months ended June 30, 2024 due primarily to increases in personnel related costs and facility related and other costs. Personnel related costs increased by $19.3 million primarily due to the continued expansion of our team to support the growth in our business, as well as an increase in stock-based compensation expense of $4.3 million, due primarily to additional grants to new and existing employees. Professional and consultant fees increased by $1.3 million due primarily to information technology and other enterprise solutions costs to support the growth in our business, partially offset by a decrease in legal fees. NOP support costs decreased due to improved efficiency in our NOP service model as a result of the addition of our logistics offering and increased scale. Facility related and other costs increased by $5.0 million due primarily to increased costs associated with post-approval studies and information technology infrastructure costs, and depreciation and amortization expense due to the growth in our business.

Previous wording

Interest income and other income (expense) for the three months ended March 31, 2024 and 2023 included interest income of $3.8 million and $0.5 million, respectively, from interest earned on invested cash balances. Other income (expense) included $0.2 million of realized and unrealized foreign currency transactions losses and $0.1 million of realized and unrealized foreign currency transactions gains during the three months ended March 31, 2024 and 2023, respectively.

Current wording

Interest income and other income (expense) for the six months ended June 30, 2024 and 2023 included interest income of $7.2 million and $2.9 million, respectively, from interest earned on our cash balances. Other income (expense) included $0.4 million of realized and unrealized foreign currency transactions losses and $0.1 million of realized and unrealized foreign currency transactions gains during the six months ended June 30, 2024 and 2023, respectively.

Previous wording

Since our inception, we have incurred significant operating losses. To date, we have funded our operations primarily with proceeds from borrowings under loan agreements, proceeds from the issuance of our Notes, proceeds from the sale of common stock in our public offerings and revenue from commercial sales of our OCS products and NOP services and clinical trials. On May 11, 2023, we issued $460.0 million aggregate principal amount of the Notes in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The total net proceeds from the sale of the Notes, after deducting debt issuance costs of $14.6 million, and purchases of Capped Calls of $52.1 million, were $393.3 million. At March 31, 2024, our principal source of liquidity was cash of $350.2 million.

Current wording

From our inception through December 31, 2023, we have incurred significant operating losses. To date, we have funded our operations primarily with proceeds from borrowings under loan agreements, proceeds from the issuance of our Notes, proceeds from the sale of common stock in our public offerings and revenue from commercial sales of our OCS products and NOP services and clinical trials. On May 11, 2023, we issued $460.0 million aggregate principal amount of the Notes in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The total net proceeds from the sale of the Notes, after deducting debt issuance costs of $14.6 million, and purchases of Capped Calls of $52.1 million, were $393.3 million. At June 30, 2024, our principal source of liquidity was cash of $362.8 million.

Previous wording

During the three months ended March 31, 2024, operating activities used $3.4 million of cash, primarily resulting from net cash used by changes in our operating assets and liabilities of $28.1 million, partially offset by our net income of $12.2 million and net non-cash charges of $12.5 million. Net cash used by changes in our operating assets and liabilities for the three months ended March 31, 2024 consisted primarily of an increase in accounts receivable of $18.4 million, an increase in inventory of $5.6 million, a decrease in accounts payable and accrued expenses and other current liabilities of $2.1 million and an increase in prepaid expenses and other current assets of $1.6 million.

Current wording

During the six months ended June 30, 2024, operating activities provided $22.3 million of cash, primarily resulting from net income of $24.4 and net non-cash charges of $25.8 million, partially offset by net cash used by changes in our operating assets and liabilities of $27.9 million. Net cash used by changes in our operating assets and liabilities for the six months ended June 30, 2024 consisted primarily of an increase in accounts receivable of $17.7 million, an increase in inventory of $7.9 million and an increase in prepaid expenses and other current assets of $3.2 million, partially offset by an increase in accounts payable and accrued expenses and other current liabilities of $2.4 million .

Previous wording

During the three months ended March 31, 2023, operating activities used $8.7 million of cash, primarily resulting from our net loss of $2.6 million and net cash used by changes in our operating assets and liabilities of $11.4 million, partially offset by net non-cash charges of $5.4 million. Net cash used by changes in our operating assets and liabilities for the three months ended March 31, 2023 consisted primarily of an increase in accounts receivable of $11.0 million and an increase in inventory of $3.6 million, partially offset by an increase in accounts payable and accrued expenses and other current liabilities of $4.5 million.

Current wording

During the six months ended June 30, 2023, operating activities used $14.5 million of cash, primarily resulting from our net loss of $3.6 million and net cash used by changes in our operating assets and liabilities of $23.3 million, partially offset by net non-cash charges of $12.4 million. Net cash used by changes in our operating assets and liabilities for the six months ended June 30, 2023 consisted primarily of an increase in accounts receivable of $19.9 million and an increase in inventory of $11.0 million, partially offset by an increase in accounts payable and accrued expenses and other current liabilities of $7.9 million.

Previous wording

During the three months ended March 31, 2024, net cash used in investing activities of $44.2 million consisted of purchases of property, plant and equipment, including an increase of $39.4 million in transplant-related aircraft.

Current wording

During the six months ended June 30, 2024, net cash used in investing activities of $67.9 million consisted of purchases of property, plant and equipment, including an increase of $53.6 million in transplant aircraft.

Previous wording

During the three months ended March 31, 2023, net cash used by investing activities of $0.9 million consisted of purchases of property and equipment.

Current wording

During the six months ended June 30, 2023, net cash used by investing activities of $2.3 million consisted of purchases of property and equipment.

Previous wording

During the three months ended March 31, 2024, net cash provided by financing activities of $3.2 million consisted of proceeds from the issuance of common stock upon exercise of stock options of $2.5 million and proceeds from the issuance of common stock in connection with the 2019 Employee Stock Purchase Plan of $0.6 million.

Current wording

During the six months ended June 30, 2024, net cash provided by financing activities of $13.8 million consisted of proceeds from the issuance of common stock upon exercise of stock options of $13.2 million and proceeds from the issuance of common stock in connection with the 2019 Employee Stock Purchase Plan of $0.6 million.

Previous wording

During the three months ended March 31, 2023, net cash provided by financing activities of $4.0 million consisted of proceeds from the issuance of common stock upon exercise of stock options of $3.6 million and proceeds from the issuance of common stock in connection with the 2019 Employee Stock Purchase Plan of $0.4 million.

Current wording

During the six months ended June 30, 2023, net cash provided by financing activities of $398.0 million consisted of net proceeds from the issuance of our Notes of $445.4 million, partially offset by payments of $52.1 million for associated capped calls, proceeds from the issuance of common stock upon exercise of stock options of $4.3 million and proceeds from the issuance of common stock in connection with the 2019 Employee Stock Purchase Plan of $0.4 million.

Previous wording

All obligations of us and each guarantor are secured by substantially all of our and each guarantor’s assets, including their intellectual property, subject to certain exceptions. Under the CIBC Credit Agreement, we have agreed to customary representations and warranties, events of default and certain affirmative and negative covenants to which we will remain subject until maturity. The financial covenants include, among other covenants, (x) a requirement to maintain a minimum liquidity amount of the greater of either (i) the consolidated adjusted EBITDA loss (or gain), as defined, for the trailing four month period (only if EBITDA is negative) and (ii) $10.0 million, and (y) a requirement to maintain total net revenue of at least 75% of the level set forth in the total revenue plan presented to CIBC. The obligations under the CIBC Credit Agreement are subject to acceleration upon the occurrence of specified events of default, including payment default, change in control, bankruptcy, insolvency, certain defaults under other material debt, certain events with respect to governmental approvals (if such events could cause a material adverse change in our business), failure to comply with certain covenants and a material adverse change in our business, operations or financial condition. As of March 31, 2024, we were in compliance with all covenants of the CIBC Credit Agreement. During the continuance of an event of default, the interest rate per annum will be equal to the rate that would have otherwise been applicable at the time of the event of default plus 2.0%. If an event of default (other than certain events of bankruptcy or insolvency) occurs and is continuing, CIBC may declare all or any portion of the outstanding principal amount of the borrowings plus accrued and unpaid interest to be due and payable. Upon the occurrence of certain events of bankruptcy or insolvency, all of the outstanding principal amount of the borrowings plus accrued and unpaid interest will automatically become due and payable. In addition, we may be required to prepay outstanding borrowings, subject to certain exceptions, with portions of net cash proceeds of certain asset sales and certain casualty and condemnation events.

Current wording

All obligations of us and each guarantor are secured by substantially all of our and each guarantor’s assets, including their intellectual property, subject to certain exceptions. Under the CIBC Credit Agreement, we have agreed to customary representations and warranties, events of default and certain affirmative and negative covenants to which we will remain subject until maturity. The financial covenants include, among other covenants, (x) a requirement to maintain a minimum liquidity amount of the greater of either (i) the consolidated adjusted EBITDA loss (or gain), as defined, for the trailing four month period (only if EBITDA is negative) and (ii) $10.0 million, and (y) a requirement to maintain total net revenue of at least 75% of the level set forth in the total revenue plan presented to CIBC. The obligations under the CIBC Credit Agreement are subject to acceleration upon the occurrence of specified events of default, including payment default, change in control, bankruptcy, insolvency, certain defaults under other material debt, certain events with respect to governmental approvals (if such events could cause a material adverse change in our business), failure to comply with certain covenants and a material adverse change in our business, operations or financial condition. As of June 30, 2024, we were in compliance with all financial covenants of the CIBC Credit Agreement. During the continuance of an event of default, the interest rate per annum will be equal to the rate that would have otherwise been applicable at the time of the event of default plus 2.0%. If an event of default (other than certain events of bankruptcy or insolvency) occurs and is continuing, CIBC may declare all or any portion of the outstanding principal amount of the borrowings plus accrued and unpaid interest to be due and payable. Upon the occurrence of certain events of bankruptcy or insolvency, all of the outstanding principal amount of the borrowings plus accrued and unpaid interest will automatically become due and payable. In addition, we may be required to prepay outstanding borrowings, subject to certain exceptions, with portions of net cash proceeds of certain asset sales and certain casualty and condemnation events.

Previous wording

the costs associated with building our commercial operations, including the NOP;

Current wording

the costs associated with maintaining and improving our commercial operations, including the NOP;

Previous wording

the costs associated with maintaining and growing our logistics capabilities, including by means of the acquisition of fixed-wing aircraft for our aviation transportation services or other acquisitions, joint ventures or strategic investments;

Current wording

the costs associated with maintaining and growing our logistics capabilities, including by means of the acquisition, maintenance, or replacement of fixed-wing aircraft for our aviation transportation services or other acquisitions, joint ventures or strategic investments;