Pulmonx Corp

Previous wording

In June 2018, we received pre-market approval (“PMA”) by the U.S. Food and Drug Administration (“FDA”) as a result of our breakthrough technology designation. The Zephyr Valve is now commercially available in numerous countries globally. We have established reimbursement in major markets in North America, Europe and Asia Pacific and the Zephyr Valve has been included in treatment guidelines for COPD worldwide.

Current wording

In June 2018, we received pre-market approval (“PMA”) by the U.S. Food and Drug Administration (“FDA”) as a result of our breakthrough technology designation. The Zephyr Valve is commercially available in numerous countries globally. We have established reimbursement in major markets in North America, Europe and Asia Pacific and the Zephyr Valve has been included in treatment guidelines for COPD worldwide.

Previous wording

We market and sell our products in the United States through a direct sales organization. Our sales territory managers are focused on promoting awareness and increasing adoption of our solution primarily among the pulmonologists performing interventional pulmonary procedures across approximately 500 high-volume hospitals in the United States. We are expanding our commercial operations in the United States while continuing to foster our international growth. We employ both direct and distributor-based sales models, with 97% of our revenue generated in markets where we sell directly for the three months ended March 31, 2024.

Current wording

We market and sell our products in the United States through a direct sales organization. Our sales territory managers are focused on promoting awareness and increasing adoption of our solution primarily among the pulmonologists performing interventional pulmonary procedures across approximately 500 high-volume hospitals in the United States. We are expanding our commercial operations in the United States while continuing to foster our international growth. We employ both direct and distributor-based sales models, with 97% of our revenue generated in markets where we sell directly for the six months ended June 30, 2024.

Previous wording

To date, we have financed our operations primarily through the sale of equity securities, debt financing arrangements and sales of our products. We have devoted substantially all of our resources to research and development activities related to our solution, including clinical and regulatory initiatives to obtain marketing approval, sales and marketing activities, and investing in general and administrative infrastructure. We generated revenue of $18.9 million, with a gross margin of 74.7% and a net loss of $13.7 million, for the three months ended March 31, 2024 compared to revenue of $14.5 million, with a gross margin of 72.9% and a net loss of $15.9 million, for the three months ended March 31, 2023. As of March 31, 2024, we had an accumulated deficit of $424.9 million, cash, cash equivalents and marketable securities of $120.4 million, and $37.2 million of outstanding term loans and credit agreements, net of debt discount and debt issuance costs.

Current wording

To date, we have financed our operations primarily through the sale of equity securities, debt financing arrangements and sales of our products. We have devoted substantially all of our resources to research and development activities related to our solution, including clinical and regulatory initiatives to obtain marketing approval, sales and marketing activities, and investing in general and administrative infrastructure. We generated revenue of $20.8 million, with a gross margin of 73.7% and a net loss of $15.3 million, for the three months ended June 30, 2024 compared to revenue of $17.2 million, with a gross margin of 74.1% and a net loss of $16.2 million, for the three months ended June 30, 2023. For the six months ended June 30, 2024, we generated revenue of $39.6 million, with a gross margin of 74.1% and a net loss of $29.1 million, compared to revenue of $31.7 million, with a gross margin of 73.5% and a net loss of $32.1 million, for the six months ended June 30, 2023. As of June 30, 2024, we had an accumulated deficit of $440.2 million, cash, cash equivalents and marketable securities of $114.5 million, and $37.2 million of outstanding term loans and credit agreements, net of debt discount and debt issuance costs.

Previous wording

We have invested heavily in product development. Our research and development activities have been centered on driving continuous improvements to our solution. We have also made significant investments in clinical studies to demonstrate the safety and efficacy of the Zephyr Valve and to support regulatory submissions. We intend to continue to make significant investments in our sales and marketing organization throughout the United States, Europe and Asia Pacific. We also intend to continue to make investments in research and development efforts to develop our next generation products and support our future regulatory submissions to increase our addressable market and to expand indications and new markets. Because of these and other factors, we expect to continue to incur net losses for the next several years and we expect to require substantial additional funding, which may include future equity and debt financings.

Current wording

We have invested heavily in product development. Our research and development activities have been centered on driving continuous improvements to our solution. We have also made significant investments in clinical studies to demonstrate the safety and efficacy of the Zephyr Valve and to support regulatory submissions. We intend to continue to make significant investments in our sales and marketing organization throughout the United States, Europe and Asia Pacific. We have made, and intend to continue to make, investments in research and development efforts to develop our next generation products and support our future regulatory submissions to increase our addressable market and to expand indications and new markets. Because of these and other factors, we expect to continue to incur net losses for the next several years and we expect to require substantial additional funding, which may include future equity and debt financings.

Previous wording

We intend to continue investing in existing and next generation technologies to further improve our products and clinical outcomes, enhance patient selection and broaden the patient population that can be treated with our products. In addition, we are continuing to invest in the accuracy and features of our patient assessment tools. Moreover, we are conducting clinical research of AeriSeal, a potential product in development for the treatment of severe emphysema patients who are not qualified for Zephyr Valve treatment due to excessive collateral ventilation.

Current wording

In addition, we are continuing to invest in the accuracy and features of our patient assessment tools. Moreover, we continue to make progress with our CONVERT II pivotal trial of AeriSeal, a potential product in development for the treatment of severe emphysema patients who are not qualified for Zephyr Valve treatment due to excessive collateral ventilation.

Previous wording

We currently derive substantially all of our revenue from the sale of our products to hospitals and distributors. We market and sell our products through a direct sales organization in the United States and through direct sales and several third-party distributors in select markets outside the United States. We currently generate most of our revenue from the sales of Zephyr Valves and delivery catheters. We also generate a smaller amount of our revenue from our Chartis System, which is comprised of sales of the balloon catheters, usage fees and sales of the Chartis console. The StratX Platform, which is used to identify patients eligible for treatment with Zephyr Valves, does not independently generate any revenue for us. No single customer accounted for more than 10% of our revenue during the three months ended March 31, 2024 and March 31, 2023.

Current wording

We currently derive substantially all of our revenue from the sale of our products to hospitals and distributors. We market and sell our products through a direct sales organization in the United States and through direct sales and several third-party distributors in select markets outside the United States. We currently generate most of our revenue from the sales of Zephyr Valves and delivery catheters. We also generate a smaller amount of our revenue from our Chartis System, which is comprised of sales of the balloon catheters, usage fees and sales of the Chartis console. The StratX Platform, which is used to identify patients eligible for treatment with Zephyr Valves, does not independently generate any revenue for us. No single customer accounted for more than 10% of our revenue during the six months ended June 30, 2024 and June 30, 2023.

Previous wording

Cost of goods sold consists primarily of payroll and personnel-related expenses for our manufacturing and quality assurance employees, costs related to materials, components and subassemblies, third-party costs, manufacturing overhead, equipment depreciation, and charges for excess, obsolete and non-sellable inventories. Overhead costs include the cost of quality assurance, testing, material procurement, inventory control, operations supervision and management and an allocation facilities overhead cost, including rent and utilities. Cost of goods sold also includes certain direct costs such as those incurred for shipping our products and costs related to providing analysis services for patient scans. We record adjustments to our inventory valuation for estimated excess, obsolete and non-sellable inventories based on assumptions about future demand, past usage, changes to manufacturing processes and overall market conditions. We expect cost of goods sold to increase in absolute dollars to the extent more of our products are sold.

Current wording

Cost of goods sold consists primarily of payroll and personnel-related expenses for our manufacturing and quality assurance employees, costs related to materials, components and subassemblies, third-party costs, manufacturing overhead, equipment depreciation, and charges for excess, obsolete and non-sellable inventories. Overhead costs include the cost of quality assurance, testing, material procurement, inventory control, operations supervision and management and an allocation of facilities overhead cost, including rent and utilities. Cost of goods sold also includes certain direct costs such as those incurred for shipping our products and costs related to providing analysis services for patient scans. We record adjustments to our inventory valuation for estimated excess, obsolete and non-sellable inventories based on assumptions about future demand, past usage, changes to manufacturing processes and overall market conditions. We expect cost of goods sold to increase in absolute dollars to the extent more of our products are sold.

Previous wording

Our research and development activities primarily consist of engineering and research programs associated with our products under development and improvements to our existing products. Research and development expenses include payroll and personnel-related costs for our research and development employees, including expenses related to stock-based compensation, consulting services, clinical trial expenses, prototyping, testing, laboratory supplies, and an allocation of facility overhead costs. Our clinical trial expenses, such as those related to our AeriSeal clinical development program, include costs associated with clinical trial design, clinical trial site development and study costs, data management costs, related travel expenses and the cost of products used for clinical activities. We expense research and development costs as they are incurred. We expect our research and development expenses, including related stock-based compensation expense, to increase in absolute dollars as we hire additional personnel to develop new product offerings and product enhancements.

Current wording

Our research and development activities primarily consist of engineering and research programs associated with our products under development and improvements to our existing products. Research and development expenses include payroll and personnel-related costs for our research and development employees, including expenses related to stock-based compensation, consulting services, clinical trial expenses, prototyping, testing, laboratory supplies, impairment charges associated with capitalized internally developed software, and an allocation of facility overhead costs. Our clinical trial expenses, such as those related to our AeriSeal clinical development program, include costs associated with clinical trial design, clinical trial site development and study costs, data management costs, related travel expenses and the cost of products used for clinical activities. We expense research and development costs as they are incurred. We expect our research and development expenses, including related stock-based compensation expense, to increase in absolute dollars as we hire additional personnel to develop new product offerings and product enhancements.

Previous wording

Other income, net primarily consists of foreign currency exchange gains and losses.

Current wording

Other (expense) income, net primarily consists of foreign currency exchange gains and losses.

Previous wording

Revenue increased by $4.3 million, or 29.7%, to $18.9 million during the three months ended March 31, 2024, compared to $14.5 million during the three months ended March 31, 2023. The sale of products in the United States increased by $3.5 million to $12.9 million during the three months ended March 31, 2024, compared to $9.3 million for the three months ended March 31, 2023. The sale of products in international markets increased by $0.8 million to $6.0 million during the three months ended March 31, 2024, compared to $5.2 million for the three months ended March 31, 2023. The increase in revenue was primarily attributable to the continued growth of Zephyr Valve procedure volumes in the United States and in international markets.

Current wording

Revenue increased by $3.6 million, or 20.9%, to $20.8 million during the three months ended June 30, 2024, compared to $17.2 million during the three months ended June 30, 2023. The sale of products in the United States increased by $2.9 million to $13.9 million during the three months ended June 30, 2024, compared to $11.0 million for the three months ended June 30, 2023. The sale of products in international markets increased by $0.7 million to $6.9 million during the three months ended June 30, 2024, compared to $6.2 million for the three months ended June 30, 2023. The increase in revenue was primarily attributable to the continued growth of Zephyr Valve procedure volumes in the United States and in international markets.

Previous wording

Cost of goods sold increased by $0.8 million, or 21.0%, to $4.8 million during the three months ended March 31, 2024, compared to $3.9 million during the three months ended March 31, 2023. The increase was mainly due to an increase in the number of products sold and increased manufacturing costs as we invested to support anticipated growth. Gross margin increased by 1.8% to 74.7% during the three months ended March 31, 2024, compared to 72.9% during the three months ended March 31, 2023. The increase was primarily due to favorable geographic mix and higher capacity utilization during the three months ended March 31, 2024.

Current wording

Cost of goods sold increased by $1.0 million, or 22.8%, to $5.5 million during the three months ended June 30, 2024, compared to $4.5 million during the three months ended June 30, 2023. The increase was mainly due to an increase in the number of products sold and increased manufacturing costs as we invested to support anticipated growth. Gross margin was 73.7% during the three months ended June 30, 2024, compared to 74.1% during the three months ended June 30, 2023.

Previous wording

Selling, general and administrative expenses increased by $1.7 million, or 7.3%, to $24.4 million during the three months ended March 31, 2024, compared to $22.7 million during the three months ended March 31, 2023. The increase in selling, general and administrative expenses was primarily due to an increase of $1.1 million in payroll and personnel-related expenses including stock-based compensation for our sales, marketing and administrative personnel, and an increase of $0.2 million in legal and other professional expenses.

Current wording

Selling, general and administrative expenses increased by $1.9 million, or 7.9%, to $25.3 million during the three months ended June 30, 2024, compared to $23.5 million during the three months ended June 30, 2023. The increase in selling, general and administrative expenses was primarily due to an increase of $1.1 million in advertising and marketing related expenses, an increase of $0.4 million in global travel and conference related expenses, and an increase of $0.3 million in payroll and personnel-related expenses including stock-based compensation for our sales, marketing and administrative personnel.

Previous wording

Interest expense increased by $0.3 million to $0.9 million during the three months ended March 31, 2024 compared to $0.6 million during the three months ended March 31, 2023 due to higher outstanding debt principal and higher interest rates. Interest income increased by $0.3 million to $1.4 million during the three months ended March 31, 2024 compared to $1.1 million during the three months ended March 31, 2023, primarily as a result of higher returns on cash, cash equivalents and marketable securities balances.

Current wording

Interest expense increased by $0.4 million to $1.8 million during the six months ended June 30, 2024 compared to $1.4 million during the six months ended June 30, 2023 due to higher outstanding debt principal and higher interest rates. Interest income increased by $0.2 million to $2.7 million during the six months ended June 30, 2024 compared to $2.5 million during the six months ended June 30, 2023, primarily as a result of higher returns on cash, cash equivalents and marketable securities balances.

Previous wording

Other income, net increased by $0.3 million to $0.4 million during the three months ended March 31, 2024, compared to $0.1 million during the three months ended March 31, 2023, primarily due to foreign currency exchange gains.

Current wording

Other (expense) income, net increased by $0.5 million to $0.4 million income during the six months ended June 30, 2024, compared to $(0.1) million expense during the six months ended June 30, 2023, primarily due to foreign currency exchange gains.

Previous wording

To date, we have financed our operations primarily through our initial public offering, private placements of equity securities, debt financing arrangements and sales of our products. As of March 31, 2024, we had cash, cash equivalents and marketable securities of $120.4 million, an accumulated deficit of $424.9 million, and $37.2 million outstanding under the CIBC Loan and Credit Agreement, net of debt discount and debt issuance costs.

Current wording

To date, we have financed our operations primarily through our initial public offering, private placements of equity securities, debt financing arrangements and sales of our products. As of June 30, 2024, we had cash, cash equivalents and marketable securities of $114.5 million, an accumulated deficit of $440.2 million, and $37.2 million outstanding under the CIBC Loan and Credit Agreement, net of debt discount and debt issuance costs.

Previous wording

In October 2022, we entered into a Third Amendment to the Amended and Restated CIBC Agreement (the “Third Amendment”), which, among other things, extended the maturity date to October 31, 2027; provided a commitment for a new $20.0 million tranche of term loans that may be drawn at the Company’s option through October 31, 2023, subject to the satisfaction of certain conditions; and provided for a new interest only period of 24 months from the signing date of the Third Amendment, with the possibility of an additional extension of such interest only period of up to 12 months, subject to satisfaction of certain conditions.

Current wording

In October 2022, we entered into a Third Amendment to the Amended and Restated CIBC Agreement (the “Third Amendment”), which, among other things, extended the maturity date to October 31, 2027; provided a commitment for a new $20.0 million tranche of term loans that may be drawn at our option through October 31, 2023, subject to the satisfaction of certain conditions; and provided for a new interest only period of 24 months from the signing date of the Third Amendment, with the possibility of an additional extension of such interest only period of up to 12 months, subject to satisfaction of certain conditions.

Previous wording

In February 2023, we drew $20.0 million of the Amended Tranche B of the CIBC Loan. The Amended Tranche B bears interest at a floating rate equal to 1.0% above the Wall Street Journal Prime Rate and has the same repayment terms as Tranche A.

Current wording

In February 2023, we drew $20.0 million of the Amended Tranche B which has the same interest rate and repayment terms as Tranche A of the CIBC Loan.

Previous wording

The loans provided under the Amended and Restated CIBC Agreement bear interest at a floating rate equal to 1.0% above the Wall Street Journal Prime Rate at any time. The loan is collateralized by substantially all of our assets, including cash and cash equivalents, accounts receivable, intellectual property and equipment. We may prepay the loans, subject to certain conditions, including a prepayment fee equal to 2.0% of the principal amount prepaid during the first year after the effective date of the Third Amendment or 1.0% of the principal amount prepaid during the second year after the effective date of the Third Amendment. The Amended and Restated CIBC Agreement contains financial covenants that require the Company to maintain minimum cash and minimum revenue amounts, and the Amended and Restated CIBC Agreement contains other customary restrictive covenants, representations and warranties, events of default and other customary terms and conditions.

Current wording

The loans provided under the Amended and Restated CIBC Agreement bear interest at a floating rate equal to 1.0% above the Wall Street Journal Prime Rate at any time. The loans are collateralized by substantially all of our assets, including cash and cash equivalents, accounts receivable, intellectual property and equipment. We may prepay the loans, subject to certain conditions, including a prepayment fee equal to 2.0% of the principal amount prepaid during the first year after the effective date of the Third Amendment or 1.0% of the principal amount prepaid during the second year after the effective date of the Third Amendment. The Amended and Restated CIBC Agreement contains financial covenants that require us to maintain minimum cash and minimum revenue amounts, and the Amended and Restated CIBC Agreement contains other customary restrictive covenants, representations and warranties, events of default and other customary terms and conditions.

Previous wording

We paid $0.5 million fees to the lender and third parties which is reflected as a discount on the loans provided under the Amended and Restated CIBC Agreement and is being accreted over the life of the loan using the effective interest method. During the three months ended March 31, 2024 and March 31, 2023, the Company recorded interest expense related to debt discount and debt issuance costs of CIBC Loan of less than $0.1 million and less than $0.1 million, respectively.

Current wording

We paid $0.5 million fees to the lender and third parties which is reflected as a discount on the loans provided under the Amended and Restated CIBC Agreement and is being accreted over the life of the loan using the effective interest method. During the three months ended June 30, 2024 and June 30, 2023, we recorded interest expense related to debt discount and debt issuance costs of the CIBC Loan of less than $0.1 million and less than $0.1 million, respectively. During the six months ended June 30, 2024 and June 30, 2023, we recorded interest expense related to debt discount and debt issuance costs of the CIBC Loan of less than $0.1 million and less than $0.1 million, respectively.

Previous wording

Interest expense on the CIBC Loan amounted $0.9 million and $0.6 million during the three months ended March 31, 2024 and March 31, 2023, respectively.

Current wording

Interest expense on the CIBC Loan was $0.9 million during each of the three months ended June 30, 2024 and June 30, 2023. Interest expense on the CIBC Loan was $1.8 million and $1.4 million during the six months ended June 30, 2024 and June 30, 2023, respectively.

Previous wording

In May 2020, Pulmonx International Sàrl, our wholly owned subsidiary, received 0.5 million Swiss Francs ($0.5 million U.S. dollar equivalent) from a COVID-19 Credit Agreement under a Swiss Federal Government program designed to mitigate the economic impact of the spread of the coronavirus. The COVID-19 Credit Agreement initially bore no interest through March 31, 2023. Beginning April 1, 2023, the loan bears interest at a rate of 1.5% per year, payable at the end of each calendar quarter. The loan principal is being repaid in twelve equal installments, paid semi-annually, which began in March of 2022. As of March 31, 2024, Pulmonx International Sàrl has repaid $0.2 million to the lender.

Current wording

In May 2020, Pulmonx International Sàrl, our wholly owned subsidiary, received 0.5 million Swiss Francs ($0.5 million U.S. dollar equivalent) from a COVID-19 Credit Agreement under a Swiss Federal Government program designed to mitigate the economic impact of the spread of the coronavirus. The COVID-19 Credit Agreement bore no interest through March 31, 2023. Beginning April 1, 2023, the loan bears interest at a rate of 1.5% per year, payable at the end of each calendar quarter. The loan principal is being repaid in twelve equal installments, paid semi-annually, which began in March of 2022. As of June 30, 2024, Pulmonx International Sàrl has repaid $0.2 million to the lender.

Previous wording

Net cash used in operating activities was $11.8 million for the three months ended March 31, 2024. Cash used in operating activities was primarily a result of the net loss of $13.7 million, a decrease in accrued liabilities of $6.0 million due to payment of incentive compensation expense associated with the achievement of performance objectives, an increase in inventory of $1.1 million due to continued production to build inventory to meet projected increase in sales and to protect against potential supply interruptions, and a decrease in lease liabilities of $0.8 million due to lease payments. This is partially offset by stock-based compensation expense of $5.7 million, an increase in accounts payable of $1.6 million due to timing of payments to our vendors, a decrease in accounts receivable of $1.4 million due to the timing of payments from our customers, and non-cash lease expense of $0.7 million.

Current wording

Net cash used in operating activities was $17.6 million for the six months ended June 30, 2024. Cash used in operating activities was primarily a result of the net loss of $29.1 million, a decrease in accrued liabilities of $4.2 million due to payment of incentive compensation expense associated with the achievement of performance objectives, a decrease in lease liabilities of $1.5 million due to lease payments, amortization of premiums and discounts on marketable securities of $0.9 million, and an increase in inventory of $0.7 million due to continued production to build inventory to meet projected increase in sales and to protect against potential supply interruptions. This is partially offset by stock-based compensation expense of $11.6 million, a non-cash impairment charge of $1.7 million related to certain previously capitalized software development costs recorded in the second quarter of 2024, an increase in accounts payable of $1.6 million due to timing of payments to our vendors, non-cash lease expense of $1.2 million, depreciation and amortization expense of $0.8 million, a decrease in accounts receivable of $0.8 million due to the timing of payments from our customers, and a decrease in prepaid expenses and other current assets of $0.6 million.

Previous wording

Net cash used in operating activities was $12.6 million for the three months ended March 31, 2023. Cash used in operating activities was primarily a result of the net loss of $15.9 million, an increase in inventory of $0.6 million due to continued production to build inventory to meet projected increase in sales and to protect against potential supply interruptions, a decrease in accrued liabilities of $2.5 million, a decrease in lease liabilities of $0.8 million due to lease payments and an increase in prepaid expenses and other current asset of $0.2 million, partially offset by an increase in accounts payable of $0.9 million due to timing of payments to our vendors, a decrease in accounts receivable of $0.5 million, stock-based compensation expense of $4.6 million, non-cash lease expense of $0.7 million, depreciation and amortization expense of $0.4 million and write-down of inventory of $0.3 million.

Current wording

Net cash used in operating activities was $20.5 million for the six months ended June 30, 2023. Cash used in operating activities was primarily a result of the net loss of $32.1 million, an increase in inventory of $0.3 million due to continued production to build inventory to meet projected increase in sales and to protect against potential supply interruptions, an increase in accounts receivable of $0.2 million, a decrease in lease liabilities of $1.6 million due to lease payments, and amortization of premiums and discounts on marketable securities of $0.4 million, partially offset by an increase in accounts payable of $0.4 million due to timing of payments to our vendors, an increase in accrued liabilities of $0.5 million, stock-based compensation expense of $10.5 million, non-cash lease expense of $1.3 million, depreciation and amortization expense of $0.8 million and write-down of inventory of $0.4 million.

Previous wording

Net cash used in investing activities in the three months ended March 31, 2024 was $2.5 million, consisting of purchases of marketable securities of $13.8 million and purchases of property and equipment of $0.5 million, offset by proceeds from maturities of marketable securities of $11.8 million.

Current wording

Net cash used in investing activities in the six months ended June 30, 2024 was $3.3 million, consisting of purchases of marketable securities of $20.8 million and purchases of property and equipment of $0.9 million, offset by proceeds from maturities of marketable securities of $18.4 million.

Previous wording

Net cash provided by investing activities in the three months ended March 31, 2023 was $0.6 million consisting of proceeds from maturities of marketable securities of $13.8 million partially offset by purchases of marketable securities of $13.1 million and purchases of property and equipment of $0.1 million.

Current wording

Net cash used in investing activities in the six months ended June 30, 2023 was $0.2 million, consisting of purchases of marketable securities of $25.6 million and purchases of property and equipment of $0.1 million partially offset by proceeds from maturities of marketable securities of $25.5 million.

Previous wording

Net cash provided by financing activities in the three months ended March 31, 2024 was $0.9 million, consisting of proceeds from the issuance of common stock under the employee stock purchase plan of $0.8 million and proceeds from the exercise of common stock options of $0.1 million.

Current wording

Net cash provided by financing activities in the six months ended June 30, 2024 was $0.8 million, consisting of proceeds from the issuance of common stock under the employee stock purchase plan of $0.8 million and proceeds from the exercise of common stock options of $0.1 million, offset by repayment of debt under the Credit Agreement of less than $0.1 million.

Previous wording

Net cash provided by financing activities in the three months ended March 31, 2023 of $20.7 million primarily relates to proceeds of $20.0 million from borrowing under the Amended and Restated CIBC Agreement and proceeds from the issuance of common stock under the employee stock purchase plan of $0.7 million.

Current wording

Net cash provided by financing activities in the six months ended June 30, 2023 of $20.8 million primarily relates to proceeds of $20.0 million from borrowing under the Amended and Restated CIBC Agreement, proceeds from issuance of common stock under the employee stock purchase plan of $0.7 million and proceeds from exercise of common stock options of $0.2 million.

Previous wording

Our net cash operating expenditures were $11.8 million in the three months ended March 31, 2024 and $12.6 million in the three months ended March 31, 2023. We intend to continue to make investments in the development of our products, including ongoing research and development programs. Our cash outflows for capital expenditures were $0.5 million and $0.1 million in the three months ended March 31, 2024 and March 31, 2023, respectively, and we expect to maintain the level of expenditures in the future to support our commercial infrastructure, sales force and other commercialization efforts. Recent and expected working and other capital requirements include amounts related to future lease payments for operating lease obligations, which totaled $3.4 million as of March 31, 2024, with $2.8 million expected to be paid within the next 12 months, and amounts related to future short-term and long-term debt which totaled $37.2 million, with $8.7 million due within the next 12 months. Lastly, we may undertake additional expenses to further expand our commercial organization and efforts, enhance our research and development efforts and pursue product expansion opportunities.

Current wording

Our net cash operating expenditures were $17.6 million in the six months ended June 30, 2024 and $20.5 million in the six months ended June 30, 2023. We intend to continue to make investments in the development of our products, including ongoing research and development programs. Our cash outflows for capital expenditures were $0.9 million and $0.1 million in the six months ended June 30, 2024 and June 30, 2023, respectively, and we expect to maintain the level of expenditures in the future to support our commercial infrastructure, sales force and other commercialization efforts. Recent and expected working and other capital requirements include amounts related to future lease payments for operating lease obligations, which totaled $32.3 million as of June 30, 2024, with $2.9 million expected to be paid within the next 12 months, and amounts related to future short-term and long-term debt which totaled $37.2 million, with $3.6 million due within the next 12 months. Lastly, we may undertake additional expenses to further expand our commercial organization and efforts, enhance our research and development efforts and pursue product expansion opportunities.

Previous wording

As of March 31, 2024, we had cash, cash equivalents and marketable securities of $120.4 million. Based on our current planned operations, we expect that our cash, cash equivalents and marketable securities will enable us to fund our operating expenses for at least 12 months from the issuance of our condensed consolidated financial statements as of and for the three months ended March 31, 2024. We believe we will meet longer-term expected future cash requirements and obligations through a combination of available cash, cash equivalents and marketable securities, sales of our products, debt financings, and access to other public or private equity offerings. We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect.

Current wording

As of June 30, 2024, we had cash, cash equivalents and marketable securities of $114.5 million. Based on our current planned operations, we expect that our cash, cash equivalents and marketable securities will enable us to fund our operating expenses for at least 12 months from the issuance of our condensed consolidated financial statements as of and for the six months ended June 30, 2024. We believe we will meet longer-term expected future cash requirements and obligations through a combination of available cash, cash equivalents and marketable securities, sales of our products, debt financings, and access to other public or private equity offerings. We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect.

Previous wording

Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 27, 2024, and the notes to the unaudited condensed consolidated financial statements included in “Part I, Item 1 — Financial Statements” of this Quarterly Report on Form 10-Q. During the three months ended March 31, 2024, except as described in Note 2 to the unaudited interim condensed financial statements appearing elsewhere in this Quarterly Report on Form 10-Q, there were no material changes to our critical accounting estimates from those discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 27, 2024.

Current wording

Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 27, 2024, and the notes to the unaudited condensed consolidated financial statements included in “Part I, Item 1 — Financial Statements” of this Quarterly Report on Form 10-Q. During the six months ended June 30, 2024, except as described in Note 2 to the unaudited interim condensed financial statements appearing elsewhere in this Quarterly Report on Form 10-Q, there were no material changes to our critical accounting estimates from those discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 27, 2024.