AVITA Medical, Inc.
For the period ended Sep 30, 2025. Filed Nov 6, 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.
Sep 30, 2025 · Filed Nov 6, 2025
RCEL$16.59+5.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-08.
0001762303-25-000014
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0001193125-25-269597
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 67 previous paragraphs and 72 current paragraphs.
31 unchanged; 30 reworded; 8 added; 4 removed; 2 previous and 3 current paragraphs rearranged.
Tables are not compared: 3 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 (8)
Current report
Expand adoption of Cohealyx
Current report
On October 1, 2025, the Centers for Medicare & Medicaid Services (CMS) approved a New Technology Add-On Payment (NTAP) for the RECELL® System, applicable to acute non-thermal full-thickness skin defects—such as traumatic injuries and surgical wounds—that require inpatient care and are treated with RECELL in combination with a meshed autograft. This NTAP designation allows Medicare Part A inpatient claims to receive up to $4,875 in additional reimbursement per case, beyond the standard MS-DRG base rate, provided CMS thresholds and coding criteria are met. The NTAP is effective from October 1, 2025, through September 30, 2026, and was granted under CMS’s alternative pathway recognizing RECELL’s FDA Breakthrough Device status, reinforcing its clinical value and supporting broader hospital adoption.
Current report
On September 14, 2025, we obtained the CE Mark for RECELL GO under the European Union Medical Device Regulation (EU MDR). This allows the Company to commercialize RECELL GO in Europe and other markets that recognize the CE Mark. Data recently presented at both the 2025 British Burn Association and the European Burns Association Congress demonstrated that adults with deep-partial thickness burns treated with RECELL experienced a 36% reduction in hospital stays compared with traditional grafting, underscoring the clinical value of the RECELL technology.
Current report
We are executing a focused strategy targeting approximately 200 U.S. burn and trauma centers—including legacy burn centers—that represent the highest value and volume in the country’s acute wound care landscape. These institutions are central to our commercial efforts, given their concentration of complex inpatient cases and procedural throughput. By concentrating on burn and trauma centers, we aim to maximize impact and drive adoption of our portfolio across the most critical segments of acute wound care.
Current report
Total revenues decreased by 13%, or $2.5 million, to $17.1 million, compared to $19.5 million in the same period in the prior year. The decrease in commercial revenues was primarily driven by Medicare Administrative Contractor (MAC) reimbursement headwinds, partially offset by increased revenue from new product launches and expanding adoption within our established markets.
Current report
Research and development expenses decreased by 31%, or $1.7 million, to $3.7 million, compared to $5.4 million in the same period in the prior year. Lower costs in the current year are due to decreases in salaries and benefits of approximately $1.1 million, research and development expense of $0.4 million, and other development expenses of $0.2 million. The decreases in salaries and benefits are due to lower headcount. The decrease in research and development expenses are primarily due to the capitalization of project costs, specifically internally developed software.
Current report
On August 12, 2025, we completed a private placement (the “Placement”) on the ASX to institutional and professional investors to raise $14.8 million, or $13.8 million after deducting sales commissions and offering expenses, through the issuance of 17,201,886 CHESS Depositary Interests (“CDIs”), which is the equivalent of 3,440,377 shares of Common stock. Proceeds of the Placement will be used for working capital requirements and will provide additional strategic flexibility to support continued growth of our therapeutic acute wound portfolio.
Current report
On September 30, 2025, we received a waiver related to the trailing 12-month net revenue covenant for the third quarter of 2025. On November 5, 2025, we entered into a sixth amendment to the Credit Agreement (the “Sixth Amendment”), which amended the trailing 12-month revenue covenant to $70.0 million for the quarter ending December 31, 2025, and waived the event of default caused by the “going concern” qualification in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2025. The revenue covenants for all subsequent quarters through the Maturity Date remain in effect. In consideration for the Sixth Amendment, we agreed to add $500,000 to the principal balance of the Loan Facility, with interest paid on this amount as of November 1, 2025 and during the term of the Loan Facility and payable along with the original $40,000,000 principal balance, either at the Maturity Date or when and if earlier repaid.
Removed paragraphs (4)
Previous report
Expand adoption of Cohealyx after full commercial launch on April 1, 2025
Previous report
Research and development expenses increased by 5%, or $0.2 million, to $5.1 million, compared to $4.9 million in the same period in the prior year. Higher costs in the current year are due to increases in salaries and benefits of approximately $0.3 million, stock-based compensation expense of $0.1 million, offset by a decrease of $0.2 million in other development expenses. The increases in salaries and benefits and stock-based compensation expenses are due to increased headcount.
Previous report
*nm = not meaningful
Previous report
Sales and marketing expenses increased by 1%, or $0.2 million, to $29.1 million, compared to $28.9 million in the corresponding period in the prior year.
Reworded paragraphs (30)
Previous wording
The following discussion and analysis of AVITA Medical, Inc.’s (“we”, “our”, “us”) financial condition and results of operations should be read in conjunction with our unaudited Consolidated Financial Statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q.
Current wording
The following discussion and analysis of AVITA Medical, Inc.’s (“AVITA Medical”, the “Company”, “we”, “our”, or “us”) financial condition and results of operations should be read in conjunction with our unaudited Consolidated Financial Statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q.
Previous wording
Conduct a post-market study of Cohealyx in 2025 to develop clinical data to further support commercialization
Current wording
Continue enrollment of the post-market study of Cohealyx in 2025 to develop clinical data to further support commercialization
Previous wording
Conduct a post-market study of PermeaDerm in 2025 to develop clinical data to further support commercialization
Current wording
Continue enrollment of the post-market study of PermeaDerm in 2025 to develop clinical data to further support commercialization
Previous wording
Obtain CE mark for RECELL GO, allowing us to commercialize in the European Union, the U.K., and Australia under our distribution agreements
Current wording
After obtaining CE mark for RECELL GO, commercialization in the European Union, the U.K., and Australia under our distribution agreements
Previous wording
hospitals and the broader healthcare system. These changes could reduce demand for our products, particularly if healthcare providers face lower margins or additional administrative burdens. While we believe this issue contributed to a decline in demand for the RECELL System during the first half of the year, recent advocacy efforts are progressing towards a complete resolution which is expected to drive revenue recovery in the second half of 2025.
Current wording
hospitals and the broader healthcare system. These changes could reduce demand for our products, particularly if healthcare providers face lower margins or additional administrative burdens. While we believe this issue contributed to a decline in demand for the RECELL System during the first half of the year, recent advocacy efforts are progressing towards a resolution which is expected to drive revenue recovery.
Previous wording
On April 1, 2025, we initiated a full commercial launch of Cohealyx, a collagen-based dermal matrix branded by AVITA Medical and co-developed with Regenity. Cohealyx is designed to support cellular migration and revascularization, advancing readiness for wound bed closure. In pre-clinical and initial clinical utilization, Cohealyx is integrated into the wound bed as early as seven days.
Current wording
On April 1, 2025, we initiated a U.S. commercial launch of Cohealyx, a collagen-based dermal matrix branded by AVITA Medical and co-developed with Regenity. Cohealyx is designed to support cellular migration and revascularization, advancing readiness for wound bed closure. In pre-clinical and initial clinical utilization, Cohealyx is integrated into the wound bed as early as seven days.
Previous wording
Cohealyx expands our therapeutic wound care portfolio, complementing our flagship product, the RECELL System, which is FDA-approved for the treatment of thermal burns and traumatic and surgical wounds, and our PermeaDerm product, a temporary biosynthetic dressing used to support healing before and after grafting. These products support the two-stage standard of care for full-thickness wounds. Cohealyx is used as a dermal matrix to manage the wound bed. RECELL Spray-On Skin Cells and wound protection with PermeaDerm provide solutions for definitive closure. This integrated approach may improve clinical outcomes and expands our market opportunity.
Current wording
Cohealyx, along with PermeaDerm and our flagship product, the RECELL System, support the standard of care for full-thickness wounds. Cohealyx is a dermal matrix that prepares wounds for grafting; RECELL Spray-On Skin Cells, used alone or in conjunction with a skin graft, achieve definitive wound closure; and PermeaDerm provides a translucent, variable porosity covering to protect the wound through all stages of management and healing. This integrated approach may improve clinical outcomes and expand our market opportunity.
Previous wording
The post-market study, TONE, and the health care economics study, both related to our vitiligo initiative were published during the first quarter of 2025. However, the reimbursement environment for vitiligo remains challenging and uncertain. As a consequence, we are pausing further investment in vitiligo.
Current wording
The post-market study, TONE, and the health care economics study, both related to our vitiligo initiative were published during the first quarter of 2025. However, the reimbursement environment for vitiligo remains challenging and uncertain. As a consequence, we continue to pause investment in vitiligo.
Previous wording
Gross profit margin was 81.2% compared to 86.1% in the corresponding period in the prior year. Note that the gross margin for RECELL products only was 84.3% for the quarter, which we believe will remain in this range for future quarters. The decrease in the overall gross margin percentage from the prior year was primarily caused by volume discounts, a higher inventory reserve, and product mix. The Company shares the average sales price for Cohealyx at 50% and for PermeaDerm at 60%. Although these arrangements are highly beneficial, they inevitably result in an overall decrease in gross margin percentage. Therefore, the product mix is expected to continue to impact the overall gross margin percentage while increasing the gross profit, and, given that expenses associated with this revenue do not increase significantly, operating profit on a quarterly basis.
Current wording
Gross profit margin was 81.3% compared to 83.7% in the corresponding period in the prior year. Note that the gross margin for RECELL products only was 83.6% for the quarter, which we believe will remain in this range for future quarters. The decrease in the overall gross margin percentage from the prior year was primarily caused by product mix and higher inventory reserve. We share the average sales price for Cohealyx at 50% and for PermeaDerm at 60%. Although these arrangements are highly beneficial, they inevitably result in an overall decrease in gross margin percentage. Therefore, the product mix is expected to continue to impact the overall gross margin percentage while increasing the gross profit, and given that costs associated with this revenue do not increase significantly, operating profit on a quarterly basis.
Previous wording
Total operating expenses decreased by 9%, or $2.6 million, to $26.1 million, compared with $28.7 million in the corresponding period in the prior year.
Current wording
Total operating expenses decreased by 24%, or $7.2 million, to $23.0 million, compared with $30.2 million in the corresponding period in the prior year.
Previous wording
General and administrative expenses decreased by 11%, or $0.9 million, to $6.7 million, compared to $7.5 million in the same period in the prior year. Lower costs in the current year are due to decreases in salaries and benefits of approximately of $0.8 million and stock-based compensation expense of $0.6 million, offset by increases in recruiting expense of $0.2 million and other administrative expenses of $0.3 million. The decrease in salaries and benefits and stock-based compensation is primarily attributable to higher severance and other related benefits in the prior year.
Current wording
General and administrative expenses decreased by 25%, or $2.4 million, to $7.2 million, compared to $9.6 million in the same period in the prior year. Lower costs in the current year are due to decreases in salaries and benefits of approximately $1.7 million and stock-based compensation expenses of $1.3 million, offset by increases in professional fees of $0.6 million. The decrease in salaries and benefits and stock-based compensation is primarily attributable to higher severance and other related benefits in the prior year. The increase in professional fees is largely related to legal expenses due to corporate matters.
Previous wording
Other income, net increased by $0.9 million to $2.5 million from $1.6 million in the prior period. In the current period, other income, net consists of a non-cash gains of $1.2 million related to the change in fair value of warrants and $0.9 million related to the change in fair value of loan facility and $0.4 million in income related to our investments. The prior period income consisted of a non-cash gain of $2.1 million related to the change in fair value of warrant liability, and $0.7 million in income related to our investments, offset by a non-cash charge of $1.2 million due to the change in fair value of the loan facility.
Current wording
Other expense, net increased by $1.7 million to $2.8 million from $1.1 million in the prior period. In the current period, other income, net consists of a non-cash charges of $2.2 million related to the amendment of our loan facility and $0.9 million related to the change in fair value of loan facility, offset by $0.3 million in income related to our investments. The prior period expense consisted of non-cash charges of $1.0 million and $0.8 million related to the changes in fair value of the debt and warrant liability, respectively, offset by $0.6 million in income related to our investments and $0.1 million in other gains, net.
Previous wording
Results of Operations for the six-months ended June 30, 2025 compared to the six-months ended June 30, 2024.
Current wording
Results of Operations for the nine-months ended September 30, 2025 compared to the nine-months ended September 30, 2024.
Previous wording
Total revenues increased by 21%, or $3.2 million, to $18.4 million, compared to $15.2 million in the same period in the prior year. The growth in commercial revenues was largely driven by deeper penetration within customer accounts, new accounts for the treatment of traumatic and surgical wounds and, to a lesser extent, new product launches.
Current wording
Total revenues increased by 18%, or $8.2 million, to $54.0 million, compared to $45.8 million in the same period in the prior year. The growth in commercial revenues was largely driven by deeper penetration within customer accounts, new accounts for the treatment of traumatic and surgical wounds and, to a lesser extent, new product launches.
Previous wording
Gross profit margin was 82.9% compared to 86.2% in the corresponding period in the prior year. Note that the gross margin for RECELL products only was 85.5% for the six months ended June 30, 2025, which we believe will remain in this range for future quarters. The decrease in the overall gross margin percentage from the prior year was primarily caused by volume discounts, a higher inventory reserve, and product mix.
Current wording
Gross profit margin was 82.4% compared to 85.1% in the corresponding period in the prior year. Note that the gross margin for RECELL products only was 84.5% for the nine months ended September 30, 2025, which we believe will remain in this range for future quarters. The decrease in the overall gross margin percentage from the prior year was primarily caused by volume discounts, a higher inventory reserve, and product mix.
Previous wording
Total operating expenses decreased by 3%, or $1.9 million, to $53.6 million, compared with $55.5 million in the corresponding period in the prior year.
Current wording
Total operating expenses decreased by 11%, or $9.0 million, to $76.6 million, compared with $85.7 million in the corresponding period in the prior year.
Previous wording
Sales and marketing expenses decreased by 12%, or $2.0 million, to $14.3 million, compared to $16.3 million in the corresponding period in the prior year. Lower costs in the current year are due to decreases in stock based compensation expense of $0.8 million, salaries and benefits of approximately $0.7 million, decreases in recruiting expenses of $0.3 million, and reduced spend of $0.3 million related to seminars and meetings attendance, offset by an increase in other selling expenses of $0.1 million. The decreases in stock-based compensation and salaries and benefits are due to the reduction of our sales force as part of cost savings initiatives.
Current wording
Sales and marketing expenses decreased by 7%, or $2.9 million, to $41.2 million, compared to $44.1 million in the corresponding period in the prior year. Lower costs in the current year are due to decreases in stock-based compensation expense of $0.9 million, salaries and benefits of $0.7 million, recruiting expenses of $0.6 million, seminars and meetings expenses of $0.4 million, and travel expenses of $0.3 million. The decreases are primarily due to the reduction of our sales force as part of cost savings initiatives.
Previous wording
General and administrative expenses decreased by 21%, or $3.4 million, to $13.1 million, compared to $16.5 million in the same period in the prior year. Lower costs in the current year are due to decreases in salaries and benefits of approximately of $1.6 million, stock-based compensation expense of $0.6 million, deferred compensation expense of $0.6 million, professional fees of $0.4 million, and $0.2 million in other corporate expenses. The decrease in salaries and benefits and stock-based compensation expense is primarily attributable to decreased headcount and lower severance payments. The decrease in deferred compensation expense is driven by lower stock price used to calculate the deferred compensation liability for the deferred restricted stock awards. The decrease in professional fees is due to lower consulting costs and lower legal fees.
Current wording
General and administrative expenses decreased by 22%, or $5.8 million, to $20.3 million, compared to $26.1 million in the same period in the prior year. Lower costs in the current year are due to decreases in salaries and benefits of $3.4 million, stock-based compensation expense of $1.9 million, and deferred compensation expense of $0.9 million, offset by an increase of $0.4 million in other corporate expenses. The decrease in salaries and benefits and stock-based compensation expense is primarily attributable to decreased headcount and lower severance payments. The decrease in deferred compensation expense is driven by lower stock price used to calculate the deferred compensation liability for the deferred restricted stock awards.
Previous wording
Research and development expenses increased by 13%, or $1.3 million, to $11.4 million, compared to $10.1 million in the same period in the prior year. Higher costs in the current year are due to increases in salaries and benefits of approximately $1.7 million and stock-based compensation expense of $0.4 million, offset by a decrease in professional fees of $0.2 million and a decrease of $0.6 million in other development expenses. The increase in salaries and benefits and stock-based compensation expenses is due to increased headcount. The decrease in professional fees is due to the completion of the vitiligo TONE study partially offset by clinical trial costs associated with PermeaDerm and Cohealyx post-market studies.
Current wording
Research and development expenses decreased by 2%, or $0.4 million, to $15.1 million, compared to $15.5 million in the same period in the prior year. Lower costs in the current year are due to decreases in research and development expenses of $0.8 million, professional fees of $0.4 million and other development expenses of $0.2 million, offset by increases in salaries and benefits of approximately $0.5 million and stock-based compensation expense of $0.5 million. The decrease in professional fees is due to the completion of the vitiligo TONE study partially offset by clinical trial costs associated with PermeaDerm and Cohealyx post-market studies. The decreases in research and development expenses are due to the capitalization of project costs, specifically internally developed software. The increases in salaries and benefits and stock-based compensation expenses are due to increased headcount.
Previous wording
Other income, net increased by $0.2 million to $1.7 million from $1.5 million in the prior period. In the current period, other income, net consists of non-cash gains of $1.5 million related to the change in fair value of warrants and $0.2 million related to the change in fair value of loan facility, plus $0.8 million in income related to our investments offset by $0.8 million in debt issuance costs. The prior period income consisted of a non-cash gain of $1.2 million related to the change in fair value of warrant liability, $1.7 million in income related to our investments, and $0.2 million in other gains, net, offset by a non-cash charge of $1.6 million due to the change in fair value of the loan facility.
Current wording
Other (expense) income, net decreased by $1.5 million to other expense, net of $1.1 million from other income, net of $0.5 million in the prior period. In the current period, other (expense) income, net consists of $3.0 million in debt issuance costs and $0.8 million related to the change in fair value of loan facility, offset by a non-cash gain of $1.6 million related to the change in fair value of warrants, $0.7 million in income related to our investments, and $0.4 million in other gains, net. The prior period income consisted of $2.3 million in income related to our investments, $0.4 million due to the change in fair value of warrant liability, and $0.4 million in other gains, net, offset by a non-cash charge of $2.6 million due to the change in fair value of the debt.
Previous wording
We had approximately $12.2 million in cash and cash equivalents and $3.5 million in marketable securities as of June 30, 2025. We have funded our research and development activities, and more recently our substantial investment in sales and marketing activities, through the sale of our products, the issuance of equity securities, and debt financing. If capital is not available to us when amounts are needed, we could be required to delay, scale back or abandon commercial and development programs and other operations, which could adversely impact our business, financial condition, and operating results.
Current wording
We had approximately $15.4 million in cash and cash equivalents and $7.9 million in marketable securities as of September 30, 2025. We have funded our research and development activities, and more recently our substantial investment in sales and marketing activities, through the sale of our products, the issuance of equity securities, and debt financing. If capital is not available to us when amounts are needed, we could be required to delay, scale back or abandon commercial and development programs and other operations, which could adversely impact our business, financial condition, and operating results.
Previous wording
Based on our liquidity position as of June 30, 2025 and our current forecast of operating results and cash flows, management has determined that, absent any mitigating action, it is probable we will not be able to maintain compliance of the minimum cash balance covenant pursuant with the terms of our Credit Agreement within the next twelve months following the date of issuance of the Consolidated Financial Statements in this Quarterly Report on Form 10-Q. Should such situation arise, the Lender could exercise its right to accelerate repayment of the outstanding debt. These events and conditions raise substantial doubt about our ability to continue as a going concern. As a result of this conclusion, and due to our current debt servicing obligations, the long-term portion of the credit facility has been classified as a current liability in the Consolidated Balance Sheets as of June 30, 2025. On August 7, 2025, the Company obtained a waiver related to these debt service obligations.
Current wording
Based on our liquidity position as of September 30, 2025 and our current forecast of operating results and cash flows, management has determined that, absent any mitigating action, it is probable we may not be able to maintain compliance of the minimum cash balance covenant pursuant with the terms of our Credit Agreement within the next twelve months following the date of issuance of the Consolidated Financial Statements in this Quarterly Report on Form 10-Q. Should such situation arise, the Lender could exercise its right to accelerate repayment of the outstanding debt. These events and conditions raise substantial doubt about our ability to continue as a going concern. As a result of this conclusion, and due to our current debt servicing obligations, the long-term portion of the credit facility has been classified as a current liability in the Consolidated Balance Sheets as of September 30, 2025.
Previous wording
On October 18, 2023 (the “Closing Date”), the Company entered into a Credit Agreement (the “Credit Agreement”), by and between the Company, as borrower, and an affiliate of OrbiMed Advisors, LLC, as the lender and administrative agent (the “Lender”). The Credit Agreement provides for a five-year senior secured credit facility in an aggregate principal amount of up to $90.0 million (the “Loan Facility”), of which $40.0 million was borrowed on the Closing Date, less certain fees and expenses payable to or on behalf of the Lender. On November 7, 2024, the Lender and the Company mutually agreed to a third amendment (the “Third Amendment”) to the Credit Agreement. Under the terms of the Third Amendment and subject to the payment by the Company of a consent fee to the Lender, the Company and the Lender mutually agreed to (1) terminate two additional tranches of available debt in the aggregate amount of $50.0 million and (2) remove the trailing 12-month revenue covenant for the fourth quarter of 2024, which was set at $67.5 million. All revenue covenants for subsequent quarters remained in effect. The indebtedness under the Credit Agreement is secured by substantially all of our assets and will accrue interest at a rate equal to the greater of (a) forward-looking one-month term SOFR rate and (b) four percent (4%) per annum, plus eight percent (8%). In the event that the Company does not meet certain 12-month trailing revenue targets at the end of future fiscal quarters, the outstanding balance of the loan must be repaid in equal quarterly installments of 5% of the funded amount through the maturity date. In addition, if we don’t maintain a minimum cash and cash equivalents balance at the end of each reporting period, we may have to repay amounts outstanding in full as a result of an event of default. The Credit Agreement contains representations, warranties, and covenants that are customary for this type of agreement.
Current wording
On October 18, 2023 (the “Closing Date”), we entered into a Credit Agreement (the “Credit Agreement”), by and between us, as borrower, and an affiliate of OrbiMed Advisors, LLC, as the lender and administrative agent (the “Lender”). The Credit Agreement provides for a five-year senior secured credit facility in an aggregate principal amount of up to $90.0 million (the “Loan Facility”), of which $40.0 million was borrowed on the Closing Date, less certain fees and expenses payable to or on behalf of the Lender. The indebtedness under the Credit Agreement is secured by substantially all of our assets and will accrue interest at a rate equal to the greater of (a) forward-looking one-month term SOFR rate and (b) four percent (4%) per annum, plus eight percent (8%). In the event that we do not meet certain 12-month trailing revenue targets at the end of future fiscal quarters, the outstanding balance of the loan must be repaid in equal quarterly installments of 5% of the funded amount through the maturity date. In addition, if we don’t maintain a minimum cash and cash equivalents balance at the end of each reporting period, we may have to repay amounts outstanding in full as a result of an event of default. The Credit Agreement contains representations, warranties, and covenants that are customary for this type of agreement.
Previous wording
On February 13, 2025, we entered into a fourth amendment to the Credit Agreement (the “Fourth Amendment”), which amended the trailing 12-month revenue covenant to $73.0 million for the quarter ending March 31, 2025, to $78.0 million for the quarter ending June 30, 2025, to $84.0 million for the quarter ending September 30, 2025, to $92.0 million for the quarter ending December 31, 2025 and to $103.0 million for the quarter ending March 31, 2026. While the $115.0 million revenue covenant for all subsequent quarters through the date of debt maturity remained in effect, we were not in compliance with the trailing 12-month net revenue covenants for the first and second quarters of 2025. On March 31, 2025, we received a waiver related to the trailing 12-month net revenue covenant for the first quarter of 2025, which was set at $73.0 million. On June 30, 2025, we received a waiver related to the trailing 12-month net revenue covenant for the second quarter of 2025, which was set at $78.0 million.
Current wording
On February 13, 2025, we entered into a fourth amendment to the Credit Agreement (the “Fourth Amendment”), which amended the trailing 12-month revenue covenant to $73.0 million for the quarter ending March 31, 2025, to $78.0 million for the quarter ending June 30, 2025, to $84.0 million for the quarter ending September 30, 2025, to $92.0 million for the quarter ending December 31, 2025 and to $103.0 million for the quarter ending March 31, 2026. The $115.0 million revenue covenant for all subsequent quarters through the date of debt maturity remained in effect. We were not in compliance with the trailing 12-month net revenue covenants for the first and second quarters of 2025. In consideration of the Fourth Amendment, we issued to the Lender warrants to purchase up to 145,180 shares of our common stock, at an exercise price of $0.01 per share, with a term of 10 years from the issuance date.
Previous wording
On August 7, 2025, we entered into a fifth amendment to the Credit Agreement (the “Fifth Amendment”), which amended the trailing 12-month revenue covenant to $74.0 million for the quarter ending September 30, 2025, to $77.0 million for the quarter ending December 31, 2025, to $90.0 million for the quarter ending March 31, 2026, and to $103.0 million for the quarter ending June 30, 2026. The $115.0 million revenue covenant for all subsequent quarters through the date of debt maturity remains in effect. In consideration for the amended covenants in the Fifth Amendment, we issued to the Lender 400,000 shares of our common stock.
Current wording
On August 7, 2025, we entered into a fifth amendment to the Credit Agreement (the “Fifth Amendment”), which amended the trailing 12-month revenue covenant to $73.0 million for the quarter ending September 30, 2025, to $77.0 million for the quarter ending December 31, 2025, to $90.0 million for the quarter ending March 31, 2026, and to $103.0 million for the quarter ending June 30, 2026, and waived the event of default caused by the “going concern” qualification in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025. The $115.0 million revenue covenant for all subsequent quarters through the date of debt maturity remains in effect. In consideration of the Fifth Amendment, we issued 400,000 shares of our Common stock to the Lender.
Previous wording
Net cash used in operating activities was $20.5 million and $33.6 million during the six-months ended June 30, 2025 and 2024, respectively. The decrease in net cash used in operations was primarily due to gross profit resulting from increased revenues and cost saving initiatives.
Current wording
Net cash used in operating activities was $25.8 million and $40.9 million during the nine-months ended September 30, 2025 and 2024, respectively. The decrease in net cash used in operations was primarily due to cost saving initiatives and gross profit resulting from increased revenues.
Previous wording
Net cash provided by investing activities was $17.8 million and $27.5 million during the six-months ended June 30, 2025 and 2024, respectively. The decrease in cash provided by investing activities is primarily attributable to lower cash inflows from maturities of marketable securities and lower cash outflows from purchases of marketable securities in the current year, as well as a decrease in cash outflow for capital expenditures compared to the prior year. The decrease in capital expenditures in the current year is primarily related to higher leasehold improvement costs for manufacturing output enhancements effected at the Ventura production facility in the prior year.
Current wording
Net cash provided by investing activities was $12.4 million and $34.9 million during the nine-months ended September 30, 2025 and 2024, respectively. The decrease in cash provided by investing activities is primarily attributable to lower cash inflows from maturities of marketable securities and lower cash outflows from purchases of marketable securities in the current year, as well as a decrease in cash outflow for capital expenditures compared to the prior year. The decrease in capital expenditures in the current year is primarily related to higher leasehold improvement costs for manufacturing output enhancements effected at the Ventura production facility in the prior year.
Previous wording
Net cash provided by financing activities was $0.9 million and $1.5 million during the six-months ended June 30, 2025 and 2024, respectively. The decrease in cash provided by financing activities is related to proceeds from the exercises of stock options, as well as lower ESPP purchases.
Current wording
Net cash provided by financing activities was $14.7 million and $2.5 million during the nine-months ended September 30, 2025 and 2024, respectively. The increase in cash provided by financing activities is related to net proceeds received from the Placement, the proceeds from the exercises of stock options, and lower ESPP purchases.
Previous wording
For the six-months ended June 30, 2025, there were no dividends paid and we have no plans to commence the payment of dividends. Under the terms of the Regenity Agreement, we made a $2.0 million payment during the three-months ended March 31, 2025. We have a further obligation to make up to an additional $3.0 million payment on or before January 4, 2026 to guarantee development and manufacturing capacity (and related resources), contingent on positive results of certain clinical studies, and have recorded $3.0 million in Contingent liability in the Consolidated Balance Sheets.
Current wording
For the nine-months ended September 30, 2025, there were no dividends paid and we have no plans to commence the payment of dividends. Under the terms of the Regenity Agreement, we made a $2.0 million payment during the three-months ended March 31, 2025. We have a further obligation to make up to an additional $3.0 million payment on or before January 4, 2026 to guarantee development and manufacturing capacity (and related resources), contingent on positive results of certain clinical studies, and have recorded $3.0 million in Contingent liability in the Consolidated Balance Sheets.
Previous wording
With the exception of the milestone payment under the Regenity Agreement, we do not have any other purchase commitments or long-term contractual obligations except for lease obligations as of June 30, 2025 (see Note 8 to the Consolidated Financial Statements). In addition, we have no material off-balance sheet arrangements (as defined in the applicable rules and regulations established by the SEC) that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. While we have no committed plans to issue further shares on the market, we will continue to assess market conditions.
Current wording
With the exception of the payment under the Regenity Agreement, we do not have any other purchase commitments or long-term contractual obligations except for lease obligations as of September 30, 2025 (see Note 8 to the Consolidated Financial Statements). In addition, we have no material off-balance sheet arrangements (as defined in the applicable rules and regulations established by the SEC) that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. While we have no committed plans to issue further shares on the market, we will continue to assess market conditions.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Sales and marketing expenses decreased by 20%, or $3.1 million, to $12.1 million, compared to $15.1 million in the corresponding period in the prior year. Lower costs in the current year are due to decreases in salaries and benefits of $1.5 million, selling expenses of $1.5 million, and travel expenses of $0.2 million offset by an increase in other selling expenses of $0.1 million. The decreases in salaries and benefits and travel expenses are due to the reduction of our sales force as part of cost savings initiatives. The decreases in selling expenses are due to lower commissions.
Current report — wording carried from elsewhere
On November 7, 2024, we entered into the third amendment (the “Third Amendment”) to the Credit Agreement. Under the terms of the Third Amendment and subject to our payment of a consent fee to the Lender, we mutually agreed to (1) terminate two additional tranches of available debt in the aggregate amount of $50.0 million and (2) remove the trailing 12-month revenue covenant for the fourth quarter of 2024, which was set at $67.5 million. All revenue covenants for subsequent quarters remained in effect.
Current report — wording carried from elsewhere
On March 31, 2025, we received a waiver related to the trailing 12-month net revenue covenant for the first quarter of 2025, which was set at $73.0 million. On June 30, 2025, we received a waiver related to the trailing 12-month net revenue covenant for the second quarter of 2025, which was set at $78.0 million.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Total revenues increased by 40%, or $10.6 million, to $36.9 million, compared to $26.3 million in the same period in the prior year. The growth in commercial revenues was largely driven by deeper penetration within customer accounts, new accounts for the treatment of traumatic and surgical wounds and, to a lesser extent, new product launches.
Previous report — wording carried elsewhere
On February 13, 2025, in consideration of the Fourth Amendment, we issued to the Lender warrants to purchase up to 145,180 shares of our common stock, at an exercise price of $0.01 per share, with a term of 10 years from the issuance date.