EKSO BIONICS HOLDINGS INC

Previous wording

This Quarterly Report contains forward-looking statements. These forward-looking statements include statements other than statements of historical facts contained or incorporated by reference in this Quarterly Report, including statements regarding (i) the plans and objectives of management for future operations, including those relating to the design, development and commercialization of exoskeleton products for humans, (ii) the manufacturing of our products and strengthening of our supply chain, and potential opportunities for strategic partnerships, (iii) beliefs regarding the regulatory path for our products, including potential approvals required and timing of approvals, (iv) statements regarding the financial and operational impacts on our business following the completion of the integration of our acquisition from Parker Hannifin Corporation of certain assets related to Parker Hannifin Corporation's human motion control business, and software applications, support services and cloud environments related to such business in December 2022 (the "HMC Acquisition"), (v) our future financial performance, including any such statement contained in a discussion and analysis of financial condition by management or in the results of operations included pursuant to the rules and regulations of the SEC, (vi) our beliefs regarding the potential for commercial opportunities, including for exoskeleton technology and our exoskeleton products, and for strategic partnerships, (vii) our beliefs regarding potential clinical and other health benefits of our medical devices, (viii) the actions we will take in seeking reimbursement from Centers for Medicare and Medicaid Services ("CMS") and the success of such actions, (ix) the timing and amounts of potential CMS reimbursement, (x) our ability to obtain CE certificates registered by Ekso Bionics, Inc. for our Ekso Indego Therapy and Ekso Indego Personal devices, (xi) the impact and effects of global health events and other risk factors on our business, results of operations or prospects, and (xii) the assumptions underlying or relating to any statement described in points (i) through (xi) above. The words “may,” “might,” “would,” “should,” “could,” “project,” “estimate,” “pro-forma,” “predict,” “potential,” “strategy,” “anticipate,” “attempt,” “develop,” “plan,” “help,” “believe,” “continue,” “intend,” “expect,” “future,” and similar expressions (including the negative of any of the foregoing) are intended to identify forward-looking statements.

Current wording

This Quarterly Report contains forward-looking statements. These forward-looking statements include statements other than statements of historical facts contained or incorporated by reference in this Quarterly Report, including statements regarding (i) the plans and objectives of management for future operations, including those relating to the design, development and commercialization of exoskeleton products for humans, (ii) the manufacturing of our products and strengthening of our supply chain, and potential opportunities for strategic partnerships, (iii) beliefs regarding the regulatory path for our products, including potential approvals required and timing of approvals, (iv) statements regarding the financial and operational impacts on our business following the completion of the integration of our acquisition from Parker Hannifin Corporation of certain assets related to Parker Hannifin Corporation's human motion control business, and software applications, support services and cloud environments related to such business in December 2022 (the "HMC Acquisition"), (v) our future financial performance, including any such statement contained in a discussion and analysis of financial condition by management or in our results of operations, (vi) our beliefs regarding the potential for commercial opportunities, including for exoskeleton technology and our exoskeleton products, and for strategic partnerships, (vii) our beliefs regarding potential clinical and other health benefits of our medical devices, (viii) the actions we will take in seeking reimbursement from Centers for Medicare and Medicaid Services ("CMS") and the success of such actions, (ix) the timing and amounts of CMS reimbursement, (x) our ability to grow and expand our EksoHealth segment as we work to grow revenue in light of Medicare reimbursement from CMS of the Ekso Indego Personal, (xi) our ability to obtain insurance coverage beyond CMS, (xii) our ability to obtain additional indications for products that cover the Ekso Indego Personal, (xiii) our ability to obtain CE certificates registered by Ekso Bionics, Inc. for our Ekso Indego Therapy and Ekso Indego Personal devices, (xiv) the impact and effects of the other risk factors on our business, results of operations or prospects, and (xv) the assumptions underlying or relating to any statement described in points (i) through (xiv) above. The words “may,” “might,” “would,” “should,” “could,” “project,” “estimate,” “pro-forma,” “predict,” “potential,” “strategy,” “anticipate,” “attempt,” “develop,” “plan,” “help,” “believe,” “continue,” “intend,” “expect,” “future,” and similar expressions (including the negative of any of the foregoing) are intended to identify forward-looking statements.

Previous wording

We design, develop, and market exoskeleton products that augment human strength, endurance, and mobility. Our exoskeleton technology serves multiple end markets and can be utilized both by persons with physical disabilities or impairments and on able-bodies. The majority of our sales are generated in our Enterprise Health business line within our EksoHealth Segment, which includes the sales of products and services related to neurorehabilitation in clinical settings. We also provide products and service to individual users, primarily driven by sales of our Ekso Indego Personal product in our Personal Health business line.

Current wording

We design, develop, and market exoskeleton products that augment human strength, endurance, and mobility. Our exoskeleton technology serves multiple end markets and can be utilized both by persons with physical disabilities or impairments and on able-bodies. The majority of our sales are generated in our Enterprise Health business line within our EksoHealth Segment, which includes the sales of products and services related to neurorehabilitation in clinical settings. We also provide products and service from our Personal Health business line to individual users.

Previous wording

Our Personal Health business line is focused on marketing and sales of our Ekso Indego Personal product to individual users. These individual users are currently served by the Veterans Administration, which provides our products to qualified veterans for individual use, individuals who are covered under worker’s compensation insurance, and private individuals who pay out of pocket. In April 2024, CMS approved a final payment level of $91,031.93 for Medicare reimbursement of the Ekso Indego Personal, which took effect of April 1, 2024. We intend to seek insurance coverage beyond CMS and to seek additional indications of use for our products. We believe that our Personal Health business line has the potential for a higher growth rate than our Enterprise Health business line.

Current wording

Our Personal Health business line is focused on marketing and sales of our Ekso Indego Personal product to individual users. These individual users are currently served by the Veterans Administration, which provides our products to qualified veterans for individual use, individuals who are covered under worker’s compensation insurance, and private individuals who pay out of pocket. In April 2024, CMS approved a final payment level of $91,031.93 for Medicare reimbursement of the Ekso Indego Personal, which took effect on April 1, 2024. We intend to seek insurance coverage beyond CMS and to seek additional indications of use for our products. We believe that our Personal Health business line has the potential for a higher growth rate than our Enterprise Health business line.

Previous wording

With the recent approval of CMS lump sum reimbursement for Indego Personal, we believe we will see increased demand for this device as we are able to more economically serve the larger U.S. patient population suffering from SCI. Specifically, according to the National Spinal Cord Injury Statistical Center, an estimated 294,000 individuals are currently living with SCI and another 17,810 suffer from new SCI injuries each year. Approximately 56% of individuals with SCI are enrolled in Medicare or Medicaid within 5 years post-injury. With Medicare reimbursement recently approved, we plan to sell products to individuals in this market through Durable Medical Equipment suppliers (DMEs). DMEs typically resell products from DME manufacturers to individual users. DMEs are responsible for the Medicare reimbursement process, which requires a physician’s prescription and evidence of medical necessity to be submitted to and approved by Medicare before reimbursement is provided. See “Part I—Item 1A. Risk Factors,” specifically the risk titled “Coverage policies and reimbursement levels of third-party payers, including Medicare or Medicaid, may impact sales of our products” in our Annual Report for more information.

Current wording

With the recent approval of CMS lump sum reimbursement for Indego Personal, we believe we will see increased demand for this device as we are able to more economically serve the larger U.S. patient population suffering from SCI. Specifically, according to the National Spinal Cord Injury Statistical Center, an estimated 305,000 individuals are currently living with SCI and another 18,000 suffer from new SCI injuries each year. Approximately 57% of individuals with SCI are enrolled in Medicare or Medicaid within 5 years post-injury. With Medicare reimbursement recently approved, we have begun selling products to individuals in this market through Durable Medical Equipment suppliers (DMEs). DMEs typically resell products from DME manufacturers to individual users. DMEs are responsible for the Medicare reimbursement process, which requires a physician’s prescription and evidence of medical necessity to be submitted to and approved by Medicare before reimbursement is provided. See “Part I—Item 1A. Risk Factors,” specifically the risk titled “Coverage policies and reimbursement levels of third-party payers, including Medicare or Medicaid, may impact sales of our products” in our Annual Report for more information.

Previous wording

We use the Black-Scholes option-pricing model to value our warrant liabilities at each reporting period, which requires the input of highly subjective assumptions, most notably the estimated volatility of our common stock over the expected term. We use our historical common stock volatility to estimate expected volatility over the warrant terms. Management must also make uncertain estimates regarding the likelihood and timing of certain future events for application of the Lattice Model for the valuation of certain warrants. Changes in these assumptions could have potential material impacts on the estimated fair value of warrant liabilities. During the three months ended June 30, 2024, management made no changes to its estimates regarding the likelihood of future events.

Current wording

We use the Black-Scholes option-pricing model to value our warrant liabilities at each reporting period, which requires the input of highly subjective assumptions, most notably the estimated volatility of our common stock over the expected term. We use our historical common stock volatility to estimate expected volatility over the warrant terms. Changes in these assumptions could have potential material impacts on the estimated fair value of warrant liabilities.

Previous wording

An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimate that are reasonably likely to occur, could materially impact the consolidated financial statements. We believe that our critical accounting policies reflect the more significant estimates and assumptions used in the preparation of the consolidated financial statements. Refer to Note. 2Basis of Presentation and Summary of Significant Accounting Policies and Estimates in the notes to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Current wording

An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimate that are reasonably likely to occur, could materially impact the consolidated financial statements. We believe that our critical accounting policies reflect the more significant estimates and assumptions used in the preparation of the consolidated financial statements. Refer to Note 2.Basis of Presentation and Summary of Significant Accounting Policies and Estimates in the notes to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Previous wording

Revenue increased $0.2 million, or 5%, for the three months ended June 30, 2024, compared to the same period of 2023. This incr ease was comprised of a $0.1 million increase in EksoHealth revenue and a $0.1 million increase in EksoWorks revenue.

Current wording

Revenue decreased $0.5 million, or 10%, for the three months ended September 30, 2024, compared to the same period of 2023. This decrease was comprised of a $0.3 millionde crease in EksoHealth revenue and a $0.2 millionde crease in EksoWorks revenue.

Previous wording

The increase in EksoHealth revenue was driven by an increase in the average selling price for the EksoNR on an aggregate basis across all regions, driven by an increase in the volume of EksoNR service revenue, partially offset by a lower volume of EksoNR subscriptions revenue. The increase in EksoWorks revenue was primarily driven by an increase in the volume of EVO sales.

Current wording

The decrease in EksoHealth revenue was primarily driven by adecrease in the volume of Enterprise Health device shipments andlower volume of EksoNR subscriptions, partially offset by an increase in the volume of Personal Health device shipments. The decrease in EksoWorks revenue was primarily driven by a decrease in the volume of EVO shipments.

Previous wording

Gross profit increased $0.4 million for the three months ended June 30, 2024 compared to the same period of 2023, driven by an increase in sales in the EksoHealth and EksoWorks segments, cost savings on supply chain and a reduction in service costs.

Current wording

Gross profit decreased $0.2 million for the three months ended September 30, 2024, compared to the same period of 2023, driven by adecrease in sales in the EksoHealth and EksoWorks segments, partially offset bycost savings in supply chain and a reduction in service costs.

Previous wording

Sales and marketing expenses decreased $0.5 million, or 21%, forthe three months ended June 30, 2024, compared to the same period of 2023. The decrease was primarily due to lower headcount and consultant costs.

Current wording

Sales and marketing expenses decreased $0.3 million, or 14%, forthe three months ended September 30, 2024, compared to the same period of 2023. The decrease was primarily due to lower headcount, discretionary payroll and travel expenses.

Previous wording

Research and development expenses decreased $0.3 million, or 20%, forthe three months ended June 30, 2024, compared to the same period of 2023, prim arily due to a decrease in the Company's use of third-party product development consultants and lower discretionary payroll costs.

Current wording

Research and development expenses decreased $0.4 million, or 33%, forthe three months ended September 30, 2024, compared to the same period of 2023, prim arily due to a decrease in the Company's use of product development consultants.

Previous wording

Interest expense, net increased 21% for the three months ended June 30, 2024 compared to the same period of 2023. This increase is primarily related to lower interest income from cash deposits.

Current wording

Interest expense, net increased 23% for the three months ended September 30, 2024 compared to the same period of 2023. This increase is primarily related to lower interest income from cash deposits, partially offset by lower interest expense related to the Promissory Note principal payments.

Previous wording

Gain on revaluation of warrant liabilities was $0.1 million for the three months ended June 30, 2024 as compared to a gain on revaluation of warrant liabilities of $0.2 million for the three months ended June 30, 2023, and was associated with the revaluation of warrants issued in 2019, 2020 and 2021. Gains and losses on revaluation of warrants are primarily driven by changes in our stock price, time to maturity and the risk-free interest rate.

Current wording

Gain on revaluation of warrant liabilities was de minimis for the three months ended September 30, 2024 as compared to a gain on revaluation of warrant liabilities of $0.1 million for the three months ended September 30, 2023, and was associated with the revaluation of warrants issued in 2019, 2020 and 2021. Gains and losses on revaluation of warrants are primarily driven by changes in our stock price, stock price volatility, time to maturity and the risk-free interest rate.

Previous wording

Unrealized loss on foreign exchange for the three months ended June 30, 2024 was $0.1 million compared to a de minimis unrealized loss on foreign exchange for the same period of 2023. These unrealized gains and losses are primarily the result of foreign currency revaluations of our inter-company monetary assets and liabilities.

Current wording

Unrealized gain on foreign exchange for the three months ended September 30, 2024 was$0.6 million comparedto an unrealized loss on foreign exchange of $0.4 million for the same period of 2023. These unrealized gains and losses are primarily the result of foreign currency revaluations of our inter-company monetary assets and liabilities.

Previous wording

The following table presents our results of operations for the six months ended June 30, 2024 and 2023 (in thousands, except percentages):

Current wording

The following table presents our results of operations for the nine months ended September 30, 2024 and 2023 (in thousands, except percentages):

Previous wording

Revenue decreased $0.1 million, or 1%, for the six months ended June 30, 2024, compared to the same period of 2023. This decrease was comprised of a $0.3 million decrease in EksoHealth revenue offset by a $0.2 million increase in EksoWorks.

Current wording

Revenue decreased $0.6 million, or 4%, for thenine months ended September 30, 2024, compared to the same period of 2023. This decrease was comprised of a $0.6 million decrease in EksoHealth revenue, offset by ade minimis increase in EksoWorks revenue.

Previous wording

The decrease in EksoHealth revenue was primarily due to a decrease in the volume of EksoNR device sales and partially offset by an increase in the volume of Indego device sales, an increase in the volume of EksoNR and Indego service revenue, and partially due to lower volume of EksoNR subscriptions revenue. The increase in EksoWorks revenue was primarily driven by an increase in the volume of EVO sales.

Current wording

The decrease in EksoHealth revenue was primarily due to a decrease in the volume of Enterprise Health device shipments and lower volume of EksoNR subscriptions, partially offset by an increase in service revenue. The increase in EksoWorks revenue was primarily driven by an increase in the volume of EVO shipments.

Previous wording

Gross profit increased $0.3 million for the six months ended June 30, 2024 compared to the same period of 2023, driven by an increase in sales in the EksoHealth and EksoWorks segments, cost savings on supply chain and a reduction in service costs.

Current wording

Gross profit increased $0.1 million for thenine months ended September 30, 2024 compared to the same period of 2023, driven by cost savings in supply chain and a reduction in service costs.

Previous wording

Gross margin increased to 53% for the three months ended June 30, 2024, compared to a gross margin of 48% for the same period of 2023. The overall increase in gross margin was primarily due to an increase in the average selling price for the EksoNR on an aggregate basis across all regions and lower EksoHealth device and service costs.

Current wording

Gross margin increased to 53% for thenine months ended September 30, 2024, compared to a gross margin of 50% for the same period of 2023. The overall increase in gross margin was primarily driven by cost savings in supply chain and a reduction in service costs.

Previous wording

Sales and marketing expenses decreased $0.8 million, or 17%, for the six months ended June 30, 2024, compared to the same period of 2023. The decrease was primarily due to lower headcount and consultant costs.

Current wording

Sales and marketing expenses decreased $1.1 million, or 16%, for thenine months ended September 30, 2024, compared to the same period of 2023. The decrease was primarily due to lower headcount, discretionary payrolland consultant costs.

Previous wording

Research and development expenses decreased $0.3 million, or 12%, for the six months ended June 30, 2024, compared to the same period of 2023, primarily due to a decrease in the Company's use of third-party product development consultants and lower discretionary payroll costs.

Current wording

Research and development expenses decreased $0.7 million, or 18%, for thenine months ended September 30, 2024, compared to the same period of 2023, primarily due to a decrease in the Company's use of product development consultants and discretionary payroll costs.

Previous wording

General and administrative expenses decreased $0.8 million, or 28%, for the three months ended June 30, 2024, compared to the same period of 2023, primarilydue to lower discretionary payroll, consultant and legal costs.

Current wording

General and administrative expenses decreased $1.6 million, or 20%, for the nine months ended September 30, 2024, compared to the same period of 2023, primarily due tolower discretionary payroll, accounting and legal costs.

Previous wording

Interest expense, net decreased 24% for the six months ended June 30, 2024 compared to the same period of 2023. This decrease is primarily related to higher interest income from cash deposits.

Current wording

Interest expense, net decreased 11% for the nine months ended September 30, 2024 compared to the same period of 2023. This decrease is primarily related to lower interest expense from the Promissory Note principal payments.

Previous wording

Loss on modification of warrants of $0.1 million for the six months ended June 30, 2024 was due to the reduction of the exercise price of the May 2019 Warrants from $3.52 per share to $1.55 per share, in connection with the January 2024 Offering. There was no comparable amount for the six months ended June 30, 2023.

Current wording

Loss on modification of warrants of $0.1 million for the nine months ended September 30, 2024 was due to the reduction of the exercise price of the May 2019 Warrants from $3.52 per share to $1.55 per share, in connection with the January 2024 Offering. There was no comparable amount for the nine months ended September 30, 2023.

Previous wording

Gain on revaluation of warrant liabilities was $0.4 million for the six months ended June 30, 2024 as compared to a gain on revaluation of warrant liabilities of $0.1 million for the six months ended June 30, 2023, and was associated with the revaluation of warrants issued in 2019, 2020 and 2021. Gains and losses on revaluation of warrants are primarily driven by changes in our stock price, time to maturity, and the risk-free interest rate.

Current wording

Gain on revaluation of warrant liabilities was $0.4 million for thenine months ended September 30, 2024 as compared to a gain on revaluation of warrant liabilities of $0.2 million for the nine months ended September 30, 2023, and was associated with the revaluation of warrants issued in 2019, 2020 and 2021. Gains and losses on revaluation of warrants are primarily driven by changes in our stock price, stock price volatility, time to maturity and the risk-free interest rate.

Previous wording

Unrealized loss on foreign exchange for the six months ended June 30, 2024 was $0.4 million compared to unrealized gain on foreign exchange of $0.2 million for the same period of 2023. These unrealized gains and losses are primarily the result of foreign currency revaluations of our inter-company monetary assets and liabilities.

Current wording

Unrealized gain on foreign exchange for thenine months ended September 30, 2024 was $0.2 million compared to unrealized loss on foreign exchange of $0.2 million for the same period of 2023. These unrealized gains and losses are primarily the result of foreign currency revaluations of our inter-company monetary assets and liabilities.

Previous wording

As of June 30, 2024, of our $5.9 million of cash, $5.2 million was held domestically while $0.7 million was held by our foreign subsidiaries. Cash consisted of bank deposits with third-party financial institutions. As described in Note 9 in the notes to our condensed consolidated financial statements included elsewhere in this Quarterly Report under the caption Notes Payable, net, borrowings under our secured term loan agreement with Pacific Western Bank have a requirement of minimum cash on hand equivalent to the current outstanding principal balance, which is due in full August 2026. As of June 30, 2024, $2.0 million of cash must remain as restricted. After considering cash restrictions, effective unrestricted cash as of June 30, 2024 was approximately $3.9 million.

Current wording

As of September 30, 2024, $8.3 million of cash was held domestically and by our foreign subsidiaries. Cash consisted of bank deposits with third-party financial institutions. As described in Note 9 in the notes to our condensed consolidated financial statements included elsewhere in this Quarterly Report under the caption Notes Payable, net, borrowings under our secured term loan agreement with Banc of California have a requirement of minimum cash on hand equivalent to the current outstanding principal balance, which is due in full August 2026. As of September 30, 2024, $2.0 million of cash must remain as restricted. After considering cash restrictions, effective unrestricted cash as of September 30, 2024 was approximately $6.3 million.

Previous wording

On June 30, 2024, we had working capital of $11.0 million, compared to working capital of $12.1 million as of December 31, 2023. The decrease in working capital was primarily due to a lower cash balance from cash used in operations.

Current wording

On September 30, 2024, we had working capital of $13.6 million, compared to working capital of $12.1 million as of December 31, 2023. The increase in working capital was primarily due to a higher accounts receivable balance and a lower accrued liability balance.

Previous wording

We have financed our operations primarily through the issuance and sale of equity securities for cash consideration and through bank debt.

Current wording

We have funded our operations primarily through the issuance and sale of equity securities and bank debt.

Previous wording

In July 2024, we filed with the SEC a registration statement on Form S-1 relating to our potential offering of shares of common stock and pre-funded warrants to purchase shares of common stock. To the extent an offering under such registration statement is consummated, we expect to use the net proceeds from such offering for general corporate purposes, which may include growth and expansion of our EksoHealth segment as we work to increase our revenue following the establishment of CMS reimbursement of the Ekso Indego Personal device, research and development activities, selling, general and administrative costs, and pursuing strategic initiatives, which initiatives may include potential synergistic and accretive acquisitions, as well as meeting our other working capital needs. Such offering, if consummated at all, will depend on a variety of factors, including, among other things, the SEC declaring the registration statement effective, market conditions and the trading price of our common stock, and such offering would be dilutive to our existing stockholders. See “Part II – Item 1A. Risk Factors—You may be diluted from future issuances of our equity securities, including in future financings or strategic transactions, from compensatory equity awards and exercises of outstanding warrants, and such issuances, or perception that such issuances may occur, could depress the market price of our common stock."

Current wording

On September 3, 2024, we sold 3,100,000 shares of common stock, a Pre-Funded Warrant to purchase 2,900,000 shares of common stock, Series A Warrants to purchase an aggregate of 6,000,000 shares of common stock, and Series B Warrants to purchase an aggregate of 6,000,000 shares of common stock in an underwritten public offering (the "September 2024 Offering"), which generated net proceeds of approximately $5.0 million after deducting the underwriting discount and commissions and offering expenses paid by the Company. We are using the net proceeds from the September 2024 Offering for general corporate purposes, which may include growth and expansion of our EksoHealth segment as we work to increase our revenue following the establishment of Medicare CMS reimbursement of the Ekso Indego Personal device, research and development activities, selling, general and administrative costs, and pursuing strategic initiatives, which initiatives may include potential synergistic and accretive acquisitions, as well as meeting our other working capital needs.

Previous wording

In October 2020, we entered into an At The Market Offering Agreement (the "ATM Agreement") with H.C. Wainwright & Co., LLC (the "Agent"), under which we may issue and sell shares of our common stock, from time to time, to or through the Agent. Offers and sales of shares of common stock by us through the Agent may be made by any method deemed to be an “at the market offering” as defined under SEC Rule 415 or in privately negotiated transactions, subject to certain conditions. Such shares may be offered pursuant to the registration statement on Form S-3 (File No. 333-272607) (the “Registration Statement”), which was declared effective by the SEC on June 20, 2023, and a related prospectus supplement filed with the SEC on July 28, 2023 (the “ATM Prospectus”). Pursuant to the Registration Statement and the ATM Prospectus, shares having an aggregate offering price of up to $5.0 million may be offered and sold, subject to certain SEC rules limiting the amount of shares of the Company’s common stock that we may sell under the Registration Statement. In June 2023, we entered into an amendment to the ATM Agreement that removed the requirement that shares of our common stock may not be sold for a price lower than $6.75 per share. During the three months ended June 30, 2024, we sold 75,166 shares of common stock under the ATM Agreement at an average price of $1.42, for aggregate proceeds of $46,190, net of commission and issuance costs. During the six months ended June 30, 2024, we sold 105,049 shares of common stock under the ATM Agreement at an average price of $1.43, for aggregate proceeds of $85,073, net of commission and issuance costs. As of June 30, 2024, we had $4.1 million available for future offerings under the prospectus filed with respect to the ATM Agreement.

Current wording

In October 2020, we entered into an At The Market Offering Agreement (the "ATM Agreement") with H.C. Wainwright & Co., LLC (the "Agent"), under which we may issue and sell shares of our common stock, from time to time, to or through the Agent. Offers and sales of shares of common stock by us through the Agent may be made by any method deemed to be an “at the market offering” as defined under SEC Rule 415 or in privately negotiated transactions, subject to certain conditions. Such shares may be offered pursuant to the registration statement on Form S-3 (File No. 333-272607) (the “Registration Statement”), which was declared effective by the SEC on June 20, 2023, and a related prospectus supplement filed with the SEC on July 28, 2023 (the “ATM Prospectus”). Pursuant to the Registration Statement and the ATM Prospectus, shares having an aggregate offering price of up to $5.0 million may be offered and sold, subject to certain SEC rules limiting the amount of shares of the Company’s common stock that we may sell under the Registration Statement. In June 2023, we entered into an amendment to the ATM Agreement that removed the requirement that shares of our common stock may not be sold for a price lower than $6.75 per share. During the three months ended September 30, 2024, we did not sell any shares of common stock under the ATM Agreement. During the nine months ended September 30, 2024, we sold 105,049 shares of common stock under the ATM Agreement at an average price of $1.43, for aggregate proceeds of $85,073, net of commission and issuance costs. As of September 30, 2024, we had $4.1 million available for future offerings under the prospectus filed with respect to the ATM Agreement.

Previous wording

Net cash used in operating activities decreased by $1 million, or 14%, for the six months ended June 30, 2024, compared to the same period of 2023 primarily due to the absence of payments related to the acquisition and integration of HMC and cost savings on supply chain, reduction in service costs and efficiencies in operating activities.

Current wording

Net cash used in operating activities decreased by $2 million, or 20%, for the nine months ended September 30, 2024, compared to the same period of 2023 primarily due to the absence of payments related to the acquisition and integration of HMC and cost savings on supply chain, reduction in service costs and other efficiencies in operating activities.

Previous wording

Net cash used in investing activities decreased by $0.1 million, or 91%, for the six months ended June 30, 2024, compared to the same period of 2023, primarily due to the reduction in manufacturing equipment purchases.

Current wording

Net cash used in investing activities decreased by$0.1 million, or 86%, for the nine months ended September 30, 2024, compared to the same period of 2023, primarily due to the reduction in manufacturing equipment purchases.

Previous wording

Net cash provided by financing activities of $3.4 million for the six months ended June 30, 2024 was related to net proceeds of $3.9 million from the January 2024 Offering after deducting placement agent fees and offering expenses, proceeds of $0.1 million from shares of common stock sold under the ATM Agreement, partially offset by $0.6 million of principal payments towards the Promissory Note.

Current wording

Net cash provided by financing activities of $8.1 million for the nine months ended September 30, 2024 was related tonet proceeds of $5.0 million from the September 2024 Offering after deducting the underwriting discount and commissions and offering expenses paid by us, net proceeds of $3.9 million from the January 2024 Offering after deducting placement agent fees and offering expenses, proceeds of $0.1 million from shares of common stock sold under the ATM Agreement, partially offset by $0.9 million of principal payments towards the Promissory Note.

Previous wording

Our material cash requirements include the following items, some of which are represented in the table of Contractual Obligations and Commitments: (1) employee wages, benefits and incentives, (2) the procurement of raw materials and components to support the manufacturing and sale of our products, (3) expenditures for the ongoing improvement and development of existing and new technologies, (4) debt repayments (for additional information see Note 9 in the notes to our condensed consolidated financial statements included elsewhere in the Quarterly Report on Form 10-Q), and (5) operating lease payments (for additional information see Note 10 in the notes to our condensed consolidated financial statements included elsewhere in the Quarterly Report on Form 10-Q).

Current wording

Our material cash requirements include the following items, some of which are represented in the table of Contractual Obligations and Commitments: (1) employee wages, benefits and incentives, (2) the procurement of raw materials and components to support the manufacturing and sale of our products, (3) expenditures for the ongoing improvement and development of existing and new technologies, (4) debt repayments (for additional information see Note 9 in the notes to our condensed consolidated financial statements included elsewhere in the Quarterly Report on Form 10-Q), (5) operating lease payments (for additional information see Note 10 in the notes to our condensed consolidated financial statements included elsewhere in the Quarterly Report on Form 10-Q), and (6) pursuing strategic initiatives.

Previous wording

We expect that our operating cash requirements in the near term will continue to exceed cash provided by operations with the product development activities assumed in the HMC Acquisition, service of our Promissory Note with Parker Hannifin, and with the significant research and development activities related to the development of the Company's advanced technology and commercialization of such technology into its medical device business. As described in Note 1.* Organization: Liquidity and Going Concern*of the notes to our condensed consolidated financial statements, management believes that substantial doubt exists about our ability to meet cash requirements twelve months from the issuance of such financial statements, and such substantial doubt is not alleviated by our plans.

Current wording

We expect that our operating cash requirements in the near term will continue to exceed cash provided by operations with the significant research and development activities related to the development of the Company's advanced technology and commercialization of such technology into its medical device business and with the service of our Promissory Note with Parker Hannifin. As described in Note 1.* Organization: Liquidity and Going Concern*of the notes to our condensed consolidated financial statements, management believes that substantial doubt exists about our ability to meet cash requirements twelve months from the issuance of such financial statements, and such substantial doubt is not alleviated by our plans.

Previous wording

The Company does not expect, nor do our historical operating results suggest, that cash flows generated from operations will be sufficient to meet our material cash requirements in the long term. Management expects that the Company's historical reliance on external financing, from both equity and debt financings, will continue to provide the capital necessary to meet its material cash requirements in the long term. Management has not yet determined the form such additional financing may take, but management expects that the most likely forms include one or more of the following: (i) underwritten offerings of shares of our common stock or other offerings of equity and/or equity-linked securities, including the potential offering contemplated by our recently filed registration statement on Form S-1, (ii) sales of shares of our common stock under an "at the market" offering program, (iii) incurring indebtedness with one or more financial institutions, and (iv) the factoring of trade receivables.

Current wording

The Company does not expect, nor do our historical operating results suggest, that cash flows generated from operations will be sufficient to meet our material cash requirements in the long term. Management expects that the Company's historical reliance on external financing, from both equity and debt financings, will continue to provide the capital necessary to meet its material cash requirements in the long term. Management has not yet determined the form such additional financing may take, but management expects that the most likely forms include one or more of the following: (i) underwritten offerings of shares of our common stock or other offerings of equity and/or equity-linked securities, (ii) sales of shares of our common stock under an "at the market" offering program, (iii) incurring indebtedness with one or more financial institutions, (iv) sale of product line or technology, and (v) the factoring of trade receivables.