Bioventus Inc
For the period ended Sep 28, 2024. Filed Nov 5, 2024.
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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 28, 2024 · Filed Nov 5, 2024
BVS$10.61-0.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-29; filed 2024-08-06.
0001628280-24-034979
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-28; filed 2024-11-05.
0001628280-24-045114
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 123 previous paragraphs and 127 current paragraphs.
78 unchanged; 37 reworded; 12 added; 8 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 28 previous and 30 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 (12)
Current report
Significant developments
Current report
On September 30, 2024, we entered into a Purchase Agreement with a third-party purchaser to sell certain products within our Advanced Rehabilitation Business. The Advanced Rehabilitation Business is considered non-core and requires additional research and development expenditures to achieve its next stage of growth. The consideration for the transactions includes $25.0 million at closing, subject to a post-closing adjustment for net working capital adjustments, indebtedness, transaction expenses and cash, and up to an aggregate of $20.0 million in potential Earn-out Payments, which are based on the achievement of certain revenue and financial metric thresholds in respect to sales of products from the Advanced Rehabilitation Business during the 2025 and 2026 fiscal years.
Current report
Allograft Delivery Device
Current report
(i)Other items primarily includes charges associated with strategic transactions, including potential acquisitions or divestitures and a transformative project to redesign systems and information processing. Divestiture costs related to our Advanced Rehabilitation Business, including transactional fees, totaled $1.6 million and $3.5 million during the three and nine months ended September 28, 2024, respectively. Strategic transactions and transformative project expenses amounted to $0.4 million and $1.3 million, respectively, for the nine months ended September 28, 2024.
Current report
Selling, general and administrative expenses increased $11.3 million, or 16.1%, primarily due to increases in (i) compensation related costs of $7.1 million; (ii) bad debt expenses of $1.3 million due to a reversal of bad debt expense in the prior year related to favorable collection activity that did not recur in the current year; (iii) employee related insurance costs of $0.8 million; (iv) accounting and legal costs of $0.6 million; and (v) equity-based compensation of $0.4 million.
Current report
Research and development expense remained consistent with the prior year comparable period.
Current report
Depreciation and amortization decreased during the three months ended September 28, 2024 compared to the prior year comparable period. The decline is the result of the discontinuance of amortization and depreciation on Advanced Rehabilitation Business’ intangible and fixed assets that are classified as held for sale.
Current report
Other (income) expense
Current report
Income tax expense (benefit), net
Current report
The rate change for the nine months ended September 28, 2024 compared to the prior year comparable period was due to the recognition of deferred tax benefits resulting from the impairments recorded.
Current report
Adjusted EBITDA increased $1.1 million or 39.8%, due to higher gross profits.
Current report
Adjusted EBITDA increased $1.2 million or 13.6% due to higher gross profit.
Removed paragraphs (8)
Previous report
Significant transactions
Previous report
OSTEOAMP®
Previous report
Selling, general and administrative expenses increased $19.9 million, or 73.4%, primarily due to increases in (i) accounting and legal costs of $10.7 million, primarily related to the settlement of shareholder litigation; (ii) equity-based compensation of $6.2 million; and (iii) compensation related costs of $2.9 million.
Previous report
Research and development expense decreased by $0.6 million, or 8.1%, primarily due to a decrease in consulting costs.
Previous report
Other expense (income)
Previous report
Income tax (benefit) expense, net
Previous report
Adjusted EBITDA decreased $0.6 million or 16.9%, primarily due to a decrease in gross profit and an increase in compensation costs.
Previous report
Adjusted EBITDA remained consistent with the prior year comparable period.
Reworded paragraphs (37)
Previous wording
In May 2024, we began contract negotiations with a third-party (the “Buyer”) to sell certain products within our advanced rehabilitation business, including the L100, L300 Go, L360, H200, Vector Gait & Safety System and BITS-Bioness Integrated Therapy System (collectively, the “Advanced Rehabilitation Business”). The Advanced Rehabilitation Business is considered non-core and will require additional research and development expenditures to achieve its next stage of growth. The potential divestiture of the Advanced Rehabilitation Business is expected to simplify our business structure and improve liquidity, as the proceeds, net of transactional fees, are required to be used to reduce long-term debt obligations. Contract negotiations are ongoing with the Buyer and as of the end of the second quarter 2024, we had incurred $2,500 in transactional fees resulting from the potential divestiture of the Advanced Rehabilitation Business.
Current wording
The divestiture of the Advanced Rehabilitation Business is expected to close near the end of 2024 or early 2025 and is expected to simplify our business structure and improve liquidity, as the proceeds, net of transactional fees, are required to be used to reduce long-term debt obligations. As of September 28, 2024, we had incurred $2.5 million in transactional fees resulting from the planned divestiture of the Advanced Rehabilitation Business.
Previous wording
The Company evaluated the Advanced Rehabilitation Business for impairment due to its potential divestiture and, as a result of this evaluation, recorded a $31,870 impairment under the U.S. reporting segment within the consolidated condensed statements of operations and comprehensive loss during the three and six months ended June 29, 2024 to reduce the intangible assets of the Advanced Rehabilitation Business to reflect their respective fair values less any costs to sell. The fair value of its intangibles was based on the consideration offered for the Advanced Rehabilitation Business.
Current wording
We evaluated the Advanced Rehabilitation Business for impairment due to its planned divestiture. As a result of this evaluation, we recorded impairments totaling $2.0 million and $33.9 million for the three and nine months ended September 28, 2024, respectively, under the U.S. reporting segment within the consolidated condensed statements of operations and comprehensive loss. The impairment losses reduced the intangible assets of the Advanced Rehabilitation Business to reflect their respective fair values less any costs to sell. The fair value of its intangibles was based on the consideration agreed to with the purchaser for the Advanced Rehabilitation Business.
Previous wording
We reclassified revenue and expense of the SonicOne Ultrasonic Cleansing and Debridement Systems (“SonicOne”) from the Restorative Therapies to the Surgical Solutions business in the first quarter of 2024. SonicOne’s capabilities to remove devitalized or necrotic tissue and fiber deposits more closely aligns with Surgical Solutions’ soft tissue management. SonicOne revenue reclassified for the three and six months ended July 1, 2023 totaled $1.8 million and $3.5 million, respectively, for the U.S. reporting segment and $0.1 million in both periods for the International reporting segment.
Current wording
We reclassified revenue and expense of the SonicOne Ultrasonic Cleansing and Debridement Systems (“SonicOne”) from the Restorative Therapies to the Surgical Solutions business in the first quarter of 2024. SonicOne’s capabilities to remove devitalized or necrotic tissue and fiber deposits more closely aligns with Surgical Solutions’ soft tissue management. SonicOne revenue reclassified for the three and nine months ended September 30, 2023 totaled $1.8 million and $5.3 million, respectively, for the U.S. reporting segment and $0.1 million and $0.2 million for the International reporting segment during the three and nine months ended September 28, 2024, respectively.
Previous wording
OSTEOAMP Cannula, a customized delivery system for our OSTEOAMP® Flowable product, received FDA clearance in June 2024. OSTEOAMP® is an allograft-derived bone graft with growth factors used for reconstructive bone grafting procedures. The Cannula delivery system will assist the use of OSTEOAMP® Flowable, the fastest growing product in our portfolio, in minimally invasive surgical procedures as well as open procedures. FDA clearance will also allow us to bring the product to market in the US, starting with a limited launch planned in the fourth quarter of 2024.
Current wording
The Allograft Delivery Device, a customized delivery system for our OSTEOAMP® Flowable product, received FDA clearance in June 2024. OSTEOAMP® is an allograft-derived bone graft with growth factors used for reconstructive bone grafting procedures. The Allograft Delivery Device is intended to be used for the delivery of hydrated allograft to an orthopedic site, therefore assisting with the use of OSTEOAMP® Flowable, the fastest growing product in our bone graft substitutes portfolio, in minimally invasive surgical procedures as well as open procedures. FDA clearance of the Allograft Delivery Device will also allow us to bring the product to market in the US, starting with a limited launch planned in the fourth quarter of 2024.
Previous wording
We evaluated the Wound Business for impairment prior to its sale and recorded a $78.6 million impairment within the consolidated statements of operations and comprehensive loss during the six months ended July 1, 2023 as a result of this evaluation to reduce the intangible assets of the Wound Business to reflect their respective fair values, less any costs to sell. The fair values of its intangibles were determined based on the consideration received for the Wound Business.
Current wording
We evaluated the Wound Business for impairment prior to its sale and recorded a $78.6 million impairment within the consolidated statements of operations and comprehensive loss during the nine months ended September 30, 2023 as a result of this evaluation to reduce the intangible assets of the Wound Business to reflect their respective fair values, less any costs to sell. The fair values of its intangibles were determined based on the consideration received for the Wound Business.
Previous wording
(a)Includes for the three months ended June 29, 2024 and July 1, 2023 and the six months ended June 29, 2024 and July 1, 2023, respectively, depreciation and amortization of $11,021, $12,301, $21,046 and $26,640 in cost of sales and $2,069, $2,299, $3,829 and $4,433 in operating expenses presented in the consolidated statements of operations and comprehensive loss.
Current wording
(a)Includes for the three months ended September 28, 2024 and September 30, 2023 and the nine months ended September 28, 2024 and September 30, 2023, respectively, depreciation and amortization of $10.2 million, $11.5 million, $31.3 million and $38.1 million in cost of sales and $2.1 million, $2.3 million, $5.9 million and $6.8 million in operating expenses presented in the consolidated statements of operations and comprehensive loss.
Previous wording
(e)Includes compensation expense resulting from awards granted under our equity-based compensation plans. The three and six months ended July 1, 2023 includes the reversal of equity compensation expenses totaling $3,803 related to the transition of our executive leadership.
Current wording
(e)Includes compensation expense resulting from awards granted under our equity-based compensation plans. The three and nine months ended September 30, 2023 includes the reversal of equity compensation expenses totaling $3.8 million related to the transition of our executive leadership.
Previous wording
(i)Other items primarily includes charges associated with strategic transactions, such as potential acquisitions or divestitures and a transformative project to redesign systems and information processing. We incurred $0.3 million and $1.2 million in costs, respectively, during the three and six months ended July 1, 2023 related to MOTYS. Other items for the three and six months ended July 1, 2023 also includes severance costs totaling $2.3 million related to the transition of our executive leadership.
Current wording
Strategic transactions and divestiture expenses totaled $0.7 million and $4.2 million for the three and nine months ended September 30, 2023, respectively. Transformative project costs incurred amounted to $1.0 million and $3.1 million during the three and nine months ended September 30, 2023, respectively. We incurred $1.2 million in costs during the nine months ended September 30, 2023 related to MOTYS. Other items for the nine months ended September 30, 2023 also includes severance costs totaling $2.3 million related to the transition of our executive leadership.
Previous wording
Net sales increased $13.6 million, or 11.2%, compared to three months ended July 1, 2023. Changes by business were: (i) Pain Treatments—$9.6 million increase due to volume; (ii) Restorative Therapies—$2.6 million decrease due to the divestiture of our Wound Business, partially offset with a volume increase for our Exogen Bone Stimulation System; and (iii) Surgical Solutions—$6.6 million increase due to volume growth.
Current wording
Net sales increased $16.7 million, or 15.7%, compared to the three months ended September 30, 2023. Changes by business were: (i) Pain Treatments—$7.9 million increase due to volume growth primarily driven by Durolane; (ii) Restorative Therapies—$2.3 million increase primarily due to volume growth related to our Exogen Bone Stimulation System; and (iii) Surgical Solutions—$6.4 million increase due to volume growth.
Previous wording
Net sales increased compared with the prior year comparable period. The net sales in Pain Treatments increased $1.0 million due to volume growth, partially offset by a decrease of $0.5 million in Restorative Therapies due to less volume.
Current wording
Net sales increased compared with the prior year comparable period. The net sales in Pain Treatments increased $1.5 million due to volume growth, partially offset by a decrease of $0.7 million in Restorative Therapies.
Previous wording
Net sales increased $23.9 million, or 10.6%, compared to the prior year period. Changes by business were: (i) Pain Treatments—$19.2 million increase due to volume; (ii) Restorative Therapies—$8.0 million decrease due to the divestiture of our Wound Business and larger volumes in 2023 related to our Vector rehabilitation product, partially offset with an Exogen Bone Stimulation System volume increase; and (iii) Surgical Solutions—$12.7 million increase due to volume growth.
Current wording
Net sales increased $40.5 million, or 12.2%, compared to the prior year period. Changes by business were: (i) Pain Treatments—$27.1 million increase due to volume growth primarily driven by Durolane; (ii) Restorative Therapies—$5.7 million decrease due to the divestiture of our Wound Business and larger volumes in 2023 related to our Vector rehabilitation product, partially offset by larger volumes and higher average selling price related to our Exogen Bone Stimulation System in 2024; and (iii) Surgical Solutions—$19.1 million increase due to volume growth.
Previous wording
Net sales increased compared with the prior year comparable period. There was an increase in Pain Treatments of $1.8 million net sales due to volume growth, partially offset with decrease of $0.9 million in Restorative Therapies due to less volume.
Current wording
Net sales increased compared with the prior year comparable period. The net sales in Pain Treatments increased $3.3 million due to volume growth, partially offset by a decrease of $1.6 million in Restorative Therapies.
Previous wording
Gross profit increased $14.7 million, or 18.5%, primarily due to volume growth in Pain Treatments, Surgical Solutions and our Exogen Bone Stimulation System, partially offset by the Wound Business divestiture. Gross margin increased due to product mix.
Current wording
Gross profit increased $13.7 million, or 19.6%, primarily due to volume growth in Pain Treatments, Surgical Solutions and our Exogen Bone Stimulation System. Gross margin increased due to product mix.
Previous wording
Gross profit decreased $0.2 million, or 1.8%, primarily due to a decline in Restorative Therapies and product mix, partially offset with growth in Pain Treatments.
Current wording
Gross profit increased $1.0 million, or 10.9%, primarily due to growth in Pain Treatments and gross margin slightly increased due to product mix, partially offset with a decline in Restorative Therapies.
Previous wording
Gross profit increased $28.5 million, or 19.7%, primarily due to volume growth in Pain Treatments, Surgical Solutions and our Exogen Bone Stimulation System, partially offset by the Wound Business divestiture. Gross margin increased due to product mix.
Current wording
Gross profit increased $42.3 million, or 19.7%, primarily due to volume growth in Pain Treatments, Surgical Solutions and our Exogen Bone Stimulation System, partially offset by the Wound Business divestiture. Gross margin increased due to product mix.
Previous wording
Gross profit increased $0.4 million, or 2.4%, primarily due to volume growth in Pain Treatments, partially offset with a volume decrease for Restorative Therapies. Gross margin remained consistent with the prior year comparable period.
Current wording
Gross profit increased $1.4 million, or 5.2%, primarily due to volume growth in Pain Treatments, partially offset with a volume decrease for Restorative Therapies. Gross margin slightly increased due to product mix.
Previous wording
Selling, general and administrative expenses increased $17.5 million, or 11.2%, due to increases in: (i) accounting and legal costs of $10.8 million, primarily related to the settlement of shareholder litigation; (ii) equity-based compensation of $7.6 million; and (iii) compensation-related costs of $7.1 million. These increases were partially offset with a decline in consulting expenses of $8.6 million.
Current wording
Selling, general and administrative expenses increased $28.8 million, or 12.8%, due to increases in: (i) compensation-related costs of $14.2 million; (ii) accounting and legal costs of $11.4 million, primarily related to the settlement of shareholder litigation; and (iii) equity-based compensation of $7.9 million. These increases were partially offset with a decline in consulting expenses of $9.1 million.
Previous wording
Research and development increased by $0.6 million, or 17.4%, primarily due to increases in compensation related costs.
Current wording
Research and development increased by $0.8 million, or 26.3%, primarily due to an increase in consulting costs.
Previous wording
Restructuring activity related to our previously announced restructuring plans were completed in 2023. Costs incurred during the three and six months ended July 1, 2023 are primarily the result of an initiative to align the Company’s organizational and management cost structure to improve profitability and cash flow through headcount reduction and cutting third-party related costs.
Current wording
Restructuring activity related to our previously announced restructuring plans were completed in 2023. Costs incurred during the three and nine months ended September 30, 2023 are primarily the result of an initiative to align the Company’s organizational and management cost structure to improve profitability and cash flow through headcount reduction and cutting third-party related costs.
Previous wording
The fair value of contingent consideration during the three and six months ended June 29, 2024 remained consistent with the prior year comparable period. The activity for both periods relates to contingent consideration associated with the acquisition of Bioness in March 2021.
Current wording
Activity relating to the change in fair value of contingent consideration for both periods relates to contingent consideration associated with the acquisition of Bioness in March 2021.
Previous wording
Depreciation and amortization decreased during the three and six months ended June 29, 2024 compared with the prior year comparable period. The decrease was primarily the result of the impairment of intellectual property intangible assets associated with the Wound Business, which was divested during the second quarter of 2023.
Current wording
Depreciation and amortization decreased during the nine months ended September 28, 2024 compared to the prior year comparable period. The decrease was primarily the result of the impairment of intellectual property intangible assets associated with the Wound Business, which was divested during the second quarter of 2023 and the discontinuance of amortization and depreciation on Advanced Rehabilitation Business’ intangible and fixed assets that are classified as held for sale.
Previous wording
Our decision to potentially divest the Advanced Rehabilitation Business in 2024 and divest the Wound Business in 2023 required us to evaluate whether certain of their assets were impaired. We recorded a $31.9 million non-cash impairment charge as a result of the evaluation of the Advanced Rehabilitation Business during the three and six months ended June 29, 2024 and a $78.6 million non-cash impairment charge related to the Wound Business during the six months ended July 1, 2023 as a result of their respective evaluations to reduce the intangible assets to their fair values less costs to sell. The fair value of intangibles for the Advanced Rehabilitation and Wound Businesses were determined based on the consideration offered.
Current wording
Our decision to enter into an agreement to divest the Advanced Rehabilitation Business in 2024 and the divestiture the Wound Business in 2023 required us to evaluate whether certain of their assets were impaired. We recorded a $2.0 million and $33.9 million non-cash impairment charge as a result of the evaluation of the Advanced Rehabilitation Business during the three and nine months ended September 28, 2024, respectively. The $78.6 million non-cash impairment charge during the nine months ended September 30, 2023 related to our Wound Business. Impairments for both transactions resulted from their respective evaluations to reduce intangible assets to their fair values less costs to sell. The fair value of intangibles for the Advanced Rehabilitation and Wound Businesses were determined based on the consideration offered.
Previous wording
The loss on disposals during the three and six months ended July 1, 2023 resulted from working capital adjustments associated with the sale of our Wound Business.
Current wording
Loss on disposals during the three and nine months ended September 30, 2023 resulted from $1.3 million in working capital adjustments associated with the sale of our Wound Business and a $1.1 million loss on fixed assets due to the integration of acquisitions.
Previous wording
Interest expense, net decreased slightly during the three months ended June 29, 2024 compared to the prior year comparable period primarily due to less debt outstanding. Other expense decreased due to reserving miscellaneous assets in 2023, mostly offset with changes in foreign currency.
Current wording
Interest expense, net decreased slightly during the three months ended September 28, 2024 compared to the prior year comparable period primarily due to less debt outstanding. Other (income) expense changed due to fluctuations in foreign currency.
Previous wording
Interest expense, net remained consistent with the prior year comparable period. Other expense (income) decreased $1.3 million due to the 2023 receipt of $1.5 million from the settlement of a legal claim.
Current wording
Interest expense, net decreased slightly during the nine months ended September 28, 2024 compared to the prior year comparable period primarily due to less debt outstanding. Activity for other (income) expense during the nine months ended September 30, 2023 changed $0.2 million due to the 2023 receipt of $1.5 million from the settlement of a legal claim, partially offset with changes in foreign currency.
Previous wording
Income tax expense was incurred for the three and six months ended June 29, 2024 compared to a benefit in the prior year comparable period primarily due to losses in certain entities.
Current wording
The change in rate for the three months ended September 28, 2024 compared to the prior year comparable period was primarily due to losses in certain entities.
Previous wording
Subsequent to the IPO and related transactions, we are the sole managing member of BV LLC in which we owned 80.5% and 79.9% at June 29, 2024 and December 31 2023, respectively. We have a majority economic interest, the sole voting interest in, and control the management of BV LLC. As a result, we consolidate the financial results of BV LLC and report a noncontrolling interest representing the 19.5% that is owned by the Continuing LLC Owner. Noncontrolling interest activity during the three and six months ended June 29, 2024 was the result of losses recorded.
Current wording
Subsequent to the IPO and related transactions, we are the sole managing member of BV LLC in which we owned 80.5% and 80.0% at September 28, 2024 and December 31, 2023, respectively. We have a majority economic interest and the sole voting interest in, and control the management of BV LLC. As a result, we consolidate the financial results of BV LLC and report a noncontrolling interest representing the 19.5% that is owned by the Continuing LLC Owner. Noncontrolling interest activity during the three and nine months ended September 28, 2024 was the result of losses recorded.
Previous wording
Adjusted EBITDA increased $6.9 million, or 27.8%, due to higher gross profit, partially offset with an increase in compensation costs.
Current wording
Adjusted EBITDA increased $0.7 million, or 3.8%, primarily due to higher gross profit, partially offset with an increase in compensation costs and other administrative expenses.
Previous wording
Adjusted EBITDA increased $11.9 million, or 30.2%, primarily due higher gross profit, partially offset with an increase in compensation costs and other administrative expenses.
Current wording
Adjusted EBITDA increased $12.6 million, or 21.6%, primarily due higher gross profit, partially offset with an increase in compensation costs and other administrative expenses.
Previous wording
Our principal liquidity needs have historically been for acquisitions, working capital, research and development, clinical trials, and capital expenditures. We expect these needs to continue as we carry out our operations, develop and commercialize our existing product candidates and any new products candidates and possibly further our expansion into international markets.
Current wording
Our principal liquidity needs have historically been for acquisitions, working capital, research and development, clinical trials, and capital expenditures. We expect these needs to continue as we carry out our operations, develop and commercialize our existing product candidates and any new product candidates and possibly further our expansion into international markets.
Previous wording
We began contract negotiations with a third-party to sell certain products within our advanced rehabilitation business, including the L100, L300 Go, L360, H200, Vector Gait & Safety System and BITS-Bioness Integrated Therapy System (collectively, the “Advanced Rehabilitation Business”). The potential divestiture of the Advanced Rehabilitation Business is expected to simplify our business structure and improve liquidity, as the proceeds, net of transactional fees, are required to be used to reduce long-term debt obligations.
Current wording
On September 30, 2024, we entered into a Purchase Agreement with a third-party purchaser to sell our Advanced Rehabilitation Business. The Advanced Rehabilitation Business is considered non-core and requires additional research and development expenditures to achieve its next stage of growth. The consideration for the transaction includes $25.0 million payable to the purchaser at closing, subject to a post-closing adjustment for net working capital, indebtedness, transaction expenses and cash, and up to an aggregate of $20.0 million in potential Earn-out Payments. The divestiture of the Advanced Rehabilitation Business is expected to close near the end of 2024 or early 2025 and is expected to simplify our business structure and improve liquidity, as the proceeds, net of transactional fees, are required to be used to reduce long-term debt obligations.
Previous wording
We anticipate that to the extent that we require additional liquidity, we will obtain funding through additional equity financings or the incurrence of other indebtedness or a combination of these potential sources of liquidity. We may explore additional divestiture opportunities for non-core assets to improve our liquidity position, as we did with the Wound Business. In addition, we may raise additional funds to finance future cash needs through receivables or royalty financings or corporate collaboration and licensing arrangements. If we raise additional funds by issuing equity securities or convertible debt, our stockholders will experience dilution. The covenants under the Amended 2019 Credit Agreement limit our ability to obtain additional debt financing. Debt financing, if allowed under the Amended 2019 Credit Agreement and if available, would result in increased payment obligations and might involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, or making capital expenditures. If we raise additional funds through collaboration and licensing arrangements with third-parties, it might be necessary to relinquish valuable rights to our products, future revenue streams or product candidates, or to grant licenses on terms that might not be favorable to us. We cannot be certain that additional funding will be available on acceptable terms, or at all.
Current wording
We anticipate that to the extent that we require additional liquidity, we will obtain funding through additional equity financings or the incurrence of other indebtedness or a combination of these potential sources of liquidity. We may explore additional divestiture opportunities for non-core assets to improve our liquidity position, as we did with the Wound Business and our Advanced Rehabilitation Business. In addition, we may raise additional funds to finance future cash needs through receivables or royalty financings or corporate collaboration and licensing arrangements. If we raise additional funds by issuing equity securities or convertible debt, our stockholders will experience dilution. The covenants under the Amended 2019 Credit Agreement limit our ability to obtain additional debt financing. Debt financing, if allowed under the Amended 2019 Credit Agreement and if available, would result in increased payment obligations and might involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, or making capital expenditures. If we raise additional funds through collaboration and licensing arrangements with third-parties, it might be necessary to relinquish valuable rights to our products, future revenue streams or product candidates, or to grant licenses on terms that might not be favorable to us. We cannot be certain that additional funding will be available on acceptable terms, or at all.
Previous wording
We have an outstanding Revolver balance of $15.0 million as of March 30, 2024, which was borrowed and used for working capital needs during the third quarter of 2023.
Current wording
We have an outstanding Revolver balance of $15.0 million as of September 28, 2024, which was borrowed and used for working capital needs.
Previous wording
Cash, cash equivalents and restricted cash as of June 29, 2024 totaled $32.0 million, compared to $37.0 million as of December 31, 2023. The decrease in cash was primarily due to the following:
Current wording
Cash, cash equivalents and restricted cash as of September 28, 2024 totaled $43.1 million, compared to $37.0 million as of December 31, 2023. The increase in cash was primarily due to the following:
Previous wording
Net cash from operating activities from continuing operations decreased $6.3 million, due to: (i) increases in employee compensation as we annually pay bonuses and raise wages during the first quarter and no bonuses were paid during the first quarter of 2023; (ii) a rise in interest payments due to higher interest rates; and (iii) an increase in inventory purchases. These operating cash outflows were partially offset with an increase in cash collections from the growth in sales and timing of payments on accounts payable.
Current wording
Net cash from operating activities from continuing operations increased $12.3 million, due to cash collections from the growth in sales and timing of working capital payments. These operating inflows were partially offset with: (i) increases in employee compensation due to higher bonus payments in 2024 compared to prior year; (ii) an increase in inventory purchases; and (iii) a rise in interest payments.
Previous wording
Net cash from investing activities from continuing operations decreased $31.0 million, due to the $34.9 million receipt of cash resulting from the sale of our Wound Business in 2023 and a $0.7 million purchase of distribution rights for one of our HA products in 2024. These were partially offset with a $4.6 million decrease in capital expenditures, primarily within information technology.
Current wording
Net cash from investing activities from continuing operations decreased $29.0 million, due to the $34.9 million receipt of cash resulting from the sale of our Wound Business in 2023 and a $0.7 million purchase of distribution rights for one of our HA products in 2024. These were partially offset with a $6.6 million decrease in capital expenditures, primarily within information technology.
Previous wording
Cash flows from financing activities increased $22.8 million, primarily due to $29.4 million less in principal and deferred financing payments during 2024, partially offset with $7.0 million in net borrowings on our Revolver during 2023.
Current wording
Net cash flows from financing activities changed $14.9 million, primarily due to $29.4 million less in principal and deferred financing payments during 2024, partially offset with $15.0 million in net borrowings on our Revolver during 2023.