Joe Army - President and CEO Marie Thibault - BTIG Good afternoon, and thank you for joining us for the Vapotherm third quarter 2023 financial results conference call. Joining us on today's call are Vapotherm's President and Chief Executive Officer, Joe Army; and its Senior Vice President and Chief Financial Officer, John Landry. This call is being webcast live and recorded. A replay of the event will be available following the call on our website. To access the webcast, please visit the Events link in the ...

Financial Performance - Net revenue for Q3 2023 was $15,167,000, an increase of 12% compared to $13,545,000 in Q3 2022[20] - The net loss for Q3 2023 was $15,130,000, a reduction from a net loss of $26,201,000 in Q3 2022, indicating improved financial performance[20] - The company reported a net loss of $48,008,000 for the nine months ended September 30, 2023, compared to a net loss of $91,822,000 for the same period in 2022, indicating a 47.8% improvement in losses year-over-year[31] - Adjusted non-GAAP net revenue increased by $2.3 million, or 17.6%, for Q3 2023 compared to the same period in 2022[181] - The company expects to incur net losses for the next several years and may require additional funding[182] Revenue Breakdown - Product revenue for the three months ended September 30, 2023 was $13.060 million, up from $10.856 million in the same period of 2022, reflecting a growth of 20.2%[152] - Revenue from single-use disposables represented approximately 70.5% of net revenue for the nine months ended September 30, 2023, increasing by 7.0% year over year[186] - Capital equipment revenue increased by 35.7% in Q3 2023 due to higher sales volume and average sale prices from the next generation HVT 2.0 platform[184] - Net revenue generated in the United States increased by $0.2 million, or 1.5%, to $11.2 million for Q3 2023[185] - International net revenue increased by $1.5 million, or 58.6%, to $3.9 million for Q3 2023[185] Cost Management - Gross profit for Q3 2023 was $6,013,000, significantly up from $1,863,000 in Q3 2022, reflecting improved cost management[20] - Gross profit as a percentage of revenue increased to 39.6% in Q3 2023 compared to 13.8% in Q3 2022[191] - Cost of revenue decreased by $2.5 million, or 21.6%, to $9.2 million in Q3 2023 compared to $11.7 million in Q3 2022[189] - Research and development expenses for Q3 2023 were $3,132,000, down from $4,382,000 in Q3 2022, reflecting a strategic focus on cost control[20] - Sales and marketing expenses decreased by $3.5 million, or 30.5%, to $8.0 million in Q3 2023 compared to Q3 2022, representing 52.5% of revenue[195] Assets and Liabilities - Total current assets decreased to $49,154,000 as of September 30, 2023, down from $59,901,000 at the end of 2022, primarily due to a reduction in inventories[16] - Total liabilities increased to $128,100,000 as of September 30, 2023, compared to $124,385,000 at the end of 2022, driven by higher long-term loans payable[16] - The accumulated deficit increased to $538,010,000 as of September 30, 2023, compared to $490,002,000 at the end of 2022, reflecting ongoing operational losses[16] - The company’s total stockholders' deficit was $47,496,000 as of September 30, 2023, compared to $28,190,000 at the end of 2022, highlighting financial challenges[16] Cash Flow and Liquidity - Cash and cash equivalents decreased to $14,418,000 as of September 30, 2023, from $15,738,000 at the end of 2022, indicating tighter liquidity[16] - The company reported a net cash used in operating activities of $20,347,000 for the nine months ended September 30, 2023, compared to $69,265,000 in the same period of 2022, reflecting a significant reduction in cash burn[31] - The company reported a net cash used in operating activities of $3.0 million and $19.1 million for the three and nine months ended September 30, 2023, respectively, a significant decrease from $19.1 million and $69.3 million for the same periods in 2022[176] - The net decrease in cash, cash equivalents, and restricted cash was $1.3 million in the first nine months of 2023[212] - The company anticipates that its cash and working capital will be sufficient to meet capital requirements for at least the next 12 months[211] Stock and Financing Activities - The company completed a private placement on February 10, 2023, raising approximately $23.0 million in gross proceeds by issuing 2,187,781 shares of common stock and accompanying warrants[39] - The company executed a reverse stock split at a ratio of 1-for-8, reducing issued and outstanding shares from approximately 49,081,000 to 6,135,000 shares[41][42] - As of September 30, 2023, the outstanding balance under the Fifth Amended SLR Loan Agreement was $106.9 million, with an interest rate of 14.73%[123] - The Company paid interest in-kind totaling $2.4 million and $7.0 million during the three and nine months ended September 30, 2023, respectively[123] - The company granted SLR warrants to purchase a total of 66,990 shares of common stock in the third quarter of 2023, valued using the Black-Scholes pricing model[101] Operational Developments - The company exited the Vapotherm Access call center business in the fourth quarter of 2022 as part of its path to profitability[37] - The company has treated over 4.1 million patients with its High Velocity Therapy systems, with a global installed base of over 37,400 units, reflecting a 3.1% increase compared to September 30, 2022[174] - The company has established a Technology Center in Singapore to enhance its research and development capabilities and reduce costs[176] - The company received FDA clearance for expanded respiratory distress indications for its HVT 2.0 platform in December 2022, which is cleared for therapy in multiple care settings[174] Impairments and Restructuring - The company recognized an impairment charge of $14.7 million for the Vapotherm Access reporting unit during the second quarter of 2022, with no impairments of goodwill during the three or nine months ended September 30, 2023[111] - The Company incurred restructuring expenses of approximately $0.8 million and $1.0 million for the three and nine months ended September 30, 2023, related to impairments of right-of-use assets and termination benefits[138] - The Company recognized impairment charges of $0.8 million and $0.9 million for the Domain Sublease asset group during the three and nine months ended September 30, 2023, respectively[139]

Customers are clearly seeing the value of HVT 2.0, it's intuitive, easy to use, and since it has its own air source can be used throughout the hospital. As a result, our HVT 2.0 pipeline is strong, especially given existing customer demand to upgrade their Precision Flow fleets. Our disposables revenue increased by 38% compared to 2Q, 2022, but came in below our expectations as U.S. DPC turn rates did not recover as quickly as expected. Before turning the call over to John, I wanted to provide an update on ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission File Number: 001-38740 Vapotherm, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of inc ...

Company Participants John Landry - Senior Vice President and CFO Zachary Day - Canaccord Genuity Operator Mark Klausner This call will also include references to certain financial measures that are not calculated in accordance with generally accepted accounting principles or GAAP. We generally refer to these as non-GAAP financial measures. Reconciliations of the historical non-GAAP financial measures to the most comparable measures calculated and presented in accordance with GAAP are available in the earnin ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Exact name of registrant as specified in its charter) FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission File Number: 001-38740 Vapotherm, Inc. (State or other jurisdiction of in ...

On the gross margin front, most of the significant structural changes have been made, our relocation to Mexico is complete and now we are going to return to executing our gross margin improvement plan, including ASP uplift, direct material and labor cost reductions, and greater overhead cost absorption. Operator Mark Klausner - ICR Westwicke, IR Operator Before we begin, I would like to remind everyone that our remarks and responses to your questions today may contain forward-looking statements. These state ...

Revenue Performance - Revenue decreased to $66.8 million for the year ended December 31, 2022, down from $113.3 million in 2021, primarily due to lower hospitalizations from COVID-19[27] - Revenue from single-use disposables represented approximately 69.4% of total revenues for 2022, a decrease of 30.4% year-over-year[27] - The company had 67 full-time employees in the U.S. market and 27 in international markets as of December 31, 2022, with 78.7% of revenue derived from the U.S.[82] Market Potential and Product Adoption - The annual total addressable market for High Velocity Therapy technology is now estimated to exceed $8.3 billion, reflecting growth in patient numbers and expanded product use[21] - More than 3.8 million patients have been treated with High Velocity Therapy systems, with a global installed base of over 36,700 units, an increase of 4.4% from 2021[16] - The company has sold High Velocity Therapy systems to over 2,400 hospitals in the U.S. and over 50 countries globally[26] Cost Savings and Efficiency - The average cost for a stay in the ICU in the United States is $21,547 per week, highlighting potential cost savings by reducing ICU transfers[18] - A multicenter utilization study indicated that 54% of patients treated with High Velocity Therapy could be transferred to general care floors instead of being admitted to the ICU, potentially reducing ICU costs averaging $21,547 per week[43] - The use of High Velocity Therapy technology resulted in an estimated savings of $3,750 per patient by avoiding ICU admission[79] Product Development and Regulatory Approvals - The HVT 2.0 platform received FDA clearance for expanded respiratory distress indications in December 2022, enhancing its market position[25] - The next generation HVT 2.0 system received FDA clearance in 2021 and supports patients outside of hospital settings, enhancing market reach[52] - The company is seeking FDA approval for the Oxygen Assist Module, which has received Breakthrough Device Designation for on-demand titration of oxygen[56] Compliance and Regulatory Environment - The company’s products are subject to extensive regulation by the FDA and other authorities, ensuring safety and effectiveness for intended uses[100] - Compliance with federal, state, and foreign laws is essential to avoid fraud and abuse allegations, which could affect business practices[124] - The company is subject to U.S. federal healthcare fraud and abuse laws, including the Anti-Kickback Statute and the False Claims Act, which could lead to severe penalties if violated[125] Financial Management and Risks - Borrowings under the Third Amended SLR Loan Agreement totaled $100.0 million, with an interest rate of 12.58% as of December 31, 2022[171] - A 100 basis point increase in the annual interest rate on outstanding borrowings would result in a $1.0 million increase in annual interest expense[171] - Third-party payors are increasingly reducing reimbursements, which may negatively affect product demand and pricing, impacting the company's financial condition[123] Employee Engagement and Company Culture - Approximately 76% of the company's team has equity in the company, promoting an ownership culture[166] - The company has implemented various employee development programs, including mentorship and leadership development initiatives[164] - The company has received recognition as "Best Company to Work For" every year through 2021 since 2016[160] International Expansion and Market Strategy - As of December 31, 2022, the company partnered with 42 distributors in 44 countries to expand its international business, focusing on established markets with growth potential[87] - The company utilizes a digital marketing platform to educate international clinicians, focusing primarily on the United Kingdom[87] - The sales strategy focuses on increasing the utilization of High Velocity Therapy systems through direct sales and building relationships with clinicians across various care settings[83] Inflation and External Factors - The company experienced inflationary pressures on transportation and commodities costs during the year ended December 31, 2022, which are expected to continue into 2023[481] - External factors such as adverse weather conditions, supply chain disruptions, and labor shortages have impacted transportation and commodities costs[481] - There is uncertainty regarding the ability to pass on increased costs to customers without affecting volume, revenue, margins, and operating results[481]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission File Number: 001-38740 Vapotherm, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of inc ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission file number: 001-38740 Vapotherm, Inc. (Exact name of registrant as specified in its charter) Delaware 46-2259298 (State or othe ...