Financial Performance - For the three months ended September 30, 2023, the company reported revenue of $3,728,816, a significant increase compared to the previous year[165]. - Gross profit for the same period was $2,184,990, reflecting a strong performance in revenue generation[165]. - The company incurred a loss from operations of $5,137,373, compared to a loss of $851,923 in the same period last year, indicating increased operational challenges[165]. - Net loss before taxes for the quarter was $11,464,769, which is a decline of $5,397,467 compared to the previous year[165]. - Revenue for the nine months ended September 30, 2023, was $3,728,816, reflecting a significant increase compared to the previous year[175]. - Gross profit for the same period was $2,184,990, indicating a strong performance in the company's commercial activities[175]. - The company reported a net loss of $18,602,436 for the nine months ended September 30, 2023, compared to a loss of $5,936,114 in the same period of 2022[175]. Operating Expenses - Total operating expenses reached $7,322,363, an increase of $6,470,440 from the previous year, primarily driven by research and development and selling and marketing expenses[165]. - Total operating expenses for the nine months ended September 30, 2023, were $10,084,618, up from $7,364,979 in 2022, primarily due to the inclusion of AxBio's expenses[179]. - Research and development expenses increased to $3,235,888 for the nine months ended September 30, 2023, compared to $1,554,602 in 2022, driven by clinical expenses related to Legacy Carmell's BHA product[180]. - Selling and marketing expenses were $3,069,520 for the nine months ended September 30, 2023, reflecting the inclusion of AxBio's costs from August 9, 2023[181]. - Restructuring efforts are expected to yield annual savings of $2,000,000 to $3,000,000 by reducing operating expenses through workforce reductions[192]. Cash and Financing - The company has approximately $7,900,000 in cash and cash equivalents as of September 30, 2023, with an accumulated deficit of approximately $61,171,378[163]. - Cash as of September 30, 2023, was $7,968,502, a significant increase from $128,149 at the end of 2022[186]. - Net cash provided by financing activities increased to $12,411,625 for the nine months ended September 30, 2023, compared to $1,131,631 for the same period in 2022, primarily due to proceeds of $31,050,882 from a Business Combination[197]. Acquisitions and Strategic Changes - The company completed the AxBio Acquisition on August 9, 2023, issuing 3,845,337 shares of common stock and 4,243 shares of Series A Preferred Stock as part of the transaction[154]. - The AxBio Acquisition included up to $8,000,000 in cash and performance-based earn-out considerations totaling up to $66,000,000 in shares of common stock[152]. - A strategic realignment led to the resignation of several executive officers, including the CEO, to streamline operations post-acquisition[158]. Future Plans - The company plans to launch a new line of skin care products in the first quarter of 2024, focusing on aesthetic products with near-term commercial potential[160]. - The company expects continued revenue erosion in Q4 2023 due to uncertainty regarding Medicare reimbursements, which constitute the majority of its revenue stream[178]. - The company plans to launch a line of skin care products in Q1 2024 based on its research and development activities[189]. Legal and Compliance - The company is facing a legal complaint asserting damages totaling $2,725,484 related to breaches of obligations under Convertible Notes and Warrants[198]. - As of September 30, 2023, the company reported no off-balance sheet arrangements[200]. - The company qualifies as an "emerging growth company" and has opted to adopt new accounting standards at the same time as private companies[202]. - The company is classified as a "smaller reporting company," with a market value of stock held by non-affiliates expected to be less than $700 million and annual revenue below $100 million[203].
ALPHA HEALTHCARE(ALPA) - 2023 Q3 - Quarterly Report