Tenon Medical(TNON) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Condensed Financial Statements (unaudited) The company reports a Q1 net loss of $3.6 million and highlights a going concern uncertainty due to insufficient cash Condensed Balance Sheet Data (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $10,311 | $6,535 | | Total current assets | $11,990 | $8,210 | | Total Assets | $13,394 | $9,843 | | Liabilities & Equity | | | | Total current liabilities | $2,195 | $1,869 | | Total Liabilities | $4,018 | $3,872 | | Total Stockholders' Equity | $9,376 | $5,971 | Condensed Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $726 | $719 | | Gross Profit | $323 | $470 | | Loss from Operations | $(3,677) | $(3,506) | | Net Loss | $(3,616) | $(3,576) | | Net Loss Per Share (Basic and diluted) | $(1.01) | $(10.02) | - During Q1 2025, the company issued common stock and warrants, resulting in net proceeds of $2,735 thousand from an inducement agreement and $3,524 thousand from other offerings[17] - Total stockholders' equity increased to $9,376 thousand as of March 31, 2025, up from $5,971 thousand at December 31, 2024[17] Summary of Cash Flows (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(2,483) | $(2,338) | | Net cash used in investing activities | $0 | $(119) | | Net cash provided by financing activities | $6,259 | $4,371 | | Net Increase in Cash | $3,776 | $1,960 | - The company is a medical device firm focused on its FDA-cleared Catamaran™ SI Joint Fusion System for lower back pain[21] - Management has substantial doubt about the Company's ability to continue as a going concern, as existing cash will not be sufficient to meet obligations for at least twelve months from the filing date[25][26] - In March 2025, the company raised net proceeds of $2.7 million through a warrant inducement transaction and an additional $3.5 million through two securities purchase agreements[43][45][46] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses flat revenue, declining gross margins, and substantial doubt about its going concern status - The company has developed the FDA-approved Catamaran™ SI Joint Fusion System to treat SI Joint dysfunction, a cause of chronic lower back pain[77] - As of March 31, 2025, the company had an accumulated deficit of approximately $72.4 million and has incurred net losses since its inception in 2012[81] - Management states that existing cash and cash equivalents will not be sufficient to fund operating expenses for at least the next 12 months, and they plan to raise additional capital[99] Comparison of Results for the Three Months Ended March 31 (in thousands) | Metric | 2025 | 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $726 | $719 | $7 | 1% | | Cost of goods sold | $403 | $249 | $154 | 62% | | Gross profit | $323 | $470 | $(147) | (31)% | | Gross profit percentage | 44% | 65% | - | - | | Total operating expenses | $4,000 | $3,976 | $24 | 1% | - Sales and marketing expenses increased by 19% due to higher commission, payroll, and consulting fees[95] - General and administrative expenses decreased by 14%, primarily due to lower insurance and stock-based compensation costs[96] - The company had cash and cash equivalents of $10.3 million and an accumulated deficit of $72.4 million as of March 31, 2025[98][99] - Management believes there is substantial doubt in the company's ability to continue as a going concern for the next twelve months due to insufficient capital[101] Cash Flow Summary for Q1 2025 vs Q1 2024 (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in Operating activities | $(2,483) | $(2,338) | | Net cash used in Investing activities | $0 | $(119) | | Net cash provided by Financing activities | $6,259 | $4,371 | Item 3. Quantitative and Qualitative Disclosures About Market Risk The company is exempt from market risk disclosures as a smaller reporting company - Disclosure is not required under Regulation S-K for "smaller reporting companies"[107] Item 4. Controls and Procedures Management concluded disclosure controls were not effective as of March 31, 2025, due to a material weakness - Based on an evaluation as of March 31, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures are not effective at the reasonable assurance level[108] - A material weakness exists due to the company's inability to effectively segregate accounting duties because of its small size and limited resources[109] - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[111] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company reported no legal proceedings during the period - None[113] Item 1A. Risk Factors No material changes to risk factors were reported since the last Annual Report - There have been no material changes in risk factors as previously disclosed in the Annual Report on Form 10-K filed on March 26, 2025[114] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None[115] Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities - None[116] Item 4. Mine Safety Disclosures This item is not applicable to the company - Not Applicable[117] Item 5. Other Information The company reported no other information - None[118] Item 6. Exhibits This section provides an index of all exhibits filed with the Form 10-Q