MEDTECH ACQUISIT(MTAC) - 2025 Q2 - Quarterly Report

Special Note Regarding Forward-Looking Statements Forward-Looking Statements and Risks This section highlights that the Quarterly Report contains forward-looking statements subject to known and unknown risks, uncertainties, and assumptions, cautioning investors against undue reliance and listing factors that could cause actual results to differ materially - The report contains forward-looking statements that are not guarantees of performance and are subject to significant risks and uncertainties[9][10][11] - Key risk factors include the company's ability to raise future financing, service indebtedness, retain key personnel, successfully commercialize products, achieve regulatory approvals, manage operating losses, execute business strategy, protect intellectual property, and navigate unfavorable industry or global economic conditions[12] PART I. FINANCIAL INFORMATION This part presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations Item 1. Financial Statements This item provides TriSalus Life Sciences, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, stockholders' deficit, and cash flows, with explanatory notes Condensed Consolidated Balance Sheets The condensed consolidated balance sheets show a significant increase in total assets and liabilities, primarily driven by cash, long-term debt, and warrant/SEPA liabilities, with the company continuing to report a stockholders' deficit | Metric | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :----------------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $26,490 | $8,525 | | Total current assets | $38,084 | $20,669 | | Total assets | $41,317 | $23,971 | | Total current liabilities | $9,324 | $10,228 | | Long-term debt, net | $32,274 | $22,084 | | Warrant and SEPA liabilities | $9,997 | $8,316 | | Total liabilities | $60,740 | $49,865 | | Total stockholders' deficit | $(19,423) | $(25,894) | Condensed Consolidated Statements of Operations For the three and six months ended June 30, 2025, TriSalus reported increased revenue and gross profit but also higher operating and interest expenses, leading to increased net losses attributable to common stockholders | Metric | Three Months Ended June 30, 2025 ($ thousands) | Three Months Ended June 30, 2024 ($ thousands) | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | | :------------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Revenue | $11,213 | $7,364 | $20,380 | $13,821 | | Cost of goods sold | $1,802 | $912 | $3,297 | $1,883 | | Gross profit | $9,411 | $6,452 | $17,083 | $11,938 | | Research and development | $3,923 | $4,666 | $7,219 | $10,510 | | Sales and marketing | $7,163 | $6,004 | $13,897 | $12,691 | | General and administrative | $5,657 | $3,956 | $10,628 | $8,583 | | Loss from operations | $(7,332) | $(8,174) | $(14,661) | $(19,846) | | Interest expense | $(1,423) | $(877) | $(2,632) | $(880) | | Net loss available to common stockholders | $(8,288) | $(4,332) | $(18,663) | $(17,538) | | Net loss attributable to common stockholders | $(9,002) | $(5,133) | $(20,089) | $(19,140) | | Net loss per common share, basic and diluted | $(0.27) | $(0.21) | $(0.65) | $(0.81) | Condensed Consolidated Statements of Stockholders' Deficit The company's total stockholders' deficit decreased from $(25.9) million at December 31, 2024, to $(19.4) million at June 30, 2025, primarily due to common stock proceeds and stock-based compensation, partially offset by net losses | Metric | At December 31, 2024 ($ thousands) | At June 30, 2025 ($ thousands) | | :-------------------------- | :------------------- | :--------------- | | Additional paid-in capital | $253,652 | $278,786 | | Accumulated deficit | $(279,549) | $(298,212) | | Total stockholders' deficit | $(25,894) | $(19,423) | - Proceeds from the sale of common stock contributed $20.7 million to additional paid-in capital during the six months ended June 30, 2025[23] - Net loss for the six months ended June 30, 2025, was $(18.7) million, increasing the accumulated deficit[20][23] Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, the company significantly reduced cash used in operating activities and saw a substantial increase in cash provided by financing activities, leading to a notable increase in cash and cash equivalents | Activity | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | | :-------------------------------- | :------------------------------- | :------------------------------- | | Net cash used in operating activities | $(11,819) | $(24,289) | | Net cash used in investing activities | $(621) | $(126) | | Net cash provided by financing activities | $30,405 | $29,119 | | Increase in cash, cash equivalents and restricted cash | $17,965 | $4,704 | | Cash, cash equivalents and restricted cash, end of period | $26,840 | $16,831 | - Financing activities in H1 2025 included $22.2 million from common stock issuance and $10.0 million from debt issuance[29] Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures regarding the company's financial statements, covering business nature, accounting policies, business combination, financial instruments, and specific accounts (1) Nature of Business TriSalus Life Sciences, Inc. is an oncology-focused medical technology company developing PEDD™ infusion systems and nelitolimod to improve solid tumor treatment, with a history of operating losses and going concern uncertainties - TriSalus Life Sciences, Inc. (formerly MedTech Acquisition Corporation) completed a merger on August 10, 2023, with Legacy TriSalus deemed the accounting acquirer[31] - The company focuses on oncology, developing Pressure Enabled Drug Delivery (PEDD™) infusion systems and an investigational immunotherapeutic, nelitolimod (a TLR9 agonist), to address high intratumoral pressure and immunosuppression in solid tumors[32][33] - TriNav™ is a key PEDD device, with new HCPCS codes C9797 (effective Jan 1, 2024) and C8004 (effective April 1, 2025) providing reimbursement clarity; new devices like TriNav LV and TriNav FLX were launched in 2024 and June 2025, respectively[34][217][218][219] - The company has a history of recurring operating losses and an accumulated deficit of $298.2 million as of June 30, 2025, raising substantial doubt about its ability to continue as a going concern for the next 12 months without additional financing[37][38][39][46] (2) Summary of Significant Accounting Policies This section outlines the key accounting principles and methods used in preparing the condensed consolidated financial statements, covering basis of presentation, cash, credit risk, receivables, estimates, inventory, property, leases, and various liabilities - The financial statements are prepared in accordance with U.S. GAAP, with certain information condensed or omitted per SEC rules; operating results for the six months ended June 30, 2025, are not indicative of future periods[48] - The company revised previously issued financial statements for the six months ended June 30, 2024, to correct errors related to patent cost capitalization, which were deemed immaterial[49][50][51] - Significant estimates are made for the valuation of warrant liabilities, contingent earnout liability, revenue base redemption liability, clinical expense accruals, and the valuation allowance on deferred tax assets[56] - Revenue is primarily generated from sales of PEDD infusion systems (TriNav) and recognized when control transfers to the customer, typically upon shipment, with rebates recorded as a reduction of revenue[73][75][228][229] - R&D costs, including engineering, regulatory, pre-clinical, and clinical activities, are expensed as incurred[76][233] (3) Business Combination On August 10, 2023, TriSalus Life Sciences, Inc. completed a merger with Legacy TriSalus, involving equity exchange, warrant assumption, PIPE financing for Series A Convertible Preferred Stock, and a Sponsor Earnout subject to stock price targets - The merger between MTAC and Legacy TriSalus was consummated on August 10, 2023, with MTAC renamed TriSalus Life Sciences, Inc. and Legacy TriSalus as the accounting acquirer[31][91] - Existing Legacy TriSalus stockholders exchanged their equity for 21,999,886 shares of Common Stock[92] - A PIPE financing on the closing date resulted in the purchase of 4,015,002 shares of Series A Convertible Preferred Stock for $40.2 million[93] - 3,125,000 Sponsor Earnout Shares were made unvested and subject to forfeiture if specific volume-weighted average price (VWAP) targets ($15.00, $20.00, $25.00, $30.00) are not met within five years of the closing date[94][95] (4) Financial Instruments The company's financial instruments include cash, receivables, payables, and various fair-valued liabilities like warrants, contingent earnout, SEPA, and revenue base redemption, with Level 3 valuations requiring significant judgment - Financial instruments include cash, accounts receivable, trade payables, and liabilities for warrants, contingent earnout, SEPA, and revenue base redemption, with the latter measured at fair value[96][98] - Warrant liabilities (Public, Private Placement, Working Capital) are valued using Level 1 (publicly traded) and Level 2 inputs, while contingent earnout, SEPA, and OrbiMed warrant liabilities use Level 3 (unobservable) inputs[100][105] | Liability Type | Fair Value at Dec 31, 2024 ($ thousands) | Change in Unrealized (Gains) Losses (H1 2025) ($ thousands) | Issuances (H1 2025) ($ thousands) | Fair Value at June 30, 2025 ($ thousands) | | :-------------------------------- | :------------------------- | :------------------------------------------ | :------------------- | :-------------------------- | | Public Warrants - Level 1 | $1,927 | $333 | — | $2,260 | | Private Placement Warrants - Level 2 | $4,872 | $841 | — | $5,713 | | Working Capital Warrants - Level 2 | $1,100 | $190 | — | $1,290 | | Contingent earnout liability - Level 3 | $7,401 | $121 | — | $7,522 | | SEPA derivative liability - Level 3 | $55 | $(52) | — | $3 | | OrbiMed Warrants liability - Level 3 | $362 | $3 | $366 | $731 | | Revenue base redemption liability - Level 3 | $507 | $(149) | — | $358 | - The fair value of OrbiMed Warrants increased from $362K to $731K in H1 2025, partly due to a $366K issuance related to the First Delayed Draw[109] (5) Cash, Cash Equivalents and Restricted Cash As of June 30, 2025, total cash, cash equivalents, and restricted cash significantly increased to $26.8 million from $8.9 million at December 31, 2024, with $350 thousand restricted for a credit card program | Metric | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :------------------------------------------ | :------------ | :---------------- | | Cash and cash equivalents | $26,490 | $8,525 | | Restricted cash (included in Other assets) | $350 | $350 | | Total cash, cash equivalents and restricted cash | $26,840 | $8,875 | (6) Inventory The company's net inventory decreased slightly from $4.0 million at December 31, 2024, to $3.8 million at June 30, 2025, primarily due to reduced finished goods, partially offset by increased raw materials and obsolete inventory reserve | Component | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :------------------------ | :------------ | :---------------- | | Raw materials | $1,674 | $1,338 | | Finished goods | $2,194 | $2,720 | | Reserve for obsolete inventory | $(61) | $(10) | | Inventory, net | $3,807 | $4,048 | (7) Accrued Liabilities Total accrued liabilities decreased from $7.4 million at December 31, 2024, to $7.1 million at June 30, 2025, driven by reductions in clinical trials and incentives, partially offset by increases in general accrued liabilities and payroll | Component | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :-------------------------- | :------------ | :---------------- | | Accrued liabilities - general | $2,230 | $1,850 | | Accrued liabilities - clinical trials | $1,773 | $2,297 | | Accrued incentives | $1,346 | $2,094 | | Accrued payroll | $1,271 | $718 | | Accrued vacation | $400 | $362 | | Accrued taxes | $58 | $34 | | Total accrued liabilities | $7,078 | $7,355 | (8) Contingent Earnout Liability The contingent earnout liability, tied to 3,125,000 Sponsor Earnout Shares, was remeasured to $7.5 million at June 30, 2025, from $7.4 million at December 31, 2024, reflecting changes in common stock price and valuation assumptions - The contingent earnout liability is tied to 3,125,000 Sponsor Earnout Shares, which vest if specific common stock VWAP targets ($15.00, $20.00, $25.00, $30.00) are met within five years of the August 10, 2023 closing date[94][114] | Metric | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :-------------------------- | :------------ | :---------------- | | Fair Value | $7,522 | $7,401 | | Current stock price | $5.45 | $5.01 | | Expected share price volatility | 70.0% | 70.0% | | Risk-free interest rate | 3.7% | 4.3% | | Expected term (years) | 3.11 | 3.61 | - The remeasurement of the liability resulted in a $0.7 million gain for the three months ended June 30, 2025, and a $0.1 million loss for the six months ended June 30, 2025, compared to gains of $13.7 million and $9.7 million for the respective periods in 2024[20][114] (9) Warrants As of June 30, 2025, the company had 7,402,541 total warrants outstanding, including Public, Private Placement, Working Capital, and OrbiMed Warrants, with their fair value increasing due to market price and new issuances | Warrant Type | June 30, 2025 (shares) | December 31, 2024 (shares) | | :-------------------------- | :------------ | :---------------- | | Public Warrants | 1,751,825 | 1,751,825 | | Private Placement Warrants | 4,428,648 | 4,428,648 | | Working Capital Warrants | 1,000,000 | 1,000,000 | | OrbiMed Warrants | 222,068 | 130,805 | | Total warrants | 7,402,541 | 7,311,278 | - The fair value of Public, Private Placement, and Working Capital Warrants increased from $7.9 million at December 31, 2024, to $9.3 million at June 30, 2025, with a $1.4 million unrealized loss recognized[108] - OrbiMed Warrants, classified as derivative liabilities, increased from 130,805 shares at December 31, 2024, to 222,068 shares at June 30, 2025, due to the issuance of Subsequent OrbiMed Warrants in connection with the First Delayed Draw[116][131] - The OrbiMed Warrants are subject to anti-dilution adjustments and can be exercised via cash payment or cashless exercise, with an ownership cap of 9.99%[132][133][134][135] (10) Income Taxes The company uses the asset-and-liability method for income taxes, maintaining a full valuation allowance against net deferred tax assets, resulting in a near-zero effective federal tax rate, and is evaluating the impact of the "One Big Beautiful Bill Act" enacted July 4, 2025 - TriSalus maintains a full valuation allowance against its net deferred tax assets due to cumulative losses, resulting in an immaterial income tax expense and a zero effective federal tax rate for the periods presented[142][143] - The "One Big Beautiful Bill Act," enacted July 4, 2025, which allows for immediate expensing of R&D and permanent extension of certain Tax Cuts and Jobs Act provisions, is currently being evaluated for its impact[144][146] (11) Dynavax Purchase TriSalus acquired nelitolimod from Dynavax in 2020, with potential future payments including development and commercial milestones up to $170 million and $80 million, respectively, plus low double-digit royalties on net sales post-FDA approval - TriSalus purchased nelitolimod (a TLR9 agonist) from Dynavax in 2020, an in-process R&D asset intended to improve therapeutic distribution and outcomes for liver metastases and LA-PDAC when delivered via PEDD devices[147] - The purchase agreement includes potential milestone payments up to $170 million for development achievements and up to $80 million for commercial milestones, plus annual royalties of 10.0%-12.0% on net sales post-FDA approval[148][149] - No payments were made to Dynavax for milestone or royalty payments during the three and six months ended June 30, 2025, and 2024[150] (12) Standby Equity Purchase Agreement In October 2023, TriSalus entered a Standby Equity Purchase Agreement (SEPA) with Yorkville, allowing the sale of up to $30.0 million of common stock over 24 months, accounted for as a fair-valued derivative liability, with no shares sold in H1 2025 - The SEPA with Yorkville grants TriSalus the right, but not the obligation, to sell up to $30.0 million of common stock over 24 months, subject to certain volume and ownership limitations[152] - The SEPA is classified as a derivative liability and measured at fair value, which decreased from $0.1 million at December 31, 2024, to $3.1 thousand at June 30, 2025, resulting in a gain recognized in the statements of operations[109][153][154] - No advances (sales of common stock) were made under the SEPA during the three and six months ended June 30, 2025[153] (13) Debt TriSalus secured a $50.0 million term loan facility with OrbiMed in April 2024, drawing $25.0 million initially and an additional $10.0 million in February 2025, with the debt including a revenue-based redemption feature, premiums, and interest, and the company was in compliance as of June 30, 2025 - TriSalus secured a $50.0 million term loan facility with OrbiMed in April 2024, drawing $25.0 million initially and an additional $10.0 million in February 2025 after achieving a $30.0 million trailing 12-month Product Revenue Base[41][157] - The loan matures on April 30, 2029, with remaining $15.0 million available subject to a $50.0 million revenue target[157][160] - The Credit Agreement includes a revenue-based redemption feature, where repayments commence if the Product Revenue Base falls below specified thresholds; as of June 30, 2025, the company was in compliance[160][161] - Interest is calculated as SOFR (min 4.0%) plus 8.5%, with 3.5% designated as paid-in-kind (PIK) interest until 15 months post-closing; repayment premiums (0-3% plus Make-Whole) and an Exit Fee (4.0%) apply[162][163][164] | Metric | Balance at Dec 31, 2024 ($ thousands) | First Delayed Draw Term Loan Commitment ($ thousands) | Balance at June 30, 2025 ($ thousands) | | :-------------------------------- | :---------------------- | :-------------------------------------- | :----------------------- | | Initial draw | $25,000 | — | $25,000 | | Debt issuance costs (cash & noncash) | $(4,133) | $(887) | $(5,020) | | Amortization of debt issuance costs | $486 | $362 | $848 | | PIK interest | $604 | $584 | $1,188 | | Accretion of exit fee liability | $127 | $131 | $258 | | Balance at period end | $22,084 | $10,000 | $32,274 | (14) Convertible Preferred Stock TriSalus issued 4,015,002 Series A Convertible Preferred Stock shares for $40.2 million in August 2023, accruing 8.00% cumulative dividends, with a conversion price reset to $5.277 on February 10, 2025, and nearly all converted to 11,813,059 common stock shares by July 31, 2025 - 4,015,002 shares of Series A Convertible Preferred Stock were issued on August 10, 2023, for $40.2 million[177] - These shares accrue cumulative annual dividends at 8.00% of the $10.00 original issue price, which can be paid in cash or common stock; total undeclared cumulative dividends were $5.4 million as of June 30, 2025[178][184] - The Series A Preferred Stock is convertible into common stock, with the conversion price reset to $5.277 on February 10, 2025[179][186] - An offer initiated in June 2025 resulted in the conversion of approximately 98.8% of Series A Convertible Preferred Stock into 11,813,059 common stock shares by July 31, 2025[190][225] (15) Net Loss Per Share Basic and diluted net loss per common share were identical for the six months ended June 30, 2025, and 2024, as net losses rendered all potentially dilutive securities anti-dilutive, with 39.6 million common stock equivalents excluded as of June 30, 2025 - Due to net losses, basic and diluted net loss per common share are identical, as all potentially dilutive securities (preferred stock, warrants, RSUs, PSUs, stock options, SEPA shares) are anti-dilutive[191] | Security Type | June 30, 2025 (shares) | June 30, 2024 (shares) | | :-------------------------- | :------------ | :------------ | | Preferred stock | 22,590,869 | 25,237,155 | | Common stock warrants | 7,402,541 | 14,345,917 | | RSUs and PSUs | 671,803 | 544,988 | | Options to purchase common stock | 5,434,039 | 4,866,070 | | Shares issuable under the SEPA | 3,468,998 | 4,510,704 | | Total | 39,568,250 | 49,504,834 | - Following a July 2025 offer, preferred stock will be fully converted to common stock and will no longer be considered a potentially dilutive security[192] (16) Share-Based Compensation TriSalus maintains the 2023 Equity Incentive Plan and previously the 2009 Plan, with 6,105,842 total awards outstanding as of June 30, 2025, and $11.1 million in unrecognized compensation expense to be recognized over 2.7 years - The company operates the 2023 Equity Incentive Plan (with 5,178,075 shares available for issue) and the frozen 2009 Plan, granting stock options, RSUs, and PSUs[196][197][198][200] - As of June 30, 2025, total outstanding awards were 6,105,842 (1,206,450 under 2009 Plan, 4,899,392 under 2023 Plan)[197] - Unrecognized compensation expense totaled $11.1 million ($0.4 million for 2009 Plan, $10.7 million for 2023 Plan), to be recognized over a weighted average period of 2.7 years[199][201] - The ESPP, active since 2024, saw 49,939 shares purchased during the six months ended June 30, 2025, with authorized shares increasing to 3,303,948[204][206] (17) Commitments And Contingencies TriSalus accrues for probable and estimable contingent liabilities, has no pending material legal claims, and holds $2.1 million in lease obligations, plus potential future milestone and royalty payments to Dynavax up to $238 million for nelitolimod - The company is not currently a party to any material legal proceedings and is unaware of any pending or threatened claims that could materially adversely affect its financial position[207][209] - Contractual obligations as of June 30, 2025, include $2.1 million in lease obligations[273] - Potential future payments to Dynavax for nelitolimod include up to $158 million for development and regulatory milestones and up to $80 million for commercial milestones, plus low double-digit royalties on net sales[274] (18) Leases TriSalus has two operating property leases in Westminster, CO (expiring Dec 2031) and Bannockburn, IL (expiring Jan 2028), with extension options, plus two finance leases for copier equipment, and extended the Westminster lease in July 2024 for $1.5 million in additional rent - The company has two operating property leases: Westminster, CO (expires Dec 2031) and Bannockburn, IL (expires Jan 2028), both with extension options[210][212] - In July 2024, the Westminster facility lease was extended for an additional five years (Jan 2027 - Dec 2031), with approximately $1.5 million in rent over the extended term[211] - Two finance leases are in place for copier equipment[210] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and results of operations, discussing revenue, expenses, liquidity, capital resources, and performance factors for the three and six months ended June 30, 2025, compared to 2024 Overview TriSalus is an oncology-focused medical technology company transforming solid tumor treatment with PEDD™ infusion systems and nelitolimod, expanding its portfolio with new TriNav devices and initiating a registry study for thyroid disease, potentially adding a $400 million market opportunity - TriSalus is an oncology-focused medical technology company integrating PEDD infusion systems with standard-of-care therapies and nelitolimod to improve outcomes for solid tumors by addressing delivery and immunosuppression barriers[215][216] - Key products include TriNav™ Infusion System, TriNav LV Infusion System, TriGuide Guiding Catheter, and the newly launched TriNav FLX, designed to optimize therapeutic delivery across various vessel sizes and anatomies[217][218][219] - The company initiated the PROTECT registry study for thyroid disease, which could expand the addressable market by approximately 50,000 procedures, representing an incremental $400.0 million market opportunity[219] - Phase I clinical trials for nelitolimod (UMLM, LA-PDAC, ICC/HCC) have been completed or are nearing data availability, with plans to seek pharmaceutical partners for further development[220] Factors Affecting Our Performance The company's performance is significantly influenced by TriNav market acceptance and growth, ability to maintain pricing and gross margins, success and cost of nelitolimod clinical trials, FDA approval, and critical reimbursement rates post-TPT payments - Performance is dependent on the continued market acceptance and growth of TriNav, competing with other technologies, and the sales force's ability to drive adoption[221] - Maintaining TriNav's current pricing and high gross margins is crucial for funding growth and R&D; the expiration of TPT payments and reliance on new HCPCS codes for reimbursement pose risks to revenue and profitability[221] - The success, cost, and regulatory approval (FDA) of nelitolimod's Phase I clinical trials are significant factors, with no guarantee of favorable data or approval[221] Recent Developments Recent developments include an April 2025 private placement raising $22.0 million from 5,500,000 common stock shares, a June 2025 offer converting 98.8% of Series A Convertible Preferred Stock into 11,813,059 common stock shares by July 31, 2025, and evaluation of the "One Big Beautiful Bill Act" enacted in July 2025 - In April 2025, TriSalus completed a private placement, selling 5,500,000 common stock shares at $4.00 per share, generating approximately $22.0 million in gross proceeds[222][224] - An offer initiated in June 2025 resulted in the conversion of approximately 98.8% of Series A Convertible Preferred Stock into 11,813,059 common stock shares by July 31, 2025[225] - The "One Big Beautiful Bill Act," enacted July 4, 2025, which allows immediate expensing of R&D and extends certain tax provisions, is currently being evaluated for its impact on the company's financial statements[226] Components of Results of Operations This section details the components of the Condensed Consolidated Statements of Operations, including revenue, cost of goods sold, gross profit, operating expenses, changes in fair value for various liabilities, and income tax expense - Revenue is primarily from sales of PEDD infusion systems (TriNav) to hospitals, clinics, and physicians, recognized upon transfer of control, with rebates recorded as a reduction[228][229] - Cost of goods sold includes raw materials, direct labor, manufacturing overhead, and depreciation related to TriNav production[230] - Operating expenses comprise R&D (expensed as incurred), sales and marketing (salaries, commissions, promotions), and general and administrative (executive, finance, IT, HR, legal, public company costs)[232][233][234][235] - Changes in fair value of SEPA, warrant, revenue base redemption, and contingent earnout liabilities are recognized in the statements of operations, reflecting remeasurements of these derivative instruments[236][237] - The company maintains a full valuation allowance for federal and state deferred tax assets, resulting in an income tax provision primarily consisting of U.S. federal and state income taxes[238] Results of Operations This section provides a detailed comparison of the company's financial performance for the three and six months ended June 30, 2025, versus 2024, highlighting changes in revenue, cost of goods sold, gross profit, operating expenses, interest expense, and fair value adjustments of liabilities Comparison of the Three Months Ended June 30, 2025, and 2024 For the three months ended June 30, 2025, revenue increased by 52.3% to $11.2 million, gross profit rose by 45.9% to $9.4 million, R&D decreased by 15.9%, while sales and marketing and G&A increased by 19.3% and 43.0%, respectively, leading to a net loss of $(9.0) million | Metric | 2025 ($ thousands) | 2024 ($ thousands) | Change ($ thousands) | Change (%) | | :------------------------------------------ | :----- | :----- | :--------- | :--------- | | Revenue | $11,213 | $7,364 | +$3,849 | +52.3% | | Cost of goods sold | $1,802 | $912 | +$890 | +97.6% | | Gross profit | $9,411 | $6,452 | +$2,959 | +45.9% | | Gross margin | 83.9% | 87.6% | -3.7 pp | -4.2% | | Research and development | $3,923 | $4,666 | -$743 | -15.9% | | Sales and marketing | $7,163 | $6,004 | +$1,159 | +19.3% | | General and administrative | $5,657 | $3,956 | +$1,701 | +43.0% | | Interest expense | $(1,423) | $(877) | -$546 | +62.3% | | Change in fair value of SEPA, warrant, and revenue base redemption liabilities | $(330) | $(9,016) | +$8,686 | -96.3% | | Change in fair value of contingent earnout liability | $700 | $13,689 | -$12,989 | -94.9% | | Net loss attributable to common stockholders | $(9,002) | $(5,133) | -$3,869 | +75.4% | Comparison of the Six Months Ended June 30, 2025 and 2024 For the six months ended June 30, 2025, revenue increased by 47.5% to $20.4 million, gross profit rose by 43.1% to $17.1 million, R&D decreased by 31.3%, while sales and marketing and G&A increased by 9.5% and 23.8%, respectively, leading to a net loss of $(20.1) million | Metric | 2025 ($ thousands) | 2024 ($ thousands) | Change ($ thousands) | Change (%) | | :------------------------------------------ | :----- | :----- | :--------- | :--------- | | Revenue | $20,380 | $13,821 | +$6,559 | +47.5% | | Cost of goods sold | $3,297 | $1,883 | +$1,414 | +75.1% | | Gross profit | $17,083 | $11,938 | +$5,145 | +43.1% | | Gross margin | 83.8% | 86.4% | -2.6 pp | -3.0% | | Research and development | $7,219 | $10,510 | -$3,291 | -31.3% | | Sales and marketing | $13,897 | $12,691 | +$1,206 | +9.5% | | General and administrative | $10,628 | $8,583 | +$2,045 | +23.8% | | Interest expense | $(2,632) | $(880) | -$1,752 | +199.1% | | Change in fair value of SEPA, warrant, and revenue base redemption liabilities | $(1,165) | $(6,495) | +$5,330 | -82.1% | | Change in fair value of contingent earnout liability | $(120) | $9,701 | -$9,821 | -101.2% | | Net loss attributable to common stockholders | $(20,089) | $(19,140) | -$949 | +5.0% | Liquidity and Capital Resources TriSalus continues to incur significant net losses and relies on external financing, with $26.5 million in cash as of June 30, 2025, and despite recent capital raises, existing cash may be insufficient for the next 12 months, raising substantial doubt about its going concern ability - TriSalus incurred net losses of $18.7 million for the six months ended June 30, 2025, and has an accumulated deficit, indicating a need for additional capital[258] - As of June 30, 2025, cash and cash equivalents were $26.5 million[258] - The company raised $22.0 million gross proceeds from a private placement and drew an additional $10.0 million from the OrbiMed Credit Agreement in H1 2025[259][264] - Management estimates existing cash and cash equivalents are insufficient to fund projected liquidity requirements for the next 12 months, raising substantial doubt about the company's ability to continue as a going concern[259][272] Cash Flows For the six months ended June 30, 2025, net cash used in operating activities significantly decreased to $11.8 million from $24.3 million, while net cash provided by financing activities increased to $30.4 million, leading to a substantial increase in overall cash | Activity | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | | :-------------------------------- | :------------------------------- | :------------------------------- | | Net cash used in operating activities | $(11,819) | $(24,289) | | Net cash used in investing activities | $(621) | $(126) | | Net cash provided by financing activities | $30,405 | $29,119 | | Increase in cash, cash equivalents and restricted cash | $17,965 | $4,704 | - Operating cash outflow decreased due to lower net loss and non-cash charges like stock-based compensation ($3.5M), warrant/SEPA liabilities ($1.3M), and debt expenses ($1.1M)[261] - Financing cash inflow was primarily from $20.5 million (net) from the April 2025 Private Placement and $9.5 million (net) from the First Delayed Draw under the OrbiMed Credit Agreement[264] Funding Requirements TriSalus anticipates significant future funding requirements for operating expenses, TriNav commercialization, and nelitolimod R&D, with capital needs dependent on market adoption, reimbursement, clinical outcomes, regulatory approvals, and intellectual property costs - Primary cash uses include operating expenses (sales & marketing, R&D, G&A) and future commercialization expenses for product candidates[266] - Future capital requirements are dependent on TriNav's commercial success, reimbursement rates, nelitolimod's clinical trial outcomes and FDA approval, ability to draw remaining OrbiMed debt, and IP costs[267] - The company expects to finance needs through securities offerings, debt, collaborations, or licensing, which may lead to dilution or unfavorable terms and are subject to debt covenants[268][269] - Failure to raise additional capital could force delays, reductions, or termination of product development or commercialization efforts[269] Contractual Obligations and Commitments As of June 30, 2025, TriSalus has $2.1 million in lease obligations and potential future milestone and royalty payments to Dynavax for nelitolimod, totaling up to $238 million for development, regulatory, and commercial milestones - Lease obligations totaled $2.1 million as of June 30, 2025[273] - Potential future payments to Dynavax for nelitolimod include up to $158 million for development and regulatory milestones and up to $80 million for commercial milestones, along with low double-digit royalties on net sales[274] Off-Balance Sheet Arrangements TriSalus did not have any off-balance sheet financing arrangements or relationships with unconsolidated entities or financial partnerships during the periods presented, nor does it currently - The company has no off-balance sheet financing arrangements or relationships with unconsolidated entities or financial partnerships[275] Critical Accounting Policies and Estimates No significant changes occurred in TriSalus's critical accounting policies during the six months ended June 30, 2025, compared to the Annual Report on Form 10-K for December 31, 2024, with these policies involving significant judgment and estimates - No significant changes occurred in critical accounting policies during the six months ended June 30, 2025[276] - Critical accounting policies require significant judgment and estimates, and actual results may differ from these estimates[276] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, TriSalus is not required to provide quantitative and qualitative disclosures about market risk - TriSalus is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[277] Item 4. Controls and Procedures TriSalus's management concluded that disclosure controls and procedures were not effective as of June 30, 2025, due to identified material weaknesses in accounting significant transactions, Business Combination accounting, liability valuation, stock-based compensation, and IT security management, with remediation efforts ongoing - As of June 30, 2025, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were not effective at the reasonable assurance level[279] - Material weaknesses in internal control over financial reporting were identified, including insufficient trained resources for accounting significant transactions (SEPA, Exchange Warrants, OrbiMed Credit Agreement), inadequate controls over Business Combination accounting, valuation of warrant/tranche rights and revenue base redemption liability, stock-based compensation assumptions, and IT security management[280][281][282][285] - Remediation plans are underway, involving hiring additional trained resources, designing and enforcing segregation of duties, reviewing accounting estimates, and engaging outside expert consultants[283] - No other changes in internal control over financial reporting materially affected or are reasonably likely to materially affect internal control during the three months ended June 30, 2025, beyond the identified material weaknesses and remediation efforts[284] PART II. OTHER INFORMATION This part provides additional information including legal proceedings, risk factors, equity sales, defaults, mine safety, other disclosures, and exhibits Item 1. Legal Proceedings TriSalus is not currently a party to any material legal proceedings and is unaware of any pending or threatened claims that could materially adversely affect its business or financial position - The company is not involved in any material legal proceedings and is unaware of any pending or threatened claims that could materially adversely affect its business or financial condition[287] Item 1A. Risk Factors No material changes to the risk factors previously identified in the company's Annual Report on Form 10-K for December 31, 2024, have occurred, and these factors continue to represent significant risks - No material changes to risk factors have occurred since the Annual Report on Form 10-K for the year ended December 31, 2024[288] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities or use of proceeds to report for the period - No unregistered sales of equity securities or use of proceeds to report[289] Item 3. Defaults Upon Senior Securities There were no defaults upon senior securities to report for the period - No defaults upon senior securities to report[289] Item 4. Mine Safety Disclosures This item is not applicable to the company - Mine Safety Disclosures are not applicable to the company[289] Item 5. Other Information There is no other information to report for the period - No other information to report[289] Item 6. Exhibits This section lists all exhibits filed as part of the Form 10-Q, including amendments to certificates, employment agreements, Sarbanes-Oxley Act certifications, and XBRL instance documents - The report includes various exhibits such as Certificate of Amendment to Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock, Executive Employment Agreement, Sign-on Bonus Agreement, Consulting Agreement, and certifications pursuant to the Sarbanes-Oxley Act[290] Signatures This section contains the official signatures certifying the submission of the report Report Signatures The report is signed on behalf of TriSalus Life Sciences, Inc. by David Patience, Chief Financial Officer, on August 12, 2025, certifying its submission pursuant to the Securities Act - The report was signed by David Patience, Chief Financial Officer of TriSalus Life Sciences, Inc., on August 12, 2025[292][293]