AVITA Medical(US:RCEL)2025-11-06 21:18Financial Performance - Total revenues for the three months ended September 30, 2025, were $17,062,000, a decrease of 12.7% compared to $19,546,000 for the same period in 2024[18]. - Net loss for the three months ended September 30, 2025, was $13,187,000, compared to a net loss of $16,205,000 for the same period in 2024, representing a 18.6% improvement[21]. - Gross profit for the nine months ended September 30, 2025, was $44,505,000, an increase of 14.0% from $39,031,000 for the same period in 2024[18]. - Total revenues for the nine months ended September 30, 2025, increased by 18% to $54.0 million compared to $45.8 million in the same period last year, driven by deeper market penetration and new accounts[158]. - Commercial revenue from the RECELL product was $15,427,000 for the three months ended September 30, 2025, compared to $19,059,000 for the same period in 2024, indicating a decline of about 19.3%[108]. - The Company recorded a net loss of $13,187,000 for the three months ended September 30, 2025, compared to a net loss of $16,205,000 for the same period in 2024, showing an improvement in loss[108]. - The Company’s basic net loss per share for the three months ended September 30, 2025, was $(0.46), an improvement from $(0.62) in the same period of 2024[126]. Operating Expenses - Operating expenses for the three months ended September 30, 2025, totaled $23,028,000, down from $30,162,000 in the same period of 2024, reflecting a 23.5% reduction[18]. - General and administrative expenses decreased by 25% to $7.2 million for the three months ended September 30, 2025, compared to $9.6 million in the prior year[154]. - General and administrative expenses decreased by 22%, or $5.8 million, to $20.3 million compared to $26.1 million in the same period last year[162]. - Research and development expenses decreased by 2%, or $0.4 million, to $15.1 million compared to $15.5 million in the same period last year[163]. - The company’s stock-based compensation for the nine months ended September 30, 2025, was $8.146 million, compared to $10.698 million in the same period of 2024, indicating a reduction in compensation expenses[28]. - Stock-based payment expenses for the three months ended September 30, 2025, totaled $2.783 million, a decrease from $4.080 million for the same period in 2024[122]. Cash Flow and Liquidity - Cash and cash equivalents increased to $15,422,000 as of September 30, 2025, compared to $14,050,000 as of December 31, 2024[16]. - The company utilized $25.757 million in cash for operating activities during the nine months ended September 30, 2025, a decrease from $40.858 million used in the same period of 2024, indicating improved cash flow management[28]. - The company reported cash, cash equivalents, and marketable securities totaling $23.3 million as of September 30, 2025, providing a liquidity buffer for ongoing operations[34]. - As of September 30, 2025, the company had approximately $15.4 million in cash and cash equivalents and $7.9 million in marketable securities[165]. - The company completed a private placement on August 12, 2025, raising $14.8 million, which will be used for working capital requirements[166]. - Net cash used in operating activities was $25.8 million for the nine months ended September 30, 2025, down from $40.9 million in the same period last year[175]. - Net cash provided by investing activities was $12.4 million for the nine months ended September 30, 2025, compared to $34.9 million in the same period last year[176]. - Net cash provided by financing activities increased to $14.7 million for the nine months ended September 30, 2025, from $2.5 million in the same period last year[177]. Assets and Liabilities - Total current assets decreased to $41,367,000 as of September 30, 2025, from $57,000,000 as of December 31, 2024, a decline of 27.4%[16]. - Total liabilities increased to $70,394,000 as of September 30, 2025, compared to $74,968,000 as of December 31, 2024[16]. - The total stockholders' equity (deficit) as of September 30, 2025, was $(6,666,000), a decrease from $4,499,000 as of December 31, 2024[16]. - The company had accrued interest income receivable of $32,000 as of September 30, 2025, down from $121,000 as of December 31, 2024[62]. - Total intangible assets as of September 30, 2025, amounted to $5,830,000, with a net carrying amount of $5,204,000 after accumulated amortization of $626,000[8]. - The composition of the inventory as of September 30, 2025, included $2.1 million in raw materials, $100,000 in work in process, and $5.0 million in finished goods, totaling $7.2 million[97]. Debt and Financing - The Company entered into a credit agreement providing for a five-year senior secured credit facility of up to $90.0 million, with $40.0 million available on the Closing Date[84]. - As of September 30, 2025, the interest rate on the outstanding debt was 12.28%[86]. - The long-term portion of the credit facility has been classified as a current liability due to the Company's debt servicing obligations[38]. - The Company has not made any repayments on the outstanding debt balance as of September 30, 2025[85]. - The Company is actively evaluating strategies to obtain additional funding, including a potential equity financing of up to $200.0 million[39]. - There is substantial doubt about the Company's ability to continue as a going concern if it cannot maintain compliance with the minimum cash balance covenant[37]. Regulatory and Compliance - The Company was not in compliance with the trailing 12-month net revenue covenants for Q1 2025 ($73.0 million) and Q2 2025 ($78.0 million), but received waivers for both quarters[36]. - The trailing 12-month revenue covenant has been amended to $73.0 million for Q3 2025, $77.0 million for Q4 2025, $90.0 million for Q1 2026, and $103.0 million for Q2 2026, with a $115.0 million covenant for subsequent quarters[36]. - The Company entered into a sixth amendment to the Credit Agreement on November 5, 2025, amending the trailing 12-month revenue covenant to $70.0 million for the quarter ending December 31, 2025[128]. - The Centers for Medicare & Medicaid Services approved a New Technology Add-On Payment for the RECELL System, allowing up to $4,875 in additional reimbursement per case from October 1, 2025, to September 30, 2026[141]. Product Development and Market Strategy - The company’s RECELL GO mini device was approved by the FDA in December 2024, expanding its product offerings for treating smaller wounds[32]. - Cohealyx, a new collagen-based dermal matrix, was commercially launched in the U.S. on April 1, 2025, aimed at supporting cellular migration and revascularization[144]. - The Company aims to increase market penetration in U.S. burn centers and expand the adoption of the RECELL portfolio for traumatic and surgical wounds[143]. - The Company entered into a Distribution Agreement with Stedical, increasing its revenue share from 50% to 60% for PermeaDerm sales, with a target of $6.0 million in gross sales for 2025[111]. - The Regenity Agreement allows the Company to market and distribute Cohealyx in the U.S. and potentially in the EU, Japan, and Australia, with an initial term of five years[113]. Stock and Equity - The company’s total common stock increased from 25,682,078 shares at December 31, 2023, to 30,493,111 shares by September 30, 2025, indicating growth in equity financing[25]. - The Company raised $14.8 million through the issuance of 17,201,886 CDIs on August 12, 2025, equivalent to 3,440,377 shares of Common stock[118]. - The Company has an outstanding total of 5,147,459 share options as of September 30, 2025, an increase from 3,540,208 options at the end of 2024[122]. - The Company’s stockholders approved an amendment to increase the share reserve under the 2020 Omnibus Incentive Plan by an additional 2,500,000 shares, totaling 6,750,000 shares[119]. Miscellaneous - The report includes various exhibits related to corporate governance and agreements, such as the Certificate of Incorporation and amendments[194]. - The report was signed by the Interim Chief Executive Officer and Chief Financial Officer, indicating compliance with the Securities Exchange Act of 1934[196][198]. - The date of the report is November 6, 2025, reflecting the company's ongoing regulatory obligations[197].