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Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under Part I, Item 1A, “Risk Factors” and elsewhere in this Annual Report on Form 10-K.
−Removed: We are a commercial-stage medical technology company that provides a minimally invasive treatment for patients with severe emphysema, a form of chronic obstructive pulmonary disease (“COPD”).
−Removed: Our solution, which is comprised of the Zephyr Endobronchial Valve (“Zephyr Valve”), the Chartis Pulmonary Assessment System (“Chartis System”) and the StratX Lung Analysis Platform (“StratX Platform”), is designed to treat severe emphysema patients who, despite medical management, are still profoundly symptomatic and either do not want or are ineligible for surgical approaches.
−Removed: In June 2018, we received pre-market approval (“PMA”) by the U.S.
−Removed: Food and Drug Administration (“FDA”) as a result of our breakthrough technology designation.
−Removed: The Zephyr Valve is now commercially available in more than 25 countries, with over 100,000 valves used to treat more than 25,000 patients.
+Added: We are a commercial-stage medical technology company that provides a minimally invasive treatment for patients with severe emphysema, a form of chronic obstructive pulmonary disease.
+Added: Our solution, which is comprised of the Zephyr Valve, the Chartis System and the LungTraX Platform, is designed to treat severe emphysema patients who, despite medical management, are still profoundly symptomatic and either do not want or are ineligible for surgical approaches.
+Added: In 2018, we received pre-market approval from the FDA for the Zephyr Valve, following its “Breakthrough Technology” designation.
+Added: The Zephyr Valve is commercially available in numerous countries globally.
We have established reimbursement in major markets in North America, Europe and Asia Pacific and the Zephyr Valve has been included in treatment guidelines for COPD worldwide.
+Added: We also manufacture the AeriSeal System, which is a synthetic polymer foam designed to occlude, or close, collateral air channels in a target lung lobe and convert the target lung lobe to having little to no collateral ventilation (CV-).
+Added: The AeriSeal System has received a “Breakthrough Device” designation by the FDA and a Certificate of Conformity (“CE Mark”) in Europe.
+Added: The AeriSeal System is not approved by the FDA or approved for commercial sale in the United States.
+Added: It is in a global clinical trial called CONVERT II to support a PMA application.
We market and sell our products in the United States through a direct sales organization.
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We are expanding our commercial operations in the United States while continuing to foster our international growth.
−Removed: We employ both direct and distributor-based sales models, with over 96% of our revenue generated in markets where we sell directly for the year ended December 31, 2023.
+Added: We employ both direct and distributor-based sales models, with 96% of our revenue generated in markets where we sell directly for the year ended December 31, 2024.
In the United States, our solution is reimbursed based on established Category I Current Procedural Terminology (“CPT”) and ICD-10 Procedure Coding System (“PCS”) codes and associated APC and MS-DRG payment groupings.
Current reimbursement in the United States is believed to cover the hospital costs of the procedure and related inpatient care.
−Removed: Commercial payors such as Aetna, Humana, and many of the largest Blue Cross Blue Shield plans including Anthem, Health Care Service Corporation, and BCBS Michigan have issued positive coverage policies for the Zephyr Valve, and United Healthcare no longer considers the procedure unproven or experimental.
+Added: Commercial payors such as Aetna, Humana, and many of the largest Blue Cross Blue Shield plans including Anthem, Health Care Service Corporation, BCBS Michigan, and Highmark have all issued positive coverage policies for the Zephyr Valve, and United Healthcare no longer considers the procedure unproven or experimental.
Medicare covers our solution for patients when medically necessary, and other commercial insurers are approving prior authorization requests on a case-by-case basis.
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We have devoted substantially all of our resources to research and development activities related to our solution, including clinical and regulatory initiatives to obtain marketing approval, sales and marketing activities, and investing in general and administrative infrastructure.
−Removed: revenue of $68.7 million, with a gross margin of 73.9% and a net loss of $60.8 million, for the year ended December 31, 2023 compared to revenue of $53.7 million, with a gross margin of 74.3% and a net loss of $58.9 million, for the year ended December 31, 2022.
+Added: We generated revenue of $83.8 million, with a gross margin of 74.0% and a net loss of $56.4 million, for the year ended December 31, 2024 compared to revenue of $68.7 million, with a gross margin of 73.9% and a net loss of $60.8 million, for the year ended December 31, 2023.
As of December 31, 2024, we had an accumulated deficit of $467.6 million, cash, cash equivalents and marketable securities of $101.5 million, and $37.2 million of outstanding term loans and credit agreements, net of debt discount and debt issuance costs.
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We have also made significant investments in clinical studies to demonstrate the safety and efficacy of the Zephyr Valve and to support regulatory submissions.
−Removed: We intend to make significant investments building our sales and marketing organization by increasing the number of sales territory managers and continuing our marketing efforts in existing and new markets throughout the United States, Europe and Asia Pacific.
−Removed: We also intend to continue to make investments in research and development efforts to develop our next generation products and support our future regulatory submissions to increase our addressable market and to expand indications and new markets.
+Added: We intend to continue to make significant investments in our sales and marketing organization throughout the United States, Europe and Asia Pacific.
+Added: We have made, and intend to continue to make, investments in research and development efforts to develop our next generation products and support our future regulatory submissions to increase our addressable market and to expand indications and new markets.
Because of these and other factors, we expect to continue to incur net losses for the next several years and we expect to require substantial additional funding, which may include future equity and debt financings.
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Physician, Patient and Hospital Awareness and Acceptance of Our Solution
−Removed: Our goal is to establish our solution as a standard of care for severe emphysema.
We intend to continue to promote awareness of our solution through training and educating physicians, pulmonary rehabilitation centers, key opinion leaders and various medical societies on the proven clinical benefits of Zephyr Valves.
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We also intend to continue helping physicians in their outreach to patients and other healthcare providers.
−Removed: These efforts require significant investment by our marketing and sales organization, and vary depending upon the physician’s practice specialization, and personal preferences and geographic location of physicians, pulmonary rehabilitation centers and patients.
−Removed: In order to grow our business, we will need to continue to make significant investments in training and
−Removed: educating hospitals, physicians and patients on the advantages of our solution for the treatment of severe emphysema.
+Added: These efforts require significant investment by our marketing and sales organization, and vary depending upon the physician’s practice specialization, and personal preferences and geographic location of physicians, pulmonary rehabilitation
+Added: centers and patients.
+Added: In order to grow our business, we will need to continue to make significant investments in training and educating hospitals, physicians and patients on the advantages of our solution for the treatment of severe emphysema.
Third-Party Reimbursement
−Removed: Since achieving regulatory approval in the United States in June 2018, we have launched the Zephyr Valve treatment and have made progress securing third-party payor reimbursement.
−Removed: The majority of our patients are Medicare beneficiaries.
−Removed: We estimate that roughly 75% of the potential Zephyr Valve patient population are Medicare/Medicaid beneficiaries, of which approximately 30% have managed Medicare/Medicaid and the remaining 45% have traditional Medicare/Medicaid.
−Removed: Approximately 25% of the potential Zephyr Valve patient population is under third-party commercial payor policies.
−Removed: A key element of our strategy remains to broaden our coverage by private third-party payor policies.
+Added: Since achieving regulatory approval in the United States in 2018, we have launched the Zephyr Valve treatment and have made progress securing third-party payor reimbursement.
+Added: The majority of our patients are Medicare-eligible beneficiaries.
+Added: We estimate that roughly 75% of the potential Zephyr Valve patient population are Medicare beneficiaries, 5% are Medicaid beneficiaries, and 20% of the potential Zephyr Valve patient population is under third-party commercial payor policies or other government programs.
+Added: We continue to work to broaden our coverage by private third-party payor policies.
Commercial payors such as Aetna, Humana, and many of the largest Blue Cross Blue Shield plans including Anthem, Health Care Service Corporation, BCBS Michigan, and Highmark have issued positive coverage policies for the Zephyr Valve, and United Healthcare no longer considers the procedure unproven or experimental.
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We have a dedicated patient reimbursement support team in the United States that works collaboratively with patients and providers to help secure the appropriate prior authorization approvals in advance of treatment.
−Removed: We continue to educate private insurers in the United States on our clinical data and patient selection tools in an effort to continue to expand the number of positive coverage policies, in order to increase our revenue.
−Removed: Outside the United States, our solution is covered by major health systems across much of Europe, Australia, South Korea and Japan.
+Added: Through this program, we continue to educate private insurers in the United States on our clinical data and patient selection tools in an effort to continue to expand the number of positive coverage policies.
+Added: Outside of the United States, our solution is covered by major health systems across much of Europe, Australia, South Korea and Japan.
Our industry is highly competitive and subject to rapid change from the introduction of new products and technologies and other activities of industry participants.
Our goal is to establish our solution as a standard of care for severe emphysema.
−Removed: Existing treatments include medical management, lung volume reduction surgery (“LVRS”), lung transplantation as well as other minimally invasive treatments.
+Added: Existing treatments include medical management, lung volume reduction surgery, lung transplantation as well as other minimally invasive treatments.
Some of our competitors have several competitive advantages, including established relationships with pulmonologists who commonly treat patients with emphysema, significantly greater name recognition and significantly greater sales and marketing resources.
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In addition, we are continuing to invest in the accuracy and features of our patient assessment tools.
−Removed: Moreover, we are conducting clinical research of AeriSeal, a potential product in development for the treatment of severe emphysema patients who are not qualified for Zephyr Valve treatment due to excessive collateral ventilation.
+Added: Moreover, we continue to make progress with our CONVERT II pivotal trial of the AeriSeal System, a potential product in development for the treatment of severe emphysema patients who are not qualified for Zephyr Valve treatment due to excessive collateral ventilation.
While research and development and clinical testing are time consuming and costly, we believe that a pipeline of new products and product enhancements that improve efficacy, safety and cost effectiveness is critical to increasing the adoption of our solution.
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Components of Our Results of Operations
−Removed: We currently derive substantially all our revenue from the sale of our products to hospitals and distributors.
+Added: We currently derive substantially all of our revenue from the sale of our products to hospitals and distributors.
We market and sell our products through a direct sales organization in the United States and through direct sales and several third-party distributors in select markets outside the United States.
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We also generate a smaller amount of our revenue from our Chartis System, which is comprised of sales of the balloon catheters, usage fees and sales of the Chartis console.
−Removed: The StratX Platform, while used to identify patients eligible for treatment with Zephyr Valves, does not independently generate any revenue for us.
−Removed: No single customer accounted for more than 10% of our revenue during the years ended December 31, 2023 and 2022.
+Added: The LungTraX Platform, which is used to identify patients eligible for treatment with Zephyr Valves, has not independently generated any revenue for us.
+Added: No single customer accounted for more than 10% of our revenue during the years ended December 31, 2024 and December 31, 2023.
Revenue from sales of our products fluctuates based on volume of cases (procedures performed), the average number of Zephyr Valves used for a patient, pricing, discounts, incentives and mix of U.S.
and international sales.
−Removed: Our revenue also fluctuates and in the future will continue to fluctuate from quarter-to-quarter due to a variety of factors, including the availability of reimbursement, the size and success of our sales force, the number of hospitals and physicians who are aware of and perform the procedures using our solution and seasonality.
+Added: Our revenue also fluctuates and will continue to fluctuate from quarter-to-quarter due to a variety of factors, including the availability of reimbursement, the size and success of our sales force, the number of hospitals and physicians who are aware of and perform the procedures using our solution and seasonality.
Our revenue from international sales may also be impacted by fluctuations in foreign currency exchange rates between the U.S.
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Cost of goods sold consists primarily of payroll and personnel-related expenses for our manufacturing and quality assurance employees, costs related to materials, components and subassemblies, third-party costs, manufacturing overhead, equipment depreciation, and charges for excess, obsolete and non-sellable inventories.
−Removed: Overhead costs include the cost of quality assurance, testing, material procurement, inventory control, operations supervision and management and an allocation facilities overhead cost, including rent and utilities.
+Added: Overhead costs include the cost of quality assurance, testing, material procurement, inventory control, operations supervision and management and an allocation of facilities overhead cost, including rent and utilities.
Cost of goods sold also includes certain direct costs such as those incurred for shipping our products and costs related to providing analysis services for patient scans.
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Our research and development activities primarily consist of engineering and research programs associated with our products under development and improvements to our existing products.
−Removed: Research and development expenses include payroll and personnel-related costs for our research and development employees, including expenses related to stock-based compensation, consulting services, clinical trial expenses, prototyping, testing, laboratory supplies, and an allocation of facility overhead costs.
−Removed: Our clinical trial expenses, such as those related to our AeriSeal clinical development program, include costs associated with clinical trial design, clinical trial site development and study costs, data management costs, related travel expenses and the cost of products used for clinical activities.
+Added: Research and development expenses include payroll and personnel-related costs for our research and development employees, including expenses related to stock-based compensation, consulting services, clinical trial expenses, prototyping, testing, laboratory supplies, impairment charges associated with capitalized internally developed software, and an allocation of facility overhead costs.
+Added: Our clinical trial expenses, such as those related to the AeriSeal System clinical development program, include costs associated with clinical trial design, clinical trial site development and study costs, data management costs, related travel expenses and the cost of products used for clinical activities.
We expense research and development costs as they are incurred.
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Additionally, we incur expenses related to audit, legal, regulatory and tax-related services associated with being a public company, compliance with exchange listing and SEC requirements, director and officer insurance premiums and investor relations costs.
−Removed: We also saw an increase in our stock-based compensation expense with the establishment of our 2020 Equity Incentive Plan and related grants either in the form of restricted stock units or stock options.
Our selling, general and administrative expenses may fluctuate from period to period due to the seasonality of our business and as we continue to add direct sales territory managers in new territories.
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2024 2023 $ Change % Change
−Removed: (in thousands)
+Added: (in thousands, except percentages)
Revenue $ 83,789 $ 68,675 $ 15,114 22.0 %
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Research and Development Expenses
−Removed: Research and development expenses increased by $2.7 million, or 17.4%, to $18.1 million during the year ended December 31, 2023, compared to $15.4 million during the year ended December 31, 2022.
−Removed: The increase in research
−Removed: and development expenses was primarily due to an increase of $0.9 million in costs associated with our clinical trials, including fees paid to contract research organizations and testing expenses, an increase of $0.8 million in payroll and personnel-related expenses including stock-based compensation, and an increase of $0.8 million in professional services and other expenses in support of product development.
+Added: Research and development expenses decreased by $0.5 million, or 2.8%, to $17.6 million during the year ended December 31, 2024, compared to $18.1 million during the year ended December 31, 2023.
+Added: The decrease in research and development expenses was primarily due to a decrease of $1.8 million in professional services and other expenses in support of product development, a decrease of $0.2 million in personnel-related expenses including stock-based compensation, and a decrease of $0.1 million in costs associated with our clinical trials, including fees paid to contract research organizations and testing expenses.
+Added: These decreases were offset by a non-cash impairment
+Added: charge of $1.7 million related to certain previously capitalized software development costs recorded in the second quarter of 2024.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by $7.5 million, or 8.0%, to $102.1 million during the year ended December 31, 2024 compared to $94.6 million during the year ended December 31, 2023.
−Removed: The increase in selling, general and administrative expenses was primarily due to an increase of $11.4 million in payroll and personnel-related expenses including stock-based compensation for our sales, marketing and administrative personnel, and an increase of $1.3 million in legal and other professional expenses, offset by a decrease of $1.4 million in advertising and marketing related expenses.
+Added: The increase in selling, general and administrative expenses was primarily due to an increase of $3.9 million in advertising and marketing related expenses, an increase of $2.2 million in payroll and personnel-related expenses including stock-based compensation for our sales, marketing and administrative personnel, and an increase of $1.0 million in travel and conference related expenses.
Interest Expense and Income
−Removed: Interest expense increased by $2.2 million, or 203.2%, to $3.2 million during the year ended December 31, 2023, compared to $1.1 million during the year ended December 31, 2022 due to higher outstanding debt principal and higher interest rates.
−Removed: Interest income increased by $4.0 million for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily due to higher returns on cash, cash equivalents and marketable securities balances.
+Added: Interest expense increased by $0.3 million, or 8.5%, to $3.5 million during the year ended December 31, 2024, compared to $3.2 million during the year ended December 31, 2023, primarily due to higher interest rates.
+Added: Interest income decreased by $0.5 million, or 9.1%, to $5.1 million during the year ended December 31, 2024 compared to $5.6 million during the year ended December 31, 2023.
+Added: The decrease was primarily due to a lower balance of cash, cash equivalents, and marketable securities, which resulted in reduced returns on these assets.
Other Income (Expense), Net
−Removed: Other income (expense), net decreased by $0.3 million to ($0.7) million during the year ended December 31, 2023, compared to ($0.4) million during the year ended December 31, 2022, primarily due to foreign currency exchange losses driven by fluctuations in foreign exchange rates.
+Added: Other income (expense), net increased by $0.9 million to $0.3 million during the year ended December 31, 2024, compared to $(0.7) million during the year ended December 31, 2023, primarily due to foreign currency exchange gains.
Liquidity and Capital Resources;
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As of December 31, 2024, we had cash, cash equivalents and marketable securities of $101.5 million, an accumulated deficit of $467.6 million, and $37.2 million outstanding under the CIBC Loan and Credit Agreement, net of debt discount and debt issuance costs.
−Removed: On February 20, 2020, we executed a Loan and Security Agreement with Canadian Imperial Bank of Commerce (“CIBC”), which we subsequently amended on April 17, 2020 and December 28, 2020 (as amended, the “CIBC Agreement”).
−Removed: The CIBC Agreement originally provided us with the ability to borrow up to $32.0 million in debt financing consisting of $17.0 million advanced at the closing of the agreement (“Tranche A”), with the option to draw up to an additional $8.0 million (“Tranche B”) on or before February 20, 2022 and an additional $7.0 million (“Tranche C”) on or before February 20, 2022.
−Removed: Neither Tranche B nor Tranche C was drawn before the February 2022 expiration date.
−Removed: In March 2021, we entered into an Amended and Restated Loan and Security Agreement with CIBC (as amended, the “Amended and Restated CIBC Agreement”) which, among other things, extended the loan maturity date under the CIBC Agreement from March 15, 2022 to February 20, 2025, and modified certain financial covenants.
−Removed: In June 2021, we entered into a First Amendment to the Amended and Restated CIBC Agreement that extended the compliance of certain post-close covenants to March 31, 2022.
+Added: In February 2020, we executed a Loan and Security Agreement with Canadian Imperial Bank of Commerce (“CIBC”), which we subsequently amended in April 2020 and December 2020 (as amended, the “CIBC Agreement”).
+Added: The CIBC Agreement originally provided us with the ability to borrow up to $32.0 million in debt financing (“CIBC Loan”) consisting of $17.0 million advanced at the closing of the agreement (“Tranche A”), with the option to draw up to an additional $8.0 million (“Tranche B”) and an additional financing tranche (“Tranche C”) of up to $7.0 million on or prior to February 20, 2022.
+Added: Neither Tranche B nor Tranche C was drawn before the option expired.
+Added: In March 2021, we entered into an Amended and Restated Loan and Security Agreement with CIBC (as amended, the “Amended and Restated CIBC Agreement”) which, among other things, extended the loan maturity date of the CIBC Loan from March 15, 2022 to February 20, 2025, and modified certain financial covenants.
In October 2021, we entered into a Second Amendment to the Amended and Restated CIBC Agreement, which extended the interest only period of the loan from 24 months to 36 months.
Under the amended terms, principal repayment would begin in February 2023.
−Removed: There was no change to the loan interest rate or maturity date.
In October 2022, we entered into a Third Amendment to the Amended and Restated CIBC Agreement (the “Third Amendment”), which, among other things, extended the maturity date to October 31, 2027;
−Removed: provided a commitment for a new $20.0 million tranche of term loans that may be drawn at the Company’s option through October 31, 2023, subject to the satisfaction of certain conditions;
+Added: provided a commitment for a new $20.0 million tranche of term loans that may be drawn at our option through October 31, 2023, subject to
+Added: the satisfaction of certain conditions;
and provided for a new interest only period of 24 months from the signing date of the Third Amendment, with the possibility of an additional extension of such interest only period of up to 12 months, subject to satisfaction of certain conditions.
−Removed: In February 2023, we drew $20.0 million of the Amended Tranche B of the CIBC Loan.
−Removed: The Amended Tranche B bears interest at a floating rate equal to 1.0% above the Wall Street Journal Prime Rate and has the same repayment terms as Tranche A.
+Added: In February 2023, we drew $20.0 million of the Amended Tranche B which has the same interest rate and repayment terms as Tranche A of the CIBC Loan.
+Added: In May 2024, as a result of satisfying certain conditions set forth in the Third Amendment, we extended the interest-only period of the CIBC Loan from 24 months to 36 months.
+Added: Principal repayment will begin in November 2025.
+Added: There was no change to the loan interest rate, maturity date, or other terms of the loan.
The loans provided under the Amended and Restated CIBC Agreement bear interest at a floating rate equal to 1.0% above the Wall Street Journal Prime Rate at any time.
−Removed: The loan is collateralized by substantially all of our assets, including cash and cash equivalents, accounts receivable, intellectual property and equipment.
−Removed: We may prepay the loans, subject to certain conditions, including a prepayment fee equal to 2.0% of the principal amount prepaid during the first year after the effective date of the Third Amendment or 1.0% of the principal amount prepaid during the second year after the effective date of the Third Amendment.
−Removed: The Amended and Restated CIBC Agreement contains financial covenants that require the Company to maintain minimum cash and minimum revenue amounts, and the Amended and Restated CIBC Agreement contains other customary restrictive covenants, representations and warranties, events of default and other customary terms and conditions.
+Added: The loans are collateralized by substantially all of our assets, including cash and cash equivalents, accounts receivable, intellectual property and equipment.
+Added: We may prepay the loans, subject to certain conditions.
+Added: The Amended and Restated CIBC Agreement contains financial covenants that require us to maintain minimum cash and minimum revenue amounts, and the Amended and Restated CIBC Agreement contains other customary restrictive covenants, representations and warranties, events of default and other customary terms and conditions.
We paid $0.5 million fees to the lender and third parties which is reflected as a discount on the loans provided under the Amended and Restated CIBC Agreement and is being accreted over the life of the loan using the effective interest method.
−Removed: During the years ended December 31, 2023 and December 31, 2022, we recorded interest expense related to debt discount and debt issuance costs of CIBC Loan of less than $0.1 million and $0.1 million, respectively.
+Added: During the years ended December 31, 2024 and December 31, 2023, we recorded interest expense related to debt discount and debt issuance costs of CIBC Loan of $0.1 million and less than $0.1 million, respectively.
Interest expense on the CIBC Loan amounted $3.5 million and $3.2 million during the years ended December 31, 2024 and December 31, 2023, respectively.
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In May 2020, Pulmonx International Sàrl, our wholly owned subsidiary, received 0.5 million Swiss Francs ($0.5 million U.S.
−Removed: dollar equivalent) from a COVID-19 Credit Agreement under a Swiss Federal Government program designed to mitigate the economic impact of the spread of the coronavirus.
−Removed: The COVID-19 Credit Agreement initially bore no interest through March 31, 2023.
−Removed: Beginning April 1, 2023, the loan bears interest at a rate of 1.5% per year, payable at the end of each calendar quarter.
+Added: dollar equivalent) from a COVID-19 Credit Agreement under a Swiss Federal Government program.
+Added: The COVID-19 Credit Agreement currently bears interest at a rate of 1.5% per year, payable at the end of each calendar quarter.
The loan principal is being repaid in twelve equal installments, paid semi-annually, which began in March of 2022.
−Removed: Interest expense was immaterial during the year ended December 31, 2023.
+Added: Interest expense was immaterial during the years ended December 31, 2024 and December 31, 2023.
Pulmonx International Sàrl repaid $0.1 million and $0.1 million to the lender during the years ended December 31, 2024 and December 31, 2023, respectively.
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Net cash used in operating activities was $31.5 million for the year ended December 31, 2024.
−Removed: Cash used in operating activities was primarily a result of the net loss of $60.8 million, a decrease in lease liabilities of $3.2 million due to lease payments, an increase in accounts receivable of $3.1 million due to revenue growth and the timing of payments from our customers, net accretion of discounts on marketable securities of $1.0 million, and a decrease in accounts payable of $0.3 million due to timing of payments to our vendors, partially offset by an increase in accrued liabilities of $3.2 million due to increased accrued incentive compensation expense associated with the achievement of performance objectives, a decrease in inventory of $0.9 million, stock-based compensation expense of $22.1 million, non-cash lease expense of $2.7 million, depreciation and amortization expense of $1.5 million and write-down of inventory of $0.5 million.
+Added: Cash used in operating activities was primarily a result of the net loss of $56.4 million, net accretion of discounts on marketable securities of $1.6 million, a decrease in lease liabilities of $1.9 million due to lease payments, an increase in accounts receivable of $1.3 million due to revenue growth and the timing of payments from our customers, an increase in prepaid expenses and other current assets of $0.4 million primarily due to the timing of payments to our vendors, and an increase in other assets of $0.5 million primarily due to capitalized implementation costs of a hosting arrangement.
+Added: This is partially offset by stock-based compensation expense of $23.0 million, an increase in accounts payable of $2.3 million due to timing of payments to our vendors, a non-cash impairment charge of $1.7 million related to certain previously capitalized software development costs recorded in the second quarter of 2024, depreciation and amortization expense of $1.5 million and non-cash lease expense of $1.8 million.
Net cash used in operating activities was $37.6 million for the year ended December 31, 2023.
−Removed: Cash used in operating activities was primarily a result of the net loss of $58.9 million, an increase in inventory of $3.6 million due to continued production to build inventory to meet projected increase in sales and to protect against potential supply interruptions, an increase in accounts receivable of $2.2 million, and a decrease in lease liabilities of $2.2 million due to lease payments, partially offset by an increase in accounts payable of $0.2 million due to timing of payments to our vendors, and a decrease in prepaid expenses and other current assets of $0.8 million, stock-based compensation expense of $16.4 million, non-cash lease expense of $2.5 million, depreciation and amortization expense of $1.5 million and write-down of inventory of $0.5 million.
+Added: Cash used in operating activities was primarily a result of the net loss of $60.8 million, a decrease in lease liabilities of $3.2 million due to lease payments, an increase in accounts receivable of $3.1 million due to revenue growth and the timing of payments from our customers, net accretion of discounts on marketable securities of $1.0 million, and a decrease in accounts payable of $0.3 million due to timing of payments to our vendors, partially offset by an increase in accrued liabilities of $3.2 million due to increased accrued incentive compensation expense associated with the achievement of performance objectives, a decrease in inventory of $0.9 million, stock-based compensation expense of $22.1 million, non-cash lease expense of $2.7 million, depreciation and amortization expense of $1.5 million and write-down of inventory of $0.5 million.
Cash Flows from Investing Activities
−Removed: Net cash used in investing activities in the year ended December 31, 2023 was $2.0 million consisting of purchases of marketable securities of $46.2 million and purchases of property and equipment of $0.8 million partially offset by proceeds from maturities of marketable securities of $45.0 million.
+Added: Net cash provided by investing activities in the year ended December 31, 2024 was $17.5 million consisting of proceeds from maturities of marketable securities of $46.8 million, offset by purchases of marketable securities of $27.9 million and purchases of property and equipment of $1.4 million.
Net cash used in investing activities in the year ended December 31, 2023 was $2.0 million consisting of purchases of marketable securities of $46.2 million and purchases of property and equipment of $0.8 million partially offset by proceeds from maturities of marketable securities of $45.0 million.
Cash Flows from Financing Activities
−Removed: Net cash provided by financing activities in the year ended December 31, 2023 of $21.4 million primarily relates to proceeds of $20.0 million from borrowing under the Amended and Restated CIBC Agreement, proceeds from issuance of common stock under the employee stock purchase plan of $1.2 million and proceeds from exercise of
−Removed: common stock options of $0.3 million, partially offset by repayment of debt under the Credit Agreement of $0.1 million.
−Removed: Net cash provided by financing activities in the year ended December 31, 2022 of $2.4 million primarily relates to proceeds from the exercise of stock options of $0.6 million and proceeds from issuance of common stock under the employee stock purchase plan of $1.9 million, offset by repayment of debt under the Credit Agreement of $0.1 million.
+Added: Net cash provided by financing activities in the year ended December 31, 2024 of $1.4 million primarily relates to proceeds from issuance of common stock under the employee stock purchase plan of $1.2 million and proceeds from exercise of common stock options of $0.2 million, offset by repayment of debt under the Credit Agreement of $0.1 million.
+Added: Net cash provided by financing activities in the year ended December 31, 2023 of $21.4 million primarily relates to proceeds of $20.0 million from borrowing under the Amended and Restated CIBC Agreement, proceeds from issuance of common stock under the employee stock purchase plan of $1.2 million and proceeds from exercise of common stock options of $0.3 million, partially offset by repayment of debt under the Credit Agreement of $0.1 million.
Material Cash Requirements
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Our cash outflows for capital expenditures were $1.4 million during the year ended December 31, 2024 and $0.8 million during the year ended December 31, 2023, and we expect to maintain the level of expenditures in the future in support of our commercial infrastructure, sales force and other commercialization efforts.
−Removed: Recent and expected working and other capital requirements include amounts related to future lease payments for operating lease obligations, which totaled $4.3 million at December 31, 2023, with $3.2 million expected to be paid within the next 12 months, and amounts related to future short-term and long-term debt which totaled $45.7 million, with $5.7 million expected to be paid within the next 12 months.
+Added: Recent and expected working and other capital requirements include
+Added: amounts related to future lease payments for operating lease obligations, which totaled $31.3 million at December 31, 2024, with $2.6 million expected to be paid within the next 12 months, and amounts related to future short-term and long-term debt which totaled $43.2 million, with $6.3 million expected to be paid within the next 12 months.
Lastly, we may undertake additional expenses to further expand our commercial organization and efforts, enhance our research and development efforts and pursue product expansion opportunities.
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• the costs of commercialization activities related to commercializing our products in the United States and elsewhere, including expanding territories, increasing sales and marketing personnel, actual and anticipated product sales, marketing programs, manufacturing and distribution costs;
−Removed: • the impact of any public health crises, such as a resurgence of COVID-19 infections, on our business, financial condition and results of operations;
• the cost of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights;
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• the emergence of competing technologies or other adverse market developments;
+Added: • the impact of any public health crises on our business, financial condition and results of operations.
Until such time, if ever, as we can generate product revenue sufficient to achieve profitability, we expect to finance our cash needs through a combination of public or private equity offerings, debt financings and collaborations or licensing arrangements.
2 unchanged sentences
If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.
−Removed: If we raise additional capital through collaborations agreements, licensing arrangements or marketing and distribution arrangements, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses that may not be favorable to us.
+Added: If we raise additional capital through collaborations agreements, licensing arrangements or marketing and distribution arrangements, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses that
+Added: may not be favorable to us.
If we are unable to raise capital when needed, we will need to delay, limit, reduce or terminate planned commercialization or product development activities, or grant rights to develop and commercialize products or product candidates that we would otherwise prefer to develop and market ourselves in order to reduce costs.
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We exclude taxes assessed by governmental authorities on revenue-producing transactions from the measurement of the transaction price.
−Removed: accept product returns at our discretion or if the product is defective as manufactured.
+Added: We accept product returns at our discretion or if the product is defective as manufactured.
We elected to treat shipping and handling costs as a fulfillment cost and include them in the cost of goods sold as incurred.
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We determine these estimates through discussion with internal personnel and outside service providers as to progress or stage of completion of trials or services pursuant to contracts with clinical research organizations and other service providers and the agreed-upon fee to be paid for such services.
−Removed: Common Stock Valuation and Stock-Based Compensation
+Added: Stock-Based Compensation
We recognize compensation costs related to stock options and awards granted to employees and non-employees based on the estimated fair value of the awards on the date of grant.
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The mid-point between the vesting date and the maximum contractual expiration date is used as the expected term under this method.
−Removed: For awards with
−Removed: multiple vesting-tranches, the periods from grant until the mid-point for each of the tranches are averaged to provide an overall expected term.
+Added: For awards with multiple vesting-tranches, the periods from grant until the mid-point for each of the tranches are averaged to provide an overall expected term.
• Expected Volatility.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.