enVVeno Medical Corp 10-K/A

ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with our consolidated financial statements and the related notes contained elsewhere in this Annual Report on Form 10-K and in our other Securities and Exchange Commission filings. The following discussion may contain predictions, estimates, and other forward-looking statements that involve a number of risks and uncertainties, including those discussed under “Risk Factors” and elsewhere in this Annual Report on Form 10-K. These risks could cause our actual results to differ materially from any future performance suggested below. Overview enVVeno Medical Corporation is a late clinical-stage medical device company focused on the advancement of innovative bioprosthetic (tissue-based) solutions to improve the standard of care for the treatment of venous disease. Chronic Venous Disease (CVD) is the world’s most prevalent chronic disease, impacting approximately 70% of the adult population of the U.S. Chronic Venous Insufficiency (CVI), is a large subset of CVD, which most often occurs when valves inside of the veins of the leg become damaged, resulting in the backwards flow of blood (reflux), blood pooling in the lower leg, increased pressure in the veins of the leg (venous hypertension) and in severe cases, venous ulcers that are difficult to heal. The Company is developing surgical and non-surgical replacement venous valves for patients suffering from severe CVI of the deep venous system of the leg. The Company’s lead product is the VenoValve®, which is a first-in-class surgical replacement venous valve that is currently being evaluated in a U.S. pivotal study. The Company is also developing a second product called enVVe®, which is a first-in-class, non-surgical, transcatheter based replacement venous valve. The Company is currently conducting pre-clinical testing on enVVe. Both the VenoValve and enVVe are designed to act as one-way valves, to help assist in propelling blood up the veins of the leg, and back to the heart and lungs. The VenoValve and enVVe are being developed first for approval by the U.S. Food and Drug Administration (FDA). We expect the VenoValve to be eligible for FDA approval first, followed two to three years later by enVVe. If approved, we expect the VenoValve and enVVe to co-exist, with the VenoValve as a surgical replacement venous valve option and enVVe as a non-surgical replacement venous valve option, although we cannot provide any assurance that either the VenoValve or enVVe will receive approval from the FDA (see the section entitled “Risk Factors” in this Annual Report on Form 10-K). There are currently no devices approved as surgical or non-surgical replacement venous valves, and there are currently no effective treatments for deep venous CVI caused by incompetent valves. Our team of officers and directors has been affiliated with numerous medical devices that have received FDA approval or CE marking and that have been commercially successful. We develop and manufacture our products in connection with our clinical trials in a 14,507 sq. ft. leased manufacturing facility in Irvine, California, which has been ISO 13485-2016 certified for the design, development and manufacturing of tissue based implantable medical devices. Results of Operations Comparison of the year ended December 31, 2024 to the year ended December 31, 2023 Revenues As a late-stage clinical medical device Company, we are not currently generating revenue and our future revenue, if any, is dependent on our ability to commercialize our product candidates. We will not begin generating revenue with respect to any of our product candidates until after we obtain FDA approval, if at all. We hope to eventually achieve revenues by commercializing and selling our products or licensing our technologies to companies that have the resources and infrastructure in place to manufacture, market and sell our products. The commercialization and/or licensing of any of our products may take several years, if it is to occur at all, and depends on our ability to obtain regulatory approval. Net Loss We reported net losses of $21.8 million and $23.5 million for the years ended December 31, 2024 and 2023, respectively, representing a decrease in net loss of $1.7 million or 7%, resulting from, as described in further detail below, a decrease in operating expenses of $1.5 million, and an increase in other income of $0.2 million. Research and Development Expenses For the year ended December 31, 2024, research and development expenses decreased by $1.4 million or 10%, to $12.2 million from $13.6 million for the year ended December 31, 2023. The decrease is due to a decrease of $2.2 million in costs for the SAVVE trial, and a $0.3 million decrease in other lab costs, partially offset by an increase of $0.9 million in employee compensation from the increases in staffing, and an increase of $0.2 million in costs related to the GLP study for the enVVe. Costs related to SAVVE decreased in 2024 because, after full enrollment in 2023, activity shifted to ongoing monitoring, data collection, and preparation and filing of the PMA. The increase in compensation cost is due to the hiring of additional personnel supporting ongoing VenoValve testing and trial activity in addition to the preparation for the enVVe GLP study. Selling, General and Administrative Expenses For the year ended December 31, 2024, selling, general and administrative expenses decreased by $0.1 million or 1%, to $11.6 million from $11.7 million for the year ended December 31, 2023. This decrease is primarily driven by share-based compensation which decreased $1.1 million from 2023 to 2024. Selling, general and administrative expenses also decreased $0.1 million from lower travel cost, and $0.1 million from lower insurance cost in 2024. These decreases were partially offset by a $0.7 million increase in legal costs and a $0.5 million increase in costs related to conferences, and market research as the Company started increasing its market visibility in anticipation of commercialization activity if FDA approval of the VenoValve PMA is received. 28 Other Income For the year ended December 31, 2024, other income increased $0.3 million to $2.0 million from $1.7 million for the year ended September 30, 2023. Other income in both periods reflects realized gains, interest, and unrealized gains from our program to invest excess cash in U.S. Treasury securities. Liquidity and Capital Resources For the year ended December 31, 2024, the Company incurred losses from operations of $23.8 million and used $16.8 million cash in operating activities. The net cash used in operating activities during 2024 decreased by $2.1 million from $18.9 million for the year ended December 31, 2023, primarily due to the decrease in research and development expenses from 2023 to 2024. Our cash balance as of December 31, 2024, is $1.8 million. In addition, we have $41.4 million in investments, for total cash and investments of $43.2 million. The operating losses and the uses of cash are primarily due to the Company’s product research and development and administrative activities. Administrative functions relate to costs to support the Company’s public reporting and investor relations activities as well as internal administrative functions. Research and development activities are for continued product development and clinical trials for VenoValve and for enVVe. The Company will continue to incur these costs to complete its clinical trials, enhance products, develop new products, and operate as a public company for the foreseeable future as we seek to obtain regulatory approval for our studies and product candidates. We are not currently generating revenue. However, with the filing of our final PMA module completed in December 2024, we hope to receive FDA approval during the second half of 2025, and we have commenced limited activity toward commercial launch in anticipation of that approval. To-date, this activity is primarily market research and attendance at conferences. If and when we receive FDA approval of our PMA, we expect to significantly increase costs related to commercial launch and to direct spending toward establishing our market presence and generating revenue. We do not currently have material commitments for capital expenditures or other expenditures with the exception of our facility lease commitment of $0.3 million per year. We expect a modest increase in purchases of property and equipment and in facility lease costs as we continue SAVVE, commence TAVVE, and plan for commercialization of the VenoValve. Our future capital requirements will remain dependent upon a variety of factors, especially including the success of our clinical trials and related product development costs and our ability to successfully bring products to market. We anticipate that our cash burn rate will increase from current levels of approximately $4 million to $5 million per quarter to $5 million to $6 million per quarter in 2025. Even after considering this increase, we should have sufficient cash to fund operations through mid-2026. We have historically funded our operations through financing activities such as the capital raises completed in 2024 and 2023. We will need to raise additional capital in the future. Any inability to raise additional financing would have a material adverse effect on us. Based upon our cash and working capital as of December 31, 2024, we have sufficient capital resources to meet our obligations as they become due within at least one year after the date of this Annual Report and sustain operations. 29 Contractual Obligations As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide the information requested by paragraph (a)(5) of this Item.