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Item 7. Management’s Discussion and Analysis

2025-04-15 compared with 2024-04-11 · 223 added, 164 removed, 212 unchanged (65% of the section changed)

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You should review the sections titled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” for a discussion of forward-looking statements and important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

We are engaged in the research, development, and sales of innovative drug delivery technology and immune-oncology therapeutics to improve outcomes in difficult to treat liver and pancreatic cancer.

Our technology is utilized in the delivery

of our therapeutics and administered by interventional radiologists.

We are developing and marketing two product lines:

Pressure Enabled Drug Delivery (“PEDD”) infusion systems, in use today, and an investigational agent, called nelitolimod which shows potential to enhance immune system response in the treatment of hepatocellular cancer, pancreatic cancer and other solid tumors in the liver.

The combination of our PEDD technology with nelitolimod, is focused on solving the two main barriers in the tumor micro environment that inhibits the success of immunotherapy.

The first barrier (mechanical) is comprised of high intratumoral pressure within tumors that limits drug uptake and the second barrier (biological) is the reversal of intratumoral immunosuppression.

We are dedicated to the research, development, and commercialization of an innovative drug delivery technology platform and an immuno-oncology therapeutic, aimed at improving outcomes for patients with difficult-to-treat liver and pancreatic cancers.

Our advanced technology is designed for use by interventional radiologists to enhance the delivery of therapeutics and improve patient outcomes.

We market our cutting-edge Pressure Enabled Drug Delivery (PEDD™) infusion systems, which optimize therapeutic delivery for hepatocellular carcinoma, pancreatic cancer, and other solid liver tumors.

Additionally, we are pursuing the development of nelitolimod to illustrate how an immunotherapeutic--when administered via PEDD in combination with systemic treatment--can enhance the effectiveness of other therapeutics, ultimately leading to better patient responses.

The combination of our PEDD technology with nelitolimod is focused on solving the two main barriers in the tumor microenvironment that inhibits the success of immunotherapy.

The first barrier (mechanical) is comprised of high

intratumoral pressure within tumors that limits drug uptake and the second barrier (biological) is the reversal of intratumoral immunosuppression.

In 2020, we launched TriNav™, which is our newest liver therapy delivery device with SmartValve technology for our proprietary PEDD approach.

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On December 14, 2023, CMS created a permanent New Technology Healthcare Common Procedure Coding System (HCPCS) code for procedures involving the TriNav® Infusion System.

This new code became effective on January 1, 2024, and may be reported by hospital outpatient departments (HOPDs) and ambulatory surgical centers (ASCs) for the Company to obtain reimbursement for TriNav device.

This code became effective on January 1, 2024, and may be reported by hospital outpatient departments (HOPDs) and ambulatory surgical centers (ASCs) for the Company to obtain reimbursement for TriNav device.

Effective April 1, 2025, TriNav received a second unique and permanent HCPCS code from CMS.

This new code provides reimbursement clarity for mapping procedures conducted prior to TARE.

TriSalus recently expanded its portfolio of PEDD devices with the launch of the TriNav LV Infusion System and TriGuide Guiding Catheter to optimize therapeutic delivery for patients with larger vessels.

The TriNav LV is suitable for patients with vessels sized between 3.5 and 5.0mm and is expected to allow us to meaningfully expand our addressable liver embolization market.

The TriGuide Guiding Catheter has a larger inner diameter, lubricious inner lining, and reverse curve design to support femoral access for the TriNav LV, which we believe will enhance procedural efficiency.

These new products are eligible for the same HCPCS reimbursement codes as existing TriNav products, enabling seamless integration into current billing structures.

TriSalus also initiated a registry study called PROTECT (Pressure Enabled Retrograde Occlusive Therapy with Embolization for Control of Thyroid Disease) and intends to enroll 100 patients across five leading academic sites.

It is estimated that approximately 5% of adults have multinodular goiters, and the prevalence in adults over 50 is estimated to be up to 50%.

We estimate that this could expand the addressable market by approximately 50,000 procedures, representing an incremental $400.0 million market opportunity.

This new procedure utilizing the TriNav system is also eligible for the same Healthcare Common Procedure Coding System (HCPCS) reimbursement code allowing for seamless integration into current billing approaches.

We are currently in our early stage of development and have yet to generate revenues sufficient to drive positive cash flows from operations.

Beginning in 2020, we began a strategic transformation from a company focused solely on the sale of our infusion systems to a therapeutic company whereby our medical devices are marketed alongside the pharmaceutical drugs and other treatments that the devices deliver to patients.

This transformation led us to acquire our first immune-oncology drug, nelitolimod, in July 2020, and to begin clinical development of nelitolimod for the treatment of liver and pancreatic cancers.

If our clinical trials are successful, we anticipate submitting a New Drug Approval (“NDA”) request to the FDA no sooner than 2025, and assuming we receive FDA approval, commercial sales would begin thereafter, possibly in 2027.

This transformation led us to acquire our first immune-oncology drug, nelitolimod, in July 2020, and to begin clinical development of nelitolimod for the treatment of liver and pancreatic cancers We have initiated Phase 1 and Phase 1b clinical trials for nelitolimod, each of which are focused on a different target indication, specifically UMLM, ICC and HCC, and pancreatic cancer.

Continued investigation for ICC and HCC may continue through IITs.

Based on the changing landscape for second line treatment of uveal melanoma, we do not intend to proceed to Phase II trials for that indication on our own, but we are looking for potential partners to advance that indication.

Our Phase I PERIO-03 clinical trial in pancreatic cancer is enrolled and we anticipate data from the study will be available in sometime in 2025, depending on when treatment is completed.

The Business Combination

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On August 8, 2023, the stockholders of MTAC approved the Business Combination, and the Business Combination closed on August 10, 2023.

Pursuant to the Merger Agreement, 890,020,482 shares of Legacy TriSalus common stock (after conversion of all outstanding shares of Legacy TriSalus preferred stock and all in-the-money warrants) were exchanged for approximately 22,000,000 shares of MTAC common stock, reflecting an exchange ratio of approximately 0.02471853.

Pursuant to the terms of the Merger Agreement, 890,020,482 shares of Legacy TriSalus common stock (after conversion of all outstanding shares of Legacy TriSalus preferred stock and all in-the-money warrants) were exchanged their equity holdings at an exchange ratio of 0.02471853 (the “Exchange Ratio”) for an aggregate of 22,000,000 shares of our Common Stock.

In addition, MTAC had previously issued public warrants and private placement warrants (collectively, the “MTAC Warrants”) as part of its initial public offering in November 2020.

All share and per share amounts of our common and preferred stock have been retrospectively adjusted for the exchange ratio in the following discussion.

Following the consummation of the Business Combination, we were deemed the accounting acquirer and are accounting for the Business Combination as a reverse recapitalization.

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While we believe TriNav to be a superior technology for the delivery of therapies to tumors, particularly high-density tumors, there are other technologies with which we compete.

Our ability to grow TriNav sales depends on the skills of our sales force and the willingness of the marketplace to use TriNav.

Our ability to increase TriNav sales depends on the skills of our sales force and the willingness of the marketplace to use TriNav.

• Our ability to maintain our current TriNav pricing and gross margins to help fund the rest of our activities.

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however, the TPT authorization expired on December 31, 2023.

In December 2023, CMS granted a New

Technology HCPCS for procedures involving TriNav.

This new code, HCPCS C9797, has been assigned to the Ambulatory Payment Classification (APC) 5194 - Level 4 Endovascular Procedures.

The new code became effective on January 1, 2024, and may be reported by hospital outpatient departments and ambulatory surgical centers, but there can be no assurance that continuing reimbursement will be available at similar reimbursement rates or at all.

In December 2023, CMS granted a New Technology HCPCS for both mapping and therapeutic procedures involving TriNav.

This code, HCPCS C9797, has been assigned to the Ambulatory Payment Classification (APC) 5194 - Level 4 Endovascular Procedures.

The code became effective on January 1, 2024, and may be reported by hospital outpatient departments and ambulatory surgical centers, but there can be no assurance that continuing reimbursement will be available at similar reimbursement rates or at all.

Effective April 1, 2025, TriNav received a second unique and permanent HCPCS code from CMS, C8004, which has been assigned to APC 5193 (Level 3 Endovascular Procedures).

This new code provides reimbursement clarity for mapping procedures conducted prior to TARE.

Any reduction in the amount of the reimbursement for TriNav will negatively impact the revenue we are able to generate from the sale of TriNav and may hinder our ability to recoup our total investment in TriNav notwithstanding regulatory approval of the product.

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Recent Developments

Preferred Stock Financing

In October 2022, we sold 706,243 shares of Legacy TriSalus Series B-2 preferred stock in a private financing, primarily to existing stockholders, at a price of $14.16 per share (raising approximately $9.8 million, net of issuance costs) (the “Initial Preferred Stock Financing”).

For each share sold, we also issued a warrant to purchase four shares of Series B-3 preferred stock for no additional consideration (warrants to purchase an aggregate of 2,824,974 shares of Series B-3 preferred stock were issued in the Initial Preferred Stock Financing).

The strike price of the warrants issued was $2.03 per share.

The Initial Preferred Stock Financing included, at the unilateral option of the Legacy TriSalus's Audit Committee, a second tranche for to the sale of up to 518,854 shares of Series B-2 preferred stock for approximately $7.3 million (which could be increased up to an aggregate of 706,243 shares of Series B-2 preferred stock for approximately $10.0 million), with each such share of Series B-2 preferred stock accompanied by a warrant to purchase four shares of Series B-3 preferred stock at a strike price of $2.03 per share (warrants to purchase up to an aggregate of 2,075,417 shares of Series B-3 preferred stock may be issued in closings of the second tranche of the Initial Preferred Stock Financing assuming the full $10.0 million is sold);

and a third tranche, at the unilateral election of investors who participated in the second tranche, for the sale of up to 306,053 shares of Series B-2 preferred stock, for approximately $4.3 million (which could be increased up to an aggregate of 353,121 shares of Series B-2 preferred stock for approximately $5.0 million), with each such share of Series B-2 preferred stock accompanied by a warrant to purchase eight shares of Series B-3 preferred stock at a strike price of $2.03 per share (warrants to purchase up to an aggregate of 2,824,974 shares of Series B-3 preferred stock may be issued in the third tranche closing assuming the full $5.0 million is sold).

In March 2023, we effectuated closings (“Second Tranche Closings”) of a portion of the second tranche of the B-2 Preferred Stock Financing whereby (i) 207,541 shares of Series B-2 preferred stock and accompanying warrants to purchase 830,167 shares of Series B-3 preferred stock, representing 40.0% of the shares committed in the second tranche, were sold for an aggregate purchase price of approximately $2.9 million, net of execution costs, and (ii) 17,656 shares of Series B-2 preferred stock and accompanying warrants to purchase 70,624 shares of Series B-3 preferred stock, none of which were shares committed in the second tranche, were sold for an aggregate purchase price of $250 thousand.

As a result of the closings of a portion of the second tranche of the B-2 Preferred Stock Financing described above, in accordance with the anti-dilution rights in the Legacy TriSalus’s certificate of incorporation, the conversion prices of the Legacy TriSalus's preferred stock were adjusted.

The conversion prices were further adjusted as a result of the June 2023 exercise of a portion of the second tranche of the B-2 Preferred Stock Financing described below, which represent the conversion prices in effect on the Closing Date.

In June 2023, Legacy TriSalus effectuated closings of a portion of the second tranche of the B-2 Preferred Stock Financing whereby (i) 257,779 shares of Series B-2 preferred stock and accompanying warrants to purchase 1,031,116 shares of Series B-3 preferred stock, representing approximately 49.7% of the shares committed in the second tranche, were sold for an aggregate purchase price of approximately $3.7 million, and (ii) 165,967 shares of Series B-2 preferred stock and accompanying warrants to purchase 663,868 shares of Series B-3 preferred stock, none of which were shares committed in the second tranche, were sold for an aggregate purchase price of $2.4 million.

As a result of the closings of a portion of the second tranche of the B-2 Preferred Stock Financing described above, in accordance with the anti-dilution

rights in the Legacy TriSalus’s certificate of incorporation, the conversion prices of the Legacy TriSalus’s preferred stock (i) were adjusted to $38.84 for Series A-1 preferred stock, $12.14 for Series A-2 preferred stock, $13.36 for Series A-3 preferred stock, $12.55 for Series A-4 preferred stock, $13.36 for Series A-5 preferred stock, $14.97 for Series A-6 preferred stock, $9.71 for Series B preferred stock, and $10.93 for Series B-1 preferred stock and (ii) remained the same for Series B-2 preferred stock $14.16 and Series B-3 preferred stock $2.03, which correlate to approximate (in each case rounded to three decimals) exchange ratios of 1.275 to 1 for Series A-1 preferred stock, 1.290 to 1 for Series A-2 preferred stock, 1.303 to 1 for Series A-3 preferred stock, 1.277 to 1 for Series A-4 preferred stock, 1.333 to 1 for Series A-5 preferred stock, 1.351 to 1 for Series A-6 preferred stock, 1.250 to 1 for Series B preferred stock, 1.296 to 1 for Series B-1 preferred stock, 1 to 1 for Series B-2 preferred stock and 1 to 1 for Series B-3 preferred stock.

These conversion prices remained in effect at the Closing Date.

Any portion of the Series B-3 Warrants that remained unexercised at the time the Business Combination is consummated were automatically net settled for shares of Legacy TriSalus Common Stock immediately prior to the closing of the Business Combination (see Note 3) and exchanged into shares of our Common Stock at the Closing Date.

In July 2023, holders of warrants to purchase 2,239,309 shares of Series B-3 preferred stock exercised their purchase rights for proceeds of approximately $4.5 million.

For the year ended December 31, 2024, we sold 2,290,377 shares of common stock under the SEPA, raising $14.1 million.

Additional Fund Raising

During the year ended December 31, 2024, we also raised an additional $1.0 million, before expenses, through the sale of common stock outside of the SEPA.

OrbiMed Credit Agreement

In April 2024 (the "OrbiMed Closing Date"), we entered into a credit agreement (the "OrbiMed Credit Agreement") with OrbiMed Royalty & Credit Opportunities IV, LP ("OrbiMed"), a healthcare investment firm.

The OrbiMed Credit Agreement provides for up to $50.0 million in senior secured term debt, of which (i) $25.0 million was made available to us on the Closing Date (the “Initial Commitment Amount”) and (ii) up to $10.0 million will be made available to us on or prior to June 30, 2025, and up to $15.0 million will be made available to us on or prior to December 31, 2025, in each case,

subject to the satisfaction of certain revenue requirements (such additional commitment amounts, the “Delayed Draw Commitment Amount”).

The term loan will mature on April 30, 2029.

On April 30, 2024, we borrowed the Initial Commitment Amount, resulting in gross proceeds of $25.0 million.

In connection with the closing of the Initial Commitment Amount, we also issued OrbiMed a warrant to purchase 130,805 shares of our common stock, with the initial exercise price of $9.5562 per share, or approximately $1.25 million in the aggregate, assuming none of the Initial OrbiMed Warrant is exercised through a "cashless" exercise.

For the year ended December 31, 2024, the exercise price was adjusted pursuant to the terms of the Initial OrbiMed Warrant to $9.3722 per share, or approximately $1.23 million in the aggregate.

The Initial OrbiMed Warrant expires on April 30, 2031.

On each of the closings of the Delayed Draw Commitment Amounts, if any, we agreed to issue additional warrants to purchase a number of shares of our common stock determined by dividing 5% of the applicable Delayed Draw Commitment Amount by the 10-day volume weighted average sale price of our common stock as of the issue date.

The Subsequent Warrants will expire seven years from each applicable issuance date, if any.

In connection with the Initial OrbiMed Warrants, we entered into a Registration Rights Agreement with OrbiMed, whereby OrbiMed will have certain customary registration rights with respect to the shares of common stock underlying the Initial OrbiMed Warrants.

Subsequent to December 31, 2024, we met the First Delayed Draw Term Loan Commitment and requested the additional $10.0 million term loan associated with the Second Tranche.

On February 18, 2025, we received gross proceeds of $10.0 million.

In connection with the closing of the First Delayed Draw, we issued OrbiMed 91,263 warrants on February 18, 2025.

The Subsequent OrbiMed Warrants are held by the two of OrbiMed's operating entities associated with the Initial OrbiMed Warrants;

one for 64,748 and the second for 26,515 common shares.

The Subsequent OrbiMed Warrants expire seven years from the issuance date and contain an exercise price of $5.4787.

Effective March 20, 2025, we executed the First Amendment To Credit Agreement and Registration Rights Agreement which required the registration of the Subsequent OrbiMed Warrants to be filed by May 15, 2025 and waived the prior default events related to the Series A Convertible Preferred Stock conversion in September 2024, February 2025, and March 2025.

Warrant Exchange Offering

On May 24, 2024, we announced the commencement of (i) our offer (the “Offer”) to all holders of each class of certain outstanding warrants (the “Warrants”), consisting of (a) our publicly-traded Warrants (the “Public Warrants”), (b) certain Warrants we issued in a private placement transaction occurring simultaneously with the closing of the Business Combination (the “Private Placement Warrants”) and (c) certain Warrants we issued for working capital requirements and payment of certain expenses (“Working Capital Warrants”), to receive 0.3 shares of our common stock in exchange for each Warrant tendered by the holder and exchanged pursuant to the Offer, and (ii) the solicitation of consents (the “Consent Solicitation”) from holders of the Warrants to amend the Warrant Agreement, dated as of December 17, 2020 (the “Warrant Agreement” and such amendment, the “Warrant Amendment”), by and between the Company and Continental Stock Transfer & Trust Company, which governs all of the Warrants.

Pursuant to the Offer, we offered up to an aggregate of 4,264,532 shares of our Common Stock in exchange for the Warrants.

Pursuant to the terms of the Warrant Agreement, certain amendments, including the Warrant Amendment, require the vote or written consent of holders of at least a majority of the then outstanding (a) Public Warrants (such threshold, the “Public Warrant Consent Threshold”), (b) Private Placement Warrants with respect to modifications or amendments that apply to the Private Placement Warrants (such threshold, the “Private Placement Warrant Consent Threshold”) or any provision of the Warrant Agreement with respect to the Private Placement Warrants, including the Warrant Amendment, and (c) Working Capital Warrants with respect to modifications or amendments that apply to the Working Capital Warrants (such threshold, the “Working Capital Warrant Consent Threshold,”) or any provision of the Warrant Agreement with respect to the Working Capital Warrants, including the Warrant Amendment.

The Offer and Consent Solicitation expired at one minute after 11:59 p.m., Eastern Standard Time, on June 25, 2024.

The Warrants tendered were comprised of 6,529,954 Public Warrants and 504,685 Private Placement Warrants, which represented approximately 78.8% and 10.2% of the outstanding Warrants of each respective class.

The Warrants were validly tendered and not validly withdrawn prior to the expiration of the Offer and Consent Solicitation.

No Working Capital Warrants were tendered.

On July 1, 2024, we issued 2,110,366 shares of Common Stock in exchange for the tendered Warrants.

Pursuant to the Consent Solicitation, the Company received the requisite approval to satisfy the Public Warrant Consent Threshold.

The Company did not receive the approvals necessary to satisfy the Private Placement Warrant Consent Threshold or the Working Capital Warrant Consent Threshold.

As a result, the Warrant Amendment was approved with respect to the Public Warrants but not the Private Placement Warrants or Working Capital Warrants.

Accordingly, on June 26, 2024, the Company and the Warrant Agent entered into the Warrant Amendment, which permits the Company to require that each Public Warrant that remains outstanding following the closing of the Offer be converted into 0.27 shares of Common Stock, which is a ratio 10% less than the exchange ratio applicable to the Offer.

The Warrant Amendment has no effect on either the Private Placement Warrants or the Working Capital Warrants.

Pursuant to the Warrant Amendment, the Company has the right to require the exchange of not less than all of the Public Warrants at any time while such Public Warrants are exercisable and prior to their expiration.

Convertible Preferred Stock

In 2023, we were authorized to issue up to 10,000,000 shares of preferred stock.

On August 10, 2023 (the Business Combination "Closing Date"), we issued 4,015,002 shares of Series A Convertible Preferred Stock for $40.2 million.

The original issue and initial conversion price per share of the Series A Convertible Preferred Stock was $10.00.

The Series A Convertible Preferred Stock accrues cumulative dividends at the rate of 8.00% per annum on the original issue price.

As of December 31, 2024, total undeclared cumulative dividends were $4.4 million.

We have not recorded the undeclared dividends in our consolidated financial statements presented under "Undeclared dividends on Series A preferred stock" in our Consolidated Statement of Operations.

The Series A Convertible Preferred Stock contain a feature to automatically reset the Conversion Price upon each of February 10, 2025, and July 10, 2027, the eighteen-month and forty-seven-month anniversaries of the Closing Date, to be equal to the lower of:

(i) the then-current conversion price, and

(ii) the higher of 1) the Floor Price ($2.10 per share) or 2) the trailing ten-trading day volume weighted average price ("VWAP") of the Common Stock determined as of the date of such reset.

On February 10, 2025, the conversion price was reset to $5.277 based on the trailing ten-Trading Day VWAP of the Common Stock.

As of March 31, 2025, approximately 365,000 shares of Series A Convertible Preferred Stock, including the applicable accrued dividends, have been converted for approximately 778,000 shares of Common Stock.

Components of Results of Operations

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Revenue is recognized when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration to which we expect to be entitled in exchange for those products or services.

The primary end-user customers for our products are hospitals, clinics and physicians.

We had certain arrangements with our distributors under which they purchased our products and then resold them in geographic markets where we do not have a sales presence.

These arrangements provided for a discount on the invoice when the distributor resold our units at our normal sales price.

Such sales were recorded net of the discounts.

All such arrangements were terminated on or before December 31, 2022.

The primary end-user customers for our products are hospitals, clinics, and physicians, to which we sell directly.

We provide certain customers with rebates that are explicitly stated in our contracts and are recorded as a reduction of revenue in the period the conditions for the rebates are achieved.

The rebates result from performance-based offers that are primarily based on attaining contractually specified sales volumes.

We recognized $186 thousand of rebates in the 12 months ended December 31, 2023.

We recognized $ 0.3 million of rebates in the 12 months ended December 31, 2024.

Cost of Goods Sold

Cost of goods sold primarily consists of raw materials, direct labor and manufacturing overhead costs related to production of TriNav.

Cost of goods sold primarily consists of raw materials, direct labor, manufacturing overhead and depreciation costs related to production of TriNav.

Gross Profit and Gross Margin

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Research and Development

R&D expenses include engineering, regulatory, pre-clinical and clinical activities.

R&D expenses include engineering, regulatory, pre-clinical and clinical activities, including salaries, travel, materials purchased for R&D activities and patent expense.

We expense R&D costs as incurred.

We recognize expenses for certain development activities, such as preclinical studies and manufacturing, based on an evaluation of the progress to completion of specific tasks using data or other information provided to us by our vendors.

Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of

expenses incurred.

Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of expenses incurred.

Non-refundable advance payments for goods or services to be received in the future for use in R&D activities are recorded as prepaid expenses.

These amounts are recognized as an expense as the goods are delivered or the related services are performed, or until it is no longer expected that the goods will be delivered, or the services rendered.

R&D activities account for a significant portion of our operating expenses.

We expect our R&D expenses to increase significantly in future periods as we continue to implement our business strategy, which includes advancing our manufacturing technologies into and through clinical development of nelitolimod, expanding our R&D efforts, including hiring additional personnel to support our R&D efforts, and seeking regulatory approvals for our drug candidates that successfully complete clinical trials.

In addition, drug candidates in later stages of clinical development generally incur higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.

Accordingly, although we expect our R&D expenses to increase as nelitolimod advances into later stages of clinical development, we do not believe that it is possible at this time to accurately project total program-specific expenses through to commercialization.

Sales and Marketing

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We also record public company costs in general and administrative, including board expenses, insurance, audit fees, NASDAQ fees, and costs associated with public company financial reporting.

Loss on Equity Issuance

Loss on equity issuance represents the excess of the fair value of the warrants to purchase Series B-3 preferred stock and the Series B-2 tranche liabilities over the proceeds received from the Initial Preferred Stock Financing and subsequent tranche closings.

Loss on Equity Issuance and Extinguishment of Tranche Liability

Loss on equity issuance represents the excess of the fair value of the warrants to purchase Series B-3 preferred stock and the Series B-2 tranche liabilities over the proceeds received in a preferred stock financing and its subsequent tranche closings.

Change in Fair Value of SEPA, Warrant, and Revenue Base Redemption Liabilities

Change in fair value of SEPA, Warrant, and Revenue Base Redemption liabilities represents the change in fair value at each reporting period of the SEPA, the Series B-2 tranche liabilities (with accompanying warrants to purchase Series B-3 preferred stock) that were issued in October 2022, the change in fair value of the SPAC Warrants we assumed in the Business Combination, and the change in fair value of the Initial OrbiMed Warrant and Based Redemption Liability issued in connection with the Initial Term Loan under the OrbiMed Credit Agreement entered into in April 2024.

Change in Fair Value of Contingent Earnout Liability

Change in fair value of contingent earnout liability represents the change recorded as a result of remeasurement of the fair value.

Change in Fair Value of Tranche and Warrant Liabilities

Change in fair value of warrant and tranche liabilities represents the change in fair value of the warrants to purchase Series B-3 preferred stock and the Series B-2 tranche liabilities at each reporting period that were issued as part of the Initial Preferred Stock Financing, and the change in fair value of the Public and Private warrants we assumed in the Business Combination.

Change in fair value of contingent earnout liability, which resulted from the issuance of the common stock with certain earnout triggered as part of the Merger Agreement, represents the remeasurement of the liability based on the likelihood of the unvested Common Stock becoming vesting based on reaching certain future common stock price thresholds.

Deemed Dividend Related To Series B-2 Preferred Stock Down Round Provision

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The resulting increase in value of the preferred stock was deemed to be a dividend to the preferred stockholders and was recognized as a non-cash adjustment to additional paid-in-capital.

During 2023, the Series B-2 Preferred Stock shares were converted.

Undeclared Dividends On Series A Convertible Preferred Stock

The undeclared dividends represents the value attributed to cumulative dividends associated with the Series A Convertible Preferred Stock.

The cumulative dividends are calculated at the rate of 8.00% per annum on the original issue price of $10.00 per share.

We have not recorded the undeclared dividends in our consolidated financial statements, other than under "Undeclared dividends on Series A Preferred Stock" in our Consolidated Statements of Operations.

Income Tax Benefit (Expense)

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Loss from operations (36,165) (54,475) 18,310 33.6

Other income (expense)

Interest income 404 431 (27) (6.3)

Interest expense (16) (1) (15) 1273.2

Interest expense (3,090) (16) (3,074) n.m.

Loss on equity issuance — (5,874) 5,874 (100.0)

Change in fair value of tranche and warrant liabilities (10,855) (2,186) (8,669) 396.6

Change in fair value of contingent earnout liability 10,293 — 10,293 NA

Other income and expense, net (379) (420) 41 (9.8)

Extinguishment of tranche liability — 1,520 (1,520) (100.0)

Change in fair value of warrant, SEPA, and revenue base redemption liabilities (2,107) (10,855) 8,748 80.6

Change in fair value of contingent earnout liability 11,231 10,293 938 9.1

Other expenses, net (312) (378) 66 17.5

Loss before income taxes (30,039) (59,354) 29,315 49.4

Income tax benefit (expense) (9) (9) — 1.7

Income tax expense (6) (9) 3 33.3

Net loss available to common stockholders $ (30,045) $ (59,363) $ 29,318 49.4%

Deemed dividend related to Series B-2 preferred stock down round provision $ — $ (2,981) $ 2,981.4 100.0%

$ (2,981) $ (2,829) $ (152) 5.4%

Undeclared dividends on Series A preferred stock $ (3,188) $ (1,258) $ (1,930) (153.5)%

$ (1,258) $ — $ — $ (1,258) NA

Net loss attributable to common stockholders $ (33,233) $ (63,602) $ 30,369 47.7%

not meaningful, represented by a percentage change greater than 1,000%, favorable or unfavorable.

Comparison of the Years Ended December 31, 2024, and 2023

Revenue increased $10.9 million, or 59.0%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023.

The increase in revenue was due to higher sales volume of TriNav, amounting to $5.5 million, and the reduction in sales discounts of $0.6 million as a result of the termination of all distributor agreements in December 2022.

The increase in revenue was due to an increase of TriNav sales volumes.

Cost of Goods Sold and Gross Profit

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Research and Development

R&D expenses increased by $8.2 million, or 38.2%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022.

The increase was primarily due to a $5.5 million increase in spending on nelitolimod research and development--driven by the increased size of the studies, an increase in headcount-related expenses of $0.7 million, an increase of $1.6 million in spend on development of the production resources for nelitolimod, and a $0.4 million increase in patent and facility expenses.

R&D expenses decreased by $12.1 million, or 40.7%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023.

The decrease was primarily due to the completion of certain clinical studies related to nelitolimod in 2024.

Sales and Marketing

Sales and marketing expenses increased by $8.8 million, or 51.7%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023.

The increase was primarily driven by $4.4 million increase for additional payroll and personnel expenses due to an increase in headcount of sales and marketing personnel to support the growth of TriNav, and $0.9 million of additional travel expense, partially offset by a $1.0 million decrease in marketing expense as we shift our marketing efforts to the expansion of the sales force.

The increase was primarily driven by approximately $6.9 million increase for additional payroll and personnel expenses due to an increase in headcount of sales and marketing personnel to support the growth of TriNav and $1.7 million of additional professional service expense as we increased our sales and marketing efforts in support of the expansion of the sales force.

General and Administrative Expenses

General and administrative expenses increased by $11.0 million, or 88.4%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022.

The increase was due to a $2.2 million increase for payroll and personnel expenses due to increased headcount of general and administrative personnel;

$7.9 million in expenses (which will not recur) incurred in connection with the Business Combination, including legal, consulting and audit fees;

and a $0.9 million increase in general legal and consulting expenses.

Interest Income

Interest income increased by $0.3 million, or 139.7%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022.

The increase was due higher return from the investment of our excess cash in short-term money market funds.

General and administrative expenses decreased by $5.5 million, or 23.6%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023.

The decrease was due to a $2.5 million decrease in legal, $3.9 million decrease in accounting, and $1.1 million decrease for other professional services due to TriSalus incurring additional fees in 2023 following the Business Combination in the third quarter of 2023.

These were offset by an increase of approximately $2.3 million in stock-based compensation expenses.

Interest Expense

Interest expense increased by $15 thousand, or 1273.2%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022.

Interest expense is incurred primarily in conjunction with our accounting for leases under Topic 742, Leases .

Interest expense increased by $3.1 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023.

The interest expense increase was driven by the addition of the OrbiMed loan in the second quarter of 2024.

Loss on Equity Issuance

A loss on equity issuance of $4.4 million was recorded in the year ended December 31, 2023, compared to a loss of $8.3 million in the year ended December 31, 2022, attributable primarily to the issuance of Series B-2 preferred stock and the accompanying warrants to purchase Series B-3 preferred stock and related tranche obligations, which were valued in excess of the proceeds received as part of the transaction.

The fair value exceeded proceeds primarily due to the issuance of warrants to purchase four shares of Series B-3 preferred stock for every one share of Series B-2 preferred stock purchased in the Initial Preferred Stock Financing.

Change in Fair Value of Tranche and Warrant Liabilities

The change in fair value of tranche and warrant liabilities resulted in a loss of $10.9 million in the year ended December 31, 2023, compared to a loss of $2.2 million in the year ended December 31, 2022, as a result of the tranche exercises in 2023 and the increase in the related warrant liabilities.

There was no recorded loss on equity issuance for the year ended December 31, 2024, compared to a loss of $5.8 million in the year ended December 31, 2023, attributable primarily to the issuance of the Series B-2 preferred stock and the accompanying warrants to purchase Series B-3 preferred stock and related tranche obligations in 2023 with no comparable issuances in 2024.

Change in Extinguishment of Tranche Liability

The change of $1.5 million in extinguishment of the tranche liability was the result of the extinguishment of the Series B-2 tranche liabilities in the year ended December 31, 2023, compared to no extinguishments or other comparable equity activity during the year ended December 31, 2024.

Change in Fair Value of SEPA, Warrant.

and Revenue Base Redemption Liabilities

The change in fair value of SEPA, warrant and Revenue Base Redemption liabilities resulted in a loss of $2.1 million in the year ended December 31, 2024, compared to a loss of $10.9 million in the year ended December 31, 2023, a difference of $8.7 million.

The change was driven by the usage of the SEPA and the addition of the warrant and Revenue Base Redemption liability as part of the addition of the OrbiMed Credit Agreement in the second quarter of 2024, and the depreciation of the warrant liabilities, compared to the appreciation of the warrant liabilities in 2023.

Change in Fair Value of Contingent Earnout Liability

The change in fair value of earnout liability resulted in a gain of $10.3 million for the year ended December 31, 2023, due to the decrease in the market price of the underlying common stock.

The change in fair value of earnout liability resulted in a gain of $11.2 million for the year ended December 31, 2024 compared to a gain of $10.3 million for the year ended December 31, 2023, due to slightly larger decreases of the TriSalus stock price and risk-free rate valuation inputs in 2024 compared to valuation inputs during the period ended 2023.

Other Income and Expense, Net

Other income and expense, net, decreased by $41 thousand, or 9.8%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily due the costs associated with the conversion of the tranche and warrant liabilities from the merger.

Other income and expense, net, decreased by $0.1 million, or 17.5%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to receiving a federal refund identified in 2024 based on the completion and filing of the 2023 tax filings, offset by state increases in taxes due to the increase in 2024 sales.

Income Tax Expense

Our income tax provision consists primarily of U.S.

federal and state income taxes.

We maintain a full valuation allowance for our federal and state deferred tax assets, including net operating loss carryforwards, as we have concluded that it is not more likely than not that the deferred tax assets will be realized.

Deemed dividend related to Series B-2 preferred stock down round provision

The deemed dividend is related to the Initial Preferred Stock Financing, which was deemed to be a down round and triggered the anti-dilution provisions associated with our Legacy TriSalus preferred stock.

As a result, the conversion prices of all prior series of preferred stock were adjusted such that the holders would receive more shares of Legacy TriSalus common stock upon conversion than previously.

The additional issuances of Series B-2 preferred stock in March and June 2023 were also deemed to be down rounds which triggered additional adjustments of the conversion prices.

We recorded a $3.0 million non-cash adjustment to additional paid-in-capital due to the increased in value of the preferred stock was deemed to be a dividend to the preferred stockholders for the year ended December 31, 2023, compared to the $2.8 million, non-cash adjustment to additional paid-in-capital in the year end December 31, 2022.

The change in the deemed divided related to the Series B-2 preferred stock was a result of the Business Combination on August 10, 2023, with the Series B-2 preferred stock no longer existing;

therefore, we did not have a need to record a deemed dividend for the year ended December 31, 2024.

Undeclared dividend related to Series A convertible preferred stock

The change in the undeclared dividend related to Series A convertible preferred stock was a result of the Series A convertible preferred stock dividends calculated based on a full twelve-months for the year ended December 31, 2024 compared to a partial year for the year ended December 31, 2023.

Liquidity and Capital Resources

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We incurred net losses of $30.0 million and $59.4 million for the year ended December 31, 2024, and the year ended December 31, 2023, respectively.

We had cash and cash equivalents of approximately $11.8 million and $9.4 million as of December 31, 2023 and December 31, 2022, respectively.

We had cash and cash equivalents of approximately $8.5 million and $11.8 million as of December 31, 2024 and 2023, respectively.

Since inception, we have financed operations primarily through the issuance of preferred stock, convertible notes, and term loans and proceeds from the exercise of warrants.

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Our ability to fund future operations and execute our long-term business plan and strategy, including our transformation into a therapeutics company, will require that we raise additional capital through the issuance of additional equity and/or debt.

There can be no assurance that we will be able to raise such additional financing on satisfactory terms.

There can be no assurance that we will be able to raise such additional financing on satisfactory terms, if at all.

If additional capital is not secured when required, we may need to delay or curtail our operations until such funding is received.

If we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, financial condition and results of operations could be materially adversely affected.

As a result, we have concluded that there is substantial doubt of our ability to continue as a going concern for a reasonable period of time, which is considered to be one year from the issuance date of the financial statements.

Our ability to continue as a going concern is dependent upon obtaining additional capital and financing.

Our financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should we be unable to continue as a going concern.

We entered into the Merger Agreement with MTAC, and, upon consummation of the Business Combination on August 10, 2023, we raised $36.9 million of cash (net of expenses related to closing the Business Combination).

In addition, as described below, we received $4.5 million in cash proceeds from the exercise of warrants to purchase Series B-3 preferred stock in July 2023.

We may seek additional capital through a combination of public and private equity offerings, debt financings, strategic partnerships and licensing arrangements.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, existing holders of our securities will be diluted, such offerings may reduce the market price of the Common Stock, and the terms may include a preference on liquidating distributions or a preference on dividend payments or other preferences that adversely affect your rights as a stockholder.

Thus, existing holders of our securities bear the risk of our future offerings reducing the market price of our Common Stock and diluting their shareholdings in us.

For instance, in October 2023, w e entered into the SEPA with Yorkville , whereby we have the right, but not the obligation, to sell to Yorkville up to $30.0 million of our Common Stock at our request, subject to terms and conditions specified in the SEPA.

As of this filing of this Annual Report, we have issued and sold 350,000 shares of our common stock for gross proceeds of approximately $3.1 million.

For instance, in October 2023, w e entered into the SEPA with Yorkville , whereby we have the right, but not the obligation, to sell to Yorkville up to $30.0 million of our Common Stock a t our request, subject to terms and conditions specified in the SEPA.

As of this filing of this Annual Report, we have issued and sold 2,290,377 shares of our Common Stock under the SEPA for gross proceeds of approximately $14.1 million.

During the year ended December 31, 2024, we also raised an additional $1.0 million, before expenses, through the sale of Common Stock in a private placement.

In addition, in April 30, 2024, we entered into the OrbiMed Credit Agreement providing for up to $50.0 million in senior secured term debt, of which we immediately drew $25.0 million, before expenses.

Subsequent to December 31, 2024, we borrowed an additional $10.0 million term loan under the OrbiMed Credit Agreement.

Unless we are able to raise additional capital, we do not currently expect that our existing cash and cash equivalents will be sufficient to fund our projected liquidity requirements for the next 12 months, creating substantial doubt about our ability to continue as a going concern.

Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth in the section titled “ Risk Factors.

In October 2022, Legacy TriSalus raised an additional $9.8 million, net of issuance costs, through the issuance of Series B-2 preferred stock and warrants to purchase Series B-3 preferred stock.

This issuance also included, at Legacy TriSalus's option, a second tranche of Series B-2 preferred stock and warrants to purchase Series B-3 preferred stock (“Series B-3 Warrants”) for up to approximately $7.4 million (which could be increased to $10 million) and a third tranche, at the election of investors in the second tranche, of up to $4.3 million (which could be increased to $5 million) of Series B-2 preferred stock and warrants to purchase Series B-3 preferred stock, subject, in all respects, to the covenants in the Merger Agreement prohibiting us from issuing additional securities during the Interim Period without MTAC’s prior consent.

We offered the Series B-2 preferred stock to all of Legacy TriSalus's preferred stockholders at the time of the Initial Preferred Stock Financing (representing approximately 99.2% of Legacy TriSalus's then outstanding shares on an as-converted to common stock basis).

In January through March 2023, holders of warrants to purchase 94,294,112 shares of Series B-3 preferred stock exercised their purchase right, for proceeds of approximately $4.7 million.

In March through June 2023, Legacy TriSalus effectuated (i) a closing of a portion of the second tranche of the Initial Preferred Stock Financing whereby a total of 18,824,790 shares of Series B-2 preferred stock and accompanying warrants to purchase a total of 75,299,160 shares of Series B-3 preferred stock, representing 40-50% of the shares committed in the second tranche, were sold for an aggregate purchase price total of $6.6 million and (ii) an additional closing under the purchase agreement for the Initial Preferred Stock Financing whereby as total of 7,428,569 shares of Series B-2 preferred stock and accompanying warrants to purchase a total of 297,147,276 shares of Series B-3 preferred stock were sold for an aggregate purchase price total of $2.6 million.

Any Series B-3 Warrants that were not exercised for cash were automatically net settled for shares of TriSalus Common Stock immediately prior to the closing of the Business Combination and exchanged into shares of our Common Stock at the Effective Time.

If we are able to achieve certain targets specified in the Credit Agreement and are then able to draw the remainder of the funds available, and if market conditions allow us to sell additional shares under the SEPA, we believe we can fund our operations through the end of 2025.

We have based these estimates on assumptions that may prove to be wrong and we could use our available capital resources sooner than we currently expect, and future capital requirements and the adequacy of available funds will depend on many factors, including those described in the section titled “ Risk Factors ” in this Annual Report.

See also “Funding Requirements” below.

Comparison of the Year Ended December 31, 2024 and December 31, 2023

The following table presents net cash from operating activities, investing activities and financing activities (in thousands):

December 31, 2024 December 31, 2023

Net cash used in operating activities (40,843) $ (50,578)

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Net cash provided by financing activities 37,936 54,629

Net increase / (decrease) in cash, cash equivalents and restricted cash $ 2,463 $ (20,637)

Net (decrease) / increase in cash, cash equivalents and restricted cash $ (3,252) $ 2,463

Cash Used in Operating Activities

For the year ended December 31, 2024, net cash used in operating activities was $40.8 million.

The net cash used in operating activities consisted of net loss of $59.0 million, adjusted for non-cash charges totaling $7.1 million, a $1.0 million adjustment related to a development milestone payment to Dynavax that is included as an investing cash outflow, and a net increase of $0.7 million in our net operating assets.

The net operating assets net increase was primarily due to increases in accounts receivable of $2.0 million and inventory of $1.1 million, partially offset by an increase of $2.8 million in trade payables, accrued expenses and other liabilities, and a decrease of $1.0 million in prepaid expenses.

The net cash used in operating activities consisted of net loss of $30.0 million, adjusted for non-cash activity totaling $1.2 million, primarily related to a gain on the adjustment of the fair value of the contingent earnout liability of $11.2 million, offset by share-based compensation of $5.4 million and a loss on the adjustment of the fair value of warrants to purchase common stock of $2.8 million.

The increase in net operating assets of $9.5 million was primarily due to an increase in inventory and accounts receivable, offset by a decrease in trade payables and accrued liabilities.

For the year ended December 31, 2023, net cash used in operating activities was $50.6 million.

The net cash used in operating activities consisted of net loss of $47.2 million adjusted for non-cash charges totaling $11.6 million, a $1.0 million adjustment related to a development milestone payment to Dynavax that is included as an investing cash outflow, and a net decrease of $2.3 million in our net operating assets.

The decrease in our net operating assets was driven by an increase of $5.2 million in trade payable, accrued expenses and other current liabilities, partially offset by increases in

prepaid expenses of $2.6 million and inventory of $0.2 million.

The increase in our prepaid expenses was due principally to the deferral of costs associated with the Business Combination.

The net cash used in operating activities consisted of net loss of $59.4 million adjusted for non-cash activity totaling $8.2 million, primarily related to a loss on equity issuance of $5.9 million and a $1.0 million adjustment related to a development milestone payment to Dynavax that is included as an investing cash outflow.

The decrease in net operating assets of $0.5 million was primarily due to the increase of $2.8 million in trade payables and accrued liabilities, offset by the $2.0 million increase in accounts receivable.

Cash Used in Investing Activities

Net cash used in investing activities of $2.1 million for the year ended December 31, 2023, was primarily due to purchases of property and equipment of $0.6 million, cash paid to Dynavax for a milestone payment in connection with the purchase of nelitolimod of $1.0 million, and cash paid for purchase of other intellectual property and licenses of $0.5 million.

Net cash used in investing activities of $1.8 million for the year ended December 31, 2022, was primarily due to purchases of property and equipment of $0.7 million, cash paid to Dynavax for a milestone payment in connection with the purchase of nelitolimod of $1.0 million, and cash paid for purchase of intellectual property and licenses of $0.1 million.

Net cash used in investing activities of $0.3 million for the year ended December 31, 2024 was primarily due to purchases of property and equipment of $0.3 million.

Net cash used in investing activities of $1.6 million for the year ended December 31, 2023 was primarily due to cash paid to Dynavax for a milestone payment under the Dynavax Agreement of $1.0 million and purchases of property and equipment of $0.6 million.

Cash Provided by Financing Activities

Net cash provided by financing activities of $54.6 million for the year ended December 31, 2023, consisted of consisted principally of proceeds received upon consummation of the Business Combination of $36.9 million, proceeds from the issuance of Series B-2 preferred stock of $9.2 million, and proceeds from the exercise of warrants to purchase Series B-3 preferred stock of $9.6 million, partially offset by expenses incurred related to the Business Combination of $1.1 million

Net cash provided by financing activities of $13.5 million for the year ended December 31, 2022, consisted of proceeds from the issuance of preferred stock, net of issuance costs, of $13.5 million, proceeds from the exercise of stock options and warrants for common stock of $0.1 million, partially offset by payments on finance lease liabilities of $0.1 million.

Net cash provided by financing activities of $37.9 million for the year ended December 31, 2024 was due to $22.4 million, net of expenses, from the initial draw down under the OrbiMed Credit Agreement, $14.1 million related to the sale of Common Stock under the SEPA, and $1.0 million, before expenses, through the sale of Common Stock in a private placement.

Net cash provided by financing activities of $54.6 million for the year ended December 31, 2023 consisted primarily of proceeds of $36.9 million from the Business Combination, proceeds of $9.6 million from the exercise of warrants to purchase Series B-3 preferred stock, and proceeds of $9.2 million from the issuance of Series B-2 preferred stock, partially offset by expenses incurred related to the Business Combination of $1.1 million.

Funding Requirements

Our primary use of cash is to fund operating expenses, which consist of research, development and clinical expenses related to our lead product candidate nelitolimod, and preclinical programs, sales and marketing expenses related to the growth of TriNav, as well as general and administrative expenses.

We plan to advance the development of nelitolimod, initiate new research and pre-clinical development efforts and seek marketing approval for product candidates that we successfully develop.

If we obtain approval for our product candidates, we expect to incur commercialization expenses, which may be significant, related to establishing sales, marketing, manufacturing capabilities, distribution and other commercial infrastructure to commercialize such products.

Accordingly, we may need to obtain substantial additional funding in connection with our continuing operations.

However, global economic conditions may worsen, including disruptions to, and volatility in, the credit and financial markets in the U.S.

as well as disruptions to the U.S.

banking system.

Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds, have in the past and may in the future lead to market-wide liquidity problems.

Regardless of whether these conditions exist, we may be unable to access additional capital or our liquidity could otherwise be impacted.

If we are unable to raise capital when needed or on attractive terms, we may be forced to delay, reduce or eliminate our research and development programs and/or future commercialization efforts.

We also expect to continue to incur significant expenses in connection with our ongoing activities related to TriNav, including sales and marketing expenses and expenditures to support expansion of our production capacity to support our expected sales growth.

Our primary use of cash is to fund our operating expenses, which consist of sales and marketing expenses related to the growth of our sole commercial product TriNav, research, development and clinical expenses related to both TriNav and nelitolimod, as well as general and administrative expenses.

If we obtain approval for our product candidates, we expect to incur commercialization expenses, which may be significant, related to establishing or expanding sales, marketing, manufacturing capabilities, distribution and other commercial infrastructure to commercialize such products.

Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations.

Inflation and rising interest rates may result in an economic recession globally or in the U.S., which could lead to a reduction in product demand, a decrease in corporate capital expenditures, prolonged unemployment, labor shortages, reduction in consumer confidence, adverse geopolitical and macroeconomic events, or any similar negative economic condition.

Economic conditions in some parts of the world have been worsening, with disruptions to, and volatility and uncertainty in, the credit and financial markets in the U.S.

and worldwide resulting from the effects of inflation and rising interest rates.

These conditions have been further exacerbated by recent and potential future disruptions in access to bank deposits or lending commitments due to bank failures, the war in Ukraine and conflicts in the Middle East.

It is not possible at this time to estimate the long-term impact that these and related events could have on our business, as the impact will depend on future developments, which are highly uncertain and cannot be predicted.

If these conditions persist and deepen, we could experience an inability to access additional capital, or our liquidity could otherwise be impacted.

If we are unable to raise capital when needed and on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs and/or other efforts.

We also expect to continue to incur significant expenses in connection with our ongoing activities related to TriNav, including sales and marketing expenses to support our expected sales growth.

Our future capital requirements, both near and long-term, will depend on many factors, including but not limited to:

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the outcome, timing and cost of the regulatory approval process for nelitolimod by the FDA, including the potential for the FDA to require that we perform more studies and clinical trials than those that we currently expect;

our ability to draw the remaining $15.0 million available under the OrbiMed Credit Agreement if and when needed;

the costs involved in preparing, filing and prosecuting patent applications and annuity fees relating to issued patents;

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the number of future product candidates that we may pursue and their development requirements;

the costs of commercialization activities for any of our product candidates

that may receive marketing approval to the extent such costs are not the responsibility of any future collaborators, including the costs and timing of establishing product sales, marketing, distribution and manufacturing capabilities;

the costs of commercialization activities for any of our product candidates that may receive marketing approval to the extent such costs are not the responsibility of any future collaborators, including the costs and timing of establishing product sales, marketing, distribution and manufacturing capabilities;

the amount and timing of future revenue, if any, received from commercial sales of our current and future product candidates upon any marketing approvals;

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Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of securities offerings, debt financings, collaborations, strategic alliances and licensing arrangements.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, existing ownership interest in our company may be materially diluted, and the terms of these securities may include liquidation or other preferences that adversely affect common stockholders’ rights.

Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

Additionally, we are subject to a number of affirmative and restrictive covenants pursuant to the OrbiMed Credit Agreement, which limit or restrict our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

As of March 31, 2025, we will also be required to maintain a minimum cash balance of $10.0 million under the OrbiMed Credit Agreement.

A failure to comply with the terms of the OrbiMed Credit Agreement may result in an event of default , which could result in an acceleration of amounts due under the OrbiMed Credit Agreement.

We may not have sufficient funds or may be unable to arrange for additional financing to repay our indebtedness or to make any accelerated payments, and OrbiMed could seek to enforce security interests in the collateral securing such indebtedness, which would materially harm our business and our stock price.

If we raise funds through additional collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us.

If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

If we are unable to raise additional capital when needed, we may

be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

As of December 31, 2024, we had $8.5 million in cash and cash equivalents.

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We will likely require additional capital in the near term in order to continue to fund our operations through equity or debt financings, partnerships, collaborations, or other sources which may not be available on a timely basis, on favorable terms, or at all, and such capital, if obtained, may not be sufficient to enable us to continue to implement our long-term business strategy.

In March 2024, we sold 350,000 shares of our Common Stock under the SEPA, raising approximately $3.1 million.

We will likely require additional capital in the near term in order to continue to fund our operations through one or a combination of securities offerings, debt financings, collaborations, strategic alliances and/or licensing arrangements which may not be available on a timely basis, on favorable terms, or at all, and such capital, if obtained, may not be sufficient to enable us to continue to implement our long-term business strategy.

Additionally, we may never become profitable, or if we do, may not be able to sustain profitability on a recurring basis.

If we cannot capitalize on our business opportunities because we lack sufficient capital, our business, financial condition and results of operations could be materially adversely affected and we may need we may need to implement cost cutting measures, which may require us to reduce our marketing and commercialization expenditures for TriNav, discontinue or scale back the development of our product candidates or result in the delay of their development and commercialization, if approved, and other measures, which may materially and adversely impact our business.

Further, we may need to pursue strategic alternatives, including mergers or other transactions, if we are unable to secure additional capital.

Our continuation as a going concern is dependent on our ability to generate sufficient cash flows from operations and/or obtain additional capital through equity or debt financings, partnerships, collaborations, or other sources to carry out our long-term business strategy.

If we are unable to continue as a going concern, we may have to liquidate our assets and may receive less than fair value for such assets and less than the value at which such assets are carried on our financial statements, and it is likely that investors will lose all or a part of their investment.

As discussed in Note (1) Nature of Business to our consolidated financial statements included elsewhere in this Annual Report, there is doubt regarding our ability to continue as a going concern as of December 31, 2023 and the date of this Annual Report.

As discussed in Note (1) Nature of Business to our consolidated financial statements included elsewhere in this Annual Report, there is substantial doubt regarding our ability to continue as a going concern as of December 31, 2024 and the date of this Annual Report.

Contractual Obligations and Commitments

Our contractual obligations as of December 31, 2024, include lease obligations of $2.3 million, reflecting the minimum commitments for our principal administrative and production facility and other office spaces.

See Note (17) Leases to our audited consolidated financial statements included elsewhere in this Annual Report for more information on our lease obligations, including the scheduled maturities and timing of cash payments related to these obligations.

See Note (18) Leases to our consolidated financial statements included elsewhere in this Annual Report for more information on our lease obligations, including the scheduled maturities and timing of cash payments related to these obligations.

Pursuant to the Asset Purchase Agreement, dated July 31, 2020, between TriSalus and Dynavax, we have paid Dynavax $12.0 million as of December 31, 2024, and may be required to pay Dynavax up to an additional $157.0 million upon the achievement of certain development and regulatory milestones with respect to nelitolimod.

We will also be required to pay up to $80.0 million upon achieving certain commercial milestones once sales of nelitolimod have begun.

We will also be required to pay up to $80.0 million upon achieving certain commercial milestones for nelitolimod.

The Dynavax Agreement also obligates us to pay low double-digit royalties based on potential future net sales of product containing nelitolimod compound on a product-by-product and country-by-country basis during the applicable royalty term.

Such royalties are subject to reduction by up to 50% in certain circumstances.

We do not have any outstanding debt as of December 31, 2023.

Off-Balance Sheet Arrangements

referred to as structured finance or special purpose entities, which were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

We did not have during the periods presented, and we do not currently have, any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, which were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical Accounting Policies and Estimates:

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We do not have a history of any refunds, allowances or other concessions provided to our customers from the agreed-upon sales price after delivery of the product.

We do not offer discounts, except to distributors as discussed below.

We had certain arrangements with distributors under which the distributors purchased and then resold our products in geographic markets where we did not have sales presence.

These arrangements provided for a discount on the invoice.

When the distributor resold our units at our normal sales price, the discount served to compensate the distributor for their efforts.

We recorded these sales net of the discounts.

One of our distributors, ACD, accounted for approximately 20% of our sales for the year ended December 31, 2022.

All of the distributor agreements were discontinued on or before December 31, 2022.

We do not offer discounts.

We provide certain customers with rebates that are explicitly stated in our contracts and are recorded as a reduction of revenue in the period the conditions for the rebates are achieved.

The rebates result from performance-based offers that are primarily based on attaining contractually specified sales volumes.

Subsequent to a rebate being earned, the customer receives a credit to apply to future purchases.

Warrants Liabilities

Freestanding financial instruments that permit the holder to acquire shares that are either puttable by the holder, redeemable or contingently redeemable are required to be reported as liabilities in the consolidated financial statements.

We present such liabilities on the balance sheets at their estimated fair values.

Changes in fair value of the liability are calculated each reporting period, and any change in value are recognized in the Consolidated Statements of Operations.

We have determined that the warrants issued to investors and lenders, which are exercisable for shares of our convertible preferred stock, should be classified as liabilities due to contingent redemption liability of the underlying convertible preferred stock.

In connection with the Business Combination, we assumed warrants to purchase Common Stock.

The warrants include the Public Warrants, Private Placement Warrants and Working Capital Warrants.

We value the liability for all of the warrants based on the trading price of the publicly held warrants.

In connection with our borrowing under the Initial OrbiMed Credit Agreement, we issued the Initial OrbiMed Warrant, which we classified as a derivative liability because it did not meet the equity classification criteria under ASC 815-40.

We calculated the fair value of the Initial OrbiMed Warrant based on the Black-Scholes-Merton option pricing model.

This model considers several variables and assumptions in estimating the fair value of financial instruments, including the per-share fair value of the underlying common stock, exercise price, expected term, risk-free interest rate, expected stock price volatility over the expected term, and expected annual dividend yield.

We calculated the expected terms as the contractual expiration period.

The risk-free interest rate is estimated using the rate of return on U.S.

treasury notes with a life that approximates the expected term.

Our common stock does not have sufficient trading history and, therefore, we used the historical volatility of the stock prices of similar publicly traded peer companies.

We utilized a dividend yield of zero, as we have no history or plan of declaring dividends on the Company's common stock.

Contingent Earnout Liability

In connection with the Business Combination, the Sponsor received shares that will vest upon the achievement of certain share price targets and change in control events.

In connection with the Business Combination, the sponsor of the public entity agreed that certain of the shares of Common Stock it held would vest upon the achievement of certain share price targets and change in control events.

In accordance with ASC 815-40, Derivatives and Hedging , the earnout shares were classified as a liability as they do not qualify as being indexed to the Company’s own stock and therefore are measured at fair value at each reporting date with changes in fair value recorded in the Consolidated Statements of Operations.

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Treasury yield curve for time periods commensurate with the expected term of the earnout period;

• expected dividend yield, which we estimate to be zero based on the fact that we have never paid or declared dividends.

• expected dividend yield, which we estimate to be zero based on the fact that we have never paid or declared dividends on the Common Stock.

These estimates may be subjective in nature and involve uncertainties and matters of judgment and therefore cannot be determined with exact precision.

Revenue Base Redemption Liability

In connection with the Initial OrbiMed Loan, a “Product Revenue Base” (i.e., with respect to any period, the net revenues for such period from sales of TriNav) on a trailing 12-month basis does not equal or exceed the specified amounts, we will start repaying the outstanding principal amount of the Term Loans.

These required revenue thresholds are referred to as the “Revenue Base Redemption Liability." We determined that we should bifurcate and separately recognize the Revenue Base Redemption Liability.

We determined the value of the Revenue Base Redemption Liability using a Monte Carlo simulation of future revenue and valuing the Initial Term Loan using the with and without method.

The change in fair value of the liability is recorded in the Consolidated Statement of Operations.

See Note (14) Debt for further detail.

Standby Equity Purchase Agreement

In October 2023, the Company entered into a SEPA with Yorkville.

Pursuant to the SEPA, the Company has the right, but not the obligation, to sell to Yorkville up to $30.0 million of shares of Common Stock at the Company’s request any time during the 24 months following the execution of such purchase agreement, subject to certain conditions.

The SEPA, in its entirety, is not classified as a liability pursuant to ASC 480, and is accounted for as a derivative pursuant to ASC 815-10, Derivatives and Hedging ("ASC 815-10").

The SEPA derivative is valued based on a scenario-based valuation model utilizing the expected draws, probability of the draws and risk-free rate inputs.

The change in the fair value of the derivative is recorded in the Consolidated Statements of Operations.

See Note (13) Standby Equity Purchase Agreement for further detail.

Research and Development

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To date, we have had no material differences between our estimates of such expenses and the amounts actually incurred.

Nonrefundable advance payments for goods and services are deferred and recognized as expense in the period that the related goods are consumed or services are performed.

Tranche Rights and Obligation Liabilities

We classified the Series B-2 tranche rights and obligations and Series B-3 Warrants as liabilities on the Condensed Consolidated Balance Sheets.

We measured the Series B-2 Tranche Rights and Series B-3 Warrants at fair value upon issuance in October 2022, March 2023, and June 2023, and remeasured the liabilities to fair value at December 31, 2022, March 31, 2023, June 30, 2023, and August 10, 2023, with changes in the fair value at each measurement date recognized in Change in fair value of tranche and warrant liabilities in the consolidated statements of operations.

The Series B-2 Tranche Rights and series B-3 Warrants were extinguished in the Business Combination.

The fair value of the Series B-2 tranche liabilities was determined using a Binomial Tranche Model.

The fair value of the Series B-3 Warrants was determined using a probability-weighted expected outcome model whereby the following two scenarios were probability-weighted based on the Company’s expectation of each occurring:

(1) a status quo scenario whereby the Company would continue as a private company and (2) a scenario where the Business Combination would close.

Under the status quo scenario, the Series B-3 Warrants, including warrants to be issued under the second and third tranches, were valued using the Black-Scholes model.

The fair value of the Series B-2 tranche liabilities and Series B-3 Warrants used various inputs and assumptions that required management to apply judgment and make estimates, including:

• the equity value under the status quo scenario, which was determined using the Guideline Public Company method within the market approach to estimate the fair value of equity on a minority, marketable basis using selected publicly traded peer companies and valuation multiples based on size, growth, profitability, and other relevant factors;

• the fair value of underlying Series B-2 preferred stock, which was determined using the Option Pricing Model to allocate the Company’s equity value among its various classes of equity securities under the status quo scenario;

• issuance and exercise price, which was based on the terms of the purchase agreement;

• expected term, which we based on the expiry periods as defined in the purchase agreement;

• expected volatility, which was based on the historical equity volatility of publicly traded peer companies for a term equal to the expected term of the warrants and tranche liabilities;

• risk-free interest rate, which was determined by reference to the U.S.

Treasury yield curve for time periods commensurate with the expected terms of the warrants and tranche liabilities;

• expected dividend yield, which we estimate to be zero based on the fact that we have never paid or declared dividends.

These estimates may be subjective in nature and involve uncertainties and matters of judgment and therefore cannot be determined with exact precision.

The scenario probability is the most sensitive estimated input into the calculation of the fair value of the Series B-3 Warrants.

The risk of exposure is estimated using a sensitivity analysis of potential changes in the significant unobservable inputs, primarily the scenario probability input that is the most susceptible to valuation risk.

Nonrefundable advance

payments for goods and services are deferred and recognized as expense in the period that the related goods are consumed or services are performed.

Segment Reporting

In 2024, we adopted Accounting Standards Update 2023-07, Improvements to Disclosures About Reportable Segments .

In connection with the adoption of this Update, we re-evaluated our segment and significant expenses utilized by our Chief Operating Decision Maker (“CODM”).

Our CODM, our Chief Executive Officer ("CEO"), reviews our financial information on a consolidated basis for purposes of allocating resources and evaluating its financial performance.

The CEO considers recommendations from the Chief Financial Officer ("CFO") and reviews the Monthly Financial Report ("MFR"), including financial information and the company’s performance highlights, such as revenue, accounts receivable and inventory balances, cash flows and cash on-hand, operational expenditures and headcount.

Based on the Company’s consolidated financial information, the CEO makes the key operating decisions and determines how resources should be allocated.

Once the CEO has decided, the CEO and CFO are responsible for carrying out the CEO’s decisions.

All of our customers and long-lived assets are located in the United States.

Accordingly, we have determined we operate as a single reportable segment within a single geographic area.

Since the Company operates as a single reporting segment, all required segment reporting disclosures can be found in the consolidated financial statements, as presented in Note (2) Summary of Significant Accounting Policies.

Emerging Growth Company Status

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards.

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.

The JOBS Act provides that a company can choose not to take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any such election to not take advantage of the extended transition period is irrevocable.

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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.

What changed 10-K

Item 7. Management’s Discussion and Analysis