MEDTECH ACQUISIT(MTAC) - 2023 Q3 - Quarterly Report

Business Combination and Financing - TriSalus Life Sciences, Inc. reported a Business Combination with MedTech Acquisition Corporation, resulting in an aggregate consideration of $220.0 million, payable in 22,000,000 shares of common stock [171]. - In October 2022, TriSalus raised approximately$ 9.8 million through the sale of 706,243 shares of Series B-2 preferred stock at a price of $14.16 per share [174]. - The company completed a portion of the second tranche of the B-2 Preferred Stock Financing in March 2023, raising approximately$ 2.9 million [177]. - In June 2023, TriSalus raised approximately $3.7 million through the sale of 257,779 shares of Series B-2 preferred stock [179]. - A warrant repurchase program was approved in August 2023, authorizing up to$ 4.0 million for repurchases of Public Warrants [181]. - On October 2, 2023, TriSalus entered into a Standby Equity Purchase Agreement with Yorkville, allowing the company to sell up to $30.0 million of common stock during the commitment period [183]. - The company entered into the Yorkville Purchase Agreement in October 2023, allowing it to sell up to$ 30.0 million of shares of Common Stock [246]. Revenue and Profitability - Revenue for the three months ended September 30, 2023, increased by $1.3 million or 32.4% compared to the same period in 2022, primarily due to a$ 1.1 million increase in units of TriNav sold [203]. - Gross profit for the three months ended September 30, 2023, increased by $1.4 million or 42.9%, with gross margin rising to 88.7% from 82.1% [205]. - Revenue increased by$ 3.6 million, or 39.4%, for the nine months ended September 30, 2023, compared to the same period in 2022, primarily due to higher sales volume of TriNav [213]. - Gross profit increased by $3.0 million, or 39.3%, for the nine months ended September 30, 2023, while gross margin slightly decreased from 84.3% to 84.2% [215]. Expenses and Losses - R&D expenses increased by$ 4.6 million or 94.8% for the three months ended September 30, 2023, driven by costs associated with three clinical trials of drug candidate SD-101 [206]. - Sales and marketing expenses rose by $1.7 million or 54.8% for the three months ended September 30, 2023, primarily due to increased payroll and travel expenses [208]. - General and administrative expenses increased by$ 5.5 million or 158.2% for the three months ended September 30, 2023, mainly due to higher professional services costs related to the Business Combination [209]. - R&D expenses rose by $6.8 million, or 44.9%, for the nine months ended September 30, 2023, mainly due to increased spending on clinical trials and manufacturing development [216]. - General and administrative expenses surged by$ 9.1 million, or 107.7%, for the nine months ended September 30, 2023, largely due to higher professional service fees and increased payroll expenses [220]. - The company incurred net losses of $23.5 million for the nine months ended September 30, 2023, and has substantial doubt about its ability to continue as a going concern [226][227]. Cash Flow and Liquidity - Net cash used in operating activities was$ 41.2 million for the nine months ended September 30, 2023, compared to $24.0 million for the same period in 2022 [232]. - Net cash provided by financing activities was$ 54.6 million for the nine months ended September 30, 2023, primarily from merger proceeds and preferred stock issuance [239]. - The company had cash and cash equivalents of approximately $21.4 million as of September 30, 2023, which may not be sufficient to fund projected liquidity requirements for the next 12 months [228]. - As of September 30, 2023, the company had approximately$ 21.4 million in cash and cash equivalents, which is insufficient to fund projected liquidity requirements for the next 12 months [246]. - The company anticipates requiring additional capital in the near term to continue operations, which may not be available on favorable terms [246]. - The company may need to delay or curtail operations if it cannot raise sufficient capital [247]. Research and Development - The company has initiated Phase 1 human trials for SD-101, which aims to treat liver and pancreatic cancers, with no guarantee of favorable data or FDA approval [175]. - Approximately 12% of the company's R&D costs are headcount-related, with the remainder being external services [262]. - The company expects to incur significant expenses related to the commercialization of TriNav, including manufacturing, distribution, marketing, and sales costs [243]. - The company has paid Dynavax $12 million as of September 30, 2023, and may owe up to an additional$ 158 million upon achieving certain development and regulatory milestones for SD-101 [250]. Accounting and Compliance - The company recognizes revenue from TriNav shipments when control of the units has been transferred to the customer, following ASC 606 guidelines [253]. - The company faces substantial doubt regarding its ability to continue as a going concern as of September 30, 2023 [248]. - The company will remain an emerging growth company until the earlier of December 31, 2025, or achieving total annual gross revenue of at least $1.235 billion [270]. - The market value of the company's common equity held by non-affiliates must exceed$ 700 million to be deemed a "large accelerated filer" under SEC rules [270]. - The company has elected to take advantage of the extended transition period under the JOBS Act, which may affect comparability with other public companies [269]. - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures [272]. - Recent accounting pronouncements and their potential impact on financial condition and results of operations are detailed in the quarterly report [271].