UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
or
For the transition period from to
Commission File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) |
(Address of principal executive offices and Zip Code)
Registrant’s telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol |
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The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has selected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The number of shares of the registrant’s common stock, par value $0.0001, outstanding as of November 6, 2023 was
TABLE OF CONTENTS
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Item 1. |
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Consolidated Balance Sheets – As of September 30, 2023 (unaudited) and December 31, 2022 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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Item 4. |
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Item 1. |
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Item 1A |
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Item 2. |
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Item 3. |
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Item 4. |
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Item 5. |
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Item 6. |
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future revenues; solvency; future industry market conditions; future changes in our capacity and operations; future operating and overhead costs; intellectual property; regulatory and related approvals; the conduct or outcome of pre-clinical or clinical (human) studies; operational and management restructuring activities (including implementation of methodologies and changes in the board of directors); our ability to expand our sales organization to address effectively existing and new markets that we intend to target; future employment and contributions of personnel; tax and rising interest rates; productivity, business process, rationalization, investment, acquisition and acquisition integrations, consulting, operational, tax, financial and capital projects and initiatives; inflationary pressures on the U.S. and global economy; changes in the legal or regulatory environment; and future working capital, costs, revenues, business opportunities, cash flows, margins, earnings and growth. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential”, or “continue” or the negative of these terms or other similar expressions.
The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of important factors that could cause actual results to differ materially from those in the forward-looking statements, including the factors described under the sections in this Quarterly Report on Form 10-Q titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for our management to predict all risk factors and uncertainties.
You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.
3
PART I – Financial Information
Item 1. FINANCIAL STATEMENTS
AVITA MEDICAL, INC.
Consolidated Balance Sheets
(In thousands, except share and per share data)
(Unaudited)
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As of |
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September 30, 2023 |
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December 31, 2022 |
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ASSETS |
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Cash and cash equivalents |
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$ |
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$ |
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Marketable securities |
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Accounts receivable, net |
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BARDA receivables |
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Prepaids and other current assets |
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Inventory |
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Total current assets |
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Marketable securities long-term |
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- |
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Plant and equipment, net |
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Operating lease right-of-use assets |
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Corporate-owned life insurance ("COLI") asset |
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Intangible assets, net |
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Other long-term assets |
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Total assets |
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$ |
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$ |
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LIABILITIES, NON-QUALIFIED DEFERRED COMPENSATION PLAN SHARE AWARDS AND STOCKHOLDERS' EQUITY |
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Accounts payable and accrued liabilities |
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Accrued wages and fringe benefits |
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Current non-qualified deferred compensation liability |
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Other current liabilities |
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Total current liabilities |
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Non-qualified deferred compensation liability |
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Contract liabilities |
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Operating lease liabilities, long term |
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Total liabilities |
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Non-qualified deferred compensation plan share awards |
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Stockholders' equity: |
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Common stock, $ |
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Preferred stock, $ |
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Company common stock held by the non-qualified deferred compensation plan ("NQDC Plan") |
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Additional paid-in capital |
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Accumulated other comprehensive income |
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Accumulated deficit |
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Total stockholders' equity |
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Total liabilities, non-qualified deferred compensation plan share awards and stockholders' equity |
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$ |
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$ |
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The accompanying notes form part of the unaudited Consolidated Financial Statements.
4
AVITA MEDICAL, INC.
Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)
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Three-Months Ended |
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Nine-Months Ended |
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September 30, 2023 |
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September 30, 2022 |
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September 30, 2023 |
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September 30, 2022 |
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Revenues |
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$ |
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$ |
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$ |
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$ |
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Cost of sales |
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( |
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( |
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( |
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Gross profit |
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BARDA income |
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Operating expenses: |
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Sales and marketing expenses |
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( |
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( |
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( |
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( |
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General and administrative expenses |
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( |
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( |
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( |
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( |
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Research and development expenses |
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( |
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( |
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( |
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( |
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Total operating expenses |
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( |
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( |
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( |
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( |
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Operating loss |
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( |
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( |
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( |
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( |
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Interest expense |
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( |
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( |
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( |
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Other income |
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Loss before income taxes |
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( |
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( |
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( |
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( |
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Income tax expense |
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( |
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( |
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( |
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( |
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Net loss |
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$ |
( |
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$ |
( |
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$ |
( |
) |
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$ |
( |
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Net loss per common share: |
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Basic and Diluted |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Weighted-average common shares: |
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Basic and Diluted |
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The accompanying notes form part of the unaudited Consolidated Financial Statements.
5
AVITA MEDICAL, INC.
Consolidated Statements of Comprehensive Loss
(In thousands)
(Unaudited)
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Three-Months Ended |
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Nine-Months Ended |
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September 30, 2023 |
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September 30, 2022 |
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September 30, 2023 |
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September 30, 2022 |
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Net loss |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Foreign currency translation loss |
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( |
) |
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( |
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( |
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( |
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Net unrealized gain/(loss) on marketable securities, net of tax |
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( |
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( |
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Comprehensive loss |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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$ |
( |
) |
The accompanying notes form part of the unaudited Consolidated Financial Statements.
6
AVITA MEDICAL, INC.
(In thousands, except shares)
(Unaudited)
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Three-Months Ended September 30, 2023 |
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Common Stock |
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Shares |
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Amount |
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Company common stock held by the NQDC Plan |
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Additional |
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Accumulated Other |
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Accumulated |
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Total |
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Balance at June 30, 2023 |
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$ |
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$ |
( |
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$ |
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$ |
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$ |
( |
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$ |
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Net loss |
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- |
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- |
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- |
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- |
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- |
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( |
) |
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( |
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Stock-based compensation |
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- |
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- |
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- |
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- |
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- |
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Exercise of stock options |
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- |
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- |
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- |
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- |
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Vesting of restricted stock units |
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- |
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- |
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- |
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- |
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- |
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- |
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Company common stock held by the NQDC Plan |
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- |
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( |
) |
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- |
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- |
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- |
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Distribution of Company common stock held by the NQDC Plan |
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- |
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- |
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- |
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- |
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Change in redemption value of share awards in NQDC plan |
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- |
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- |
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- |
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- |
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- |
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Other comprehensive gain |
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- |
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- |
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- |
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- |
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- |
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Balance at September 30, 2023 |
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$ |
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$ |
( |
) |
$ |
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$ |
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$ |
( |
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$ |
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Three-Months Ended September 30, 2022 |
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Common Stock |
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Shares |
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Amount |
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Company common stock held by the NQDC Plan |
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Additional |
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Accumulated Other |
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Accumulated |
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Total |
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Balance at June 30, 2022 |
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$ |
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$ |
- |
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$ |
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$ |
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$ |
( |
) |
$ |
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Net loss |
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- |
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- |
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- |
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- |
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- |
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( |
) |
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( |
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Stock-based compensation |
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- |
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- |
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- |
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- |
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- |
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Vesting of restricted stock units |
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- |
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- |
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- |
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- |
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- |
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- |
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Company common stock held by the NQDC |
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( |
) |
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- |
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- |
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- |
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Change in redemption value of share awards in NQDC plan |
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- |
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- |
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- |
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( |
) |
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- |
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- |
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( |
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Other comprehensive loss |
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- |
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- |
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- |
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- |
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( |
) |
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- |
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( |
) |
Balance at September 30, 2022 |
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|
$ |
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$ |
( |
) |
$ |
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$ |
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$ |
( |
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$ |
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7
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Nine-Months Ended September 30, 2023 |
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Common Stock |
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Shares |
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Amount |
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Company common stock held by the NQDC Plan |
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Additional |
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Accumulated Other |
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Accumulated |
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Total |
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Balance at December 31, 2022 |
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$ |
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$ |
( |
) |
$ |
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$ |
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$ |
( |
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$ |
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Net loss |
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- |
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- |
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- |
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- |
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- |
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( |
) |
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( |
) |
Stock-based compensation |
|
- |
|
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- |
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|
- |
|
|
|
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- |
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|
- |
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||
Exercise of stock options |
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|
- |
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- |
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|
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|
- |
|
|
- |
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|||
Company common stock held by the NQDC Plan |
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|
|
- |
|
|
( |
) |
|
|
|
- |
|
|
- |
|
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- |
|
||
Vesting of restricted stock units |
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|
|
- |
|
|
- |
|
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- |
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- |
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- |
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- |
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Distribution of Company common stock held by the NQDC Plan |
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- |
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- |
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- |
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- |
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Change in redemption value of share awards in NQDC plan |
|
- |
|
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- |
|
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- |
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( |
) |
|
- |
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- |
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( |
) |
Other comprehensive gain |
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- |
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- |
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|
- |
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|
- |
|
|
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- |
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Balance at September 30, 2023 |
|
|
$ |
|
$ |
( |
) |
$ |
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$ |
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$ |
( |
) |
$ |
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|||||
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Nine-Months Ended September 30, 2022 |
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Common Stock |
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|||||||||
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Shares |
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Amount |
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Company common stock held by the NQDC Plan |
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Additional |
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Accumulated Other |
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Accumulated |
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Total |
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|||||||
Balance at December 31, 2021 |
|
|
$ |
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$ |
- |
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$ |
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$ |
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$ |
( |
) |
$ |
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|||||
Net loss |
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- |
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- |
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- |
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- |
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- |
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( |
) |
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( |
) |
Stock-based compensation |
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- |
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- |
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- |
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- |
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- |
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||
Exercise of stock options |
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- |
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- |
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- |
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- |
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|||
Vesting of restricted stock units |
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|
|
- |
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- |
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- |
|
|
- |
|
|
- |
|
|
- |
|
|
Company common stock held by the NQDC Plan |
|
|
|
- |
|
|
( |
) |
|
|
|
- |
|
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- |
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- |
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||
Change in classification of deferred compensation share awards |
|
- |
|
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- |
|
|
- |
|
|
( |
) |
|
- |
|
|
- |
|
|
( |
) |
Change in redemption value of share awards in NQDC plan |
|
- |
|
|
- |
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
|
||
Other comprehensive loss |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
- |
|
|
( |
) |
Balance at September 30, 2022 |
|
|
$ |
|
$ |
( |
) |
$ |
|
$ |
|
$ |
( |
) |
$ |
|
|||||
The accompanying notes form part of the unaudited Consolidated Financial Statements.
8
AVITA Medical, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
|
|
Nine-Months Ended |
|
|||||
|
|
September 30, 2023 |
|
|
September 30, 2022 |
|
||
Cash flow from operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Stock-based compensation |
|
|
|
|
|
|
||
Non-cash lease expense |
|
|
|
|
|
|
||
Loss on fixed asset disposal |
|
|
||||||