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What changed in TriSalus Life Sciences, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of TriSalus Life Sciences, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+599 added−704 removedSource: 10-K (2025-04-15) vs 10-K (2024-04-11)

Top changes in TriSalus Life Sciences, Inc.'s 2024 10-K

599 paragraphs added · 704 removed · 422 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

131 edited+47 added−118 removed234 unchanged
Biggest changeWe estimate that 40% of these patients are eligible for TACE or TARE procedures and that between 25% and 30% are appropriate candidates for our current TriNav device, representing a potential market opportunity of approximately 37,000 units, or approximately $286 million, based on our current price of $7,750. 4 Table of Contents When TriNav Large, a larger version of TriNav capable of being used in larger vessel size (3.0-5.0 mm), is commercially launched, we expect that our addressable market will increase by approximately 25%, resulting in an aggregate opportunity of 47,500 units or approximately $368 million, based on current TriNav pricing.
Biggest changeWe estimate that 60% of these patients are eligible for TACE or TARE procedures and that between 75% and 80% are appropriate candidates for our current TriNav device, representing a potential market opportunity of approximately 62 thousand units, or approximately $494.0 million, based on our current price of $7,983.
Our goal is to establish a high level of engagement and trust with the various clinicians and support individuals in the hospital as well as patients. Additionally, we believe that many hospitals are under cost pressure and need education on, and assistance to support and embrace, the use of modern technology.
Our goal is to establish a high level of engagement and trust with the various clinicians and support individuals in the hospital as well as with patients. Additionally, we believe that many hospitals are under cost pressure and need education on, and assistance to support and embrace, the use of modern technology.
In December 2023, CMS granted a New Technology HCPCS code for procedures involving TriNav. This new code, C9797, became effective on January 1, 2024, and may be reported by hospital outpatient departments and ambulatory surgical centers. 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 code for procedures involving TriNav. This code, C9797, became effective on January 1, 2024, and may be reported by hospital outpatient departments and ambulatory surgical centers. There can be no assurance that continuing reimbursement will be available at similar reimbursement rates or at all.
For patients not eligible for Kimmtrak, CPIs that target CTLA-4, such as ipilimumab, and those that target PD-1, such as nivolumab and pembrolizumab are often used off-label. However, they have had limited efficacy in metastatic uveal melanoma. An important contributor to the failure of current therapies to effectively treat uveal melanoma is the profoundly immunosuppressive intrahepatic environment.
For patients not eligible for tebentafusp (Kimmtrak), CPIs that target CTLA-4, such as ipilimumab, and those that target PD-1, such as nivolumab and pembrolizumab are often used off-label. However, they have had limited efficacy in metastatic uveal melanoma. An important contributor to the failure of current therapies to effectively treat uveal melanoma is the profoundly immunosuppressive intrahepatic environment.
This physiologically and traumatically increases local vascular pressure at the target location close to the tumor, infusing therapeutics into resistive tumor vessels to enable deeper perfusion and to improve therapeutic delivery. The SmartValve also provides a fixed centro-luminal catheter position, unlike a standard microcatheter where the position of the catheter is in a random, off-centered position.
This physiologically increases local vascular pressure at the target location close to the tumor, infusing therapeutics into resistive tumor vessels to enable deeper perfusion and to improve therapeutic delivery. The SmartValve also provides a fixed centro-luminal catheter position, unlike a standard microcatheter where the position of the catheter is in a random, off-centered position.
On December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise march-in rights.
Further, on December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise march-in rights.
We also are obligated to pay Dynavax certain royalty payments equal to 10% of aggregate net sales of products containing the nelitolimod compound acquired during each fiscal year up to and including $1 billion and 12% for the portion of aggregate net sales during a fiscal year greater than $1 billion, subject to certain adjustments.
We also are obligated to pay Dynavax certain royalty payments equal to 10% of aggregate net sales of products containing the nelitolimod compound acquired during each fiscal year up to and including $1 billion and 12% for the portion of aggregate net sales during a fiscal year greater than $1.0 billion, subject to certain adjustments.
This code can be used without restriction for any embolization or occlusion procedure consistent with the TriNav Instructions for Use and is reimbursed in the hospital outpatient and ambulatory surgery center settings. With the provision of this new code, reimbursement for TriNav has continued uninterrupted from the launch year.
This code can be used without restriction for any embolization or occlusion procedure consistent with the TriNav Instructions for Use and is reimbursed in the hospital outpatient and ambulatory surgery center settings. With the provision of this code, reimbursement for TriNav has continued uninterrupted from the launch year.
Dynavax may also receive certain development milestone consideration dependent on the results of (a) certain clinical studies, (b) the dosing of patients in clinical trials, (c) what phase of clinical trial nelitolimod reaches, and (d) regulatory approval. The development milestones are valued up to $170 million.
Dynavax may also receive certain development milestone consideration dependent on the results of (a) certain clinical studies, (b) the dosing of patients in clinical trials, (c) what phase of clinical trial nelitolimod reaches, and (d) regulatory approval. The development milestones are valued up to $170.0 million.
The Affordable Care Act, among other things, amended the intent requirement of the federal Anti-Kickback Statute such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate in order to commit a violation. • The federal civil and criminal false claims laws, including the False Claims Act, which can be enforced by private individuals on behalf of the government through civil whistleblower or qui tam actions, and civil monetary penalty laws prohibit individuals or entities from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment of government funds, or knowingly making, using, or causing to be made or used, a false record or statement material to an obligation to pay money to the government or knowingly concealing or 28 Table of Contents knowingly and improperly avoiding, decreasing, or concealing an obligation to pay money to the U.S. federal government. • The Health Insurance Portability and Accountability Act of 1996 and its implementing regulations (collectively, “HIPAA”), prohibits, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors.
The Affordable Care Act, among other things, amended the intent requirement of the federal Anti-Kickback Statute such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate in order to commit a violation. • The federal civil and criminal false claims laws, including the False Claims Act, which can be enforced by private individuals on behalf of the government through civil whistleblower or qui tam actions, and civil monetary penalty laws prohibit individuals or entities from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment of government funds, or knowingly making, using, or causing to be made or used, a false record or statement material to an obligation to pay money to the government or knowingly concealing or knowingly and improperly avoiding, decreasing, or concealing an obligation to pay money to the U.S. federal government. • The Health Insurance Portability and Accountability Act of 1996 and its implementing regulations (collectively, “HIPAA”), prohibits, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors.
For the PRVI device to become part of a combination product, we may be required to produce data supporting PRVI or PEDD’s contribution to the efficacy of nelitolimod in the targeted indications beyond the original data used in support of 510(k) clearance of the PRVI device. 23 Table of Contents The submission of an NDA generally requires payment of a substantial user fee to the FDA, however a drug that has received an Orphan Drug Designation is not subject to this user fee.
For the PRVI device to become part of a combination product, we may be required to produce data supporting PRVI or PEDD’s contribution to the efficacy of nelitolimod in the targeted indications beyond the original data used in support of 510(k) clearance of the PRVI device. 18 Table of Contents The submission of an NDA generally requires payment of a substantial user fee to the FDA, however a drug that has received an Orphan Drug Designation is not subject to this user fee.
With systemic intravenous (IV) infusion, it is difficult to achieve therapeutic levels within the tumor due to distribution of cardiac output and high intratumoral pressures, and off-target toxicity is common.
With systemic IV infusion, it is difficult to achieve therapeutic levels within the tumor due to distribution of cardiac output and high intratumoral pressures, and off-target toxicity is common.
In the event governmental authorities conclude that our business practices do not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations, they may impose sanctions under these laws, which are potentially significant and may include civil monetary penalties, damages, exclusion of an entity or individual from participation in government health care programs, criminal fines and imprisonment, additional reporting requirements if we become subject to a corporate integrity agreement or other settlement to resolve allegations of violations of these laws, as well as the potential curtailment or restructuring of our operations.
In the event governmental authorities conclude that our business practices do not comply with current or future statutes, regulations or case law involving applicable fraud and 24 Table of Contents abuse or other healthcare laws and regulations, they may impose sanctions under these laws, which are potentially significant and may include civil monetary penalties, damages, exclusion of an entity or individual from participation in government health care programs, criminal fines and imprisonment, additional reporting requirements if we become subject to a corporate integrity agreement or other settlement to resolve allegations of violations of these laws, as well as the potential curtailment or restructuring of our operations.
Information contained on or accessible through our website is not a part of this prospectus, and the inclusion of our website address in this Annual Report is an inactive textual reference only.
Information contained on or accessible through our website is not a part of this Annual Report, and the inclusion of our website address in this Annual Report is an inactive textual reference only.
Dynavax Asset Purchase Agreement On July 31, 2020, we entered into an Asset Purchase Agreement with Dynavax pursuant to which we purchased from Dynavax (i) nelitolimod intellectual property and product know-how, together with any and all goodwill, rights to royalties, profits, compensation, license fees and all rights to obtain renewals, reissues and extensions of registrations, (ii) all permits related to nelitolimod, (iii) all regulatory documentation related to nelitolimod, (iv) the nelitolimod investigational new drug and (v) all clinical trial data associated with nelitolimod (the “Dynavax Agreement”). 16 Table of Contents Pursuant to the Dynavax Agreement, we made an upfront payment to Dynavax of $5 million, and on December 30, 2020, made an additional payment of $4 million to reimburse Dynavax for clinical trial expenses incurred.
Dynavax Asset Purchase Agreement On July 31, 2020, we entered into an Asset Purchase Agreement with Dynavax pursuant to which we purchased from Dynavax (i) nelitolimod intellectual property and product know-how, together with any and all goodwill, rights to royalties, profits, compensation, license fees and all rights to obtain renewals, reissues and extensions of registrations, (ii) all permits related to nelitolimod, (iii) all regulatory documentation related to nelitolimod, (iv) the nelitolimod investigational new drug and (v) all clinical trial data associated with nelitolimod (the “Dynavax Agreement”). 12 Table of Contents Pursuant to the Dynavax Agreement, we made an upfront payment to Dynavax of $5.0 million, and on December 30, 2020, made an additional payment of $4.0 million to reimburse Dynavax for clinical trial expenses incurred.
The FDA regulates and inspects equipment, facilities, and processes used in manufacturing pharmaceutical products prior to approval. If, after receiving approval, a company makes a material change in 24 Table of Contents manufacturing equipment, location, or process (all of which are, to some degree, incorporated in the NDA), additional regulatory review and approval may be required.
The FDA regulates and inspects equipment, facilities, and processes used in manufacturing pharmaceutical products prior to approval. If, after receiving approval, a company makes a material change in 19 Table of Contents manufacturing equipment, location, or process (all of which are, to some degree, incorporated in the NDA), additional regulatory review and approval may be required.
Priority Review Designation is designed to give a product candidate that treats a serious condition and, if approved, would provide a significant improvement in safety or effectiveness, an initial review within eight months as compared to a standard review time of within ten months of the 26 Table of Contents date the FDA files the NDA.
Priority Review Designation is designed to give a product candidate that treats a serious condition and, if approved, would provide a significant improvement in safety or effectiveness, an initial review within eight months as compared to a standard review time of within ten months of the 21 Table of Contents date the FDA files the NDA.
Where appropriate, agreements we obtain with our consultants also typically contain similar assignment of invention provisions. Further, we generally require confidentiality agreements from business partners and other third parties that receive our confidential information. Trademarks We also rely on 16 registered trademarks and trade designs to develop and maintain our competitive position.
Where appropriate, agreements we obtain with our consultants also typically contain similar assignment of invention provisions. Further, we generally require confidentiality agreements from business partners and other third parties that receive our confidential information. Trademarks We also rely on 18 registered trademarks and trade designs to develop and maintain our competitive position.
Of these, more than 80,000 may be addressable through our nelitolimod /PEDD platform for liver and pancreas. Additionally, there is a high global incidence in key targeted indications, such as HCC and ICC, providing an additional opportunity outside the U.S.
Of these, more than 80 thousand may be addressable through our nelitolimod /PEDD platform for liver and pancreas. Additionally, there is a high global incidence in key targeted indications, such as HCC and ICC, providing an additional opportunity outside the U.S.
Our on-market, 510(k) cleared PEDD device, the TriNav Infusion System (“TriNav”) is currently being used for a number of interventional radiology procedures, most commonly transarterial radioembolization (“TARE”) and transarterial chemoembolization (“TACE”) in patients with either primary liver cancer and in patients with liver metastases.
Our on-market, 510(k) cleared PEDD device, the TriNav Infusion System (“TriNav”) is currently being used for a number of interventional radiology procedures, most commonly transarterial radioembolization (“TARE”) and transarterial chemoembolization (“TACE”) in patients with primary liver cancer or in patients with liver metastases.
The Orphan Drug Act provides incentives for the development of drugs intended to treat rare diseases or conditions, which generally are diseases or conditions affecting less than 200,000 individuals in the U.S. If a sponsor demonstrates that a drug product qualifies for orphan drug designation, the FDA grants orphan drug designation to the product for that use.
The Orphan Drug Act provides incentives for the development of drugs intended to treat rare diseases or conditions, which generally are diseases or conditions affecting less than 200 thousand individuals in the U.S. If a sponsor demonstrates that a drug product qualifies for orphan drug designation, the FDA grants orphan drug designation to the product for that use.
The incidence of pancreatic cancer in the U.S. is more than 64,000 annually with more than 90% of these being pancreatic ductal adenocarcinoma (“PDAC”). PDAC and liver cancers are areas of very high unmet medical need and represent large market opportunities.
The incidence of pancreatic cancer in the U.S. is more than 64 thousand annually with more than 90% of these being pancreatic ductal adenocarcinoma (“PDAC”). PDAC and liver cancers are areas of very high unmet medical need and represent large market opportunities.
In that instance, the exclusivity period does not preclude filing or review of an ANDA or 505(b)(2) application; rather, the 25 Table of Contents FDA is precluded from granting final approval to the ANDA or 505(b)(2) application until three years after approval of the RLD.
In that instance, the exclusivity period does not preclude filing or review of an ANDA or 505(b)(2) application; rather, the 20 Table of Contents FDA is precluded from granting final approval to the ANDA or 505(b)(2) application until three years after approval of the RLD.
PEDD devices are designed to not only increase therapeutic delivery to target tumors but also to provide anti-reflux protection to minimize off-target delivery of radioactive micro spheres and the potential complications associated with undesired normal tissue exposure.
PEDD devices are designed to not only increase therapeutic delivery to target tumors but also to provide protection to minimize off-target delivery of radioactive micro spheres and the potential complications associated with undesired normal tissue exposure.
If the FDA determines that there are deficiencies or other concerns with an IDE for which it requires modification, the FDA may permit a clinical trial to proceed under a conditional approval. In addition, clinical studies must be approved by, and conducted under the oversight of, an Institutional Review Board (“IRB”) for each clinical site.
If 16 Table of Contents the FDA determines that there are deficiencies or other concerns with an IDE for which it requires modification, the FDA may permit a clinical trial to proceed under a conditional approval. In addition, clinical studies must be approved by, and conducted under the oversight of, an Institutional Review Board (“IRB”) for each clinical site.
Manufacturing and Distribution Manufacturing We manufacture TriNav at our facility in Westminster, Colorado, and have adequate capacity to meet anticipated commercial and clinical demands throughout the next several years. We are continually strengthening our supply chain and are currently qualifying additional third-party suppliers for select components of TriNav.
Manufacturing Manufacturing We manufacture TriNav at our facility in Westminster, Colorado, and have adequate capacity to meet anticipated commercial and clinical demands through the next several years. We are continually strengthening our supply chain and are currently qualifying additional third-party suppliers for select components of TriNav.
This procedure allows a manufacturer whose novel device is automatically classified into Class III to request down-classification of its medical device into Class I or Class II on the basis that the device presents low or moderate risk, rather than requiring the submission and approval of a PMA.
This procedure allows a manufacturer whose novel device is automatically classified into Class III to request 15 Table of Contents down-classification of its medical device into Class I or Class II on the basis that the device presents low or moderate risk, rather than requiring the submission and approval of a PMA.
A significant risk device is one that presents a potential for serious risk to the health, safety or welfare of a patient and either is implanted, used in supporting or 21 Table of Contents sustaining human life, substantially important in diagnosing, curing, mitigating or treating disease or otherwise preventing impairment of human health, or otherwise presents a potential for serious risk to a subject.
A significant risk device is one that presents a potential for serious risk to the health, safety or welfare of a patient and either is implanted, used in supporting or sustaining human life, substantially important in diagnosing, curing, mitigating or treating disease or otherwise preventing impairment of human health, or otherwise presents a potential for serious risk to a subject.
The results showed that across all tumor types, PEDD increased the T/N by a median of 24%, and the TD by a median of 23%, (p 3 Table of Contents • PEDD achieved greater on-target distribution of chemotherapy eluting beads, delivering a significantly higher concentration of therapy in the tumor as compared to standard microcatheters and delivered higher radiographic and pathologic response rates in a head-to-head comparison between the PEDD device and standard catheters in the study summarized below; • A retrospective, single-center study, included 88 treatment-naive patients with solitary HCC tumors Real-world Support TriSalus recently published a HEOR study looking at real-world data capturing both safety and clinical complications for TriNav as compared to conventional catheters over the 2020-2022 time period.
The results showed that across all tumor types, PEDD increased the T/N by a median of 24%, and the TD by a median of 23%, (p • PEDD achieved greater on-target distribution of chemotherapy eluting beads, delivering a significantly higher concentration of therapy in the tumor as compared to standard microcatheters and delivered higher radiographic and pathologic response rates in a head-to-head comparison between the PEDD device and standard catheters in the study summarized below; • A retrospective, single-center study, included 88 treatment-naive patients with solitary HCC tumors Real-world Support TriSalus recently published a Health Economic and Outcome Research ("HEOR") study looking at real-world data capturing both safety and clinical complications for TriNav as compared to conventional catheters over the 2020-2022 time period.
Treatment of Liver Tumors with Transarterial Radioembolization (TARE) 2 Table of Contents TARE is an image guided, locoregional therapy that involves hepatic artery embolization with intra-arterial infusion of Yttrium-90 (" 90 Y") microspheres for treatment of hepatocellular cancer as well as patients with certain metastatic liver cancers.
Treatment of Liver Tumors with Transarterial Radioembolization (TARE) TARE is an image guided, locoregional therapy that involves hepatic artery embolization with intra-arterial infusion of Yttrium-90 (" 90 Y") microspheres for treatment of hepatocellular cancer as well as patients with certain metastatic liver cancers.
We believe that a significant majority of embolization patients are "complex patients” defined by one or more of the following: • Previous embolization and/or systemic therapy; • Multi-nodal or bilobar lesions – (Significant tumor burden); • Large tumors ( > 8 cm); and • Multiple comorbidities.
We believe that a significant majority of embolization patients are "complex patients” defined by one or more of the following: • Previous embolization and/or systemic therapy; • Multi-nodal or bilobar lesions – (Significant tumor burden); • Large tumors ( > 5 cm); • Multiple comorbidities; and • Hypovasular tumors.
We believe our PRVI device may address these challenges by: • Modulating pressure and flow to overcome mechanical barriers; • Embedding real-time pressure sensing capability important to ensure a pressure flow that stays within safe and appropriate pressure levels and that avoids hypoxia; and 8 Table of Contents • Enabling a therapeutic index that is efficacious while limiting toxicity compared to systemic dosing.
We believe our PRVI device may address these challenges by: • Modulating pressure and flow to overcome mechanical barriers; • Embedding real-time pressure sensing capability important to ensure a pressure flow that stays within safe and appropriate pressure levels and that avoids hypoxia; and • Enabling a therapeutic index that is efficacious while limiting toxicity compared to systemic dosing.
We believe that the combination of PEDD with nelitolimod creates a platform approach with the potential to address common therapeutic barriers across numerous cancer indications affecting the liver and pancreas and that this approach 1 Table of Contents could provide a meaningful benefit to patients.
We believe that the combination of PEDD with nelitolimod creates a platform approach with the potential to address common therapeutic barriers across numerous cancer indications affecting the liver and pancreas and that this approach could provide a meaningful benefit to patients.
Clinical Sites and Partnerships MD Anderson Cancer Center We have been engaged with top academic sites and leading clinicians in the liver and pancreas cancer spaces. All three PERIO programs are centered on a 5-year Alliance Program with the University of Texas MD Anderson Cancer Center (“MDACC”) which we entered into in March 2021 (the “MDACC Agreement”).
Clinical Site Partnership MD Anderson Cancer Center We have been engaged with top academic sites and leading clinicians in the liver and pancreas cancer spaces. All three PERIO programs have been centered on a 5-year Alliance Program with the University of Texas MD Anderson Cancer Center (“MDACC”) which we entered into in March 2021 (the “MDACC Agreement”).
We view our customers as including the interventional radiologists, IR technicians, medical oncologists, nursing support, and the value 5 Table of Contents analysis committee staff, who either use our products or recommend the purchase of such products to hospitals and, most importantly, the patients they treat.
We view our customers as including the interventional radiologists, IR technicians, medical oncologists, nursing support, and the Value Analysis Committee ("VAC") staff, who either use our products or recommend the purchase of such products to hospitals and, most importantly, the patients they treat.
Market Opportunity for TriNav Delivery Technology and Investigational Therapeutic Nelitolimod Nelitolimod Market Opportunity According to the American Cancer Society, the National Cancer Institute and our most up-to-date epidemiology, there are approximately 137,000 new cases of primary and secondary liver cancers diagnosed annually in the U.S. alone, and more than 60,000 cases of pancreatic cancer diagnosed each year.
Market Opportunity for Investigational Therapeutic Nelitolimod Nelitolimod Market Opportunity According to the American Cancer Society, the National Cancer Institute and our most up-to-date epidemiology, there are approximately 137 thousand new cases of primary and secondary liver cancers diagnosed annually in the U.S. alone, and more than 60 thousand cases of pancreatic cancer diagnosed each year.
Uveal Melanoma Liver Metastases With fewer than 3,000 new diagnoses per year in the U.S., uveal melanoma is a rare solid organ malignancy in which metastatic spread to the liver results in rapidly progressive and often fatal disease.
Uveal Melanoma Liver Metastases With fewer than three thousand new diagnoses per year in the U.S., uveal melanoma is a rare solid organ malignancy in which metastatic spread to the liver results in rapidly progressive and often fatal disease.
We are currently studying the ability of nelitolimod, an investigational class C toll-like receptor 9 (“TLR9”) agonist, to reactivate the immune system within the liver and pancreas by broadly reprogramming immune cells and reducing myeloid derived suppressor cells (“MDSCs”), cells which cause immunosuppression, to enable more durable responses to immune checkpoint inhibitors (“CPIs”), thereby improving patient outcomes.
We are currently studying the ability of nelitolimod, an investigational class C TLR9 agonist, to reactivate the immune system within the liver and pancreas by broadly reprogramming immune cells and reducing myeloid derived suppressor cells (“MDSCs”), cells which cause immunosuppression, to enable more durable responses to immune checkpoint inhibitors (“CPIs”), thereby improving patient outcomes.
We may explore opportunities to partner with therapeutics companies at all stages of development and commercialization by reading the delivery of therapies to patients in a manner that can improve outcomes in areas of high unmet medical need. • Continue Partnering with Leading Academic Medical Centers.
We may explore opportunities to partner with therapeutics companies at all stages of development and commercialization in collaborations designed to improve targeted delivery of therapies to patients in a manner that can improve outcomes in areas of high unmet medical need • Continue Partnering with Leading Academic Medical Centers.
Solely for convenience, in some cases, the trademarks, trade names and service marks referred to in this prospectus are listed without the applicable ®, ™ and SM symbols.
Solely for convenience, in some cases, the trademarks, trade names and service marks referred to in this prospectus are listed without the applicable ®, ™ and SM symbols. 25 Table of Contents
The study also demonstrated that: • In TACE procedures, interventional radiologists were able to deliver significantly more chemotherapeutic to the tumor when using TriNav vs. the amount delivered using standard catheters, a critical treatment goal. • TriNav patients had fewer 30-day inpatient visits post-procedure vs. non-TriNav patients in matched cohort comparison. • TriNav HCC patients were more likely to have a liver transplant in matched cohort comparison. • TriNav TARE patients with liver metastases had fewer clinical complications post-procedure vs. non-TriNav patients in matched cohort comparison. ◦ TriNav TARE patients with liver metastases had lower rates of post-procedure fatigue vs. non-TriNav patients.
The study also revealed that: • TriNav patients showed reduced rates of post-procedure fatigue compared to non-TriNav patients • In TACE procedures, interventional radiologists were able to deliver significantly more chemotherapeutic to the tumor when using TriNav vs. the amount delivered using standard catheters, a critical treatment goal. • TriNav TACE patients had fewer 30-day inpatient visits post-procedure vs. non-TriNav patients in matched cohort comparison. • TriNav HCC patients were more likely to have a liver transplant in matched cohort comparison. • TriNav TARE patients with liver metastases had fewer clinical complications post-procedure vs. non-TriNav patients in matched cohort comparison. • In patients with HCC, TriNav patients showed lower rates of post-procedural gastric ulcers and jaundice.
We plan to seek FDA approval of nelitolimod through a 505(b)(1) regulatory approval pathway, as part of a combination regimen with checkpoint inhibitor(s). A combination regimen requires data demonstrating the contribution of each drug in the regimen to the treatment of the disease under study.
We plan to seek FDA approval of nelitolimod delivered via PEDD through the 505(b)(1) regulatory approval pathway, as part of a combination regimen with other therapeutics. A combination regimen requires data demonstrating the contribution of each drug in the regimen to the treatment of the disease under study.
Corporate Information Our principal executive offices are located at 6272 W. 91st Ave., Westminster, Colorado 80031 and our telephone number is (888) 321-5212. Our corporate website address is www.trisaluslifesci.com.
Corporate Information We were incorporated in Delaware in September 2020. Our principal executive offices are located at 6272 W. 91st Ave., Westminster, Colorado 80031 and our telephone number is (888) 321-5212. Our corporate website address is www.trisaluslifesci.com.
Pursuant to the MDACC Agreement, investigators at MDACC agreed to serve as the lead clinicians for the PERIO-01, PERIO-02, and PERIO-03 studies and we agreed to pay $10.0 million in collaboration funding to MDACC to conduct preclinical and clinical studies as mutually agreed by the parties.
Pursuant to the MDACC Agreement, investigators at MDACC agreed to serve as the lead clinicians for the PERIO-01, PERIO-02, and PERIO-03 studies and we agreed to pay $10.0 million in collaboration funding to MDACC to conduct preclinical and clinical studies as mutually agreed by the parties. To date, we have paid an aggregate of $8.0 million towards these studies.
For our TriNav device, we are the sole owner of five granted U.S. patents, seven pending U.S. patent applications, one granted patent in Japan and four pending foreign patent applications in Canada, China, Europe, and Hong Kong relating to a dynamic reconfigurable microvalve protection device and the PEDD method for infusing an immunotherapy agent to a solid tumor and method for selective pressure-controlled therapeutic delivery.
For our TriNav device, we are the sole owner of five granted U.S. patents, five pending U.S. patent applications, eight foreign patents (counting national validations in Europe) and two pending foreign patent applications in Canada and Europe relating to a dynamic reconfigurable microvalve protection device and the PEDD method for infusing an immunotherapy agent to a solid tumor and method for selective pressure-controlled therapeutic delivery.
Facilities Our principal office is located in Westminster, Colorado, where we lease approximately 21,000 square feet of office, manufacturing, and warehouse space pursuant to a lease that expires on December 31, 2026. The lease includes two 29 Table of Contents extension options, each for five years. We have not yet determined if we will exercise the extension options.
Facilities Our principal office is located in Westminster, Colorado, where we lease approximately 21 thousand square feet of office, manufacturing, and warehouse space pursuant to a lease that expires on December 31, 2031. The lease includes one extension option, for five years. We have not yet determined if we will exercise the extension option.
In addition, the IRA, among other things, (1) directs HHS to negotiate the price of certain single-source drugs and biologics covered under Medicare and (2) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.
In addition, the IRA, among other things, (1) directs HHS to negotiate the price of certain single-source drugs and biologics covered under Medicare and (2) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation. These provisions began to take effect progressively starting in fiscal year 2023.
We also lease office facilities in Bannockburn, Illinois, and Cranston, Rhode Island. We also lease laboratory space at Rhode Island hospital in Providence, Rhode Island. We believe our facilities are adequate to meet our current needs, although we may seek to negotiate new leases or evaluate additional or alternate space for our operations.
We also lease office facilities in Bannockburn, Illinois, and laboratory space at Rhode Island Hospital in Providence, Rhode Island. We believe our facilities are adequate to meet our current needs, although we may seek to negotiate new leases or evaluate additional or alternate space for our operations. We believe appropriate alternative space will be readily available on commercially reasonable terms.
Our ultimate goal is to transform the treatment paradigm for patients battling liver and pancreatic tumors.
Our ultimate goal is to transform the treatment paradigm for patients battling solid tumors.
However, we jointly own with Merck Sharp & Dohme LLC one granted US, seven granted foreign patents, and two pending foreign applications that relate to nelitolimod, which is a CPG-C type oligonucleotide, as discussed further below. We also jointly own a pending U.S. patent application with the Regents of the University of California and H.
However, we jointly own with Merck Sharp & Dohme LLC two granted US and 14 granted foreign patents (counting national validations in Europe) that expire in 2036 and related to nelitolimod, which is a CPG-C type oligonucleotide, as discussed further below. We also jointly own a pending U.S. patent application with the Regents of the University of California and H.
We have the right to terminate a study (and the corresponding study order) upon 30 days prior notice to MDACC, provided that the joint steering committee (which is composed of three representatives of each party and oversees the collaboration) has approved such termination and that all reasonable study costs and fees associated with wind-down activities and final monitoring visit shall be paid by us.
Prior to the expiration of the term of the MDACC Agreement, either party may terminate the MDACC Agreement if the other party commits a material breach of the agreement and fails to cure such breach within 30 days of receiving notice of such breach. 11 Table of Contents We have the right to terminate a study (and the corresponding study order) upon 30 days prior notice to MDACC, provided that the joint steering committee (which is composed of three representatives of each party and oversees the collaboration) has approved such termination and that all reasonable study costs and fees associated with wind-down activities and final monitoring visit shall be paid by us.
For additional information, see the “Introductory Statement” to this Annual Report, Item 7- Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report, and (3) Business Combination of our financial statements for the year ended December 31, 2023, included in Item 8 of this Annual Report for more information regarding the Merger.
For additional information, see Item 7- Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report, and (3) Business Combination of our audited consolidated financial statements for the year ended December 31, 2024, included in Item 8 of this Annual Report.
We have developed an innovative organ-specific platform that is designed to overcome two of the most significant challenges that prevent optimal delivery and performance of therapeutics in these difficult-to-treat diseases: (i) high intratumoral pressure caused by tumor growth and collapsed vasculature restricting the delivery of oncology therapeutics and (ii) the immunosuppressive properties of liver and pancreatic tumor immune cells.
We have developed an innovative technology designed to overcome two of the most significant challenges that prevent optimal delivery and performance of therapeutics in these difficult-to-treat diseases: (i) high intratumoral pressure caused by tumor growth and collapsed vasculature restricting the delivery of oncology therapeutics and (ii) off target delivery.
In clinical studies, the use of PEDD devices for delivery of drug-coated micro spheres to treat HCC has demonstrated improved microsphere deposition, tumor necrosis, and imaging response compared to delivery with conventional end-hole catheters.
TriNav alters downstream hepatic arterial blood pressure and may reduce resistance in tumor microvascular. In clinical studies, the use of PEDD devices for delivery of drug-coated micro spheres to treat HCC has demonstrated improved microsphere deposition, tumor necrosis, and imaging response compared to delivery with conventional end-hole catheters.
Termination of one or more study orders will not automatically result in the termination of the MDACC Agreement or termination of any other study orders. 15 Table of Contents Under the terms of the MDACC Agreement, each party retains all right, title and interest in and to its own background intellectual property and no license to use such background intellectual property is granted to the other party except for MDACC’s use of the study drug and study devices, as applicable, in a study as set forth in the MDACC Agreement.
Under the terms of the MDACC Agreement, each party retains all right, title and interest in and to its own background intellectual property and no license to use such background intellectual property is granted to the other party except for MDACC’s use of the study drug and study devices, as applicable, in a study as set forth in the MDACC Agreement.
(including the Federal Trade Commission, the Office of the Inspector General of the Department of Health and Human Services, the U.S. Department of Justice, and various state attorneys general), monitor the promotion and advertising of our products.
In addition, the FDA and other regulatory bodies, both within and outside the U.S. (including the Federal Trade Commission, the Office of the Inspector General of the Department of Health and Human Services, the U.S. Department of Justice, and various state attorneys general), monitor the promotion and advertising of our products.
We are also subject to periodic inspections for compliance with applicable manufacturing and quality system regulations, which govern the methods used in, and the facilities and controls used for, the design, manufacture, packaging, and servicing of finished drugs and medical devices intended for human use. In addition, the FDA and other regulatory bodies, both within and outside the U.S.
We are also subject to periodic inspections for compliance with applicable manufacturing and quality system regulations, which govern the methods used in, and the facilities and controls used for, the design, manufacture, packaging, 14 Table of Contents and servicing of finished drugs and medical devices intended for human use.
If the FDA disagrees with a manufacturer’s determination, the FDA can require the manufacturer to cease marketing and/or request the recall of the modified device until FDA has cleared or approved a 510(k), de novo or PMA for the change.
If the FDA disagrees with a manufacturer’s determination, the FDA can require the manufacturer to cease marketing and/or request the recall of the modified device until FDA has cleared or approved a 510(k), de novo or PMA for the change. Also, in these circumstances, the manufacturer may be subject to significant regulatory fines or penalties. De Novo Process .
Nelitolimod Potential Indications: Pancreatic Cancer PDAC is a prevalent, highly lethal cancer, with a five-year survival rate of 13% across all stages. Systemic first-line therapies for advanced pancreatic carcinoma currently provide short-term disease control. Both locally advanced and metastatic PDAC face similar challenges with respect to drug delivery and deep immunosuppression.
Nelitolimod Potential Indications: Pancreatic Cancer PDAC is a prevalent, highly lethal cancer, with a five-year survival rate of 13% across all stages. Systemic first-line therapies for advanced pancreatic carcinoma currently provide short-term disease control.
The five granted U.S. patents expire between 2031 and 2038. The one granted patent in Japan expires in 2038.
The five granted U.S. patents expire between 2031 and 2038. The eight granted foreign patent expire in 2038.
Potential market impact of additional indications will be determined after clinical data become available. TriNav Positioning Multiple clinical studies, both in TACE and in TARE, have demonstrated that the PEDD approach can increase therapeutic delivery to the tumor while decreasing delivery of radioembolics or chemoembolics to healthy tissue.
TriNav Positioning Multiple clinical studies, both in TACE and in TARE, have demonstrated that the PEDD™ approach can increase therapeutic delivery to the tumor while decreasing delivery of radioembolics or chemoembolics to healthy tissue.
The Pancreatic Retrograde Venous Infusion Device has not been commercialized and commercial sales are anticipated to coincide with approval, if any, of nelitolimod in locally advanced Pancreatic cancer. Pre-clinical pancreatic cancer model experiments indicated that using the PRVI method of PEDD improved drug delivery 3.6-7.0-fold.
The Pancreatic Retrograde Venous Infusion Device has not been commercialized and commercial sales are not anticipated before 2026. 7 Table of Contents Pre-clinical pancreatic cancer model experiments indicated that using the PRVI method of PEDD™ improved drug delivery 3.6-7.0-fold.
Reimbursement In December 2023 TriNav received a unique and permanent HCPCS code from CMS, C9797, which has been assigned to APC 5194 (Level 4 Endovascular Procedures) for calendar year 2024 with a payment rate of $16,724.70.
Reimbursement In December 2023 TriNav received a unique and permanent HCPCS code from Centers for Medicare & Medicaid Services (“CMS”), C9797, which has been assigned to APC 5194 (Level 4 Endovascular Procedures) for calendar year 2025 with a payment rate of $17,957.
TriSalus developed a novel way to access the pancreas via the venous vasculature where the vessels are larger, easier to access and PRVI is designed to address many of the limitations inherent to arterial infusions in the pancreas. The PRVI device is currently being studied in a clinical trial for nelitolimod delivery into pancreatic tumors.
TriSalus developed a novel way to access the pancreas via the venous vasculature where the vessels are larger, easier to access and PRVI is designed to address many of the limitations inherent to arterial infusions in the pancreas.
TriNav is a highly innovative, novel technology, FDA-cleared drug delivery device that has undergone peer-reviewed studies at multiple clinical sites. The PEDD method has now been used in over 18,000 procedures, primarily TACE and TARE. TriNav achieved $18.5 million in revenue in 2023 with fourth quarter growth of 77% vs. the previous year.
TriNav is a highly innovative and novel device that is FDA-cleared and has undergone peer-reviewed studies at multiple clinical sites. The PEDD method has now been used in over 21,000 procedures, primarily TACE and TARE. TriNav achieved $29.4 million in revenue in 2024 representing growth of 59.0% vs. the previous year.
Immunocore’s Kimmtrak® is indicated for the treatment of HLA-A*02:01 positive adults with unresectable or metastatic uveal melanoma. Although an improvement over previous therapeutic options, it is only available to approximately 50% of uveal melanoma patients due to its HLA restriction and with median overall survival of 21.7 months and 1-year overall survival of 73% in first line patients.
Although an improvement over previous therapeutic options, it is only available to approximately 50% of uveal melanoma patients due to its HLA restriction. Kimmtrak was approved by the FDA with median overall survival of 21.7 months and 1-year overall survival of 73% in first line patients.
Also, in these circumstances, the manufacturer may be subject to significant regulatory fines or penalties. 20 Table of Contents De Novo Process . If a previously unclassified new medical device does not qualify for the 510(k) pre-market notification process because no predicate device to which it is substantially equivalent can be identified, the device is automatically classified into Class III.
If a previously unclassified new medical device does not qualify for the 510(k) pre-market notification process because no predicate device to which it is substantially equivalent can be identified, the device is automatically classified into Class III.
The new C9797 code brings significant benefit vs. previous CMS coverage as the new code is not restricted to use in conjunction with specific CPT codes, which was the case under TPT status. In November 2019, TriNav, with its innovative SmartValve technology, received transitional pass-through ("TPT") status for U.S. reimbursement.
The C9797 code brings significant benefit vs. previous CMS coverage as the new code is not restricted to use in conjunction with specific CPT codes, which was the case under TPT status.
Many TLR agonists have been in clinical development with varying results, most often using needle injection strategies which limit the ability to treat multiple or large tumors. TLR agonists are generally not safe to be administered intravenously due to concerns related to excessive immune cell activation.
Many TLR agonists have been in clinical development with varying results, most often using needle injection strategies which limit the ability to treat multiple or large tumors.
Dynavax may also receive certain commercial milestone payments based on (a) first commercial sale and (b) net sales in a fiscal year. Such commercial milestone payments are valued up to $80 million. As of December 31, 2023, we have made three milestone payments of $1 million each, totaling $3 million.
Dynavax may also receive certain commercial milestone payments based on (a) first commercial sale and (b) net sales in a fiscal year. Such commercial milestone payments are valued up to $80.0 million.
As with TARE, the goal of TACE procedures is to deliver chemotherapeutic agents (in either an emulsion or as part of a drug-eluting bead system) with the goal of complete tumor coverage while avoiding delivery of therapeutic or embolic beads to normal tissue.
As with TARE, the goal of TACE procedures is to deliver chemotherapeutic agents (in either an emulsion or as part of a drug-eluting bead system) with the goal of complete tumor coverage while avoiding delivery of therapeutic or embolic beads to normal tissue. 2 Table of Contents This goal of increasing tumor perfusion while reducing delivery to normal tissue may be achieved with the PEDD method using the 510(k) FDA-cleared TriNav device.
Importantly, regional intravascular delivery with standard microcatheters does not address the intra-tumoral pressure barrier, while balloon catheters cause a cessation of forward blood flow, which may eliminate the ability to augment baseline intravascular pressure. 10 Table of Contents Nelitolimod mechanism of action .
Importantly, regional intravascular delivery with standard microcatheters does not address the intra-tumoral pressure barrier, while balloon catheters cause a cessation of forward blood flow, which may eliminate the ability to augment baseline intravascular pressure. Nelitolimod mechanism of action As a class C TLR9 agonist, nelitolimod has the capacity to stimulate a broad array of immune cells and induce numerous cytokines.
Nelitolimod Competition We expect nelitolimod to compete primarily with a number of therapeutics that are now, or will soon be, approved for use in uveal melanoma with liver metastases, cholangiocarcinoma HCC, ICC, and locally advanced PDAC.
Nelitolimod Competition We expect nelitolimod to compete primarily with a number of therapeutics that are now, or will soon be, approved for use in UMLM with liver metastases and locally advanced PDAC. These therapeutics include a range of immunotherapeutics (e.g., tebentafusp for HLA-A*02:01 positive metastatic uveal melanoma patients.
We expect the global regulatory environment will continue to evolve, which could impact the cost, the time needed to approve, and ultimately, our ability to maintain existing approvals or obtain future approvals for our products.
We expect the global regulatory environment will continue to evolve, which could impact the cost, the time needed to approve, and ultimately, our ability to maintain existing approvals or obtain future approvals for our products. Regulations of the FDA and other regulatory agencies in and outside the U.S. impose extensive compliance and monitoring obligations on our business.
Industry and Competition Our industry is highly competitive and subject to rapid and significant technological change as research provides a deeper understanding of the pathology of diseases and new technologies and treatments are developed.
Other hospitals purchase TriNav directly, and TriNav is sold for a predetermined set fee for each catheter via a predetermined contract or purchase order. Industry and Competition Our industry is highly competitive and subject to rapid and significant technological change as research provides a deeper understanding of the pathology of diseases and new technologies and treatments are developed.
The end result of these factors creates barriers to the systemic administration of chemotherapeutic agents and nanomedicines to tumors, reducing treatment efficacy. PEDD Delivery Technology is a technological solution to this intratumoral pressure barrier that can enable more effective delivery of therapeutic agents to liver and pancreatic tumors.
PEDD Delivery Technology is a technological solution to this intratumoral pressure barrier that can enable more effective delivery of therapeutic agents to liver and pancreatic tumors.
While march-in rights have not previously been exercised, it is uncertain if that will continue under the new framework. It is possible that other healthcare reform measures may be adopted in the future, which may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any approved product.
It is possible that other healthcare reform measures may be adopted in the future, which may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any approved product,, particularly given the recent change in administration.
Higher CPI response rates in mismatch repair (“MMR”) deficient PDAC patients suggest promise for CPI in combination with immune reprogramming agents, although fewer than 5% of PDAC patients are MMR deficient.
The stroma has been shown to inhibit both spontaneous and therapeutically inducted antitumor immunity making it difficult to treat. Higher CPI response rates in mismatch repair (“MMR”) deficient PDAC patients suggest promise for CPI in combination with immune reprogramming agents, although fewer than 5% of PDAC patients are MMR deficient.
Regulations 19 Table of Contents of the FDA and other regulatory agencies in and outside the U.S. impose extensive compliance and monitoring obligations on our business. These agencies review our design and manufacturing practices, labeling, record keeping, and manufacturers’ required reports of adverse experiences and other information to identify potential problems with marketed products.
These agencies review our design and manufacturing practices, labeling, record keeping, and manufacturers’ required reports of adverse experiences and other information to identify potential problems with marketed products.
Additional legislative changes, regulatory changes and judicial challenges related to the Affordable Care Act remain possible, as discussed above under the subheading “U.S. Healthcare Reform.” In addition, there likely will continue to be proposals by legislators at both the federal and state levels, regulators, and third-party payors to contain healthcare costs.
Healthcare Reform.” In addition, there likely will continue to be proposals by legislators at both the federal and state levels, regulators, and third-party payors to contain healthcare costs.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn connection with our audited consolidated financial statements for the years ended December 31, 2022 and December 31, 2023, management identified material weaknesses in its internal control over financial reporting with respect (i) to a lack of sufficient number of trained resources with the appropriate skills and knowledge and with assigned responsibilities and accountability for the design and operation of internal controls over financial reporting; accounting for costs associated with the SEPA, patents and the Business Combination; and certain R&D accruals; (ii) to inadequate internal controls over the valuation of the warrant and tranche rights and obligations and liabilities resulting from the series B-2 preferred stock financing; and (iii) inadequate controls of the conversion of data from our legacy equity management system to our new system and assumptions used to calculate fair value of certain equity awards; each described in more detail under the heading Part II — Item 9A.
Biggest changeIn connection with our audited consolidated financial statements for the years ended December 31, 2024 and 2023 , management identified material weaknesses in its internal control over financial reporting with respect to (i) a lack of sufficient number of trained resources with the appropriate skills and knowledge and with assigned responsibilities and accountability for the design and operation of internal controls over financial reporting, patent costs, certain R&D accruals, certain general accruals, accounting for leases under ASC 842, accounting for revenue, and accounting for significant transactions, including costs associated with the SEPA, the Exchange Warrants, accounting for the OrbiMed Credit Agreement, including the Initial Commitment Amount and the related derivative financial instruments,; (ii) inadequate controls over accounting and financial reporting for the Business Combination; (iii) inadequate internal controls over the valuation of derivative financial instruments, including the warrant and tranche rights and obligations and liabilities resulting from the series B-2 preferred stock financing; and the Revenue Base Redemption liability associated with the Initial Commitment Amount; (iv) inadequate controls of the conversion of data from our legacy stock-based compensation management system to our new system and assumptions used to calculate fair value of certain equity awards; and (v) inadequate security management internal controls over certain IT applications supporting financial reporting, related to segregation of privileged IT user rights and to monitor elevated user activity; each described in more detail under the heading Part II — Item 9A.
We expect to incur significant expenses and operating losses for the foreseeable future as we continue to invest in the commercialization of TriNav, clinical trials and other development, manufacturing and regulatory activities for TriNav, nelitolimod and our other product candidates, and discovery research and development.
We expect to incur significant expenses and operating losses for the foreseeable future as we continue to invest in the commercialization of TriNav, and clinical trials and other development, manufacturing and regulatory activities for TriNav, nelitolimod, and our other product candidates, and discovery research and development.
Even after a product candidate has been approved, the FDA and comparable governmental authorities subject such product to continuing review and regulatory requirements including, for example, the reporting of safety issues or adverse events associated with use of an approved drug or cleared or approved device.
Even after a product candidate has been approved or cleared, the FDA and comparable governmental authorities subject such product to continuing review and regulatory requirements including, for example, the reporting of safety issues or adverse events associated with use of an approved drug or cleared or approved device.
To the extent that we or our partners do not perform particular regulated functions themselves but contract out to third parties, including contract manufacturers, contract research organizations, clinical trial sites, and laboratories, we or our partners may be held responsible for such third parties’ failure to follow the applicable regulatory requirements.
To the extent that our partners or we do not perform particular regulated functions themselves but contract out to third parties, including contract manufacturers, contract research organizations, clinical trial sites, and laboratories, our partners or we may be held responsible for such third parties’ failure to follow the applicable regulatory requirements.
We will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of MTAC’s initial public offering (i.e., December 31, 2025), (b) in which we have total annual gross revenue of at least $1.235 billion or (c) in which we are deemed to be a “large accelerated filer” under the rules of the SEC, which means the market value of our common equity that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which we will have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
We will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of MTAC’s initial public offering (i.e., December 31, 2025), (b) in which we have total annual gross revenue of at least $1.235 billion or (c) in which we are deemed to be a “large accelerated filer” under the rules of the SEC, which means the market value of our common equity that is held by non-affiliates exceeds $700.0 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which we will have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
For example, the EU’s General Data Protection Regulation (“EU GDPR”) imposes strict requirements for processing personal data, and, under the EU GDPR, companies may face temporary or definitive bans on data processing and other corrective actions; fines of up to 20 million Euros or 4% of annual global revenue, whichever is greater; or private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests.
For example, the EU’s General Data Protection Regulation (“EU GDPR”) imposes strict requirements for processing personal data, and, under the EU GDPR, companies may face temporary or definitive bans on data processing and other corrective actions; fines of up to 20.0 million Euros or 4% of annual global revenue, whichever is greater; or private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests.
Any strategic transaction, combination, acquisition, disposition, joint venture or similar transaction will involve risks encountered in business relationships, including: • difficulties in assimilating and integrating the operations, personnel, systems, data, technologies, products and services of the acquired business; • inability of the acquired technologies, products or businesses to achieve expected levels of revenue, profitability, productivity or other benefits; • difficulties in retaining, training, motivating and integrating key personnel; • diversion of management’s time and resources from our normal daily operations; • difficulties in successfully incorporating licensed or acquired technology and rights into our operations; • difficulties in maintaining uniform standards, controls, procedures, and policies within the combined organizations; • difficulties in retaining relationships with customers, employees, and suppliers of the acquired business; • risks of entering markets in which we have no or limited prior experience; • regulatory risks, including remaining in good standing with existing regulatory bodies or receiving any necessary pre-closing or post-closing approvals, as well as being subject to new regulators with oversight over an acquired business; • assumption of contractual obligations that contain terms that are not beneficial to us, require us to license or waive intellectual property rights, or increase our liability; • failure to successfully further develop any acquired product candidates or technology; • liability for activities of the acquired or disposed of business before the acquisition or disposition, including patent and trademark infringement claims, violations of laws, regulatory actions, commercial disputes, tax liabilities, assumed debt and other known and unknown liabilities; • difficulty in separating assets and replacing shared services; • potential disruptions to our ongoing businesses; and • unexpected costs and unknown risks and liabilities associated with the specific transaction.
Any strategic transaction, combination, acquisition, disposition, joint venture or similar transaction will involve risks encountered in business relationships, including: • difficulties in assimilating and integrating the operations, personnel, systems, data, technologies, products and services of the acquired business; • inability of the acquired technologies, products or businesses to achieve expected levels of revenue, profitability, productivity or other benefits; • difficulties in retaining, training, motivating and integrating key personnel; • diversion of management’s time and resources from our normal daily operations; • difficulties in successfully incorporating licensed or acquired technology and rights into our operations; • difficulties in maintaining uniform standards, controls, procedures, and policies within the combined organizations; • difficulties in retaining relationships with customers, employees, and suppliers of the acquired business; • risks of entering markets in which we have no or limited prior experience; • regulatory risks, including remaining in good standing with existing regulatory bodies or receiving any necessary pre-closing or post-closing approvals, as well as being subject to new regulators with oversight over an acquired business; • assumption of contractual obligations that contain terms that are not beneficial to us, require us to license or waive intellectual property rights, or increase our liability; • failure to successfully further develop any acquired product candidates or technology; 29 Table of Contents • liability for activities of the acquired or disposed of business before the acquisition or disposition, including patent and trademark infringement claims, violations of laws, regulatory actions, commercial disputes, tax liabilities, assumed debt and other known and unknown liabilities; • difficulty in separating assets and replacing shared services; • potential disruptions to our ongoing businesses; and • unexpected costs and unknown risks and liabilities associated with the specific transaction.
These provisions include: (1) presenting only two years of audited financial statements; (2) 78 Table of Contents presenting only two years of related selected financial data and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure; (3) an exemption from compliance with the auditor attestation requirement in the assessment of internal control over financial reporting pursuant to Section 404 of Sarbanes-Oxley; (4) not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements; (5) reduced disclosure obligations regarding executive compensation arrangements in periodic reports, registration statements, and proxy statements; and (6) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
These provisions include: (1) presenting only two years of audited financial statements; (2) presenting only two years of related selected financial data and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure; (3) an exemption from compliance with the auditor attestation requirement in the assessment of internal control over financial reporting pursuant to Section 404 of Sarbanes-Oxley; (4) not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements; (5) reduced disclosure obligations regarding executive compensation 71 Table of Contents arrangements in periodic reports, registration statements, and proxy statements; and (6) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
These provisions include: • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of the Boar d; • the right of the Board to elect a director to fill a vacancy created by the expansion of the Board or the resignation, death or removal of a director in certain circumstances, which prevents stockholders from being able to fill vacancies on the Boar d; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • the requirement that a special meeting of stockholders may only be called by a majority of the Board, the chairperson of the Board, or our chief executive officer which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; • the ability of the Board to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • limitation of the liability of, and the indemnification of, our directors and officers; • the ability of the Board to amend our Bylaws, which may allow the Board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the Bylaws to facilitate an unsolicited takeover attempt; and • advance notice procedures with which stockholders must comply to nominate candidates to the Board or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in the Board, and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the potential acquirer’s own slate of directors or otherwise attempting to obtain control of us.
These provisions include: 72 Table of Contents • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of the Boar d; • the right of the Board to elect a director to fill a vacancy created by the expansion of the Board or the resignation, death or removal of a director in certain circumstances, which prevents stockholders from being able to fill vacancies on the Boar d; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • the requirement that a special meeting of stockholders may only be called by a majority of the Board, the chairperson of the Board, or our chief executive officer which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; • the ability of the Board to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • limitation of the liability of, and the indemnification of, our directors and officers; • the ability of the Board to amend our Bylaws, which may allow the Board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the Bylaws to facilitate an unsolicited takeover attempt; and • advance notice procedures with which stockholders must comply to nominate candidates to the Board or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in the Board, and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the potential acquirer’s own slate of directors or otherwise attempting to obtain control of us.
Our competitors may seek to market generic versions of nelitolimod or any other product candidate for which we may in the future obtain approval by submitting abbreviated new drug applications ("ANDAs") or biosimilar applications to the FDA or new products that use our approved products as the reference listed drug, in each case where our competitors claim that our patents are invalid, unenforceable or not infringed.
Our competitors may seek to market generic versions of nelitolimod or any other product candidate for which we may in the future obtain approval by submitting abbreviated new drug applications ("ANDAs") or biosimilar applications to the FDA or new products that use our approved products as the reference listed drug or biologic, in each case where our competitors claim that our patents are invalid, unenforceable or not infringed.
We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our Common Stock held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of Common Stock held by non-affiliates equals or exceeds $700 million as of the end of that year’s second fiscal quarter.
We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our Common Stock held by non-affiliates exceeds $250.0 million as of the end of that year’s second fiscal quarter, or (2) our annual revenues exceeded $100.0 million during such completed fiscal year and the market value of Common Stock held by non-affiliates equals or exceeds $700.0 million as of the end of that year’s second fiscal quarter.
The following examples are illustrative: • others may be able to make formulations that are similar to our product candidates or other formulations but that are not covered by the claims of our patents that we own or have exclusively licensed; • the patents of third parties may have an adverse effect on our business; • we or any current or future strategic partners and/or collaborators might not have been the first to conceive or reduce to practice the inventions covered by the issued patent or pending patent application that we own; • we or any of our current or future strategic partners and/or collaborators might not have been the first to file patent applications covering certain of our inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • it is possible that our pending patent applications will not lead to issued patents; • issued patents that we may own or that we exclusively license in the future may not provide us with any competitive advantage, or may be held invalid or unenforceable, as a result of legal challenges by our competitors; • patent protection on our product candidates may expire before we are able to develop and commercialize the product, or before we are able to recover our investment in the product; • our competitors might conduct research and development activities in the United States and in other countries that provide a safe harbor from patent infringement claims for such activities, as well in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our existing or intended commercial markets; • third parties performing manufacturing or testing for us using our product candidates could use the intellectual property of others without obtaining a proper license; • we may not develop additional proprietary technologies that are patentable; • the patents of others may have an adverse effect on our business; and • we may choose not to file a patent application for certain technologies, trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property.
The following examples are illustrative: • others may be able to make formulations that are similar to our product candidates or other formulations but that are not covered by the claims of our patents that we own or have exclusively licensed; • the patents of third parties may have an adverse effect on our business; • we or any current or future strategic partners and/or collaborators might not have been the first to conceive or reduce to practice the inventions covered by the issued patent or pending patent application that we own; • we or any of our current or future strategic partners and/or collaborators might not have been the first to file patent applications covering certain of our inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • it is possible that our pending patent applications will not lead to issued patents; • issued patents that we may own or that we exclusively license in the future may not provide us with any competitive advantage, or may be held invalid or unenforceable, as a result of legal challenges by our competitors; • patent protection on our product candidates may expire before we are able to develop and commercialize the product, or before we are able to recover our investment in the product; • our competitors might conduct research and development activities in the United States and in other countries that provide a safe harbor from patent infringement claims for such activities, as well in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our existing or intended commercial markets; • third parties performing manufacturing or testing for us using our product candidates could use the intellectual property of others without obtaining a proper license; 64 Table of Contents • we may not develop additional proprietary technologies that are patentable; • the patents of others may have an adverse effect on our business; and • we may choose not to file a patent application for certain technologies, trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of existing stockholders 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 liquidation or other preferences that adversely affect the rights of existing stockholders.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of existing stockholders 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 the rights of existing stockholders.
We will also be required to pay up to $80 million upon achieving certain commercial milestones once sales of nelitolimod have begun. The Dynavax Agreement also obligates us to pay royalties based on potential future net sales of products containing nelitolimod compound on a product-by-product and country-by-country basis during the applicable royalty term.
We will also be required to pay up to $80.0 million upon achieving certain commercial milestones once sales of nelitolimod have begun. The Dynavax Agreement also obligates us to pay royalties based on potential future net sales of products containing nelitolimod compound on a product-by-product and country-by-country basis during the applicable royalty term.
So long as the trading price for our Common Stock is less than $11.50 per share (or, if the exercise price is lowered, such lower exercise price), meaning the Warrants are “out of the money,” we believe holders of our Warrants that were issued will be unlikely to exercise their warrants on a cash basis.
So long as the trading price for our Common Stock is less than $11.50 per share (or, if the exercise price is lowered, such lower exercise price), meaning the SPAC Warrants are “out of the money,” we believe holders of our SPAC Warrants that were issued will be unlikely to exercise their SPAC Warrants on a cash basis.
Any debt financing that we may secure in the future could involve significant fixed payment obligations and restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions.
Regardless, any debt financing that we may secure in the future could involve significant fixed payment obligations and restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions.
In the U.S. and in certain foreign jurisdictions, there have been a number of legislative and regulatory changes to the healthcare system that could impact our ability to sell our products profitably, such as the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act of 2010, or collectively the Affordable Care Act (“ACA”).
In the U.S. and in certain foreign jurisdictions, there have been a number of legislative and regulatory changes to the healthcare system that could impact our ability to sell our products profitably, such as the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively the Affordable Care Act (“ACA”).
On December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise march-in rights.
Further, on December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise march-in rights.
The success of our product candidates will depend on several additional factors, including: ◦ successful completion of preclinical studies; ◦ successful initiation of, patient enrollment in, and completion of clinical trials that demonstrate their safety and efficacy; ◦ receiving marketing approvals or clearances from applicable regulatory authorities; ◦ obtaining, maintaining, protecting and enforcing patent, trade secret and other intellectual property rights and regulatory exclusivity for our product candidates; 53 Table of Contents ◦ completing any post-marketing studies required by applicable regulatory authorities; ◦ making and maintaining arrangements with third-party manufacturers, or establishing manufacturing capabilities, for both clinical and commercial supplies of our product candidates; ◦ establishing sales, marketing and distribution capabilities and successfully launching commercial sales of our products, if and when approved, whether alone or in collaboration with others; ◦ the prevalence and severity of adverse events experienced with our product candidates; ◦ acceptance of our product candidates by patients, the medical community and third-party payors; ◦ a continued acceptable safety profile following approval or clearance; ◦ obtaining and maintaining healthcare coverage and adequate reimbursement for our product candidates; ◦ competing effectively with other cancer therapies, including with respect to the sales and marketing of our product candidates, if approved; ◦ obtaining licenses to any third-party intellectual property we deem necessary or desirable; and ◦ obtaining any necessary third-party agreements to register nelitolimod as part of a combination therapy.
The success of our product candidates will depend on several additional factors, including: ◦ successful completion of preclinical studies; ◦ successful initiation of, patient enrollment in, and completion of clinical trials that demonstrate their safety and efficacy; ◦ receiving marketing approvals or clearances from applicable regulatory authorities; ◦ obtaining, maintaining, protecting and enforcing patent, trade secret and other intellectual property rights and regulatory exclusivity for our product candidates; ◦ completing any post-marketing studies required by applicable regulatory authorities; ◦ making and maintaining arrangements with third-party manufacturers, or establishing manufacturing capabilities, for both clinical and commercial supplies of our product candidates; ◦ establishing sales, marketing and distribution capabilities and successfully launching commercial sales of our products, if and when approved, whether alone or in collaboration with others; ◦ the prevalence and severity of adverse events experienced with our product candidates; ◦ acceptance of our product candidates by patients, the medical community and third-party payors; ◦ a continued acceptable safety profile following approval or clearance; ◦ obtaining and maintaining healthcare coverage and adequate reimbursement for our product candidates; ◦ competing effectively with other cancer therapies, including with respect to the sales and marketing of our product candidates, if approved; ◦ obtaining licenses to any third-party intellectual property we deem necessary or desirable; and ◦ obtaining any necessary third-party agreements to register nelitolimod as part of a combination therapy.
Even if we obtain regulatory approval or clearance for any of our product candidates, they will be subject to extensive and ongoing regulatory requirements for manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, sampling and record-keeping. 54 Table of Contents These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMP regulations and GCPs, for any clinical trials that we conduct post-approval, all of which may result in significant expense and limit our ability to commercialize such products.
Even if we obtain regulatory approval or clearance for any of our product candidates, they will be subject to extensive and ongoing regulatory requirements for manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, sampling and record-keeping. 48 Table of Contents These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMP regulations and GCPs, for any clinical trials that we conduct post-approval, all of which may result in significant expense and limit our ability to commercialize such products.
We may also be bound by other contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful. We publish privacy policies, marketing materials, and other statements, such as compliance with certain certifications or self-regulatory principles, regarding data privacy and security.
We are also bound by other contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful. We publish privacy policies, marketing materials, and other statements, such as compliance with certain certifications or self-regulatory principles, regarding data privacy and security.
Pursuant to the Dynavax Agreement, we are obligated to pay up to $250 million upon the achievement of certain development, regulatory, and commercial milestones and low double-digit royalties based on potential future net sales of products containing the nelitolimod compound.
Pursuant to the Dynavax Agreement, we are obligated to pay up to $250.0 million upon the achievement of certain development, regulatory, and commercial milestones and low double-digit royalties based on potential future net sales of products containing the nelitolimod compound.
There is no guaranty that the warrant holders will exercise their options at the current exercise price or any reduced exercise price. We believe the likelihood that warrant holders will exercise their Warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of our Common Stock.
There is no guaranty that the warrant holders will exercise their Warrants at the current exercise price or any reduced exercise price. We believe the likelihood that warrant holders will exercise their Warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of our Common Stock.
So long as the trading price of our Common Stock is less than $11.50, meaning the Warrants are “out of the money,” meaning the exercise price is higher than the market price of our Common Stock, we believe that holders of the Warrants are unlikely to choose to exercise their Warrants.
So long as the trading price of our Common Stock is less than $11.50, meaning the SPAC Warrants are “out of the money,” meaning the exercise price is higher than the market price of our Common Stock, we believe that holders of the SPAC Warrants are unlikely to choose to exercise their SPAC Warrants.
In addition, a violation of the Anti-Kickback Statute can form the basis for a violation of the federal False Claims Act (discussed below); • Federal civil and criminal false claims laws and civil monetary penalties laws, including the federal False Claims Act, which provides for civil whistleblower or qui tam actions, that impose penalties against individuals or entities 58 Table of Contents for knowingly presenting or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.
In addition, a 52 Table of Contents violation of the Anti-Kickback Statute can form the basis for a violation of the federal False Claims Act (discussed below); • Federal civil and criminal false claims laws and civil monetary penalties laws, including the federal False Claims Act, which provides for civil whistleblower or qui tam actions, that impose penalties against individuals or entities for knowingly presenting or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.
The availability and price, and in the case of nelitolimod, if approved, its FDA-approved labeling versus that of competitors of our competitors’ products could limit the demand and the price we are able to charge for TriNav and nelitolimod, if approved.
The availability and price, and in the case of nelitolimod, if approved, its FDA-approved labeling versus that of our competitors’ products could limit the demand and the price we are able to charge for TriNav and nelitolimod, if approved.
Disputes may arise between us and any of these counterparties regarding intellectual property rights that are subject to such agreements, including, but not limited to: • the scope of rights granted under the agreement and other interpretation-related issues; • whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the agreement; • our right to sublicense patent and other rights to third parties; • our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of our product candidates, and what activities satisfy those diligence obligations; • the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; • our right to transfer or assign our license; and • the effects of termination.
Disputes may arise between us and any of these counterparties regarding intellectual property rights that are subject to such agreements, including, but not limited to: • the scope of rights granted under the agreement and other interpretation-related issues; • whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the agreement; • our right to sublicense patent and other rights to third parties; • our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of our product candidates, and what activities satisfy those diligence obligations; 63 Table of Contents • the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; • our right to transfer or assign our license; and • the effects of termination.
If we are unable to raise sufficient additional capital, we could be forced to curtail our planned operations and the pursuit of our growth strategy and business development efforts, which could jeopardize our ability to continue our business operations. 32 Table of Contents Our future capital needs may require us to sell additional equity or debt securities that may dilute our stockholders, adversely affect the market price of our Common Stock or introduce covenants that may restrict our operations.
If we are unable to raise sufficient additional capital, we could be forced to curtail our planned operations and the pursuit of our growth strategy and business development efforts, which could jeopardize our ability to continue our business operations. 27 Table of Contents Our future capital needs may require us to sell additional equity or debt securities that may dilute our stockholders, adversely affect the market price of our Common Stock or introduce covenants that may restrict our operations.
In addition, we have not updated the records in certain foreign patent offices to reflect our ownership of certain foreign patents relating to nelitolimod, but have recorded our ownership for at least the unexpired foreign patents acquired from Dynavax relating to composition of matter for nelitolimod in Australia, Canada, Austria, Germany, Denmark, Estonia, the UK, Hong Kong, Ireland, Luxembourg, Portugal, New Zealand, and Singapore.
In addition, we have not updated the records in certain foreign patent offices to reflect our ownership of certain expired foreign patents relating to nelitolimod, but have recorded our ownership for at least the expired foreign patents acquired from Dynavax relating to composition of matter for nelitolimod in Australia, Canada, Austria, Germany, Denmark, Estonia, the UK, Hong Kong, Ireland, Luxembourg, Portugal, New Zealand, and Singapore.
Also, we cannot guarantee that any preclinical studies or clinical trials will be conducted as planned or completed on schedule, if at all. We may experience difficulties in patient enrollment in our clinical trials for a variety of reasons, including challenges resulting from COVID-19, labor shortages, and global supply chain interruptions.
Also, we cannot guarantee that any preclinical studies or clinical trials will be conducted as planned or completed on schedule, if at all. We may experience difficulties in patient enrollment in our clinical trials for a variety of reasons, including challenges resulting from labor shortages and global supply chain interruptions.
During the five-year NCE exclusivity period, the FDA may not accept for review or approve an abbreviated new drug application, or ANDA, or a Section 505(b)(2) NDA submitted by another company for another version of such drug where the applicant does not own or have a legal right of reference to all the data required for approval.
During the five-year NCE exclusivity period, the FDA may not approve an abbreviated new drug application, or ANDA, or a Section 505(b)(2) NDA submitted by another company for another version of such drug where the applicant does not own or have a legal right of reference to all the data required for approval.
If we or the third parties on which we rely fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including but not limited to: government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar); litigation (including class-action claims) and mass arbitration demands; additional reporting requirements and/or oversight; bans on processing personal data; orders to destroy or not use personal 61 Table of Contents data; and imprisonment of company officials.
If we or the third parties on which we rely fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including but not limited to: government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar); litigation (including class-action claims) and mass arbitration demands; additional reporting requirements and/or oversight; bans on processing personal data; orders to destroy or not use personal data; and imprisonment of company officials.
In addition, the IRA, among other things, (1) directs HHS to negotiate the price of certain single-source drugs and biologics covered under Medicare and (2) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation. These provisions take effect progressively starting in fiscal year 2023.
In addition, the IRA, among other things, (1) directs HHS to negotiate the price of certain single-source drugs and biologics covered under Medicare and (2) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation. These provisions took effect progressively starting in fiscal year 2023.
If this were to occur, we could face significant material adverse consequences, including: ◦ a limited availability of market quotations for our securities; ◦ reduced liquidity for our securities; 76 Table of Contents ◦ a limited amount of news and analyst coverage for the company; and ◦ a decreased ability to issue additional securities or obtain additional financing in the future.
If this were to occur, we could face significant material adverse consequences, including: ◦ a limited availability of market quotations for our securities; ◦ reduced liquidity for our securities; ◦ a limited amount of news and analyst coverage for the company; and 69 Table of Contents ◦ a decreased ability to issue additional securities or obtain additional financing in the future.
In addition, although nelitolimod differs in certain ways from other approaches, serious adverse events or deaths in other clinical trials involving precision medicines, even if not ultimately attributable to our product candidates, could result in increased government regulation, unfavorable public perception and publicity, potential regulatory delays in the testing or licensing of our product candidates, stricter labeling requirements for those product candidates that are licensed, and a decrease in demand for any such product candidates.
In addition, although nelitolimod differs in certain ways from other approaches, serious adverse events or deaths in other clinical trials involving precision medicines, even if not ultimately attributable to our product candidates, could result in increased government regulation, unfavorable public perception and publicity, potential regulatory delays in the testing 36 Table of Contents or licensing of our product candidates, stricter labeling requirements for those product candidates that are licensed, and a decrease in demand for any such product candidates.
Furthermore, our key component suppliers may not currently be or may not continue to be in compliance with all applicable regulatory 55 Table of Contents requirements, which could result in our failure to produce our products on a timely basis and in the required quantities, if at all.
Furthermore, our key component suppliers may not currently be or may not continue to be in compliance with all applicable regulatory 49 Table of Contents requirements, which could result in our failure to produce our products on a timely basis and in the required quantities, if at all.
Competition by other forms of cancer treatment, for example, the development of new and more efficacious systemic therapies, could reduce the use of regional therapy as a standard of care in certain indications. Changes in treatment guidelines or standard of care may also impact product coverage and/or reimbursement by payers.
Competition by other forms of cancer treatment, for example, the development of new and more efficacious systemic therapies, could reduce the use of regional therapy as a standard of care in certain indications. Changes in treatment guidelines or standard of care may also impact product coverage and/or reimbursement by payors.
Although we 35 Table of Contents continue to further develop an in-house marketing organization and sales force with technical expertise and supporting distribution capabilities to commercialize TriNav, which will require significant capital expenditures, management resources and time, we may be unable to accurately predict the future level of demand for TriNav that will be generated by our existing or potential customers, or the future demand for our medical device products by these customers or new customers.
Although we continue to further develop an in-house marketing organization and sales force with technical expertise and supporting distribution capabilities to commercialize TriNav, which will require significant capital expenditures, management resources and time, we may be unable to accurately predict the future level of demand for TriNav that will be generated by our existing or potential customers, or the future demand for our medical device products by these customers or new customers.
The price of our Common Stock and Public Warrants may continue to fluctuate in the future due to a variety of factors, including, without limitation: • the volume and timing of sales of TriNav or other products; 75 Table of Contents • the introduction of new products or product enhancements by us or others in our industry; • the timing and results of clinical trials of any of our product candidates; • regulatory actions with respect to our product candidates or our competitors’ products and product candidates; • the success of existing or new competitive products or technologies; • announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments; • establishment or termination of collaborations for our product candidates or development programs; • failure or discontinuation of any of our development programs; • results of clinical trials of product candidates of our competitors; • regulatory or legal developments in the United States and other countries; • developments or disputes concerning patent applications, issued patents or other proprietary rights; • the level of expenses related to any of our product candidates or development programs; • the results of our efforts to discover, develop, acquire or in-license additional product candidates or products; • actual or anticipated changes in estimates as to financial results or development timelines; • actual or anticipated fluctuations in our quarterly or annual operating results; • publication of research reports by securities analysts about us or our competitors or our industry; • the public’s reaction to our press releases, our other public announcements and our filings with the SEC; • our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; • additions and departures of key personnel; • changes in laws and regulations affecting our business; • commencement of, or involvement in, litigation involving us; • changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; • the volume of shares of Common Stock available for public sale; • general economic and political conditions, such as recessions, interest rates, social, political and economic risks and acts of war or terrorism; and • that the information we are required to disclose in the reports that we file with the SEC is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our management, including our principal executive and financial officers.
The price of our Common Stock and publicly traded warrants may continue to fluctuate in the future due to a variety of factors, including, without limitation: • the volume and timing of sales of TriNav or other products; • the introduction of new products or product enhancements by us or others in our industry; 68 Table of Contents • the timing and results of clinical trials of any of our product candidates; • regulatory actions with respect to our product candidates or our competitors’ products and product candidates; • the success of existing or new competitive products or technologies; • announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments; • establishment or termination of collaborations for our product candidates or development programs; • failure or discontinuation of any of our development programs; • results of clinical trials of product candidates of our competitors; • regulatory or legal developments in the United States and other countries, including as a result of tariffs; • developments or disputes concerning patent applications, issued patents or other proprietary rights; • the level of expenses related to any of our product candidates or development programs; • the results of our efforts to discover, develop, acquire or in-license additional product candidates or products; • actual or anticipated changes in estimates as to financial results or development timelines; • actual or anticipated fluctuations in our quarterly or annual operating results; • publication of research reports by securities analysts about us or our competitors or our industry; • the public’s reaction to our press releases, our other public announcements and our filings with the SEC; • our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; • additions and departures of key personnel; • changes in laws and regulations affecting our business; • commencement of, or involvement in, litigation or government investigations involving us; • changes in our capital structure, such as future issuances of securities or the incurrence of (or inability to incur) additional debt; • the volume of shares of Common Stock available for public sale; • general economic and political conditions, such as recessions, interest rates, social, political and economic risks and acts of war or terrorism; and • that the information we are required to disclose in the reports that we file with the SEC is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our management, including our principal executive and financial officers.
In addition, regardless of merit or eventual outcome, product liability claims may result in: ◦ impairment of our business reputation and significant negative media attention; ◦ withdrawal of participants from our clinical trials; ◦ injury to our reputation; ◦ initiation of investigations by regulators; ◦ significant costs to defend the related litigation and related litigation; ◦ distraction of management’s attention from our primary business; ◦ substantial monetary awards to patients or other claimants; ◦ inability to commercialize a product candidate; ◦ product recalls, withdrawals or labeling, marketing or promotional restrictions; ◦ exhaustion of any available insurance and our capital resources, and the inability to commercialize any product candidate; ◦ decreased demand for a product candidate, if approved for commercial sale; and ◦ loss of revenue.
In addition, regardless of merit or eventual outcome, product liability claims may result in: ◦ impairment of our business reputation and significant negative media attention; ◦ withdrawal of participants from our clinical trials; ◦ injury to our reputation; ◦ initiation of investigations by regulators; ◦ significant costs to defend the related litigation and related litigation; ◦ distraction of management’s attention from our primary business; ◦ substantial monetary awards to patients or other claimants; ◦ inability to commercialize a product candidate; ◦ product recalls, withdrawals or labeling, marketing or promotional restrictions; ◦ exhaustion of any available insurance and our capital resources, and the inability to commercialize any product candidate; ◦ decreased demand for our products and any product candidate that is approved for commercial sale; and ◦ loss of revenue.
Failure to take adequate steps to reduce the likelihood or mitigate the potential impact of such events, or to effectively manage such events if they occur, particularly when materials are sourced from a single location or supplier or produced by a single manufacturer, could adversely affect our business, financial condition, 48 Table of Contents results of operations and/or require additional resources to restore our supply chain or manufacturing capabilities, as applicable.
Failure to take adequate steps to reduce the likelihood or mitigate the potential impact of such events, or to effectively manage such events if they occur, particularly when materials are sourced from a single location or supplier or produced by a single manufacturer, could adversely affect our business, financial condition, results of operations and/or require additional resources to restore our supply chain or manufacturing capabilities, as applicable.
Furthermore, we may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program. In addition, our reliance on third-parties could introduce new cybersecurity risks and vulnerabilities, including supply-chain attacks and other threats to our business operations.
Furthermore, we may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program. 43 Table of Contents In addition, our reliance on third-parties could introduce new cybersecurity risks and vulnerabilities, including supply-chain attacks and other threats to our business operations.
Our competitors, either alone or with collaborative partners, may succeed in developing, acquiring or licensing on an exclusive basis drug or biologic products that are more effective, safer, 41 Table of Contents more easily commercialized or less costly than nelitolimod or may develop proprietary technologies or secure patent protection that we may need for the development of our drug delivery technologies and products or product candidates.
Our competitors, either alone or with collaborative partners, may succeed in developing, acquiring or licensing on an exclusive basis drug or biologic products that are more effective, safer, more easily commercialized or less costly than nelitolimod or may develop proprietary technologies or secure patent protection that we may need for the development of our drug delivery technologies and products or product candidates.
There are situations in which non-compliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. 72 Table of Contents If our trademarks are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.
There are situations in which non-compliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. If our trademarks are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.
While it is our policy to require employees, consultants and contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as Legacy-TriSalus owned.
While it is our policy to require employees, consultants and contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, we 62 Table of Contents may be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as Legacy-TriSalus owned.
The success of these product candidates will depend on several factors, including the following: ◦ successful enrollment in clinical trials and completion of clinical trials and preclinical studies with favorable results; ◦ clearance of INDs by the FDA or similar regulatory filings by comparable foreign regulatory authorities for the conduct of clinical trials of our product candidates and our proposed design of future clinical trials; ◦ demonstrating the safety and efficacy in the proposed indications for use of our product candidates to the satisfaction of applicable regulatory authorities; ◦ receipt of marketing approvals from applicable regulatory authorities, including New Drug Applications (“NDAs”) from the FDA and maintaining such approvals; ◦ making arrangements with third-party manufacturers for, or establishing, clinical and commercial manufacturing capabilities; 36 Table of Contents ◦ establishing sales, marketing and distribution capabilities and launching commercial sales of our product candidates, if and when approved, whether alone or in collaboration with others; ◦ establishing and maintaining patent and trade secret protection or regulatory exclusivity for our product candidates; ◦ maintaining an acceptable safety profile of our products following approval; and ◦ building and maintaining an organization of people who can successfully develop our product candidates.
The success of this product candidate will depend on several factors, including the following: ◦ successful enrollment in clinical trials and completion of clinical trials and preclinical studies with favorable results; ◦ clearance of INDs by the FDA or similar regulatory filings by comparable foreign regulatory authorities for the conduct of clinical trials of our product candidate and our proposed design of future clinical trials; ◦ demonstrating the safety and efficacy in the proposed indications for use of our product candidate to the satisfaction of applicable regulatory authorities; ◦ receipt of marketing approvals from applicable regulatory authorities, including New Drug Applications (“NDAs”) from the FDA and maintaining such approvals; ◦ making arrangements with third-party manufacturers for, or establishing, clinical and commercial manufacturing capabilities; ◦ establishing sales, marketing and distribution capabilities and launching commercial sales of our product candidate, if and when approved, whether alone or in collaboration with others; ◦ establishing and maintaining patent and trade secret protection or regulatory exclusivity for our product candidate; ◦ maintaining an acceptable safety profile of our products following approval; and ◦ building and maintaining an organization of people who can successfully develop our product candidate.
Depending on the extent of any difficulties encountered, we could experience an interruption in clinical or commercial supply, with the result that the development, regulatory approval or commercialization of our products or product candidates may be delayed or interrupted. Our risk management processes and procedures may not be effective.
Depending on the extent of any difficulties encountered, we could experience an interruption in clinical or commercial supply, with the result that the development, regulatory approval or commercialization of our products or product candidates may be delayed or interrupted. 42 Table of Contents Our risk management processes and procedures may not be effective.
In addition, we cannot assure you that any future acquisition of new businesses, products, product candidates or technologies will lead to the successful integration of any products, product candidates or technologies acquired with our 49 Table of Contents existing operations or the successful development of new or enhanced products or that any new or enhanced products, if developed, will achieve market acceptance or prove to be profitable.
In addition, we cannot assure you that any future acquisition of new businesses, products, product candidates or technologies will lead to the successful integration of any products, product candidates or technologies acquired with our existing operations or the successful development of new or enhanced products or that any new or enhanced products, if developed, will achieve market acceptance or prove to be profitable.
Depending upon the timing, duration and specifics of FDA marketing approval of our product candidates, one or more of our United States patents may be eligible for limited patent term extension, or PTE, under the Drug Price Competition 65 Table of Contents and Patent Term Restoration Act of 1984 (the “Hatch-Waxman Amendments”).
Depending upon the timing, duration and specifics of FDA marketing approval of our product candidates, one or more of our United States patents may be eligible for limited patent term extension, or PTE, under the Drug Price Competition and Patent Term Restoration Act of 1984 (the “Hatch-Waxman Amendments”).
Further, if any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent such third party, or those to whom they communicate such technology or information, from using that 67 Table of Contents technology or information to compete with us.
Further, if any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent such third party, or those to whom they communicate such technology or information, from using that technology or information to compete with us.
The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the rules of the SEC, the listing requirements of the Nasdaq Stock Market, and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and 73 Table of Contents financial controls and corporate governance practices.
The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the rules of the SEC, the listing requirements of the Nasdaq Stock Market, and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.
In those countries, we and our licensees or any future licensors may have limited remedies if patents are infringed or if we and our licensees or any future licensors are compelled to grant a license to a third party, 66 Table of Contents which could materially diminish the value of those patents. This could limit our potential revenue opportunities.
In those countries, we and our licensees or any future licensors may have limited remedies if patents are infringed or if we and our licensees or any future licensors are compelled to grant a license to a third party, which could materially diminish the value of those patents. This could limit our potential revenue opportunities.
We are also subject to anti-takeover provisions under Delaware law, which 79 Table of Contents could delay or prevent a change of control. Together these provisions may discourage transactions that otherwise could involve the payment of a premium over prevailing market prices for our securities.
We are also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together these provisions may discourage transactions that otherwise could involve the payment of a premium over prevailing market prices for our securities.
Several companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to a 37 Table of Contents lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier trials, and we cannot be certain that we will not face similar setbacks.
Several companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to a lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier trials, and we cannot be certain that we will not face similar setbacks.
The value to employees of stock options or other equity awards that vest over time may be significantly affected by movements in our stock price that are 43 Table of Contents beyond our control and may at any time be insufficient to counteract more lucrative offers from other companies.
The value to employees of stock options or other equity awards that vest over time may be significantly affected by movements in our stock price that are beyond our control and may at any time be insufficient to counteract more lucrative offers from other companies.
Healthcare provider systems may try to use their market power to negotiate 44 Table of Contents price concessions or reductions for our products. If we reduce our prices because of consolidation in the healthcare industry, our revenue will decrease and our results of operations and financial condition will suffer.
Healthcare provider systems may try to use their market power to negotiate price concessions or reductions for our products. If we reduce our prices because of consolidation in the healthcare industry, our revenue will decrease and our results of operations and financial condition will suffer.
If any of our programs or product candidates receive fast track or breakthrough therapy designation by the FDA or similar designations by other regulatory authorities, there is no assurance that we will receive any benefits from such 51 Table of Contents programs or that we will continue to meet the criteria to maintain such designation.
If any of our programs or product candidates receive fast track or breakthrough therapy designation by the FDA or similar designations by other regulatory authorities, there is no assurance that we will receive any benefits from such programs or that we will continue to meet the criteria to maintain such designation.
If we fail in defending any such claims, we may have to pay monetary damages and may lose valuable intellectual property rights, such as exclusive 68 Table of Contents ownership of, or right to use, intellectual property, which could adversely impact our business, results of operations and financial condition.
If we fail in defending any such claims, we may have to pay monetary damages and may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, intellectual property, which could adversely impact our business, results of operations and financial condition.
Recalls of any of our products would divert managerial and financial resources and have an adverse effect on our reputation, results of operations and financial condition, which could impair 57 Table of Contents our ability to produce our products in a cost-effective and timely manner in order to meet our customers’ demands.
Recalls of any of our products would divert managerial and financial resources and have an adverse effect on our reputation, results of operations and financial condition, which could impair our ability to produce our products in a cost-effective and timely manner in order to meet our customers’ demands.
Further, there cannot be any assurance that such patents issued will not be infringed, designed around, invalidated by third parties or effectively prevent others from commercializing competitive technologies, products or product candidates. 62 Table of Contents The patent prosecution process is expensive, complex and time-consuming. Patent license negotiations also can be complex and protracted, with uncertain results.
Further, there cannot be any assurance that such patents issued will not be infringed, designed around, invalidated by third parties or effectively prevent others from commercializing competitive technologies, products or product candidates. The patent prosecution process is expensive, complex and time-consuming. Patent license negotiations also can be complex and protracted, with uncertain results.
We may need the cooperation of any such co-owners to enforce such patents against third parties, and such cooperation may not be provided to us. Any of the foregoing could have a material adverse effect on our competitive position, business prospects and financial conditions.
We may need the cooperation of any such co-owners to enforce such patents against third parties, and such cooperation may 58 Table of Contents not be provided to us. Any of the foregoing could have a material adverse effect on our competitive position, business prospects and financial conditions.
We take steps designed to detect, mitigate, and remediate vulnerabilities in our information systems (such as our hardware and/or software, including that of third parties upon which we rely ). We may not, however, detect and remediate all such vulnerabilities on a timely basis.
We take steps designed to detect, mitigate, and remediate vulnerabilities in our information systems (such as our hardware and/or software, including that of third parties upon which we rely ). We have not and may not in the future, however, detect and remediate all such vulnerabilities on a timely basis.
In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the United States. 63 Table of Contents Further, patents and other intellectual property rights in the pharmaceutical, biotechnology and medical device space are evolving and involve many risks and uncertainties.
In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the United States. Further, patents and other intellectual property rights in the pharmaceutical, biotechnology and medical device space are evolving and involve many risks and uncertainties.
Risks Related to Our Business and Industry 40 Table of Contents Changes in existing third-party coverage or our inability to secure and maintain favorable reimbursement may impact our ability to sell our products, which would materially and adversely impact our business, results of operations, financial condition and prospects.
Risks Related to Our Business and Industry Changes in existing third-party coverage or our inability to secure and maintain favorable reimbursement may impact our ability to sell our products, which would materially and adversely impact our business, results of operations, financial condition and prospects.
In the United States, federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws).
In the United States, federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the Federal 54 Table of Contents Trade Commission Act), and other similar laws (e.g., wiretapping laws).
A number of factors that are outside of our control may contribute to fluctuations in our financial results, including: • physician experience and hospital demand for our products and the extent of adoption of TriNav, including the rate at which physicians recommend TriNav for use on their patients; • delays in, or failure to supply product, component and material deliveries by our third-party suppliers; • positive or negative media coverage, or public, patient and/or physician perception, of TriNav or competing products and procedures; • any safety or effectiveness concerns that arise regarding TriNav; • the extent of reimbursement by CMS for purchases of TriNav; and • introduction of new products or procedures for delivering drugs into the tumor microenvironment that compete with TriNav.
A number of factors that are outside of our control may contribute to fluctuations in our financial results, including: • physician experience and hospital demand for our products and the extent of adoption of TriNav, including the rate at which physicians recommend TriNav for use on their patients; 30 Table of Contents • delays in, or failure to supply product, component and material deliveries by our third-party suppliers; • positive or negative media coverage, or public, patient and/or physician perception, of TriNav or competing products and procedures; • any safety or effectiveness concerns that arise regarding TriNav; • the extent of reimbursement by the Centers for Medicare & Medicaid Services ("CMS") for purchases of TriNav; and • introduction of new products or procedures for delivering drugs into the tumor microenvironment that compete with TriNav.
We may also rely on third-parties to provide other products, services, parts, or otherwise to operate our business, including clinical trial sites and investigators, contractors, manufacturers, suppliers, and consultants. Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security 47 Table of Contents measures in place.
We also rely on third-parties to provide other products, services, parts, or otherwise to operate our business, including clinical trial sites and investigators, contractors, manufacturers, suppliers, and consultants. Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place.
Our product development costs will also increase if we experience delays in testing or obtaining marketing approvals or clearances. Delays in clinical trials are common and have many causes, and any delay could result in increased costs to us and could jeopardize or delay our ability to obtain regulatory approval and commence future product sales.
Our product development costs will also increase if we experience delays in testing or obtaining marketing approvals or clearances. 34 Table of Contents Delays in clinical trials are common and have many causes, and any delay could result in increased costs to us and could jeopardize or delay our ability to obtain regulatory approval and commence future product sales.
Even if we are able to raise awareness and increase adoption of TriNav among physicians, physicians tend to be slow in changing their medical treatment practices and may be hesitant to select TriNav for recommendation to patients for a variety of reasons, including: • Long-standing relationships with competing companies and distributors that sell competitive products; • Competitive response and negative selling efforts from providers of alternative catheter products; • Perceived liability risk generally associated with the use of new products and procedures; • Lack of sufficient clinical evidence, including long-term data, supporting the clinical benefits of TriNav; • Reluctance to change to or use new products and procedures; and 34 Table of Contents • Time commitment and skill development that may be required to gain familiarity and proficiency with TriNav.
Even if we are able to raise awareness and increase adoption of TriNav among physicians, physicians tend to be slow in changing their medical treatment practices and may be hesitant to select TriNav for recommendation to patients for a variety of reasons, including: • Long-standing relationships with competing companies and distributors that sell competitive products; • Competitive response and negative selling efforts from providers of alternative catheter products; • Perceived liability risk generally associated with the use of new products and procedures; • Lack of sufficient clinical evidence, including long-term data, supporting the clinical benefits of TriNav in the different conditions for which PEDD may be applicable; • Reluctance to change to or use new products and procedures; and • Time commitment and skill development that may be required to gain familiarity and proficiency with TriNav.
Our ability to develop and maintain satisfactory relationships with these providers also may be negatively impacted by other factors not associated with us, such as changes in Medicare and/or Medicaid reimbursement levels and other pressures on healthcare providers and consolidation activity among hospitals, physician groups and healthcare providers.
Our ability to develop and maintain satisfactory relationships with these providers also may be negatively impacted by other factors not associated with us, such as changes in Medicare and/or Medicaid reimbursement levels and other pressures on healthcare providers and consolidation activity among hospitals, physician groups and healthcare 38 Table of Contents providers.
Our ability to generate product revenues from our pharmaceutical candidates, which we do not expect will occur for several years, if ever, will depend heavily on the successful development and eventual commercialization of our product candidates.
Our ability to generate product revenues from our product candidate, which we do not expect will occur for several years, if ever, will depend heavily on the successful development and eventual commercialization of our product candidate.
Even if we are successful in obtaining a patent, patents have a limited lifespan. Various extensions may be available; however, the life of a patent, and the protection it affords, is limited. Without patent protection of our product candidates, we may be open to competition from generic versions of such methods and compositions.
Even if we are successful in obtaining a patent, patents have a limited lifespan. Various extensions may be available; however, the life of a patent, and the protection it affords, is limited. Without patent protection of our product candidates, we may be open to competition from generic versions of such drug products.
If we are unable to demonstrate the safety and effectiveness of product candidates in our clinical trials, we will be unable to obtain the regulatory clearances or authorizations we need to commercialize new products.
If we are unable to demonstrate the safety and 33 Table of Contents effectiveness of product candidates in our clinical trials, we will be unable to obtain the regulatory clearances or authorizations we need to commercialize new products.
Even if one or more of our product candidates qualify as breakthrough therapies pursuant to FDA standards, the FDA may later decide that the product no longer meets the conditions for qualification.
Even if one or more of our product candidates qualify as 46 Table of Contents breakthrough therapies pursuant to FDA standards, the FDA may later decide that the product no longer meets the conditions for qualification.
The cash proceeds associated with the exercise of Warrants to purchase our Common Stock and the subsequent resale of that Common Stock are contingent upon our stock price. The value of our Common Stock will fluctuate and may not align with the exercise price of the Warrants at any given time.
The cash proceeds associated with the exercise of Warrants to purchase our Common Stock are contingent upon our stock price. The value of our Common Stock will fluctuate and may not align with the exercise price of the Warrants at any given time.
Academic institutions, government agencies, and other public and private research organizations may seek patent protection regarding potentially competitive products or technologies and may establish exclusive collaborative or licensing relationships with our competitors. Our competitors may be better equipped than we are to respond to competitive pressures. Competition will likely intensify.
Academic institutions, government agencies, and other public and private research organizations may seek patent protection regarding potentially competitive products or technologies and may establish exclusive collaborative or licensing relationships with our competitors. Our competitors may be better equipped than we are to respond to competitive pressures.
We may at times fail (or be perceived to have failed) in our efforts to comply with our data privacy and security obligations. Moreover, despite our efforts, our personnel or third parties on which we rely may fail to comply with such obligations, which could negatively impact our business operations.
We may at times fail (or be perceived to have failed) in our efforts to comply with our data privacy and security obligations. Moreover, despite our efforts, our personnel or third parties on which we rely may fail to comply with such 55 Table of Contents obligations, which could negatively impact our business operations.
We also intend to apply for orphan drug designation and orphan designation in the U.S. and EU, respectively, which, if granted, would extend the exclusivity period beyond the initial five years of regulatory exclusivity from the date of approval in the U.S. and beyond the eight years of data exclusivity from the date of approval in Europe; however, there can be no assurance that we will ever obtain approval or orphan drug exclusivity for such product candidates.
We also intend to apply for orphan drug designation and orphan designation for nelitolimod in the U.S. and EU, respectively, which, if granted, would extend the regulatory exclusivity period beyond the initial five years of regulatory exclusivity for a New Chemical Entity ("NCE") from the date of approval in the U.S. and beyond the eight years of data exclusivity from the date of approval in Europe; however, there can be no assurance that we will ever obtain approval or orphan drug exclusivity for such product candidates.
If the equity and credit markets deteriorate, including as a result of political unrest or war, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive. Increased inflation rates can adversely affect us by increasing our costs, including labor and employee benefit costs.
If the equity and credit markets deteriorate, including as a result of economic policies, political unrest or war, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive. Increased inflation rates or tariffs can adversely affect us by increasing our costs.
We are a commercial-stage medical device and Phase I clinical-stage pharmaceutical company with a limited operating history upon which you can evaluate our business and prospects. We have incurred significant losses since inception, including net losses of $59.0 million and $47.2 million for the years ended December 31, 2023, and 2022, respectively.
We are a commercial-stage medical device and Phase I clinical-stage pharmaceutical company with a limited operating history upon which you can evaluate our business and prospects. We have incurred significant losses since inception, including net losses of $30.0 million and $59.4 million for the years ended December 31, 2024 and 2023, respectively .

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

11 edited+1 added−1 removed5 unchanged
Biggest changeWe have worked, and expect to continue to work, with third-party service providers, as appropriate, to assess, identify and manage cybersecurity risks. As such, our DO meets with the senior management from our IT support firm regularly to discuss work requests and issues raised that may need to be added to the network for security.
Biggest changeAs such, our DO meets with the senior management from our IT support firm regularly to discuss work requests and issues raised that may need to be added to the network for security. We also conduct periodic and on-demand assessments of our cybersecurity risk management program with expert service providers to ensure it remains current, given the changing risk environment.
In addition, the Company’s incident response plan includes reporting to the Audit Committee of the board of directors for certain cybersecurity incidents. Governance Cybersecurity risks are overseen by the Board of Directors and the Audit Committee. The Audit Committee is central to the Board of Directors’ oversight of cybersecurity risks and bears the primary responsibility for overseeing cybersecurity risk.
In addition, the Company’s incident response plan includes reporting to the Audit Committee of the Board of Directors ("Audit Committee") for certain cybersecurity incidents. Governance Cybersecurity risks are overseen by the Audit Committee. The Audit Committee is central to the Board of Directors’ oversight of cybersecurity risks and bears the primary responsibility for overseeing cybersecurity risk.
The Audit Committee actively participates in strategic decisions related to cybersecurity, offering guidance and approval for major cybersecurity initiatives. This involvement ensures that cybersecurity considerations are integrated into our broader strategic objectives. Our DO provides comprehensive updates to the Audit Committee quarterly and the full Board of Directors at least annually.
The Audit Committee actively participates in strategic decisions related to cybersecurity, offering guidance and approval for major cybersecurity initiatives. This involvement ensures that cybersecurity considerations are integrated into our broader strategic objectives. Our DO provides comprehensive updates to the Audit Committee and the full Board of Directors at least annually.
Risk Factors in this Annual Report, including “ If our information technology systems or data, or those of third parties upon which we rely, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; and other adverse consequences. ” 82 Table of Contents
Risk Factors in this Annual Report, including “ If our information technology systems or data, or those of third parties upon which we rely, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; and other adverse consequences. ” 75 Table of Contents
Our cybersecurity incident response plan is designed to escalate certain cybersecurity incidents to members of management depending on the circumstances. Our DO, with the appropriate members of management, will work with the Company’s incident response team to help the Company mitigate and remediate cybersecurity incidents of which they are notified.
Our cybersecurity incident response plan is designed to escalate certain cybersecurity incidents to members of management depending on the circumstances. Our DO, with the appropriate members of management, will work with the Company’s incident response team to help us mitigate and remediate cybersecurity incidents of which they are notified.
The Board of Directors is aware of the critical nature of managing risks associated with cybersecurity threats and is actively engaged in our cybersecurity risk management strategy. As of the date of this report, there have been no cybersecurity threats that have materially affected or are reasonably likely to materially affect our business, operations, or financial condition.
The Board of Directors is aware of the importance of managing risks associated with cybersecurity threats and is actively engaged in our cybersecurity risk management strategy. As of the date of this report, there have been no cybersecurity threats that have materially affected or are reasonably likely to materially affect our business, operations, or financial condition.
Our cybersecurity risk management program leverages a combination of processes, technologies and personnel with expertise in cybersecurity to comply with applicable regulations and detect and respond to cyber-attacks, data breaches, security incidents, and compromises of personal information, as well as to regularly and promptly inform management and our Board of Directors of any significant cybersecurity risks and developments.
Our cybersecurity risk management program leverages a combination of processes, technologies and personnel with expertise in cybersecurity in an effort to comply with applicable regulations and detect and respond to cyber-attacks, data breaches, security incidents, and compromises of personal information, as well as to inform management and our Board of Directors of any significant cybersecurity risks and developments.
We recognize the critical importance of developing, implementing, and maintaining robust cybersecurity measures to maintain the security, confidentiality, integrity, and availability of our business systems and confidential information, including personal information and intellectual property.
We recognize the importance of developing, implementing, and maintaining cybersecurity measures that are designed to maintain the security, confidentiality, integrity, and availability of our business systems and confidential information, including personal information and intellectual property.
We use third-party service providers to perform a variety of critical functions throughout our business, such as hosting providers, application providers, contract research organizations and contract manufacturing organizations. We have a vendor management program to manage cybersecurity risks associated with our use of these providers.
The DO regularly updates cybersecurity matters to the executive management team. We use third-party service providers to perform a variety of critical functions throughout our business, such as hosting providers, application providers, contract research organizations and contract manufacturing organizations. We have a vendor management program to manage cybersecurity risks associated with our use of these providers.
Our DO regularly meets with our third-party IT support firm to discuss cybersecurity threats and risk. This team helps identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment using various methods and tools, for example, phishing and social engineering tests.
Our DO working knowledge of end-user best practices and regularly meets with our third-party IT support firm to discuss potential cybersecurity threats and risk. This team helps identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment using various methods and 74 Table of Contents tools, for example, phishing and social engineering tests.
Our company currently does not have a Chief Information Security Officer ("CISO") due to our size; our Director of Operations (“DO”), with assistance from our third-party information technology (“IT”) support firm, leads the Company’s effort in establishing cybersecurity strategies and structures and helps identify, assess, and manage the Company’s 81 Table of Contents cybersecurity threats and risk.
Our Senior Director of Operations (“DO”), with assistance from our third-party information technology (“IT”) support firm, leads the Company’s effort in establishing cybersecurity strategies and structures that help to identify, assess, and manage the Company’s cybersecurity threats and risk.
Removed
We also conduct periodic and on-demand assessments of our cybersecurity risk management program with expert service providers to ensure it remains current, given the changing risk environment. The DO regularly updates cybersecurity matters to the executive management team.
Added
Based on these meetings, our DO identifies additional end-user education and company security needs, which are supported through our IT support firm or other third-party IT experts. We have worked, and expect to continue to work, with third-party service providers, as appropriate, to assess, identify and manage cybersecurity risks.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe lease office facilities in Bannockburn, Illinois, and Cranston, Rhode Island. We also lease laboratory space at Rhode Island Hospital in Providence, Rhode Island. We believe our facilities are adequate to meet our current needs, although we may seek to negotiate new leases or evaluate additional or alternate space for our operations.
Biggest changeWe believe our facilities are adequate to meet our current needs, although we may seek to negotiate new leases or evaluate additional or alternate space for our operations. We believe appropriate alternative space will be readily available on commercially reasonable terms.
Item 2. Properties Our principal office is located in Westminster, Colorado, where we lease approximately 21,000 square feet of office, manufacturing, and warehouse space pursuant to a lease that expires on December 31, 2026. The lease includes two extension options, each for five years. We have not yet determined if we will exercise the extension options.
Item 2. Properties Our principal office is located in Westminster, Colorado, where we lease approximately 21.0 thousand square feet of office, manufacturing, and warehouse space pursuant to a lease that expires on December 31, 2031. The initial lease included two extension options, each for five years.
Removed
We believe appropriate alternative space will be readily available on commercially reasonable terms.
Added
On July 17, 2024, we exercised one of the two options to extend the current lease for the Westminster facility for an additional period of five years commencing on January 1, 2027, and ending on December 31, 2031 ("Second Extended Lease Term"). We lease office facilities in Bannockburn, Illinois and laboratory space at Rhode Island Hospital in Providence, Rhode Island.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeRegardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. Item 4. Mine Safety Disclosures Not Applicable. 83 Table of Contents Part II
Biggest changeRegardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. Item 4. Mine Safety Disclosures Not Applicable. 76 Table of Contents Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−4 removed2 unchanged
Biggest changeFurther, if we incur any indebtedness, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith. Securities Authorized for Issuance Under Equity Compensation Plans. Information about our equity compensation plans in Item 12 of Part III of this Annual Report is incorporated herein by reference.
Biggest changeInformation about our equity compensation plans in Item 12 of Part III of this Annual Report is incorporated herein by reference. Recent Sales of Unregistered Securities None Purchases of Equity Securities by the Issuer and Affiliated Purchasers None Item 6. [Reserved]
The payment of any cash dividends will be within the discretion of our board of directors at such time. In addition, our board of directors is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future.
The payment of any cash dividends will be within the discretion of our board of directors at such time. In addition, our board of directors is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future. Securities Authorized for Issuance Under Equity Compensation Plans.
Holders of Record On April 3, 2024, there were 136 holders of record of our shares of Common Stock, 147 holders of record of our shares of Series A preferred stock, and 17 holders of record of our warrants. Dividends We have not declared or paid any cash dividends on our Common Stock to date.
Holders of Record On March 31, 2025, there were 113 holders of record of our shares of Common Stock, 94 holders of record of our shares of Series A preferred stock, and 12 holders of record of our warrants. Dividends We have not declared or paid any cash dividends on our Common Stock to date.
Removed
Recent Sales of Unregistered Securities As previously disclosed, in October 2023, we entered the SEPA with Y orkville , 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.
Removed
As of the filing of this Annual Report, we have issued and sold 350,000 shares of Common Stock to Yorkville for gross proceeds of approximately $3.1 million .
Removed
The shares issued to Yorkville were unregistered, but, pursuant to the Registration Statement on Form S-1 (File No. 333-276070) that we filed with the SEC on December 15, 2023, and which was declared effective on December 26, 2023, the shares issued to Yorkville have been registered for resale.
Removed
The securities issued to Yorkville were issued and sold in reliance on the exemption from registration requirements thereof provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder as a transaction by an issuer not involving a public offering. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None Item 6. [Reserved]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

72 edited+77 added−53 removed43 unchanged
Biggest changeCash 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.
Biggest changeNet 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. 86 Table of Contents Funding Requirements 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.
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.
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.
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, 2023, 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.
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.
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.
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, to which we sell directly.
(for purposes of this section, the “Company,” “TriSalus” “we,” “us” and “our”) should be read together with TriSalus’ audited consolidated financial statements as of and for the fiscal years ended December 31, 2023 and 2022, together with the related notes thereto, included elsewhere in this Annual Report.
(for purposes of this section, the “Company,” “TriSalus” “we,” “us” and “our”) should be read together with TriSalus’ audited consolidated financial statements as of and for the fiscal years ended December 31, 2024 and 2023, together with the related notes thereto, included elsewhere in this Annual Report.
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.
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 the rights of holders of our Common Stock.
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.
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, if at all.
Off-Balance Sheet Arrangements 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 94 Table of Contents 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.
Off-Balance Sheet Arrangements 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.
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 maintain our current TriNav pricing and gross margins to help fund the rest of our activities.
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.
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.
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.
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.
All share and per share amounts of our common and preferred stock have been retrospectively adjusted for the exchange ratio in the following discussion. 78 Table of Contents Following the consummation of the Business Combination, we were deemed the accounting acquirer and are accounting for the Business Combination as a reverse recapitalization.
Our future capital requirements, both near and long-term, will depend on many factors, including but not limited to: the success of our commercialization of TriNav including, among other things, continued patient and physician adoption of TriNav and our ability to maintain adequate reimbursement for TriNav; the cost of commercialization activities for TriNav, including manufacturing, distribution, marketing and sales; net product revenues received from sales of TriNav; 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; the costs involved in preparing, filing and prosecuting patent applications and annuity fees relating to issued patents; the cost of maintaining and enforcing our intellectual property rights, as well as the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against us; the initiation, progress, timing, costs and results of clinical trials and other research and development related to our product candidates; and the extent to which we in-license, acquire or otherwise partner in development or commercialization of other products, product candidates or technologies; the achievement of milestones or occurrence of other developments that trigger payments under the Dynavax Agreement or any other collaboration or other agreements; 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 93 Table of Contents 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; and the costs of operating as a public company.
Our future capital requirements, both near and long-term, will depend on many factors, including but not limited to: the success of our commercialization of TriNav including, among other things, continued patient and physician adoption of TriNav and our ability to maintain adequate reimbursement for TriNav; the cost of commercialization activities for TriNav, including manufacturing, distribution, marketing and sales; net product revenues received from sales of TriNav; 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; the cost of maintaining and enforcing our intellectual property rights, as well as the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against us; the initiation, progress, timing, costs and results of clinical trials and other research and development related to our product candidates; and the extent to which we in-license, acquire or otherwise partner in development or commercialization of other products, product candidates or technologies; the achievement of milestones or occurrence of other developments that trigger payments under the Dynavax Agreement or any other collaboration or other agreements; 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 amount and timing of future revenue, if any, received from commercial sales of our current and future product candidates upon any marketing approvals; and the costs of operating as a public company.
We will also be required to pay up to $80.0 million upon achieving certain commercial milestones once sales of nelitolimod have begun. 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.
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.
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.
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.
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.
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 the price of our securities.
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.
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 77 Table of Contents intratumoral pressure within tumors that limits drug uptake and the second barrier (biological) is the reversal of intratumoral immunosuppression.
We recognized $186 thousand of rebates in the 12 months ended December 31, 2023. Cost of Goods Sold Cost of goods sold primarily consists of raw materials, direct labor and manufacturing overhead costs related to production of TriNav. Gross Profit and Gross Margin Gross profit represents revenue less cost of goods sold.
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, manufacturing overhead and depreciation costs related to production of TriNav. Gross Profit and Gross Margin Gross profit represents revenue less cost of goods sold.
As of December 31, 2023, we had $11.8 million in cash and cash equivalents. As of December 31, 2023, we have the right but not the obligation to sell up to $30.0 million of our Common Stock at our request under the SEPA, subject to terms and conditions specified in the agreement.
As of December 31, 2024, we had $8.5 million in cash and cash equivalents. As of December 31, 2024, we have the right but not the obligation to sell up to $15.9 million of our Common Stock at our request under the SEPA, subject to terms and conditions specified in the agreement.
Policies determined to be critical are those policies that have the most significant impact on our financial statements and require us to use a greater degree of judgment and/or estimates. Actual results may differ from those estimates. Additionally, changes in accounting estimates could occur in the future from period to period.
Policies determined to be critical are those policies that have the most significant impact on our financial statements and require us to use a greater degree of judgment and/or estimates. Actual results may differ from those estimates.
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.
Revenue Recognition Our revenue is derived from shipments of our TriNav infusion devices to our customers which are generally comprised of hospitals, clinics and physicians, and is recognized in accordance with the provisions of the Financial Accounting Standards Board (“FASB”) ASC 606, Revenue from Contracts with Customers , and all related applicable guidance.
Additionally, changes in accounting estimates could occur in the future from period to period. 88 Table of Contents Revenue Recognition Our revenue is derived from shipments of our TriNav infusion devices to our customers which are generally comprised of hospitals, clinics and physicians, and is recognized in accordance with the provisions of the Financial Accounting Standards Board (“FASB”) ASC 606, Revenue from Contracts with Customers , and all related applicable guidance.
Contractual Obligations and Commitments Our contractual obligations as of December 31, 2023, include lease obligations of $1.9 million, reflecting the minimum commitments for our principal administrative and production facility and other office spaces.
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.
Gross margin is gross profit expressed as a percentage of revenue. Our gross margin and overall profitability may in the future fluctuate from period to period based on a number of factors, such as the innovation initiatives we undertake, and manufacturing costs and efficiencies. Operating Expenses Our operating expenses consist of R&D, sales and marketing and general and administrative expenses.
Gross margin is gross profit expressed as a percentage of revenue. Our gross margin and overall profitability may in the future fluctuate from period to period based on a number of factors, such as the innovation initiatives we undertake, and manufacturing costs and efficiencies.
All such arrangements were terminated on or before December 31, 2022. 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 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.
In December 2023, CMS granted a New 85 Table of Contents 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.
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.
We incurred net losses of $59.0 million and $47.2 million for the year ended December 31, 2023, and the year ended December 31, 2022, 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 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 $8.5 million and $11.8 million as of December 31, 2024 and 2023, respectively.
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 87 Table of Contents 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.
Treasury yield curve for time periods commensurate with the expected terms of the warrants and tranche liabilities; and • expected dividend yield, which we estimate to be zero based on the fact that we have never paid or declared dividends.
Treasury yield curve for time periods commensurate with the expected term of the earnout period; and • 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.
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 $1.6 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.
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. 95 Table of Contents The estimated fair value of the earnout liability was determined using a Monte Carlo simulation valuation model using a distribution of potential outcomes.
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.
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.
All of the distributor agreements were discontinued on or before December 31, 2022. 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 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.
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.
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.
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 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.
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.
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 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.
Cost of Goods Sold and Gross Profit Cost of goods sold increased by $0.3 million, or 15.4%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022. The increase in cost of goods sold was due to the higher volume of TriNav produced in the period to support the increase in revenue.
The increase in cost of goods sold was due to the higher volume of TriNav produced in the period to support the increase in revenue. 83 Table of Contents Gross profit increased by $9.4 million, or 59.2%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023, and gross margin increased from 85.9% to 86.1%.
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.
Loss on Equity Issuance 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.
Cash Flows Comparison of the Year Ended December 31, 2023 and December 31, 2022 The following table presents net cash from operating activities, investing activities and financing activities (in thousands): Year Ended 2023 2022 Net cash used in operating activities (50,045) $ (32,313) Net cash used in investing activities (2,121) (1,786) Net cash provided by financing activities 54,629 13,462 Net increase / (decrease) in cash, cash equivalents and restricted cash $ 2,463 $ (20,637) Cash Used in Operating Activities For the year ended December 31, 2023, net cash used in operating activities was $50.0 million.
Cash Flows 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): Year Ended December 31, 2024 December 31, 2023 Net cash used in operating activities (40,843) $ (50,578) Net cash used in investing activities (345) (1,588) Net cash provided by financing activities 37,936 54,629 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.
Research and Development R&D expenses include engineering, regulatory, pre-clinical and clinical activities. 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.
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.
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.
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.
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.
General and Administrative Expenses 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.
Research and Development R&D costs include our engineering, regulatory, pre-clinical and clinical activities. R&D costs are expensed as incurred. Approximately 9% of our R&D costs are headcount-related; the balance is external services we purchase, such as pre-clinical supplies and materials, clinical study management and supplies, and consulting related to our R&D.
Approximately 9% of our R&D costs are headcount-related; the balance is external services we purchase, such as pre-clinical supplies and materials, clinical study management and supplies, and consulting related to our R&D. We are required to estimate our expenses resulting from our obligations under agreements with vendors, consultants, and contract research organizations, in connection with conducting R&D activities.
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.
Cash Used in Investing Activities 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.
Revenue We currently operate in one reportable segment and revenue is generated primarily from sales of PEDD infusion systems to our customers, principally related to TriNav.
Components of Results of Operations The following discussion sets forth certain components of our Consolidated Statements of Operations as well as factors that impact those items. Revenue We currently operate in one reportable segment and revenue is generated primarily from sales of PEDD infusion systems to our customers, principally related to TriNav.
Gross profit increased by $5.8 million, or 56.9%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022, and gross margin increased from 81.8% to 85.9%. The increase in gross profit was driven primarily by higher sales volume. The increase in gross margin was driven primarily by higher production and yield efficiencies.
The increase in gross profit was driven primarily by higher sales volume. The increase in gross margin was driven primarily by higher production and yield efficiencies. Operating Expenses Research and Development 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.
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. 91 Table of Contents 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.
Subsequent to December 31, 2024, we borrowed an additional $10.0 million term loan under the OrbiMed Credit Agreement. 85 Table of Contents 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 clinical trials are still in early stages, and there is no certainty that we will generate favorable data or that, upon review, the FDA will approve nelitolimod for sale.
Our clinical trials are still in early stages, and there is no certainty that we will generate favorable data or that, upon review, the FDA will approve nelitolimod for sale. Recent Developments SEPA Sales For the year ended December 31, 2024, we sold 2,290,377 shares of common stock under the SEPA, raising $14.1 million.
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.
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.
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.
These estimates may be subjective in nature and involve uncertainties and matters of judgment and therefore cannot be determined with exact precision.
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 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.
We may seek additional capital through a combination of public and private equity offerings, debt financings, strategic partnerships and licensing arrangements.
If additional capital is not secured when required, we may need to delay or curtail our operations until such funding is received. We may seek additional capital through a combination of public and private equity offerings, debt financings, strategic partnerships and licensing arrangements.
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. Income Tax Benefit (Expense) Our income tax provision consists primarily of U.S. federal and state income taxes.
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.
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.
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.
Sales and Marketing Sales and marketing expenses increased by $4.3 million, or 33.7%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022.
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.
In March 2024, we sold 350,000 shares of our Common Stock under the SEPA, raising approximately $3.1 million. Additionally, we may never become profitable, or if we do, may not be able to sustain profitability on a recurring basis.
Additionally, we may never become profitable, or if we do, may not be able to sustain profitability on a recurring basis.
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.
Such royalties are subject to reduction by up to 50% in certain circumstances.
Overview 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 84 Table of Contents of our therapeutics and administered by interventional radiologists.
Overview 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.
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. We are currently in our early stage of development and have yet to generate revenues sufficient to drive positive cash flows from operations.
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.
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 to delay or curtail our operations until such funding is received.
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.
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.
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.
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.
We utilized a dividend yield of zero, as we have no history or plan of declaring dividends on the Company's common stock. 89 Table of Contents Contingent Earnout Liability 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.
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. 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.
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 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.
Operating Expenses 89 Table of Contents 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.
Cost of Goods Sold and Gross Profit Cost of goods sold increased by $1.5 million, or 57.5%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023.
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. 90 Table of Contents 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.
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.
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.
Interest Expense 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.
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.
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 92 Table of Contents prepaid expenses of $2.6 million and inventory of $0.2 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 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.
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.
Nonrefundable advance 90 Table of Contents 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 .
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.
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.
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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.
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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.
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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”).
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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.
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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.
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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%.
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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).
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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.

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