TLSI

Business Context and Reporting Period

Company: TriSalus Life Sciences, Inc. (TLSI)
Reporting Period: Quarter and nine months ended September 30, 2025
Business Overview: TriSalus is an oncology-focused medical technology company developing the Pressure Enabled Drug Delivery (PEDD) system (TriNav) and the investigational immunotherapeutic nelitolimod. The company operates as a single reporting segment with all customers and assets located in the United States.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Growth: Revenue increased 57.4% in Q3 2025 and 50.9% for the nine months ended September 30, 2025, driven by higher unit sales of the TriNav infusion system.
• Operating Expenses:
  • R&D: Increased 22.7% in Q3 due to a $2.1 million charge to close out nelitolimod clinical trials, partially offset by reclassifying patent costs to G&A. For the nine months, R&D decreased 15.8% as trials wound down.
  • G&A: Increased 40.9% in Q3 and 29.9% for the nine months, primarily due to a $1.6 million acceleration of non-cash stock-based compensation and reclassified patent expenses.
• Non-Operating Items:
  • Warrant/SEPA Liabilities: Recorded a loss of $2.9 million in Q3 2025 (vs. a gain of $5.0 million in Q3 2024) due to stock price fluctuations and the addition of Subsequent OrbiMed Warrants.
  • Preferred Stock Conversion: In Q3 2025, all Series A Preferred Stock was converted to common stock, resulting in a $18.5 million conversion inducement charge and an $11.9 million deemed dividend, significantly impacting net loss attributable to common stockholders.
• Debt: Borrowed an additional $10.0 million under the First Delayed Draw Term Loan in February 2025 after meeting revenue thresholds, increasing total long-term debt.

Guidance, Outlook, Risks, and Unusual Items

• Going Concern: Management has raised substantial doubt about the company's ability to continue as a going concern for at least one year from the report date due to accumulated losses and the need for additional capital.
• Liquidity: Cash balance was $22.7 million as of September 30, 2025. The company recently amended its credit agreement to lower the minimum cash covenant requirement from $10.0 million to $5.0 million.
• Product Pipeline:
  • TriNav: Received a second permanent HCPCS code (C8004) in April 2025 for mapping procedures. Launched new devices (TriNav LV, TriGuide, TriNav FLX) to expand market reach.
  • Nelitolimod: Phase I trials are closing. The company does not intend to fund Phase II trials independently due to capital costs and is seeking a pharmaceutical partner.
• Internal Controls: The company disclosed material weaknesses in internal controls over financial reporting, including insufficient trained resources, inadequate controls over complex transactions (warrants, debt), and IT security issues. Remediation efforts are underway.
• Unusual Items: Significant non-cash charges related to the conversion of Series A Preferred Stock and fair value adjustments on warrant liabilities distorted net loss figures in Q3 2025.

Investor Verification Checklist

• Cash Runway: Verify if the $22.7 million cash balance is sufficient to fund operations through the next 12 months given the "substantial doubt" disclosure and ongoing operating losses.
• Debt Covenants: Confirm compliance with the OrbiMed Credit Agreement revenue thresholds required to avoid repayment triggers and maintain the $5.0 million liquidity covenant.
• Preferred Stock Conversion: Review the impact of the $30.5 million in non-cash charges (conversion inducement and deemed dividend) on the company's actual cash burn rate versus reported net loss.
• Internal Control Remediation: Assess the progress of remediation plans for material weaknesses in financial reporting, which could impact future audit opinions and investor confidence.
• Reimbursement Stability: Monitor the utilization and reimbursement rates of the new HCPCS codes (C9797 and C8004) to ensure sustained revenue growth for the TriNav system.