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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-39059

AVITA MEDICAL, INC.

(Exact name of registrant as specified in its charter)

     Delaware

     85-1021707

     (State or other jurisdiction of
incorporation or organization)

     (IRS Employer
Identification No.)

28159 Avenue Stanford

Suite 220

Valencia, CA 91355

(Address of principal executive offices and Zip Code)

Registrant’s telephone number, including area code: (661) 367-9170

Securities registered pursuant to Section 12(b) of the Act:

     Title of each class

     Trading
Symbol

     Name of each exchange
on which registered

     Common Stock, par value $0.0001 per share

     RCEL

     The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has selected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s common stock, par value $0.0001, outstanding as of November 3, 2025 was 30,493,111.

TABLE OF CONTENTS


NOTE REGARDING FORWARD-LOOKING STATEMENTS		3

PART I – FINANCIAL INFORMATION		4

Item 1.	Financial Statements	4

	Consolidated Balance Sheets – As of September 30, 2025 (unaudited) and December 31, 2024	4

	Consolidated Statements of Operations for the three-months and nine-months ended September 30, 2025 and 2024 (unaudited)	5

	Consolidated Statements of Comprehensive Loss for the three-months and nine-months ended September 30, 2025 and 2024 (unaudited)	6

	Consolidated Statements of Stockholders’ Equity (Deficit) for the three-months and nine-months ended September 30, 2025 and 2024 (unaudited)	7

	Consolidated Statements of Cash Flows for the nine-months ended September 30, 2025 and 2024 (unaudited)	9

	Notes to Consolidated Financial Statements (unaudited)	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35

Item 4.	Controls and Procedures	36

Part II – OTHER INFORMATION		37

Item 1.	Legal Proceedings	37

Item 1A	Risk Factors	37

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37

Item 3.	Defaults Upon Senior Securities	37

Item 4.	Mine Safety Disclosures	37

Item 5.	Other Information	37

Item 6.	Exhibits	38

Signatures		39

NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including uncertainties associated with our expectations regarding future revenue, or future growth in revenue, profit, or gross and/or operating margins; the ability to achieve or sustain profitability; industry market conditions; increased competition; changes in our production capacity; failure to obtain, maintain and enforce our intellectual property rights, including our expectations regarding the future scope of such rights; failure to obtain and/or maintain regulatory approvals and comply with applicable regulations; the conduct or outcome of pre-clinical or clinical (human) studies; operational and management restructuring activities; our ability to find and maintain partnerships relating to collaborations, strategic arrangements, and licensing arrangements; mergers and acquisitions (and related integration activities); if third parties fail to uphold their contractual duties or meet expected deadlines; our ability to obtain and maintain favorable coverage and reimbursement determinations from third party payors; market reaction to growth or product initiatives; our ability to expand our sales and marketing organizations to address existing and new markets that we intend to target; market penetration of our products; the ability to continue to scale our manufacturing operations to meet the demand for our products; our ability to attract and retain qualified personnel, including management; solvency; non-compliance with debt covenants, which may result in the acceleration of our debt obligations or the need for renegotiations with our lenders, tax and interest rates; inflationary pressures on the U.S. and global economies, respectively; changes in the legal or regulatory environments; the impact of a cybersecurity breach, terrorist attack or other geopolitical instability, pandemic or epidemic, or natural disaster; and future working capital, costs, productivity, business process, rationalization, investment (including rates), consulting, operational, financial, and capital projects and/or initiatives. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

In some cases, you can identify forward-looking statements by terms such as “aim,” “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect," “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” or “would” or the negative of these terms or other similar expressions.

The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of important factors that could cause actual results to differ materially from those in the forward-looking statements, including the factors described under the sections in this Quarterly Report on Form 10-Q titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for our management to predict all risk factors and uncertainties.

You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

PART I – Financial Information

Item 1. FINANCIAL STATEMENTS

AVITA MEDICAL, INC.

Consolidated Balance Sheets

(In thousands, except share and per share data)


	As of
	September 30, 2025			December 31, 2024
ASSETS	(Unaudited)
Cash and cash equivalents	$	15,422		$	14,050
Marketable securities		7,891			21,835
Accounts receivable, net		9,013			11,786
Prepaids and other current assets		1,801			2,060
Inventory		7,240			7,269
Total current assets		41,367			57,000
Plant and equipment, net		9,884			10,018
Operating lease right-of-use assets		3,128			3,571
Corporate-owned life insurance (“COLI”) asset		3,071			3,006
Intangible assets, net		5,204			5,570
Other long-term assets		1,074			546
Total assets	$	63,728		$	79,711
LIABILITIES, NON-QUALIFIED DEFERRED COMPENSATION PLAN SHARE AWARDS AND STOCKHOLDERS’ EQUITY (DEFICIT)
Accounts payable and accrued liabilities	$	8,107		$	6,294
Accrued wages and fringe benefits		5,795			10,451
Loan facility		42,449			-
Current non-qualified deferred compensation (“NQDC”) liability		331			2,094
Contingent liability		3,000			-
Other current liabilities		2,149			1,319
Total current liabilities		61,831			20,158
Loan facility - long-term		-			42,245
Non-qualified deferred compensation liability		4,081			2,969
Contract liabilities		298			324
Operating lease liabilities, long-term		2,324			2,840
Contingent liability, long-term		-			3,000
Warrant liabilities		1,860			3,432
Total liabilities		70,394			74,968
Non-qualified deferred compensation plan share awards		-			244
Commitments and contingencies (Note 11)
Stockholders' equity (deficit):
Common stock, $0.0001 par value per share, 200,000,000 shares authorized, 30,493,111 and 26,354,042, shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively		3			3
Preferred stock, $0.0001 par value per share, 10,000,000 shares authorized, no shares issued or outstanding at September 30, 2025 and December 31, 2024		-			-
Company common stock held by the non-qualified deferred compensation plan		(1,281	)		(1,319	)
Additional paid-in capital		392,782			367,568
Accumulated other comprehensive loss		(1,390	)		(1,939	)
Accumulated deficit		(396,780	)		(359,814	)
Total stockholders’ equity (deficit)		(6,666	)		4,499
Total liabilities, non-qualified deferred compensation plan share awards and stockholders’ equity (deficit)	$	63,728		$	79,711

The accompanying notes form part of the unaudited Consolidated Financial Statements.

AVITA MEDICAL, INC.

Consolidated Statements of Operations

(In thousands, except share and per share data)

(Unaudited)


	Three-Months Ended						Nine-Months Ended
	September 30, 2025			September 30, 2024			September 30, 2025			September 30, 2024

Sales revenue	$	16,897		$	19,394		$	53,448		$	45,681
Lease revenue		165			152			547			164
Total revenues		17,062			19,546			53,995			45,845
Cost of sales		(3,187	)		(3,190	)		(9,490	)		(6,814	)
Gross profit		13,875			16,356			44,505			39,031
Operating expenses:
Sales and marketing		(12,053	)		(15,144	)		(41,200	)		(44,086	)
General and administrative		(7,227	)		(9,590	)		(20,283	)		(26,071	)
Research and development		(3,748	)		(5,428	)		(15,148	)		(15,510	)
Total operating expenses		(23,028	)		(30,162	)		(76,631	)		(85,667	)
Operating loss		(9,153	)		(13,806	)		(32,126	)		(46,636	)
Interest expense		(1,268	)		(1,359	)		(3,754	)		(4,063	)
Other (expense) income, net		(2,751	)		(1,068	)		(1,058	)		478
Loss before income taxes		(13,172	)		(16,233	)		(36,938	)		(50,221	)
Income tax (expense) benefit		(15	)		28			(28	)		(35	)
Net loss	$	(13,187	)	$	(16,205	)	$	(36,966	)	$	(50,256	)
Net loss per common share:
Basic and diluted	$	(0.46	)	$	(0.62	)	$	(1.37	)	$	(1.95	)
Weighted-average common shares:
Basic and diluted		28,393,445			25,983,929			27,012,691			25,794,690

The accompanying notes form part of the unaudited Consolidated Financial Statements.

AVITA MEDICAL, INC.

Consolidated Statements of Comprehensive Loss

(In thousands)

(Unaudited)


	Three-Months Ended						Nine-Months Ended
	September 30, 2025			September 30, 2024			September 30, 2025			September 30, 2024
Net loss	$	(13,187	)	$	(16,205	)	$	(36,966	)	$	(50,256	)
Change in fair value due to credit risk on loan facility		689			(554	)		563			(116	)
Net unrealized gain (loss) on marketable securities		-			45			(14	)		(62	)
Comprehensive loss	$	(12,498	)	$	(16,714	)	$	(36,417	)	$	(50,434	)

The accompanying notes form part of the unaudited Consolidated Financial Statements.

AVITA MEDICAL, INC.

Consolidated Statements of Stockholders’ Equity (Deficit)

(In thousands, except shares)

(Unaudited)



	Common Stock
	Shares		Amount		Company common stock held by the NQDC Plan			Additional Paid-in Capital			Accumulated Other Comprehensive Gain (Loss)			Accumulated Deficit			Total Stockholders' Equity (Deficit)
Balance at June 30, 2025		26,613,678	$	3	$	(1,296	)	$	374,073		$	(2,079	)	$	(383,593	)	$	(12,892	)
Net loss		-		-		-			-			-			(13,187	)		(13,187	)
Issuance of common stock under private placement		3,440,377		-		-			14,792			-			-			14,792
Issuance costs associated with private placement		-		-		-			(1,058	)		-			-			(1,058	)
Issuance of common stock related to debt amendment		400,000		-		-			2,152			-			-			2,152
Stock-based compensation		-		-		-			2,775			-			-			2,775
Vesting of restricted stock units		23,591		-		-			-			-			-			-
Exercise of stock options		6,600		-		-			33			-			-			33
Distribution of Company common stock held by the NQDC Plan		-		-		58			(32	)		-			-			26
Vesting of Company common stock held by the NQDC Plan		8,865		-		(43	)		43			-			-			-
Change in redemption value of share awards in NQDC Plan		-		-		-			4			-			-			4
Change in fair value due to credit risk on loan facility		-		-		-			-			689			-			689
Balance at September 30, 2025		30,493,111	$	3	$	(1,281	)	$	392,782		$	(1,390	)	$	(396,780	)	$	(6,666	)


	Common Stock
	Shares		Amount		Company common stock held by the NQDC Plan			Additional Paid-in Capital			Accumulated Other Comprehensive Gain (Loss)			Accumulated Deficit			Total Stockholders' Equity
Balance at June 30, 2024		25,949,906	$	3	$	(1,022	)	$	358,510		$	(1,556	)	$	(332,020	)	$	23,915
Net loss		-		-		-			-			-			(16,205	)		(16,205	)
Stock-based compensation		-		-		-			4,040			-			-			4,040
Vesting of restricted stock units		50,157		-		-			-			-			-			-
Exercise of stock options		183,867		-		-			1,008			-			-			1,008
Distribution/diversification of Company common stock held by the NQDC Plan		-		-		58			(2	)		-			-			56
Vesting of Company common stock held by the NQDC Plan		33,699		-		(291	)		291			-			-			-
Change in redemption value of share awards in NQDC Plan		-		-		-			(78	)		-			-			(78	)
Net unrealized gain on marketable securities		-		-		-			-			45			-			45
Change in fair value due to credit risk on loan facility		-		-		-			-			(554	)		-			(554	)
Balance at September 30, 2024		26,217,629	$	3	$	(1,255	)	$	363,769		$	(2,065	)	$	(348,225	)	$	12,227


	Common Stock
	Shares		Amount		Company common stock held by the NQDC Plan			Additional Paid-in Capital			Accumulated Other Comprehensive Gain (Loss)			Accumulated Deficit			Total Stockholders' Equity (Deficit)
Balance at December 31, 2024		26,354,042	$	3	$	(1,319	)	$	367,568		$	(1,939	)	$	(359,814	)	$	4,499
Net loss		-		-		-			-			-			(36,966	)		(36,966	)
Issuance of common stock under private placement		3,440,377		-		-			14,792			-			-			14,792
Issuance costs associated with private placement		-		-		-			(1,058	)		-			-			(1,058	)
Issuance of common stock related to debt amendment		400,000		-		-			2,152			-			-			2,152
Stock-based compensation		-		-		-			8,121			-			-			8,121
Vesting of restricted stock units		85,707		-		-			-			-			-			-
Exercise of stock options		74,725		-		-			407			-			-			407
ESPP purchase		114,787		-		-			548			-			-			548
Distribution of Company common stock held by the NQDC Plan		-		-		217			(17	)		-			-			200
Vesting of Company common stock held by the NQDC Plan		23,473		-		(179	)		179			-			-			-
Change in redemption value of share awards in NQDC Plan		-		-		-			90			-			-			90
Net unrealized loss on marketable securities		-		-		-			-			(14	)		-			(14	)
Change in fair value due to credit risk on loan facility		-		-		-			-			563			-			563
Balance at September 30, 2025		30,493,111	$	3	$	(1,281	)	$	392,782		$	(1,390	)	$	(396,780	)	$	(6,666	)


	Common Stock
	Shares		Amount		Company common stock held by the NQDC Plan			Additional Paid-in Capital		Accumulated Other Comprehensive Gain (Loss)			Accumulated Deficit			Total Stockholders' Equity
Balance at December 31, 2023		25,682,078	$	3	$	(1,130	)	$	350,039	$	(1,887	)	$	(297,969	)	$	49,056
Net loss		-		-		-			-		-			(50,256	)		(50,256	)
Stock-based compensation		-		-		-			10,603		-			-			10,603
Vesting of restricted stock units		94,123		-		-			-		-			-			-
Exercise of stock options		301,524		-		-			1,701		-			-			1,701
ESPP purchase		96,253		-		-			786		-			-			786
Distribution/diversification of Company common stock held by the NQDC Plan		-		-		245			76		-			-			321
Vesting of Company common stock held by the NQDC Plan		43,651		-		(370	)		370		-			-			-
Change in redemption value of share awards in NQDC Plan		-		-		-			194		-			-			194
Net unrealized loss on marketable securities		-		-		-			-		(62	)		-			(62	)
Change in fair value due to credit risk on loan facility		-		-		-			-		(116	)		-			(116	)
Balance at September 30, 2024		26,217,629	$	3	$	(1,255	)	$	363,769	$	(2,065	)	$	(348,225	)	$	12,227

The accompanying notes form part of the unaudited Consolidated Financial Statements.

AVITA Medical, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Nine-Months Ended
	September 30, 2025			September 30, 2024
Cash flow from operating activities:
Net loss	$	(36,966	)	$	(50,256	)
Adjustments to reconcile net loss to net cash used in operating activities:
Fair value of common stock issued related to loan amendment		2,152			-
Change in fair value of loan facility		767			2,619
Change in fair value of warrant liability		(1,572	)		(399	)
Depreciation and amortization		1,647			717
Stock-based compensation		8,146			10,698
Non-cash lease expense		662			633
Loss on fixed asset disposal		590			25
Loss on patent disposal		11			16
Remeasurement and foreign currency transaction loss		17			23
Excess and obsolete inventory related charges		695			408
Provision for credit losses		(17	)		33
Amortization of premium of marketable securities		(224	)		(1,479	)
Non-cash changes in the fair value of NQDC plan		(1,069	)		36
Changes in operating assets and liabilities:
Trade and other receivables		3,714			(2,656	)
Prepaids and other current assets		257			(1,314	)
Inventory		(666	)		(1,041	)
Operating lease liability		(716	)		(667	)
Corporate-owned life insurance ("COLI") asset		406			(271	)
Other long-term assets		(529	)		(192	)
Accounts payable and accrued expenses		1,762			(65	)
Accrued wages and fringe benefits		(4,656	)		1,804
Current non-qualified deferred compensation liability		(1,739	)		1,625
Other current liabilities		(111	)		112
Non-qualified deferred compensation plan liability		1,707			(1,242	)
Contract liabilities		(25	)		(25	)
Net cash used in operating activities		(25,757	)		(40,858	)
Cash flow from investing activities:
Purchase of marketable securities		(11,346	)		(18,609	)
Maturities of marketable securities		25,500			61,200
Purchase of plant and equipment		(1,679	)		(7,559	)
Patent filing fees		(34	)		(140	)
Net cash provided by investing activities		12,441			34,892
Cash flow from financing activities:
Proceeds from private placement of common stock		14,792			-
Issuance costs associated with private placement		(1,058	)		-
Proceeds from exercise of stock options		406			1,701
Employee stock purchase plan ("ESPP") purchases		548			786
Net cash provided by financing activities		14,688			2,487
Net increase (decrease) in cash and cash equivalents		1,372			(3,479	)
Cash and cash equivalents beginning of the period		14,050			22,118
Cash and cash equivalents end of the period	$	15,422		$	18,639
Supplemental Disclosure of Cash Flow Information:
Income taxes paid during the period	$	-		$	21
Interest paid during the period	$	3,738		$	4,062
Non-cash investing activities:
Capital expenditures not yet paid	$	150		$	407
Right-of-use-asset obtained in exchange for lease liabilities	$	201		$	2,026

The accompanying notes form part of the unaudited Consolidated Financial Statements.

AVITA MEDICAL, INC.

Notes to Consolidated Financial Statements

(Unaudited)

1. The Company

Nature of the Business

AVITA Medical, Inc. and its subsidiaries (collectively, “AVITA Medical” or the “Company”) is a leading therapeutic acute wound care company delivering transformative solutions. The Company’s technologies are designed to optimize wound healing, effectively accelerating the time to patient recovery. The Company’s solutions improve the healing outcomes for patients with traumatic injuries and surgical repairs, addressing critical healing needs that arise from unpredictable and life-changing events. At the forefront of the Company’s portfolio is the patented and proprietary RECELL® System (“RECELL System” or “RECELL”), approved by the U.S. Food and Drug Administration (the “FDA”) for the treatment of thermal burn wounds and full-thickness skin defects. RECELL harnesses the healing properties of a patient’s own skin to create an autologous skin cell suspension, Spray-On Skin™ Cells, offering an innovative solution for improved clinical outcomes at the point-of-care.

The single-use RECELL Autologous Cell Harvesting Device (“RECELL Ease-of-Use” or “RECELL EOU”) is approved by the FDA for the treatment of thermal burn wounds and full-thickness skin defects. The Company's next-generation device, RECELL GO™ Autologous Cell Harvesting Device (“RECELL GO”), was approved by the FDA in May of 2024 to treat thermal burn wounds and full-thickness skin defects. RECELL GO introduces enhanced features that improve consistency and standardization across clinical settings. It consists of two components: a multi-use, AC-powered RECELL GO Processing Device (the “RPD”) and a RECELL GO Preparation Kit (the “RPK”). The RPK contains the single-use RECELL GO Cartridge, disaggregation head, RECELL Enzyme™, and other components. The RPD provides the control for the RPK, manages the pressure applied to disaggregate the donor skin cells, and precisely regulates the incubation times of the RECELL Enzyme and solutions to optimize cell yield and promote cell viability.

RECELL GO mini™ Autologous Cell Harvesting Device (“RECELL GO mini”), which was approved by the FDA in December of 2024, is a line extension of RECELL GO, designed specifically to treat smaller wounds up to 480 cm2. It utilizes the same RPD but features a RECELL GO mini Preparation Kit (the “mini RPK”), which includes a single-use RECELL GO mini Cartridge optimized for smaller skin samples. These modifications are intended to align with the needs of clinicians treating smaller wounds, and to support broader adoption of the RECELL GO platform in trauma centers.

The Company holds the rights to manufacture, market, sell, and distribute PermeaDerm®, a biosynthetic wound matrix, in the United States under the terms of an exclusive multi-year distribution agreement (the “Distribution Agreement”) and a contract manufacturing agreement (the “Manufacturing Agreement”) with Stedical Scientific, Inc. (“Stedical”). The Company also holds the rights to market, sell, and distribute Cohealyx™, a unique collagen-based dermal matrix, under the terms of an exclusive multi-year development and distribution agreement (the “Regenity Agreement”) with Collagen Matrix, Inc. dba Regenity Biosciences (“Regenity”). Under the terms of the Regenity Agreement, Regenity manufactures and supplies Cohealyx and the Company holds the exclusive marketing, sales, and distribution rights to this product under its private label in the U.S., and potentially in countries in the European Union, as well as in Australia and Japan. See Note 11 to the Consolidated Financial Statements for additional information regarding the Company’s commitments with Stedical and Regenity.

Liquidity, Capital Resources and Going Concern

The Company’s Consolidated Financial Statements have been prepared on the basis of the Company continuing as a going concern for the next 12 months. The Company has incurred operating losses and negative cash flows from operations since its inception and has an accumulated deficit of $396.8 million as of September 30, 2025. For the nine months ended September 30, 2025 and 2024, the Company used $25.8 million and $40.9 million of cash, respectively, in its operating activities. For the years ended December 31, 2024 and 2023, the Company used $48.9 million and $38.0 million of cash, respectively, in its operating activities. As of September 30, 2025, the Company had cash, cash equivalents, and marketable securities of $23.3 million. Historically, the Company has funded its operations principally through the sales of its products, issuance of equity securities, and debt financing.

On August 12, 2025, the Company completed a private placement (the “Placement”) on the Australian Securities Exchange (“ASX”) to institutional and professional investors to raise gross proceeds of $14.8 million, or $13.8 million after deducting sales commissions and offering expenses, through the issuance of 17,201,886 CHESS Depositary Interests (“CDIs”) on the ASX, which is the equivalent of 3,440,377 shares of Common stock. Proceeds of the Placement will be used for working capital requirements and will provide additional strategic flexibility to support continued growth of the Company’s therapeutic acute wound portfolio.

In connection with the Loan Facility defined in Note 6 to the Consolidated Financial Statements, the Company will need to be in compliance with a minimum trailing 12-month net revenue covenant at the end of each quarter and maintain a minimum quarterly cash and cash equivalents balance. The Company was not in compliance with the trailing 12-month net revenue covenants for the first quarter of 2025 and the second quarter of 2025. On March 31, 2025, the Company received a waiver related to the trailing 12-month net revenue covenant for the first quarter of 2025, which was set at $73.0 million. On June 30, 2025, the Company received a waiver related to the trailing 12-month net revenue covenant for the second quarter of 2025, which was set at $78.0 million. On August 7, 2025, the Company amended the Credit Agreement (as defined in Note 6 to the Consolidated Financial Statements), to amend the trailing 12-month revenue covenant to $73.0 million for the quarter ending September 30, 2025, to $77.0 million for the quarter ending December 31, 2025, to $90.0 million for the quarter ending March 31, 2026, and to $103.0 million for the quarter ending June 30, 2026. The $115.0 million revenue covenant for all subsequent quarters through the date of debt maturity remains in effect. See Note 6 to the Consolidated Financial Statements for additional information regarding the amendment. On September 30, 2025, the Company received a waiver related to the trailing 12-month net revenue covenant for the third quarter of 2025. As of September 30, 2025, subject to all applicable waivers and amendments, the Company was in compliance with all other quantitative covenants in the Credit Agreement.

Based on the Company’s liquidity position at September 30, 2025 and the Company’s current forecast of operating results and cash flows, management has determined that, absent any mitigating action, it is probable the Company will not be able to maintain compliance of the minimum cash balance covenant pursuant with the terms of its Credit Agreement within the next twelve months following the date of issuance of the Consolidated Financial Statements in this Quarterly Report on Form 10-Q. Should such situation arise, the Lender (as defined in Note 6 to the Consolidated Financial Statements) could exercise its right to accelerate repayment of the outstanding debt. These events and conditions raise substantial doubt about the Company’s ability to continue as a going concern.

As a result of this conclusion, and due to the Company’s current debt servicing obligations, the long-term portion of the credit facility has been classified as a current liability in the accompanying Consolidated Financial Statements as of September 30, 2025.

The Company is actively evaluating strategies to obtain the required additional funding for future operations. These strategies include, but are not limited to, obtaining additional equity financing, issuing debt or entering into other financing agreements. In April 2023, the Company filed a Registration Statement on Form S-3 with the SEC in relation to the registration of common stock, preferred stock, debt securities, warrants or any combination thereof for up to an aggregate of $200.0 million, of which 3,799,164 shares of the Company’s common stock may be issued and sold pursuant to an at-the-market offering program for sales of the Company’s common stock under a sales agreement with Cowen and Company, LLC. However, there can be no assurance that such funding will be available to the Company when needed, either on favorable terms or at all.

The Company’s Consolidated Financial Statements do not include any adjustments to the carrying amount of assets, liabilities, and reported expenses that may be necessary if the Company were unable to continue as a going concern.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited Consolidated Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the Consolidated Financial Statements reflect all adjustments of a normal and recurring nature that are considered necessary for a fair presentation of the results for the interim periods presented. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year-ended December 31, 2024 filed with the SEC on February 13, 2025 and lodged with the ASX on February 14, 2025 (the “2024 Annual Report”).

There have been no changes to the Company’s significant accounting policies as described in the 2024 Annual Report that have had a material impact on the Company’s Consolidated Financial Statements. See the summary of the Company’s significant accounting policies set forth in the notes to its Consolidated Financial Statements included in the 2024 Annual Report.

Principles of Consolidation

The accompanying Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments affected by this ASU require (i) enhanced disclosures in connection with an entity's effective tax rate reconciliation and (ii) income taxes paid disaggregated by jurisdiction. These amendments are effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact of adopting this ASU on its Consolidated Financial Statements and disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income (Topic 220): Expense Disaggregation Disclosures, which requires disaggregated disclosures of certain costs and expenses in the notes to financial statements. This guidance will be effective for annual reporting periods beginning after December 15, 2026, and for interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of adopting this ASU on its Consolidated Financial Statements and disclosures.

In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which addresses changes in software development methods and increases the operability of the recognition guidance for improved financial reporting. This guidance is effective for annual reporting periods beginning after December 15, 2027, and for interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of adopting this ASU on its Consolidated Financial Statements and disclosures.

Use of Estimates

The preparation of the accompanying Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts (including the stand-alone selling price (“SSP”) for the RPD, allowance for credit losses, reserves for inventory excess and obsolescence, carrying value of long-lived assets, the useful lives of long-lived assets, accounting for marketable securities, income taxes, fair value of loan facility, fair value of warrants and stock-based compensation) and related disclosures. Estimates have been prepared based on the current and available information. However, actual results could differ from estimated amounts.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash held at deposit institutions and cash equivalents. Cash equivalents consist primarily of money market funds. Cash equivalents also include short-term highly liquid investments with original maturities of three months or less from the date of purchase. The Company holds cash at deposit institutions in the amount of $7.1 million and $2.3 million as of September 30, 2025 and December 31, 2024, respectively. The Company does not have cash on deposit denominated in foreign currency in foreign institutions as of September 30, 2025 and December 31, 2024. As of September 30, 2025 and December 31, 2024, the Company held cash equivalents in the amounts of $8.3 million and $11.7 million, respectively.

Concentrations

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities, trade receivables, and debt and other liabilities. As of September 30, 2025 and December 31, 2024, substantially all the Company’s cash and cash equivalents were deposited in accounts at financial institutions, and those deposited amounts exceed federally insured limits and are subject to the risk of bank failure.

As of September 30, 2025, no single commercial customer accounted for more than 10% of net accounts receivable. As of December 31, 2024, two commercial customers accounted for more than 10% of accounts receivable. Customer A constituted 21% of the accounts receivable, while Customer B represented 11%. For the three-months and nine-months ended September 30, 2025 and 2024, no single customer accounted for more than 10% of revenues.

Revenue Recognition

The Company generates revenues primarily from:

•

The sale of RECELL EOU, RPK and mini RPK (collectively, the “RPKs”), PermeaDerm and Cohealyx products to hospitals, other treatment centers, and distributors.

•

Lease revenue for the RPD.

The Company’s sale of the RECELL EOU, PermeaDerm and Cohealyx products are accounted for under ASC 606, Revenue from contracts with customers (“ASC 606”). Revenue for the RECELL System is disaggregated between two accounting standards: (1) ASC 606 for the RPKs and (2) ASC 842, Leases (“ASC 842”) for the RPD.

To determine revenue recognition for contracts that are within the scope of ASC 606, the Company performs the following five steps:

Identify the contract with a customer

Identify the performance obligations

Determine the transaction price

Allocate the transaction price to the performance obligations

Recognize revenue when/as a performance obligation(s) is(are) satisfied

In order for an arrangement to be considered a contract, it must be probable that the Company will collect the consideration to which it is entitled for goods or services to be transferred. The Company then assesses the goods or services promised within the contract to determine whether each promised good or service is a performance obligation. Performance obligations are promises in a contract to transfer a distinct good or service to the customer that (i) the customer can benefit from on its own or together with other readily available resources, and (ii) is separately identifiable from other promises in the contract.

The Company determines the transaction price based on the amount of consideration the Company expects to receive for providing the promised goods or services in the contract. Consideration may be fixed, variable, or a combination of both. At contract inception for arrangements that include variable consideration, the Company estimates the probability and extent of consideration it expects to receive under the contract utilizing either the most likely amount method or expected amount method, whichever best estimates the amount expected to be received. The Company then considers any constraints on the variable consideration and includes in the transaction price variable consideration to the extent it is deemed probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

When accounting for a contract that contains multiple performance obligations, the Company must develop judgmental assumptions to determine the estimated SSP for each performance obligation identified in the contract. The Company utilizes the observable SSP when available, which represents the price charged for the promised product or service when sold separately. When the SSP for the Company’s products or services are not directly observable, the Company determines the SSP using relevant information available and apply suitable estimation methods including, but not limited to, the cost-plus margin approach. The Company then allocates the transaction price to each performance obligation based on the relative SSP and recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) control is transferred to the customer and the performance obligation is satisfied.

Most of the Company’s contracts have a single performance obligation. As such, the Company recognizes revenue when its customers obtain control of promised goods or services, in an amount that reflects the consideration which the Company expects to be entitled in exchange for those goods or services. Revenue is recognized net of volume discounts (variable consideration). For the Company’s contracts that have an original duration of one year or less, since contract inception and customer payment occur within the same period the Company does not consider the time value of money. Further, because of the short duration of these contracts, the Company has not disclosed the transaction price for the remaining performance obligations as of each reporting period or when the Company expects to recognize this revenue. The Company has further applied the practical expedient to exclude sales tax in the transaction price and expense contract acquisition costs such as commissions and shipping and handling expenses as incurred.

Revenue recognition for contracts that are within the scope of ASC 606 and ASC 842

The Company enters into contracts with customers where it receives consideration for the RPKs and does not receive additional consideration for the RPD. As a result, judgment and analysis are required to determine the appropriate accounting, including: (i) whether the arrangement contains an embedded lease, and if so, whether such embedded lease is a sales-type lease or an operating lease, (ii) the amount of the total consideration, as well as variable consideration, (iii) the identification of the distinct performance obligations contained within the arrangement, (iv) how the arrangement consideration should be allocated to each performance obligation when multiple performance obligations exist, including the determination of standalone selling price, and (v) when to recognize revenue on the performance obligations.

In determining whether the lease components are related to a sales-type lease or an operating lease, the Company evaluates if the lease transfers ownership at the end of the lease term, the existence of purchase options, the lease term in relation to the economic life of the asset, if the lease payments exceed the fair value of the asset, and if the asset is of a specialized nature. The Company also evaluates if the lease results in a loss at the lease commencement date. As the lease term is for a major part of the economic life, the lease meets the classification criteria for sales-type lease. However, to determine if the contract results in a loss at the lease commencement date the Company evaluated the consideration in the contract. The consideration at lease commencement does not contain fixed payments, purchase options, penalty payments or residual value guarantees. The variable consideration is related to the sale of the RPKs. As the variable lease payments are not dependent on an index or rate, the variable consideration is excluded from consideration at contract inception resulting in a loss at lease commencement. As such, the Company classifies the lease as an operating lease.

The contracts contain an operating lease component, the RPD, and non-lease components, the RPKs. The lease component will be accounted for under the ASC 842 and the non-lease component will be accounted for under ASC 606, as described above. In accordance with ASC 842, the consideration in the contract will be allocated to each separate lease component and non-lease component of the contract. The consideration is allocated to these lease and non-lease components based on the SSP (as described above for contracts within the scope of ASC 606). In accordance with ASC 842, variable lease payments will be recognized once the sale of the RPKs occurs and control has transferred to the customer. Consideration will be allocated to the RPD and the RPKs based on the SSP. Consideration related to the RPD will be recognized as Lease revenue and consideration related to the RPKs will be recognized as Sales revenues in accordance with guidance in ASC 606, as described above, upon transfer of control of the RPKs, which generally occurs at the time the product is shipped or delivered depending on the customer's shipping terms.

Assets in the Company’s lease program are reported in Plant and equipment, net on the Consolidated Balance Sheets and are depreciated over the useful life of the RPD device’s 200 uses, as indicated in the Instructions for Use that were approved by the FDA, and expensed as Costs of goods sold in the Consolidated Statements of Operations. The RPD depreciation has a direct relationship to the number of RPKs sold. Based on customer usage, each purchase of a RPKs results in a 1/200 depreciation to the RPD.

3. Marketable Securities

The following table summarizes the amortized cost and estimated fair values of securities available-for-sale:


	As of September 30, 2025
	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Carrying Value
(in thousands)
Cash equivalents:
Money market funds	$	6,339	$	-	$	-	$	6,339
U.S. Treasury securities		1,989		-		-		1,989
Total cash equivalents	$	8,328	$	-	$	-	$	8,328
Current marketable securities:
U.S. Treasury securities	$	7,891	$	-	$	-	$	7,891
Total current marketable securities	$	7,891	$	-	$	-	$	7,891


	As of December 31, 2024
	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Carrying Value
(in thousands)
Cash equivalents:
Money market funds	$	11,720	$	-	$	-	$	11,720
Total cash equivalents	$	11,720	$	-	$	-	$	11,720
Current marketable securities:
U.S. Treasury securities	$	21,821	$	14	$	-	$	21,835
Total current marketable securities	$	21,821	$	14	$	-	$	21,835

The maturities of the Company’s available-for-sale securities are summarized in the following table using contractual maturities. Actual maturities may differ from contractual maturities due to obligations that are called or prepaid.


	As of September 30, 2025				As of December 31, 2024
(in thousands)	Amortized Cost		Carrying Value		Amortized Cost		Carrying Value
Due in one year or less	$	7,891	$	7,891	$	21,821	$	21,835

Unrealized gains and losses, net of any related tax effects for available-for-sale securities are excluded from earnings and are included in other comprehensive loss and reported as a separate component of stockholders' equity until realized. Realized gains and losses on marketable securities are included in Other income, net, in the accompanying Consolidated Statements of Operations. The Company had a net unrealized loss of $0 and net unrealized gain of $14,000 as of September 30, 2025 and December 31, 2024, respectively. The Company did not have sales of investments during the three-months and nine-months ended September 30, 2025 and 2024 that resulted in realized gains or losses. As of September 30, 2025 and December 31, 2024, the Company did not recognize credit losses. The Company has accrued interest income receivable of $32,000 and $121,000 as of September 30, 2025 and December 31, 2024, respectively, recorded in Prepaids and other current assets in the Consolidated Balance Sheets.

4. Fair Value Measurements

ASC 820, Fair Value Measurement, the authoritative guidance on fair value measurements establishes a framework with respect to measuring assets and liabilities at fair value on a recurring basis and non-recurring basis. Under the framework, fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as of the measurement date. The framework also establishes a three-tier hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability and are developed based on the best information available in the circumstances. The hierarchy consists of the following three levels:

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.

Level 2: Inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Inputs are unobservable inputs for the asset or liability.

The following tables present information about the Company’s financial assets measured at fair value on a recurring basis, based on the three-tier fair value hierarchy:


	As of September 30, 2025
(in thousands)	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	6,339	$	-	$	-	$	6,339
U.S. Treasury securities		-		1,989		-		1,989
Total cash equivalents	$	6,339	$	1,989	$	-	$	8,328
Current marketable securities:
U.S. Treasury securities	$	-	$	7,891	$	-	$	7,891
Total current marketable securities	$	-	$	7,891	$	-	$	7,891
Total marketable securities and cash equivalents	$	6,339	$	9,880	$	-	$	16,219
Financial liabilities:
Loan facility	$	-	$	-	$	42,449	$	42,449
Warrant liabilities		742		-		1,118		1,860
Non-qualified deferred compensation plan liability		-		4,412		-	$	4,412
Total financial liabilities	$	742	$	4,412	$	43,567	$	48,721
Financial assets:
Corporate-owned life insurance policies	$	-	$	3,071	$	-	$	3,071
Total financial assets	$	-	$	3,071	$	-	$	3,071


	As of December 31, 2024
(in thousands)	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	11,720	$	-	$	-	$	11,720
Total cash equivalents	$	11,720	$	-	$	-	$	11,720
Current marketable securities:
U.S. Treasury securities	$	-	$	21,835	$	-	$	21,835
Total current marketable securities	$	-	$	21,835	$	-	$	21,835
Total marketable securities and cash equivalents	$	11,720	$	21,835	$	-	$	33,555
Financial liabilities:
Loan facility	$	-	$	-	$	42,245	$	42,245
Warrant liability		-		-		3,432		3,432
Non-qualified deferred compensation plan liability		-		5,063		-		5,063
Total financial liabilities	$	-	$	5,063	$	45,677	$	50,740
Financial assets:
Corporate-owned life insurance policies	$	-	$	3,006	$	-	$	3,006
Total financial assets	$	-	$	3,006	$	-	$	3,006

The following table presents the summary of changes in the fair value of the Company’s Level 3 financial instruments:


	As of September 30, 2025						As of December 31, 2024
(in thousands)	Loan facility			Warrant liability			Loan facility			Warrant liability
Balance beginning of period	$	42,245		$	3,432		$	39,812		$	3,158
Change in fair value in earnings		767			(2,314	)		2,463			274
Change in fair value in other comprehensive loss		(563	)		-			(30	)		-
Balance end of period, at fair value	$	42,449		$	1,118		$	42,245		$	3,432

The Company’s Level 1 assets include money market instruments and are valued based upon observable market prices. The Company’s Level 1 liabilities include the Penny Warrants (as defined below) and are valued based upon observable market prices. Level 2 assets consist of U.S Treasury securities. Level 2 securities are valued based upon observable inputs that include reported trades, broker/dealer quotes, bids and offers. The corporate-owned life insurance contracts are recorded at cash surrender value, which approximates the fair value and is categorized as Level 2. Non-qualified deferred compensation plan liability is measured at fair value based on quoted prices of identical instruments to the investment vehicles selected by the participants and it is recorded as Level 2. There were no transfers between fair value measurement levels during the periods ended September 30, 2025 and December 31, 2024.

Loan Facility

The fair value of the loan facility was determined using a Monte Carlo Simulation (“MCS”) in order to predict the probability of different outcomes. The valuation was performed based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The fair value of the loan facility is recorded in the Consolidated Balance Sheets. The fair value is estimated by the Company each reporting period and the change in the fair value is recorded in both earnings and other comprehensive income depending on the instrument's inherent credit risk and market risk related to the loan facility valuation.

As the loan facility is subject to net revenue requirements, the valuation of the loan facility was determined using MCS. The underlying metric to be simulated is the projected Trailing Twelve Month (“TTM”) revenues at each quarter end through the maturity date of October 18, 2028. Based on the simulated metric, the different levels of simulated TTM revenues may trigger different discounted cash flow scenarios in which the TTM revenues are lower than the targeted revenues per the Credit Agreement (as defined in Note 6 to the Consolidated Financial Statements) or the TTM revenues are equal to or higher than the targeted revenues per the Credit Agreement, as discussed in Note 6 to the Consolidated Financial Statements. MCS performs 100,000 iterations of various simulated revenues to determine the fair value of the loan facility.

The below assumptions were used in the MCS:


	September 30, 2025			December 31, 2024
Risk-free interest rate		3.57	%		4.25	%
Revenue volatility		63.00	%		63.00	%
Revenue discount rate		14.96	%		14.11	%

Warrant Liabilities

On February 13, 2025, the Company issued 145,180 warrants with an exercise price of $0.01 per share (the “Penny Warrants”). The Penny Warrants were issued in connection with the Credit Agreement. The fair value of the Penny Warrants liability was determined based on quoted prices in active markets, which represents a Level 1 measurement within the fair value hierarchy. The fair value of the Penny Warrants liability, which is reported within Warrant liabilities on the Consolidated Balance Sheets, is estimated by the Company based on the closing price of the Company’s Common Stock as quoted on the Nasdaq Capital Market (“Nasdaq”) under the ticker code, “RCEL.”

On the Closing Date of the Credit Agreement, the Company issued 409,661 warrants with an exercise price of $10.9847 per share. As a result of the Placement and the issuance of Common stock, the exercise price of these warrants was adjusted to $10.218 (the “$10.218 Warrants”). The fair value of the $10.218 Warrants liability was determined based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The fair value of the $10.218 Warrants liability, which is reported within Warrant liabilities on the Consolidated Balance Sheets, is estimated by the Company based on the Black-Scholes option pricing model with the following key inputs:


	September 30, 2025			December 31, 2024
Price of common stock	$	5.11		$	12.80
Expected term	8.05 years			8.80 years
Expected volatility		60.42	%		48.89	%
Exercise price	$	10.2180		$	10.9847
Risk-free interest rate		3.98	%		4.49	%
Expected dividends		0.00	%		0.00	%

5. Revenues

The Company generates revenues primarily from:

•

The sale of EOU, RECELL GO RPK, RECELL GO mini RPK, PermeaDerm, and Cohealyx products to hospitals, other treatment centers, and distributors.

•

Lease revenue for the RECELL GO RPD.

EOU, PermeaDerm, and Cohealyx Sales

The Company’s sale of the EOU, PermeaDerm and Cohealyx products are accounted for under ASC 606, as discussed in Note 2 to the Consolidated Financial Statements. See Note 11 to the Consolidated Financial Statements for additional information regarding the Company’s commitments with Stedical and Regenity.

RECELL GO and RECELL GO mini Sales

Revenue for the RECELL GO device is disaggregated between two accounting standards: (1) ASC 606 for the RPK and (2) ASC 842 for the RPD. The RECELL GO and RECELL GO mini devices consist of single-use RPKs and a durable AC powered device, the RPD. The Company enters into contracts with customers where it receives consideration for the single-use RPKs and does not receive additional consideration for the RPD. The consideration in the contract is allocated based on the SSP. Upon sale of the RPKs, the consideration is allocated to the lease and non-lease components. Consideration received for the RPK is recorded in Sales revenue in the Consolidated Statement of Operations and consideration for the lease is recorded in Lease revenue in the Consolidated Statement of Operations. During the three and nine-months ended September 30, 2025, the Company recorded approximately $8.3 million and $27.3 million in Sales revenue related to the RPKs, respectively, and $165,000 and $547,000 in Lease revenue related to the RPD, respectively, in the Consolidated Statement of Operations. During the three and nine-months ended September 30, 2024, the Company recorded approximately $7.6 million and $8.2 million in Sales revenue related to the RPK and $152,000 and $164,000 in Lease revenue related to the RPD in the Consolidated Statement of Operations.

Distributor Transactions

For international markets, the Company exclusively partners with third-party distributors (currently, COSMOTEC in Japan, PolyMedics Innovation GmbH in Germany, Joint Operations Ltd in the United Kingdom, and Revolution Surgical Pty Ltd in Australia and New Zealand). Revenue recognition occurs when the distributors obtain control of the product. The terms of sales transactions through distributors are generally consistent with the terms of direct sales to customers and do not contain return rights. These transactions are accounted for in accordance with the Company’s revenue recognition policy described in Note 2 to the Consolidated Financial Statements.

Variable Consideration

AVITA Medical, Inc. 10-Q