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AirXpanders Appendix 4C – Quarterly Cash Flow Report and Business Update

31 / 10 / 2018

Highlights for the quarter ended 30 September 2018 
• Worldwide net revenue of US$2.1 million, an increase of 3% over the second quarter of 2018, driven by sales growth in U.S. and Australia 
• Net operating cash burn decreased by 14% from the second quarter of 2018, to US$6.1 million 
• Completed underwritten rights offering and concurrent private placement of US$14.8 million, before transaction costs 
• Cash balances as of 30 September 2018 of US$14.3 million 


San Jose, CA, United States - AirXpanders, Inc. (ASX: AXP), a medical device company focused on the design, manufacture, sale and distribution of the AeroForm® Tissue Expander System, today released its Appendix 4C - Quarterly Cash Flow report for the quarter ended 30 September 2018. 

Net revenue performance for the quarter was as follows:

(US$ in ‘000, unaudited)

Q3 2018

Q3 2017

% Growth

Net revenue




Units sold





Worldwide net unit sales of AeroForm were 918 units in the third quarter of 2018, an increase from 767 units in the second quarter of 2018. In the United States, net unit sales of AeroForm in the third quarter of 2018 totalled 664 units, an increase from 650 units in the second quarter of 2018. In Australia, unit sales were 254 units, an increase of 117% over the second quarter of 2018. The growth in Australia unit sales was principally due to the transition to a distributor in July 2018, and associated stocking orders in their first quarter of full operation. Worldwide unit sales growth in the third quarter of 2018 outpaced revenue growth due to the lower average unit selling prices (ASPs) in Australia associated with the transition to a distributor. 

In the U.S., the Company continued to grow the number of physician users in the third quarter of 2018, with 34 new hospitals placing their initial orders, bringing the total number of hospitals that have placed orders since commercial launch in 2017 to over 220. 

"We are encouraged by the progress we made in the third quarter," commented Frank Grillo, President and CEO of AirXpanders. "We continue to bring on new surgeon users and hospitals in the U.S., as we drive the adoption of our technology. We completed the restructuring of our U.S. sales force to one hundred percent direct sales, and now have all current territories filled with direct sales representatives. We further reduced our cash burn by restructuring the workforce over the last few months, including a transition from a direct sales force to a distributor in Australia, resulting in staff reductions in operations and administration, and additional operating expense reductions. By better matching our overall supply chain to our current and anticipated demand and growth outlook, we were able to begin reducing overall inventory levels, and free up cash for operating the business. The Company's inventory balance decreased to approximately US$10 million due to a slowing of material receipts and lower factory costs. 

"In the third quarter, the Company also further reduced its workforce by approximately 10 employees, primarily in manufacturing and administrative positions. The Company currently has approximately 70 employees, with the commerical team currently comprising 28 positions, including sales, marketing and customer service. All in all, the third quarter was a quarter of continued execution toward our goal of establishing AeroForm as the standard of care in two-stage breast reconstruction." 

The Company had total cash balances of US$14.3 million as of 30 September 2018. Cash outflows for operating activities for the quarter were US$6.1 million, a decrease of 14% compared to US$7.0 million for the previous quarter, and included a reduction of approximately US$1.5 million of prior quarter outstanding payables and accrual balances. The Company expects total net cash outflows to continue to decrease in the last quarter of 2018 due to increasing sales, as well as the full effect of changes we have made to our operating model, including workforce changes, transition to a distributor model in Australia, reduced inventory purchasing commitments and overall improved working capital management. 


Frank Grillo President & CEO
Tel: +1 (650)-390-9001 

Investor relations 
Kyahn Williamson WE Buchan
Tel: +61 (3) 9866 4722 / + 61 (0)401018828

About AirXpanders 
Founded in 2005, AirXpanders, Inc. ( designs, manufactures and markets innovative medical devices to improve breast reconstruction. The Company's AeroForm Tissue Expander System, is used in patients undergoing two-stage breast reconstruction following mastectomy. Headquartered in San Jose, California, AirXpanders' vision is to be the global leader in reconstructive surgery products and to become the standard of care in two-stage breast reconstruction. AirXpanders is a publicly listed Company on the Australian Securities Exchange under the symbol "AXP." AeroForm was granted U.S. FDA de novo marketing authorization in 2016, first CE mark in Europe in 2012 and is currently licensed for sale in Australia. 

Forward-Looking Statements 
This announcement contains or may contain forward-looking statements that are based on management's beliefs, assumptions and expectations and on information currently available to management. 

All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements. These include, but are not limited to, future financial results, including projected cash outflow and cash sufficiency forecast, U.S. commercial market adoption and U.S. and Australia sales of our product, ability to achieve operating efficiencies and future profitability, and the ability to recognize efficiency as a result of restructuring our sales team in the US and sales model in Australia. 

Management believes that these forward-looking statements are reasonable when made. You should not place undue reliance on forward-looking statements because they speak only as of the date when made. AirXpanders may not actually achieve the plans, projections or expectations disclosed in forward-looking statements. Actual results, developments or events could differ materially from those disclosed in the forward-looking statements. For additional information and considerations regarding the risks faced by AirXpanders that could cause actual results to differ materially, see its most recent Quarterly Report on Form 10-Q, expected to be filed with the Securities and Exchange Commission on or about October 31, 2018, including under the caption "Risk Factors," as well as other periodic reports filed with the SEC from time to time. AirXpanders disclaims any obligation to update information contained in any forward-looking statement, except as required by law. 

For more information, refer to the Company's website at