1047 Elwell Court, Palo Alto
CA 94303 USA

Tel (US): +1 (650) 390 9000

Tel (AU): 1-800-778-662

Fax: +1 650 390 9007

www.airxpanders.com

●

●

●

●

(US$ in ‘000,

unaudited)

Q4 2017

Q4 2016

% Growth

Net revenue

$1,789

$195

817%

Units Sold

693

107

548%

(US$ in ‘000,

unaudited)

FY 2017

FY 2016

% Growth

Net revenue

$3,905

$570

585%

Units Sold

1,563

311

403%

Australia Toll Free:

Alternate Australia Toll Free:

Australia Local:

02 9007 3187

New Zealand Toll Free: 

0800 453 055

NZ Local (Auckland):

09 929 1687

NZ Local (Wellington):  

04 974 7738

NZ Local (Christchurch):

03 974 2632

4001 200 659

Belgium:

0800 72 111

Canada:      

1855 8811 339

France:

0800 913 848

Germany:     

0800 182 7617

Hong Kong:

800 966 806

India:

0008 0010 08443

Indonesia:

001 803 019 3275

Ireland:

1800 948 625

Italy:

800 793 500

Japan:

0053 116 1281

Malaysia:

1800 816 294

Philippines:     

1800 1110 1462

Norway:

800 69 950

South Korea:   

00 798 142 063 275

Singapore:

800 101 2785

South Africa:    

0800 999 976

Sweden:

020 791 959

Taiwan:

008 0112 7397

Switzerland:

0800 820 030

UAE:

8000 3570 2705

Thailand:

001800 156 206 3275

United States:

(855) 881 1339

United Kingdom:      

0800 051 8245

US Local (Los Angeles):

(909) 235 4020

US Local (New York):  

(914) 202 3258

US Local (Chicago):      

(815) 373 2080

Company

Investor relations

Scott Dodson
President & CEO
Tel: +1 (650)-390-9008

Email: sdodson@airxpanders.com  

Kyahn Williamson
WE Buchan 
Tel: +61 (3) 9866 4722 / + 61 (0)401018828
Email: kwilliamson@we-buchan.com

Name of entity

AirXpanders Inc

ABN

Quarter ended (“current quarter”)

28 604 398 423

December 31, 2017

Consolidated statement of cash flows

Current quarter

Q4

US$ ’000

Year to date

12 Months

US$ ’000

1.

Cash flows from operating activities

1,370

2,845

1.1

Receipts from customers

1.2

Payments for

(703)

(3,206)

(a)   research and development

(b)   product manufacturing and operating costs

(2,065)

(7,805)

(c)   advertising and marketing

(834)

(2,878)

(d)   leased assets

-

-

(e)   staff costs

(4,379)

(16,624)

(f)   administration and corporate costs

(719)

(4,521)

1.3

Dividends received (see note 3)

1.4

Interest received

67

184

1.5

Interest and other costs of finance paid

(322)

(445)

1.6

Income taxes paid

-

-

1.7

Government grants and tax incentives

-

-

1.8

Other (provide details if material)

-

-

1.9

Net cash from / (used in) operating activities (1)

(7,585)

(32,450)

(1) Includes approximately $2.2 million and $10.0 million of an increase in inventory in the current quarter and year to date, respectively.

2.

Cash flows from investing activities

(609)

(2,587)

2.1

Payments to acquire:

(a)   property, plant and equipment

(b)   businesses (see item 10)

-

-

(c)   investments *

(7,039)

(31,992)

(d)   intellectual property

-

-

(e)   other non-current assets

-

-

Consolidated statement of cash flows

Current quarter

Year to date

2.2

Proceeds from disposal of:

-

-

(a)   property, plant and equipment

(b)   businesses (see item 10)

-

-

(c)   investments*

9,572

13,564

(d)   intellectual property

-

-

(e)   other non-current assets

-

-

2.3

Cash flows from loans to other entities

-

-

2.4

Dividends received (see note 3)

-

-

2.5

Other (provide details if material)

-

-

2.6

Net cash from / (used in) investing activities

1,924

(21,015)

*Represents purchases and maturities of short term investments consisting of highly liquid, U.S. Treasury securities.

3.

Cash flows from financing activities

3.1

Proceeds from issues of shares

3.2

Proceeds from issue of convertible notes

-

-

3.3

Proceeds from exercise of share options

9

63

3.4

Transaction costs related to issues of shares, convertible notes or options

-

(1,462)

3.5

Proceeds from borrowings

-

15,000

3.6

Repayment of borrowings

-

(1,272)

3.7

Transaction costs related to loans and borrowings

(62)

(289)

3.8

Dividends paid

-

-

3.9

Other (provide details if material)

-

-

3.10

Net cash from / (used in) financing activities

(53)

46,150

4.

Net increase / (decrease) in cash and cash equivalents for the period

9,876

11,477

4.1

Cash and cash equivalents at beginning of quarter/year to date

4.2

Net cash from / (used in) operating activities (item 1.9 above)

(7,585)

(32,450)

4.3

Net cash from / (used in) investing activities (item 2.6 above)

1,924

(21,015)

4.4

Net cash from / (used in) financing activities (item 3.10 above)

(53)

46,150

4.5

Effect of movement in exchange rates on cash held

-

-

4.6

Cash and cash equivalents at end of quarter 

4,162

4,162

5.

Reconciliation of cash and cash equivalents
at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts

Current quarter
US$’000

Previous quarter
US$’000

5.1

Bank balances

4,162

9,875

5.2

Call deposits

-

-

5.3

Bank overdrafts

-

-

5.4

Other (provide details)

-

-

5.5

Cash and cash equivalents at end of quarter (should equal item 4.6 above) #

 4,162

 9,875

6.

Payments to directors of the entity and their associates

Current quarter
US$'000

6.1

Aggregate amount of payments to these parties included in item 1.2

58

6.2

Aggregate amount of cash flow from loans to these parties included in item 2.3

-

6.3

Include below any explanation necessary to understand the transactions included in items 6.1 and 6.2

Payments represent remuneration paid to the Board of Directors.

7.

Payments to related entities of the entity and their associates

Current quarter
US$'000

7.1

Aggregate amount of payments to these parties included in item 1.2

-

7.2

Aggregate amount of cash flow from loans to these parties included in item 2.3

-

7.3

Include below any explanation necessary to understand the transactions included in items 7.1 and 7.2

8.

Financing facilities available
Add notes as necessary for an understanding of the position

Total facility amount

at quarter end
US$’000

Amount drawn at

quarter end
US$’000

8.1

Loan facilities

$15,117

$15,000

8.2

Credit standby arrangements

-

-

8.3

Other (please specify)

-

-

8.4

Include below a description of each facility above, including the lender, interest rate and whether it is secured or unsecured. If any additional facilities have been entered into or are proposed to be entered into after quarter end, include details of those facilities as well.

In January 2014, the Company borrowed $3,500,000 under a loan and security agreement with a financial institution which matures in July 2017. The loan was paid in full at maturity in July 2017. No amounts are available to borrow under the agreement.

In August 2017, the Company borrowed $15,000,000 under a loan and security agreement with Oxford Finance LLC, or Oxford, which matures in August 2022. Interest is paid monthly on the principal amount at a variable rate equal to the greater of (a) the thirty day LIBOR rate, or (b) 0.99%, plus 7.26% per annum. The loan is secured by substantially all of our assets, excluding intellectual property, which is subject to a negative pledge in favor of Oxford. Under the terms of the agreement, interest-only payments are due monthly through September 2019, with principal payments commencing in October 2019, due in 35 equal monthly installments. If we are in compliance with certain financial milestones, the interest-only payments can be extended by twelve months through September 2020, in which case the principal payments would commence in October 2020, due in 23 equal monthly installments. A final fee of $1,200,000 is due at maturity (or acceleration or prepayment). Subject to a prepayment fee equal to between 0.5% to 2.0% of the principal amount of the prepaid amount, we can prepay the entire loan amount by providing a written five-day notice prior to such prepayment and paying all outstanding principal, interest, final payment fees and prepayment fees plus any default fees and all other sums that shall have become due and payable. In connection with the loan and security agreement, we granted warrants to Oxford for the purchase of 277,778 shares of common stock at $1.62 per share.

Total facility amount as of December 31, 2017 of $15,117,000 includes a prorata accrual of final fee of $1,200,000 described above. This amount excludes the discount recorded related to the transaction fees and fair value of warrant issued in conjunction with the loan.

9.

Estimated cash outflows for next quarter

US$’000

9.1

Research and development

(700)

9.2

Product manufacturing and operating costs

(1,800)

9.3

Advertising and marketing

(800)

9.4

Leased assets

9.5

Staff costs

(4,500)

9.6

Administration and corporate costs

(800)

9.7

Other (provide details if material)

-    Payments for property, plant and equipment

-    Repayment of borrowings

(150)

(320)

9.8

Total estimated cash outflows

(9,070)

10.

Acquisitions and disposals of business entities
(items 2.1(b) and 2.2(b) above)

Acquisitions

Disposals

10.1

Name of entity

N /A

N/A

10.2

Place of incorporation or registration

10.3

Consideration for acquisition or disposal

10.4

Total net assets

10.5

Nature of business

1

This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

2

This statement gives a true and fair view of the matters disclosed.

1.

The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report.

2.

If this quarterly report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 107: Statement of Cash Flows apply to this report. If this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standard applies to this report.

3.

Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.