Good day, and thank you for standing by. Welcome to the Aziyo Biologics Q2 2022 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star one one on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Leigh Salvo, investor relations. Please go ahead.
Thank you, and thank you all for participating in today's call. Earlier today, Aziyo released financial results for the quarter ended June 30, 2022. A copy of the press release is available on the company's website. Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that do not relate to matters of historical fact or relate to expectations or predictions of future events, results or performance are forward-looking statements. All forward-looking statements, including without limitation those relating to our operating trends and future financial performance, are based upon our current estimates and various assumptions.
These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please refer to the Risk Factors section of our public filings with the SEC, including Aziyo's annual report on Form 10-K for the year ended December 31st, 2021, as such factors may be updated from time to time in Aziyo's other filings with the SEC, including Aziyo's quarterly report on Form 10-Q for the quarterly period ended June 30, 2022, to be filed with the SEC, accessible on the SEC's website at www.sec.gov. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, August 11th, 2022.
Aziyo Biologics limits any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. Also, during this presentation, we refer to gross margin, excluding intangible asset amortization, which is a non-GAAP financial measure. Reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure is available in the company's earnings release for the second fiscal quarter ended June 30, 2022, which is accessible on the SEC's website and posted on the investor page of Aziyo's website at www.aziyo.com. With that, I will turn the call over to Aziyo's Executive Chairman, Kevin Rakin.
Okay, thank you, Leigh. It's a pleasure to be with you all today. I just wanna take a moment and introduce Randy because we announced a couple of days ago that Randy has assumed the role of permanent CEO. Just a quick background. Randy, you know, he's a proven leader. I think you'll hear today that he's a very passionate guy, subject matter expert on regenerative medicine with a background having been CEO of Osiris, also President and CEO of the California Institute of Regenerative Medicine. Randy's created significant shareholder value over his career, great public company experience, so we feel very fortunate to have Randy on board. Moreover, Randy has, you know, a history with the company. He's one of the co-founders, and he's been on our board.
Of course, being CEO is a different role, and you'll hear from him today about some of his excitement and vision for the future. I'm really pleased to build on our long-standing partnership. I've stepped up to being the executive chair, and we've spent, I think it's fair to say, a fair amount of time, probably every day we've been talking over the last six weeks. I also want you to know on a personal level, I really appreciate how Randy's literally been on the road every week for the last six weeks, and you'll hear some of his findings over that time. He has really hit the ground running and immersed himself in this job even while he was interim CEO.
We have a terrific base business here at Aziyo, but we have felt that we could build a more compelling vision for creating significant shareholder value on top of this base business or leveraging this base business, and that's what I think you'll hear today. Let me make one last point in my capacity as a shareholder. To any of the other shareholders out there, you know, HighCape, our fund, is one of the significant shareholders in Aziyo. We've been involved in this company from the beginning. We're determined to build value, but we're gonna do that within the constraints we operate in. I wanna be really clear that the debt refinancing we announced yesterday is a major step forward to strengthening our balance sheet.
We have some other things in the works, but we are not going to do any kind of dilutive offering at this kind of share price that we're at right now. You'll hear within Randy's plans how we're gonna work within the constraints we have and the resources that we have. That's some introductory comments to set the stage. I'm gonna pass the call on to Matt Ferguson, our CFO, who's gonna give you some of the financial highlights before we hear from Randy.
Okay, thanks, Kevin, and it's good to have you here today with us on this call. As Kevin noted, we're using a little bit different format here today, and so I'm just gonna hit on a few highlights of the financials. For additional details, I would refer you to the press release that we put out just about a half hour ago. As we get into it, the main comments I wanted to make or the main points I would like to highlight, one is that for the Q2, we had a really strong quarter overall from a top-line growth perspective.
We turned in 20% year-over-year revenue or net sales growth from our current products. That is excluding the sales last year of a discontinued product. We really had significant contributions both from our Richmond, California-based human tissue business as well as our Roswell, Georgia CanGaroo and cardiovascular business. Really with contributions all around, I would say that our most important growth drivers in the Q2, and I think likely to be the case in coming quarters and years, frankly, were CanGaroo and SimpliDerm. I would just note that in combination, they actually grew 35% year-over-year in the Q2. Really great performance in those parts of the business. Beyond the top-line revenue growth, I would just note more from a balance sheet and cash flow perspective.
I'm very pleased that we were able to report yesterday that we closed the debt financing transaction that Kevin referred to. We've been working on that for quite some time, and I'm really pleased that we were able to partner with SWK Holdings on that. I'd just like to give a big thank you to them who I would say really dug in deep and got to know our business extremely well. I think their investment in the company is a real signal of their confidence in us and our business, and is a real validation of the value that we have here. They were really just great to work with through the entire process there.
A little bit more about that transaction, between the cash at closing and the next second tranche of that deal, which we expect will be available to us over the course of the next 12 months, as well as now being in an interest-only period for at least the next two years. As a result, we will not be making quarterly principal payments on our outstanding indebtedness. This deal will improve our cash position over that time by approximately $15 million over that one-year period. That includes an improvement to our cash position compared to Q2 on an apples-to-apples basis of about $4 million, but it's really more important about what it's gonna do for us over time here.
We see this deal as really just the first step in a real revitalization of our balance sheet. Again, as Kevin noted, where we are really our intent is really to avoid any kind of significant dilution. In addition to this deal, we have a number of other initiatives that are at somewhat earlier stages, but I think also have a very strong likelihood of closing that will improve our financial health and our balance sheet position and will support our ongoing operating plans, which you're gonna hear a lot more about in just a minute or two.
Last, but not least, I would like to note that we are reconfirming our guidance on the top line for the year, our net sales guidance of $47 million-$50 million for the year. While we don't see short-term revenue as the real determinant of value here, I'm still pleased to report that the team is executing really well, and our overall business is definitely tracking to our plan. With that, I will turn the call over to Randy.
Thank you, Matt. It's a pleasure to join you all this afternoon. My first conference call with Aziyo, and I'm very excited to be here. I'll share some thoughts and what I would say are initial observations of my time with the company. First, let's just get into it. I'll try to keep my comments pithy today. Aziyo today, this is, as you heard from Matt and you heard from Kevin, this is a very strong company with a very real building business as a platform to build on. Just looking at the numbers, we're talking $47 million-$50 million in annual sales growing in the mid- to upper double digits. There's over 1,500 institutions globally that use Aziyo products on a day-to-day basis.
It's a very real base for which to build a powerful company on. It also has the parts to be a fully integrated company. We have research and development capabilities that have led to the creation of our proprietary products. We have strong manufacturing capabilities in our Roswell, Georgia facility, as well as our Richmond, California facility. We have a pretty remarkable commercial infrastructure. This is a point I'll be making for a couple of times. We have a commercial infrastructure that allows the work that we do in development and manufacturing to be more than a science experiment, and in fact, develop real products that have real commercial utility and validity as we take them out into the marketplace.
One of the things that gets me so excited is that when I look at this, I see these great parts, and I see this base to a company. I have to think that those parts can actually be assembled in an even better and more effective way to where those parts become an engine. The power that that engine generates is more than its pieces. What I thought we'd do today is I'd start out just sharing with you what I've observed in my first 48, 45, 48, whatever it is, days on the job. I have been, as Kevin said, out for most of that time. During that time, I've been doing a tremendous amount of listening.
I have held over 50 individual meetings with all types, physicians that love and use our products and are evangelical about them. Physicians that don't use our products because they have questions about them, our sales representatives, leaders from other companies in the space, and with our Aziyo team at all three of our Aziyo locations. During that time, three things have really become crystal clear to me, and I'm gonna tell you these three things. They're on the screen in front of you, and then I'm gonna use a few slides afterwards to try to give you some meat on the bones as why I think these three things are true. First is we have exceptionally favorable market dynamics at play here.
That's not just to say that we have demand for our product, but we have a market dynamics, which makes the introduction of our products right now unusually good. Two, we have the ability to satisfy and meet this demand with best-in-class products. We can, and we will do this, and we are uniquely positioned to do this. I will say that this is one of those areas where my background and my experiences, I'm able to come here and kind of put my hand on the scale and really tilt this one in our favor, and I intend to do that. Three, we have a great opportunity to leverage deep, meaningful strategic partnerships in order to grow efficiently and to grow quickly.
I'm gonna go in, and I'm gonna try to peel back the onion here on these three points a little bit more for you, but I'm gonna do it using a specific example. I'm gonna be using only CanGaroo here, for the majority of this vision. Keep in mind, we have, you know, four different components to our business beyond our device protection, our CanGaroo business. I thought for brevity and clarity, I'll just use CanGaroo as a model for how this vision can work. Just you'll be able to realize how it can translate into other pieces of our business, in a second. Let me just start off with some gross pictures. You can't have a biotech company without your requisite gross pictures.
One of the questions that I get asked a lot is, you know, why do you put a pacemaker inside of a pouch? What is it you're trying, you know, to prevent or keep from happening? Infection grabs a lot of the attention in this space, and it's a real problem, but it's a problem that affects 1.5%-3% of the cases. You can see on the left, that's an example of what a bad infection would look like post pacemaker implantation, right? This is a real problem. I'm not knocking the 1.5%-3% infection rate. This is actually the genesis behind our CanGaroo RM offering, which is currently at the FDA right now on track under review by them.
This is our version of CanGaroo that has a rifampin and minocycline added to the mixture, and we're very excited about that. That's really just the beginning of the story here because 8%-13% of these procedures fail. If you're a patient or you're an electrophysiologist, that's the number you really care about. How many times do I go to the operating room, I have this not work? Because pacemaker implantation, for the most part, is not an elective procedure. If you have heart block, you need pacing. When you look at some of these other conditions, erosion, this is literally where the pacemaker erodes through the skin. This happens frequently in patients with thin skin or hematoma. A small occult bleed underneath the skin becomes a real problem requiring explantation.
We're just looking at the aesthetics of pacemaker implantation. You know, that was one of the things that sort of shocked me when I went in the field. Why is it you still see a pacemaker? Why can't we do better than that? When you look at these different characteristics, you see a market that is totally ripe for innovation. We have our first product coming out in this to address this, what I would call activity, which is the CanGaroo RM product. We actually think that the base of our technology, the biological and regenerative base of our technology, enables us to tackle these other products in a way that the current market leader's product, we think can't.
We're going to attempt to address not just the infection product but multiple products, and we think that's gonna give us significant advantage in the marketplace. Now let's take a look at these market dynamics that I've been alluding to. The CIED market dynamics or CIED, fancy way of saying pacemaker market dynamics, are highly favorable for a few reasons, but let me sort of start out. The pacemaker pouch opportunity in the pacemaker market is about a $500 million opportunity in round numbers. About 500 procedures annually that are taking place. Those 500 procedures can significantly influence and largely control an $11 billion pacemaker market. There is a 20-to-1 leverage going on here.
We take a look over on the graph on the right, and we actually see that starting to come true. The market leader in both pacemakers and in the pouch market, they have their own pouch, and they've done, I think, a fantastic job at creating a market. They're using it, and they've had tremendous success within their own field. These are our estimates of what's taking place based on some different published numbers. If you take a look at that, the market leader currently has 60% market share within their own customers. There's another 300,000 implantations going on where the pacemaker is supplied by other manufacturers that don't have access to a pouch. Now there's a couple of things going on here.
The first dynamic is those other pacemaker manufacturers do not want the market leader's pouch in their procedure. They're highly motivated to come up with a pouch to actually prevent erosion of their own market. We think, given the slide I just showed you, we actually think we can turn this around. We think with a pouch that not only can address infection, but actually can also address some of the things that regenerative medicine is uniquely capable to address. Things like erosion, things like, yeah, hematomas and lead fracture and all these other different things that we're looking at.
We actually think that we have the opportunity to have, by far, the dominant pouch and enable these other manufacturers to reverse this trend and actually take device share away from the market leader by putting a better pouch into their procedures. When we look at this, we see a market that is just ripe and spring-loaded for a great pouch. That leads me really to this next point, which is since this market dynamic exists, we think we're positioned, we're in the best position to actually satisfy that market demand. Let me show you why, right? We're not new to this game. We're actually pretty darn experienced. In this field, we've really developed our R&D capabilities as a platform.
That's really how I want you to be thinking about this, as I go through it. This platform centers around three different dials that we have the ability to control and that we have domain expertise over. The first one of those dials is the material. In this particular case, in the CanGaroo case, initially we're talking about porcine SIS or extracellular matrix, ECM, as it's referred to. But we have actually expertise with a whole lot of different materials. Human acellularized dermis, amniotic tissue, bone. We have a palette of different materials to choose from. The next dial we have in our R&D platform is activity.
With activity, what we're talking about in CanGaroo, we're talking about the ability of the product to elute an antibiotic. In a product like VasCure, we're talking about cellularity. We have the ability to change the activity of these different products. Lastly, engineering. Engineering sort of comes down to the configuration and the features, whether it has holes in it or it's designed to capture a device or has a putty form or a fiber form or all these different kinds of things we can do. By combining these three different dials, we can create all kinds of different products, and we have created all kinds of different products.
Just a real quick example, as I mentioned, sort of, our VasCure product line, that's a combination of, from a material bone, mixed with, from an activity standpoint, mesenchymal stem cells engineered into a putty-type matrix. CanGaroo RM is obviously looking at human, or I'm sorry, porcine SIS mixed with two antibiotics configured into a pouch to hold a pacemaker. You can see as we sort of move on from this, we can reconfigure these things kind of in any way we want. We could take a SimpliDerm, which, you know, I alluded to in some of my comments, has a, I would say, unacceptably high, or breast reconstruction has an unacceptably high, post-surgical infection rate of about 10%.
We could take the antibiotic elution technology that we have from CanGaroo and actually introduce it into our SimpliDerm line. Between these different things, we're able to mix and match. We don't leave it there, 'cause I would say if we left it there, we would have a science experiment.
What we have is this fully integrated company, and part of that fully integrated company is a commercial team that's able to actually take these products out into the marketplace and introduce them into commerce and into sales and into contracting and get them through value-added committees into formularies and on the shelves and deal with reimbursement. That significantly changes our position when we go to negotiate partnership arrangements with other companies because we validated not just the scientific need but the actual commercial utility of the product. That's something obviously I'm very passionate about and I'm very excited about. This is again one, given my background, great market demand. Can you build it?
Given my background, I have a tremendous amount of confidence that we have what it takes in order to build these products, and we will build the best products in each of the markets that we go into. Moving on. We look at in this model, we were talking about pacemaker or CIED market at a $500 million market. That for us is really just the beginning of this market. Because when you start manipulating these three dials and you start being able to effectively move into other markets, $600 million breast reconstruction market, which is currently sitting with a 10% infection rate. We think we can go into that market with a superior product. Sleep apnea, neuromodulation. We have this facility in Richmond which enables us to do great things like cartilage resurfacing.
There's a tremendous amount of market opportunity for us to go into. One of the things that I'll say is when I talk about these kinds of things, it seems like a great idea, Randy. It also seems like a tremendous amount of money from an R&D standpoint. A lot of what we're talking about, given the existing platform we have, is actually pretty low-hanging fruit, things that we can do within, you know, the 510K pathway or the 361 pathway or some combinations of those. We actually have a pretty fast and pretty efficient pathway to creating some best-in-class marketed product or best-in-class products on the market, protected with a pretty strong, actually a really strong, intellectual property portfolio of patents around this technology.
Okay, I'll summarize here and get on to taking questions. We believe and we're very excited about the favorable market dynamics that currently exist. Given those market dynamics that exist, we really firmly believe that we can build best-in-class products to satisfy them, and we intend to use strategic partnerships going forward in order to efficiently and quickly capture those markets. You're probably saying, "Great, Randy, what are you gonna do next?" Well, a couple of things. One is, we're gonna focus our commercial team on continuing to engage our key opinion leaders to continue to validate the innovations that we make. Obviously the CanGaroo RM regulatory review process is top of mind for us, and we're gonna keep working on getting that done.
Generate additional clinical, and I would say non-clinical data as well, to support our proprietary product franchises. When we say best in class, we want that to be evidence-based. Build out a product pipeline. We're not gonna show it obviously here, today, but you will soon see from us a more robust product pipeline that starts connecting some of these dots that I'm alluding to. Lastly, engage in some robust commercial discussions over strategic partnerships that we can then leverage and help us with market adoption efficiently and quickly. It's been 45 days, it's still early. You may wanna ask me a whole lot of questions I don't have great answers to yet. That's okay. I'll do my best. With that, I wanna thank you for listening and turn the call over to the operator, and get to your questions.
As a reminder, if you'd like to ask a question, that is star one one. Our first question comes from the line of Josh Jennings with Cowen. Your line is now open.
Hi. Good afternoon. Thanks for taking the questions. Randy, it's great, congratulations on taking the CEO seat formally. Nice start with this quarter under your belt. I wanted just a couple follow-up questions. I know it's still early with you being in a leadership position. But just in terms of the clinical data pursuit to support your franchises, I mean, should we be thinking about funding trials at centers, or are you talking about funding major randomized controlled trials to support the CanGaroo RM launch and SimpliDerm and other products that will come out of the pipeline? Or just how should we think about this clinical data accrual that that's gonna come?
Yeah. Thanks, Josh. We currently have two different studies that are ongoing right now. We have a HEAL study and a RECON Study, which are generating data. We will start to get readouts on those, and I think that you can expect to see data from both of those in the H2 of this year. Those things are up and running. With regards to SimpliDerm, I think you're dead on. We see tremendous opportunity in the SimpliDerm market, particularly with Allergan's acquisition of the AlloDerm product. We think there's a big market there to take. We also think there's a big market there to improve on. We'll be designing some studies there going forward, but we don't have those built into the formula yet sufficiently for me to comment on them.
Understood. Just want to also ask about the strategic partnership route. I mean, you have a number of strategic partnerships in play with the bone matrices unit. We should be thinking about commercial partnerships more extensive for SimpliDerm or across the board, even more stronger strategic partnerships with CanGaroo distribution as well. Any other hints you can provide in terms of that strategy. Just to follow up on that, you know, I think one of the elements of our understanding of the potential to boost out your revenue growth is some tuck-in M&A, and I know you guys just signed that credit facility. Just how should we be thinking about tuck-in M&A opportunities over the next 12-36 months as well? Thanks for taking the questions.
Yeah. No, Josh. Great. Two great follow-up questions. With regards to different types of partnerships, we obviously have been very successful in the orthopedic side of the house. Again, SimpliDerm's a pretty interesting beast, in that we've actually had a lot of success with our commercial team running a distributor model there. That's working pretty well, and it's simple. It's, you know, it's nice and clear and clean. Financially it's pretty advantageous for us. I think we like the idea of expanding that model on the SimpliDerm side.
I would say probably not to start there with a major commercial partnership. Where I think I see the you know the most prominent opportunity is on the cardiovascular and CanGaroo side of the house. You know I wasn't in my seat but a couple of days before I started you know getting calls from people I've had relationships with historically you know asking you know basically are you really gonna go and you know and build these great regenerative medicine products in the space? And if so can we talk about can we talk about partnerships for them? We have two to start with and I don't wanna be in any way dismissive of those.
We have a great relationship with Boston Scientific, which is specific to products for the CIED market within the United States, so current products within the United States. We have another more non-exclusive partnership with BIOTRONIK. Like I said, both of those partnerships we think are very good. We also think, though, the dynamic of this space says that if you're in the CIED space, you know you need a pouch. There's a lot of pressure, you know, to basically make sure that you have a chair before the music stops.
It's sort of a big world out there, and we have a pretty big canvas on which to paint, particularly when you think, you know, you think about modifications we can make to these products. I think that gives you sort of a good idea of our thinking, you know, thinking around partnerships. Your last question with regards to M&A, I think it's something opportunistically we would seek in time, Josh, but I'll tell you right now, we have more opportunity in front of us. You know, we're drinking from a fire hose. We are laser-focused on getting that. We see a market that needs our products. If we build those products, we think they'll be taken up.
We see a path to get that done through partnerships, and so we're gonna kinda keep our eye focused on that for right now. If something too good to be true comes along, well, maybe it is, but we'll certainly take a hard look at it, but we're focused on organic right now.
Understood. Thanks a lot.
Our next question comes from the line of Matthew O'Brien with Piper Sandler. Your line is now open.
Hi. Good afternoon. This is Simran on for Matt. Randy, first off, congrats on the new role. I guess, if we can just start off with the, you know, Q2 performance, maybe, you guys can, you know, 35% growth in the core business. Maybe you can parse out kind of, growth driven by CanGaroo, growth driven in SimpliDerm, just performance of each of those business lines, and, you know, how the non-core business kind of trended during the quarter.
I'll sort of start by putting a little color around this question. I'll turn it over to Matt to give the good financial CFO answer to this question, Simran, that you're probably more interested in. I would say first. You know, I'm not a big fan. I'm just gonna say it. I'm not a big fan of core non-core. We make very serious products that go into patients who depend on the quality of our work for their lives. There is no part of that that we don't take very seriously. I know those were our terms, not yours. There's something I think going forward you can look for us to drop from our lexicon. They are all our children and we certainly love them all. They might have different growth trajectories. They might have different sales cycles and customer base, some B2C, some B2B.
They are all very important, very high quality products. Going forward, they're all core to me. With regards to breaking them out, Matt?
Yeah. Well, Simran, I think that's a good question. We've, you know, we're really pleased with what we saw from CanGaroo and SimpliDerm, and that led us to wanna at least break out the growth rate for those two highly proprietary products as a group, and really pleased to see 35% growth there. Clearly, as you pointed out, our contract manufacturing business and the other products that go into that non-core line, we have seen really nice growth for multiple quarters there. that business, you know, a lot of great people contributing to that and that part of the business is really going well.
In general, for the Q2, it seems like kind of a long time ago now, but you know, thinking all the way back to April or so, you know, that we started off well, and I think we had a good, steady, consistent performance throughout the quarter. You know, I think it was a pretty clean and predictable period for us. I hopefully got to most of your question there. If there's anything I missed, or that you'd like Randy or me to follow up on, please let us know.
No. That was perfect. I guess switching gears to you know RM specifically, lots of excitement there. It sounds like it's still on track for approval in the H2. I guess could you maybe provide some color on what your discussions with the FDA are looking like at this point? You know, I guess to follow up to that, what's the commercial strategy here? Are you able to start selling RM sometime in Q4? Is there any pricing power that you can leverage?
Yeah. Those are great questions. My, again, limited short-term involvement with this, with the RM product, specifically, and after meeting with the regulatory and the development teams, I'll just tell you my takeaway from it. I think we have a product that is going through the review process well and is going to be reviewed. I'll also tell you, I've now been around this industry for a long, long time, and I've worked with the FDA, and we have a review right now that's going through two agencies or involves two agencies, CDRH and Drugs. I just wouldn't handicap and really wouldn't get into, you know, whether it's this quarter or next quarter or, you know, sometime next year.
I'll say also because for our new way of thinking, it's we're thinking about this company differently. We're not thinking about this company in terms of incremental revenue growth. We're thinking this company in transformational revenue growth. That actually goes perfectly with your sort of your last point. With the right strategic partners and importantly, with the right strategic partnership in place, these kind of questions fall away and you know and become sort of less you know less important on you know what day in the quarter do we start selling or can we eke out a little bit more.
We're thinking about this in a more transformational way, driven more by partnerships, where and you guys too to get used to it, where we look more like a biotech company. Hopefully we start thinking about our valuations with a B on it in terms of market cap instead of with an M on it. Yeah.
Okay. Perfect. If I could just squeeze one last one in here, I guess for Matt. You guys have $25 million in the debt financing, and it sounds like there are opportunities to secure additional funding. I guess, can you provide a bit more color on, you know, your capital allocation priorities and, you know, how that, I guess what that looks like over the next 12 months in terms of deployment?
Yeah. Simran, again, really good question, and it may be a little early to get into a great amount of detail i n terms of the next 12 months. What I can tell you is that, you know, the deal that we announced yesterday is a really important one for us. It does bring cash onto the balance sheet immediately, and it does still leave open the availability to do an additional working capital-based debt facility up to $8 million. That's something that we'll be working on in the near term. This is a business that has a really manageable burn rate. You know, our EBITDA loss for the last quarter was only about $5 million. Our cash usage from operations was below that. You know, we feel like we're in good shape.
We are working on a number of other things which I, you know, can't comment yet on in detail, but as we mentioned in the prepared remarks, you know, our goal is to avoid going back to the equity markets and avoid dilution in any significant sort of way. We think we've got some really good opportunities to do that. I guess, in part, my answer would be stay tuned. We think we'll have more to announce before too long here.
Okay, perfect. That's it for me. Thank you.
Thank you.
Our next question comes from David Rescott with Truist. Your line is now open.
Hey, guys. Thanks for taking the questions, and Randy, you can grab some for me, stepping into the new role here. I wanna start just on some of the commentary you made around partnerships and CanGaroo and the CIED market overall. You mentioned that there's this, you know, 60/40 split between or with the market leader as it relates to the kind of number of product or percentage of CIED envelopes going into these products versus the overall market around 5%. You know, my question is what, I guess, do you think is the biggest driving factor on that?
I mean, my guess is that, you know, some of the reimbursement, you know, the way that some of the reimbursement is set up and the dynamics that they have by being able to bundle some of these products, you know, that's not something that you necessarily would be able to do given that you're going through this partnership route. I'm wondering how you think about the partnerships that you currently have as it relates to addressing the CIED pouch market with CanGaroo and in its current state, do you believe that, you know, maybe what you've seen thus far with the partnerships, whether or not they need to shift around at all as you think about going into market with CanGaroo?
Yeah. Thanks, David. Boy, you hit one of the things sort of right on the head with regards to bundling, contracting, inventorying, you know, the products where we have more of a sales agent type relationship under our current partnerships. Really, I mean, I wouldn't even say disadvantages. It almost sort of takes the product, in a lot of cases, just almost completely out of the game. It goes to our commercial team. They are remarkable at what they can do and what they can overcome. A lot of those really massive barriers fall away if the agreements would be treated differently. I think there's good reason to believe, you know, that will happen.
Okay. That's helpful. I guess as it relates to the guide for the year, I mean, obviously, strong acceleration in CanGaroo and SimpliDerm. If I look at kind of the growth in the back half of the year and the, you know, 14% growth in Q1, 20% growth in Q2, excluding the FiberCel product, you know, it definitely looks, I think, a little maybe conservative.
Just wondering, how you're thinking about the cadence at least, given some of the acceleration you've seen with CanGaroo and SimpliDerm, thus far, you know, how you're thinking of at least the cadence in the Q3, and then what maybe, if at all, any type of conservatism is built into the full year, especially, if we should think about maybe, the new CanGaroo RM product contributing, maybe in Q4.
Yeah. David, you know, I think right now, 45 days into it, I have seen a company that is really strong. I've seen a company that's firing on all cylinders. But 45 days into it, I don't think I have the confidence yet. I just don't know enough, you know, in order to change guidance. I'll also just say stylistically going forward as we get to know each other, I am far more of a point to the scoreboard at the end of the game kind of guy than I am sort of talk smack, you know, before or during the game. I just don't know enough to do anything, you know, to comment on guidance. Even if I did, I'm not sure I would.
Okay. Maybe just one last one. You know, I know that our, you know, the commentary, at least for the term loan, I think you said, you know, operational metrics, financial metrics, by September 2023, that are contingent on drawing on those additional $4 million term loan. Just wondering, if at all, I know you probably don't go into the specifics around what those are, but just wondering if at all you could comment maybe on what we should be thinking about or maybe what kind of the operational or financial metrics that you guys are thinking about, when you look out to that 3Q 2023 time frame.
Yeah, I think that's probably in my camp, Dave. I think the intent is very much that second tranche will be available to us, both, you know, from the point of view of SWK and for ourselves. Specifically, the operational metric is the clearance of CanGaroo RM, and the financial metrics have to do with gross profit at levels that are really not much higher than where gross profit sits today. We'll have more details out at some point, and we'll have an 8-K kind of spelling out the full details of the loan. That's the gist of it. You know, we fully expect that second tranche to be available to us sometime in 2023.
All right. Very helpful. Thank you.
Our next question comes from Ross Osborn with Cantor Fitzgerald. Your line is now open.
Hi. Thanks for taking my questions, and congrats on the new role, Dr. Mills. Looking at Q2 revenue, could you maybe parse out growth from, you know, higher utilization at existing accounts versus adding new accounts during the quarter?
Boy, I sure can't, but maybe Matt can or maybe Matt can't, I don't know.
Ross, I can speak to it a little bit. We certainly look at that internally, and I can say that we saw contributors from both of those elements, new accounts as well as utilization within existing accounts. I would say, without getting into the exact numbers, which I don't have right in front of me, but we got more of a contribution from existing accounts than from new accounts. You know, I think that speaks to the stickiness of our products with our customer base and you know, is a good indicator of an overall healthy business.
Great. No, that's exactly what I was looking for. Thanks for providing that clarity. Maybe just one more on OpEx. You know, SG&A stepped up a little bit sequentially. Could you just walk through some of the drivers there and then maybe how we should think about the cadence for the balance of the year?
Sure. You know, again, I can speak to that. Q2, we did have a little bit of a bump in some of our OpEx. Some of that was non-cash stock-based comp, which is not too much to be concerned about. We did also have some things that I think were more transitory in terms of, you know, we had the transition in the CEO seat, which had some expense that went along with it, that probably will in fact spill over into Q3. We have had some higher legal expenses, other G&A type expenses that, you know, I think will probably come down over time as well. I think Q2 is probably not a bad indicator for maybe where we'll be in the current quarter and perhaps even into Q4. But we're definitely looking hard at all of our discretionary spending and making sure that we're managing our business judiciously.
Sounds good. Thanks for taking my questions and congrats again on the progress.
Okay. Thank you.
That concludes today's question and answer session. I'd like to turn the call back to Randy Mills for closing remarks.
Thank you very much. I appreciate you all listening. I look forward to getting out on the road and seeing and meeting you all at upcoming events as they unfold. We'll be sending out a list of those. I hope you have a great day. Bye.
This concludes today's conference call. Thank you for participating. You may now disconnect.