News & Events

Highlights for the quarter ended 30 September 2017

• Revenue increased to US$1.2 million compared to US$0.2 million in Q3 2016; driven primarily by U.S. sales growth

• U.S. unit sales grew 108% compared to Q2 2017

• AeroForm® available in more than one hundred and twenty (120) hospitals across the US

• Third party contract manufacturer in Costa Rica validated and on-line for higher capacity production

• Closed US$15 million minimally-dilutive debt agreement with Oxford

• Cash and short-term investments balance as of 30 September 2017 of US$30.8 million

Palo Alto, 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 2017.

Revenue performance for the quarter was as follows:

Worldwide unit sales of the AeroForm Tissue Expander grew to 459 units, an increase from 297 units in second quarter 2017. This was driven by continued acceleration of the Company's targeted market release of AeroForm in the United States in the third quarter of 2017, with unit sales of 366 units, compared to 176 units in the second quarter of 2017, an increase of 108%. Revenue growth in the third quarter continued to outpace unit growth due to the additive impact of higher average unit selling prices (ASPs) in the United States. In Australia, unit sales were 93 units, which is slightly down on the previous quarter with the Company experiencing a turn-over of sales personnel in certain regions.

"Our third quarter results are the product of continued progress during our controlled launch of AeroForm in the U.S. market. Our sales representatives are successfully on-boarding and training physicians, working with them on their initial cases and helping ensure an overall positive clinical experience and outcome for both physicians and patients alike. AeroForm is now already available in over 120 hospitals throughout the United States," said Scott Dodson, President and CEO of AirXpanders.

"We were also excited to announce the completion of our manufacturing transfer with Medplast in Costa Rica. We believe the availability of product out of that facility is the basis for future increased capacity and improved gross margins."

The Company had total cash and short-term investment balances of US$30.8 million as of 30 September 2017. Short-term investments consist of highly liquid, U.S. Treasury securities. Cash outflow for operating activities during the quarter was US$9.8 million, compared to US$8.4 million in the previous quarter. This increase was primarily attributable to the Company's build of inventory of US$4.2 million, to support the increasing demand for AeroForm the Company is experiencing in the U.S. Cash outflows for property, plant and equipment also decreased to $0.8 million from $0.9 million in the second quarter of 2017.

Investor Conference Call
An investor conference call to discuss the Appendix 4C and Quarterly Update will be held on Friday 20 October 2017 9:00am AEDT (Thursday 19 October 3:00pm PDT). An archived version of the webcast will be available in the Investor section of the company's website at www.airxpanders.com, until the posting of the next webcast.

Company
Scott Dodson
President & CEO
Tel: +1 (650)-390-9008
Email: [email protected]

Investor relations
Kyahn Williamson
WE Buchan
Tel: +61 (3) 9866 4722 / + 61 (0)401018828
Email: [email protected]

About AirXpanders
Founded in 2005, AirXpanders, Inc. (www.airxpanders.com) 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 Palo Alto, 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 publically 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, without limitation, commercial success of our U.S launch, the success of our sales personnel in on-boarding and training physicians, the clinical benefits to physicians and patients, the ability of our third-party contract manufacturer to produce our product in greater capacity and at lower gross margins.

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, as filed with the Securities and Exchange Commission on August 9, 2017 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 www.airxpanders.com.