Press Release
Asensus Surgical, Inc. Reports Operating and Financial Results for the First Quarter 2021
Recent Highlights
- Signed two lease agreements with hospitals to install Senhance® Surgical Systems
- A hospital completed the first buyout of a previously leased Senhance Surgical System
- Made FDA 510(k) submission for articulating instruments
- Published results from the first milestone study comparing health economic outcomes versus another robotic system as well as traditional laparoscopy
- Received expanded 510(k) clearance for general surgery indication
-
Received CE Mark for the Intelligent Surgical Unit™(ISU™), enabling clinical use of machine vision capabilities in
Europe -
Announced partnering arrangement with Amsterdam Skills Centre to launch Senhance surgical training center in
the Netherlands - Strengthened balance sheet through equity financings, extending cash runway into 2024
“We were pleased with our performance during the first quarter and with our strong start to the year. We acknowledge the pandemic around the world is still having impacts, but I'm encouraged by the signs of recovery this quarter,” said
Name Change and Rebranding
On
Upcoming 2021 Milestones
For the full year 2021, the Company continues to expect to install 10 - 12 new Senhance Surgical Systems.
During the second quarter of 2021, the Company expects to achieve the following regulatory milestones:
- File for FDA 510(k) clearance for the next wave of ISU features
During the second half of 2021, the Company expects to publish clinical papers in peer reviewed journals on the following subjects:
- Health economic evidence comparing Senhance, robotics and laparoscopy in General Surgery and Gynecology
Commercial and Clinical Update
Thus far in 2021, the Company has signed two new agreements with two hospitals in
During the first quarter, over 500 procedures were performed globally using the Senhance Surgical System, an increase of 3% over the first quarter of 2020.
On
On
On
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In
First Quarter Financial Results
For the three months ended
For some lease arrangements, the customers are provided with the right to purchase the leased Senhance System during or at the end of the lease term, or a Lease Buyout. Systems revenue consisted of one Lease Buyout and revenue from multiple lease arrangements.
For the three months ended
For the three months ended
For the three months ended
Balance Sheet Updates
On
The Company had cash and cash equivalents and restricted cash of approximately
Conference Call
About
Non-GAAP Measures
The adjusted net loss and adjusted net loss per share presented in this press release are non-GAAP financial measures. The adjustments relate to amortization of intangible assets, change in fair value of contingent consideration, change in fair value of warrant liabilities, and for 2020, restructuring and other charges, and deemed dividend related to beneficial conversion feature of preferred stock. These financial measures are presented on a basis other than in accordance with
Forward-Looking Statements
This press release includes statements relating to the current market development and operational plans for the Senhance Surgical System, as well as 2021 first quarter results and plans for 2021. These statements and other statements regarding our future plans and goals constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties that are often difficult to predict, are beyond our control and which may cause results to differ materially from expectations and include whether we are able install 10-12 new Senhance Surgical Systems in 2021, whether we will file for FDA 510(k) clearance for the next generation ISU features in the second quarter of 2021, whether we will publish clinical papers in peer reviewed journals related to health economic evidence comparing Senhance, robotics and laparoscopy in General Surgery and Gynecology, whether we can manage our cash flow efficiently, whether we can manage the continuing impact of the COVID-19 pandemic on our business, whether we can meet the operational and regulatory goals we have set forth for 2021 and whether our cash on hand will be sufficient to meet our anticipated cash needs into 2024. For a discussion of the risks and uncertainties associated with
Consolidated Statements of Operations and Comprehensive Loss (in thousands except per share amounts) (Unaudited) |
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Three Months Ended |
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||||||
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2021 |
|
2020 |
||||
Revenue: |
|
|
||||||
Product |
$ |
1,704 |
|
$ |
242 |
|
||
Service |
|
379 |
|
|
358 |
|
||
Total revenue |
|
2,083 |
|
|
600 |
|
||
Cost of revenue: |
|
|
||||||
Product |
|
2,380 |
|
|
913 |
|
||
Service |
|
732 |
|
|
825 |
|
||
Total cost of revenue |
|
3,112 |
|
|
1,738 |
|
||
Gross loss |
|
(1,029 |
) |
|
(1,138 |
) |
||
Operating Expenses: |
|
|
||||||
Research and development |
|
4,215 |
|
|
3,934 |
|
||
Sales and marketing |
|
3,053 |
|
|
4,253 |
|
||
General and administrative |
|
3,992 |
|
|
3,349 |
|
||
Amortization of intangible assets |
|
2,867 |
|
|
2,564 |
|
||
Change in fair value of contingent consideration |
|
257 |
|
|
1,056 |
|
||
Restructuring and other charges |
|
— |
|
|
858 |
|
||
Total Operating Expenses |
|
14,384 |
|
|
16,014 |
|
||
Operating Loss |
|
(15,413 |
) |
|
(17,152 |
) |
||
Other Expense, net: |
|
|
||||||
Change in fair value of warrant liabilities |
|
(1,981 |
) |
|
(155 |
) |
||
Interest income |
|
52 |
|
|
27 |
|
||
Interest expense |
|
(7 |
) |
|
— |
|
||
Other expense, net |
|
(29 |
) |
|
(15 |
) |
||
Total Other Expense, net |
|
(1,965 |
) |
|
(143 |
) |
||
Loss before income taxes |
|
(17,378 |
) |
|
(17,295 |
) |
||
Income tax benefit |
|
38 |
|
|
697 |
|
||
Net loss |
|
(17,340 |
) |
|
(16,598 |
) |
||
Deemed dividend related to beneficial conversion feature of preferred stock |
|
— |
|
|
(412 |
) |
||
Net loss attributable to common stockholders |
|
(17,340 |
) |
|
(17,010 |
) |
||
Comprehensive loss: |
|
|
||||||
Net loss |
|
(17,340 |
) |
|
(16,598 |
) |
||
Foreign currency translation loss |
|
(1,938 |
) |
|
(872 |
) |
||
Comprehensive loss |
$ |
(19,278 |
) |
$ |
(17,470 |
) |
||
|
|
|
||||||
Net loss per common share attributable to common stockholders – basic and diluted |
$ |
(0.08 |
) |
$ |
(0.59 |
) |
||
|
|
|
||||||
Weighted average number of shares used in computing net loss per common share – basic and diluted |
|
204,992 |
|
|
28,906 |
|
Consolidated Balance Sheets (in thousands, except share amounts) (Unaudited) |
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2021 |
|
2020 |
||||
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|
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Assets |
|
|
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Current Assets: |
|
|
||||||
Cash and cash equivalents |
$ |
165,245 |
|
$ |
16,363 |
|
||
Accounts receivable, net |
|
2,306 |
|
|
1,115 |
|
||
Inventories |
|
11,181 |
|
|
10,034 |
|
||
Other current assets |
|
3,593 |
|
|
6,501 |
|
||
Total Current Assets |
|
182,325 |
|
|
34,013 |
|
||
Restricted cash |
|
1,149 |
|
|
1,166 |
|
||
Inventories, long-term |
|
7,656 |
|
|
8,813 |
|
||
Property and equipment, net |
|
9,179 |
|
|
10,342 |
|
||
Intellectual property, net |
|
18,591 |
|
|
22,267 |
|
||
Net deferred tax assets |
|
288 |
|
|
307 |
|
||
Operating lease right-of-use assets, net |
|
4,234 |
|
|
1,164 |
|
||
Other long term assets |
|
193 |
|
|
186 |
|
||
Total Assets |
$ |
223,615 |
|
$ |
78,258 |
|
||
Liabilities and Stockholders’ Equity |
|
|
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Current Liabilities: |
|
|
||||||
Accounts payable |
$ |
2,327 |
|
$ |
1,965 |
|
||
Accrued expenses |
|
3,830 |
|
|
6,301 |
|
||
Deferred revenue – current portion |
|
892 |
|
|
789 |
|
||
Notes payable – current portion, net of debt discount |
|
2,459 |
|
|
1,228 |
|
||
Total Current Liabilities |
|
9,508 |
|
|
10,283 |
|
||
Long Term Liabilities: |
|
|
||||||
Contingent consideration |
|
4,193 |
|
|
3,936 |
|
||
Notes payable – less current portion |
|
356 |
|
|
1,587 |
|
||
Warrant liabilities |
|
— |
|
|
255 |
|
||
Noncurrent operating lease liabilities |
|
3,640 |
|
|
628 |
|
||
Total Liabilities |
|
17,697 |
|
|
16,689 |
|
||
Commitments and Contingencies |
|
|
||||||
Stockholders’ Equity |
|
|
||||||
Common stock |
|
233 |
|
|
116 |
|
||
Preferred stock, |
|
— |
|
|
— |
|
||
Additional paid-in capital |
|
944,907 |
|
|
781,397 |
|
||
Accumulated deficit |
|
(740,252 |
) |
|
(722,912 |
) |
||
Accumulated other comprehensive income |
|
1,030 |
|
|
2,968 |
|
||
Total Stockholders’ Equity |
|
205,918 |
|
|
61,569 |
|
||
Total Liabilities and Stockholders’ Equity |
$ |
223,615 |
|
$ |
78,258 |
|
Consolidated Statements of Cash Flows (in thousands) (Unaudited) |
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Three Months Ended |
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2021 |
|
2020 |
||||
Operating Activities: |
|
|
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Net loss |
$ |
(17,340 |
) |
$ |
(16,598 |
) |
||
Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities: |
|
|
||||||
Depreciation |
|
802 |
|
|
570 |
|
||
Amortization of intangible assets |
|
2,867 |
|
|
2,564 |
|
||
Stock-based compensation |
|
1,786 |
|
|
1,923 |
|
||
Deferred tax benefit |
|
(38 |
) |
|
(697 |
) |
||
Write down of inventory |
|
122 |
|
|
— |
|
||
Change in fair value of warrant liabilities |
|
1,981 |
|
|
155 |
|
||
Change in fair value of contingent consideration |
|
257 |
|
|
1,056 |
|
||
Changes in operating assets and liabilities: |
|
|
||||||
Accounts receivable |
|
(1,608 |
) |
|
(340 |
) |
||
Inventories |
|
(162 |
) |
|
(1,603 |
) |
||
Other current and long term assets |
|
(21 |
) |
|
(76 |
) |
||
Accounts payable |
|
242 |
|
|
509 |
|
||
Accrued expenses |
|
(2,290 |
) |
|
(433 |
) |
||
Deferred revenue |
|
128 |
|
|
83 |
|
||
Noncurrent operating lease liabilities |
|
3,037 |
|
|
(130 |
) |
||
Net cash and cash equivalents used in operating activities |
|
(10,237 |
) |
|
(12,477 |
) |
||
Investing Activities: |
|
|
||||||
Purchase of property and equipment |
|
(395 |
) |
|
(2 |
) |
||
Net cash and cash equivalents (used in) provided by investing activities |
|
(395 |
) |
|
(2 |
) |
||
Financing Activities: |
|
|
||||||
Proceeds from issuance of common stock, preferred stock and warrants under 2020 financing, net of issuance costs |
|
— |
|
|
13,525 |
|
||
Proceeds from issuance of common stock, net of issuance costs |
|
129,322 |
|
|
11,212 |
|
||
Taxes paid related to net share settlement of vesting of restricted stock units |
|
(214 |
) |
|
(33 |
) |
||
Proceeds from exercise of stock options and warrants |
|
30,497 |
|
|
— |
|
||
Net cash and cash equivalents provided by (used in) financing activities |
|
159,605 |
|
|
24,704 |
|
||
Effect of exchange rate changes on cash and cash equivalents |
|
(108 |
) |
|
(51 |
) |
||
Net increase in cash, cash equivalents and restricted cash |
|
148,865 |
|
|
12,174 |
|
||
Cash, cash equivalents and restricted cash, beginning of period |
|
17,529 |
|
|
10,567 |
|
||
Cash, cash equivalents and restricted cash, end of period |
$ |
166,394 |
|
$ |
22,741 |
|
||
|
|
|
||||||
Supplemental Schedule of Non-cash Investing and Financing Activities |
|
|
||||||
Transfer of inventories to property and equipment |
$ |
— |
|
$ |
1,958 |
|
||
Acquisition of property and equipment in accounts payable |
$ |
191 |
|
$ |
— |
|
||
Reclass of warrant liability to common stock and additional paid-in-capital |
$ |
2,236 |
|
$ |
— |
|
||
Lease liabilities arising from obtaining right-of-use assets |
$ |
3,427 |
|
$ |
— |
|
||
Exchange of common stock for Series B Warrants |
$ |
— |
|
$ |
2,470 |
|
||
Transfer of in-process research and development to intellectual property |
$ |
— |
|
$ |
2,425 |
|
||
Conversion of preferred stock to common stock |
$ |
— |
$ |
30 |
|
||||||||
Reconciliation of Non-GAAP Measures |
||||||||
Adjusted Net Loss and Net Loss per Share |
||||||||
(in thousands except per share amounts) |
||||||||
(Unaudited) |
||||||||
Three Months Ended |
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|
||||||||
2021 |
|
2020 |
||||||
|
|
|
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Net loss attributable to common stockholders (GAAP) |
$ |
(17,340 |
) |
|
$ |
(17,010 |
) |
|
|
|
|
||||||
Adjustments |
|
|
|
|||||
Amortization of intangible assets |
|
2,867 |
|
|
|
2,564 |
|
|
Change in fair value of contingent consideration |
|
257 |
|
|
|
1,056 |
|
|
Change in fair value of warrant liabilities |
|
1,981 |
|
|
|
155 |
|
|
Restructuring and other charges |
|
— |
|
|
|
858 |
|
|
Deemed dividend related to beneficial conversion feature of preferred stock |
|
— |
|
|
|
412 |
|
|
Adjusted net loss attributable to common stockholders (Non-GAAP) |
$ |
(12,235 |
) |
|
$ |
(11,965 |
) |
|
|
|
|
||||||
Three Months Ended |
||||||||
|
||||||||
2021 |
|
2020 |
||||||
Net loss per share attributable to common stockholders (GAAP) |
$ |
(0.08 |
) |
|
$ |
(0.59 |
) |
|
|
|
|
||||||
Adjustments |
|
|
|
|||||
Amortization of intangible assets |
|
0.01 |
|
|
|
0.09 |
|
|
Change in fair value of contingent consideration |
|
0.00 |
|
|
|
0.04 |
|
|
Change in fair value of warrant liabilities |
|
0.01 |
|
|
|
0.01 |
|
|
Restructuring and other charges |
|
— |
|
|
|
0.03 |
|
|
Deemed dividend related to beneficial conversion feature of preferred stock |
|
— |
|
|
|
0.01 |
|
|
Adjusted net loss per share attributable to common stockholders (Non-GAAP) |
$ |
(0.06 |
) |
|
$ |
(0.41 |
) |
The non-GAAP financial measures for the three months ended
a) Intangible assets that are amortized consist of developed technology and purchased patent rights recorded at cost and amortized over 5 to 10 years.
b) Contingent consideration in connection with the acquisition of the Senhance System in 2015 is recorded as a liability and is the estimate of the fair value of potential milestone payments related to business acquisitions. Contingent consideration is measured at fair value using a discounted cash flow model utilizing significant unobservable inputs including the probability of achieving each of the potential milestones and an estimated discount rate associated with the risks of the expected cash flows attributable to the various milestones. Significant increases or decreases in any of the probabilities of success or changes in expected timelines for achievement of any of these milestones would result in a significantly higher or lower fair value of these milestones, respectively, and commensurate changes to the associated liability. The contingent consideration is revalued at each reporting period and changes in fair value are recognized in the consolidated statements of operations and comprehensive loss.
c) The Company’s Series B Warrants are measured at fair value using a simulation model which takes into account, as of the valuation date, factors including the current exercise price, the expected life of the warrant, the current price of the underlying stock, its expected volatility, holding cost and the risk-free interest rate for the term of the warrant. The warrant liability is revalued at each reporting period or upon exercise and changes in fair value are recognized in the consolidated statements of operations and comprehensive loss.
d) Beginning in the fourth quarter of 2019 and continuing into the first quarter of 2020, we implemented a restructuring plan to reduce operating expenses as we continue the global market development of the Senhance platform. During the first quarter of 2020 our continued restructuring efforts resulted in
e) During the first quarter of 2020, the Company closed an underwritten public offering under which it issued, as part of units and the exercise of an over-allotment option, 25,367,646 Series C Warrants, each to acquire one share of Common Stock at an exercise price of
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INVESTOR CONTACT:
invest@asensus.com
or
MEDIA CONTACT:
CG Life
kschaeffer@cglife.com
Source: