Press Release
Asensus Surgical, Inc. Reports Operating and Financial Results for the Second Quarter 2024
Recent Highlights
- Announced a definitive merger agreement (the “Merger Agreement”) with
KARL STORZ Endoscopy-America, Inc. ("KARL STORZ"), a wholly owned direct subsidiary ofKARL STORZ SE & Co. KG , an independent, family-owned global medical technology company. Under the Merger Agreement, KARL STORZ will acquire all of the outstanding shares ofAsensus Surgical for$0.35 per share in cash (the “Merger”) - Leading independent proxy advisory firms, ISS and Glass Lewis, recommend that stockholders vote FOR the merger proposal
- Second quarter revenue of
$2.2 million - The Company had cash and cash equivalents, excluding restricted cash, of approximately
$7.8 million atJune 30, 2024
"We're at a critical juncture for our company. After thoroughly exploring all reasonably available options, we believe the Merger proposal offers the best opportunity to maximize value for our stockholders in our current circumstances,” said
Company Urges Stockholder Participation in Critical Merger Vote as Extended Deadline Approaches
The Company’s Special Meeting of Stockholders regarding the merger proposal with KARL STORZ was recently adjourned to
If not approved, the Company will incur significant near-term financial obligations, including a repayment to KARL STORZ of their
The Board of Directors, after careful consideration, concluded that this merger proposal represents the best choice to maximize stockholder value. Leading independent proxy advisory firms, ISS and Glass Lewis, have also recommended that the merger proposal is in stockholders' best interests. If the Merger is not approved, we expect to seek bankruptcy protection in order to maximize the value of our assets as we seek an orderly liquidation of the company.
KARL STORZ's merger offer stands at
Stockholder participation in this vote is crucial. Abstaining or failing to vote is effectively the same as voting against the merger proposal, as approval is needed from a majority of outstanding shares, not just a majority of votes cast.
Any stockholder with questions about the Special Meeting or in need of assistance in voting their shares should contact the Company’s proxy solicitor:
Stockholders, banks and brokers may call toll free: (844) 858-7383
Outside the
Second Quarter Financial Results
For the three months ended
For the three months ended
For the three months ended
Adjusted net loss is a non-GAAP financial measure. See the reconciliation of GAAP to Non-GAAP Measures below. For the three months ended
Balance Sheet Updates
The Company had cash and cash equivalents, excluding restricted cash, of approximately
Conference Call
To listen to the conference call on your telephone, please dial 1-800-717-1738 for domestic callers and 1-646-307-1865 for international callers, approximately ten minutes prior to the start time. To access the live audio webcast or archived recording, use the following link https://ir.asensus.com/events-and-presentations. The replay will be available on the Company’s website.
About
Forward-Looking Statements
This press release includes statements relating to
Important Additional Information and Where to Find It
In connection with the Merger, the Company has filed with the
Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands, except per share amounts) (unaudited) |
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Three Months Ended | Six Months Ended | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Revenue: | |||||||||||||||
Product | $ | 1,396 | $ | 298 | $ | 1,709 | $ | 591 | |||||||
Service | 236 | 289 | 521 | 484 | |||||||||||
Lease | 575 | 494 | 1,100 | 982 | |||||||||||
Total revenue | 2,207 | 1,081 | 3,330 | 2,057 | |||||||||||
Cost of revenue: | |||||||||||||||
Product | 1,155 | 1,612 | 2,836 | 2,837 | |||||||||||
Service | 695 | 519 | 1,147 | 1,268 | |||||||||||
Lease | 809 | 943 | 1,732 | 1,916 | |||||||||||
Total cost of revenue | 2,659 | 3,074 | 5,715 | 6,021 | |||||||||||
Gross loss | (452 | ) | (1,993 | ) | (2,385 | ) | (3,964 | ) | |||||||
Operating expenses: | |||||||||||||||
Research and development | 7,631 | 8,980 | 15,722 | 19,119 | |||||||||||
Sales and marketing | 3,655 | 4,449 | 7,297 | 9,002 | |||||||||||
General and administrative | 5,994 | 5,124 | 10,368 | 10,592 | |||||||||||
Amortization of intangible assets | 110 | 114 | 224 | 226 | |||||||||||
Change in fair value of contingent consideration | 5,700 | 203 | 12,180 | 308 | |||||||||||
Total operating expenses | 23,090 | 18,870 | 45,791 | 39,247 | |||||||||||
Operating loss | (23,542 | ) | (20,863 | ) | (48,176 | ) | (43,211 | ) | |||||||
Change in fair value of warrant liabilities | (1,825 | ) | — | 291 | — | ||||||||||
Interest income | 66 | 431 | 192 | 870 | |||||||||||
Interest expense | (321 | ) | — | (321 | ) | — | |||||||||
Other expense, net | (52 | ) | (242 | ) | (111 | ) | (460 | ) | |||||||
Total other (expense) income, net | (2,132 | ) | 189 | 51 | 410 | ||||||||||
Loss before income taxes | (25,674 | ) | (20,674 | ) | (48,125 | ) | (42,801 | ) | |||||||
Income tax (expense) benefit | (75 | ) | 12 | (121 | ) | (79 | ) | ||||||||
Net loss | (25,749 | ) | (20,662 | ) | (48,246 | ) | (42,880 | ) | |||||||
Net loss per common share attributable to common stockholders – basic and diluted | $ | (0.09 | ) | $ | (0.09 | ) | $ | (0.18 | ) | $ | (0.18 | ) | |||
Weighted average number of shares used in computing net loss per common share – basic and diluted | 272,316 | 239,570 | 270,791 | 238,929 | |||||||||||
Comprehensive loss: | |||||||||||||||
Net loss | (25,749 | ) | (20,662 | ) | (48,246 | ) | (42,880 | ) | |||||||
Foreign currency translation (loss) gain | (174 | ) | 175 | (668 | ) | 725 | |||||||||
Unrealized gain on available-for-sale investments | 1 | 99 | 9 | 406 | |||||||||||
Comprehensive loss | $ | (25,922 | ) | $ | (20,388 | ) | $ | (48,905 | ) | $ | (41,749 | ) | |||
Condensed Consolidated Balance Sheets (in thousands, except for share data) (unaudited) |
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2024 | 2023 | ||||||
Assets | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 7,782 | $ | 17,096 | |||
Short-term investments, available-for-sale | — | 3,971 | |||||
Accounts receivable, net | 406 | 3,508 | |||||
Inventories | 7,160 | 7,172 | |||||
Prepaid expenses | 2,729 | 3,143 | |||||
Other current assets | 1,364 | 1,496 | |||||
Total Current Assets | 19,441 | 36,386 | |||||
Restricted cash |
1,517 | 1,642 | |||||
Inventories, net of current portion | 2,516 | 4,043 | |||||
Property and equipment, net | 8,034 | 8,959 | |||||
Intellectual property, net | 1,012 | 1,237 | |||||
Net deferred tax assets | 34 | 44 | |||||
Operating lease right-of-use assets, net | 4,688 | 5,165 | |||||
Other long-term assets | 1,260 | 1,610 | |||||
Total Assets | $ | 38,502 | $ | 59,086 | |||
Liabilities and Stockholders’ Equity | |||||||
Current Liabilities: | |||||||
Accounts payable | $ | 2,057 | $ | 4,145 | |||
Accrued employee compensation and benefits | 3,977 | 5,390 | |||||
Accrued expenses and other current liabilities | 2,611 | 1,636 | |||||
Contingent consideration, current | 14,400 | — | |||||
Operating lease liabilities, current | 1,070 | 1,036 | |||||
Deferred revenue | 496 | 421 | |||||
Notes payable | 15,309 | — | |||||
Total Current Liabilities | 39,920 | 12,628 | |||||
Long Term Liabilities: | |||||||
Deferred revenue – less current portion | 258 | 290 | |||||
Contingent consideration | — | 2,220 | |||||
Warrant liabilities | 5,597 | 5,888 | |||||
Noncurrent operating lease liabilities | 4,054 | 4,646 | |||||
Total Liabilities | 49,829 | 25,672 | |||||
Commitments and Contingencies | |||||||
Stockholders’ Equity | |||||||
Common stock 264,921,526 shares issued and outstanding at |
273 | 265 | |||||
Preferred stock, |
— | — | |||||
Additional paid-in capital | 977,285 | 973,129 | |||||
Accumulated deficit | (987,614 | ) | (939,368 | ) | |||
Accumulated other comprehensive loss | (1,271 | ) | (612 | ) | |||
Total Stockholders’ Equity | (11,327 | ) | 33,414 | ||||
Total Liabilities and Stockholders’ Equity | $ | 38,502 | $ | 59,086 |
Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) |
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Six Months Ended | |||||||
2024 | 2023 | ||||||
Operating Activities: | |||||||
Net loss | $ | (48,246 | ) | $ | (42,880 | ) | |
Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities: | |||||||
Depreciation | 1,682 | 1,652 | |||||
Amortization of intangible assets | 224 | 226 | |||||
Amortization (accretion) of discounts and premiums on investments, net | 979 | (298 | ) | ||||
Stock-based compensation | 3,273 | 3,894 | |||||
Deferred tax expense | — | 79 | |||||
Bad debt expense | 5 | — | |||||
Change in inventory reserves | 1,011 | 459 | |||||
Change in fair value of warrant liabilities | (291 | ) | — | ||||
Change in fair value of contingent consideration | 12,180 | 308 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 3,008 | 1,614 | |||||
Inventories | (646 | ) | (1,240 | ) | |||
Operating lease right-of-use assets | 387 | 40 | |||||
Prepaid expenses | 391 | 409 | |||||
Other current and long-term assets | 350 | 340 | |||||
Accounts payable | (2,040 | ) | 961 | ||||
Accrued employee compensation and benefits | (1,319 | ) | (577 | ) | |||
Accrued expenses and other current liabilities | 912 | (55 | ) | ||||
Deferred revenue | 62 | (94 | ) | ||||
Interest payable | 309 | — | |||||
Operating lease liabilities | (459 | ) | (42 | ) | |||
Net cash and cash equivalents used in operating activities | (28,228 | ) | (35,204 | ) | |||
Investing Activities: | |||||||
Purchase of available-for-sale investments | — | (12,268 | ) | ||||
Proceeds from maturities of available-for-sale investments | 3,000 | 48,735 | |||||
Purchase of property and equipment | (111 | ) | (166 | ) | |||
Net cash and cash equivalents provided by investing activities | 2,889 | 36,301 | |||||
Financing Activities: | |||||||
Proceeds from notes payable | 15,000 | — | |||||
Proceeds from issuance of common stock, net of issuance costs | 982 | 196 | |||||
Taxes paid related to net share settlement of vesting of restricted stock units | (176 | ) | (490 | ) | |||
Proceeds from refund of non-redeemed shares of non-accredited investors | 85 | — | |||||
Proceeds from exercise of stock options | — | 5 | |||||
Net cash and cash equivalents provided by (used in) financing activities | 15,891 | (289 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | 9 | 751 | |||||
Net (decrease) increase in cash, cash equivalents and restricted cash | (9,439 | ) | 1,559 | ||||
Cash, cash equivalents and restricted cash, beginning of period | 18,738 | 7,470 | |||||
Cash, cash equivalents and restricted cash, end of period | $ | 9,299 | $ | 9,029 | |||
Supplemental Disclosure for Cash Flow Information: | |||||||
Cash paid for leases | $ | 804 | $ | 655 | |||
Cash paid for taxes | $ | 142 | $ | 262 | |||
Supplemental Schedule of Non-cash Investing and Financing Activities: | |||||||
Transfer of inventories to property and equipment | $ | 857 | $ | 802 | |||
Lease liabilities arising from obtaining right-of-use assets | $ | 112 | $ | 417 |
Reconciliation of GAAP to Non-GAAP Financial Measures (in thousands, except per share amounts) (unaudited) |
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Three Months Ended | Six Months Ended | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Net loss attributable to common stockholders (GAAP) | $ | (25,749 | ) | $ | (20,662 | ) | $ | (48,246 | ) | $ | (42,880 | ) | |||
Adjustments | |||||||||||||||
Amortization of intangible assets (a) | 110 | 114 | 224 | 226 | |||||||||||
Change in fair value of contingent consideration (b) |
5,700 | 203 | 12,180 | 308 | |||||||||||
Change in fair value of warrant liabilities (c) | 1,825 | — | (291 | ) | — | ||||||||||
Adjusted net loss attributable to common stockholders (Non-GAAP) | $ | (18,114 | ) | $ | (20,345 | ) | $ | (36,133 | ) | $ | (42,346 | ) | |||
Three Months Ended | Six Months Ended | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Net loss per share attributable to common stockholders - basic and diluted (GAAP) | $ | (0.09 | ) | $ | (0.09 | ) | $ | (0.18 | ) | $ | (0.18 | ) | |||
Adjustments | |||||||||||||||
Amortization of intangible assets (a) | — | — | — | — | |||||||||||
Change in fair value of contingent consideration (b) | 0.02 | — | 0.04 | — | |||||||||||
Change in fair value of warrant liabilities (c) | — | — | — | — | |||||||||||
Adjusted net loss per share attributable to common stockholders – basic and diluted (Non-GAAP) |
$ | (0.07 | ) | $ | (0.09 | ) | $ | (0.14 | ) | $ | (0.18 | ) | |||
The non-GAAP financial measures for the three and six months ended
a) Intangible assets that are amortized consist of developed technology and purchased patent rights recorded at cost and amortized over 7 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 probability of occurrence related to the Merger Agreement with
c) The Company recorded warrant liabilities related to common stock warrants issued in the registered direct offering in
Warrant liabilities were recorded at their initial estimated fair value. Adjustments associated with changes in fair value of the warrant liabilities are included in the Company’s consolidated statements of operations and comprehensive loss.
INVESTOR CONTACT:
ICR Westwicke
invest@asensus.com
443-213-0499
MEDIA CONTACT:
AsensusPR@matternow.com
617-874-5488
Source: Asensus Surgical, Inc.