TransEnterix, Inc. (NYSE American: TRXC), a medical device
company that is digitizing the interface between the surgeon and
the patient to improve minimally invasive surgery, today announced
its operating and financial results for the second quarter of
2020.
Recent Highlights
- Submitted CE Mark application for the initial Intelligent
Surgical Unit in the second quarter and expect approval by the end
of 2020
- Filed FDA 510(k) submission for general surgery indication in
the third quarter
- Reduced operating expenses sequentially over the first quarter
of 2020 as a result of cost saving initiatives
- Raised approximately $15.0 million in gross proceeds in an
underwritten public offering in July of 2020
- The Company now expects to have cash to support its operations
into the second quarter of 2021
- Year-to-date, six clinical programs initiated with two
additional systems pending installation
“Despite operating in a challenging environment throughout the
second quarter, we made significant progress towards our goals for
the year, which include increasing system installations, increasing
procedure volumes globally, and continuing to gain regulatory
approvals for new technologies and expanding indications for use
for the Senhance,” said Anthony Fernando, President, and CEO of
TransEnterix. “Leveraging the momentum we generated in the first
quarter, we were able to sign two new system leases in the quarter
while at the same time maintaining the quality of our pipeline.
Additionally, we made progress against our portfolio expansion and
clinical validation efforts. While procedure volumes were down in
the quarter, we saw a strong rebound from April to June which has
continued into July. We continue to believe we are well-positioned
to deliver on our strategy and bring transformative technology to
surgeons, hospitals, and patients globally.”
Commercial and Clinical Update
During the quarter, two Senhance systems were installed, one in
the U.S. and one in Europe.
Subsequent to the end of the second quarter, one additional
system has been installed in Europe.
Year to date in 2020, the Company has installed six Senhance
systems globally and has two systems pending installation.
In late July, the Company filed its 510(k) submission with the
FDA for a general surgery indication expansion, as announced on
August 4, 2020.
Underwritten Public Offering
On July 6, 2020, the Company announced the closing of an
underwritten public offering, raising gross proceeds of
approximately $15.0 million, which included the full exercise of
the underwriter’s over-allotment option to purchase additional
shares.
Second Quarter Financial Results
For the three months ended June 30, 2020, the Company reported
revenue of $0.7 million as compared to revenue of $3.6 million in
the three months ended June 30, 2019. Revenue in the second quarter
of 2020 included no system sales, $0.3 million in system leasing
and instruments and accessories, and $0.3 million in services.
For the three months ended June 30, 2020, total operating
expenses were $13.6 million, as compared to $22.2 million in the
three months ended June 30, 2019.
For the three months ended June 30, 2020, net loss attributable
to common stockholders was $14.1 million, or $0.27 per share, as
compared to a net loss of $20.2 million, or $1.21 per share, in the
three months ended June 30, 2019.
For the three months ended June 30, 2020, the adjusted net loss
attributable to common stockholders was $10.9 million, or $0.21 per
share, as compared to an adjusted net loss of $19.2 million, or
$1.15 per share in the three months ended June 30, 2019, after
adjusting for the following items: change in fair value of warrant
liabilities, amortization of intangible assets, change in fair
value of contingent consideration, and deemed dividend related to
the conversion of preferred stock into common stock. Adjusted net
loss attributable to common stockholders is a non-GAAP financial
measure. See the reconciliation from GAAP to Non-GAAP Measures
below.
The Company had cash and cash equivalents and restricted cash of
approximately $16.2 million as of June 30, 2020.
As a result of restructuring, cost optimization efforts and
recent equity financing, together with anticipated cash received
from product and instrument sales and leases, we believe that
current cash on hand will be sufficient to meet our anticipated
cash needs into the second quarter of 2021.
Business Outlook
Given the continued uncertainty that exists within the global
healthcare market, we cannot currently predict the specific extent
or duration of the impact of the COVID-19 outbreak on our financial
and operating results. As a result, we are not providing forward
looking revenue guidance at this time.
Conference Call
TransEnterix, Inc. will host a conference call on Wednesday,
August 5, 2020, at 4:30 PM ET to discuss its second quarter 2020
operating and financial results. To listen to the conference call
on your telephone, please dial 1-855-327-6837 for domestic callers
and 1-631-891-4304 for international callers, and reference
conference ID 10010432 approximately ten minutes prior to the start
time. To access the live audio webcast or archived recording, use
the following link http://ir.transenterix.com/events.cfm. The
replay will be available on the Company’s website.
About TransEnterix
At TransEnterix, Inc., we are digitizing the interface between
the surgeon and the patient to improve minimally invasive surgery
(MIS) through a new category of care called Digital Laparoscopy.
Digitizing the interface enables the use of advanced capabilities
like augmented intelligence, connectivity and robotics in
laparoscopy, and allows us to address the current clinical,
cognitive and economic shortcomings in surgery. The system features
the first machine vision system for use in robotic surgery which is
powered by the new intelligent Surgical Unit (ISU) that enables
augmented intelligence in surgery. The Senhance®️ Surgical System
brings the benefits of Digital Laparoscopy to patients around the
world while staying true to the principles of value-based
healthcare. Learn more about Digital Laparoscopy with the Senhance
Surgical System here: https://Senhance.com/. Now available for sale
in the US, the EU, Japan, and select other countries. For a
complete list of indications for use, please visit:
https://www.transenterix.com/indications-for-use/.
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 the change in fair value of warrant
liabilities, amortization of intangible assets, change in fair
value of contingent consideration, restructuring and other charges,
acquisition-related costs, deemed dividend related to beneficial
conversion feature of the preferred stock, deemed dividend related
to the conversion of preferred stock into common stock and the loss
from sale of SurgiBot assets. These financial measures are
presented on a basis other than in accordance with U.S. generally
accepted accounting principles ("Non-GAAP Measures"). In the tables
that follow under "Reconciliation of Non-GAAP Measures,” we present
adjusted net loss and adjusted net loss per share, reconciled to
their comparable GAAP measures. These items are adjusted because
they are not operational or because these charges are non-cash or
non-recurring and management believes these adjustments are
meaningful to understanding the Company's performance during the
periods presented. These Non-GAAP Measures should be considered a
supplement to, not a substitute for, or superior to, the
corresponding financial measures calculated in accordance with
GAAP.
Forward-Looking Statements
This press release includes statements relating to the current
market development and operational plans for the Senhance System,
as well as 2020 second quarter financial results and plans for
2020. These statements and other statements regarding our future
plans and goals constitute "forward-looking statements" within the
meaning of 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 the extent of the impact of the COVID-19 pandemic on our
current and future results of operations, whether we will be
well-positioned to deliver on our strategy and bring transformative
technology to surgeons, hospitals and patients globally, whether we
have cash on hand sufficient, together with anticipated cash
received from product and instrument sales and leases, to meet our
anticipated cash needs into the second quarter of 2021 and whether
we can meet the operational goals we have set forth for 2020. For a
discussion of the risks and uncertainties associated with
TransEnterix's business, please review our filings with the
Securities and Exchange Commission (SEC), including our Annual
Report on Form 10-K for the year ended December 31, 2019, which we
filed on March 16, 2020 and our other SEC filings. You are
cautioned not to place undue reliance on these forward-looking
statements, which are based on our expectations as of the date of
this press release and speak only as of the origination date of
this press release. We undertake no obligation to publicly update
or revise any forward-looking statement, whether as a result of new
information, future events or otherwise.
TransEnterix, Inc.
Consolidated Statements of
Operations and Comprehensive Loss
(in thousands except per share
amounts)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2020
2019
2020
2019
Revenue:
Product
$
315
$
3,342
$
557
$
5,171
Service
340
297
698
649
Total revenue
655
3,639
1,255
5,820
Cost of revenue:
Product
720
2,956
1,633
4,229
Service
693
980
1,518
2,174
Total cost of revenue
1,413
3,936
3,151
6,403
Gross loss
(758
)
(297
)
(1,896
)
(583
)
Operating Expenses:
Research and development
4,257
6,295
8,191
11,950
Sales and marketing
2,901
7,868
7,154
15,542
General and administrative
3,619
4,489
6,968
9,049
Amortization of intangible assets
2,619
2,585
5,183
5,196
Change in fair value of contingent
consideration
212
960
1,268
1,958
Restructuring and other charges
—
—
858
—
Acquisition related costs
—
—
—
45
Loss from sale of SurgiBot assets, net
—
—
—
97
Total Operating Expenses
13,608
22,197
29,622
43,837
Operating Loss
(14,366
)
(22,494
)
(31,518
)
(44,420
)
Other Income (Expense):
Change in fair value of warrant
liabilities
(114
)
2,528
(269
)
2,422
Interest income
4
178
31
496
Interest expense
—
(1,061
)
—
(2,177
)
Other expense
(55
)
(191
)
(70
)
(496
)
Total Other Income (Expense), net
(165
)
1,454
(308
)
245
Loss before income taxes
(14,531
)
(21,040
)
(31,826
)
(44,175
)
Income tax benefit
691
869
1,388
1,479
Net loss
(13,840
)
(20,171
)
(30,438
)
(42,696
)
Deemed dividend related to beneficial
conversion feature of preferred stock
—
—
(412
)
—
Deemed dividend related to conversion of
preferred stock into common stock
(299
)
—
(299
)
—
Net loss attributable to common
stockholders
(14,139
)
(20,171
)
(31,149
)
(42,696
)
Comprehensive loss:
Net loss
(13,840
)
(20,171
)
(30,438
)
(42,696
)
Foreign currency translation gain
(loss)
962
1,240
90
(709
)
Comprehensive loss
$
(12,878
)
$
(18,931
)
$
(30,348
)
$
(43,405
)
Net loss per common share attributable to
common stockholders – basic
$
(0.27
)
$
(1.21
)
$
(0.77
)
$
(2.56
)
Net loss per common share attributable to
common stockholders – diluted
$
(0.27
)
$
(1.35
)
$
(0.77
)
$
(2.68
)
Weighted average number of shares used in
computing net loss per common share – basic
52,351
16,729
40,628
16,703
Weighted average number of shares used in
computing net loss per common share – diluted
52,351
16,814
40,628
16,814
TransEnterix, Inc.
Consolidated Balance
Sheets
(in thousands, except share
amounts)
June 30,
December 31,
2020
2019
(unaudited)
Assets
Current Assets:
Cash and cash equivalents
$
15,603
$
9,598
Accounts receivable, net
971
620
Inventories
10,857
10,653
Other current assets
6,881
7,084
Total Current Assets
34,312
27,955
Restricted cash
627
969
Inventories, net of current portion
6,334
7,594
Property and equipment, net
6,963
4,706
Intellectual property, net
25,802
28,596
In-process research and development
—
2,470
Net deferred tax assets
40
—
Other long term assets
1,896
2,489
Total Assets
$
75,974
$
74,779
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable
$
2,347
$
3,579
Accrued expenses
6,840
8,553
Deferred revenue – current portion
868
818
Contingent consideration – current
portion
—
73
Total Current Liabilities
10,055
13,023
Long Term Liabilities:
Deferred revenue – less current
portion
—
27
Contingent consideration – less current
portion
2,278
1,011
Notes payable - net of issuance costs
2,815
—
Warrant liabilities
187
2,388
Net deferred tax liabilities
—
1,392
Other long term liabilities
1,082
1,403
Total Liabilities
16,417
19,244
Commitments and Contingencies
Stockholders’ Equity
Common stock $0.001 par value, 750,000,000
shares authorized at June 30, 2020 and December 31, 2019;
56,902,140 and 20,691,301 shares issued and outstanding at June 30,
2020 and December 31, 2019, respectively
57
21
Preferred stock, $0.01 par value,
25,000,000 shares authorized, including 7,937,057 and 0 shares of
Series A Convertible Preferred Stock at June 30, 2020 and December
31, 2019, and 0 shares issued and outstanding at June 30, 2020 and
December 31, 2019
—
—
Additional paid-in capital
754,818
720,484
Accumulated deficit
(694,038
)
(663,600
)
Accumulated other comprehensive loss
(1,280
)
(1,370
)
Total Stockholders’ Equity
59,557
55,535
Total Liabilities and Stockholders’
Equity
$
75,974
$
74,779
TransEnterix, Inc.
Consolidated Statements of
Cash Flows
(in thousands)
(Unaudited)
Six Months Ended
June 30,
2020
2019
Operating Activities:
Net loss
$
(30,438
)
$
(42,696
)
Adjustments to reconcile net loss to net
cash and cash equivalents used in
operating activities:
Loss from sale of SurgiBot assets, net
—
97
Depreciation
1,162
1,126
Amortization of intangible assets
5,183
5,196
Amortization of debt discount and debt
issuance costs
—
622
Amortization of short-term investment
discount
—
(300
)
Stock-based compensation
3,856
6,336
Interest expense on deferred consideration
– MST acquisition
—
387
Deferred tax benefit
(1,388
)
(1,479
)
Write down of inventory
—
761
Change in fair value of warrant
liabilities
269
(2,422
)
Change in fair value of contingent
consideration
1,268
1,958
Changes in operating assets and
liabilities:
Accounts receivable
(350
)
2,808
Interest receivable
—
(4
)
Inventories
(2,332
)
(10,301
)
Other current and long term assets
827
(3,689
)
Accounts payable
(1,221
)
2,499
Accrued expenses
(1,736
)
(1,454
)
Deferred revenue
22
(862
)
Other long term liabilities
(258
)
1,879
Net cash and cash equivalents used in
operating activities
(25,136
)
(39,538
)
Investing Activities:
Purchase of short-term investments
—
(12,883
)
Proceeds from maturities of short-term
investments
—
55,000
Purchase of property and equipment
(3
)
(189
)
Net cash and cash equivalents (used in)
provided by investing activities
(3
)
41,928
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
11,212
—
Proceeds from notes payable, net of
issuance costs
2,815
(30
)
Taxes paid related to net share settlement
of vesting of restricted stock units
(33
)
(499
)
Payment of contingent consideration
(74
)
—
Proceeds from exercise of warrants
3,340
534
Net cash and cash equivalents provided by
(used in) financing activities
30,785
5
Effect of exchange rate changes on cash
and cash equivalents
17
(32
)
Net increase in cash, cash equivalents and
restricted cash
5,663
2,363
Cash, cash equivalents and restricted
cash, beginning of period
10,567
21,651
Cash, cash equivalents and restricted
cash, end of period
$
16,230
$
24,014
Supplemental Disclosure for Cash Flow
Information
Interest paid
$
—
$
1,528
Supplemental Schedule of Non-cash
Investing and Financing Activities
Transfer of inventories to property and
equipment
$
3,403
$
415
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
$
79
$
—
TransEnterix, Inc.
Reconciliation of Non-GAAP
Measures
Adjusted Net Loss and Net Loss
per Share
(in thousands except per share
amounts)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2020
2019
2020
2019
(Unaudited, U.S. Dollars, in
thousands)
Net loss attributable to common
stockholders (GAAP)
$
(14,139
)
$
(20,171
)
$
(31,149
)
$
(42,696
)
Adjustments
Loss from sale of SurgiBot assets, net
—
—
—
97
Amortization of intangible assets
2,619
2,585
5,183
5,196
Change in fair value of contingent
consideration
212
960
1,268
1,958
Acquisition related costs
—
—
—
45
Change in fair value of warrant
liabilities
114
(2,528
)
269
(2,422
)
Restructuring and other charges
—
—
858
—
Deemed dividend related to beneficial
conversion feature of preferred stock
—
—
412
—
Deemed dividend related to conversion of
preferred stock into common stock
299
—
299
—
Adjusted net loss attributable to
common stockholders (Non-GAAP)
$
(10,895
)
$
(19,154
)
$
(22,860
)
$
(37,822
)
Three Months Ended
Six Months Ended
June 30,
June 30,
(Unaudited, per basic share)
2020
2019
2020
2019
Net loss per share attributable to
common stockholders (GAAP)
$
(0.27
)
$
(1.21
)
$
(0.77
)
$
(2.56
)
Adjustments
Loss from sale of SurgiBot assets, net
—
—
—
0.01
Amortization of intangible assets
0.05
0.15
0.13
0.31
Change in fair value of contingent
consideration
0.00
0.07
0.03
0.13
Acquisition related costs
—
—
—
0.00
Change in fair value of warrant
liabilities
0.00
(0.15
)
0.01
(0.15
)
Restructuring and other charges
—
—
0.02
—
Deemed dividend related to beneficial
conversion feature of preferred stock
—
—
0.01
—
Deemed dividend related to conversion of
preferred stock into common stock
0.01
—
0.01
—
Adjusted net loss per share
attributable to common stockholders (Non-GAAP)
$
(0.21
)
$
(1.14
)
$
(0.56
)
$
(2.26
)
The non-GAAP financial measures for the three and six months
ended June 30, 2020 and 2019 provide management with additional
insight into the Company’s results of operations from period to
period without non-recurring and non-cash charges, and are
calculated using the following adjustments:
a) Loss from sale of SurgiBot assets relates to additional
outside service costs to transfer the assets in connection with the
sale of SurgiBot assets to Great Belief International Limited.
b) Intangible assets that are amortized consist of developed
technology and purchased patent rights recorded at cost and
amortized over 5 to 10 years.
c) 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.
d) Acquisition related costs were incurred in connection with
the MST purchase agreement and consist of legal, accounting, and
other costs.
e) 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.
f) During the fourth quarter of 2019, we announced the
implementation of a restructuring plan to reduce operating expenses
as we continue the global market development of the Senhance
platform. During March 2020, the Company continued the
restructuring efforts with additional headcount reductions which
resulted in $0.9 million related to severance costs in the six
months ended June 30, 2020.
g) 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 $0.68 per share, and 25,367,646 Series D
Warrants, each to acquire one share of Common Stock at an exercise
price of $0.68 per share. The Company concluded that the Series C
Warrants and Series D Warrants are considered equity instruments.
The fair value of the Series C and Series D Warrants on the
issuance date was determined using a Black-Scholes Merton model.
The unit proceeds were then allocated to the Series A preferred
stock, Series C Warrants, and Series D Warrants, respectively,
based on their relative fair values. As a result, the Company
determined that a beneficial conversion feature was created by the
difference between the effective conversion price of the preferred
stock of $0.37 and the fair value of the Company's common stock as
of the issuance date of $0.42. The Company therefore recorded a
beneficial conversion charge of $0.4 million as an immediate charge
to earnings available to common stockholders for the six months
ended June 30, 2020. Upon conversion of the preferred stock to
common stock during the three months ended June 30, 2020, an
additional deemed dividend of $0.3 million was recorded as an
immediate charge to earnings available to common stockholders for
the three and six months ended June 30, 2020.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200805005812/en/
Investors: Mark Klausner, 443-213-0501
invest@transenterix.com or Media: Terri Clevenger,
203-856-8297 terri.clevenger@icrinc.com
TransEnterix (AMEX:TRXC)
Historical Stock Chart
From Apr 2024 to May 2024
TransEnterix (AMEX:TRXC)
Historical Stock Chart
From May 2023 to May 2024