Asensus Surgical, Inc. (NYSE American: ASXC), a medical device
company that is digitizing the interface between the surgeon and
the patient to pioneer a new era of Performance-Guided Surgery™,
today announced its 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 Anthony Fernando, President
and CEO of Asensus Surgical. “We submitted for 510(k) clearance for
articulating instruments, received FDA clearance for general
surgery, saw strong procedure volume trends including the
utilization of the ISU, announced a new training center in the EU,
raised significant funds, finalized our name change and rebranding,
and, subsequent to the quarter end, signed two Senhance system
lease agreements. Our ability to deliver results while also
advancing our technology pipeline during these times is proof to
the capabilities and broad applicability of Senhance.”
Name Change and Rebranding
On February 23, 2021, the Company announced that it changed its
corporate name to Asensus Surgical, Inc. The name change reflects
the company's broader vision of shaping the future of surgery by
integrating computer vision and machine learning with surgical
robotics. Effective March 5, 2021, the company’s ticker symbol was
changed to ASXC.
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 Europe, and expects both of these new programs to
be initiated in the second quarter. In addition, a hospital in Asia
purchased a previously leased Senhance system at the end of the
lease term.
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 January 19, 2021, the Company announced it received CE Mark
approval for the ISU that enables machine vision capabilities on
the Senhance Surgical System. This approval will provide Senhance
digital laparoscopic programs in Europe access to this new
technology, ushering them to the forefront of surgical innovation
utilizing augmented intelligence.
On February 18, 2021, the Company agreed to team with the
Amsterdam Skills Centre (ASC) in the Netherlands for surgical
training. This site will serve surgeons and staff throughout Europe
with basic and advanced training on the Senhance Surgical System.
The ASC will also provide Asensus Surgical with a world-class
facility to engage European surgeons in technology and clinical
development studies.
On March 3, 2021, the Company announced it received an
additional FDA clearance for the Senhance Surgical System which
allows for indication expansion in general surgery in the United
States.
On April 15, 2021, the first milestone study comparing health
economic outcomes of the Senhance System versus another robotic
system, as well as traditional laparoscopy was published in The
International Journal of Medical Robotics and Computer Assisted
Surgery in April. According to the study, Senhance was less than
half the cost of procedures performed on another robotic platform
and was comparable to traditional laparoscopically assisted vaginal
hysterectomy costs for certain gynecologic procedures. The study
also found that case times for Senhance and other robotic systems
were similar.
In May 2021, the Company submitted for FDA 510(k) clearance of
articulating instruments for the Senhance Surgical System
technology platform.
First Quarter Financial Results
For the three months ended March 31, 2021, the Company reported
revenue of $2.1 million as compared to revenue of $0.6 million in
the three months ended March 31, 2020. Revenue in the first quarter
of 2021 included $1.3 million in Senhance system revenue, $0.4
million in instruments and accessories, and $0.4 million in
services.
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 March 31, 2021, total net operating
expenses were $14.4 million, as compared to $16.0 million in the
three months ended March 31, 2020.
For the three months ended March 31, 2021, net loss was $17.3
million, or $0.08 per share, as compared to a net loss of $17.0
million, or $0.59 per share, in the three months ended March 31,
2020.
For the three months ended March 31, 2021, the adjusted net loss
was $12.2 million, or $0.06 per share, as compared to an adjusted
net loss of $12.0 million, or $0.41 per share in the three months
ended March 31, 2020, after adjusting for the following charges:
amortization of intangible assets, change in fair value of
contingent consideration, change in fair value of warrant
liabilities, restructuring and other charges, and deemed dividend
related to beneficial conversion feature of preferred stock, all of
which are non-cash charges. Adjusted net loss is a non-GAAP
financial measure. See the reconciliation from GAAP to Non-GAAP
Measures below.
Balance Sheet Updates
On January 14 and February 1, 2021, the Company closed two
separate equity financings respectively, totaling approximately
$111 million in gross proceeds in aggregate, which, along with
other capital obtained from warrant exercises and an ATM offering,
is expected to extend the cash runway into 2024.
The Company had cash and cash equivalents and restricted cash of
approximately $166.4 million as of March 31, 2021.
Conference Call
Asensus Surgical, Inc. will host a conference call on Tuesday,
May 11, 2021, at 4:30 PM ET to discuss its first quarter 2021
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 10014229 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 Asensus Surgical, Inc.
Asensus Surgical, Inc. is digitizing the interface between the
surgeon and patient to pioneer a new era of Performance-Guided
Surgery by unlocking clinical intelligence for surgeons to enable
consistently superior outcomes and a new standard of surgery. This
builds upon the foundation of Digital Laparoscopy with the Senhance
Surgical System powered by the Intelligent Surgical Unit™ (ISU™) to
increase surgeon control and reduce surgical variability. With the
addition of machine vision, augmented intelligence, and deep
learning capabilities throughout the surgical experience, we intend
to holistically address the current clinical, cognitive and
economic shortcomings that drive surgical outcomes and value-based
healthcare. Learn more about Performance-Guided Surgery and Digital
Laparoscopy with the Senhance Surgical System here:
www.senhance.com. Now available for sale in the US, EU, Japan,
Russia, and select other countries. For a complete list of
indications for use, visit: www.senhance.com/indications. For more
information, visit www.asensus.com.
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 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 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 Asensus Surgical'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, 2020, which we filed with the SEC on March 11, 2021.
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.
Asensus Surgical, Inc.
Consolidated Statements of
Operations and Comprehensive Loss
(in thousands except per share
amounts)
(Unaudited)
Three Months Ended
March 31,
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
Asensus Surgical, Inc.
Consolidated Balance
Sheets
(in thousands, except share
amounts)
(Unaudited)
March 31,
December 31,
2021
2020
Assets
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
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 $0.001 par value, 750,000,000
shares authorized at March 31, 2021 and December 31, 2020;
232,716,797 and 116,231,072 shares issued and outstanding at March
31, 2021 and December 31, 2020, respectively
233
116
Preferred stock, $0.01 par value,
25,000,000 shares authorized, no shares issued and outstanding at
March 31, 2021 and December 31, 2020, respectively
—
—
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
Asensus Surgical, Inc.
Consolidated Statements of
Cash Flows
(in thousands)
(Unaudited)
Three Months Ended
March 31,
2021
2020
Operating Activities:
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
Asensus Surgical, Inc.
Reconciliation of Non-GAAP
Measures
Adjusted Net Loss and Net Loss
per Share
(in thousands except per share
amounts)
(Unaudited)
Three Months Ended
March 31,
2021
2020
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
March 31,
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 March
31, 2021 and 2020 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) 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 $0.9 million
in severance costs due to headcount reduction.
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 $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 three months
ended March 31, 2020.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210511006042/en/
INVESTOR CONTACT: Mark Klausner or Mike Vallie,
443-213-0499 invest@asensus.com or MEDIA CONTACT: Kristin
Schaeffer CG Life kschaeffer@cglife.com
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