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 second
quarter 2021.
Recent Highlights
- Signed two lease agreements with hospitals to install Senhance®
Surgical Systems
- Over 1,000 global procedures performed using Senhance during
the first half of 2021, the highest first half performance
achieved
- Over 150 procedures have been performed utilizing the
Intelligent Surgical Unit™ (ISU™)
- Published multiple clinical papers, including results from the
first milestone study comparing health economic outcomes versus
another robotic system as well as traditional laparoscopy
- Submitted FDA 510(k) and received clearance for 5 mm
articulating instruments
- Made FDA 510(k) submission for expanded capabilities of the
ISU
- Appointed two new board members: Dr. Elizabeth Kwo and Kevin
Hobert
“During the quarter, we continued to drive strong adoption and
utilization trends while making progress towards our strategic
focus areas, including the expansion of clinical evidence, growth
of our installed base, increased procedure volumes, the expansion
of our portfolio and the continued technological development of
Senhance. Importantly, I am encouraged by our procedure volumes in
the United States which point to both a macro recovery in the
business and an acceleration in adoption by surgeons,” said Anthony
Fernando, President and CEO of Asensus Surgical. “Looking ahead, we
plan to leverage this momentum, in conjunction with the progress
made towards the ongoing development of Senhance, to drive
increased global adoption.”
Commercial and Clinical Update
Thus far in 2021, the Company has signed agreements with two
hospitals in Europe, both of which were previously announced.
Inselspital, University Hospital Bern, Switzerland has entered into
an agreement to lease a Senhance Surgical System and has initiated
its clinical program. LAKUMED hospitals has entered into an
agreement to lease and utilize a Senhance Surgical System. The
system will be utilized at the Landshut-Achdorf hospital, just
outside of Munich, Germany and is anticipated to begin its clinical
program shortly.
During the second quarter of 2021, procedure volumes increased
by over 175% over the prior year quarter, with growth across all
geographies. For the second quarter in a row, over 500 procedures
were completed, bringing total procedures completed during the
first half of 2021 to over 1,000. To date, over 5,000 procedures
have been performed globally.
Over 150 procedures have been performed utilizing the ISU on
Senhance Systems. Feedback from initial pilot sites has been
positive and the Company anticipates installing additional ISU
units over the balance of the year.
A study was published in The International Journal of Medical
Robotics and Computer Assisted Surgery comparing health economic
outcomes of the Senhance System versus another robotic system, as
well as traditional laparoscopy
(https://pubmed.ncbi.nlm.nih.gov/33860631/). According to the
study, Senhance was less than half the cost of procedures performed
on another robotic platform and was comparable to the cost of
traditional laparoscopically assisted vaginal hysterectomy. The
study also found that case times for Senhance and the other robotic
system were similar.
The Company previously submitted a 510(k) to the FDA for 5 mm
articulating instruments to be utilized on the Senhance Surgical
System technology platform. On July 28, 2021, the Company announced
that it had received 510(k) clearance for these instruments, which
offer better access to difficult-to-reach areas of the anatomy by
providing two additional degrees of freedom.
On July 14, 2021, the Company submitted an FDA 510(k) for an
expansion of capabilities on the ISU. The current features of the
ISU enable machine vision driven control of the camera for a
surgeon by responding to commands and recognizing certain objects
and locations in the surgical field and allow a surgeon to change
the field of view using instruments. The new features would expand
the ISU’s augmented intelligence capabilities to include more
advanced features to gather real time data during surgery based on
the anatomical structures in the surgical field.
Second Quarter Financial Results
For the three months ended June 30, 2021, the Company reported
revenue of $1.1 million as compared to revenue of $0.7 million in
the three months ended June 30, 2020. Revenue in the second quarter
of 2021 included $0.4 million in Senhance system revenue, $0.3
million in instruments and accessories, and $0.4 million in
services.
For the three months ended June 30, 2021, total net operating
expenses were $14.8 million, as compared to $13.6 million in the
three months ended June 30, 2020.
For the three months ended June 30, 2021, net loss was $13.2
million, or $0.06 per common share, as compared to a net loss of
$14.1 million, or $0.27 per common share, in the three months ended
June 30, 2020.
For the three months ended June 30, 2021, the adjusted net loss
was $12.7 million, or $0.05 per common share, as compared to an
adjusted net loss of $10.9 million, or $0.21 per common share in
the three months ended June 30, 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, gain on extinguishment of debt, 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
The Company had cash and cash equivalents and restricted cash of
approximately $158.1 million as of June 30, 2021.
Board of Directors Expansion and New Board Member
Appointments
On July 26, 2021, the Company announced the expansion of its
Board of Directors, and the appointment of two new board members,
Dr. Elizabeth Kwo, and Kevin Hobert. In addition to bringing the
Payor and Provider perspectives to the Board, these new Directors
bring predictive analytics, big data, and digital imaging
experience, which are valuable skills that will help realize the
vision of Performance-Guided Surgery. Subsequent to these
additions, the Company has nine members of its Board of
Directors.
Upcoming 2021 Milestones
For the full year 2021, the Company continues to expect to
install 10 - 12 new Senhance Surgical Systems.
During the second half of 2021, the Company expects to publish
multiple clinical papers in peer reviewed journals highlighting
health economic evidence comparing Senhance, robotics and
laparoscopy in General Surgery and Gynecology across multiple
procedures, specialties and hospitals.
Conference Call
Asensus Surgical, Inc. will host a conference call on Thursday,
August 5, 2021, at 4:30 PM ET to discuss its second quarter 2021
operating and financial results. To listen to the conference call
on your telephone, please dial 1-800-736-4610 for domestic callers
and 1-212-231-2910 for international callers, and reference
conference ID 21995990 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, gain on extinguishment of debt, and for 2020,
restructuring and other charges, and deemed dividend relating to
conversion of preferred stock into common 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 second 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 increased
procedure volumes in the United States, along with leveraging our
current momentum, in conjunction with the progress towards the
ongoing development of Senhance, will drive increased global
adoption of the Senhance Surgical System, whether we will install
additional ISU units over the balance of 2021, whether we are able
install 10-12 new Senhance Surgical Systems for the full year 2021,
whether we can manage the continuing impact of the COVID-19
pandemic on our business and whether during the second half of
2021, we will publish multiple clinical papers in peer reviewed
journals highlighting health economic evidence comparing Senhance,
robotics and General Surgery and Gynecology across multiple
procedures, specialties and hospitals. 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.
Condensed Consolidated
Statements of Operations and Comprehensive Loss
(in thousands except per share
amounts)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2021
2020
2021
2020
Revenue:
Product
$
696
$
315
$
2,400
$
557
Service
406
340
785
698
Total revenue
1,102
655
3,185
1,255
Cost of revenue:
Product
1,478
720
3,858
1,633
Service
869
693
1,601
1,518
Total cost of revenue
2,347
1,413
5,459
3,151
Gross loss
(1,245
)
(758
)
(2,274
)
(1,896
)
Operating Expenses:
Research and development
4,089
4,257
8,304
8,191
Sales and marketing
3,562
2,901
6,615
7,154
General and administrative
3,848
3,619
7,840
6,968
Amortization of intangible assets
2,862
2,619
5,729
5,183
Change in fair value of contingent
consideration
478
212
735
1,268
Restructuring and other charges
—
—
—
858
Total Operating Expenses
14,839
13,608
29,223
29,622
Operating Loss
(16,084
)
(14,366
)
(31,497
)
(31,518
)
Other Income (Expense):
Gain on extinguishment of debt
2,847
—
2,847
—
Change in fair value of warrant
liabilities
—
(114
)
(1,981
)
(269
)
Interest income
79
4
131
31
Interest expense
(5
)
—
(12
)
—
Other expense, net
(7
)
(55
)
(36
)
(70
)
Total Other Income (Expense), net
2,914
(165
)
949
(308
)
Loss before income taxes
(13,170
)
(14,531
)
(30,548
)
(31,826
)
Income tax (expense) benefit
(2
)
691
36
1,388
Net loss
(13,172
)
(13,840
)
(30,512
)
(30,438
)
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
(13,172
)
(14,139
)
(30,512
)
(31,149
)
Comprehensive loss:
Net loss
(13,172
)
(13,840
)
(30,512
)
(30,438
)
Foreign currency translation gain
(loss)
472
962
(1,466
)
90
Comprehensive loss
$
(12,700
)
$
(12,878
)
$
(31,978
)
$
(30,348
)
Net loss per common share attributable to
common stockholders – basic and diluted
$
(0.06
)
$
(0.27
)
$
(0.14
)
$
(0.77
)
Weighted average number of shares used in
computing net loss per common share – basic and diluted
233,250
52,351
219,199
40,628
Asensus Surgical, Inc.
Condensed Consolidated Balance
Sheets
(in thousands, except share
amounts)
(Unaudited)
June 30,
December 31,
2021
2020
Assets
Current Assets:
Cash and cash equivalents
$
157,078
$
16,363
Accounts receivable, net
960
1,115
Inventories
12,523
10,034
Other current assets
3,446
6,501
Total Current Assets
174,007
34,013
Restricted cash
1,045
1,166
Inventories, net of current portion
6,590
8,813
Property and equipment, net
9,876
10,342
Intellectual property, net
15,943
22,267
Net deferred tax assets
288
307
Operating lease right-of-use assets,
net
4,099
1,164
Other long term assets
156
186
Total Assets
$
212,004
$
78,258
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable
$
2,653
$
1,965
Accrued expenses
4,007
5,615
Operating lease liabilities – current
portion
861
686
Deferred revenue
786
789
Notes payable – current portion, net of
debt discount
—
1,228
Total Current Liabilities
8,307
10,283
Long Term Liabilities:
Contingent consideration
4,671
3,936
Noncurrent operating lease liabilities
3,465
628
Notes payable, less current portion
—
1,587
Warrant liabilities
—
255
Total Liabilities
16,443
16,689
Commitments and Contingencies
Stockholders’ Equity
Common stock $0.001 par value, 750,000,000
shares authorized at June 30, 2021 and December 31, 2020;
234,231,132 and 116,231,072 shares issued and outstanding at June
30, 2021 and December 31, 2020, respectively
234
116
Preferred stock, $0.01 par value,
25,000,000 shares authorized, no shares issued and outstanding at
June 30, 2021 and December 31, 2020, respectively
—
—
Additional paid-in capital
947,249
781,397
Accumulated deficit
(753,424
)
(722,912
)
Accumulated other comprehensive income
1,502
2,968
Total Stockholders’ Equity
195,561
61,569
Total Liabilities and Stockholders’
Equity
$
212,004
$
78,258
Asensus Surgical, Inc.
Condensed Consolidated
Statements of Cash Flows
(in thousands)
(Unaudited)
Six Months Ended
June 30,
2021
2020
Operating Activities:
Net loss
$
(30,512
)
$
(30,438
)
Adjustments to reconcile net loss to net
cash and cash equivalents used in operating activities:
Depreciation
1,585
1,162
Amortization of intangible assets
5,729
5,183
Stock-based compensation
3,628
3,856
Gain on extinguishment of debt
(2,847
)
—
Deferred tax benefit
(36
)
(1,388
)
Write down of inventory
288
—
Change in fair value of warrant
liabilities
1,981
269
Change in fair value of contingent
consideration
735
1,268
Changes in operating assets and
liabilities:
Accounts receivable
127
(350
)
Inventories
(1,687
)
(2,332
)
Operating lease right-of-use assets
(2,970
)
546
Other current and long term assets
3,177
281
Accounts payable
679
(1,221
)
Accrued expenses
(1,428
)
(1,451
)
Deferred revenue
14
22
Operating lease liabilities
3,052
(608
)
Other long term liabilities
—
65
Net cash and cash equivalents used in
operating activities
(18,485
)
(25,136
)
Investing Activities:
Purchase of property and equipment
(700
)
(3
)
Net cash and cash equivalents used in
investing activities
(700
)
(3
)
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
130,314
11,212
Proceeds from notes payable, net of
issuance costs
—
2,815
Taxes paid related to net share settlement
of vesting of restricted stock units
(1,041
)
(33
)
Payment of contingent consideration
—
(74
)
Proceeds from exercise of stock options
and warrants
30,835
3,340
Net cash and cash equivalents provided by
financing activities
160,108
30,785
Effect of exchange rate changes on cash
and cash equivalents
(329
)
17
Net increase in cash, cash equivalents and
restricted cash
140,594
5,663
Cash, cash equivalents and restricted
cash, beginning of period
17,529
10,567
Cash, cash equivalents and restricted
cash, end of period
$
158,123
$
16,230
Supplemental Schedule of Non-cash
Investing and Financing Activities
Transfer of inventories to property and
equipment
$
1,243
$
3,403
Acquisition of property and equipment in
accounts payable
$
67
$
—
Reclass of warrant liability to common
stock and additional paid-in-capital
$
2,236
$
—
Lease liabilities arising from obtaining
right-of-use assets
$
3,461
$
—
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
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
Six Months Ended
June 30,
June 30,
2021
2020
2021
2020
Net loss attributable to common
stockholders (GAAP)
$
(13,172
)
$
(14,139
)
$
(30,512
)
$
(31,149
)
Adjustments
Amortization of intangible assets
2,862
2,619
5,729
5,183
Change in fair value of contingent consideration
478
212
735
1,268
Change in fair value of warrant liabilities
—
114
1,981
269
Restructuring and other charges
—
—
—
858
Gain on extinguishment of debt
(2,847
)
—
(2,847
)
—
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)
$
(12,679
)
$
(10,895
)
$
(24,914
)
$
(22,860
)
Three Months Ended
Six Months Ended
June 30,
June 30,
2021
2020
2021
2020
Net loss per share attributable to
common stockholders (GAAP)
$
(0.06
)
$
(0.27
)
$
(0.14
)
$
(0.77
)
Adjustments
Amortization of intangible assets
0.02
0.05
0.03
0.13
Change in fair value of contingent consideration
0.00
0.00
0.00
0.03
Change in fair value of warrant liabilities
—
0.00
0.01
0.01
Restructuring and other charges
—
—
—
0.02
Gain on extinguishment of debt
(0.01
)
—
(0.01
)
—
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)
$
(0.05
)
$
(0.21
)
$
(0.11
)
$
(0.56
)
The non-GAAP financial measures for the three and six months
ended June 30, 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, an estimated discount
rate associated with the risks of the expected cash flows
attributable to the various milestones, and volatility. 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) During the second quarter of 2021, the Company received
notification from the U.S. Small Business Administration (the
“SBA”) that the principal amount of its Paycheck Protection Program
loan (“PPP loan”) of $2.8 million and related interest had been
forgiven. Gain on extinguishment of debt of $2.8 million was
recognized for the three and six months ended June 30, 2021 in the
condensed consolidated statement of operations and comprehensive
loss.
e) 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, the Company continued the restructuring efforts with
additional headcount reductions, which resulted in $0.9 million in
severance costs in the six months ended June 30, 2020.
f) 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 Series A
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 loss available to common stockholders for the
six months ended June 30, 2020. Upon conversion of the Series A
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 loss 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/20210805005891/en/
INVESTOR CONTACT: Mark Klausner or Mike Vallie,
443-213-0499 invest@asensus.com or MEDIA CONTACT: Kristin
Schaeffer CG Life kschaeffer@cglife.com
Asensus Surgical, Inc. (NYSE:ASXC)
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