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Asensus Surgical, Inc. Reports Operating and Financial Results for the First Quarter 2024

Asensus Surgical, Inc.
Asensus Surgical, Inc.

RESEARCH TRIANGLE PARK, N.C., May 14, 2024 (GLOBE NEWSWIRE) -- Asensus Surgical, Inc. (NYSE American: ASXC), a global leader of innovative digital solutions for the operating room, announced its operating and financial results for the first quarter 2024.

Recent Highlights

  • Announced non-binding acquisition proposal and exclusivity arrangement with KARL STORZ SE & Co. KG (KARL STORZ)

  • KARL STORZ to provide up to $20 million in financing

  • Nearly 900 procedures performed globally during the quarter

  • One Senhance® Surgical Program initiation year-to-date

  • First quarter revenue of $1.1 million

  • The Company had cash and cash equivalents and short-term investments, excluding restricted cash, of approximately $8.0 million at March 31, 2024

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“In the first quarter, we made steady progress in the continued adoption and utilization of Senhance and the ISU, as well as the development of the LUNA™ Surgical System,” said Anthony Fernando, Asensus Surgical President and CEO. “We also recently announced a potential acquisition by KARL STORZ, which we believe could accelerate our mission to transform the way surgery is performed on a global scale. Looking to the balance of 2024, our team remains focused on goals and milestones for LUNA and the negotiation of a definitive merger agreement with KARL STORZ, which we hope will lead to a completed transaction.”

Upcoming 2024 Milestones

For the full year 2024, the Company expects:

  • To initiate 8 - 10 new Senhance programs

  • Procedure volume growth of 15% to 20% over 2023

  • Achieve design freeze for the LUNA Surgical System

  • Verification and validation testing, and pilot manufacturing for the LUNA Surgical System

Non-Binding Acquisition Proposal and Exclusivity Arrangement with KARL STORZ

In April, the Company announced a non-binding letter of intent with KARL STORZ, a global medical technology company, regarding a potential acquisition. KARL STORZ proposed to acquire 100% of Asensus' outstanding shares for $0.35 per share in cash. During an exclusivity period of up to ten weeks, KARL STORZ will conduct due diligence, and the parties will negotiate a definitive merger agreement. Asensus entered into a secured loan of up to $20 million from KARL STORZ to support operations during the exclusivity period and potential transaction process. This loan will provide up to $10 million of liquidity during the exclusivity period. As of today the Company has drawn the first $7 million of the initial $10 million tranche of the loan which has provided liquidity for operations. If a definitive merger agreement is successfully negotiated and executed, additional funding in an aggregate amount of up to $10 million will be available under the loan to fund operations while the Company pursues stockholder approval. If a definitive merger agreement is reached and approved by Asensus' stockholders, and all other closing conditions are met, the Company will be acquired by KARL STORZ and cease to be publicly traded.

Market Development

Procedure Volumes

In the first quarter of 2024, surgeons performed nearly 900 procedures utilizing the Senhance System. These procedures included general surgery, gynecology, urology, colorectal, pediatric, and bariatric surgical cases.

2024 Senhance Program Initiations

Year to date, the Company initiated one new Senhance Surgical System placement at Sendai Tokushukai Hospital in Japan.

Clinical Registry (TRUST)

The Company continues to leverage its growing body of real-world clinical data through the utilization of its TRUST™ clinical registry. The Company believes TRUST is the largest multi-specialty robotic-assisted laparoscopic registry in the industry, with approximately 3,500 patients enrolled to date, a 45% increase from first quarter 2023.

Clinical Validation

Year to date, there were 6 peer-reviewed clinical papers published providing further support for the clinical utility of the Senhance System across a variety of surgical specialties. These papers, along with a library of similar papers, can be found on the Company’s website:
https://www.asensus.com/resources/clinical-publications

First Quarter Financial Results

For the three months ended March 31, 2024, the Company reported revenue of $1.1 million as compared to revenue of $1.0 million in the three months ended March 31, 2023. Revenue in the first quarter of 2024 included $0.5 million in lease revenue, $0.3 million in instruments and accessories, and $0.3 million in services.

For the three months ended March 31, 2024, total operating expenses were $22.7 million, as compared to $20.4 million, in the three months ended March 31, 2023.

For the three months ended March 31, 2024, net loss was $22.5 million, or $0.08 per share, as compared to a net loss of $22.2 million, or $0.09 per share, in the three months ended March 31, 2023.

Adjusted net loss is a non-GAAP financial measure. See the reconciliation of GAAP to Non-GAAP Measures below. For the three months ended March 31, 2024, the adjusted net loss was $18.0 million, or $0.07 per share, as compared to an adjusted net loss of $22.0 million, or $0.09 per share in the three months ended March 31, 2023, after adjusting for the following charges: amortization of intangible assets, change in fair value of contingent consideration, and change in fair value of warrant liabilities, all of which are non-cash charges.

Balance Sheet Updates

The Company had cash, cash equivalents and short-term investments, excluding restricted cash of approximately $8.0 million as of March 31, 2024.

Conference Call

To listen to the conference call on your telephone, please dial 1-888-886-7786 for domestic callers and 416-764-8658 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 Asensus Surgical, Inc.

Asensus Surgical is revolutionizing surgery with the first intra-operative Augmented Intelligence technology approved for use in operating rooms around the world. Recognized as an award-winning leader in digital technology, Asensus is committed to making surgery more accessible and predictable while delivering consistently superior outcomes. The Company’s novel approach to digitizing laparoscopy has led to system placements globally. Led by engineers, medical professionals, and industry luminaries, Asensus is powered by human ingenuity and driven by collaboration. To learn more about the Senhance® Surgical System and the new LUNA™ System in development, visit www.asensus.com.

Follow Asensus

Email Alerts: https://ir.asensus.com/email-alerts

LinkedIn: https://www.linkedin.com/company/asensus-surgical-inc/

X: https://twitter.com/AsensusSurgical

YouTube: https://www.youtube.com/@AsensusSurgical

Forward-Looking Statements

This press release includes statements relating to Asensus Surgical, and our 2024 first quarter results, and of the potential acquisition transaction with KARL STORZ (the “Potential Acquisition”). 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 will be able to meet our milestones for the year, including the initiation of 8-10 new Senhance programs, 15% to 20% procedure volume growth over the full year 2023, active design freeze for the LUNA Surgical System, and verification and validation testing and pilot manufacturing for the LUNA Surgical System; whether the Potential Acquisition by KARL STORZ will occur, the results of the due diligence investigation by KARL STORZ, the possibility that KARL STORZ will terminate the exclusivity period, whether the parties will successfully negotiate and enter into a definitive merger agreement and, if so, whether it will be approved, the risk that the terms of the definitive agreement may not be as favorable to the Company’s stockholders as proposed in the letter of intent, including the purchase price, the timing of execution of such agreement, the availability and sufficiency for funding the Company’s near-term operations of up to $20 million available under the secured promissory note (the “Note”), if received, and whether the Company will be able to repay the Note if the Potential Acquisition is not consummated. For a discussion of the risks and uncertainties associated with the Company’s business, please review our filings with the Securities and Exchange Commission (SEC). 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
March 31,

 

 

2024

 

2023

 

Revenue:

 

 

 

 

 

 

 

 

Product

$

313

 

 

$

293

 

 

Service

 

285

 

 

 

195

 

 

Lease

 

525

 

 

 

488

 

 

Total revenue

 

1,123

 

 

 

976

 

 

Cost of revenue:

 

 

 

 

 

 

 

 

Product

 

1,681

 

 

 

1,225

 

 

Service

 

452

 

 

 

749

 

 

Lease

 

923

 

 

 

973

 

 

Total cost of revenue

 

3,056

 

 

 

2,947

 

 

Gross loss

 

(1,933

)

 

 

(1,971

)

 

Operating expenses:

 

 

 

 

 

 

 

 

Research and development

 

8,091

 

 

 

10,139

 

 

Sales and marketing

 

3,642

 

 

 

4,553

 

 

General and administrative

 

4,374

 

 

 

5,468

 

 

Amortization of intangible assets

 

114

 

 

 

112

 

 

Change in fair value of contingent consideration

 

6,480

 

 

 

105

 

 

Total operating expenses

 

22,701

 

 

 

20,377

 

 

Operating loss

 

(24,634

)

 

 

(22,348

)

 

Other income (expense), net:

 

 

 

 

 

 

 

 

Change in fair value of warrant liabilities

 

2,116

 

 

 

 

 

Interest income

 

126

 

 

 

439

 

 

Other expense, net

 

(59

)

 

 

(218

)

 

Total other income (expense), net

 

2,183

 

 

 

221

 

 

Loss before income taxes

 

(22,451

)

 

 

(22,127

)

 

Income tax expense

 

(46

)

 

 

(91

)

 

Net loss

 

(22,497

)

 

 

(22,218

)

 

 

 

 

 

 

 

 

 

 

Comprehensive loss:

 

 

 

 

 

 

 

 

Net loss

 

(22,497

)

 

 

(22,218

)

 

Foreign currency translation (loss) gain

 

(494

)

 

 

550

 

 

Unrealized gain on available-for-sale investments

 

8

 

 

 

307

 

 

Comprehensive loss

$

(22,983

)

 

$

(21,361

)

 

 

 

 

 

 

 

 

 

 

Net loss per common share attributable to common
stockholders – basic and diluted

$

(0.08

)

 

$

(0.09

)

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares used in computing
net loss per common share – basic and diluted

 

269,265

 

 

 

238,280

 

 

 

 


Asensus Surgical, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share amounts)
(Unaudited)

 

 

 

 

March 31,
2024

 

December 31,
2023

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

6,995

 

 

$

17,096

 

 

Short-term investments, available-for-sale

 

994

 

 

 

3,971

 

 

Accounts receivable, net

 

675

 

 

 

3,508

 

 

Inventories

 

5,958

 

 

 

7,172

 

 

Prepaid expenses

 

3,314

 

 

 

3,143

 

 

Other current assets

 

1,312

 

 

 

1,496

 

 

Total Current Assets

 

19,248

 

 

 

36,386

 

 

 

 

 

 

 

 

 

 

 

Restricted cash

 

1,483

 

 

 

1,642

 

 

Inventories, net of current portion

 

3,954

 

 

 

4,043

 

 

Property and equipment, net

 

8,630

 

 

 

8,959

 

 

Intellectual property, net

 

1,114

 

 

 

1,237

 

 

Net deferred tax assets

 

37

 

 

 

44

 

 

Operating lease right-of-use assets, net

 

4,926

 

 

 

5,165

 

 

Other long-term assets

 

1,422

 

 

 

1,610

 

 

Total Assets

$

40,814

 

 

$

59,086

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts payable

$

4,036

 

 

$

4,145

 

 

Accrued employee compensation and benefits

 

3,814

 

 

 

5,390

 

 

Accrued expenses and other current liabilities

 

1,243

 

 

 

1,636

 

 

Contingent consideration, current

 

8,700

 

 

 

 

 

Operating lease liabilities, current

 

1,056

 

 

 

1,036

 

 

Deferred revenue

 

439

 

 

 

421

 

 

Total Current Liabilities

 

19,288

 

 

 

12,628

 

 

Long-Term Liabilities:

 

 

 

 

 

 

 

 

Deferred revenue – less current portion

 

330

 

 

 

290

 

 

Contingent consideration

 

 

 

 

2,220

 

 

Warrant liabilities

 

3,772

 

 

 

5,888

 

 

Noncurrent operating lease liabilities

 

4,400

 

 

 

4,646

 

 

Total Liabilities

 

27,790

 

 

 

25,672

 

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

 

 

 

Common stock $0.001 par value, 750,000,000 shares authorized at
March 31, 2024 and December 31, 2023; 271,986,369 and
264,921,526 shares issued and outstanding at March 31, 2024 and
December 31, 2023, respectively

 

272

 

 

 

265

 

 

Preferred stock, $0.01 par value, 25,000,000 shares authorized, no shares
issued and outstanding at March 31, 2024 and December 31, 2023,
respectively

 

 

 

 

 

 

Additional paid-in capital

 

975,715

 

 

 

973,129

 

 

Accumulated deficit

 

(961,865

)

 

 

(939,368

)

 

Accumulated other comprehensive income

 

(1,098

)

 

 

(612

)

 

Total Stockholders’ Equity

 

13,024

 

 

 

33,414

 

 

Total Liabilities and Stockholders’ Equity

$

40,814

 

 

$

59,086

 

 

 

 


Asensus Surgical, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)

 

 

 

 

Three Months Ended
March 31,

 

 

2024

 

2023

 

Operating Activities:

 

 

 

 

 

 

 

 

Net loss

$

(22,497

)

 

$

(22,218

)

 

   Adjustments to reconcile net loss to net cash and cash equivalents used in
       operating activities:

 

 

 

 

 

 

 

 

        Depreciation

 

841

 

 

 

813

 

 

        Amortization of intangible assets

 

114

 

 

 

112

 

 

        Accretion of discounts and premiums on investments, net

 

(15

)

 

 

(89

)

 

        Stock-based compensation

 

1,745

 

 

 

1,916

 

 

        Deferred tax expense

 

 

 

 

91

 

 

        Bad debt expense

 

(2

)

 

 

 

 

        Change in inventory reserves

 

959

 

 

 

(374

)

 

        Change in fair value of warrant liabilities

 

(2,116

)

 

 

 

 

        Change in fair value of contingent consideration

 

6,480

 

 

 

105

 

 

        Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

               Accounts receivable

 

2,776

 

 

 

1,607

 

 

               Inventories

 

(559

)

 

 

203

 

 

               Operating lease right-of-use assets

 

177

 

 

 

187

 

 

               Prepaid expenses

 

(183

)

 

 

250

 

 

               Other current and long-term assets

 

313

 

 

 

(27

)

 

               Accounts payable

 

(74

)

 

 

1,608

 

 

               Accrued employee compensation and benefits

 

(1,523

)

 

 

(1,120

)

 

               Accrued expenses and other current liabilities

 

(359

)

 

 

(93

)

 

               Deferred revenue

 

73

 

 

 

(13

)

 

               Operating lease liabilities

 

(158

)

 

 

(206

)

 

Net cash and cash equivalents used in operating activities

 

(14,008

)

 

 

(17,248

)

 

Investing Activities:

 

 

 

 

 

 

 

 

Purchase of available-for-sale investments

 

 

 

 

(2,949

)

 

Proceeds from maturities of available-for-sale investments

 

3,000

 

 

 

32,750

 

 

Purchase of property and equipment

 

 

 

 

(64

)

 

Net cash and cash equivalents provided by investing activities

 

3,000

 

 

 

29,737

 

 

Financing Activities:

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock, net of issuance costs

 

982

 

 

 

 

 

Taxes paid related to net share settlement of vesting of restricted stock units

 

(171

)

 

 

(488

)

 

Proceeds from exercise of stock options

 

 

 

 

5

 

 

Net cash and cash equivalents provided by (used in) financing activities

 

811

 

 

 

(483

)

 

Effect of exchange rate changes on cash and cash equivalents

 

(63

)

 

 

403

 

 

Net (decrease) increase in cash, cash equivalents and restricted cash

 

(10,260

)

 

 

12,409

 

 

Cash, cash equivalents and restricted cash, beginning of period

 

18,738

 

 

 

7,470

 

 

Cash, cash equivalents and restricted cash, end of period

$

8,478

 

 

$

19,879

 

 

 

 

 

 

 

 

 

 

 

Supplemental Disclosure for Cash Flow Information:

 

 

 

 

 

 

 

 

Cash paid for leases

$

351

 

 

$

330

 

 

Cash paid for taxes

$

87

 

 

$

190

 

 

 

 

 

 

 

 

 

 

 

Supplemental Schedule of Non-cash Investing and Financing Activities:

 

 

 

 

 

 

 

 

Transfer of inventories to property and equipment

$

630

 

 

$

112

 

 

Lease liabilities arising from obtaining right-of-use assets

$

72

 

 

$

45

 

 

 

 


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,

 

 

2024

 

2023

 

 

 

 

 

 

 

 

 

 

Net loss attributable to common stockholders
(GAAP)

$

(22,497

)

 

$

(22,218

)

 

 

 

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

 

Amortization of intangible assets (a)

 

114

 

 

 

112

 

 

Change in fair value of contingent consideration (b)

 

6,480

 

 

 

105

 

 

Change in fair value of warrant liabilities (c)

 

(2,116

)

 

 

 

 

Adjusted net loss attributable to common
stockholders (Non-GAAP)

$

(18,019

)

 

$

(22,001

)

 

 

 

 

 

 

Three Months Ended
March 31,

 

 

2024

 

2023

 

Net loss per share attributable to common
stockholders (GAAP)

$

(0.08

)

 

$

(0.09

)

 

 

 

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

 

Amortization of intangible assets (a)

 

 

 

 

 

 

Change in fair value of contingent consideration (b)

 

0.02

 

 

 

 

 

Change in fair value of warrant liabilities (c)

 

(0.01

)

 

 

 

 

Adjusted net loss per share attributable to common
stockholders (Non-GAAP)

$

(0.07

)

 

$

(0.09

)

 

 

 

The non-GAAP financial measures for the three months ended March 31, 2024 and 2023, provide management with additional insight into the Company’s results of operations from period to period without 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 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 a non-binding letter of intent with KARL STORZ SE & Co. KG for a potential acquisition of the Company and a Monte-Carlo simulation utilizing significant unobservable inputs including the probability of achieving each of the potential milestones, revenue volatility, EURO to USD exchange rate, 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 recorded warrant liabilities related to common stock warrants issued in the registered direct offering in July 2023.

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:

Mark Klausner or Mike Vallie
ICR Westwicke
invest@asensus.com
443-213-0499

MEDIA CONTACT:

Dan Ventresca
Matter Communications
AsensusPR@matternow.com
617-874-5488