UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark one)
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended JuneSeptember 30, 2020
OR
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from
toCommission File
ACUTUS MEDICAL, INC.
(Exact name of registrant as specified in its charter)
Delaware | 45-1306615 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
2210 Faraday Ave., Suite 100, Carlsbad, CA | 92008 | |
(Address of principal executive offices) | (zip code) |
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol | Name of each exchange on which registered | ||
Common Stock, par value | AFIB | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days
Indicate by check mark whether the registrant has submitted electronically, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether registrant is a shell company (as defined in Rule
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.
Class of Common Stock | Outstanding Shares as of | |
Common Stock, $0.001 par value | 27,846,083 |
ACUTUS MEDICAL, INC. AND SUBSIDIARIES
Form 10-Q
For the Quarter Ended JuneSeptember 30, 2020
Table of Contents
Page | ||||||
PART I. FINANCIAL INFORMATION | ||||||
Item 1. | 1 | |||||
1 | ||||||
2 | ||||||
3 | ||||||
5 | ||||||
6 | ||||||
Item 2. | 31 | |||||
Item 3. | 47 | |||||
Item 4. | 47 | |||||
Item 1. | 48 | |||||
Item 1A. | 48 | |||||
Item 2. | 48 | |||||
Item 6. | 49 | |||||
50 |
Acutus Medical, Inc. and Subsidiaries
(in thousands, except share and per share amounts)
|
| September 30, 2020 |
|
| December 31, 2019 |
| ||
|
| (unaudited) |
|
|
|
|
| |
ASSETS: |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| $ | 58,302 |
|
| $ | 9,452 |
|
Marketable securities, short-term |
|
| 99,742 |
|
|
| 62,351 |
|
Restricted cash |
|
| 150 |
|
|
| 150 |
|
Accounts receivable |
|
| 1,893 |
|
|
| 263 |
|
Inventory |
|
| 10,932 |
|
|
| 8,424 |
|
Prepaid expenses and other current assets |
|
| 4,635 |
|
|
| 1,816 |
|
Total current assets |
|
| 175,654 |
|
|
| 82,456 |
|
|
|
|
|
|
|
|
|
|
Marketable securities, long-term |
|
| 8,789 |
|
|
| — |
|
Property and equipment, net |
|
| 9,940 |
|
|
| 4,427 |
|
Right-of-use asset, net |
|
| 1,838 |
|
|
| 2,341 |
|
Intangible assets, net |
|
| 3,780 |
|
|
| 4,110 |
|
Goodwill |
|
| 12,026 |
|
|
| 12,026 |
|
Other assets |
|
| 482 |
|
|
| 95 |
|
Total assets |
| $ | 212,509 |
|
| $ | 105,455 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
| $ | 4,723 |
|
| $ | 3,882 |
|
Accrued liabilities |
|
| 6,500 |
|
|
| 10,076 |
|
Contingent consideration, short-term |
|
| 4,000 |
|
|
| 8,200 |
|
Operating lease liabilities, short-term |
|
| 907 |
|
|
| 833 |
|
Common and preferred stock warrant liability |
|
| — |
|
|
| 8,919 |
|
Total current liabilities |
|
| 16,130 |
|
|
| 31,910 |
|
|
|
|
|
|
|
|
|
|
Operating lease liabilities, long-term |
|
| 1,365 |
|
|
| 2,054 |
|
Long-term debt |
|
| 38,762 |
|
|
| 38,244 |
|
Contingent consideration, long-term |
|
| 3,600 |
|
|
| 5,700 |
|
Other long-term liabilities |
|
| 8 |
|
|
| — |
|
Total liabilities |
|
| 59,865 |
|
|
| 77,908 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies (Note 12) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible preferred stock |
|
|
|
|
|
|
|
|
Series A convertible preferred stock, $0.001 par value; no shares authorized, issued and outstanding as of September 30, 2020; 3,848,696 shares authorized and 391,210 shares issued and outstanding as of December 31, 2019; liquidation preference of $3,245 as of December 31, 2019 |
|
| — |
|
|
| 3,059 |
|
Series B convertible preferred stock, $0.001 par value; no shares authorized, issued and outstanding as of September 30, 2020; 30,032,100 shares authorized and 3,088,444 shares issued and outstanding as of December 31, 2019; liquidation preference of $41,294 as of December 31, 2019 |
|
| — |
|
|
| 40,685 |
|
Series C convertible preferred stock, $0.001 par value; no shares authorized, issued and outstanding as of September 30, 2020; 48,184,000 shares authorized and 4,499,921 shares issued and outstanding as of December 31, 2019; liquidation preference of $75,000 as of December 31, 2019 |
|
| — |
|
|
| 74,575 |
|
Series D convertible preferred stock, $0.001 par value; no shares authorized, issued and outstanding as of September 30, 2020; 90,000,000 shares authorized and 8,200,297 issued and outstanding as of December 31, 2019; liquidation preference of $136,675 as of December 31, 2019 |
|
| — |
|
|
| 135,039 |
|
|
|
|
|
|
|
|
|
|
Stockholders' equity (deficit) |
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value; 5,000,000 shares authorized as of September 30, 2020 and no shares authorized as of December 31, 2019; no shares issued and outstanding as of each of September 30, 2020 and December 31, 2019, respectively |
|
| — |
|
|
| — |
|
Common stock, $0.001 par value; 260,000,000 shares authorized as of each of September 30, 2020 and December 31, 2019; 27,826,408 and 695,902 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively |
|
| 28 |
|
|
| 1 |
|
Additional paid-in capital |
|
| 484,162 |
|
|
| 33,252 |
|
Accumulated deficit |
|
| (331,613 | ) |
|
| (259,034 | ) |
Accumulated other comprehensive income (loss) |
|
| 67 |
|
|
| (30 | ) |
Total stockholders' equity (deficit) |
|
| 152,644 |
|
|
| (225,811 | ) |
Total liabilities, convertible preferred stock and stockholders' equity (deficit) |
| $ | 212,509 |
|
| $ | 105,455 |
|
June 30, 2020 | December 31, 2019 | |||||||
(unaudited) | ||||||||
ASSETS: | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 24,295 | $ | 9,452 | ||||
Marketable securities | 5,037 | 62,351 | ||||||
Restricted cash | 150 | 150 | ||||||
Accounts receivable | 860 | 263 | ||||||
Inventory | 12,266 | 8,424 | ||||||
Deferred offering costs | 2,506 | — | ||||||
Prepaid expenses and other current assets | 1,323 | 1,816 | ||||||
Total current assets | 46,437 | 82,456 | ||||||
Property and equipment, net | 7,584 | 4,427 | ||||||
Right-of-use asset, net | 2,005 | 2,341 | ||||||
Intangible assets, net | 3,890 | 4,110 | ||||||
Goodwill | 12,026 | 12,026 | ||||||
Other assets | 87 | 95 | ||||||
Total assets | $ | 72,029 | $ | 105,455 | ||||
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 9,084 | $ | 3,882 | ||||
Accrued liabilities | 7,036 | 10,076 | ||||||
Contingent consideration, short-term | 3,500 | 8,200 | ||||||
Operating lease liabilities, short-term | 882 | 833 | ||||||
Common and preferred stock warrant liability | 10,791 | 8,919 | ||||||
Total current liabilities | 31,293 | 31,910 | ||||||
Operating lease liabilities, long-term | 1,594 | 2,054 | ||||||
Long-term debt | 38,558 | 38,244 | ||||||
Contingent consideration, long-term | 4,000 | 5,700 | ||||||
Total liabilities | 75,445 | 77,908 | ||||||
Commitments and contingencies (Note 11) | ||||||||
C onvertible preferred stock | ||||||||
Series A convertible preferred stock, $0.001 par value; 3,848,696 shares authorized as of each of June 30, 2020 and December 31, 2019; 391,210 shares issued and outstanding as of each of June 30, 2020 and December 31, 2019; liquidation preference of $3,245 as of each of June 30, 2020 and December 31, 2019 | 3,059 | 3,059 | ||||||
Series B convertible preferred stock, $0.001 par value; 30,032,100 shares authorized as of each of June 30, 2020 December 31, 2019; 3,088,444 shares issued and outstanding as of each of June 30, 2020 and December 31, 2019; liquidation preference of $41,294 as of each of June 30, 2020 and December 31, 2019 | 40,685 | 40,685 | ||||||
Series C convertible preferred stock, $0.001 par value; 48,184,000 shares authorized as of each of June 30, 2020 and December 31, 2019; 4,499,921 shares issued and outstanding as of each of June 30, 2020 and December 31, 2019; liquidation preference of $75,000 as of each of June 30, 2020 and December 31, 2019 | 74,575 | 74,575 | ||||||
Series D convertible preferred stock, $0.001 par value; 90,000,000 shares authorized as of each of June 30, 2020 and December 31, 2019; 8,593,360 and 8,200,297 issued and outstanding as of June 30, 2020 and December 31, 2019, respectively; liquidation preference of $157,348 and $136,675 as of June 30, 2020 and December 31, 2019, respectively | 142,236 | 135,039 | ||||||
Stockholders’ deficit | ||||||||
Common stock, $0.001 par value; 260,000,000 shares authorized as of each of June 30, 2020 and December 31, 2019; 775,403 and 695,902 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively | 1 | 1 | ||||||
Additional paid-in capital | 36,355 | 33,252 | ||||||
Accumulated deficit | (300,325 | ) | (259,034 | ) | ||||
Accumulated other comprehensive loss | (2 | ) | (30 | ) | ||||
Total stockholders’ deficit | (263,971 | ) | (225,811 | ) | ||||
Total liabilities, convertible preferred stock and stockholders’ deficit | $ | 72,029 | $ | 105,455 | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
1
Acutus Medical, Inc. and Subsidiaries
(in thousands, except share and per share amounts)
(Unaudited)
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
| ||||||||||
|
| 2020 |
|
| 2019 |
|
| 2020 |
|
| 2019 |
| ||||
Revenue |
| $ | 3,173 |
|
| $ | 646 |
|
| $ | 5,890 |
|
| $ | 2,167 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products sold |
|
| 5,141 |
|
|
| 2,267 |
|
|
| 10,998 |
|
|
| 6,878 |
|
Research and development |
|
| 8,343 |
|
|
| 5,865 |
|
|
| 24,492 |
|
|
| 15,489 |
|
Research and development - license acquired |
|
| — |
|
|
| 15,000 |
|
|
| — |
|
|
| 15,000 |
|
Selling, general and administrative |
|
| 15,833 |
|
|
| 7,978 |
|
|
| 35,193 |
|
|
| 18,998 |
|
Change in fair value of contingent consideration |
|
| 118 |
|
|
| 700 |
|
|
| (1,466 | ) |
|
| 700 |
|
Total costs and operating expenses |
|
| 29,435 |
|
|
| 31,810 |
|
|
| 69,217 |
|
|
| 57,065 |
|
Loss from operations |
|
| (26,262 | ) |
|
| (31,164 | ) |
|
| (63,327 | ) |
|
| (54,898 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in fair value of warrant liability and embedded derivative |
|
| (3,683 | ) |
|
| (3 | ) |
|
| (5,555 | ) |
|
| (608 | ) |
Loss on debt extinguishment |
|
| — |
|
|
| (49 | ) |
|
| — |
|
|
| (1,447 | ) |
Interest income |
|
| 23 |
|
|
| 525 |
|
|
| 393 |
|
|
| 733 |
|
Interest expense |
|
| (1,366 | ) |
|
| (1,394 | ) |
|
| (4,090 | ) |
|
| (20,905 | ) |
Total other expense, net |
|
| (5,026 | ) |
|
| (921 | ) |
|
| (9,252 | ) |
|
| (22,227 | ) |
Net loss |
| $ | (31,288 | ) |
| $ | (32,085 | ) |
| $ | (72,579 | ) |
| $ | (77,125 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized (loss) gain on marketable securities |
|
| (9 | ) |
|
| 40 |
|
|
| (50 | ) |
|
| 47 |
|
Foreign currency translation adjustment |
|
| 78 |
|
|
| (45 | ) |
|
| 147 |
|
|
| (57 | ) |
Comprehensive loss |
| $ | (31,219 | ) |
| $ | (32,090 | ) |
| $ | (72,482 | ) |
| $ | (77,135 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common share, basic and diluted |
| $ | (1.95 | ) |
| $ | (47.21 | ) |
| $ | (12.36 | ) |
| $ | (115.66 | ) |
Weighted average shares outstanding, basic and diluted |
|
| 16,080,467 |
|
|
| 679,591 |
|
|
| 5,870,861 |
|
|
| 666,823 |
|
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Revenue | $ | 1,134 | $ | 734 | $ | 2,717 | $ | 1,521 | ||||||||
Costs and operating expenses: | ||||||||||||||||
Cost of products sold | 2,663 | 2,435 | 5,857 | 4,611 | ||||||||||||
Research and development | 8,176 | 5,247 | 16,149 | 9,624 | ||||||||||||
Selling, general and administrative | 9,125 | 6,927 | 19,360 | 11,020 | ||||||||||||
Change in fair value of contingent consideration | 635 | — | (1,584 | ) | — | |||||||||||
Total costs and operating expenses | 20,599 | 14,609 | 39,782 | 25,255 | ||||||||||||
Loss from operations | (19,465 | ) | (13,875 | ) | (37,065 | ) | (23,734 | ) | ||||||||
Other income (expense): | ||||||||||||||||
Change in fair value of warrant liability and embedded derivative | (2,453 | ) | (1,446 | ) | (1,872 | ) | (605 | ) | ||||||||
Loss on debt extinguishment | — | (1,398 | ) | — | (1,398 | ) | ||||||||||
Interest income | 95 | 143 | 370 | 208 | ||||||||||||
Interest expense | (1,370 | ) | (13,769 | ) | (2,724 | ) | (19,511 | ) | ||||||||
Total other expense, net | (3,728 | ) | (16,470 | ) | (4,226 | ) | (21,306 | ) | ||||||||
Net loss | $ | (23,193 | ) | $ | (30,345 | ) | $ | (41,291 | ) | $ | (45,040 | ) | ||||
Other comprehensive income (loss) | ||||||||||||||||
Unrealized (loss) gain on marketable securities | (14 | ) | 6 | (41 | ) | 7 | ||||||||||
Foreign currency translation adjustment | 96 | 2 | 69 | (12 | ) | |||||||||||
Comprehensive loss | $ | (23,111 | ) | $ | (30,337 | ) | $ | (41,263 | ) | $ | (45,045 | ) | ||||
Net loss per common share, basic and diluted | $ | (32.24 | ) | $ | (45.70 | ) | $ | (58.16 | ) | $ | (68.21 | ) | ||||
Weighted-average shares outstanding, basic and diluted | 719,421 | 663,972 | 709,961 | 660,333 | ||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
2
(in thousands, except share amounts)
(Unaudited)
For the Three Months Ended JuneSeptember 30, 2020
|
| Series A |
|
| Series B |
|
| Series C |
|
| Series D |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Accumulated |
|
| Total |
| ||||||||||||||||||||||
|
| Convertible Preferred Stock |
|
| Convertible Preferred Stock |
|
| Convertible Preferred Stock |
|
| Convertible Preferred Stock |
|
|
| Common Stock |
|
| Additional Paid-in |
|
| Accumulated |
|
| Other Comprehensive |
|
| Equity Stockholders' |
| |||||||||||||||||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
|
| Shares |
|
| Amount |
|
| Capital |
|
| Deficit |
|
| Income (Loss) |
|
| (Deficit) |
| ||||||||||||||
Balance as of June 30, 2020 (unaudited) |
|
| 391,210 |
|
| $ | 3,059 |
|
|
| 3,088,444 |
|
| $ | 40,685 |
|
|
| 4,499,921 |
|
| $ | 74,575 |
|
|
| 8,593,360 |
|
| $ | 142,236 |
|
|
|
| 775,403 |
|
| $ | 1 |
|
| $ | 36,355 |
|
| $ | (300,325 | ) |
| $ | (2 | ) |
| $ | (263,971 | ) |
Unrealized loss on marketable securities |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (9 | ) |
|
| (9 | ) |
Foreign currency translation adjustment |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 78 |
|
|
| 78 |
|
Conversion of convertible preferred stock into common stock upon IPO |
|
| (391,210 | ) |
|
| (3,059 | ) |
|
| (3,088,444 | ) |
|
| (40,685 | ) |
|
| (4,499,921 | ) |
|
| (74,575 | ) |
|
| (8,593,360 | ) |
|
| (142,236 | ) |
|
|
| 16,572,935 |
|
|
| 17 |
|
|
| 260,538 |
|
|
| — |
|
|
| — |
|
|
| 260,555 |
|
Issuance of common stock for cash, net of issuance costs of $16,361 |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
| 10,147,058 |
|
|
| 10 |
|
|
| 166,276 |
|
|
| — |
|
|
| — |
|
|
| 166,286 |
|
Reclassification of warrant liability to stockholders' equity |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
|
| 14,474 |
|
|
| — |
|
|
| — |
|
|
| 14,474 |
|
Stock option exercises |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
| 27,661 |
|
|
| — |
|
|
| 145 |
|
|
| — |
|
|
| — |
|
|
| 145 |
|
Stock-based compensation |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
| 303,351 |
|
|
| — |
|
|
| 6,374 |
|
|
| — |
|
|
| — |
|
|
| 6,374 |
|
Net loss |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (31,288 | ) |
|
| — |
|
|
| (31,288 | ) |
Balance as of September 30, 2020 (unaudited) |
|
| — |
|
| $ | — |
|
|
| — |
|
| $ | — |
|
|
| — |
|
| $ | — |
|
|
| — |
|
| $ | — |
|
|
|
| 27,826,408 |
|
| $ | 28 |
|
| $ | 484,162 |
|
| $ | (331,613 | ) |
| $ | 67 |
|
| $ | 152,644 |
|
Series A Convertible Preferred Stock | Series B Convertible Preferred Stock | Series C Convertible Preferred Stock | Series D Convertible Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total Stockholders’ Deficit | ||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2020 (unaudited) | 391,210 | $ | 3,059 | 3,088,444 | $ | 40,685 | 4,499,921 | $ | 74,575 | 8,593,360 | $ | 142,236 | 710,841 | $ | 1 | $ | 34,993 | $ | (277,132 | ) | $ | (84 | ) | $ | (242,222 | ) | ||||||||||||||||||||||||||||||
Unrealized loss on marketable securities | — | — | — | — | — | — | — | — | — | — | — | — | (14 | ) | (14 | ) | ||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | — | — | — | 96 | 96 | ||||||||||||||||||||||||||||||||||||||||||
Stock option exercises | — | — | — | — | — | — | — | — | 64,562 | — | 205 | — | — | 205 | ||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | — | — | 1,157 | — | — | 1,157 | ||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | (23,193 | ) | — | (23,193 | ) | ||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2020 (unaudited) | 391,210 | $ | 3,059 | 3,088,444 | $ | 40,685 | 4,499,921 | $ | 74,575 | 8,593,360 | $ | 142,236 | 775,403 | $ | 1 | $ | 36,355 | $ | (300,325 | ) | $ | (2) | $ | (263,971 | ) | |||||||||||||||||||||||||||||||
For the Three Months Ended JuneSeptember 30, 2019
|
| Series A |
|
| Series B |
|
| Series C |
|
| Series D |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Accumulated |
|
|
|
|
| |||||||||||||||||||||
|
| Convertible Preferred Stock |
|
| Convertible Preferred Stock |
|
| Convertible Preferred Stock |
|
| Convertible Preferred Stock |
|
|
| Common Stock |
|
| Additional Paid-in |
|
| Accumulated |
|
| Other Comprehensive |
|
| Total Stockholders' |
| |||||||||||||||||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
|
| Shares |
|
| Amount |
|
| Capital |
|
| Deficit |
|
| Income (Loss) |
|
| Deficit |
| ||||||||||||||
Balance as of June 30, 2019 (unaudited) |
|
| 391,210 |
|
| $ | 3,059 |
|
|
| 3,088,444 |
|
| $ | 40,685 |
|
|
| 4,499,921 |
|
| $ | 74,575 |
|
|
| 6,418,437 |
|
| $ | 106,702 |
|
|
|
| 671,960 |
|
| $ | 1 |
|
| $ | 31,569 |
|
| $ | (207,035 | ) |
| $ | 15 |
|
| $ | (175,450 | ) |
Unrealized gain on marketable securities |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 40 |
|
|
| 40 |
|
Foreign currency translation adjustment |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (45 | ) |
|
| (45 | ) |
Issuance of Series D convertible preferred stock for cash, net of issuance costs of $1,358 |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,781,860 |
|
|
| 28,341 |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Stock-based compensation |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
| 4,612 |
|
|
| — |
|
|
| 812 |
|
|
| — |
|
|
| — |
|
|
| 812 |
|
Stock option exercises |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
| 7,452 |
|
|
| — |
|
|
| 19 |
|
|
| — |
|
|
| — |
|
|
| 19 |
|
Net loss |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (32,085 | ) |
|
| — |
|
|
| (32,085 | ) |
Balance as of September 30, 2019 (unaudited) |
|
| 391,210 |
|
| $ | 3,059 |
|
|
| 3,088,444 |
|
| $ | 40,685 |
|
|
| 4,499,921 |
|
| $ | 74,575 |
|
|
| 8,200,297 |
|
| $ | 135,043 |
|
|
|
| 684,024 |
|
| $ | 1 |
|
| $ | 32,400 |
|
| $ | (239,120 | ) |
| $ | 10 |
|
| $ | (206,709 | ) |
Series A Convertible Preferred Stock | Series B Convertible Preferred Stock | Series C Convertible Preferred Stock | Series D Convertible Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total Stockholders’ Deficit | ||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2019 (unaudited) | 391,210 | $ | 3,059 | 3,088,444 | $ | 40,685 | 4,499,921 | $ | 74,575 | — | $ | — | 656,654 | $ | 1 | $ | 30,709 | $ | (176,690 | ) | $ | 7 | $ | (145,973 | ) | |||||||||||||||||||||||||||||||
Unrealized gain on marketable securities | — | — | — | — | — | — | — | — | — | — | — | — | 6 | 6 | ||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | — | — | — | 2 | 2 | ||||||||||||||||||||||||||||||||||||||||||
Issuance of Series D convertible preferred stock for cash, net of issuance costs of $274 | — | — | — | — | — | — | 2,309,959 | 38,226 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Issuance of Series D convertible preferred stock for 2018 Convertible Notes and 2019 Convertible Notes | — | — | — | — | — | — | 4,108,478 | 68,476 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | 6,837 | — | 803 | — | — | 803 | ||||||||||||||||||||||||||||||||||||||||||
Stock option exercises | — | — | — | — | — | — | — | — | 8,469 | — | 57 | — | — | 57 | ||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | (30,345 | ) | — | (30,345 | ) | ||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2019 (unaudited) | 391,210 | $ | 3,059 | 3,088,444 | $ | 40,685 | 4,499,921 | $ | 74,575 | 6,418,437 | $ | 106,702 | 671,960 | $ | 1 | $ | 31,569 | $ | (207,035 | ) | $ | 15 | $ | (175,450 | ) | |||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit
(in thousands, except share amounts)
(Unaudited)
For the SixNine Months Ended JuneSeptember 30, 2020
|
| Series A |
|
| Series B |
|
| Series C |
|
| Series D |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Additional |
|
| Total |
| ||||||||||||||||||||||
|
| Convertible Preferred Stock |
|
| Convertible Preferred Stock |
|
| Convertible Preferred Stock |
|
| Convertible Preferred Stock |
|
|
| Common Stock |
|
| Additional Paid-in |
|
| Accumulated |
|
| Other Comprehensive |
|
| Stockholders' Equity |
| |||||||||||||||||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
|
| Shares |
|
| Amount |
|
| Capital |
|
| Deficit |
|
| Income (Loss) |
|
| (Deficit) |
| ||||||||||||||
Balance as of December 31, 2019 |
|
| 391,210 |
|
| $ | 3,059 |
|
|
| 3,088,444 |
|
| $ | 40,685 |
|
|
| 4,499,921 |
|
| $ | 74,575 |
|
|
| 8,200,297 |
|
| $ | 135,039 |
|
|
|
| 695,902 |
|
| $ | 1 |
|
| $ | 33,252 |
|
| $ | (259,034 | ) |
| $ | (30 | ) |
| $ | (225,811 | ) |
Unrealized loss on marketable securities |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (50 | ) |
|
| (50 | ) |
Foreign currency translation adjustment |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 147 |
|
|
| 147 |
|
Issuance of Series D convertible preferred stock for the Biotronik Asset Purchase |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 273,070 |
|
|
| 5,000 |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Issuance of Series D convertible preferred stock for the contingent consideration related to the Rhythm Xience Acquisition |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 119,993 |
|
|
| 2,197 |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Conversion of convertible preferred stock into common stock upon IPO |
|
| (391,210 | ) |
|
| (3,059 | ) |
|
| (3,088,444 | ) |
|
| (40,685 | ) |
|
| (4,499,921 | ) |
|
| (74,575 | ) |
|
| (8,593,360 | ) |
|
| (142,236 | ) |
|
|
| 16,572,935 |
|
|
| 17 |
|
|
| 260,538 |
|
|
| — |
|
|
| — |
|
|
| 260,555 |
|
Issuance of common stock for cash, net of issuance costs of $16,361 |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
| 10,147,058 |
|
|
| 10 |
|
|
| 166,276 |
|
|
| — |
|
|
| — |
|
|
| 166,286 |
|
Reclassification of warrant liability to stockholders' equity |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
|
| 14,474 |
|
|
| — |
|
|
| — |
|
|
| 14,474 |
|
Stock option exercises |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
| 92,223 |
|
|
| — |
|
|
| 350 |
|
|
| — |
|
|
| — |
|
|
| 350 |
|
Stock-based compensation |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
| 318,290 |
|
|
| — |
|
|
| 9,272 |
|
|
| — |
|
|
| — |
|
|
| 9,272 |
|
Net loss |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (72,579 | ) |
|
| — |
|
|
| (72,579 | ) |
Balance as of September 30, 2020 (unaudited) |
|
| — |
|
| $ | — |
|
|
| — |
|
| $ | — |
|
|
| — |
|
| $ | — |
|
|
| — |
|
| $ | — |
|
|
|
| 27,826,408 |
|
| $ | 28 |
|
| $ | 484,162 |
|
| $ | (331,613 | ) |
| $ | 67 |
|
| $ | 152,644 |
|
Series A | Series B | Series C | Series D | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total Stockholders’ Deficit | ||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Preferred Stock | Convertible Preferred Stock | Convertible Preferred Stock | Convertible Preferred Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2019 | 391,210 | $ | 3,059 | 3,088,444 | $ | 40,685 | 4,499,921 | $ | 74,575 | 8,200,297 | $ | 135,039 | 695,902 | $ | 1 | $ | 33,252 | $ | (259,034) | $ | (30) | $ | (225,811) | |||||||||||||||||||||||||||||||||
Unrealized loss on marketable securities | — | — | — | — | — | — | — | — | — | — | — | — | (41 | ) | (41 | ) | ||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | — | — | — | 69 | 69 | ||||||||||||||||||||||||||||||||||||||||||
Issuance of Series D convertible preferred stock for the Biotronik Asset Purchase | — | — | — | — | — | — | 273,070 | 5,000 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Issuance of Series D convertible preferred stock for the contingent consideration related to the Rhythm Xience Acquisition | — | — | — | — | — | — | 119,993 | 2,197 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Stock option exercises | — | — | — | — | — | — | — | — | 64,562 | — | 205 | — | — | 205 | ||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | 14,939 | — | 2,898 | — | — | 2,898 | ||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | (41,291 | ) | — | (41,291 | ) | ||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2020 (unaudited) | 391,210 | $ | 3,059 | 3,088,444 | $ | 40,685 | 4,499,921 | $ | 74,575 | 8,593,360 | $ | 142,236 | 775,403 | $ | 1 | $ | 36,355 | $ | (300,325) | $ | (2) | $ | (263,971 | ) | ||||||||||||||||||||||||||||||||
For the SixNine Months Ended JuneSeptember 30, 2019
|
| Series A |
|
| Series B |
|
| Series C |
|
| Series D |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Accumulated |
|
|
|
|
| |||||||||||||||||||||
|
| Convertible Preferred Stock |
|
| Convertible Preferred Stock |
|
| Convertible Preferred Stock |
|
| Convertible Preferred Stock |
|
|
| Common Stock |
|
| Additional Paid-in |
|
| Accumulated |
|
| Other Comprehensive |
|
| Total Stockholders' |
| |||||||||||||||||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
|
| Shares |
|
| Amount |
|
| Capital |
|
| Deficit |
|
| Income (Loss) |
|
| Deficit |
| ||||||||||||||
Balance as of December 31, 2018 |
|
| 388,558 |
|
| $ | 3,059 |
|
|
| 3,088,444 |
|
| $ | 40,685 |
|
|
| 4,499,921 |
|
| $ | 74,575 |
|
|
| — |
|
| $ | — |
|
|
|
| 656,654 |
|
| $ | 1 |
|
| $ | 30,150 |
|
| $ | (161,995 | ) |
| $ | 20 |
|
| $ | (131,824 | ) |
Unrealized gain on marketable securities |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 47 |
|
|
| 47 |
|
Foreign currency translation adjustment |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (57 | ) |
|
| (57 | ) |
Issuance of Series A preferred stock for cashless warrant exercise |
|
| 2,652 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Issuance of Series D convertible preferred stock for cash, net of issuance costs of $1,632 |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 4,091,819 |
|
|
| 66,567 |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Issuance of Series D convertible preferred stock for 2018 Convertible Notes and 2019 Convertible Notes |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 4,108,478 |
|
|
| 68,476 |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Stock-based compensation |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
| 11,449 |
|
|
| — |
|
|
| 2,174 |
|
|
| — |
|
|
| — |
|
|
| 2,174 |
|
Stock option exercises |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
| 15,921 |
|
|
| — |
|
|
| 76 |
|
|
| — |
|
|
| — |
|
|
| 76 |
|
Net loss |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (77,125 | ) |
|
| — |
|
|
| (77,125 | ) |
Balance as of September 30, 2019 (unaudited) |
|
| 391,210 |
|
| $ | 3,059 |
|
|
| 3,088,444 |
|
| $ | 40,685 |
|
|
| 4,499,921 |
|
| $ | 74,575 |
|
|
| 8,200,297 |
|
| $ | 135,043 |
|
|
|
| 684,024 |
|
| $ | 1 |
|
| $ | 32,400 |
|
| $ | (239,120 | ) |
| $ | 10 |
|
| $ | (206,709 | ) |
Series A Convertible Preferred Stock | Series B Convertible Preferred Stock | Series C Convertible Preferred Stock | Series D Convertible Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total Stockholders’ Deficit | ||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2018 | 388,558 | $ | 3,059 | 3,088,444 | $ | 40,685 | 4,499,921 | $ | 74,575 | — | $ | — | 656,654 | $ | 1 | $ | 30,150 | $ | (161,995) | $ | 20 | $ | (131,824) | |||||||||||||||||||||||||||||||||
Unrealized gain on marketable securities | — | — | — | — | — | — | — | — | — | — | — | — | 7 | 7 | ||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | — | — | — | (12 | ) | (12 | ) | ||||||||||||||||||||||||||||||||||||||||
Issuance of Series A preferred stock for cashless warrant exercise | 2,652 | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Issuance of Series D convertible preferred stock for cash, net of issuance costs of $274 | — | — | — | — | — | — | 2,309,959 | 38,226 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Issuance of Series D convertible preferred stock for 2018 Convertible Notes and 2019 Convertible Notes | — | — | — | — | — | — | 4,108,478 | 68,476 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | 6,837 | — | 1,362 | — | — | 1,362 | ||||||||||||||||||||||||||||||||||||||||||
Stock option exercises | — | — | — | — | — | — | — | — | 8,469 | — | 57 | — | — | 57 | ||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | (45,040 | ) | — | (45,040 | ) | ||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2019 (unaudited) | 391,210 | $ | 3,059 | 3,088,444 | $ | 40,685 | 4,499,921 | $ | 74,575 | 6,418,437 | $ | 106,702 | 671,960 | $ | 1 | $ | 31,569 | $ | (207,035) | $ | 15 | $ | (175,450) | |||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
(in thousands)
(Unaudited)
|
| Nine Months Ended September 30, |
| |||||
|
| 2020 |
|
| 2019 |
| ||
Cash flows from operating activities |
|
|
|
|
|
|
|
|
Net loss |
| $ | (72,579 | ) |
| $ | (77,125 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Depreciation expense |
|
| 1,754 |
|
|
| 1,676 |
|
Amortization of intangible assets |
|
| 330 |
|
|
| 125 |
|
Stock-based compensation expense |
|
| 9,272 |
|
|
| 2,174 |
|
Amortization of premiums/(accretion of discounts) on marketable securities, net |
|
| 113 |
|
|
| (100 | ) |
Amortization of debt issuance costs |
|
| 518 |
|
|
| 17,438 |
|
Amortization of right-of-use assets |
|
| 507 |
|
|
| 470 |
|
Research and development - license acquired |
|
| — |
|
|
| 15,000 |
|
Gain on disposal of property and equipment |
|
| — |
|
|
| (1 | ) |
Loss on debt extinguishment |
|
| — |
|
|
| 1,447 |
|
Change in fair value of warrant liability and embedded derivative |
|
| 5,555 |
|
|
| 608 |
|
Change in fair value of contingent consideration |
|
| (1,466 | ) |
|
| 700 |
|
Changes in operating assets and liabilities, net of effect from business combination: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
| (1,630 | ) |
|
| (697 | ) |
Inventory |
|
| (1,865 | ) |
|
| (3,829 | ) |
Prepaid expenses and other current assets |
|
| (2,729 | ) |
|
| (306 | ) |
Other assets |
|
| (387 | ) |
|
| (8 | ) |
Accounts payable |
|
| 753 |
|
|
| 2,873 |
|
Accrued liabilities |
|
| 1,423 |
|
|
| 9,268 |
|
Operating lease liabilities |
|
| (615 | ) |
|
| (536 | ) |
Other long-term liabilities |
|
| 8 |
|
|
| — |
|
Net cash used in operating activities |
|
| (61,038 | ) |
|
| (30,823 | ) |
|
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|
Purchases of available-for-sale marketable securities |
|
| (108,528 | ) |
|
| (68,735 | ) |
Sales of available-for-sale marketable securities |
|
| 17,095 |
|
|
| — |
|
Maturities of available-for-sale marketable securities |
|
| 45,000 |
|
|
| 11,550 |
|
Purchases of property and equipment |
|
| (7,822 | ) |
|
| (683 | ) |
Purchase of research and development license |
|
| — |
|
|
| (10,000 | ) |
Cash paid, net of cash acquired for the Rhythm Xience Acquisition |
|
| — |
|
|
| (3,000 | ) |
Net cash used in investing activities |
|
| (54,255 | ) |
|
| (70,868 | ) |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
Proceeds from issuance of debt and warrants |
|
| — |
|
|
| 77,000 |
|
Repayment of debt |
|
| — |
|
|
| (15,000 | ) |
Payment of issuance and extinguishment costs related to debt |
|
| — |
|
|
| (2,332 | ) |
Payment of contingent consideration |
|
| (2,636 | ) |
|
| — |
|
Proceeds from issuance of convertible preferred stock, net of issuance costs |
|
| — |
|
|
| 66,567 |
|
Proceeds from issuance of common stock upon IPO, net of issuance costs |
|
| 166,286 |
|
|
| — |
|
Proceeds from stock options exercises |
|
| 350 |
|
|
| 76 |
|
Net cash provided by financing activities |
|
| 164,000 |
|
|
| 126,311 |
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
| 143 |
|
|
| (50 | ) |
|
|
|
|
|
|
|
|
|
Net change in cash, cash equivalents and restricted cash |
|
| 48,850 |
|
|
| 24,570 |
|
Cash, cash equivalents and restricted cash, at the beginning of the period |
|
| 9,602 |
|
|
| 9,775 |
|
Cash, cash equivalents and restricted cash, at the end of the period |
| $ | 58,452 |
|
| $ | 34,345 |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
|
Cash paid for income taxes |
| $ | — |
|
| $ | — |
|
Cash paid for interest |
| $ | 3,526 |
|
| $ | 4,647 |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of noncash investing and financing activities: |
|
|
|
|
|
|
|
|
Issuance of Series D convertible preferred stock for 2018 Convertible Notes and 2019 Convertible Notes |
| $ | — |
|
| $ | 68,476 |
|
Issuance of Series D convertible preferred stock for Biotronik asset purchase |
| $ | 5,000 |
|
| $ | — |
|
Issuance of Series D convertible preferred stock for Rhythm Xience Acquisition |
| $ | 2,197 |
|
| $ | — |
|
Change in unrealized (gain) loss on marketable securities |
| $ | 50 |
|
| $ | (47 | ) |
Warrants issued in conjunction with OrbiMed debt |
| $ | — |
|
| $ | 872 |
|
Right-of-use assets exchanged for operating lease liabilities |
| $ | — |
|
| $ | 2,978 |
|
Accrued purchase of research and development-license |
| $ | — |
|
| $ | 5,000 |
|
Unpaid purchases of property and equipment |
| $ | 88 |
|
| $ | 35 |
|
Conversion of convertible preferred stock into common stock upon IPO |
| $ | 260,555 |
|
| $ | — |
|
Reclassification of warrant liability to stockholders' equity |
| $ | 14,474 |
|
| $ | — |
|
Six Months Ended June 30, | ||||||||
2020 | 2019 | |||||||
Cash flows from operating activities | ||||||||
Net loss | $ | (41,291 | ) | $ | (45,040 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation expense | 978 | 1,142 | ||||||
Amortization of intangible assets | 220 | — | ||||||
Stock-based compensation expense | 2,898 | 1,362 | ||||||
Accretion of discounts/(amortization of premiums) on marketable securities, net | 5 | (19 | ) | |||||
Amortization of debt issuance costs | 314 | 17,309 | ||||||
Amortization of right-of-use | 336 | 312 | ||||||
Loss on debt extinguishment | — | 1,398 | ||||||
Change in fair value of warrant liability and embedded derivative | 1,872 | 605 | ||||||
Change in fair value of contingent consideration | (1,584 | ) | — | |||||
Changes in operating assets and liabilities, net of effect from business combination: | ||||||||
Accounts receivable | (597 | ) | (280 | ) | ||||
Inventory | (3,616 | ) | (1,961 | ) | ||||
Prepaid expenses and other current assets | 666 | (43 | ) | |||||
Other assets | 8 | (12 | ) | |||||
Accounts payable | 5,286 | 1,682 | ||||||
Accrued liabilities | 155 | 1,810 | ||||||
Operating lease liabilities | (411 | ) | (349 | ) | ||||
Net cash used in operating activities | (34,761 | ) | (22,084 | ) | ||||
Cash flows from investing activities | ||||||||
Purchases of available-for-sale | — | (22,208 | ) | |||||
Sales of available-for-sale | 17,095 | — | ||||||
Maturities of available-for-sale | 40,000 | 8,100 | ||||||
Purchases of property and equipment | (4,445 | ) | (316 | ) | ||||
Cash paid, net of cash acquired for the Rhythm Xience Acquisition | — | (3,000 | ) | |||||
Net cash provided by (used in) investing activities | 52,650 | (17,424 | ) | |||||
Cash flows from financing activities | ||||||||
Proceeds from issuance of debt and warrants | — | 77,000 | ||||||
Repayment of debt | — | (15,000 | ) | |||||
Payment of issuance and extinguishment costs related to debt | — | (2,332 | ) | |||||
Payment of contingent consideration | (2,619 | ) | — | |||||
Proceeds from issuance of convertible preferred stock, net of issuance costs | — | 38,226 | ||||||
Payment of deferred offering costs | (701 | ) | — | |||||
Proceeds from stock options exercises | 205 | 57 | ||||||
Net cash (used in) provided by financing activities | (3,115 | ) | 97,951 | |||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 69 | (12 | ) | |||||
Net change in cash, cash equivalents and restricted cash | 14,843 | 58,431 | ||||||
Cash, cash equivalents and restricted cash, at the beginning of the period | 9,602 | 9,775 | ||||||
Cash, cash equivalents and restricted cash, at the end of the period | $ | 24,445 | $ | 68,206 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for income taxes | $ | — | $ | — | ||||
Cash paid for interest | $ | 2,376 | $ | 1,168 | ||||
Supplemental disclosure of noncash investing and financing activities: | ||||||||
Issuance of Series D convertible preferred stock for 2018 Convertible Notes and 2019 Convertible Notes | $ | — | $ | 68,476 | ||||
Issuance of Series D convertible preferred stock for Biotronik asset purchase | $ | 5,000 | $ | — | ||||
Issuance of Series D convertible preferred stock for Rhythm Xience Acquisition | $ | 2,197 | $ | — | ||||
Change in unrealized (gain) loss on marketable securities | $ | 41 | $ | (7 | ) | |||
Warrants issued in conjunction with OrbiMed debt | $ | — | $ | 872 | ||||
Right-of-use | $ | — | $ | 2,978 | ||||
Unpaid purchases of property and equipment | $ | 55 | $ | 77 | ||||
Unpaid deferred offering costs | $ | 1,805 | $ | — |
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
Acutus Medical, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Acutus Medical, Inc. (the “Company”) is an arrhythmia management company focused on improving the way cardiac arrhythmias are diagnosed and treated. The Company designs, manufactures and markets a range of tools for catheter-based ablation procedures to treat various arrhythmias. The Company’s product portfolio includes novel access sheaths, transseptal crossing tools, diagnostic and mapping catheters, ablation catheters, mapping and imaging consoles and accessories, as well as supporting algorithms and software programs. The Company was incorporated in the state of Delaware on March 25, 2011, and is located in Carlsbad, California.
Reverse Stock Split
The Company’s board of directors approved a reverse split of shares of the Company’s common stock and convertible preferred stock on a 9.724-for-one basis (the “Reverse Stock Split”), which was effected on July 28, 2020. The par value and the number of authorized shares of the convertible preferred stock and common stock were not adjusted in connection with the Reverse Stock Split. All references to common stock, convertible preferred stock, warrants to purchase common stock, warrants to purchase convertible preferred stock, options to purchase common stock, restricted stock units, restricted stock awards, share data, per share data and related information contained in the condensed consolidated financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented. No fractional shares of the Company’s common stock were issued in connection with the Reverse Stock Split. Any fractional share resulting from the Reverse Stock Split was rounded down to the nearest whole share, and any stockholder entitled to a fractional share as a result of the Reverse Stock Split will receivereceived a cash payment in lieu of receiving fractional shares. See Note 19 – Subsequent Events for further information.
Initial Public Offering
On August 10, 2020, the Company issued 10,147,058 shares of common stock
On August 10, 2020, in connection with the closing of the IPO, 391,210 shares of Series A, 3,088,444 shares of Series B, 4,499,921 shares of Series C and 8,593,360 shares of Series D convertible preferred stock, respectively, automatically converted into an equal number of shares of common stock and the warrants to purchase 446,990 shares of Series D convertible preferred stock were automatically converted to an equal number of warrants to purchase common stock at an exercise price of $16.67 per share.
As a result of the IPO, the underwriters’ exercise of their option, and the conversions of the Series A, B, C and D convertible preferred stock, the Company’s total number of outstanding shares increased by 26,719,993 immediately following the closing of the IPO. See Note 19 – Subsequent Events for further information.
Going Concern, Liquidity and Capital Resources
The Company has limited revenue, has incurred operating losses since inception and expects to continue to incur significant operating losses for at least the next several years and may never become profitable. As of JuneSeptember 30, 2020 and December 31, 2019, the Company had an accumulated deficit of $300.3$331.6 million and $259.0 million, respectively, and working capital of $15.1$159.5 million and
6
Acutus Medical, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
debt, making acquisitions or capital expenditures or declaring dividends. If the Company is unable to maintain sufficient financial resources, its business, financial condition and results of operations will be materially and adversely affected. The Company may be required to delay, limit, reduce or terminate its product discovery and development activities or future commercialization efforts. There can be no assurance that the Company will be able to obtain the needed financing on acceptable terms or at all.
Beginning in early March 2020, the
Note 2—Summary of Significant Accounting Policies
Basis of Presentation
The condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form
Principles of Consolidation
The condensed consolidated financial statements include the accounts of Acutus Medical, Inc. and its wholly-owned subsidiary Acutus Medical NV (“Acutus NV”), which was incorporated under the laws of Belgium in August 2013. All intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates and Assumptions
The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, expenses and disclosures of contingent assets and liabilities. The most significant estimates and assumptions in the Company’s condensed consolidated financial statements include, but are not limited to, revenue recognition, useful lives of intangible assets, assessment of impairment of goodwill, provisions for income taxes, measurement of operating lease liabilities, and the fair value of common stock, stock options, warrants, intangible assets, contingent consideration and goodwill. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results could differ from those estimates.
Segments
Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment.
The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. All of the Company’s cash equivalents have liquid markets and high credit ratings. The Company maintains its cash in bank deposits and other accounts, the balances of which, at times and as of JuneSeptember 30, 2020 and December 31, 2019, exceeded federally insured limits.
Restricted cash serves as collateral for the Company’s corporate credit card program. The following table reconciles cash, cash equivalents and restricted cash in the condensed consolidated balance sheets to the totals shown on the condensed consolidated statements of cash flows (in thousands):
|
| September 30, |
|
| December 31, |
| ||
|
| 2020 |
|
| 2019 |
| ||
|
| (unaudited) |
|
|
|
|
| |
Cash and cash equivalents |
| $ | 58,302 |
|
| $ | 9,452 |
|
Restricted cash |
|
| 150 |
|
|
| 150 |
|
Total cash, cash equivalents and restricted cash |
| $ | 58,452 |
|
| $ | 9,602 |
|
June 30, 2020 | December 31, 2019 | |||||||
(unaudited) | ||||||||
Cash and cash equivalents | $ | 24,295 | $ | 9,452 | ||||
Restricted cash | 150 | 150 | ||||||
Total cash, cash equivalents and restricted cash | $ | 24,445 | $ | 9,602 | ||||
Marketable Securities
The Company considers its debt securities to be
Securities that are classified as
Marketable securities are subject to a periodic impairment review. The Company may recognize an impairment charge when a decline in the fair value of investments below the cost basis is determined to be other-than-temporary. In determining whether a decline in market value is other-than-temporary, various factors are considered, including the cause, duration of time and severity of the impairment, any adverse changes in the investees’ financial condition and the Company’s intent and ability to hold the security for a period of time sufficient to allow for an anticipated recovery in market value. Declines in value judged to be other-than-temporary are included in the Company’s condensed consolidated statements of operations and comprehensive loss. The Company did not record any other-than-temporary impairments related to marketable securities in the Company’s condensed consolidated statements of operations and comprehensive loss for the
Concentrations of Credit Risk and
Financial instruments that potentially subject the Company to credit risk consist principally of cash, cash equivalents, restricted cash, accounts receivable and marketable securities. Cash and restricted cash are maintained in accounts with financial institutions, which, at times may exceed the Federal depository insurance coverage of $0.25 million. The Company has not experienced losses on these accounts and management believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant. The Company’s marketable securities portfolio consists primarily of investments in money market funds, commercial paper and short-term high credit quality corporate debt securities.
8
Acutus Medical, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The Company accounts for revenue earned from contracts with customers under Accounting Standards Codification (“ASC”) 606,
Step 1: Identify the contract with the customer.
Step 2: Identify the performance obligations in the contract.
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price to the performance obligations in the contract.
Step 5: Recognize revenue when, or as, the company satisfies a performance obligation.
The Company
During the three months ended September 30, 2020, the Company entered into deferred equipment agreements that are generally structured such that the Company agrees to provide an AcQMap System at no up-front charge, with title of the device transferring to the customer at the end of the contract term, in exchange for the customer’s commitment to purchase disposables at a specified price over the term of the agreement, which generally ranges from two to four years. The Company determined that the deferred equipment agreements include embedded sales-type leases. The Company allocates contract consideration under deferred equipment agreements containing fixed annual disposable purchase commitments to the underlying lease and non-lease components at contract inception. The Company expenses the cost of the device at the inception of the agreement and records a financial lease asset equal to the gross consideration allocated to the lease. The lease asset will be reduced by payments for minimum disposable purchases that are allocated to the lease.
The following table sets forth the Company’s revenue for disposables and systems/service for the three and sixnine months ended JuneSeptember 30, 2020 and 2019 (in thousands):
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
| ||||||||||
|
| 2020 |
|
| 2019 |
|
| 2020 |
|
| 2019 |
| ||||
|
| (unaudited) |
|
| (unaudited) |
| ||||||||||
Disposables |
| $ | 2,179 |
|
| $ | 643 |
|
| $ | 4,358 |
|
| $ | 2,155 |
|
Systems |
|
| 965 |
|
|
| — |
|
|
| 1,485 |
|
|
| — |
|
Service/Other |
|
| 29 |
|
|
| 3 |
|
|
| 47 |
|
|
| 12 |
|
Total |
| $ | 3,173 |
|
| $ | 646 |
|
| $ | 5,890 |
|
| $ | 2,167 |
|
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
Disposables | $ | 1,122 | $ | 730 | $ | 2,179 | $ | 1,512 | ||||||||
Systems | — | — | $ | 520 | — | |||||||||||
Service/Other | 12 | 4 | 18 | 9 | ||||||||||||
Total | $ | 1,134 | $ | 734 | $ | 2,717 | $ | 1,521 | ||||||||
The Company’s contracts only include fixed consideration. There are no discounts, rebates, returns or other forms of variable consideration. Customers are generally required to pay within 30 to 60 days.
The delivery of disposable products are performance obligations satisfied at a point in time. The disposable products are shipped Free on Board (“FOB”) shipping point or FOB destination. For disposable products that are shipped FOB shipping point, the customer has the significant risks and rewards of ownership and legal title to the assets when the disposable products leave the Company’s shipping facilities, thus the customer obtains control and revenue is recognized at that point in time. Revenue is recognized on delivery for disposable products shipped via FOB destination.
9
Acutus Medical, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The installation and delivery of the AcQMap systemSystem is satisfied at a point in time when the installation is complete, which is when the customer can benefit and has control of the system. The Company’s software updates and equipment service performance obligations are satisfied evenly over time as the customer simultaneously receives and consumes the benefits of the Company’s performance for these services throughout the service period.
The Company allocates the transaction price to each performance obligation identified in the contract based on the relative standalone selling price (“SSP”). The Company determines SSP for the purposes of allocating the transaction price to each performance obligation based on the adjusted market assessment approach that maximizes the use of observable inputs, which includes, but is not limited to, transactions where the specific performance obligations are sold separately, list prices, and offers to customers.
The Company’s contracts with customers generally have an expected duration of one year or less, and therefore the Company has elected the practical expedient in ASC 606 to not disclose information about its remaining performance obligations. Any incremental costs to obtain contracts are recorded as selling, general and administrative expense as incurred due to the short duration of the Company’s contracts. The Company’s contract balances consisted solely of accounts receivable as of JuneSeptember 30, 2020 and December 31, 2019.
In May 2020, the Company entered into
The following table provides revenue by geographic location for the three and sixnine months ended JuneSeptember 30, 2020 and 2019 (in thousands):
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
| ||||||||||
|
| 2020 |
|
| 2019 |
|
| 2020 |
|
| 2019 |
| ||||
|
| (unaudited) |
|
| (unaudited) |
| ||||||||||
United States |
| $ | 1,867 |
|
| $ | 147 |
|
| $ | 3,195 |
|
| $ | 603 |
|
Europe |
|
| 1,306 |
|
|
| 499 |
|
|
| 2,695 |
|
|
| 1,564 |
|
Total Revenue |
| $ | 3,173 |
|
| $ | 646 |
|
| $ | 5,890 |
|
| $ | 2,167 |
|
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
United States | $ | 559 | $ | 221 | $ | 1,328 | $ | 456 | ||||||||
Europe | 575 | 513 | 1,389 | 1,065 | ||||||||||||
Total Revenue | $ | 1,134 | $ | 734 | $ | 2,717 | $ | 1,521 | ||||||||
Inventory
Inventory is comprised of raw materials, direct labor and manufacturing overhead and is stated at the lower of cost
Accounts Receivable
Trade accounts receivable are recorded net of allowances for uncollectible accounts. The Company evaluates the collectability of its accounts receivable based on various factors including historical experience, the length of time the receivables are past due and the financial health of the customer. The Company reserves specific receivables if collectability is no longer reasonably assured. Based upon the assessment of these factors, the Company did not record an allowance for uncollectible accounts as of JuneSeptember 30, 2020 and December 31, 2019.
Property and equipment are recorded at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful lives of the related assets, generally three to five years, or, in the case of leasehold improvements, over the lesser of the useful life of the related asset or the lease term.
Intangible Assets
Intangible assets consist of acquired developed technology, acquired
Goodwill
Goodwill represents the excess of the purchase price of an entity over the estimated fair value of the assets acquired and liabilities assumed, and it is presented as goodwill in the accompanying condensed consolidated balance sheets. Under ASC 350,
Impairment of Long-Lived Assets
The Company reviews long-lived assets, including property and equipment and finite-lived intangible assets, for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. An impairment loss is recognized when the asset’s carrying value exceeds the total undiscounted cash flows expected from its use and eventual disposition. The amount of the impairment loss is determined as the excess of the carrying value of the asset over its fair value. For the three and sixnine months ended JuneSeptember 30, 2020 and 2019, the Company determined that there was no impairment of property and equipment or intangible assets.
Foreign Currency Translation and Transactions
The assets, liabilities and results of operations of Acutus NV are measured using their functional currency, the Euro, which is the currency of the primary foreign economic environment in which this subsidiary operates. Upon consolidating this entity with the Company, its assets and liabilities are translated to U.S. dollars at currency exchange rates as of the balance sheet date and its revenues and expenses are translated at the weighted-averageweighted average currency exchange rates during the applicable reporting periods. Translation adjustments resulting from the process of translating this entity’s financial statements are reported in accumulated other comprehensive lossincome (loss) in the condensed consolidated balance sheets and foreign currency translation adjustment in the condensed consolidated statements of operations and comprehensive loss.
Lessee Leases
11
Acutus Medical, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
condensed consolidated balance sheet as both a
In calculating the
Cost of Products Sold
Cost of products sold includes raw materials, direct labor, manufacturing overhead, shipping and receiving costs and other less significant indirect costs related to the production of the Company’s products.
Research and Development
The Company is actively engaged in new product research and development efforts. Research and development expenses consist primarily of salaries and employee-related costs (including stock-based compensation) for personnel directly engaged in research and development activities, clinical trial expenses, equipment costs, material costs, allocated rent and facilities costs and depreciation. Research and development expenses also include payments for the asset acquisition from Biotronik and VascoMed GmbH (collectively, the “Biotronik Parties”) for certain licenses of patents, technology,
Research and development expenses relating to possible future products are expensed as incurred. The Company also accrues and expenses costs for activities associated with clinical trials performed by third parties as incurred. All other costs relative to setting up clinical trial sites are expensed as incurred. Clinical trial site costs related to patient enrollment are accrued as patients are entered into the trials.
Selling, General and Administrative
Selling, general and administrative (“SG&A”) expenses consist primarily of salaries and employee-related costs (including stock-based compensation) for personnel in sales, executive, finance and other administrative functions, allocated rent and facilities costs, legal fees relating to intellectual property and corporate matters, professional fees for accounting and consulting services, marketing costs and insurance costs. The Company expenses all SG&A costs as incurred.
Fair Value Measurements
Fair value measurements are based on the premise that fair value is an exit price representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the following three-tier fair value hierarchy has been used in determining the inputs used in measuring fair value:
Level 1—Quoted prices in active markets for identical assets or liabilities.
Level 2—Observable inputs other than Level 1 prices for similar assets or liabilities that are directly or indirectly observable in the marketplace.
Level 3—Unobservable inputs which are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.
Financial instruments measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Management’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The use of different assumptions and/or estimation methodologies may have a material effect on estimated fair values. Accordingly, the fair value estimates disclosed or initial amounts
12
Acutus Medical, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
exchange. There were no transfers made among the three levels in the fair value hierarchy for the three and sixnine months ended JuneSeptember 30, 2020 and 2019.
As of JuneSeptember 30, 2020 and December 31, 2019, the Company’s cash (excluding cash equivalents which are recorded at fair value on a recurring basis), restricted cash, accounts receivable, accounts payable and accrued expenses were carried at cost, which approximates the fair values due to the short-term nature of the instruments.
The carrying amount of the Company’s long-term debt approximates fair value due to its variable market interest rate and management’s opinion that current rates and terms that would be available to the Company with the same maturity and security structure would be essentially equivalent to that of the Company’s long-term debt.
The following tables classify the Company’s financial assets and liabilities measured at fair value on a recurring basis into the fair value hierarchy as of JuneSeptember 30, 2020 and December 31, 2019 (in thousands):
|
| Fair Value Measured at September 30, 2020 (unaudited) |
|
|
|
|
| |||||||||
|
| Quoted Prices in Active Markets for Identical Assets (Level 1) |
|
| Significant Other Observable Inputs (Level 2) |
|
| Significant Unobservable Inputs (Level 3) |
|
| Fair Value at September 30, 2020 |
| ||||
Assets included in: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money market securities |
| $ | 53,063 |
|
| $ | — |
|
| $ | — |
|
| $ | 53,063 |
|
Marketable securities at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debt securities |
|
| — |
|
|
| 31,455 |
|
|
| — |
|
|
| 31,455 |
|
U.S. treasury securities |
|
| — |
|
|
| 14,361 |
|
|
| — |
|
|
| 14,361 |
|
Commercial paper |
|
| — |
|
|
| 53,926 |
|
|
| — |
|
|
| 53,926 |
|
Asset-backed securities |
|
| — |
|
|
| 8,789 |
|
|
| — |
|
|
| 8,789 |
|
Total fair value |
| $ | 53,063 |
|
| $ | 108,531 |
|
| $ | — |
|
| $ | 161,594 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities included in: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent consideration |
| $ | — |
|
| $ | — |
|
| $ | 7,600 |
|
| $ | 7,600 |
|
Total fair value |
| $ | — |
|
| $ | — |
|
| $ | 7,600 |
|
| $ | 7,600 |
|
13
Acutus Medical, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
|
| Fair Value Measured at December 31, 2019 |
|
|
|
|
| |||||||||
|
| Quoted Prices in Active Markets for Identical Assets (Level 1) |
|
| Significant Other Observable Inputs (Level 2) |
|
| Significant Unobservable Inputs (Level 3) |
|
| Fair Value at December 31, 2019 |
| ||||
Assets included in: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money market securities |
| $ | 8,901 |
|
| $ | — |
|
| $ | — |
|
| $ | 8,901 |
|
Marketable securities at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debt securities |
|
| — |
|
|
| 28,224 |
|
|
| — |
|
|
| 28,224 |
|
Asset-backed securities |
|
| — |
|
|
| 17,121 |
|
|
| — |
|
|
| 17,121 |
|
U.S. treasury securities |
|
| — |
|
|
| 5,032 |
|
|
| — |
|
|
| 5,032 |
|
Commercial paper |
|
| — |
|
|
| 11,974 |
|
|
| — |
|
|
| 11,974 |
|
Total fair value |
| $ | 8,901 |
|
| $ | 62,351 |
|
| $ | — |
|
| $ | 71,252 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities included in: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent consideration |
| $ | — |
|
| $ | — |
|
| $ | 13,900 |
|
| $ | 13,900 |
|
Common and preferred stock warrant liability |
|
| — |
|
|
| — |
|
|
| 8,919 |
|
|
| 8,919 |
|
Total fair value |
| $ | — |
|
| $ | — |
|
| $ | 22,819 |
|
| $ | 22,819 |
|
Fair Value Measured at June 30, 2020 (unaudited) | ||||||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Fair Value at June 30, 2020 | |||||||||||||
Assets included in: | ||||||||||||||||
Cash and cash equivalents | ||||||||||||||||
Money market securities | $ | 21,544 | $ | — | $ | — | $ | 21,544 | ||||||||
Marketable securities at fair value | ||||||||||||||||
U.S. treasury securities | — | 5,037 | — | 5,037 | ||||||||||||
Total fair value | $ | 21,544 | $ | 5,037 | $ | — | $ | 26,581 | ||||||||
Liabilities included in: | ||||||||||||||||
Contingent consideration | $ | — | $ | — | $ | 7,500 | $ | 7,500 | ||||||||
Common and preferred stock warrant liability | — | — | 10,791 | 10,791 | ||||||||||||
Total fair value | $ | — | $ | — | $ | 18,291 | $ | 18,291 | ||||||||
Fair Value Measured at December 31, 2019 | ||||||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Fair Value at December 31, 2019 | |||||||||||||
Assets included in: | ||||||||||||||||
Cash and cash equivalents | ||||||||||||||||
Money market securities | $ | 8,901 | $ | — | $ | — | $ | 8,901 | ||||||||
Marketable securities at fair value | ||||||||||||||||
Corporate debt securities | — | 28,224 | — | 28,224 | ||||||||||||
Asset-backed securities | — | 17,121 | — | 17,121 | ||||||||||||
U.S. treasury securities | — | 5,032 | — | 5,032 | ||||||||||||
Commercial paper | — | 11,974 | — | 11,974 | ||||||||||||
Total fair value | $ | 8,901 | $ | 62,351 | $ | — | $ | 71,252 | ||||||||
Liabilities included in: | ||||||||||||||||
Contingent consideration | $ | — | $ | — | $ | 13,900 | $ | 13,900 | ||||||||
Common and preferred stock warrant liability | — | — | 8,919 | 8,919 | ||||||||||||
Total fair value | $ | — | $ | — | $ | 22,819 | $ | 22,819 | ||||||||
The fair value of the Company’s money market funds is determined using quoted market prices in active markets for identical assets.
The Company’s portfolio of marketable securities is comprised of commercial paper, asset-backed securities, U.S. treasury securities and short-term highly liquid, high credit quality corporate debt securities. The fair value for the
The following table presents changes in Level 3 liabilities measured at fair value for the sixnine months ended JuneSeptember 30, 2020 (in thousands):
|
| Common and Preferred Stock Warrant Liability |
|
| Contingent Consideration |
|
| Total |
| |||
Balance, December 31, 2019 |
| $ | 8,919 |
|
| $ | 13,900 |
|
| $ | 22,819 |
|
Payment of contingent consideration |
|
| — |
|
|
| (2,636 | ) |
|
| (2,636 | ) |
Issuance of preferred stock for contingent consideration |
|
| — |
|
|
| (2,197 | ) |
|
| (2,197 | ) |
Reclassification of warrant liability to stockholders' equity |
|
| (14,474 | ) |
|
| — |
|
|
| (14,474 | ) |
Change in fair value |
|
| 5,555 |
|
|
| (1,466 | ) |
|
| 4,089 |
|
Balance, September 30, 2020 (unaudited) |
| $ | — |
|
| $ | 7,600 |
|
| $ | 7,600 |
|
Common and Preferred Stock Warrant Liability | Contingent Consideration | Total | |||||||||||
Balance, December 31, 2019 | $ | 8,919 | $ | 13,900 | $ | 22,819 | |||||||
Payment of contingent consideration | — | (2,619 | ) | (2,619 | ) | ||||||||
Issuance of preferred stock for contingent consideration | — | (2,197 | ) | (2,197 | ) | ||||||||
Change in fair value | 1,872 | (1,584 | ) | 288 | |||||||||
Balance, June 30, 2020 (unaudited) | $ | 10,791 | $ | 7,500 | $ | 18,291 | |||||||
Unrealized gains and losses associated with liabilities within the Level 3 category include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long-dated volatilities) inputs.
The fair value of the common and preferred stock
14
Acutus Medical, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
value implied from the preferred stock transactions and from examination of income and market approaches for measurement dates in which a preferred transaction was not applicable. Additionally, the expected IPO value was considered in the determination of the equity value. The fair value of the warrants was impacted by the model selected as well as assumptions surrounding unobservable inputs including the underlying equity value, risk-free interest rate, expected dividend yield, contractual term and expected volatility. On August 10, 2020 when the warrants were converted and became equity classified warrants, the fair value of the common and preferred stock warrant liability was estimated using a Black-Scholes model. The weighted-averageunderlying equity included in the Black-Scholes model was based on the IPO share price of $18.00. The weighted average (in aggregate) significant unobservable inputs (Level 3 inputs) used in measuring the common and preferred stock warrant liabilitiesliability as of June 30,August 10, 2020 (date of conversion to equity classified warrants) and December 31, 2019 were as follows:
|
| August 10, |
|
| December 31, |
|
| 2020 |
|
| 2019 |
|
| (unaudited) |
|
|
|
Risk-free interest rate |
| 0.39% |
|
| 1.59% - 1.60% |
Expected dividend yield |
| — |
|
| — |
Contractual term in years |
| 7.8 - 8.8 |
|
| 0.7 - 1.0 |
Expected volatility |
| 65.0% |
|
| 60.0% - 110.5% |
The fair value of the contingent consideration from the acquisition of Rhythm Xience represents the estimated fair value of future payments due to the sellers of Rhythm Xience based on the achievement of certain milestones and revenue-based targets in certain years. The initial fair value of the revenue-based contingent consideration was calculated through the use of a Monte Carlo simulation using revenue projections for the respective
|
| September 30, 2020 |
|
| December 31, 2019 |
| |
|
| (unaudited) |
|
|
|
|
|
Risk-free interest rate |
| 0.20% |
|
| 1.60% |
| |
Expected term in years |
| 1.0 - 2.0 |
|
| 1.0 - 2.0 |
| |
Expected volatility |
| 20.4% |
|
| 11.8% |
|
June 30, 2020 | December 31, 2019 | |||
(unaudited) | ||||
Risk-free interest rate | 0.20% | 1.60% | ||
Expected term in years | 1.0 - 2.0 | 1.0 - 2.0 | ||
Expected volatility | 18.3% | 11.8% |
Stock-Based Compensation
The Company accounts for all stock-based payments to employees and
15
Acutus Medical, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
expense in the condensed consolidated statements of operations and comprehensive loss based upon the respective employee’s or
Income Taxes
Income taxes are recorded in accordance with ASC 740,
The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit wouldwill more likely than not be realized assuming examination by the taxing authority. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. To date, there have been no interest or penalties charged in relation to the unrecognized tax benefits.
Warrant Liability
The Company accountsaccounted for certain common stock warrants and convertible preferred stock warrants outstanding as a liability, in accordance with ASC 815,
Asset Acquisitions (Research and Development—License Acquired)
The Company accounts for asset acquisitions, where substantially all of the fair value of the assets acquired is concentrated in a group of similar assets (i.e., intellectual property) and therefore the acquisitions do not constitute a business, in accordance with ASC 805,
Business Combinations
The Company accounts for business acquisitions using the acquisition method of accounting based on ASC 805, which requires recognition and measurement of all identifiable assets acquired and liabilities assumed at their fair value as of the date control is obtained. The Company determines the fair value of assets acquired and liabilities assumed based upon its best estimates of the acquisition-date fair value of assets acquired and liabilities assumed in the acquisition. Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired. Subsequent adjustments to fair value of any contingent consideration are recorded to the Company’s condensed consolidated statements of operations and comprehensive loss.
In June 2016,
In December 2019, the FASB issued ASU
In March 2020, the FASB issued ASU No.
Note 3—Asset Acquisition and Business Combination
Biotronik Asset Acquisition
In July 2019, the Company entered into a License and Distribution Agreement with the Biotronik Parties to obtain certain licenses to the Biotronik Parties’ patents, whereby the Company acquired certain manufacturing equipment and obtained from the Biotronik Parties a license under certain patents and technology to develop, commercialize, distribute and manufacture the AcQBlate Force ablation catheters and Qubic Force device. In exchange for the rights granted to the Company, the Company made cash payments totaling $10.0 million during the year ended December 31, 2019, and issued 273,070 shares of Series D convertible preferred stock with an implied value of $5.0 million during the sixnine months ended JuneSeptember 30, 2020. The implied value of $5.0 million was recorded as an accrued liability as of December 31, 2019. In accordance with ASC 805, the Biotronik Asset Acquisition
Additional contingent milestone payments of up to $10.0 million are to be made to the Biotronik Parties contingent upon certain regulatory approvals and first commercial sale. In further consideration of the rights granted, beginning with the Company’s first commercial sale of the first force sensing ablation catheter within the licensed product line, the Company will also make per unit royalty payments. The Company has determined that as of the acquisition date and as of JuneSeptember 30, 2020 and December 31, 2019, the contingent milestone and royalty payments are not probable and estimable and therefore have not been recorded as a liability. Upon regulatory approval of the Company’s force sensing ablation catheter in Europe, the milestone payments will be capitalized and amortized, and the royalty payments will be recorded as cost of products sold as sales of catheters are recognized.
Rhythm Xience Business Combination
On June 18, 2019 (the “Acquisition Date”), the Company acquired an integrated family of transseptal crossing and steerable introducer systems through its acquisition of Rhythm Xience for $3.0 million in cash in exchange for all of the stock of Rhythm
17
Acutus Medical, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Xience (the “Rhythm Xience Acquisition”). The cash payment did not include the potential $17.0 million in earn out consideration, of which $2.0$2.2 million was paid with the issuance of Series D convertible preferred stock in February 2020 and the remainder is to be paid based on the achievement of certain regulatory milestones and revenue milestones. In accordance with ASC 805, the Rhythm Xience Acquisition is accounted for as a business combination.
Purchase Price Allocation
The following table summarizes the allocation of the purchase price to the assets acquired and liabilities assumed for the Rhythm Xience Acquisition (in thousands):
Accounts receivable, net |
| $ | 3 |
|
Prepaid expenses and other current assets |
|
| 8 |
|
Property and equipment, net |
|
| 3 |
|
Intangible assets |
|
| 4,360 |
|
Goodwill |
|
| 12,026 |
|
Contingent consideration |
|
| (13,400 | ) |
Cash consideration |
| $ | 3,000 |
|
Accounts receivable, net | $ | 3 | ||
Prepaid expenses and other current assets | 8 | |||
Property and equipment, net | 3 | |||
Intangible assets | 4,360 | |||
Goodwill | 12,026 | |||
Contingent consideration | (13,400 | ) | ||
Cash consideration | $ | 3,000 | ||
The Company recorded $12.0 million of goodwill that arose out of synergies from the Rhythm Xience Acquisition. The Company does not expect goodwill to be deductible for tax purposes.
As part of Rhythm Xience Acquisition, the Company recorded a contingent consideration liability for potential additional payments due to the sellers of Rhythm Xience if certain regulatory approval milestones and revenue milestones are achieved.
Note 4—Marketable Securities
Marketable securities consisted of the following as of JuneSeptember 30, 2020 and December 31, 2019 (in thousands):
|
| September 30, 2020 (unaudited) |
| |||||||||||||
|
| Amortized Cost |
|
| Gross Unrealized Gains |
|
| Gross Unrealized Losses |
|
| Fair Value |
| ||||
Available-for-sale securities - short-term: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debt securities |
| $ | 31,459 |
|
| $ | — |
|
| $ | (4 | ) |
| $ | 31,455 |
|
U.S. treasury securities |
|
| 14,362 |
|
|
| — |
|
|
| (1 | ) |
|
| 14,361 |
|
Commercial paper |
|
| 53,926 |
|
|
| — |
|
|
| — |
|
|
| 53,926 |
|
Total available-for-sale securities - short-term |
|
| 99,747 |
|
|
| — |
|
|
| (5 | ) |
|
| 99,742 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset-backed securities, long-term |
|
| 8,789 |
|
|
|
|
|
|
| — |
|
|
| 8,789 |
|
Total available-for-sale securities |
| $ | 108,536 |
|
| $ | — |
|
| $ | (5 | ) |
| $ | 108,531 |
|
18
Acutus Medical, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
|
| December 31, 2019 |
| |||||||||||||
|
| Amortized Cost |
|
| Gross Unrealized Gains |
|
| Gross Unrealized Losses |
|
| Fair Value |
| ||||
Available-for-sale securities - short-term: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debt securities |
| $ | 28,204 |
|
| $ | 20 |
|
| $ | — |
|
| $ | 28,224 |
|
Asset-backed securities |
|
| 17,108 |
|
|
| 13 |
|
|
| — |
|
|
| 17,121 |
|
U.S. treasury securities |
|
| 5,020 |
|
|
| 12 |
|
|
| — |
|
|
| 5,032 |
|
Commercial paper |
|
| 11,974 |
|
|
| — |
|
|
| — |
|
|
| 11,974 |
|
Total available-for-sale securities |
| $ | 62,306 |
|
| $ | 45 |
|
| $ | — |
|
| $ | 62,351 |
|
June 30, 2020 (unaudited) | ||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||
Available-for-sale securities - short-term : | ||||||||||||||||
U.S. treasury securities | $ | 5,033 | $ | 4 | $ | — | $ | 5,037 | ||||||||
Total available-for-sale | $ | 5,033 | $ | 4 | $ | — | $ | 5,037 | ||||||||
December 31, 2019 | ||||||||||||||||
Amortized | Gross Gains | Gross Losses | Fair | |||||||||||||
Available-for-sale securities - short-term: | ||||||||||||||||
Corporate debt securities | $ | 28,204 | $ | 20 | $ | — | $ | 28,224 | ||||||||
Asset-backed securities | 17,108 | 13 | — | 17,121 | ||||||||||||
U.S. treasury securities | 5,020 | 12 | — | 5,032 | ||||||||||||
Commercial paper | 11,974 | — | — | 11,974 | ||||||||||||
Total available-for-sale | $ | 62,306 | $ | 45 | $ | — | $ | 62,351 | ||||||||
As of June 30, 2020 and December 31, 2019, all of the Company’s
Note 5—Inventory
Inventory as of JuneSeptember 30, 2020 and December 31, 2019 consisted of the following (in thousands):
|
| September 30, |
|
| December 31, |
| ||
|
| 2020 |
|
| 2019 |
| ||
|
| (unaudited) |
|
|
|
|
| |
Raw materials |
| $ | 5,980 |
|
| $ | 5,492 |
|
Work in process |
|
| 864 |
|
|
| 1,605 |
|
Finished goods |
|
| 4,088 |
|
|
| 1,327 |
|
Total inventory |
| $ | 10,932 |
|
| $ | 8,424 |
|
June 30, 2020 | December 31, 2019 | |||||||
(unaudited) | ||||||||
Raw materials | $ | 6,468 | $ | 5,492 | ||||
Work in process | 1,353 | 1,605 | ||||||
Finish goods | 4,445 | 1,327 | ||||||
Total inventory | $ | 12,266 | $ | 8,424 | ||||
Note 6—Lessor Sales-Type Leases
The Company recognizes revenue and costs, as well as a lease receivable, at the time embedded sales-type leases within its deferred equipment agreements commence. Lease revenue related to sales-type leases for each of Contents
The Company has a short-term lease receivable of $0.3 million and a long-term lease receivable of $0.4 million included in prepaid expenses and other current assets and other assets, respectively, as of September 30, 2020. There was no lease receivable as of December 31, 2019.
As of September 30, 2020, estimated future maturities of customer sales-type lease receivables for each of the following years are as follows (in thousands):
Three months ending December 31, 2020 |
| $ | 68 |
|
Year ending December 31, 2021 |
|
| 273 |
|
Year ending December 31, 2022 |
|
| 254 |
|
Year ending December 31, 2023 |
|
| 46 |
|
Year ending December 31, 2024 |
|
| 27 |
|
Lease receivable |
| $ | 668 |
|
19
Acutus Medical, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The Company’s property and equipment, net, consisted of the following as of JuneSeptember 30, 2020 and December 31, 2019 (in thousands):
|
| September 30, |
|
| December 31, |
| ||
|
| 2020 |
|
| 2019 |
| ||
|
| (unaudited) |
|
|
|
|
| |
Medical diagnostic equipment |
| $ | 10,155 |
|
| $ | 5,492 |
|
Furniture and fixtures |
|
| 388 |
|
|
| 159 |
|
Office equipment |
|
| 1,391 |
|
|
| 1,321 |
|
Laboratory equipment and software |
|
| 3,409 |
|
|
| 2,807 |
|
Leasehold improvements |
|
| 600 |
|
|
| 507 |
|
Construction in process |
|
| 141 |
|
|
| 306 |
|
Total property and equipment |
|
| 16,084 |
|
|
| 10,592 |
|
Less: accumulated depreciation |
|
| (6,144 | ) |
|
| (6,165 | ) |
Property and equipment, net |
| $ | 9,940 |
|
| $ | 4,427 |
|
June 30, 2020 | December 31, 2019 | |||||||
(unaudited) | ||||||||
Medical diagnostic equipment | $ | 7,180 | $ | 5,492 | ||||
Furniture and fixtures | 388 | 159 | ||||||
Office equipment | 1,377 | 1,321 | ||||||
Laboratory equipment and software | 3,380 | 2,807 | ||||||
Leasehold improvements | 595 | 507 | ||||||
Construction in process | 102 | 306 | ||||||
Total property and equipment | 13,022 | 10,592 | ||||||
Less: accumulated depreciation | (5,438 | ) | (6,165 | ) | ||||
Property and equipment, net | $ | 7,584 | $ | 4,427 | ||||
Property and equipment includes certain medical diagnostic equipment, AcQMap Systems, located at customer premises. The Company retains the ownership of the equipment and has the right to remove the equipment if it is not being used according to expectations.
Depreciation expense was $0.6$0.8 million and $0.5 million for the three months ended JuneSeptember 30, 2020 and 2019, respectively, and $1.0$1.8 million and $1.1$1.7 million for the sixnine months ended JuneSeptember 30, 2020 and 2019, respectively.
Note 7—8—Goodwill and Intangible Assets
The table below summarizes goodwill and intangible assets activities as of JuneSeptember 30, 2020 and December 31, 2019 (in thousands):
|
| Goodwill |
|
| Intangible Assets |
| ||
Balance at December 31, 2019 |
| $ | 12,026 |
|
| $ | 4,110 |
|
Amortization expense |
|
| — |
|
|
| (330 | ) |
Balance at September 30, 2020 (unaudited) |
| $ | 12,026 |
|
| $ | 3,780 |
|
|
| Estimated Useful |
| Weighted Average Remaining |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
| Life (in years) |
| Life (in years) |
|
| Intangible Assets |
|
| Accumulated Amortization |
|
| September 30, 2020 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (unaudited) |
| |
Developed technology |
| 10 |
|
| 8.8 |
|
| $ | 4,200 |
|
| $ | (495 | ) |
| $ | 3,705 |
|
Trademarks and trade names |
| 0.5 |
| — |
|
|
| 60 |
|
|
| (60 | ) |
|
| — |
| |
Customer-related intangible |
| 5 |
| 3.75 |
|
|
| 100 |
|
|
| (25 | ) |
|
| 75 |
| |
Total |
|
|
|
|
|
|
| $ | 4,360 |
|
| $ | (580 | ) |
| $ | 3,780 |
|
Goodwill | Intangible Assets | |||||||
Balance at December 31, 2019 | $ | 12,026 | $ | 4,110 | ||||
Amortization expense | — | (220 | ) | |||||
Balance at June 30, 2020 (unaudited) | $ | 12,026 | $ | 3,890 | ||||
Estimated Useful Life (in years) | Weighted Average Remaining Life (in years) | Intangible Assets | Accumulated Amortization | June 30, 2020 | ||||||||||||
(unaudited) | ||||||||||||||||
Developed technology | 10 | 9.1 | $ | 4,200 | $ | (390 | ) | $ | 3,810 | |||||||
Trademarks and trade names | 0.5 | — | 60 | (60 | ) | — | ||||||||||
Customer-related intangible | 5 | 4 | 100 | (20 | ) | 80 | ||||||||||
Total | $ | 4,360 | $ | (470 | ) | $ | 3,890 | |||||||||
20
Acutus Medical, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
|
| Estimated Useful |
| Weighted Average Remaining |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Life (in years) |
| Life (in years) |
| Intangible Assets |
|
| Accumulated Amortization |
|
| December 31, 2019 |
| |||
Developed technology |
| 10 |
| 9.5 |
| $ | 3,600 |
|
| $ | (180 | ) |
| $ | 3,420 |
|
In-process technology |
| indefinite |
|
|
|
| 600 |
|
|
| — |
|
|
| 600 |
|
Trademarks and trade names |
| 0.5 |
| — |
|
| 60 |
|
|
| (60 | ) |
|
| — |
|
Customer-related intangible |
| 5 |
| 4.5 |
|
| 100 |
|
|
| (10 | ) |
|
| 90 |
|
Total |
|
|
|
|
| $ | 4,360 |
|
| $ | (250 | ) |
| $ | 4,110 |
|
Estimated Useful Life (in years) | Weighted Average Remaining Life (in years) | Intangible Assets | Accumulated Amortization | December 31, 2019 | ||||||||||||||||
Developed technology | 10 | 9.5 | $ | 3,600 | $ | (180 | ) | $ | 3,420 | |||||||||||
In-process technology | indefinite | 600 | — | 600 | ||||||||||||||||
Trademarks and trade names | 0.5 | — | 60 | (60 | ) | — | ||||||||||||||
Customer-related intangible | 5 | 4.5 | 100 | (10 | ) | 90 | ||||||||||||||
Total | $ | 4,360 | $ | (250 | ) | $ | 4,110 | |||||||||||||
Acquired
The following table shows the remaining amortization expense associated with amortizable intangible assets as of JuneSeptember 30, 2020 (in thousands):
|
| Developed Technology |
|
| Customer- Related Intangible |
|
| Total Amortization |
| |||
Three months ending December 31, 2020 |
| $ | 105 |
|
| $ | 5 |
|
| $ | 110 |
|
Year ending December 31, 2021 |
|
| 420 |
|
|
| 20 |
|
|
| 440 |
|
Year ending December 31, 2022 |
|
| 420 |
|
|
| 20 |
|
|
| 440 |
|
Year ending December 31, 2023 |
|
| 420 |
|
|
| 20 |
|
|
| 440 |
|
Year ending December 31, 2024 |
|
| 420 |
|
|
| 10 |
|
|
| 430 |
|
Thereafter |
|
| 1,920 |
|
|
| — |
|
|
| 1,920 |
|
Total |
| $ | 3,705 |
|
| $ | 75 |
|
| $ | 3,780 |
|
Developed Technology | Customer-Related Intangible | Total Amortization | |||||||||||
Six months ending December 31, 2020 | $ | 210 | $ | 10 | $ | 220 | |||||||
Year ending December 31, 2021 | 420 | 20 | 440 | ||||||||||
Year ending December 31, 2022 | 420 | 20 | 440 | ||||||||||
Year ending December 31, 2023 | 420 | 20 | 440 | ||||||||||
Year ending December 31, 2024 | 420 | 10 | 430 | ||||||||||
Thereafter | 1,920 | 0 | 1,920 | ||||||||||
Total | $ | 3,810 | $ | 80 | $ | 3,890 | |||||||
Note 8—9—Accrued Liabilities
Accrued liabilities consisted of the following as of JuneSeptember 30, 2020 and December 31, 2019 (in thousands):
|
| September 30, |
|
| December 31, |
| ||
|
| 2020 |
|
| 2019 |
| ||
|
| (unaudited) |
|
|
|
|
| |
Payroll and related expenses |
| $ | 5,083 |
|
| $ | 3,785 |
|
Professional fees |
|
| 290 |
|
|
| 188 |
|
Deferred revenue |
|
| 290 |
|
|
| 311 |
|
Sales and use tax |
|
| 140 |
|
|
| 151 |
|
Biotronik Asset Acquisition - accrued purchase price |
|
| — |
|
|
| 5,000 |
|
Other |
|
| 697 |
|
|
| 641 |
|
Total accrued liabilities |
| $ | 6,500 |
|
| $ | 10,076 |
|
June 30, 2020 | December 31, 2019 | |||||||
(unaudited) | ||||||||
Biotronik Asset Acquisition - accrued purchase price | $ | — | $ | 5,000 | ||||
Payroll and related expenses | 3,869 | 3,785 | ||||||
Professional fees | 1,850 | 188 | ||||||
Deferred revenue | 88 | 311 | ||||||
Other | 1,229 | 792 | ||||||
Total accrued liabilities | $ | 7,036 | $ | 10,076 | ||||
Outstanding debt as of JuneSeptember 30, 2020 and December 31, 2019 consisted of the following (in thousands):
|
| September 30, |
|
| December 31, |
| ||
|
| 2020 |
|
| 2019 |
| ||
|
| (unaudited) |
|
|
|
|
| |
2019 Credit Agreement (1) |
| $ | 44,550 |
|
| $ | 44,550 |
|
Total debt, gross |
|
| 44,550 |
|
|
| 44,550 |
|
Less: Unamortized debt discount and fees |
|
| (5,788 | ) |
|
| (6,306 | ) |
Total long-term debt |
| $ | 38,762 |
|
| $ | 38,244 |
|
June 30, 2020 | December 31, 2019 | |||||||
(unaudited) | ||||||||
2019 Credit Agreement (1) | $ | 44,550 | $ | 44,550 | ||||
Total debt, gross | 44,550 | 44,550 | ||||||
Less: Unamortized debt discount and fees | (5,992 | ) | (6,306 | ) | ||||
Total long-term debt | $ | 38,558 | $ | 38,244 | ||||
(1) | The 2019 Credit Agreement includes final payment fees of $4.6 million. |
2019 Credit Agreement
On May 20, 2019, the Company entered into a Credit Agreement (the “2019 Credit Agreement”). The 2019 Credit Agreement provided the Company with a senior term loan facility in aggregate principal amount of $70.0 million, of which the Company borrowed $40.0 million upon closing. Of the remaining amount of the facility, $10.0 million was available for borrowing by the Company on or prior to June 30, 2020 and $20.0 million is available for borrowing by the Company on or prior to December 31, 2020, in each case subject to the achievement of specified trailing revenue levels. The Company did not achieve the trailing revenue levels to draw the $10.0 million by June 30, 2020 but the $20.0 million remains available for borrowing on or prior to December 31, 2020 if the specified trailing revenue levels are met. The 2019 Credit Agreement bears interest per annum at 7.75% plus LIBOR for such interest period and the principal amount of term loans outstanding under the 2019 Credit Agreement is due on May 20, 2024. The 2019 Credit Agreement provides for final payment fees of an additional $4.6 million that are due upon prepayment or on the maturity date or upon acceleration.
Upon the occurrence and during an event of default, which includes but is not limited to payment default, covenant default or the occurrence of a material adverse change, the lenders may declare all outstanding principal and accrued and unpaid interest immediately due and payable, all unfunded commitments would be terminated, there would be an increase in the applicable interest rate by 10.0% per annum, and the lenders would be entitled to exercise their other rights and remedies provided for under the 2019 Credit Agreement. Additionally, the lenders may request repayment of a portion of obligations outstanding under the 2019 Credit Agreement to the extent of the Company’s receipt of any (i) net casualty proceeds or (ii) net asset sales proceeds, as defined. These acceleration and early payment features are an embedded derivative that is separately measured from the loan host instrument and classified with the loan host instrument.
In connection with the issuance of the 2019 Credit Agreement, the Company issued liability-classified warrants with a fair value of $0.9 million to purchase 419,992 shares of Series C convertible preferred stock at $16.667$16.67 per share. These warrants were subsequently automatically converted into warrants to purchase an equal number of shares of the Company’s Series D convertible preferred stock at a price of $16.667$16.67 per share.
The initial recognition of the warrant liability and direct fees of $1.2 million and final payment fees of $4.6 million for the 2019 Credit Agreement resulted in a discount of $6.7 million, which is being amortized to interest expense over the term of the 2019 Credit Agreement using the effective interest method.
The Company’s obligations under the 2019 Credit Agreement are secured by substantially all of its assets, including its intellectual property, and is guaranteed by Acutus NV. The 2019 Credit Agreement contains customary affirmative and negative covenants, including with respect to the Company’s ability to enter into fundamental transactions, incur additional indebtedness, grant liens, pay any dividend or make any distributions to its holders, make investments and merge or consolidate with any other person or engage in transactions with its affiliates, but does not include any financial covenants, other than a minimum liquidity requirement. As of and for the sixnine months ended JuneSeptember 30, 2020 and 2019, the Company was in compliance with all such covenants.
2019 Convertible Notes
On May 20, 2019, the Company sold and issued $37.0 million in aggregate principal amount of convertible promissory notes (the “2019 Convertible Notes”). The 2019 Convertible Notes bore interest at 13% per annum and were due on December 31, 2019.
22
Acutus Medical, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The 2019 Convertible Notes, including accrued interest, automatically convertconverted into preferred stock at the lowest price per share paid by a cash investor in a qualified equity financing of at least $23.0 million (excluding the principal of any debt that is cancelled or converted into preferred stock in the equity financing), which occurred on June 12, 2019. In accordance with ASC 480,
Note 10—11—Operating Leases
The Company leases approximately 50,800 square feet of office space for its corporate headquarters and manufacturing facility in Carlsbad, California under a noncancelable operating lease that expires on December 31, 2022. The lease is subject to variable charges for common area maintenance and other costs that are determined annually based on actual costs. The base rent is subject to an annual increase each year. The Company has a renewal option for an additional five-year term upon the expiration date of the lease, which has been excluded from the calculation of the
The Company also leases approximately 3,900 square feet of office space in Zaventem, Belgium under a noncancelable operating lease that expires on December 31. 2021. The lease is subject to variable charges that are determined annually for common area maintenance and other costs based on actual costs, and base rent is subject to an annual increase each year based on an index rate. The Company has a renewal option for an additional three-year term upon the expiration date of the lease, which has been included in the calculation of the
The following table summarizes quantitative information about the Company’s operating leases for the sixnine months ended JuneSeptember 30, 2020 and 2019 (dollars in thousands):
|
| Nine Months Ended September 30, |
| |||||
|
| 2020 |
|
| 2019 |
| ||
|
| (unaudited) |
| |||||
Operating cash flows from operating leases |
| $ | 760 |
|
| $ | 725 |
|
Right-of-use assets exchanged for operating lease liabilities |
| $ | — |
|
| $ | 2,978 |
|
Weighted average remaining lease term – operating leases (in years) |
|
| 1.7 |
|
|
| 2.2 |
|
Weighted average discount rate – operating leases |
|
| 7.0 | % |
|
| 7.0 | % |
Six Months Ended June 30, | ||||||||
2020 | 2019 | |||||||
(unaudited) | ||||||||
Operating cash flows used in operating leases | $ | 507 | $ | 477 | ||||
Right-of-use | $ | — | $ | 2,978 | ||||
Weighted-average remaining lease term – operating leases | 1.8 years | 2.3 years | ||||||
Weighted-average discount rate – operating leases | 7.0 | % | 7.0 | % |
The following table provides the components of the Company’s lease cost (in thousands):
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
| ||||||||||
|
| 2020 |
|
| 2019 |
|
| 2020 |
|
| 2019 |
| ||||
|
| (unaudited) |
|
| (unaudited) |
| ||||||||||
Operating leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating lease cost |
| $ | 216 |
|
| $ | 216 |
|
| $ | 648 |
|
| $ | 648 |
|
Variable lease cost |
|
| 73 |
|
|
| 65 |
|
|
| 238 |
|
|
| 169 |
|
Total rent expense |
| $ | 289 |
|
| $ | 281 |
|
| $ | 886 |
|
| $ | 817 |
|
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
Operating leases | ||||||||||||||||
Operating lease cost | $ | 216 | $ | 216 | $ | 432 | $ | 432 | ||||||||
Variable lease cost | 92 | 40 | 165 | 104 | ||||||||||||
Total rent expense | $ | 308 | $ | 256 | $ | 597 | $ | 536 | ||||||||
23
Acutus Medical, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
As of JuneSeptember 30, 2020, future minimum payments under the
Three months ending December 31, 2020 |
| $ | 253 |
|
Year ending December 31, 2021 |
|
| 1,044 |
|
Year ending December 31, 2022 |
|
| 1,074 |
|
Year ending December 31, 2023 |
|
| 51 |
|
Year ending December 31, 2024 |
|
| 51 |
|
Total |
|
| 2,473 |
|
Less: present value discount |
|
| (201 | ) |
Operating lease liabilities |
| $ | 2,272 |
|
Six months ending December 31, 2020 | $ | 507 | ||
Year ending December 31, 2021 | 1,044 | |||
Year ending December 31, 2022 | 1,074 | |||
Year ending December 31, 2023 | 51 | |||
Year ending December 31, 2024 | 51 | |||
Total | 2,727 | |||
Less: present value discount | (251 | ) | ||
Operating lease liabilities | $ | 2,476 | ||
Note 11—12—Commitments and Contingencies
The Company is not a party to any material legal proceedings and is not aware of any pending or threatened claims. From time to time however, the Company may be subject to various legal proceedings and claims that arise in the ordinary course of its business activities.
Note 12—13—Warrants
As of JuneSeptember 30, 2020 and December 31, 2019, the outstanding warrants to purchase the Company’s common stock were comprised of the following:
|
| Equity Upon |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Exercise |
|
|
|
|
|
|
| September 30, |
|
| December 31, |
| ||
|
| (After Conversion) |
| Exercise Price |
|
| Expiration Date |
| 2020 |
|
| 2019 |
| |||
|
|
|
|
|
|
|
|
|
| (unaudited) |
|
|
|
|
| |
Warrants issued in 2015 |
| Common Stock |
| $ | 5.25 |
|
| 1/30/25 |
|
| 7,616 |
|
|
| 7,616 |
|
Warrants issued with 2018 Convertible Notes |
| Common Stock |
| $ | 0.10 |
|
| 6/7/28 |
|
| 501,946 |
|
|
| 501,946 |
|
Warrants issued with 2018 Term Loan |
| Common Stock |
| $ | 16.67 |
|
| 7/31/28 |
|
| 26,998 |
|
|
| 26,998 |
|
Warrants issued with 2019 Credit Agreement |
| Common Stock |
| $ | 16.67 |
|
| 5/20/29 |
|
| 419,992 |
|
|
| 419,992 |
|
Total Warrants |
|
|
|
|
|
|
|
|
|
| 956,552 |
|
|
| 956,552 |
|
Equity Upon Exercise | Exercise | Expiration | June 30, 2020 | December 31, 2019 | ||||||||||||||||
(unaudited) | ||||||||||||||||||||
Warrants issued in 2015 | Common Stock | $ | 5.25 | 1/30/25 | 7,616 | 7,616 | ||||||||||||||
Warrants issued with 2018 Convertible Notes | Common Stock | $ | 0.10 | 6/7/28 | 501,946 | 501,946 | ||||||||||||||
Warrants issued with 2018 Term Loan | Series D convertible preferred | | $ | 16.67 | 7/31/28 | 26,998 | 26,998 | |||||||||||||
Warrants issued with 2019 Credit Agreement | Series D convertible preferred | | $ | 16.67 | 5/20/29 | 419,992 | 419,992 | |||||||||||||
Total Warrants | 956,552 | 956,552 | ||||||||||||||||||
The Company has no warrant activity for the sixnine months ended JuneSeptember 30, 2020. The remaining weighted average contractual life is 7.97.7 years as of JuneSeptember 30, 2020.
Warrants Classified as Liabilities
During 2019, in connection with the Company’s entry into the 2019 Credit Agreement, the Company issued warrants to purchase 419,992 shares of its Series C convertible preferred stock with an exercise price of $16.667$16.67 per share. These warrants were subsequently automatically converted into warrants to purchase an equal number of shares of the Company’s Series D convertible preferred stock at a price of $16.667$16.67 per share. During 2018, in connection with the issuance of the 2018 Convertible Notes and the 2018 Term Loan, the Company issued
24
Acutus Medical, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The Company’s warrants provide the holder the option to purchase a specified number of shares for a specified price. The holder may exercise the warrant in cash or exercise pursuant to a cashless exercise whereby a calculated number of shares are withheld upon exercise to satisfy the exercise price. The warrants do not provide the holder any voting rights until the warrants are exercised. In
Prior to the event of conversion of the Company’s convertible preferred stock into common shares, the warrants become exercisable into common shares of the Company’s stock, subject to certain adjustments.
Warrants Classified as Equity
In accordance with ASC 815, the warrants issued in 2015 do not meet the definition of a derivative and are classified in stockholders’ deficitequity (deficit) in the condensed consolidated balance sheets.
Note 13—14—Convertible Preferred Stock
In February 2020, the Company issued 119,993 shares of its Series D convertible preferred stock with an implied value of $2.2 million in connection with a contingent consideration payment related to the Rhythm Xience Acquisition.
In February 2020, the Company issued 273,070 shares of its Series D convertible preferred stock with an implied value of $5.0 million for the finalstock issuance portion of the purchase consideration of the Biotronik Asset Acquisition.
On August 10, 2020, in connection with the closing of the IPO, all of the 391,210 shares of Series A, 3,088,444 shares of Series B, 4,499,921 shares of Series C and 8,593,360 shares of Series D convertible preferred stock, respectively, automatically converted into an equal number of shares of common stock.
Redemption
The convertible preferred stock
Dividends
The holders of shares of convertible preferred stock
Liquidation
The holders of the Series D convertible preferred stock
Each share of preferred stock
Series |
| Conversion Price |
| |
Series A convertible preferred stock |
| $ | 8.295 |
|
Series B convertible preferred stock |
| $ | 13.370 |
|
Series C convertible preferred stock |
| $ | 16.667 |
|
Series D convertible preferred stock |
| $ | 16.667 |
|
Series | Conversion Price | |||
Series A convertible preferred stock | $ | 8.295 | ||
Series B convertible preferred stock | $ | 13.370 | ||
Series C convertible preferred stock | $ | 16.667 | ||
Series D convertible preferred stock | $ | 16.667 |
Each share of convertible preferred stock
Note 15—Stockholders’ Equity (Deficit)
On August 10, 2020, the Company issued 10,147,058 shares of common stock in its IPO, which included 1,323,529 shares of common stock issued upon the underwriters’ exercise in full of an option to purchase, at the public offering price less underwriting discounts and commissions, up to an additional 1,323,529 shares. The price to the public for each share was $18.00. The Company received gross proceeds of $182.6 million from the IPO. Net of underwriting discounts and commission and other offering expenses, the Company received net proceeds of $166.3 million from the IPO.
On August 10, 2020, in connection with the closing of the IPO, each outstanding sharethe Company filed an amended and restated certificate of Seriesincorporation (the “A&R Certificate”) with the Secretary of State of the State of Delaware. The A B, C&R Certificate amended and D convertible preferred stock converted into one share of common stock.
As of December 31, 2019, the Company’s Amended and Restated Certificate of Incorporation authorized the issuance of 220,000,000 shares of common stock, $0.001 par value per share. Each share of common stock is entitled to one voting right. Common stock owners are entitled to dividends when funds are legally available and declared by the Board.
During the sixnine months ended JuneSeptember 30, 2020 and 2019, stock options to acquire 64,56292,223 and 8,46915,921 shares, respectively, were exercised for shares of common stock. The Company received approximately $0.2$0.4 million and $0.1
Note 15—16—Stock-Based Compensation
2020 Equity Incentive Plan
The 2020 Equity Incentive Plan (“2020 Plan”) which permits the granting of nonstatutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance units, performance shares and other equity-based awards to employees, directors and consultants became effective on August 5, 2020. As of September 30, 2020, 2,191,600 shares of common stock were authorized for issuance under the 2020 Plan and 1,101,996 shares remain available for issuance under the 2020 Plan.
2011 Equity Incentive Plan
The Company’s 2011 Equity Incentive Plan (the “2011 Plan”) permits the granting of incentive stock options,
26
Acutus Medical, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
of JuneSeptember 30, 2020, 3,858,0992,823,333 shares of common stock were authorized for issuance under the 2011 Plan and 390,912no shares remain available for issuance under the 2011 Plan.
Stock Options
The stock options generally vest over four years and have a
The following assumptions were used to estimate the fair value of stock option for the sixnine months ended JuneSeptember 30, 2020 and 2019:
|
| Nine Months Ended September 30, |
| ||||
|
| 2020 |
|
| 2019 |
| |
|
| (unaudited) |
| ||||
Risk-free interest rate |
| 0.4% - 0.9% |
|
| 1.6% - 2.1% |
| |
Expected dividend yield |
| — |
|
| — |
| |
Expected term in years |
|
| 7.0 |
|
| 6.4 - 10.0 |
|
Expected volatility |
| 70% - 80% | �� |
| 80% |
|
Six Months Ended June 30, | ||||||||
2020 | 2019 | |||||||
(unaudited) | ||||||||
Risk-free interest rate | 0.90% | 2.0% - 2.1 % | ||||||
Expected dividend yield | — | — | ||||||
Expected term in years | 7.0 | 6.38 - 10.00 | ||||||
Expected volatility | 70.0% | 80.0% |
The following table summarizes stock option activity during the sixnine months ended JuneSeptember 30, 2020:
|
| Stock Options |
|
| Weighted Average Exercise Price |
|
| Weighted Average Remaining Contractual Life (in years) |
|
| Aggregate Intrinsic Value (in thousands) |
| ||||
Outstanding as of December 31, 2019 |
|
| 2,041,205 |
|
| $ | 9.52 |
|
|
| 7.7 |
|
| $ | 7,857 |
|
Options granted |
|
| 1,746,415 |
|
|
| 16.69 |
|
|
|
|
|
|
|
|
|
Option exercised |
|
| (139,597 | ) |
|
| 7.24 |
|
|
|
|
|
|
|
|
|
Options forfeited |
|
| (231,678 | ) |
|
| 11.91 |
|
|
|
|
|
|
|
|
|
Outstanding as of September 30, 2020 (unaudited) |
|
| 3,416,345 |
|
| $ | 13.12 |
|
|
| 8.2 |
|
| $ | 57,110 |
|
Options vested and exercisable as of September 30, 2020 (unaudited) |
|
| 1,310,459 |
|
| $ | 9.22 |
|
|
| 6.5 |
|
| $ | 26,974 |
|
Stock Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (in years) | Aggregate Intrinsic (in | |||||||||||||
Outstanding as of December 31, 2019 | 2,041,205 | $ | 9.52 | 7.7 | $ | 7,857 | ||||||||||
Options granted | 867,031 | 14.81 | ||||||||||||||
Option exercised | (111,936 | ) | 7.73 | |||||||||||||
Options forfeited | (200,213 | ) | 12.01 | |||||||||||||
Outstanding as of June 30, 2020 (unaudited) | 2,596,087 | $ | 11.17 | 7.8 | $ | 17,816 | ||||||||||
Options vested and exercisable as of June 30, 2020 (unaud i ted) | 1,138,429 | $ | 8.34 | 6.1 | $ | 11,037 | ||||||||||
The aggregate intrinsic value in the above table is calculated as the difference between the fair value of the Company’s common stock
Number of Shares | Weighted Average Grant Price | |||||||
Unvested as of December 31, 2019 | — | $ | — | |||||
Granted | 14,945 | 14.81 | ||||||
Vested | (14,945 | ) | 14.81 | |||||
Unvested as of June 30, 2020 (unaudited) | — | $ | — | |||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
Cost of products sold | $ | 58 | $ | 54 | $ | 166 | $ | 106 | ||||||||
Research and development | 167 | 150 | 378 | 292 | ||||||||||||
Selling, general and administrative | 932 | 599 | 2,354 | 964 | ||||||||||||
Total stock-based compensation | $ | 1,157 | $ | 803 | $ | 2,898 | $ | 1,362 | ||||||||
Performance-Based Restricted Stock Units
In June 2019, the Company granted 567,509 PSUs, with a grant date fair value of $13.37. Vesting of the PSUs iswas dependent upon the satisfaction of both a service condition and a performance condition, which is an initial public offeringIPO or a change of control. As the performance conditions for the PSU were not considered
27
Acutus Medical, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The Company’s PSU and RSU activity for the nine months ended September 30, 2020 was as follows:
|
| Number of Shares |
|
| Weighted Average Grant Price |
| ||
Unvested as of December 31, 2019 |
|
| 567,509 |
|
| $ | 13.37 |
|
Granted |
|
| 215,846 |
|
|
| 18.35 |
|
Forfeited |
|
| (1,388 | ) |
|
| 18.00 |
|
Vested |
|
| (285,375 | ) |
|
| 13.37 |
|
Unvested as of September 30, 2020 (unaudited) |
|
| 496,592 |
|
| $ | 15.52 |
|
Restricted Stock
The Company’s RSA activity for the nine months ended September 30, 2020 was as follows:
|
| Number of Shares |
|
| Weighted Average Grant Price |
| ||
Unvested as of December 31, 2019 |
|
| — |
|
| $ | — |
|
Granted |
|
| 32,921 |
|
|
| 16.55 |
|
Vested |
|
| (32,921 | ) |
|
| 16.55 |
|
Unvested as of September 30, 2020 (unaudited) |
|
| — |
|
| $ | — |
|
The following table summarizes the total stock-based compensation expense for the stock options, PSUs, RSUs and RSAs recorded in the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2020 and 2019 (in thousands):
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
| ||||||||||
|
| 2020 |
|
| 2019 |
|
| 2020 |
|
| 2019 |
| ||||
|
| (unaudited) |
|
| (unaudited) |
| ||||||||||
Cost of products sold |
| $ | 126 |
|
| $ | 56 |
|
| $ | 292 |
|
| $ | 162 |
|
Research and development |
|
| 319 |
|
|
| 179 |
|
|
| 697 |
|
|
| 471 |
|
Selling, general and administrative |
|
| 5,929 |
|
|
| 577 |
|
|
| 8,283 |
|
|
| 1,541 |
|
Total stock-based compensation |
| $ | 6,374 |
|
| $ | 812 |
|
| $ | 9,272 |
|
| $ | 2,174 |
|
Employee Stock Purchase Plan
The 2020 Employee Stock Purchase Plan (“2020 ESPP”), which permits employees to purchase shares of the Company’s common stock, became effective on August 10, 2020 and 387,063 shares of common stock were authorized for sale under the 2020 ESPP. As of September 30, 2020, there were no purchase of shares under the 2020 ESPP.
28
Acutus Medical, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-averageweighted average number of shares of common stock outstanding for the period. Diluted net loss per common share excludes the potential impact of the Company’s convertible preferred stock, common stock options and warrants because their effect would be anti-dilutive due to the Company’s net loss. Since the Company had a net loss in the periods presented, basic and diluted net loss per common share are the same.
The table below provides potentially dilutive securities not included in the calculation of the diluted net loss per common share because to do so would be anti-dilutive:
|
| Nine Months Ended September 30, |
| |||||
Shares issuable upon: |
| 2020 |
|
| 2019 |
| ||
Conversion of Series A Preferred Stock |
|
| — |
|
|
| 391,210 |
|
Conversion of Series B Preferred Stock |
|
| — |
|
|
| 3,088,444 |
|
Conversion of Series C Preferred Stock |
|
| — |
|
|
| 4,499,921 |
|
Conversion of Series D Preferred Stock |
|
| — |
|
|
| 6,418,437 |
|
Exercise of stock options |
|
| 3,416,345 |
|
|
| 1,751,616 |
|
Exercise of common stock warrants |
|
| 956,552 |
|
|
| 509,562 |
|
Exercise of preferred stock warrants |
|
| — |
|
|
| 446,990 |
|
Vesting of PSUs and RSUs |
|
| 496,592 |
|
|
| — |
|
Total |
|
| 4,869,489 |
|
|
| 17,106,180 |
|
Six Months Ended June 30, | ||||||||
2020 | 2019 | |||||||
Shares issuable upon conversion of Series A Preferred Stock | 391,210 | 391,210 | ||||||
Shares issuable upon conversion of Series B Preferred Stock | 3,088,444 | 3,088,444 | ||||||
Shares issuable upon conversion of Series C Preferred Stock | 4,499,921 | 4,499,921 | ||||||
Shares issuable upon conversion of Series D Preferred Stock | 8,593,360 | 6,418,437 | ||||||
Shares issuable upon exercise of stock options | 2,596,087 | 1,751,616 | ||||||
Shares issuable upon exercise of common stock warrants | 509,562 | 509,562 | ||||||
Shares issuable upon exercise of preferred stock warrants | 446,990 | 446,990 | ||||||
Total | 20,125,574 | 17,106,180 | ||||||
For the sixnine months ended JuneSeptember 30, 2020 and 2019, the PSUs are not included in the above table as awards with performance conditions are not included in the calculation of diluted earnings per share until the performance conditions for the PSU are considered probable.
Note 17—18—401(k) Retirement Plan
The Company has a 401(k) retirement savings plan that provides retirement benefits to substantially all full-time U.S. employees. Eligible employees may contribute a percentage of their annual compensation, subject to Internal Revenue Service limitations. The Company did 0tnot provide any contributions to the 401(k) retirement savings plan for the sixnine months ended JuneSeptember 30, 2020 and 2019.
Note 18—19—Related Party Transactions
The Company licenses certain patent rights from a former director and shareholder. The license agreement provides for royalty payments to the shareholder of 3% of net product sales, as defined in the agreement. Royalties earned prior to the director’s resignation were $16,000$22,000 and $11,000$10,000 for the three months ended JuneSeptember 30, 2020 and 2019, respectively, and $37,000$61,000 and $23,000$32,000 for the sixnine months ended JuneSeptember 30, 2020 and 2019, respectively. Additionally, the former director and shareholder also works for one of the Company’s customers and can significantly influence the customer to purchase the Company’s product. ThePrior to the director’s resignation, the Company recorded sales to this customer of $0.2 million$8,000 and $50,000 for the three months ended JuneSeptember 30, 2020 and 2019, respectively, and $0.5 million and $0.1$0.2 million for the sixnine months ended JuneSeptember 30, 2020 and 2019, respectively.
The Company has a consulting agreement with a director and chairman of the Company’s board of directors. The Company recorded $47,000$55,000 and $74,000$81,000 for the three months ended JuneSeptember 30, 2020 and 2019, respectively, and $0.1 million and $0.2 million for the sixnine months ended JuneSeptember 30, 2020 and 2019, respectively, in SG&A expense in the condensed consolidated statements of operations and comprehensive loss, for the consulting services.
29
Acutus Medical, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The Company had a consulting agreement with an officer of the Company in the prior year. The Company recorded $94,000$93,000 for the three months ended JuneSeptember 30, 2019, and $0.2$0.3 million for the sixnine months ended JuneSeptember 30, 2019 in SG&A expense in the condensed consolidated statements of operations and comprehensive loss, for the consulting services.
The Company had a consulting arrangement with a current director and officer of the Company, prior to his full-time employment. The Company recorded $0.1$0.2 million and $0.2$0.4 million for the three and sixnine months ended JuneSeptember 30, 2019, respectively, in SG&A expense in the condensed consolidated statements of operations and comprehensive loss, for the consulting services.
Multiple preferred stock shareholders entered into the 2018 and 2019 Convertible Notes that also contained detached warrants. Additionally, Orbimed Royalty Opportunities II, LP and Deerfield Private Design Fund II, L.P. entered into the 2019 Credit Agreement with the Company in 2019 for a total of $70.0 million, with $40.0 million being drawn as of JuneSeptember 30, 2020. The Company recorded $1.3$1.4 million and $0.6$1.4 million for the three months ended JuneSeptember 30, 2020 and 2019, respectively, and $2.7$4.1 million and $0.6$2.1 million for the sixnine months ended JuneSeptember 30, 2020 and 2019, respectively, in interest expense related to these debt agreements.
You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and related notes and other financial information included elsewhere in this Form
Overview
We are an arrhythmia management company focused on improving the way cardiac arrhythmias are diagnosed and treated. Despite several decades of effort by the incumbents in this field, the clinical and economic challenges associated with arrhythmia treatment continue to be a huge burden for patients, providers and payors. We are committed to advancing the field of electrophysiology with a unique array of products and technologies which will enable more physicians to treat more patients more effectively and efficiently. Through internal product development, acquisitions and global partnerships, we have established a global sales presence delivering a broad portfolio of highly differentiated electrophysiology products. Our goal is to provide our customers with a complete solution for catheter-based treatment of cardiac arrhythmias in each of our geographic markets.
Our product portfolio includes novel access catheters, diagnostic and mapping catheters, ablation catheters, mapping and imaging consoles and accessories, as well as supporting algorithms and software programs. Our foundational and most highly differentiated product is our AcQMap imaging and mapping system. Our paradigm-shifting AcQMap System offers a novel approach to mapping the drivers and maintainers of arrhythmias with unmatched speed and precision. With the ability to rapidly and accurately identify ablation targets and to confirm both ablation success and procedural completion, we believe our AcQMap System addresses the primary unmet need in electrophysiology procedures today.
We were incorporated in the State of Delaware on March 25, 2011 and are headquartered in Carlsbad, California. Early versions of our AcQMap System and certain related accessory products have been used in the United States since May 2018 and Western Europe since July 2016 in a limited, pilot launch capacity, where our focus was on optimizing workflow and validating our value proposition. We fully commenced the launch of our commercial-grade console and software products in the first quarter of 2020. Critical to our launch were a series of recent strategic transactions and regulatory approvals, including: FDA 510(k) clearance and CE Mark of our second-generation AcQMap console and SuperMap software suite; the addition of an integrated family of transseptal crossing and steerable introducer systems to our product portfolio through our acquisition of Rhythm Xience, Inc., or Rhythm Xience; and the acquisition of our AcQBlate Force sensing product line from Biotronik SE & Co. KG, or Biotronik. Since our full launch, we have continued to enhance our product portfolio and global presence by entering into
We market our electrophysiology products worldwide to hospitals and electrophysiologists that treat patients with arrhythmias. We have strategically developed a direct selling presence in the United States and select markets in Western Europe where cardiac ablation is a standard of care and third-party reimbursement is well-established. In these markets, we install our AcQMap console and workstation with customer accounts and then sell our disposable products to those accounts for use with our system. In other international markets, we leverage our partnership with Biotronik to install our AcQMap console and workstation with customer accounts and then to sell our disposable products to those accounts. Once an AcQMap console and workstation is established in a customer account, our revenue from that account becomes predominantly recurring in nature and derived from the sale of our portfolio of disposable products used with our system. Our currently marketed disposable products include access sheaths, transseptal crossing tools, diagnostic and mapping catheters, ablation catheters and accessories. We plan to leverage the geographically concentrated nature of procedure volumes and the recurring nature of our sales to drive an increasingly efficient commercial model.
As of JuneSeptember 30, 2020, our commercial organization consisted of 6062 individuals with substantial applicable medical device, sales and clinical experience, including sales managers, sales representatives and mappers. Over time, we plan to selectively add highly qualified personnel to our commercial organization with a strategic mix of sales representatives and mappers to cover the concentrated group of hospitals that we believe perform the majority of the cardiac ablation procedures in our direct markets.
Our revenue has historically consisted predominantly of sales of our disposable products (principally our mapping catheters and related access sheaths, and to a lesser extent our transseptal crossing tools, ablation catheters and other accessories), as we generally loaned our first-generation AcQMap console and workstation to our customers without charge to facilitate the use of our disposable products. Beginning in late 2019, we began to install our second-generation AcQMap console and workstation with customers under evaluation contracts. Under these evaluation contracts, we place our AcQMap console and workstation with customers for no upfront fee to the customer during the applicable evaluation period and seek to reach agreement with the customer for purchase of the console and workstation in the form of a contractual commitment to purchase a minimum amount of our disposable products or a cash purchase. In addition, we have also generated a small portion of our revenue from service agreements with our customers.
We currently manufacture our novel access sheaths, transseptal crossing tools, diagnostic and mapping catheters, ablation catheters, mapping and imaging consoles and accessories at our approximately 50,800 square foot facility in Carlsbad, California. This facility provides approximately 15,750 square feet of space for our production and distribution operations, including manufacturing, quality control and storage. In addition, we stock inventory of raw materials, components and finished goods at our facility in Carlsbad and, to a limited extent, with our sales representatives, who travel to our customers’ locations as part of their sales efforts. We rely on a single or limited number of suppliers for certain raw materials and components, and we generally have no long-term supply arrangements with our suppliers, as we generally order on a purchase order basis. Furthermore, we rely on third parties to manufacture certain products we offer our customers as part of our product portfolio, including Biotronik for diagnostic and ablation catheters, radiofrequency, or RF, generators and irrigation pumps, Innovative Health for reprocessed diagnostic catheters and MedFact for robotic navigation enabled ablation catheters.
As of JuneSeptember 30, 2020, we have completed three clinical trials that collectively evaluated 223 subjects across 16 centers in multiple countries. We are currently conducting two post-market trials to provide physicians with additional safety and effectiveness data on the use of our AcQMap System, and weSystem. Global data has been collected on over 100 participants. We are planning two investigational device exemption or IDE, trials(IDE) studies to support U.S. regulatory approval of our AcQBlate Force ablation catheters. Our ongoing and planned trials are anticipated to involve an aggregate of over 700 subjects in at least 35 centers in the United States and internationally. We expect to provide data readouts from these ongoing and planned trials at various points in time through 2023.
For the sixnine months ended JuneSeptember 30, 2020, and 2019, we generated revenue of $2.7$5.9 million and $1.5$2.2 million, respectively, of which 51%46% and 70%72%, respectively, was from customers located outside of the United States. Since our inception, we have generated significant losses. Our net loss was $41.3$72.6 million and $45.0$77.1 million for the sixnine months ended JuneSeptember 30, 2020 and 2019, respectively. As of JuneSeptember 30, 2020 and December 31, 2019, we had an accumulated deficit of $300.4$331.6 million and $259.0 million, respectively, and working capital of $15.1$159.5 million and $50.5 million, respectively. Prior to our initial public offering (“IPO”) on August 10, 2020, our operations have been financed primarily by aggregate net proceeds from the sale of our convertible preferred stock and principal of our converted debt of $253.9 million, as well as other indebtedness.
We intend to continue to make significant investments in our sales and marketing organization. We believe increasing the number of sales representatives and expanding our international marketing programs will help facilitate further adoption of our products among existing customer accounts as well as broaden awareness of our products to new accounts. We also expect to continue to make substantial investments in our ongoing clinical trials and in additional clinical trials that are designed to provide clinical evidence of the safety and effectiveness of our existing and future generations of products. We expect to continue to make investments in research and development and regulatory affairs to develop future generations of products based on our technology, supported with appropriate regulatory submissions. We may in the future seek to acquire or invest in additional businesses, products or technologies that we believe could complement or expand our portfolio, enhance our technical capabilities or otherwise offer growth opportunities. We will also incur costs as a public company that we have not previously incurred or have previously incurred at lower rates, including increased costs for employee-related expenses, director and officer insurance premiums, audit and legal fees, investor relations fees, fees to members of our board of directors and expenses for compliance with public-company reporting requirements under the Exchange Act and rules implemented by the SEC, as well as Nasdaq rules. Because of these and other factors, we expect to continue to incur substantial net losses and negative cash flows from operations for at least the next several years.
Biotronik Agreements
Biotronik License Agreement
In July 2019, we entered into the Biotronik License Agreement with Biotronik and VascoMed GmbH, or VascoMed (who we refer to together as the Biotronik Parties), whereby we acquired certain manufacturing equipment and obtained from the Biotronik Parties a license under certain patents and technology to develop, commercialize, distribute and manufacture our AcQBlate Force ablation catheters and Qubic Force device. We refer to this transaction as the Biotronik Asset Acquisition. Pursuant to the Biotronik License Agreement, we paid Biotronik a $3.0 million upfront fee at the time the agreement was signed, as well as a technology transfer fee consisting of $7.0 million in cash in December 2019 and $5.0 million in shares of our Series D convertible preferred stock in February 2020.
The Biotronik License Agreement also requires that we pay the Biotronik Parties certain milestone payments as follows: (i) $2.0 million upon receipt of marketing approval for the sale of our AcQBlate Force ablation catheters in Europe; (ii) $5.0 million upon the receipt of marketing approval for the sale of our AcQBlate Force ablation catheters in the United States; and (iii) $3.0 million upon the first commercial sale of our AcQBlate Force ablation catheters in the United States. We are also required to pay the Biotronik Parties unit-based royalties on any sales we make of our AcQBlate Force ablation catheters following commercialization.
Bi-Lateral
In May 2020, we entered into more expansive
Pursuant to the
Key Business Metric
We regularly review a number of operating and financial metrics, including the following key business metric, to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions. We believe that the following metric is representative of our current business. However, we anticipate this metric may change or may be substituted for additional or different metrics as our business grows and as we introduce new products.
Installed Base
Once an AcQMap console and workstation is established in a customer account, our revenue from that account becomes predominantly recurring in nature and derived from the sale of our portfolio of disposable products used with our system. We believe our installed base is one of the key indicators of our ability to drive customer adoption of our products. We define our installed base as the cumulative number of AcQMap consoles and workstations placed into service at customer sites. Beginning in late 2019, we began to install our second-generation AcQMap console and workstation with customers under evaluation contracts. Under these evaluation contracts, we place our AcQMap console and workstation with customers for no upfront fee to the customer during the applicable evaluation period and seek to reach agreement with the customer for the purchase of the console and workstation in the form of a contractual commitment to purchase a minimum amount of our disposable products or a cash purchase. Our total installed base as of JuneSeptember 30, 2020 and 2019 is set forth in the table below:
|
| As of September 30, |
| |||||
|
| 2020 |
|
| 2019 |
| ||
|
| (unaudited) |
| |||||
Acutus Direct |
|
|
|
|
|
|
|
|
US |
|
| 29 |
|
|
| 6 |
|
Europe |
|
| 15 |
|
|
| 17 |
|
Total Acutus Direct |
|
| 44 |
|
|
| 23 |
|
Biotronik |
|
| 5 |
|
|
| — |
|
Total installed base |
|
| 49 |
|
|
| 23 |
|
As of June 30, | ||||||||
2020 | 2019 | |||||||
(unaudited) | ||||||||
Acutus Direct | ||||||||
US | 20 | 8 | ||||||
Europe | 18 | 18 | ||||||
Total Acutus Direct | 38 | 26 | ||||||
Biotronik | — | — | ||||||
Total net system placements | 38 | 26 | ||||||
Our net increase in installed base for the three and sixnine months ended JuneSeptember 30, 2020 and 2019, exclusive of transfers between Acutus and Biotronik, is set forth in the table below:
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
| ||||||||||
|
| 2020 |
|
| 2019 |
|
| 2020 |
|
| 2019 |
| ||||
|
| (unaudited) |
|
| (unaudited) |
| ||||||||||
Acutus Direct |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US |
|
| 9 |
|
|
| (2 | ) |
|
| 19 |
|
|
| 1 |
|
Europe |
|
| 2 |
|
|
| (1 | ) |
|
| 3 |
|
|
| 1 |
|
Total Acutus Direct |
|
| 11 |
|
|
| (3 | ) |
|
| 22 |
|
|
| 2 |
|
Net systems to Biotronik |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Total net system placements |
|
| 11 |
|
|
| (3 | ) |
|
| 22 |
|
|
| 2 |
|
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
Acutus Direct | ||||||||||||||||
US | 7 | 1 | 10 | 3 | ||||||||||||
Europe | — | 2 | 1 | 2 | ||||||||||||
Total Acutus Direct | 7 | 3 | 11 | 5 | ||||||||||||
Biotronik | — | — | — | — | ||||||||||||
Total net system placements | 7 | 3 | 11 | 5 | ||||||||||||
Growth in our quarterly installed base can fluctuate due to a number of factors, including the commercial effectiveness of our sales representatives and strategic partners such as Biotronik, and the procurement and budgeting cycles of many of our customers, especially those where unused funds may be forfeited or future budgets may be reduced if purchases are not made by their fiscal year end. We also believe the timing of installations has been impacted and will continue to be impacted by the timing of product introductions and transitions. In addition, the growth of our market in certain geographic regions and our continued efforts to service these regions impact unit volumes quarter to quarter.
There are a number of factors that have impacted, and we believe will continue to impact, or that we expect to impact, our results of operations and growth. These factors include:
Market Acceptance
Commercial Organization Size and Effectiveness
Strategic Partnerships and Acquisitions
Continued Investment in Innovation
Product and Geographic Mix; Timing
Competition
COVID-19
In addition, we may experience meaningful variability in our quarterly revenue and gross profit/loss as a result of a number of factors, including, but not limited to: inventory write-offs and write-downs; costs, benefits and timing of new product introductions; the availability and cost of components and raw materials; and fluctuations in foreign currency exchange rates. Additionally, we may experience quarters in which our costs and operating expenses, in particular our research and development expenses, fluctuate depending on the stage and timing of product development.
While certain of these factors may present significant opportunities for us, they all pose significant risks and challenges that we must address. See the section titled “Risk Factors” for more information.
Components of Results of Operations
Revenue
Our revenue consists of: (i) revenue from the sale of our disposable products; and (ii) systems and service revenue. In the United States and select markets in Western Europe where we have developed a direct selling presence, we install our AcQMap console and workstation with our customer accounts and then generate revenue from the sale of our disposable products to these accounts for use with our system. In other international markets, we leverage our partnership with Biotronik to install our AcQMap console and workstation with customer accounts and then generate revenue from Biotronik’s sale of our disposable products to these accounts for use with our system. Our currently marketed disposable products include access sheaths, transseptal crossing tools, diagnostic and mapping catheters, ablation catheters and accessories.
Our revenue has historically consisted predominantly of sales of our disposable products (principally our mapping catheters and related access sheaths, and to a lesser extent our transseptal crossing tools, ablation catheters and other accessories), as we generally loaned our first-generation AcQMap console and workstation to our customers without charge to facilitate the use of our disposable products. Beginning in late 2019, we began to install our second-generation AcQMap console and workstation with customers under evaluation contracts. Under these evaluation contracts, we place our second-generation AcQMap console and workstation with customers for no upfront fee to the customer during the applicable evaluation period and seek to reach agreement with the customer for the purchase of the console and workstation in the form of a contractual commitment to purchase a minimum amount of our disposable products or a cash purchase. When a sale of a second-generation AcQMap system is made, the sale includes installation of the equipment, software updates and maintenance, and equipment service. Evaluation contracts are not accounted for as sales under Accounting Standards Codification, or ASC, 606,sixnine months ended JuneSeptember 30, 2020 and 2019, approximately 51%46% and 70%72%, respectively, of our sales were denominated in currencies other than U.S. dollars, primarily in Euros and the British Pound Sterling, or GBP. Our revenue is subject to fluctuation based on the foreign currency in which our products are sold.
Costs and Operating Expenses
Cost of Products Sold
Cost of products sold consist primarily of raw materials, direct labor, manufacturing overhead associated with the production and sale of our disposable products and, to a more limited extent, production and depreciation of our AcQMap console and workstation that we install with our customer accounts. We depreciate equipment over a three-year period. Cost of products sold also includes expenditures for warranty, field service, freight, royalties and inventory reserve provisions. We expect cost of products sold to increase in absolute dollars in future periods as our revenue increases.
Gross profit is calculated as revenue less cost of products sold. Gross margin is gross profit expressed as a percentage of revenue. Our gross margins may fluctuate from period to period due to a variety of factors, including: average selling prices; production volumes; the cost of direct materials; the timing of customer orders or medical procedures and the timing and number of system installations; the number of available selling days in a particular period, which can be impacted by a number of factors such as holidays or days of severe inclement weather in a particular geography; the mix of products sold and the geographic mix of where products are sold; the level of reimbursement available for our products; discounting practices; manufacturing costs; product yields; headcount; and cost-reduction strategies. For example, gross margins on the sale of our products by our direct selling organization in the United States and Western Europe are higher than gross margins on the sale of our products by Biotronik in other parts of the world. Moreover, gross margins on the sale of our proprietary products are generally higher than gross margins on the sale of products we source through our strategic partnerships with third parties. Future selling prices and gross margins for our products may fluctuate due to a variety of other factors, including the introduction by others of competing products or the attempted integration by third parties of capabilities similar to ours into their existing products. We aim to mitigate downward pressure on our selling prices by increasing the value proposition offered by our products through innovation.
In addition, we have experienced negative gross margins in recent periods as a result of significant investments in our infrastructure to support our commercial launch and to enable our production volumes to scale as our business grows. We expect our gross margins to increase over the long term to the extent we are successful in increasing our sales volume and are therefore able to leverage our fixed costs. We intend to use our design, engineering and manufacturing capabilities to further advance and improve the efficiency of our manufacturing processes, which, if successful, we believe will reduce costs and enable us to increase our gross margins. Such manufacturing cost improvement efforts may involve moving production of key subassemblies in house, volume driven supplier cost reductions and process redesigns. While we expect gross margins to increase over the long term, they will likely fluctuate from quarter to quarter as we continue to introduce new products and adopt new manufacturing processes and technologies.
Research and Development Expenses
Research and development expenses consist primarily of salaries and employee-related costs (including stock-based compensation) for personnel directly engaged in research and development activities, clinical trial expenses, equipment costs, materials costs, allocated rent and facilities costs and depreciation.
Research and development expenses related to possible future products are expensed as incurred. We also accrue and expense costs for activities associated with clinical trials performed by third parties as incurred. All other costs relative to setting up clinical trial sites are expensed as incurred. Clinical trial site costs related to patient enrollment are accrued as patients are entered into the trials.
We expect our research and development expenses to increase in absolute dollars for the foreseeable future, though they may vary from period to period as a percentage of revenue, as we hire additional research and development personnel, as well as continue to develop new products, enhance existing products and technologies and perform activities related to obtaining additional regulatory approvals or clearances.
Research and Development Expenses—License Acquired
In July 2019, we entered into the Biotronik License Agreement with the Biotronik Parties in connection with the Biotronik Asset Acquisition. In accordance with ASC 805,
Selling, General and Administrative Expenses
Selling, general and administrative expenses consist primarily of salaries and employee-related costs (including stock-based compensation) for personnel in sales, executive, finance and other administrative functions, allocated rent and facilities costs, legal fees relating to intellectual property and corporate matters, professional fees for accounting and consulting services, marketing costs and insurance costs.
We expect our selling, general and administrative expenses to increase in absolute dollars for the foreseeable future, though they may vary from period to period as a percentage of revenue, as we expand our sale force and increase the number of our mappers, increase our professional education and physician training, as well as to support our expanded infrastructure and incur increased costs associated with operating as a public company. These increases are expected to include increased costs for fees to members of our board of directors, increased employee-related expenses, and increased director and officer insurance premiums, audit and legal fees, investor relations fees and expenses for compliance with public company reporting requirements under the Exchange Act and rules implemented by the SEC, as well as stock exchange rules.
In connection with our IPO, certain performance-based restricted stock awards vested as the completion of our IPO constituted the relevant performance condition. As a result, we expect to recordrecorded an incremental stock-based compensation charge of $3.8 million for the awards that vested upon the IPO as part of selling, general and administrative expenses for the quarter endingended September 30, 2020 in our condensed consolidated financial statements.
Other Income (Expense)
Change in Fair Value of Warrant Liability
We accounted for certain of our freestanding warrants to purchase shares of our common stock and preferred stock as liabilities at fair value. We accounted for certain features of our convertible notes issued in 2018, or the 2018 Convertible Notes (which were converted into shares of our Series D convertible preferred stock in 2019), that were determined to be an embedded derivative requiring bifurcation and separate accounting at fair value. The warrants and embedded derivative were subject
Loss on Debt Extinguishment
During 2019, we repaid the entire principal amount of our loan under our loan and security agreement with Oxford Finance LLC, or the 2018 Term Loan. We recorded a loss on debt extinguishment for the write off of deferred financing fees, the prepayment penalty and related fees upon our prepayment of this loan.
Interest income consists primarily of interest earned on our cash, cash equivalents and marketable securities.
Interest Expense
Interest expense relates to our: (i) Credit Agreement with Orbimed Royalty Opportunities II, LP and Deerfield Private Design Fund II, L.P., or the 2019 Credit Agreement; (ii) 2018 Term Loan, which was repaid during 2019; (iii) 2018 Convertible Notes; and (iv) convertible notes issued in 2019, or the 2019 Convertible Notes. Our 2018 Convertible Notes and our 2019 Convertible Notes were converted into shares of our Series D convertible preferred stock during 2019.
Results of Operations for the Three Months Ended JuneSeptember 30, 2020 and 2019
The results of operations presented below should be reviewed in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Form
|
| Three Months Ended September 30, |
|
| Change |
| ||||||||||
(dollars in thousands) |
| 2020 |
|
| 2019 |
|
| $ |
|
| % |
| ||||
|
| (Unaudited) |
|
|
|
|
|
|
|
|
| |||||
Revenue(2) |
| $ | 3,173 |
|
| $ | 646 |
|
| $ | 2,527 |
|
|
| 391 | % |
Costs and operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of products sold(1) |
|
| 5,141 |
|
|
| 2,267 |
|
|
| 2,874 |
|
|
| 127 | % |
Research and development(1) |
|
| 8,343 |
|
|
| 5,865 |
|
|
| 2,478 |
|
|
| 42 | % |
Research and development - license acquired |
|
| — |
|
|
| 15,000 |
|
|
| (15,000 | ) |
| NM |
| |
Selling, general and administrative(1) |
|
| 15,833 |
|
|
| 7,978 |
|
|
| 7,855 |
|
|
| 98 | % |
Change in fair value of contingent consideration |
|
| 118 |
|
|
| 700 |
|
|
| (582 | ) |
|
| (83 | %) |
Total costs and operating expenses |
|
| 29,435 |
|
|
| 31,810 |
|
|
| (2,375 | ) |
|
| (7 | %) |
Loss from operations |
|
| (26,262 | ) |
|
| (31,164 | ) |
|
| 4,902 |
|
|
| (16 | %) |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in fair value of warrant liability |
|
| (3,683 | ) |
|
| (3 | ) |
|
| (3,680 | ) |
| NM |
| |
Loss on debt extinguishment |
|
| — |
|
|
| (49 | ) |
|
| 49 |
|
| NM |
| |
Interest income |
|
| 23 |
|
|
| 525 |
|
|
| (502 | ) |
|
| (96 | %) |
Interest expense |
|
| (1,366 | ) |
|
| (1,394 | ) |
|
| 28 |
|
|
| (2 | %) |
Total other expense, net |
|
| (5,026 | ) |
|
| (921 | ) |
|
| (4,105 | ) |
| NM |
| |
Net loss |
| $ | (31,288 | ) |
| $ | (32,085 | ) |
| $ | 797 |
|
|
| (2 | %) |
Other comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss) on marketable securities |
|
| (9 | ) |
|
| 40 |
|
|
| (49 | ) |
| NM |
| |
Foreign currency translation adjustment |
|
| 78 |
|
|
| (45 | ) |
|
| 123 |
|
| NM |
| |
Comprehensive loss |
| $ | (31,219 | ) |
| $ | (32,090 | ) |
| $ | 871 |
|
|
| (3 | %) |
Three Months Ended June 30, | Change | |||||||||||||||
(dollars in thousands) | 2020 | 2019 | $ | % | ||||||||||||
(Unaudited) | ||||||||||||||||
Revenue (2) | $ | 1,134 | $ | 734 | $ | 400 | 54 | % | ||||||||
Costs and operating expenses: | ||||||||||||||||
Costs of products sold (1) | 2,663 | 2,435 | 228 | 9 | % | |||||||||||
Research and development (1) | 8,176 | 5,247 | 2,929 | 56 | % | |||||||||||
Selling, general and administrative (1) | 9,125 | 6,927 | 2,198 | 32 | % | |||||||||||
Change in fair value of contingent consideration | 635 | — | 635 | NM | ||||||||||||
Total operating expenses | 20,599 | 14,609 | 5,990 | 41 | % | |||||||||||
Loss from operations | (19,465 | ) | (13,875 | ) | (5,590 | ) | 40 | % | ||||||||
Other income (expense): | ||||||||||||||||
Change in fair value of warrant liability and embedded derivative | (2,453 | ) | (1,446 | ) | (1,007 | ) | 70 | % | ||||||||
Loss on debt extinguishment | — | (1,398 | ) | 1,398 | (100 | %) | ||||||||||
Interest income | 95 | 143 | (48 | ) | (34 | %) | ||||||||||
Interest expense | (1,370 | ) | (13,769 | ) | 12,399 | (90 | %) | |||||||||
Total other expense, net | (3,728 | ) | (16,470 | ) | 12,742 | (77 | %) | |||||||||
Net loss | $ | (23,193 | ) | $ | (30,345 | ) | $ | 7,152 | (24 | %) | ||||||
Other comprehensive income (loss) | ||||||||||||||||
Unrealized gain (loss) on marketable securities | (14 | ) | 6 | (20 | ) | NM | ||||||||||
Foreign currency translation adjustment | 96 | 2 | 94 | NM | ||||||||||||
Comprehensive loss | $ | (23,111 | ) | $ | (30,337 | ) | $ | 7,226 | (24 | %) | ||||||
NM - Not meaningful
(1) | The following table sets forth the stock-based compensation expense included in our results of operations for the three months ended |
|
| Three Months Ended September 30, |
| |||||
|
| 2020 |
|
| 2019 |
| ||
|
| (unaudited) |
| |||||
Cost of products sold |
| $ | 126 |
|
| $ | 56 |
|
Research and development |
|
| 319 |
|
|
| 179 |
|
Selling, general and administrative |
|
| 5,929 |
|
|
| 577 |
|
Total stock-based compensation |
| $ | 6,374 |
|
| $ | 812 |
|
Three Months Ended June 30, | ||||||||
2020 | 2019 | |||||||
(unaudited) | ||||||||
Cost of products sold | $ | 58 | $ | 54 | ||||
Research and development | 167 | 150 | ||||||
Selling, general and administrative | 932 | 599 | ||||||
Total stock-based compensation | $ | 1,157 | $ | 803 | ||||
(2) | The following |
|
| Three Months Ended September 30, |
| |||||
|
| 2020 |
|
| 2019 |
| ||
|
| (unaudited) |
| |||||
Acutus Direct |
|
|
|
|
|
|
|
|
Disposables |
| $ | 1,680 |
|
| $ | 635 |
|
Systems |
|
| 965 |
|
|
| — |
|
Service/Other |
|
| 29 |
|
|
| 3 |
|
Total Acutus direct revenue |
|
| 2,674 |
|
|
| 638 |
|
Distribution agreements |
|
| 499 |
|
|
| 8 |
|
Total revenue |
| $ | 3,173 |
|
| $ | 646 |
|
|
| Three Months Ended September 30, |
| |||||
|
| 2020 |
|
| 2019 |
| ||
|
| (unaudited) |
| |||||
Acutus Direct |
|
|
|
|
|
|
|
|
United States |
| $ | 1,790 |
|
| $ | 147 |
|
Europe |
|
| 884 |
|
|
| 491 |
|
Total Acutus direct revenue |
|
| 2,674 |
|
|
| 638 |
|
Distribution Agreements |
|
|
|
|
|
|
|
|
United States |
|
| 77 |
|
|
| — |
|
Europe |
|
| 422 |
|
|
| 8 |
|
Total revenue through distribution |
|
| 499 |
|
|
| 8 |
|
Total revenue |
| $ | 3,173 |
|
| $ | 646 |
|
Three Months Ended June 30, | ||||||||
2020 | 2019 | |||||||
(Unaudited) | ||||||||
Acutus Direct | ||||||||
Disposables | $ | 899 | $ | 705 | ||||
Systems | — | — | ||||||
Service/Other | 12 | 4 | ||||||
Total Acutus direct revenue | 911 | 709 | ||||||
Distribution agreements | 223 | 25 | ||||||
Total revenue | $ | 1,134 | $ | 734 | ||||
Three Months Ended June 30, | ||||||||
2020 | 2019 | |||||||
(Unaudited) | ||||||||
Acutus Direct | ||||||||
United States | $ | 544 | $ | 221 | ||||
Europe | 367 | 488 | ||||||
Total Acutus direct revenue | 911 | 709 | ||||||
Distribution Agreements | ||||||||
United States | 15 | — | ||||||
Europe | 208 | 25 | ||||||
Total revenue through distribution | 223 | 25 | ||||||
Total revenue | $ | 1,134 | $ | 734 | ||||
Revenue
Revenue was $1.1$3.2 million for the three months ended JuneSeptember 30, 2020, compared to $0.7$0.6 million for the three months ended JuneSeptember 30, 2019. This increase of $0.4$2.5 million, or 54%391%, was primarily attributable to a $0.4$1.6 million increase in purchase volume of our disposable products used in electrophysiology procedures as a result of a higher installed base as well as slightly higher average selling prices on certain of our disposable products.
Revenue, classified by the major geographic areas, in which our products are shipped, was $0.6$1.9 million for the United States and $0.6$1.3 million for all other countries in the three months ended JuneSeptember 30, 2020, compared to $0.2$0.1 million for the United States and $0.5 million for all other countries for the comparative period in 2019.
Costs and Operating Expenses
Cost of Products Sold
Cost of products sold was $2.7$5.1 million for the three months ended JuneSeptember 30, 2020, compared to $2.4$2.3 million for the three months ended JuneSeptember 30, 2019. This increase of $0.2$2.9 million, or 9%127%, was primarily attributabledriven by an increase of $2.2 million of costs from growth in our sales volume, $0.4 million of depreciation and freight expense to a $0.2support the higher installed base, and $0.3 million increase in warranty and field service expense to support the higher installed base.service. Gross margin was negative 135%62% for the three months ended JuneSeptember 30, 2020 compared to negative 232%251% for the three months ended JuneSeptember 30, 2019. This improvement in gross margin was primarily attributable to increased sales volume of our disposable products.
Research and development expenses were $8.2$8.3 million for the three months ended JuneSeptember 30, 2020, compared to $5.2$5.9 million for the three months ended JuneSeptember 30, 2019. This increase of $2.9$2.5 million, or 56%42%, was primarily attributable to $0.9$1.7 million in increased compensation and related costs from higher headcount, and $2.0$0.8 million in increased materials and supplies costs related to higher engineering project spending.
Research and Development Expenses – License Acquired
Research and development expenses – license acquired were $15.0 million for the three months ended September 30, 2019, related to the Biotronik Asset Acquisition, where we acquired intellectual property. Since the acquired intellectual property had no alternative use and was for products that have not yet received regulatory approval, the intellectual property was immediately charged to research and development expenses—license acquired.
Selling, General and Administrative Expenses
Selling, general and administrative expenses were $9.1$15.8 million for the three months ended JuneSeptember 30, 2020, compared to $6.9$8.0 million for the three months ended JuneSeptember 30, 2019. This increase of $2.2$7.9 million, or 32%98%, was primarily attributable to $3.1$3.8 million of stock-based compensation for certain performance-based awards as the applicable performance conditions were achieved upon the completion of our IPO and $3.5 million in increased compensation and related costs due to our investment in our commercial organization in support of our full commercial launch in the United States which started in the first quarter of 2020. However, due to the
Change in Fair Value of Contingent Consideration
For the three months ended JuneSeptember 30, 2020 and 2019, we recorded a change in fair value of contingent consideration of $0.6$0.1 million and $0.7 million, respectively, for the increase in the fair value of the contingent consideration for the acquisition of Rhythm Xience.
Other Income (Expense)
Other expense, net was $3.7$5.0 million for the three months ended JuneSeptember 30, 2020, compared to $16.5$0.9 million for the three months ended JuneSeptember 30, 2019. This decreaseincrease of $12.7$4.1 million or 77%, was primarily attributable to a decreasean increase of $12.4$3.7 million in interest expense primarily related to the 2019 Credit Agreement and 2018 Convertible Notes.
Results of Operations for the SixNine Months Ended JuneSeptember 30, 2020 and 2019
The results of operations presented below should be reviewed in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Form
|
| Nine Months Ended September 30, |
|
| Change |
| ||||||||||
|
| 2020 |
|
| 2019 |
|
| $ |
|
| % |
| ||||
|
| (Unaudited) |
|
|
|
|
|
|
|
|
| |||||
Revenue(2) |
| $ | 5,890 |
|
| $ | 2,167 |
|
| $ | 3,723 |
|
|
| 172 | % |
Costs and operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of products sold(1) |
|
| 10,998 |
|
|
| 6,878 |
|
|
| 4,120 |
|
|
| 60 | % |
Research and development(1) |
|
| 24,492 |
|
|
| 15,489 |
|
|
| 9,003 |
|
|
| 58 | % |
Research and development - license acquired |
|
| — |
|
|
| 15,000 |
|
|
| (15,000 | ) |
| NM |
| |
Selling, general and administrative(1) |
|
| 35,193 |
|
|
| 18,998 |
|
|
| 16,195 |
|
|
| 85 | % |
Change in fair value of contingent consideration |
|
| (1,466 | ) |
|
| 700 |
|
|
| (2,166 | ) |
| NM |
| |
Total costs and operating expenses |
|
| 69,217 |
|
|
| 57,065 |
|
|
| 12,152 |
|
|
| 21 | % |
Loss from operations |
|
| (63,327 | ) |
|
| (54,898 | ) |
|
| (8,429 | ) |
|
| 15 | % |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in fair value of warrant liability and embedded derivative |
|
| (5,555 | ) |
|
| (608 | ) |
|
| (4,947 | ) |
| NM |
| |
Loss on debt extinguishment |
|
| — |
|
|
| (1,447 | ) |
|
| 1,447 |
|
| NM |
| |
Interest income |
|
| 393 |
|
|
| 733 |
|
|
| (340 | ) |
|
| (46 | %) |
Interest expense |
|
| (4,090 | ) |
|
| (20,905 | ) |
|
| 16,815 |
|
|
| (80 | %) |
Total other expense, net |
|
| (9,252 | ) |
|
| (22,227 | ) |
|
| 12,975 |
|
|
| (58 | %) |
Net loss |
| $ | (72,579 | ) |
| $ | (77,125 | ) |
| $ | 4,546 |
|
|
| (6 | %) |
Other comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss) on marketable securities |
|
| (50 | ) |
|
| 47 |
|
|
| (97 | ) |
| NM |
| |
Foreign currency translation adjustment |
|
| 147 |
|
|
| (57 | ) |
|
| 204 |
|
| NM |
| |
Comprehensive loss |
| $ | (72,482 | ) |
| $ | (77,135 | ) |
| $ | 4,653 |
|
|
| (6 | %) |
Six Months Ended June 30, | Change | |||||||||||||||
2020 | 2019 | $ | % | |||||||||||||
(Unaudited) | ||||||||||||||||
Revenue (2) | $ | 2,717 | $ | 1,521 | $ | 1,196 | 79 | % | ||||||||
Costs and operating expenses: | ||||||||||||||||
Costs of products sold (1) | 5,857 | 4,611 | 1,246 | 27 | % | |||||||||||
Research and development (1) | 16,149 | 9,624 | 6,525 | 68 | % | |||||||||||
Selling, general and administrative (1) | 19,360 | 11,020 | 8,340 | 76 | % | |||||||||||
Change in fair value of contingent consideration | (1,584 | ) | — | (1,584 | ) | NM | ||||||||||
Total operating expenses | 39,782 | 25,255 | 14,527 | 58 | % | |||||||||||
Loss from operations | (37,065 | ) | (23,734 | ) | (13,331 | ) | 56 | % | ||||||||
Other income (expense): | ||||||||||||||||
Change in fair value of warrant liability and embedded derivative | (1,872 | ) | (605 | ) | (1,267 | ) | 209 | % | ||||||||
Loss on debt extinguishment | — | (1,398 | ) | 1,398 | (100 | %) | ||||||||||
Interest income | 370 | 208 | 162 | 78 | % | |||||||||||
Interest expense | (2,724 | ) | (19,511 | ) | 16,787 | (86 | %) | |||||||||
Total other expense, net | (4,226 | ) | (21,306 | ) | 17,080 | (80 | %) | |||||||||
Net loss | $ | (41,291 | ) | $ | (45,040 | ) | $ | 3,749 | (8 | %) | ||||||
Other comprehensive income (loss) | ||||||||||||||||
Unrealized gain (loss) on marketable securities | (41 | ) | 7 | (48 | ) | NM | ||||||||||
Foreign currency translation adjustment | 69 | (12 | ) | 81 | NM | |||||||||||
Comprehensive loss | $ | (41,263 | ) | $ | (45,045 | ) | $ | 3,782 | (8 | %) | ||||||
NM - Not meaningful
(1) |
|
| Nine Months Ended September 30, |
| |||||
|
| 2020 |
|
| 2019 |
| ||
|
| (unaudited) |
| |||||
Cost of products sold |
| $ | 292 |
|
| $ | 162 |
|
Research and development |
|
| 697 |
|
|
| 471 |
|
Selling, general and administrative |
|
| 8,283 |
|
|
| 1,541 |
|
Total stock-based compensation |
| $ | 9,272 |
|
| $ | 2,174 |
|
Six Months Ended June 30, | ||||||||
2020 | 2019 | |||||||
(unaudited) | ||||||||
Cost of products sold | $ | 166 | $ | 106 | ||||
Research and development | 378 | 292 | ||||||
Selling, general and administrative | 2,354 | 964 | ||||||
Total stock-based compensation | $ | 2,898 | $ | 1,362 | ||||
(2) | The following |
|
| Nine Months Ended September 30, |
| |||||
|
| 2020 |
|
| 2019 |
| ||
|
| (unaudited) |
| |||||
Acutus Direct |
|
|
|
|
|
|
|
|
Disposables |
| $ | 3,599 |
|
| $ | 2,123 |
|
Systems |
|
| 1,485 |
|
|
| — |
|
Service/Other |
|
| 47 |
|
|
| 12 |
|
Total Acutus direct revenue |
|
| 5,131 |
|
|
| 2,135 |
|
Distribution agreements |
|
| 759 |
|
|
| 32 |
|
Total revenue |
| $ | 5,890 |
|
| $ | 2,167 |
|
|
| Nine Months Ended September 30, |
| |||||
|
| 2020 |
|
| 2019 |
| ||
|
| (unaudited) |
| |||||
Acutus Direct |
|
|
|
|
|
|
|
|
United States |
| $ | 3,103 |
|
| $ | 603 |
|
Europe |
|
| 2,028 |
|
|
| 1,532 |
|
Total Acutus direct revenue |
|
| 5,131 |
|
|
| 2,135 |
|
Distribution Agreements |
|
|
|
|
|
|
|
|
United States |
|
| 92 |
|
|
| — |
|
Europe |
|
| 667 |
|
|
| 32 |
|
Total revenue through distribution |
|
| 759 |
|
|
| 32 |
|
Total revenue |
| $ | 5,890 |
|
| $ | 2,167 |
|
Six Months Ended June 30, | ||||||||
2020 | 2019 | |||||||
(unaudited) | ||||||||
Acutus Direct | ||||||||
Disposables | $ | 1,919 | $ | 1,487 | ||||
Systems | 520 | — | ||||||
Service/Other | 18 | 9 | ||||||
Total Acutus direct revenue | 2,457 | 1,496 | ||||||
Distribution agreements | 260 | 25 | ||||||
Total revenue | $ | 2,717 | $ | 1,521 | ||||
Six Months Ended June 30, | ||||||||
2020 | 2019 | |||||||
(unaudited) | ||||||||
Acutus Direct | ||||||||
United States | $ | 1,313 | $ | 456 | ||||
Europe | 1,144 | 1,040 | ||||||
Total Acutus direct revenue | 2,457 | 1,496 | ||||||
Distribution Agreements | ||||||||
United States | 15 | — | ||||||
Europe | 245 | 25 | ||||||
Total revenue through distribution | 260 | 25 | ||||||
Total revenue | $ | 2,717 | $ | 1,521 | ||||
Revenue
Revenue was $2.7$5.9 million for the sixnine months ended JuneSeptember 30, 2020, compared to $1.5$2.2 million for the sixnine months ended JuneSeptember 30, 2019. This increase of $1.2$3.7 million, or 79%172%, was primarily attributable to $0.5 million of AcQMap systems sales and a $0.7$2.2 million increase in purchase volume of our disposable products used in electrophysiology procedures as a result of a higher installed base as well as slightly higher average selling prices on certainand $1.5 million of our disposable products.
Revenue, classified by the major geographic areas, in which our products are shipped, was $1.3$3.2 million for the United States and $1.4$2.7 million for all other countries in the threenine months ended JuneSeptember 30, 2020, compared to $0.5$0.6 million for the United States and $1.1$1.6 million for all other countries for the comparative period in 2019.
Costs and Operating Expenses
Cost of Products Sold
Cost of products sold was $5.9$11.0 million for the sixnine months ended JuneSeptember 30, 2020, compared to $4.6$6.9 million for the sixnine months ended JuneSeptember 30, 2019. This increase of $1.2$4.1 million, or 27%60%, was primarily attributable to $1.0 million due todriven by an increase of $2.9 million of costs
from growth in our sales volume, and a $0.4$0.7 million increase in warranty and field service expense to support the higher installed base, partially offset by $0.2 million decreaseincrease in depreciation costs due to impairment of first generation systems at the end of 2019.royalties, and $0.2 million increase in freight. Gross margin was negative 116%87% for the sixnine months ended JuneSeptember 30, 2020 compared to negative 203%217% for the sixnine months ended JuneSeptember 30, 2019. This improvement in gross margin was primarily attributable to increased sales volume of our disposable products.
Research and Development Expenses
Research and development expenses were $16.1$24.5 million for the sixnine months ended JuneSeptember 30, 2020, compared to $9.6$15.5 million for the sixnine months ended JuneSeptember 30, 2019. This increase of $6.5$9.0 million, or 68%58%, was primarily attributable to $2.9 million in increased compensation and related costs from higher headcount, and $3.6$5.8 million in increased materials and supplies costs related to higher engineering project spending.
Research and Development Expenses – License Acquired
Research and development expenses – license acquired were $15.0 million for the nine months ended September 30, 2019, related to the Biotronik Asset Acquisition, where we acquired intellectual property. Since the acquired intellectual property had no alternative use and was for products that have not yet received regulatory approval, the intellectual property was immediately charged to research and development expenses—license acquired.
Selling, General and Administrative Expenses
Selling, general and administrative expenses were $19.4$35.2 million for the sixnine months ended JuneSeptember 30, 2020, compared to $11.0$19.0 million for the sixnine months ended JuneSeptember 30, 2019. This increase of $8.3$16.2 million, or 76%85%, was primarily attributable to $7.6$10.2 million in increased compensation and related costs due to our investment in our commercial organization in support of our full commercial launch in the United States, in$3.8 million of stock-based compensation for certain performance-based awards as the first quarterapplicable performance conditions were achieved upon the completion of 2020, $0.6our IPO and $0.7 million in increased consulting expenses and $0.2 million in increased general marketing expenses.
Change in Fair Value of Contingent Consideration
For the sixnine months ended JuneSeptember 30, 2020 and 2019, we recorded a change in fair value of contingent consideration of $1.6$1.5 million for the decrease inand $0.7 million for the fair valueincrease, respectively, of the contingent consideration for the acquisition of Rhythm Xience.
Other Income (Expense)
Other expense, net was $4.2$9.3 million for the sixnine months ended JuneSeptember 30, 2020, compared to $21.3$22.2 million for the sixnine months ended JuneSeptember 30, 2019. This decrease of $17.1$13.0 million, or 80%58%, was primarily attributable to a decrease of $16.8 million in interest expense primarily related to the 2019 Credit Agreement and 2018 Convertible Notes.
Liquidity and Capital Resources
We have incurred significant operating losses and negative cash flows from operations since our inception, and we anticipate that we will incur significant losses for at least the next several years. As of JuneSeptember 30, 2020 and December 31, 2019, we had cash and cash equivalents and marketable securities of $29.3$166.8 million and $71.8 million, respectively. For the sixnine months ended JuneSeptember 30, 2020 and the years ended December 31, 2019 and 2018, our net losses were $41.3$72.6 million, $97.0 million and $47.9 million, respectively, and our net cash used in operating activities was $35.5$61.0 million, $56.0 million and $33.8 million, respectively. We had an accumulated deficit of $300.3$331.6 million and $259.0 million as of JuneSeptember 30, 2020 and December 31, 2019, respectively.
Prior to our initial public offering (“IPO”)IPO in August 2020, our operations had been financed primarily by aggregate net proceeds from the sale of our convertible preferred stock and principal of our converted debt of $253.9 million, as well as other indebtedness. In June and July 2019, we completed an equity financing pursuant to which we issued 8,200,297 shares of Series D convertible preferred stock in a private placement. The Series D convertible preferred stock issuance was comprised of: (i) 4,091,819 shares at $16.67 per share for cash proceeds of $66.6 million, net of fees of $1.6 million; and (ii) 1,884,565 shares at $13.33 per share (including a 20% discount) for the conversion of our 2018 Convertible Notes (and related accrued interest) and 2,223,913 shares at $16.67 per share for the conversion of our 2019 Convertible Notes (and related accrued interest), in an aggregate amount of $68.5 million, including the fair value of the embedded derivative of $6.3 million relating to the 20% discount for the conversion of the 2018 Convertible Notes. On August 10, 2020, we issued 10,147,058 shares of common stock in our IPO, which included 1,323,529 shares of common stock issued upon the exercise in full by the underwriters of an option to purchase, at the public offering price less underwriting discounts and commissions, up to an additional 1,323,529 shares. The price to the public for each share was $18.00.
Our future liquidity and capital funding requirements will depend on numerous factors, including:
our revenue growth;
our research and development efforts;
our sales and marketing activities;
our success in leveraging our strategic partnerships, including with Biotronik, as well as entrance into any other strategic partnerships or strategic transactions in the future;
our ability to raise additional funds to finance our operations;
the outcome, costs and timing of any clinical trial results for our current or future products;
the emergence and effect of competing or complementary products;
the availability and amount of reimbursement for procedures using our products;
our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights;
our ability to retain our current employees and the need and ability to hire additional management and sales, scientific and medical personnel;
the terms and timing of any collaborative, licensing or other arrangements that we have or may establish;
debt service requirements;
the extent to which we acquire or invest in businesses, products or technologies; and
the impact of the
Our primary uses of capital are, and we expect will continue to be, investment in our commercial organization and related expenses, clinical research and development services, laboratory and related supplies, legal and other regulatory expenses, general administrative costs and working capital. In addition, we have acquired, and may in the future seek to acquire or invest in, additional businesses, products or technologies that we believe could complement or expand our portfolio, enhance our technical capabilities or otherwise offer growth opportunities. For example, in June 2019, we acquired Rhythm Xience, a medical device company specializing in the design and manufacture of transseptal crossing and steerable introducer systems, for $3.0 million in cash. The cash payment did not include the potential $17.0 million in earn out consideration to be paid based on the achievement of certain regulatory milestones and revenue milestones. In February 2020, we issued to the former owners of Rhythm Xience 119,993 shares of our Series D convertible preferred stock and paid them $2.6 million in connection with the regulatory and revenue milestones earned to date. In addition, pursuant to the Biotronik License Agreement, we paid Biotronik a $3.0 million upfront fee at the time the agreement was signed, as well as a technology transfer fee consisting of $7.0 million in cash in December 2019 and $5.0 million in shares of our Series D convertible preferred stock in February 2020. We are required to pay the Biotronik Parties up to $10.0 million upon the achievement of various regulatory and sales-related milestones, as well as unit-based royalties on any sales of force sensing catheters. We will also incur costs as a public company that we have not previously incurred or have previously incurred at lower rates.
With the closing of our IPO, our current cash, and cash equivalents and marketable securities are sufficient to fund operations for at least the next 12 months. However, we will need to raise additional funds through one or more of the following: issuance of additional debt, equity or both. Until such time, if ever, that we can generate revenue sufficient to achieve profitability, we expect to finance our operations through equity or debt financings, which may not be available to us on the timing needed or on terms that we deem to be favorable. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of common stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures or declaring dividends. If we are unable to maintain sufficient financial resources, our business, financial condition and results of operations will be materially and adversely affected. We may be required to delay, limit, reduce or terminate our product discovery and development activities or future commercialization efforts. There can be no assurance that we will be able to obtain the needed financing on acceptable terms or at all.
Debt Obligations
During 2019, we repaid our 2018 Term Loan and our 2018 Convertible Notes and our 2019 Convertible Notes were converted into shares of our Series D convertible preferred stock.
On May 20, 2019, we entered into the 2019 Credit Agreement. The 2019 Credit Agreement provided us with a senior term loan facility in aggregate principal amount of $70.0 million, of which we borrowed $40.0 million upon closing. Of the remaining $30.0 million, $10.0 million is no longer available for borrowing and $20.0 million is available for borrowing by us on or prior to December 31, 2020, subject to our achievement of specified trailing revenue levels. The 2019 Credit Agreement bears interest per annum at 7.75% plus LIBOR for such interest period, and the principal amount of term loans outstanding under the 2019 Credit Agreement is due on May 20, 2024. The 2019 Credit Agreement can be prepaid but is subject to prepayment penalties. The 2019 Credit Agreement provides for final payment fees of an additional $4.6 million that are due upon prepayment, on the maturity date or upon acceleration.
Our obligations under the 2019 Credit Agreement are secured by substantially all of our assets, including our intellectual property, and is guaranteed by our subsidiary. The 2019 Credit Agreement contains customary affirmative and restrictive covenants, including
In connection with our entry into the 2019 Credit Agreement, we issued liability-classified warrants with a fair value of $0.9 million to purchase 419,992 shares of our Series C convertible preferred stock at $16.67 per share. These warrants were subsequently automatically converted into warrants to purchase an equal number of shares of our Series D convertible preferred stock at a price of $16.67 per share. Upon closing of our IPO, these warrants were automatically converted into warrants to purchase an equal number of shares of our common stock at a price of $16.67 per share.
Cash Flows
The following table shows a summary of our cash flows for the sixnine months ended JuneSeptember 30, 2020 and 2019 (in thousands):
|
| Nine Months Ended September 30, |
| |||||
|
| 2020 |
|
| 2019 |
| ||
|
| (Unaudited) |
| |||||
Net cash used in operating activities |
| $ | (61,038 | ) |
| $ | (30,823 | ) |
Net cash used in investing activities |
|
| (54,255 | ) |
|
| (70,868 | ) |
Net cash provided by financing activities |
|
| 164,000 |
|
|
| 126,311 |
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
| 143 |
|
|
| (50 | ) |
Net change in cash, cash equivalents and restricted cash |
| $ | 48,850 |
|
| $ | 24,570 |
|
Six Months Ended June 30, | ||||||||
2020 | 2019 | |||||||
(Unaudited) | ||||||||
Net cash used in operating activities | $ | (34,761 | ) | $ | (22,084 | ) | ||
Net cash provided by (used in) investing activities | 52,650 | (17,424 | ) | |||||
Net cash (used in) provided by financing activities | (3,115 | ) | 97,951 | |||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 69 | (12 | ) | |||||
Net change in cash, cash equivalents and restricted cash | $ | 14,843 | $ | 58,431 | ||||
During the sixnine months ended JuneSeptember 30, 2020, operating activities used $34.8$61.0 million of cash, an increase of $12.7$30.2 million from the sixnine months ended JuneSeptember 30, 2019. ThisThis increase was primarily attributable to a $23.0 million decrease of non-cash items, primarily driven by aan decrease of $17.0$16.9 million in amortization of debt issuance costs a decrease of $1.6 million in the fair value of the contingent considerationnine months ended September 30, 2020 and a decrease$15.0 million write-off of $1.4 million of loss on debt extinguishment. This increase wasintellectual property acquired in the Biotronik Asset Acquisition in the nine months ended September 30, 2019, partially offset by a $3.7 million decreasean increase in the net loss, a $1.5 million increase of stock-based compensation expense of $7.1 million and $1.3 millionan increase in the change in fair value of warrant liability and embedded derivative.
Investing Activities
During the sixnine months ended JuneSeptember 30, 2020, investing activities provided $52.7used $54.3 million of cash, an increasea decrease of $70.1$16.6 million from the sixnine months ended JuneSeptember 30, 2019. This increasedecrease was attributable to (a) an increase of maturities of marketable securities of $31.9$33.5 million and sales of marketable securities of $17.1 million, aand (b) cash paid of $10.0 million for the Biotronik research and development license and $3.0 million for the Rhythm Xience acquisition for the nine months ended September 30, 2019. This decrease of $22.2is partially offset by an additional $39.8 million of purchases of marketable securities and $3.0an additional $7.1 million of cash paid for the Rhythm Xience acquisition, partially offset by a $4.1 million increase in purchases of property and equipment.
Financing Activities
During the sixnine months ended JuneSeptember 30, 2020, financing activities used $3.1provided $164.0 million of cash, a decreasean increase of $101.1$37.7 million from the sixnine months ended JuneSeptember 30, 2019. The primary financing activityactivities for the sixnine months ended JuneSeptember 30, 2020 was the closing of the Company’s IPO which resulted in net proceeds of $166.3 million and payment of contingent consideration of $2.6 million related to the Rhythm Xience acquisition for the achievement of certain regulatory milestones and revenue targets. The primary financing activities for the sixnine months ended JuneSeptember 30, 2019 included $40.0 million resulting from the closing of the 2019 Credit Agreement, $38.2$66.6 million from the issuance of shares of our Series D convertible preferred stock in June 2019 and $37.0 million from the issuance of the 2019 Convertible Notes in May 2019, partially offset by $17.3 million in debt repayments related to the repayment of the 2018 Term Loan and payments of issuance and extinguishment costs
Contractual Obligations and Commitments
During the sixnine months ended JuneSeptember 30, 2020, there have been no material changes outside the ordinary course of business to our contractual obligations from those disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the prospectus dated August 5, 2020 (the “Prospectus”) that forms a part of the Company’s Registration Statementsregistration statement on Form
Off-Balance
As of JuneSeptember 30, 2020 and December 31, 2019, we did not have, and we do not currently have, any
Critical Accounting Policies and Estimates
Management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions for the reported amounts of assets, liabilities, revenue and expenses. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and any such differences may be material.
During the sixnine months ended JuneSeptember 30, 2020, there have been no material changes to our critical accounting policies and estimates from those disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Prospectus that forms a part of the Company’s Registration Statementsregistration statement on Form(FileAct of 1933, as amended.
Our significant accounting policies are described in the Note 2 to our condensed consolidated financial statements.
Recent Accounting Pronouncements
See Note 2 to our condensed consolidated financial statements for a description of recent accounting pronouncements applicable to our condensed consolidated financial statements.
As a “smaller reporting company” as defined by Item 10 of Regulation
Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as such term is defined in
The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
With respect to the quarter ended JuneSeptember 30, 2020, under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures. Based upon this evaluation, our Chief Executive Officer and PrincipalChief Financial Officer have concluded that our disclosure controls and procedures are effective. Management does not expect that our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control systems are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in a cost-effective control system, no evaluation of internal control over financial reporting can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been or will be detected.
Changes in Internal Control over Financial Reporting:
There were no changes in our internal control over financial reporting (as defined in Rules
From time to time, we are involved in various legal proceedings arising from the normal course of our business activities. We are not presently a party to any litigation the outcome of which, we believe, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, cash flows or financial condition. We have received, and may from time to time receive, letters from third parties alleging patent infringement, violation of employment practices or trademark infringement, and we may in the future participate in litigation to defend ourselves. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
As of the date of this Quarterly Report on Form
(a) Sales of Unregistered Securities
Between AprilJuly 1, 2020 and JuneSeptember 30, 2020:
we issued and sold to our current and former officers and employees an aggregate of 64,56218,631 shares of common stock upon the exercise of options under our equity compensation plans at exercise prices ranging from $0.54$1.85 to $1.06$13.38 per share, for an aggregate amount of $0.2$0.1 million.
None of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering. Unless otherwise stated, the sales of the above securities were deemed to be exempt from registration under the Securities Act in reliance upon Section 4(a)(2) of the Securities Act (or Regulation D promulgated thereunder) or Rule 701 promulgated under Section 3(b) of the Securities Act as transactions by an issuer not involving any public offering or pursuant to benefit plans and contracts relating to compensation as provided under Rule 701. The recipients of the securities in each of these transactions represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed upon the stock certificates issued in these transactions.
|
|
|
| Incorporated by Reference | ||||||||
Exhibit No. |
| Exhibit Description |
| Form |
| File No. |
| Exhibit |
| Filing Date |
| Filed Herewith |
|
|
|
|
|
|
|
|
|
|
|
|
|
3.1 |
| Amended and Restated Certificate of Incorporation of Acutus Medical, Inc. |
| 8-K |
| 001-39430 |
| 3.1 |
| August 10, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.2 |
| Amended and Restated Bylaws of the Registrant Acutus Medical, Inc. |
| 8-K |
| 001-39430 |
| 3.2 |
| August 10, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.1 |
|
| S-1 |
| 333-239873 |
| 10.12 |
| July 15, 2020 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
10.2 |
| 2020 Equity Incentive Plan and forms of agreements thereunder. |
| S-1/A |
| 333-239873 |
| 10.14 |
| July 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.3 |
|
| S-1/A |
| 333-239873 |
| 10.15 |
| July 30, 2020 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
10.4 |
|
| S-1 |
| 333-239873 |
| 10.16 |
| July 15, 2020 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
31.1 |
|
|
|
|
|
|
|
|
|
| X | |
|
|
|
|
|
|
|
|
|
|
|
|
|
31.2 |
|
|
|
|
|
|
|
|
|
| X | |
|
|
|
|
|
|
|
|
|
|
|
|
|
32.1* |
|
|
|
|
|
|
|
|
|
| X | |
|
|
|
|
|
|
|
|
|
|
|
|
|
32.2* |
|
|
|
|
|
|
|
|
|
| X | |
|
|
|
|
|
|
|
|
|
|
|
|
|
101 |
| The following financial information from the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2020, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations and Comprehensive Loss, (iii) the Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit), (iv) the Condensed Consolidated Statements of Cash Flows, and (v) Notes to the Condensed Consolidated Financial Statements (filed herewith). |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
104 |
| Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
|
|
|
|
|
|
|
|
|
|
* | The certifications furnished in Exhibit 32 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Securities |
Acutus Medical, Inc. | |||||||
(Registrant) | |||||||
Date: | By: | /s/ Vince Burgess | |||||
Vince Burgess | |||||||
President and Chief Executive Officer | |||||||
(Principal Executive Officer) | |||||||
Date: | By: | /s/ Gary W. Doherty | |||||
Gary W. Doherty | |||||||
Chief Financial Officer | |||||||
(Principal Financial Officer) |
50