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Acutus Medical Reports First Quarter 2023 Financial Results

CARLSBAD, Calif., May 11, 2023 (GLOBE NEWSWIRE) -- Acutus Medical, Inc. (“Acutus” or the “Company”) (Nasdaq: AFIB), an arrhythmia management company focused on improving the way cardiac arrhythmias are diagnosed and treated, today reported results for the first quarter of 2023.

Recent Highlights:

  • Reported revenue of $4.2 million for the first quarter of 2023, a 13% increase compared to $3.7 million for the same quarter last year.
  • Continued improvement in financial performance with year-over-year reductions of 58% in GAAP operating expenses, and year-over-year reductions of 39% in both non-GAAP operating expenses and cash burn for the first quarter of 2023.
  • Increased full year revenue outlook to $19.0 million-$21.0 million, reflecting strong double-digit growth.
  • Announced publication of the RECOVER AF study, which underscored AcQMap’s differentiated offering for retreatment procedures and ability to fulfill a major unmet need in the market.

“We are pleased with the advancement of our key strategic initiatives thus far in 2023 as we set the foundation for stronger growth”, said David Roman, President & CEO of Acutus. “In addition to year-over-year revenue growth, our first quarter results demonstrated further progress in our effort to strengthen the Company’s financial position with year-over-year improvements in non-GAAP gross margin, operating expenses, and cash burn.”

First Quarter 2023 Financial Results

Revenue was $4.2 million for the first quarter of 2023, an increase of 13% compared to $3.7 million for the first quarter of 2022. The improvement over the same quarter last year was driven by higher AcQMap disposable revenue in markets outside the United States, increased Service, Rent and Other Revenue, and sales through the Company’s distribution agreement with Medtronic.

Gross margin on a GAAP basis was negative 63% for the first quarter of 2023 compared to negative 89% for the same quarter last year. The improvement was primarily driven by a higher production volume, lower manufacturing variances, and a significantly reduced manufacturing overhead structure.

Operating expenses consisting of research and development and selling, general and administrative expenses on a GAAP basis were $15.7 million for the first quarter of 2023 compared with $22.4 million for the same quarter last year. Non-GAAP operating expenses were $13.9 million for the first quarter of 2023 compared with $22.7 million in the same quarter last year. The decrease in operating expenses on both a GAAP and Non-GAAP basis resulted from the Company’s restructuring actions in the first half of 2022, reduced by discretionary spend, and the reprioritization of certain research and development programs.

Net loss on a GAAP basis was $16.3 million for the first quarter of 2023 and net loss per share was $0.57 on a weighted average basic and diluted outstanding share count of 28.8 million, compared to a net loss of $40.0 million and a net loss per share of $1.42 on a weighted average basic and diluted outstanding share count of 28.1 million in the same period of the prior year.

Excluding amortization of acquired intangibles, non-cash stock-based compensation expense, restructuring charges, change in fair value of warrant liability, change in the fair value of contingent consideration and gain on sale of business, the Company’s non-GAAP net loss for the first quarter of 2023 was $16.8 million, or $0.59 per share, compared to a net loss of $28.5 million, or $1.00 per share, for the first quarter of 2022.

Cash, cash equivalents, marketable securities and restricted cash were $76.7 million as of March 31, 2023.

2023 Outlook

The company expects full year 2023 revenue to be in a range from $19.0-$21.0 million.

Non-GAAP Financial Measures

This press release includes references to non-GAAP net loss and non-GAAP basic and diluted net loss per share, which are non-GAAP financial measures, to provide information that may assist investors in understanding the Company’s financial results and assessing its prospects for future performance. The Company believes these non-GAAP financial measures are important indicators of its operating performance because they exclude items that are primarily non-cash accounting line items unrelated to, and may not be indicative of, the Company’s core operating results. These non-GAAP financial measures, as Acutus calculates them, may not necessarily be comparable to similarly titled measures of other companies and may not be appropriate measures for comparing the performance of other companies relative to the Company. These non-GAAP financial results are not intended to represent and should not be considered to be more meaningful measures than, or alternatives to, measures of operating performance as determined in accordance with GAAP. Non-GAAP net loss is defined as net loss before income taxes, adjusted for stock-based compensation, amortization of acquisition-related intangibles, employee retention credit, goodwill impairment, restructuring charges, changes in the fair value of contingent consideration, gain on sale of business, loss on debt extinguishment and change in fair value of warrant liability and other adjustments. To the extent such non-GAAP financial measures are used in the future, the Company expects to calculate them using a consistent method from period to period. A reconciliation of the most directly comparable GAAP financial measure to the non-GAAP financial measure has been provided under the heading “Reconciliation of GAAP Results to Non-GAAP Results” in the financial statement tables attached to this press release.

Webcast and Conference Call Information

Acutus will host a conference call to discuss the first quarter 2023 financial results after market close on Thursday, May 11, 2023 at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time. To access the live call via telephone, please register in advance using the link: https://register.vevent.com/register/BIa1254f845156421eb004052b75889416. Upon registering, each participant will receive an email confirmation with dial-in numbers and a unique personal PIN that can be used to join the call. The live webinar of the call may be accessed at https://ir.acutusmedical.com.

About Acutus

Acutus is an arrhythmia management company focused on improving the way cardiac arrhythmias are diagnosed and treated. Acutus is 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 efficiently and effectively. Through internal product development, acquisitions and global partnerships, Acutus has established a global sales presence delivering a broad portfolio of highly differentiated electrophysiology products that provide its customers with a complete solution for catheter-based treatment of cardiac arrhythmias. Founded in 2011, Acutus is based in Carlsbad, California.

Caution Regarding Forward-Looking Statements

This press release includes statements that may constitute “forward-looking” statements, usually containing the words “believe,” “estimate,” “project,” “expect” or similar expressions. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, the Company’s ability to continue to manage expenses and cash burn rate at sustainable levels, continued acceptance of its products in the marketplace, the effect of global economic conditions on the ability and willingness of customers to purchase the Company’s systems and the timing of such purchases, competitive factors, changes resulting from healthcare policy in the United States and globally including changes in government reimbursement of procedures, dependence upon third-party vendors and distributors, timing of regulatory approvals, the impact of the coronavirus (COVID-19) pandemic and Acutus’ response to it and other risks discussed in the Company’s periodic and other filings with the Securities and Exchange Commission. By making these forward-looking statements, Acutus undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.

Investor Contact:Media Contact:
Caroline CornerRhiannon Pickus
Westwicke ICRAcutus Medical, Inc.
D: 415-202-5678M: 442-232-6094
caroline.corner@westwicke.com Rhiannon.Pickus@acutus.com
  


 
ACUTUS MEDICAL, INC.
Condensed Consolidated Balance Sheets
(in thousands, except per share amounts)
 
  March 31,
2023
 December 31,
2022
  (unaudited)  
ASSETS    
Current assets:    
Cash and cash equivalents $22,738  $25,584 
Marketable securities, short-term  46,839   44,863 
Restricted cash, short-term  7,139   5,764 
Accounts receivable  5,340   21,085 
Inventory  14,938   13,327 
Employer retention credit receivable  2,562   4,703 
Prepaid expenses and other current assets  2,232   2,541 
Total current assets  101,788   117,867 
     
Property and equipment, net  8,145   9,221 
Right-of-use asset, net  3,708   3,872 
Intangible assets, net  1,533   1,583 
Other assets  822   897 
Total assets $115,996  $133,440 
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities:    
Accounts payable $5,569  $4,721 
Accrued liabilities  7,302   9,686 
Contingent consideration, short-term  2,000   1,800 
Operating lease liabilities, short-term  339   319 
Warrant liability  1,900   3,346 
Total current liabilities  17,110   19,872 
     
Operating lease liabilities, long-term  3,883   4,103 
Long-term debt  34,526   34,434 
Other long-term liabilities  11   12 
Total liabilities  55,530   58,421 
     
Commitments and contingencies    
     
Stockholders' equity    
Preferred stock, $0.001 par value; 5,000,000 shares authorized as of March 31, 2023 and December 31, 2022; 6,666 shares of the preferred stock, designated as Series A Common Equivalent Preferred Stock, are issued and outstanding as of March 31, 2023 and December 31, 2022      
Common stock, $0.001 par value; 260,000,000 shares authorized as of March 31, 2023 and December 31, 2022; 28,894,080 and 28,554,656 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively  29   29 
Additional paid-in capital  595,864   594,173 
Accumulated deficit  (534,629)  (518,314)
Accumulated other comprehensive loss  (798)  (869)
Total stockholders' equity  60,466   75,019 
Total liabilities and stockholders' equity $115,996  $133,440 


 
ACUTUS MEDICAL, INC.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except per share amounts)
 
  Three Months Ended March 31,
   2023   2022 
  (unaudited)
Revenue $4,170  $3,681 
Cost of products sold  6,790   6,941 
Gross profit  (2,620)  (3,260)
     
Operating expenses (income):    
Research and development  6,117   8,003 
Selling, general and administrative  9,565   14,385 
Goodwill impairment     12,026 
Restructuring  12   949 
Change in fair value of contingent consideration  200   7 
Gain on sale of business  (1,207)   
Total operating (income) expenses  14,687   35,370 
Loss from operations  (17,307)  (38,630)
     
Other income (expense):    
Change in fair value of warrant liability  1,446    
Interest income  853   24 
Interest expense  (1,307)  (1,411)
Total other income (expense), net  992   (1,387)
Loss before income taxes  (16,315)  (40,017)
Income tax benefit      
Net loss $(16,315) $(40,017)
     
Other comprehensive income (loss):    
Unrealized gain (loss) on marketable securities  12   (57)
Foreign currency translation adjustment  59   (166)
Comprehensive loss $(16,244) $(40,240)
     
Net loss per common share, basic and diluted $(0.57) $(1.42)
Weighted average shares outstanding, basic and diluted  28,764,444   28,118,090 


 
ACUTUS MEDICAL, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
 
  Three Months Ended March 31,
   2023   2022 
  (unaudited)
Cash flows from operating activities    
Net loss $(16,315) $(40,017)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation expense  1,297   1,567 
Amortization of intangible assets  50   160 
Non-cash stock-based compensation expense  1,904   3,032 
(Accretion of discounts) amortization of premiums on marketable securities, net  (527)  173 
Amortization of debt issuance cost  104   378 
Amortization of operating lease right-of-use assets  164   160 
Goodwill impairment     12,026 
Gain on sale of business, net  (1,207)   
Change in fair value of warrant liability  (1,446)   
Loss on disposal of property and equipment  38    
Change in fair value of contingent consideration  200   7 
Changes in operating assets and liabilities:    
Accounts receivable  (11)  655 
Inventory  (1,611)  (1,212)
Employer retention credit receivable  2,141    
Prepaid expenses and other current assets  391   (3,487)
Other assets  75   120 
Accounts payable  873   (2,641)
Accrued liabilities  (2,433)  1,532 
Operating lease liabilities  (201)  (14)
Other long-term liabilities  (1)  (48)
Net cash used in operating activities  (16,515)  (27,609)
     
Cash flows from investing activities    
Proceeds from sale of business  17,000    
Purchases of available-for-sale marketable securities  (28,019)   
Sales of available-for-sale marketable securities     2,500 
Maturities of available-for-sale marketable securities  26,500   14,587 
Purchases of property and equipment  (232)  (1,088)
Net cash provided by investing activities  15,249   15,999 
     
Cash flows from financing activities    
Proceeds from the exercise of stock options  4   66 
Repurchase of common shares to pay employee withholding taxes  (217)   
Proceeds from employee stock purchase plan     182 
Payment of contingent consideration     (290)
Net cash used in financing activities  (213)  (42)
     
Effect of exchange rate changes on cash, cash equivalents and restricted cash  8   (100)
     
Net change in cash, cash equivalents and restricted cash  (1,471)  (11,752)
Cash, cash equivalents and restricted cash, at the beginning of the period  31,348   24,221 
Cash, cash equivalents and restricted cash, at the end of the period $29,877  $12,469 
     
Supplemental disclosure of cash flow information:    
Cash paid for interest $1,207  $1,025 
     
Supplemental disclosure of noncash investing and financing activities:    
Accounts receivable from sale of business $1,244  $ 
Change in unrealized (gain) loss on marketable securities $(12) $57 
Change in unpaid purchases of property and equipment $(25) $(97)
Contingent consideration escrow release $  $17 


 
ACUTUS MEDICAL, INC.
Reconciliation of GAAP Results to Non-GAAP Results
(in thousands)
(unaudited)
 
Three Months Ended March 31, 2023 Cost of
Products Sold
 Research and
Development
 Selling,
General and
Administrative
 Loss from
Operations
 Other Income
(Expense),
Net
 Net Loss Basic and
Diluted EPS
Reported $6,790  $6,117  $9,565  $(17,307) $992  $(16,315) $(0.57)
Amortization of acquired intangibles  (50)        50      50   0.00 
Stock-based compensation  (74)  (346)  (1,484)  1,904      1,904   0.07 
Restructuring charges           12      12   0.00 
Change in fair value of warrant liability              (1,446)  (1,446)  (0.05)
Change in fair value of contingent consideration           200      200   0.00 
Gain on sale of business           (1,207)     (1,207)  (0.04)
Adjusted $6,666  $5,771  $8,081  $(16,348) $(454) $(16,802) $(0.59)
               
               
Three Months Ended March 31, 2022 Cost of
Products Sold
 Research and
Development
 Selling,
General and
Administrative
 Loss from
Operations
 Other
Expense,
Net
 Net Loss Basic and
Diluted EPS
Reported $6,941  $8,003  $14,385  $(38,630) $(1,387) $(40,017) $(1.42)
Amortization of acquired intangibles  (155)     (5)  160      160   0.01 
Stock-based compensation  (226)  (514)  (2,292)  3,032      3,032   0.11 
Employee retention credit  1,503   1,394   1,742   (4,639)     (4,639)  (0.16)
Goodwill impairment           12,026      12,026   0.43 
Restructuring charges           949      949   0.03 
Change in fair value of contingent consideration           7      7   0.00 
Adjusted $8,063  $8,883  $13,830  $(27,095) $(1,387) $(28,482) $(1.00)


ACUTUS MEDICAL, INC.

Key Business Metrics
(unaudited)

Installed Base and Procedure Volumes

The total installed base which includes AcQMap Systems as of March 31, 2023 and 2022 are as follows:

  As of March 31,
  2023 2022
Acutus    
U.S. 28 39
Outside the U.S. 49 38
Total Acutus net system placements 77 77


Procedure volumes for the three months ended March 31, 2023 and 2022 are as follows:

  Three Months Ended
  March 31,
  2023 2022
Procedure volumes 433 465


Revenue

The following table sets forth the Company’s revenue for disposables, systems and service/other for the three months ended March 31, 2023 and 2022 (in thousands):

  Three Months Ended
  March 31,
   2023  2022
Disposables $3,426 $3,211
Systems    
Service / other  744  470
Total revenue $4,170 $3,681


The following table presents revenue by geographic location for the three months ended March 31, 2023 and 2022 (in thousands):

  Three Months Ended
  March 31,
   2023  2022
United States $2,248 $2,023
Outside the United States  1,922  1,658
Total revenue $4,170 $3,681

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