Asensus Surgical, Inc. Reports Operating and Financial Results for the First Quarter 2024
Asensus Surgical announced its Q1 2024 financial results with significant updates. The company reported $1.1 million in revenue, a slight increase from $1.0 million in Q1 2023. Despite this, their net loss expanded to $22.5 million. A non-binding acquisition proposal from KARL STORZ was announced, including up to $20 million in financing. The proposal values Asensus shares at $0.35 each. Nearly 900 surgical procedures utilizing the Senhance System were performed globally. Asensus aims to initiate 8-10 new Senhance programs and expects a 15%-20% procedure volume growth for 2024. The company had $8.0 million in cash and equivalents as of March 31, 2024.
- Revenue increased to $1.1 million in Q1 2024 from $1.0 million in Q1 2023.
- Announced a non-binding acquisition proposal by KARL STORZ, valuing shares at $0.35 each.
- Secured up to $20 million in financing from KARL STORZ.
- Nearly 900 procedures performed globally using the Senhance System.
- Initiated one new Senhance program at Sendai Tokushukai Hospital in Japan.
- Expecting 15%-20% growth in procedure volume for 2024.
- Achieved a 45% increase in the TRUST clinical registry, now including 3,500 patients.
- Published 6 peer-reviewed papers supporting clinical utility of the Senhance System.
- Net loss increased to $22.5 million in Q1 2024, from $22.2 million in Q1 2023.
- Total operating expenses rose to $22.7 million from $20.4 million year-over-year.
- Cash and equivalents decreased to $8.0 million as of March 31, 2024.
- Increased dependence on external financing, with $7 million already drawn from the loan.
Insights
Asensus Surgical's Q1 2024 financial results show a modest revenue growth from
The operating expenses have increased to
However, the non-binding acquisition proposal from KARL STORZ, with a proposed share price of
In the short term, the financials present a mixed bag with incremental revenue growth overshadowed by high losses. For the long term, the acquisition, if successful, could provide much-needed stability and resources.
The reported nearly 900 procedures performed globally using the Senhance System underscores the system's increasing adoption. This volume represents significant use cases and validation of the technology across diverse fields such as general surgery, gynecology and urology. However, the adoption rate appears modest given the scale needed for substantial commercial success.
Looking ahead, verification and validation testing and pilot manufacturing for the LUNA Surgical System are critical milestones. Successful completion of these steps could pave the way for broader commercialization, offering potential new revenue streams and reinforcing Asensus's position in surgical robotics.
While the initiation of one new Senhance program in Japan is a positive step, it highlights the slow and often challenging process of market penetration and adoption in a competitive tech landscape. Investors should weigh the potential of technological advancements against the current slow adoption rate, considering the long time-to-market for such innovative products.
The announcement of a non-binding acquisition proposal by KARL STORZ is a significant development with potential market-moving implications. This potential acquisition, at
The exclusivity arrangement and due diligence period suggest a thorough evaluation process, which could either validate the strategic fit and lead to a definitive merger agreement or reveal potential issues that might deter the acquisition. Investors should stay informed about the progress and outcomes of these negotiations.
The
In summary, the potential acquisition could offer significant upside, but the reliance on this deal for future funding and strategic direction introduces risks that investors should carefully consider.
RESEARCH TRIANGLE PARK, N.C., May 14, 2024 (GLOBE NEWSWIRE) -- Asensus Surgical, Inc. (NYSE American: ASXC), a global leader of innovative digital solutions for the operating room, announced its operating and financial results for the first quarter 2024.
Recent Highlights
- Announced non-binding acquisition proposal and exclusivity arrangement with KARL STORZ SE & Co. KG (KARL STORZ)
- KARL STORZ to provide up to
$20 million in financing - Nearly 900 procedures performed globally during the quarter
- One Senhance® Surgical Program initiation year-to-date
- First quarter revenue of
$1.1 million - The Company had cash and cash equivalents and short-term investments, excluding restricted cash, of approximately
$8.0 million at March 31, 2024
“In the first quarter, we made steady progress in the continued adoption and utilization of Senhance and the ISU, as well as the development of the LUNA™ Surgical System,” said Anthony Fernando, Asensus Surgical President and CEO. “We also recently announced a potential acquisition by KARL STORZ, which we believe could accelerate our mission to transform the way surgery is performed on a global scale. Looking to the balance of 2024, our team remains focused on goals and milestones for LUNA and the negotiation of a definitive merger agreement with KARL STORZ, which we hope will lead to a completed transaction.”
Upcoming 2024 Milestones
For the full year 2024, the Company expects:
- To initiate 8 - 10 new Senhance programs
- Procedure volume growth of
15% to20% over 2023 - Achieve design freeze for the LUNA Surgical System
- Verification and validation testing, and pilot manufacturing for the LUNA Surgical System
Non-Binding Acquisition Proposal and Exclusivity Arrangement with KARL STORZ
In April, the Company announced a non-binding letter of intent with KARL STORZ, a global medical technology company, regarding a potential acquisition. KARL STORZ proposed to acquire
Market Development
Procedure Volumes
In the first quarter of 2024, surgeons performed nearly 900 procedures utilizing the Senhance System. These procedures included general surgery, gynecology, urology, colorectal, pediatric, and bariatric surgical cases.
2024 Senhance Program Initiations
Year to date, the Company initiated one new Senhance Surgical System placement at Sendai Tokushukai Hospital in Japan.
Clinical Registry (TRUST)
The Company continues to leverage its growing body of real-world clinical data through the utilization of its TRUST™ clinical registry. The Company believes TRUST is the largest multi-specialty robotic-assisted laparoscopic registry in the industry, with approximately 3,500 patients enrolled to date, a
Clinical Validation
Year to date, there were 6 peer-reviewed clinical papers published providing further support for the clinical utility of the Senhance System across a variety of surgical specialties. These papers, along with a library of similar papers, can be found on the Company’s website:
https://www.asensus.com/resources/clinical-publications
First Quarter Financial Results
For the three months ended March 31, 2024, the Company reported revenue of
For the three months ended March 31, 2024, total operating expenses were
For the three months ended March 31, 2024, net loss was
Adjusted net loss is a non-GAAP financial measure. See the reconciliation of GAAP to Non-GAAP Measures below. For the three months ended March 31, 2024, the adjusted net loss was
Balance Sheet Updates
The Company had cash, cash equivalents and short-term investments, excluding restricted cash of approximately
Conference Call
To listen to the conference call on your telephone, please dial 1-888-886-7786 for domestic callers and 416-764-8658 for international callers, approximately ten minutes prior to the start time. To access the live audio webcast or archived recording, use the following link https://ir.asensus.com/events-and-presentations. The replay will be available on the Company’s website.
About Asensus Surgical, Inc.
Asensus Surgical is revolutionizing surgery with the first intra-operative Augmented Intelligence technology approved for use in operating rooms around the world. Recognized as an award-winning leader in digital technology, Asensus is committed to making surgery more accessible and predictable while delivering consistently superior outcomes. The Company’s novel approach to digitizing laparoscopy has led to system placements globally. Led by engineers, medical professionals, and industry luminaries, Asensus is powered by human ingenuity and driven by collaboration. To learn more about the Senhance® Surgical System and the new LUNA™ System in development, visit www.asensus.com.
Follow Asensus
Email Alerts: https://ir.asensus.com/email-alerts
LinkedIn: https://www.linkedin.com/company/asensus-surgical-inc/
X: https://twitter.com/AsensusSurgical
YouTube: https://www.youtube.com/@AsensusSurgical
Forward-Looking Statements
This press release includes statements relating to Asensus Surgical, and our 2024 first quarter results, and of the potential acquisition transaction with KARL STORZ (the “Potential Acquisition”). These statements and other statements regarding our future plans and goals constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties that are often difficult to predict, are beyond our control and which may cause results to differ materially from expectations and include whether we will be able to meet our milestones for the year, including the initiation of 8-10 new Senhance programs,
| Asensus Surgical, Inc. Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands, except per share amounts) (Unaudited) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Revenue: | ||||||||
| Product | $ | 313 | $ | 293 | ||||
| Service | 285 | 195 | ||||||
| Lease | 525 | 488 | ||||||
| Total revenue | 1,123 | 976 | ||||||
| Cost of revenue: | ||||||||
| Product | 1,681 | 1,225 | ||||||
| Service | 452 | 749 | ||||||
| Lease | 923 | 973 | ||||||
| Total cost of revenue | 3,056 | 2,947 | ||||||
| Gross loss | (1,933 | ) | (1,971 | ) | ||||
| Operating expenses: | ||||||||
| Research and development | 8,091 | 10,139 | ||||||
| Sales and marketing | 3,642 | 4,553 | ||||||
| General and administrative | 4,374 | 5,468 | ||||||
| Amortization of intangible assets | 114 | 112 | ||||||
| Change in fair value of contingent consideration | 6,480 | 105 | ||||||
| Total operating expenses | 22,701 | 20,377 | ||||||
| Operating loss | (24,634 | ) | (22,348 | ) | ||||
| Other income (expense), net: | ||||||||
| Change in fair value of warrant liabilities | 2,116 | — | ||||||
| Interest income | 126 | 439 | ||||||
| Other expense, net | (59 | ) | (218 | ) | ||||
| Total other income (expense), net | 2,183 | 221 | ||||||
| Loss before income taxes | (22,451 | ) | (22,127 | ) | ||||
| Income tax expense | (46 | ) | (91 | ) | ||||
| Net loss | (22,497 | ) | (22,218 | ) | ||||
| Comprehensive loss: | ||||||||
| Net loss | (22,497 | ) | (22,218 | ) | ||||
| Foreign currency translation (loss) gain | (494 | ) | 550 | |||||
| Unrealized gain on available-for-sale investments | 8 | 307 | ||||||
| Comprehensive loss | $ | (22,983 | ) | $ | (21,361 | ) | ||
| Net loss per common share attributable to common stockholders – basic and diluted | $ | (0.08 | ) | $ | (0.09 | ) | ||
| Weighted average number of shares used in computing net loss per common share – basic and diluted | 269,265 | 238,280 | ||||||
| Asensus Surgical, Inc. Condensed Consolidated Balance Sheets (in thousands, except share amounts) (Unaudited) | ||||||||
| March 31, 2024 | December 31, 2023 | |||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 6,995 | $ | 17,096 | ||||
| Short-term investments, available-for-sale | 994 | 3,971 | ||||||
| Accounts receivable, net | 675 | 3,508 | ||||||
| Inventories | 5,958 | 7,172 | ||||||
| Prepaid expenses | 3,314 | 3,143 | ||||||
| Other current assets | 1,312 | 1,496 | ||||||
| Total Current Assets | 19,248 | 36,386 | ||||||
| Restricted cash | 1,483 | 1,642 | ||||||
| Inventories, net of current portion | 3,954 | 4,043 | ||||||
| Property and equipment, net | 8,630 | 8,959 | ||||||
| Intellectual property, net | 1,114 | 1,237 | ||||||
| Net deferred tax assets | 37 | 44 | ||||||
| Operating lease right-of-use assets, net | 4,926 | 5,165 | ||||||
| Other long-term assets | 1,422 | 1,610 | ||||||
| Total Assets | $ | 40,814 | $ | 59,086 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 4,036 | $ | 4,145 | ||||
| Accrued employee compensation and benefits | 3,814 | 5,390 | ||||||
| Accrued expenses and other current liabilities | 1,243 | 1,636 | ||||||
| Contingent consideration, current | 8,700 | — | ||||||
| Operating lease liabilities, current | 1,056 | 1,036 | ||||||
| Deferred revenue | 439 | 421 | ||||||
| Total Current Liabilities | 19,288 | 12,628 | ||||||
| Long-Term Liabilities: | ||||||||
| Deferred revenue – less current portion | 330 | 290 | ||||||
| Contingent consideration | — | 2,220 | ||||||
| Warrant liabilities | 3,772 | 5,888 | ||||||
| Noncurrent operating lease liabilities | 4,400 | 4,646 | ||||||
| Total Liabilities | 27,790 | 25,672 | ||||||
| Commitments and Contingencies | ||||||||
| Stockholders’ Equity | ||||||||
| Common stock March 31, 2024 and December 31, 2023; 271,986,369 and 264,921,526 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively | 272 | 265 | ||||||
| Preferred stock, issued and outstanding at March 31, 2024 and December 31, 2023, respectively | — | — | ||||||
| Additional paid-in capital | 975,715 | 973,129 | ||||||
| Accumulated deficit | (961,865 | ) | (939,368 | ) | ||||
| Accumulated other comprehensive income | (1,098 | ) | (612 | ) | ||||
| Total Stockholders’ Equity | 13,024 | 33,414 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 40,814 | $ | 59,086 | ||||
| Asensus Surgical, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) (Unaudited) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Operating Activities: | ||||||||
| Net loss | $ | (22,497 | ) | $ | (22,218 | ) | ||
| Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities: | ||||||||
| Depreciation | 841 | 813 | ||||||
| Amortization of intangible assets | 114 | 112 | ||||||
| Accretion of discounts and premiums on investments, net | (15 | ) | (89 | ) | ||||
| Stock-based compensation | 1,745 | 1,916 | ||||||
| Deferred tax expense | — | 91 | ||||||
| Bad debt expense | (2 | ) | — | |||||
| Change in inventory reserves | 959 | (374 | ) | |||||
| Change in fair value of warrant liabilities | (2,116 | ) | — | |||||
| Change in fair value of contingent consideration | 6,480 | 105 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 2,776 | 1,607 | ||||||
| Inventories | (559 | ) | 203 | |||||
| Operating lease right-of-use assets | 177 | 187 | ||||||
| Prepaid expenses | (183 | ) | 250 | |||||
| Other current and long-term assets | 313 | (27 | ) | |||||
| Accounts payable | (74 | ) | 1,608 | |||||
| Accrued employee compensation and benefits | (1,523 | ) | (1,120 | ) | ||||
| Accrued expenses and other current liabilities | (359 | ) | (93 | ) | ||||
| Deferred revenue | 73 | (13 | ) | |||||
| Operating lease liabilities | (158 | ) | (206 | ) | ||||
| Net cash and cash equivalents used in operating activities | (14,008 | ) | (17,248 | ) | ||||
| Investing Activities: | ||||||||
| Purchase of available-for-sale investments | — | (2,949 | ) | |||||
| Proceeds from maturities of available-for-sale investments | 3,000 | 32,750 | ||||||
| Purchase of property and equipment | — | (64 | ) | |||||
| Net cash and cash equivalents provided by investing activities | 3,000 | 29,737 | ||||||
| Financing Activities: | ||||||||
| Proceeds from issuance of common stock, net of issuance costs | 982 | — | ||||||
| Taxes paid related to net share settlement of vesting of restricted stock units | (171 | ) | (488 | ) | ||||
| Proceeds from exercise of stock options | — | 5 | ||||||
| Net cash and cash equivalents provided by (used in) financing activities | 811 | (483 | ) | |||||
| Effect of exchange rate changes on cash and cash equivalents | (63 | ) | 403 | |||||
| Net (decrease) increase in cash, cash equivalents and restricted cash | (10,260 | ) | 12,409 | |||||
| Cash, cash equivalents and restricted cash, beginning of period | 18,738 | 7,470 | ||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 8,478 | $ | 19,879 | ||||
| Supplemental Disclosure for Cash Flow Information: | ||||||||
| Cash paid for leases | $ | 351 | $ | 330 | ||||
| Cash paid for taxes | $ | 87 | $ | 190 | ||||
| Supplemental Schedule of Non-cash Investing and Financing Activities: | ||||||||
| Transfer of inventories to property and equipment | $ | 630 | $ | 112 | ||||
| Lease liabilities arising from obtaining right-of-use assets | $ | 72 | $ | 45 | ||||
| Asensus Surgical, Inc. Reconciliation of Non-GAAP Measures Adjusted Net Loss and Net Loss per Share (in thousands except per share amounts) (Unaudited) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Net loss attributable to common stockholders (GAAP) | $ | (22,497 | ) | $ | (22,218 | ) | ||
| Adjustments | ||||||||
| Amortization of intangible assets (a) | 114 | 112 | ||||||
| Change in fair value of contingent consideration (b) | 6,480 | 105 | ||||||
| Change in fair value of warrant liabilities (c) | (2,116 | ) | — | |||||
| Adjusted net loss attributable to common stockholders (Non-GAAP) | $ | (18,019 | ) | $ | (22,001 | ) | ||
| Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Net loss per share attributable to common stockholders (GAAP) | $ | (0.08 | ) | $ | (0.09 | ) | ||
| Adjustments | ||||||||
| Amortization of intangible assets (a) | — | — | ||||||
| Change in fair value of contingent consideration (b) | 0.02 | — | ||||||
| Change in fair value of warrant liabilities (c) | (0.01 | ) | — | |||||
| Adjusted net loss per share attributable to common stockholders (Non-GAAP) | $ | (0.07 | ) | $ | (0.09 | ) | ||
The non-GAAP financial measures for the three months ended March 31, 2024 and 2023, provide management with additional insight into the Company’s results of operations from period to period without non-cash charges, and are calculated using the following adjustments:
a) Intangible assets that are amortized consist of developed technology and purchased patent rights recorded at cost and amortized over 7 to 10 years.
b) Contingent consideration in connection with the acquisition of the Senhance System in 2015 is recorded as a liability and is the estimate of the fair value of potential milestone payments related to business acquisitions. Contingent consideration is measured at fair value using a probability of occurrence related to a non-binding letter of intent with KARL STORZ SE & Co. KG for a potential acquisition of the Company and a Monte-Carlo simulation utilizing significant unobservable inputs including the probability of achieving each of the potential milestones, revenue volatility, EURO to USD exchange rate, and an estimated discount rate associated with the risks of the expected cash flows attributable to the various milestones. Significant increases or decreases in any of the probabilities of success or changes in expected timelines for achievement of any of these milestones would result in a significantly higher or lower fair value of these milestones, respectively, and commensurate changes to the associated liability. The contingent consideration is revalued at each reporting period and changes in fair value are recognized in the consolidated statements of operations and comprehensive loss.
c) The Company recorded warrant liabilities related to common stock warrants issued in the registered direct offering in July 2023.
Warrant liabilities were recorded at their initial estimated fair value. Adjustments associated with changes in fair value of the warrant liabilities are included in the Company’s consolidated statements of operations and comprehensive loss.
INVESTOR CONTACT:
Mark Klausner or Mike Vallie
ICR Westwicke
invest@asensus.com
443-213-0499
MEDIA CONTACT:
Dan Ventresca
Matter Communications
AsensusPR@matternow.com
617-874-5488
FAQ
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