Acutus Medical Reports Fourth Quarter and Full Year 2023 Financial Results

2024-04-01

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CARLSBAD, Calif., April 01, 2024 (GLOBE NEWSWIRE) -- Acutus Medical Inc. (“Acutus” or the “Company”) (Nasdaq: AFIB) today reported results for the fourth quarter and full year ended December 31,2023. Recent Highlights: Announced strategic realignment of resources and corporate restructuring on November 8, 2023 with the objective of optimizing financial position and maximizing free cash flow. The Continuing Operations focuses on the implementation of the business model to shift to solely support the manufacturing and distribution of Medtronic’s left-heart access product portfolio. Discontinued Operations relates to the Company’s mapping and ablation business that was wound down as part of the strategic realignment of resources and corporate restructuring. Fourth quarter revenue from Continuing Operations of $2.4 million grew 118% year-over-year, from $1.1 million in the year ago fourth quarter. Full year revenue from Continuing Operations of $7.2 million, grew 136% year-over-year from $3.0 million in 2022. Full Year 2024 Financial Results Revenue from Continuing Operations was $2.4 million for the fourth quarter of 2023, an increase of 118% compared to $1.1 million for the fourth quarter of 2022. The improvement over last year was driven by sales through the Company’s distribution agreement with Medtronic. Full Year 2024 Financial Results Revenue from Continuing Operations was $7.2 million for the full year of 2023, an increase of 136% compared to $3.0 million for the full year of 2022. The improvement over last year was primarily driven by sales through the Company’s distribution agreement with Medtronic. Gross margin on a GAAP basis was negative 44% for the full year ended December 31,2023 compared to negative 63% for the full year ended December 31, 2022. The improvement was driven by higher production volumes related to left-heart access manufacturing, operational efficiencies implemented on the production line, and reduced manufacturing overhead expenses. Operating expenses for continuing operations, consisting of research and development, and selling, general and administrative expenses on a GAAP basis were $17.5 million for the year ended December 31,2023 compared to $23.4 million for the same period last year. The decrease in operating expenses resulted from reduced discretionary spend, and the reprioritization of certain research and development programs. Net loss on continuing operations on a GAAP basis was $11.9 million for the full year ended December 31, 2023 and net loss per share was $0.41 on a weighted average basic and diluted outstanding share count of 29.3 million, compared to a net income of $28.8 million and a net earnings per share of $1.02 on a weighted average basic outstanding share count of 29.3, and a net earnings per share of $0.78 on a weighted average diluted outstanding share count of 28.6 million for the same quarter last year. The decrease in net Income is primarily related to the change in the gain on sale of the Left Heart Access business to Medtronic from the year ended December 31, 2022. Cash, cash equivalents, marketable securities and restricted cash were $29.4 million as of December 31, 2023. Loss on Discontinued Operations Loss on discontinued operations was $69.7 million for the year ended December 31, 2023, compared to $68.4 million for the year ended December 31, 2022. This increase of $1.3 million was primarily attributable to an increase in restructuring expense of $21.9 million, which includes the $16.4 million loss recorded on classification of held for sale, offset by a decrease in selling and marketing expenses of $8.5 million, a decrease in research and development expenses of $6.7 million and an improvement in gross profit margin of 2,900 basis points, during the year ended December 31, 2023. Outlook Due to the announced plan to realign resources to support the left-heart access distribution business and exit from the electrophysiology mapping and ablation businesses, the Company will no longer provide financial guidance. About Acutus Acutus is focused on the production of left-heart access products under its distribution agreement with Medtronic, Inc. 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, successful completion of the Company’s restructuring plan, continued acceptance of the Company’s left-heart access products in the marketplace, the effect of global economic conditions on the ability and willingness of Medtronic to purchase the Company’s left-heart access products 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 Company’s ability to maintain its listing on Nasdaq, 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: Chad Hollister Acutus Medical, Inc. investors@acutus.com Acutus Medical, Inc. Consolidated Balance Sheets (in thousands, except share and per share amounts) December 31, 2023 December 31, 2022 ASSETS Current assets: Cash and cash equivalents $ 19,170 $ 25,584 Marketable securities, short-term 3,233 44,863 Restricted cash, short-term 7,030 5,764 Accounts receivable 11,353 17,919 Inventory 4,278 1,794 Employer retention credit receivable — 4,703 Prepaid expenses and other current assets 678 1,254 Current assets of discontinued operations (Note 3) 510 15,986 Total current assets 46,252 117,867 Property and equipment, net 825 1,669 Right-of-use assets, net 3,189 3,872 Other assets 94 94 Non-current assets of discontinued operations (Note 3) 3,600 9,938 Total assets $ 53,960 $ 133,440 LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY Current liabilities: Accounts payable 2,761 2,473 Accrued liabilities 2,887 3,310 Contingent consideration, short-term — 1,800 Operating lease liabilities, short-term 718 319 Long-term debt, current portion 1,864 — Warrant liability 409 3,346 Current liabilities of discontinued operations (Note 3) 10,303 8,624 Total current liabilities 18,942 19,872 Operating lease liabilities, long-term 3,243 4,103 Long-term debt 32,654 34,434 Other long-term liabilities — 12 Total liabilities 54,839 58,421 Commitments and contingencies (Note 12) Stockholders' (deficit) equity Preferred stock, $0.001 par value; 5,000,000 shares authorized as of December 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 December 31, 2023 and December 31, 2022, respectively — — Common stock, $0.001 par value; 260,000,000 shares authorized as of December 31, 2023 and December 31, 2022; 29,313,667 and 28,554,656 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively 29 29 Additional paid-in capital 599,935 594,173 Accumulated deficit (599,977 ) (518,314 ) Accumulated other comprehensive loss (866 ) (869 ) Total stockholders' equity (879 ) 75,019 Total liabilities and stockholders' equity $ 53,960 $ 133,440 Acutus Medical, Inc. Consolidated Statements of Operations and Comprehensive Loss Year Ended December 31, 2023 (in thousands, except share and per share amounts) 2023 2022 Revenue $ 7,164 $ 3,031 Cost of products sold 10,301 4,941 Gross loss (3,137 ) (1,910 ) Operating expenses (income): Research and development 3,482 3,118 Selling, general and administrative 14,066 20,315 Goodwill impairment — 12,026 Change in fair value of contingent consideration 123 1,053 Gain on sale of business (9,080 ) (79,465 ) Total operating expenses (income) 8,591 (42,953 ) (Loss) income from operations (11,728 ) 41,043 Other income (expense): Loss on debt extinguishment — (7,947 ) Change in fair value of warrant liability 2,937 33 Interest income 2,588 868 Interest expense (5,655 ) (5,149 ) Total other expense, net (130 ) (12,195 ) (Loss) income from continuing operations before income taxes (11,858 ) 28,848 Income tax expense 63 15 Net (loss) income from continuing operations (11,921 ) 28,833 Discontinued operations: Loss from discontinued operations before income taxes (69,530 ) (68,382 ) Income tax expense - discontinued operations 212 67 Loss from discontinued operations (69,742 ) (68,449 ) Net loss $ (81,663 ) $ (39,616 ) Other comprehensive income (loss): Unrealized gain on marketable securities 7 39 Foreign currency translation adjustment (4 ) (691 ) Comprehensive loss $ (81,660 ) $ (40,268 ) Net (loss) earnings per share, basic: (Loss) income from continuing operations $ (0.41 ) $ 1.02 Loss from discontinued operations $ (2.40 ) $ (2.42 ) Net loss per common share, basic $ (2.81 ) $ (1.40 ) Net earnings (loss) per share, diluted: (Loss) income from continuing operations $ (0.41 ) $ 0.78 Loss from discontinued operations $ (2.40 ) $ (2.42 ) Net loss per common share, diluted $ (2.81 ) $ (1.40 ) Weighted average number of common shares outstanding, basic 29,095,294 28,471,389 Weighted average number of common shares outstanding, diluted- continuing operations 29,095,294 37,152,367 Weighted average number of common shares outstanding, diluted- discontinued operations and net loss per common share 29,095,294 28,471,389 Acutus Medical, Inc. Consolidated Statements of Cash Flows Year Ended December 31, 2023 (in thousands) 2023 2022 Cash flows from operating activities Net loss $ (81,663 ) $ (39,616 ) Less: Loss on discontinued operations 69,742 68,449 Adjustments to reconcile net loss to net cash used in operating activities: Depreciation expense 191 339 AcQMap Systems converted to sales — — Sales-type lease gain — — Amortization of intangible assets — 220 Non-cash stock-based compensation expense 3,032 3,400 Accretion of discounts on marketable securities, net (1,428 ) (24 ) Amortization of debt issuance costs 571 850 Amortization of operating lease right-of-use assets 683 649 Loss on debt extinguishment — 7,947 Goodwill impairment — 12,026 Gain on sale of business, net (9,080 ) (79,465 ) Direct costs paid related to sale of business — (4,027 ) Change in fair value of warrant liability (2,937 ) (33 ) Loss on disposal of property and equipment — — Change in fair value of contingent consideration 123 1,053 Changes in operating assets and liabilities: Accounts receivable (1,074 ) (464 ) Inventory (2,484 ) (65 ) Employer retention credit receivable 4,703 (4,703 ) Prepaid expenses and other current assets 656 2,452 Other assets — — Accounts payable 288 (204 ) Accrued liabilities (700 ) 1,434 Operating lease liabilities (461 ) (526 ) Other long-term liabilities (12 ) (538 ) Net cash used in operating activities - continuing operations (19,850 ) (30,846 ) Net cash used in operating activities - discontinued operations (43,268 ) (58,071 ) Net cash used in operating activities (63,118 ) (88,917 ) Cash flows from investing activities Proceeds from sale of business 17,000 70,000 Purchases of available-for-sale marketable securities (39,765 ) (54,508 ) Sales of available-for-sale marketable securities 750 18,599 Maturities of available-for-sale marketable securities 82,000 74,642 Purchases of property and equipment (219 ) (228 ) Net cash provided by investing activities - continuing operations 59,766 108,505 Net cash used in investing activities - discontinued operations (1,211 ) (3,754 ) Net cash provided by investing activities 58,555 104,751 Cash flows from financing activities Repayment of debt — (44,550 ) Penalty fees paid for early prepayment of debt — (1,063 ) Borrowing under new debt, net of fees — 34,825 Payment of debt issuance costs (490 ) (626 ) Proceeds from the exercise of stock options 4 67 Repurchase of common shares to pay employee withholding taxes — (111 ) Proceeds from employee stock purchase plan 25 214 Payment of contingent consideration (1,923 ) (372 ) Net cash used in financing activities - continuing operations (2,384 ) (11,616 ) Net cash used in financing activities - discontinued operations (280 ) — Net cash used in financing activities (2,664 ) (11,616 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash 2,079 2,909 Net change in cash, cash equivalents and restricted cash (5,148 ) 7,127 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 $ 26,200 $ 31,348 Supplemental disclosure of cash flow information: Cash paid for interest $ 5,012 $ 4,231 Supplemental disclosure of noncash investing and financing activities: Changes between assets and liabilities in discontinued operations $ 5,445 $ (11,341 ) Accounts receivable from sale of business $ 9,360 $ 17,000 Change in unrealized (gain) loss on marketable securities $ (7 ) $ (39 ) Change in unpaid purchases of property and equipment $ — $ 54 Contingent consideration escrow release $ — $ 381 Net book value on AcQMap system sales-type leases $ — $ 244 Amount of debt proceeds allocated to warrant liability $ — $ 3,379