Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 17, 2020

 

 

Acutus Medical, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware   001-39430   45-1306615

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS 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: (442) 232-6080

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class

  

Trading

Symbol(s)

  

Name of Each Exchange

on Which Registered

Common Stock, par value $0.001    AFIB    The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

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.  ☐

 

 

 


Item 2.02.

Results of Operations and Financial Condition.

On September 17, 2020, the Company issued a press release (the “Press Release”) announcing its financial results for the quarter ended June 30, 2020. A copy of the Press Release is attached as Exhibit 99.1 to this current report on Form 8-K.

The information under Item 2.02 in this current report on Form 8-K and the related information in the exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

 

Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit
Number

  

Description of Exhibit

99.1    Press release dated September 17, 2020


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    Acutus Medical, Inc.
Date: September 17, 2020     /s/ Gary W. Doherty
   

Gary W. Doherty

   

Chief Financial Officer

EX-99.1

Exhibit 99.1

 

Press Release   LOGO

Acutus Medical Reports Second Quarter 2020 Financial Results

Carlsbad, Calif. – September 17, 2020 – Acutus Medical, Inc. (“Acutus”) (Nasdaq: AFIB), today reported financial results for its second quarter ended June 30, 2020.

Recent Highlights:

 

   

Reported revenue of $1.1 million in the second quarter of 2020, a 54% increase over the same quarter last year and within the preliminary range disclosed in our initial public offering (“IPO”) prospectus.

 

   

Increased worldwide installed base of AcQMap consoles to 38 as of June 30, 2020, up from 31 at the end of the prior quarter. Of those 38 consoles, 21 were 2nd generation machines, up from 11 at the end of the prior quarter.

 

   

During August, completed an initial public offering of 10.1 million shares, raising $163.3 million in net proceeds.

“In light of the challenging circumstances experienced by medical device companies generally during the first half of 2020, I’m very pleased with our second quarter results and the dedication demonstrated by our team to our mission of improving the efficiency and effectiveness of arrhythmia treatment,” said Vince Burgess, President and Chief Executive Officer. “While we did see widespread interruptions to hospital electrophysiology services in the US and Europe due to the COVID-19 pandemic, we nevertheless saw strong console placements in the second quarter. We also saw many of our EP customers begin to re-open their labs in the latter half of Q2, driving an encouraging trend toward recovery to procedure rates, so we feel well positioned as we look to continue our growth.”

Second Quarter 2020 Financial Results

Revenue was $1.1 million for the second quarter of 2020, compared to $1.6 million for the prior quarter and $0.7 million for the second quarter of 2019, and within the preliminary range disclosed in our IPO prospectus. Headwinds from the global pandemic drove a procedural decline during the second quarter of 2020 relative to the first quarter of 2020. The increase in revenue when compared to the second quarter of 2019 was driven by increased disposables sales associated with the expansion of our AcQMap console installed base as we initiated our full commercial launch.

Gross margin was negative 135% for the second quarter of 2020, compared with negative 232% in the same quarter last year. The improvement was driven by greater production volumes and efficiencies in labor and manufacturing overhead absorption when compared to the same period last year. Over time and in advance of our full future requirements we have made significant investments in our manufacturing infrastructure to support our commercial launch in order to position us to scale production in-house as our business grows. As volumes increase over time, we expect to see the benefit of these investments and improvements to our margin profile.

Operating expenses were $17.9 million for the second quarter of 2020, compared with $12.2 million in the same quarter last year. The increase was driven primarily due to the expansion of our commercial team in conjunction with our full commercial launch, various R&D projects related to console enhancements and catheter development programs, and increased G&A costs incurred in anticipation of our becoming a public company.


Press Release   LOGO

 

We effected a 1-for-9.724 reverse split of our capital stock on July 28, 2020 in anticipation of our IPO. We have retrospectively adjusted outstanding shares to reflect the impact of the reverse stock split for all periods presented. Net loss was $23.2 million for the second quarter of 2020 and net loss per share was $32.24 on a weighted-average basic and diluted outstanding share count of 0.72 million, compared to $30.3 million and a net loss per share of $45.70 on a weighted-average basic and outstanding diluted share count of 0.66 million in the same period of the prior year. It is important to note these figures are based on pre-IPO share counts and do not reflect the conversion of 16.6 million shares of convertible preferred stock to common nor the issuance of 10.1 million common shares at the IPO. Beginning in the third quarter of 2020, these 26.7 million shares will be included in our calculation of weighted-average basic and diluted share counts, which will significantly reduce our net loss per share for future reporting periods as compared to reporting periods prior to our IPO.

Cash, cash equivalents, marketable securities and restricted cash were $29.5 million as of June 30, 2020, which excludes the $163.3 million net proceeds from our IPO, which closed on August 10, 2020.

Outlook and COVID-19

Due to uncertainty surrounding the COVID-19 pandemic, Acutus Medical will not provide financial guidance for the remainder of 2020 at this time. Management will continue to evaluate its guidance policies and anticipates providing an update at the time of its third quarter earnings announcement, to the extent practicable, based on available information at that time.

Webcast and Conference Call Information

Acutus Medical will host a conference call to discuss the second quarter financial results after market close on Thursday, September 17, 2020 at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time. The conference call can be accessed live over the phone (833) 570-1131 for U.S. callers or (914) 987-7078 for international callers, using conference ID: 9767216. The live webinar can be accessed at https://ir.acutusmedical.com.

About Acutus Medical, Inc.

Acutus Medical 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. Acutus Medical’s goal is to provide its customers with a complete solution for catheter-based treatment of cardiac arrhythmias in each of its geographic markets. 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 the Company’s products in the marketplace, the effect of global


Press Release   LOGO

 

economic conditions on the ability and willingness of customers to purchase its systems and the timing of such purchases, competitive factors, changes resulting from healthcare policy in the United States, including changes in government reimbursement of procedures, dependence upon third-party vendors and distributors, timing of regulatory approvals, the impact of the recent coronavirus (COVID-19) pandemic and our 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, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.

Investor Contact:

Caroline Corner

Westwicke ICR

D: 415-314-1725

[email protected]

Holly Windler

M: 619-929-1275

[email protected]


Press Release   LOGO

 

Acutus Medical, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands)

 

     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

    

Convertible preferred stock

    

Series A convertible preferred stock

     3,059       3,059  

Series B convertible preferred stock

     40,685       40,685  

Series C convertible preferred stock

     74,575       74,575  

Series D convertible preferred stock

     142,236       135,039  

Stockholders’ deficit

    

Common stock

     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  
  

 

 

   

 

 

 


Press Release   LOGO

 

Acutus Medical, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share amounts)

(Unaudited)

 

     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  
  

 

 

   

 

 

   

 

 

   

 

 

 


Press Release   LOGO

 

Acutus Medical, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

 

     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 assets

     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 marketable securities

     —         (22,208

Sales of available-for-sale marketable securities

     17,095       —    

Maturities of available-for-sale marketable securities

     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