SEC Filing | Acutus Medical, Inc.

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10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

10-Q

(Mark one)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission File

Number 001-39430

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 and zip code)

(442) 232-6080

(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 $0.0001 per share	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

YES

☐

☒

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

S-T

(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

YES ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a

non-accelerated

filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule

12b-2

of the Exchange Act.

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

12b-2

of the Exchange Act).

YES ☐ NO ☒

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 September 1 7 , 2020
Common Stock, $0.001 par value		27,826,408

Table of Contents

ACUTUS MEDICAL, INC. AND SUBSIDIARIES

Form 10-Q

For the Quarter Ended June 30, 2020

Table of Contents


		Page
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements		1

	Condensed Consolidated Balance Sheets as of June 30, 2020 (unaudited) and December 31, 2019		1

	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2020 and 2019 (unaudited)		2

	Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit for the three and six months ended June 30, 2020 and 2019 (unaudited)		3

	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2020 and 2019 (unaudited)		5

	Notes to Condensed Consolidated Financial Statements (unaudited)		6

Item 2.	Management’s Discussion and Analysis of the Results of Operations		31

Item 3.	Quantitative and Qualitative Disclosures about Market Risk		47

Item 4.	Controls and Procedures		47

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings		48

Item 1A.	Risk Factors		48

Item 2.	Recent Sales of Unregistered Securities		48

Item 6.	Exhibits		49

Signatures			51

Table of Contents

Item 1. Financial Statements.

Acutus Medical, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts)


	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 and 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.

Table of Contents

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

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

Acutus Medical, Inc. and Subsidiaries

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit

(in thousands, except share amounts)

(Unaudited)

For the Three Months Ended June 30, 2020


	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		Additional Paid-in Capital		Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Deficit
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 June 30, 2019


	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		Additional Paid-in Capital		Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Deficit
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.

Table of Contents

Acutus Medical, Inc. and Subsidiaries

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit

(in thousands, except share amounts)

(Unaudited)

For the Six Months Ended June 30, 2020


	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				Common 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 Six Months Ended June 30, 2019

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

Amount

Balance as of December 31, 2018

388,558

3,059

3,088,444

40,685

4,499,921

74,575

—