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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
OR
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
                    
to 
                    
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
  
    NO  
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.
 
Large accelerated filer
     Accelerated filer  
Non-accelerated filer
 
  
Smaller reporting company
 
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.  
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
 
 
 
 

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.        1  
       1  
       2  
       3  
      
5
 
       6  
Item 2.        31  
Item 3.        47  
Item 4.        47  
  
Item 1.        48  
Item 1A.        48  
Item 2.        48  
Item 6.        49  
Signatures      51  

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.
 
1

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.
 
2

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
 
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
 
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.
 
3

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
 
   
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
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
 
Balance as of December 31, 2018
  
 
388,558
 
  
$
 3,059
 
  
 
3,088,444
 
  
$
 40,685
 
  
 
4,499,921
 
  
$
 74,575
 
  
 
—  
 
  
$
—  
 
  
 
656,654
 
  
$
1
 
  
$
 30,150
 
  
$
 (161,995)
 
 
$
20
 
 
$
 (131,824)
 
Unrealized gain on marketable securities
  
 
—  
 
  
 
—  
 
  
 
—  
 
  
 
—  
 
  
 
—  
 
  
 
—  
 
  
 
—  
 
  
 
—  
 
  
 
—