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): November 12, 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 November 12, 2020, the Company issued a press release (the “Press Release”) announcing its financial results for the quarter ended September 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 November 12, 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: November 12, 2020   

/s/ Gary W. Doherty

  

Gary W. Doherty

Chief Financial Officer

EX-99.1

Exhibit 99.1

 

Press Release       LOGO

Acutus Medical Reports Third Quarter 2020 Results

Carlsbad, Calif. – November 12, 2020 – Acutus Medical, Inc. (“Acutus”) (Nasdaq: AFIB), an arrhythmia management company focused on improving the way cardiac arrhythmias are diagnosed and treated, today reported results for the third quarter of 2020.

Recent Highlights:

 

   

Reported revenue of $3.2 million in the third quarter ended September 30, 2020, a 180% increase sequentially and a 391% increase over the same quarter last year.

 

   

Increased worldwide installed base of second generation AcQMap consoles to 37 as of September 30, 2020, up from 21 at the end of the prior quarter – bringing the total installed base of AcQMap consoles to 49 as of September 30, 2020.

 

   

Filled a key role with the addition of Dr. Steve Mickelson as our Chief Translational Science Officer. Dr. Mickelsen is a prominent figure in the emerging area of Pulsed Field Ablation.

Vince Burgess, President & CEO of Acutus, said, “In the third quarter we saw strong execution by our commercial team and made considerable progress on key development and operational fronts. Despite headwinds from COVID-19, we continued to add new customers and aggressively upgraded existing customers to our groundbreaking second-generation electrophysiology mapping system, AcQMap. Bringing on a new customer in our business requires extensive cross-functional collaboration with our customers and many members of our internal team. The growth of our installed base achieved this quarter demonstrates enthusiastic demand for our technology and terrific execution from our entire team during uniquely challenging times. As we look to the future, we are highly confident that Acutus is well positioned for continued growth in the years ahead.”

Third Quarter 2020 Financial Results

Revenue was $3.2 million for the third quarter of 2020, compared to $1.1 million for the prior quarter and $0.6 million in the third quarter last year. The improvement over the same quarter last year was driven by increased direct sales of Acutus disposables, sales of our AcQMap consoles, and distributor sales through our partner Biotronik as we continue to operationalize this foundational relationship.

Gross margin was negative 62% for the third quarter of 2020, compared with negative 251% 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. Also affecting margins in the quarter were our first ever console sales that are paid for via long-term disposables commitment deals. These types of sales, which will be common at Acutus going forward, allocate a portion of the future disposables’ revenue stream and all of the console COGS at the time of the placement. It is typical for these transactions to result in unfavorable gross margins on the up-front placement of the console that is more than offset by a committed, predictable annuity stream of disposables sales in future quarters. We continue to make significant investments in our manufacturing infrastructure to support our aggressive launch expectations and position us to scale in-house production as our business grows. As volumes increase over time, and the benefit of console sales accrues, we expect to see continuous improvements to our margin profile.


Press Release       LOGO

 

Operating expenses were $24.3 million for the third quarter of 2020, compared with $29.5 million in the same quarter last year. The decrease was driven by a $15.0 million payment for the acquisition and in-licensing of the force sensing product line from Biotronik made during the third quarter of 2019. This decrease was partially offset by 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 associated with our initial public offering and becoming a public company.

Net loss on a GAAP basis was $31.3 million for the third quarter of 2020 and net loss per share was $1.95 on a weighted average basic and diluted outstanding share count of 16.1 million, compared to $32.1 million and a net loss per share of $47.21 on a weighted average basic and diluted outstanding share count of 0.7 million in the same period of the prior year. Excluding non-cash stock-based compensation expense, remeasurement of our warrant liability, and changes in the fair value of contingent consideration, our non-GAAP net loss for the third quarter of 2020 was $21.1 million, or $0.91 per share, compared to $30.6 million, or $1.86 per share, after giving effect to the pro forma conversion of our convertible preferred stock for the third quarter of 2019.

Cash, cash equivalents, marketable securities and restricted cash were $167.0 million as of September 30, 2020, which includes the $166.3 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 fourth quarter earnings announcement, to the extent practicable, based on available information at that time.

Non-GAAP Financial Measures

This press release includes references to non-GAAP net loss and non-GAAP net loss per share, which are non-GAAP financial measures, to provide information that may assist investors in understanding the Company’s financial results and assessing its prospects for future performance. We believe these non-GAAP financial measures are important indicators of our operating performance because they exclude items that are non-cash accounting line items unrelated to, and may not be indicative of, our core operating results. These non-GAAP financial measures, as we calculate them, may not necessarily be comparable to similarly titled measures of other companies and may not be appropriate measures for comparing the performance of other companies relative to the Company. These non-GAAP financial results are not intended to represent and should not be considered to be more meaningful measures than, or alternatives to, measures of operating performance as determined in accordance with GAAP. To the extent we utilize such non-GAAP financial measures in the future, we expect to calculate them using a consistent method from period to period. A reconciliation of each of the most directly comparable GAAP financial measures to the non-GAAP financial measures has been provided under the heading “Reconciliation of GAAP results to Non-GAAP Results” in the financial statement tables attached to this press release.


Press Release       LOGO

 

Webcast and Conference Call Information

Acutus Medical will host a conference call to discuss the third quarter financial results after market close on Thursday, November 12, 2020 at 2:00 p.m. Pacific Time / 5:00 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: 6990208. 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 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 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)

 

     September 30,     December 31,  
     2020     2019  
     (unaudited)        

ASSETS:

    

Current assets:

    

Cash and cash equivalents

   $ 58,302     $ 9,452  

Marketable securities, short-term

     99,742       62,351  

Restricted cash

     150       150  

Accounts receivable

     1,893       263  

Inventory

     10,932       8,424  

Prepaid expenses and other current assets

     4,635       1,816  
  

 

 

   

 

 

 

Total current assets

     175,654       82,456  
  

 

 

   

 

 

 

Marketable securities, long-term

     8,789       —    

Property and equipment, net

     9,940       4,427  

Right-of-use asset, net

     1,838       2,341  

Intangible assets, net

     3,780       4,110  

Goodwill

     12,026       12,026  

Other assets

     482       95  
  

 

 

   

 

 

 

Total assets

   $ 212,509     $ 105,455  
  

 

 

   

 

 

 

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

    

(DEFICIT)

    

Current liabilities:

    

Accounts payable

   $ 4,723     $ 3,882  

Accrued liabilities

     6,500       10,076  

Contingent consideration, short-term

     4,000       8,200  

Operating lease liabilities, short-term

     907       833  

Common and preferred stock warrant liability

     —         8,919  
  

 

 

   

 

 

 

Total current liabilities

     16,130       31,910  
  

 

 

   

 

 

 

Operating lease liabilities, long-term

     1,365       2,054  

Long-term debt

     38,762       38,244  

Contingent consideration, long-term

     3,600       5,700  

Other long-term liabilities

     8       —    
  

 

 

   

 

 

 

Total liabilities

     59,865       77,908  
  

 

 

   

 

 

 

Commitments and contingencies

    

Convertible preferred stock

    

Series A convertible preferred stock

     —         3,059  

Series B convertible preferred stock

     —         40,685  

Series C convertible preferred stock

     —         74,575  

Series D convertible preferred stock

     —         135,039  

Stockholders’ equity (deficit)

    

Preferred stock

     —         —    

Common stock,

     28       1  

Additional paid-in capital

     484,162       33,252  

Accumulated deficit

     (331,613     (259,034

Accumulated other comprehensive income (loss)

     67       (30
  

 

 

   

 

 

 

Total stockholders’ equity (deficit)

     152,644       (225,811
  

 

 

   

 

 

 

Total liabilities, convertible preferred stock and stockholders’ equity (deficit)

   $ 212,509     $ 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 September 30,     Nine Months Ended September 30,  
     2020     2019     2020     2019  

Revenue

   $ 3,173     $ 646     $ 5,890     $ 2,167  

Costs and operating expenses:

        

Cost of products sold

     5,141       2,267       10,998       6,878  

Research and development

     8,343       5,865       24,492       15,489  

Research and development - license acquired

     —         15,000       —         15,000  

Selling, general and administrative

     15,833       7,978       35,193       18,998  

Change in fair value of contingent consideration

     118       700       (1,466     700  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and operating expenses

     29,435       31,810       69,217       57,065  
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (26,262     (31,164     (63,327     (54,898

Other income (expense):

        

Change in fair value of warrant liability and embedded derivative

     (3,683     (3     (5,555     (608

Loss on debt extinguishment

     —         (49     —         (1,447

Interest income

     23       525       393       733  

Interest expense

     (1,366     (1,394     (4,090     (20,905
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other expense, net

     (5,026     (921     (9,252     (22,227
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

   $ (31,288   $ (32,085   $ (72,579   $ (77,125
  

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive income (loss)

        

Unrealized (loss) gain on marketable securities

     (9     40       (50     47  

Foreign currency translation adjustment

     78       (45     147       (57
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive loss

   $ (31,219   $ (32,090   $ (72,482   $ (77,135
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per common share, basic and diluted

   $ (1.95   $ (47.21   $ (12.36   $ (115.66
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding, basic and diluted

     16,080,467       679,591       5,870,861       666,823  
  

 

 

   

 

 

   

 

 

   

 

 

 


Press Release       LOGO

 

Acutus Medical, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

 

     Nine Months Ended September 30,  
     2020     2019  

Cash flows from operating activities

    

Net loss

   $ (72,579   $ (77,125

Adjustments to reconcile net loss to net cash used in operating activities:

    

Depreciation expense

     1,754       1,676  

Amortization of intangible assets

     330       125  

Stock-based compensation expense

     9,272       2,174  

Amortization of premiums/(accretion of discounts) on marketable securities, net

     113       (100

Amortization of debt issuance costs

     518       17,438  

Amortization of right-of-use assets

     507       470  

Research and development - license acquired

     —         15,000  

Gain on disposal of property and equipment

     —         (1

Loss on debt extinguishment

     —         1,447  

Change in fair value of warrant liability and embedded derivative

     5,555       608  

Change in fair value of contingent consideration

     (1,466     700  

Changes in operating assets and liabilities, net of effect from business combination:

    

Accounts receivable

     (1,630     (697

Inventory

     (1,865     (3,829

Prepaid expenses and other current assets

     (2,729     (306

Other assets

     (387     (8

Accounts payable

     753       2,873  

Accrued liabilities

     1,423       9,268  

Operating lease liabilities

     (615     (536

Other long-term liabilities

     8       —    
  

 

 

   

 

 

 

Net cash used in operating activities

     (61,038     (30,823
  

 

 

   

 

 

 

Cash flows from investing activities

    

Purchases of available-for-sale marketable securities

     (108,528     (68,735

Sales of available-for-sale marketable securities

     17,095       —    

Maturities of available-for-sale marketable securities

     45,000       11,550  

Purchases of property and equipment

     (7,822     (683

Purchase of research and development license

     —         (10,000

Cash paid, net of cash acquired for the Rhythm Xience Acquisition

     —         (3,000
  

 

 

   

 

 

 

Net cash used in investing activities

     (54,255     (70,868
  

 

 

   

 

 

 

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

     (2,636     —    

Proceeds from issuance of convertible preferred stock, net of issuance costs

     —         66,567  

Proceeds from issuance of common stock upon IPO, net of issuance costs

     166,286       —    

Proceeds from stock options exercises

     350       76  
  

 

 

   

 

 

 

Net cash provided by financing activities

     164,000       126,311  
  

 

 

   

 

 

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

     143       (50
  

 

 

   

 

 

 

Net change in cash, cash equivalents and restricted cash

     48,850       24,570  

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

   $ 58,452     $ 34,345  
  

 

 

   

 

 

 


Press Release       LOGO

 

Acutus Medical, Inc. and Subsidiaries

Reconciliation of GAAP Results to Non-GAAP Results

(in thousands, except share and per share data)

(Unaudited)

 

     Three Months Ended September 30,     Nine Months Ended September 30,  
     2020     2019     2020     2019  

GAAP net loss

   $ (31,288   $ (32,085   $ (72,579   $ (77,125

Stock-based compensation

     6,374       812       9,272       2,174  

Change in fair value of contingent consideration

     118       700       (1,466     700  

Change in fair value of warrant liability and embedded derivative

     3,683       3       5,555       608  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net loss

   $ (21,113   $ (30,569   $ (59,218   $ (73,643
  

 

 

   

 

 

   

 

 

   

 

 

 

Denominator

        

Weighted average shares of common stock outstanding used in GAAP per share calculations

     16,080,467       679,591       5,870,861       666,823  

Adjustments to reflect the assumed conversion of convertible preferred stock (1)

     7,205,624       15,712,489       13,373,360       11,290,142  
  

 

 

   

 

 

   

 

 

   

 

 

 

Shares used in non-GAAP per share calculations

     23,286,091       16,392,080       19,244,221       11,956,965  
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP net loss per share

   $ (1.95   $ (47.21   $ (12.36   $ (115.66

Non-GAAP net loss per share

   $ (0.91   $ (1.86   $ (3.08   $ (6.16

 

(1)

Assumes the conversion of oustanding shares of convertible preferred stock into shares of common stock as if such conversion had occurred at the beginning of the period or their issuance dates, if later.