afib-10q_20200930.htm

 

 

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 September 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)

(zip code)

 

(Registrant’s telephone number, including area code) (442) 232-6080

 

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 $0.001 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 November 9, 2020

Common Stock, $0.001 par value

 

27,846,083

 

 



 

ACUTUS MEDICAL, INC. AND SUBSIDIARIES

Form 10-Q

For the Quarter Ended September 30, 2020

Table of Contents

 

 

 

 

 

 

Page

PART I. FINANCIAL INFORMATION

 

 

 

 

Item 1.

Financial Statements

1

 

 

 

 

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

1

 

 

 

 

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

2

 

 

 

 

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the three and nine months ended September 30, 2020 and 2019 (unaudited)

3

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the nine months ended September 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

50

 


Item 1. Financial Statements.

Acutus Medical, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts)

 

 

 

September 30,

2020

 

 

December 31,

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 (Note 12)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Convertible preferred stock

 

 

 

 

 

 

 

 

Series A convertible preferred stock, $0.001 par value; no shares authorized, issued and outstanding as of

   September 30, 2020; 3,848,696 shares authorized and 391,210 shares issued and outstanding as of

   December 31, 2019; liquidation preference of $3,245 as of December 31, 2019

 

 

 

 

 

3,059

 

Series B convertible preferred stock, $0.001 par value; no shares authorized, issued and outstanding as of

   September 30, 2020; 30,032,100 shares authorized and 3,088,444 shares issued and outstanding as of

   December 31, 2019; liquidation preference of $41,294 as of December 31, 2019

 

 

 

 

 

40,685

 

Series C convertible preferred stock, $0.001 par value; no shares authorized, issued and outstanding as of

   September 30, 2020; 48,184,000 shares authorized and 4,499,921 shares issued and outstanding as of

   December 31, 2019; liquidation preference of $75,000 as of December 31, 2019

 

 

 

 

 

74,575

 

Series D convertible preferred stock, $0.001 par value; no shares authorized, issued and outstanding as of

   September 30, 2020; 90,000,000 shares authorized and 8,200,297 issued and outstanding as of

   December 31, 2019; liquidation preference of $136,675 as of December 31, 2019

 

 

 

 

 

135,039

 

 

 

 

 

 

 

 

 

 

Stockholders' equity (deficit)

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value; 5,000,000 shares authorized as of September 30, 2020 and no shares

   authorized as of December 31, 2019; no shares issued and outstanding as of each of September 30, 2020

   and December 31, 2019, respectively

 

 

 

 

 

 

Common stock, $0.001 par value; 260,000,000 shares authorized as of each of September 30, 2020

   and December 31, 2019; 27,826,408 and 695,902 shares issued and outstanding as of September 30, 2020

   and December 31, 2019, respectively

 

 

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

 

 

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

1


 

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

 

 

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

 

2


Acutus Medical, Inc. and Subsidiaries

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(in thousands, except share amounts)

(Unaudited)

For the Three Months Ended September 30, 2020

 

 

 

Series A

 

 

Series B

 

 

Series C

 

 

Series D

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

Total

 

 

 

Convertible Preferred

Stock

 

 

Convertible Preferred

Stock

 

 

Convertible Preferred

Stock

 

 

Convertible Preferred

Stock

 

 

 

Common Stock

 

 

Additional

Paid-in

 

 

Accumulated

 

 

Other

Comprehensive

 

 

Equity

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income (Loss)

 

 

(Deficit)

 

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

)

Unrealized loss on marketable

   securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9

)

 

 

(9

)

Foreign currency translation

   adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

78

 

 

 

78

 

Conversion of convertible

   preferred stock into common

   stock upon IPO

 

 

(391,210

)

 

 

(3,059

)

 

 

(3,088,444

)

 

 

(40,685

)

 

 

(4,499,921

)

 

 

(74,575

)

 

 

(8,593,360

)

 

 

(142,236

)

 

 

 

16,572,935

 

 

 

17

 

 

 

260,538

 

 

 

 

 

 

 

 

 

260,555

 

Issuance of common stock for

   cash, net of issuance costs of

   $16,361

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,147,058

 

 

 

10

 

 

 

166,276

 

 

 

 

 

 

 

 

 

166,286

 

Reclassification of warrant liability to

   stockholders' equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14,474

 

 

 

 

 

 

 

 

 

14,474

 

Stock option exercises

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

27,661

 

 

 

 

 

 

145

 

 

 

 

 

 

 

 

 

145

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

303,351

 

 

 

 

 

 

6,374

 

 

 

 

 

 

 

 

 

6,374

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(31,288

)

 

 

 

 

 

(31,288

)

Balance as of September 30, 2020

   (unaudited)

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

27,826,408

 

 

$

28

 

 

$

484,162

 

 

$

(331,613

)

 

$

67

 

 

$

152,644

 

 

For the Three Months Ended September 30, 2019

 

 

 

Series A

 

 

Series B

 

 

Series C

 

 

Series D

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

Convertible Preferred

Stock

 

 

Convertible Preferred

Stock

 

 

Convertible Preferred

Stock

 

 

Convertible Preferred

Stock

 

 

 

Common Stock

 

 

Additional

Paid-in

 

 

Accumulated

 

 

Other

Comprehensive

 

 

Total

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income (Loss)

 

 

Deficit

 

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

)

Unrealized gain on marketable

   securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

40

 

 

 

40

 

Foreign currency translation

   adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(45

)

 

 

(45

)

Issuance of Series D convertible

   preferred stock for cash, net of

   issuance costs of $1,358

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,781,860

 

 

 

28,341

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,612

 

 

 

 

 

 

812

 

 

 

 

 

 

 

 

 

812

 

Stock option exercises

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,452

 

 

 

 

 

 

19

 

 

 

 

 

 

 

 

 

19

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(32,085

)

 

 

 

 

 

(32,085

)

Balance as of September 30, 2019

   (unaudited)

 

 

391,210

 

 

$

3,059

 

 

 

3,088,444

 

 

$

40,685

 

 

 

4,499,921

 

 

$

74,575

 

 

 

8,200,297

 

 

$

135,043

 

 

 

 

684,024

 

 

$

1

 

 

$

32,400

 

 

$

(239,120

)

 

$

10

 

 

$

(206,709

)

 

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

 

3


Acutus Medical, Inc. and Subsidiaries

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(in thousands, except share amounts)

(Unaudited)

For the Nine Months Ended September 30, 2020

 

 

 

Series A

 

 

Series B

 

 

Series C

 

 

Series D

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Total

 

 

 

Convertible Preferred

Stock

 

 

Convertible Preferred

Stock

 

 

Convertible Preferred

Stock

 

 

Convertible Preferred

Stock

 

 

 

Common Stock

 

 

Additional

Paid-in

 

 

Accumulated

 

 

Other

Comprehensive

 

 

Stockholders'

Equity

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income (Loss)

 

 

(Deficit)

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(50

)

 

 

(50

)

Foreign currency translation

   adjustment