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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 March 31, 2021 

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 May 10, 2021

Common Stock, $0.001 par value

 

28,124,057

 

 

 


 

Acutus Medical, Inc.

Form 10-Q

For the Quarter Ended March 31, 2021

Table of Contents

 

 

 

 

 

 

Page

PART I. FINANCIAL INFORMATION

 

 

 

 

Item 1.

Financial Statements

1

 

 

 

 

Condensed Consolidated Balance Sheets as of March 31, 2021 (unaudited) and December 31, 2020

1

 

 

 

 

Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2021 and 2020 (unaudited)

2

 

 

 

 

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the three months ended March 31, 2021 and 2020 (unaudited)

3

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020
(unaudited)

4

 

 

 

 

Notes to Condensed Consolidated Financial Statements (unaudited)

5

 

 

 

Item 2.

Management’s Discussion and Analysis of the Results of Operations

26

 

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

36

 

 

 

Item 4.

Controls and Procedures

37

 

 

PART II. OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

38

 

 

 

Item 1A.

Risk Factors

38

 

 

 

Item 2.

Recent Sales of Unregistered Securities

38

 

 

 

Item 6.

Exhibits

39

 

 

Signatures

40

 

 

 


 

Item 1. Financial Statements.

Acutus Medical, Inc.

Condensed Consolidated Balance Sheets

 

 

 

March 31,

 

 

December 31,

 

 

 

2021

 

 

2020

 

(in thousands, except share and per share amounts)

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

8,631

 

 

$

25,234

 

Marketable securities, short-term

 

 

86,888

 

 

 

105,839

 

Restricted cash

 

 

150

 

 

 

150

 

Accounts receivable

 

 

2,477

 

 

 

2,160

 

Inventory

 

 

13,837

 

 

 

12,958

 

Prepaid expenses and other current assets

 

 

4,124

 

 

 

5,047

 

Total current assets

 

 

116,107

 

 

 

151,388

 

 

 

 

 

 

 

 

 

 

Marketable securities, long-term

 

 

11,225

 

 

 

8,726

 

Property and equipment, net

 

 

14,648

 

 

 

12,356

 

Right-of-use assets, net

 

 

1,480

 

 

 

1,669

 

Intangible assets, net

 

 

5,493

 

 

 

5,653

 

Goodwill

 

 

12,026

 

 

 

12,026

 

Other assets

 

 

967

 

 

 

717

 

Total assets

 

$

161,946

 

 

$

192,535

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

6,108

 

 

$

8,266

 

Accrued liabilities

 

 

8,808

 

 

 

7,308

 

Contingent consideration, short-term

 

 

2,600

 

 

 

5,400

 

Operating lease liabilities, short-term

 

 

955

 

 

 

933

 

Total current liabilities

 

 

18,471

 

 

 

21,907

 

 

 

 

 

 

 

 

 

 

Operating lease liabilities, long-term

 

 

875

 

 

 

1,134

 

Long-term debt

 

 

39,339

 

 

 

39,011

 

Contingent consideration, long-term

 

 

3,000

 

 

 

3,900

 

Total liabilities

 

 

61,685

 

 

 

65,952

 

Commitments and contingencies (Note 12)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value; 5,000,000 shares authorized as of March 31, 2021 and December 31, 2020; no shares issued and outstanding as of March 31, 2021 and December 31, 2020

 

 

 

 

 

 

Common stock, $0.001 par value; 260,000,000 shares authorized as of March 31, 2021 and December 31, 2020; 28,113,165 and 27,991,425 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively

 

 

28

 

 

 

28

 

Additional paid-in capital

 

 

490,369

 

 

 

487,290

 

Accumulated deficit

 

 

(390,196

)

 

 

(361,015

)

Accumulated other comprehensive income

 

 

60

 

 

 

280

 

Total stockholders' equity

 

 

100,261

 

 

 

126,583

 

Total liabilities and stockholders' equity

 

$

161,946

 

 

$

192,535

 

 

 

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

1


 

Acutus Medical, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

 

 

 

Three Months Ended March 31,

 

 

 

2021

 

 

2020

 

(in thousands, except share and per share amounts)

 

(unaudited)

 

Revenue

 

$

3,591

 

 

$

1,583

 

 

 

 

 

 

 

 

 

 

Costs and operating expenses:

 

 

 

 

 

 

 

 

Cost of products sold

 

 

6,955

 

 

 

3,194

 

Research and development

 

 

9,370

 

 

 

7,973

 

Selling, general and administrative

 

 

16,252

 

 

 

10,235

 

Change in fair value of contingent consideration

 

 

(1,153

)

 

 

(2,219

)

Total costs and operating expenses

 

 

31,424

 

 

 

19,183

 

Loss from operations

 

 

(27,833

)

 

 

(17,600

)

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

Change in fair value of warrant liability

 

 

 

 

 

581

 

Interest income

 

 

40

 

 

 

275

 

Interest expense

 

 

(1,388

)

 

 

(1,354

)

Total other expense, net

 

 

(1,348

)

 

 

(498

)

Loss before income taxes

 

 

(29,181

)

 

 

(18,098

)

Income tax benefit

 

 

 

 

 

 

Net loss

 

$

(29,181

)

 

$

(18,098

)

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

Unrealized gain (loss) on marketable securities

 

 

6

 

 

 

(27

)

Foreign currency translation adjustment

 

 

(226

)

 

 

(27

)

Comprehensive loss

 

$

(29,401

)

 

$

(18,152

)

 

 

 

 

 

 

 

 

 

Net loss per common share, basic and diluted

 

$

(1.04

)

 

$

(25.84

)

Weighted average shares outstanding, basic and diluted

 

 

28,031,686

 

 

 

700,505

 

 

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

 

 

2


 

 

Acutus Medical, Inc.

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

 

 

For the Three Months Ended March 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

(in thousands, except share amounts)

Common Stock

 

 

Additional

Paid-in

 

 

Accumulated

 

 

Other

Comprehensive

 

 

Total

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income (Loss)

 

 

Equity

 

Balance as of December 31, 2020

 

 

27,991,425

 

 

$

28

 

 

$

487,290

 

 

$

(361,015

)

 

$

280

 

 

$

126,583

 

Unrealized gain on marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6

 

 

 

6

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(226

)

 

 

(226

)

Stock option exercises

 

 

27,509

 

 

 

 

 

 

169

 

 

 

 

 

 

 

 

 

169

 

Stock-based compensation

 

 

94,231

 

 

 

 

 

 

2,910

 

 

 

 

 

 

 

 

 

2,910

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(29,181

)

 

 

 

 

 

(29,181

)

Balance as of March 31, 2021 (unaudited)

 

 

28,113,165

 

 

$

28

 

 

$

490,369

 

 

$

(390,196

)

 

$

60

 

 

$

100,261

 

 

For the Three Months Ended March 31, 2020

 

 

 

Series A

 

 

Series B

 

 

Series C

 

 

Series D

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

(in thousands, except share amounts)

 

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 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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(27

)

 

 

(27

)

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(27

)

 

 

(27

)

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-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14,962

 

 

 

 

 

 

1,741

 

 

 

 

 

 

 

 

 

1,741

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,098

)

 

 

 

 

 

(18,098

)

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

 

 

 

 

710,864

 

 

$

1

 

 

$

34,993

 

 

$

(277,132

)

 

$

(84

)

 

$

(242,222

)

 

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

 

 

3


 

 

Acutus Medical, Inc.

Condensed Consolidated Statements of Cash Flows

 

 

 

 

 

Three Months Ended March 31,

 

 

 

2021

 

 

2020

 

(in thousands)

 

(unaudited)

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(29,181

)

 

$

(18,098

)

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

 

 

 

 

 

 

 

 

Depreciation expense

 

 

1,241

 

 

 

429

 

Amortization of intangible assets

 

 

160

 

 

 

110

 

Stock-based compensation expense

 

 

2,910

 

 

 

1,741

 

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

 

 

412

 

 

 

(5

)

Amortization of debt issuance costs

 

 

328

 

 

 

154

 

Amortization of right-of-use assets

 

 

180

 

 

 

169

 

Change in fair value of warrant liability

 

 

 

 

 

(581

)

Change in fair value of contingent consideration

 

 

(1,153

)

 

 

(2,219

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(317

)

 

 

(708

)

Inventory

 

 

(879

)

 

 

(1,809

)

Prepaid expenses and other current assets

 

 

1,104

 

 

 

214

 

Other assets

 

 

(250

)

 

 

(267

)

Accounts payable

 

 

(2,091

)

 

 

3,602

 

Accrued liabilities

 

 

1,500

 

 

 

(83

)

Operating lease liabilities

 

 

(237

)

 

 

(207

)

Net cash used in operating activities

 

 

(26,273

)

 

 

(17,558

)

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

Purchases of available-for-sale marketable securities

 

 

(9,135

)

 

 

 

Sales of available-for-sale marketable securities

 

 

 

 

 

8,100

 

Maturities of available-for-sale marketable securities

 

 

25,000

 

 

 

25,300

 

Purchases of property and equipment

 

 

(3,693

)

 

 

(1,683

)

Net cash provided by investing activities

 

 

12,172

 

 

 

31,717

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Payment of contingent consideration

 

 

(2,547

)

 

 

(2,584

)

Proceeds from stock options exercises

 

 

169

 

 

 

 

Net cash used in financing activities

 

 

(2,378

)

 

 

(2,584

)

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

 

 

(124

)

 

 

(27

)

Net change in cash, cash equivalents and restricted cash

 

 

(16,603

)

 

 

11,548

 

Cash, cash equivalents and restricted cash, at the beginning of the period

 

 

25,384

 

 

 

9,602

 

Cash, cash equivalents and restricted cash, at the end of the period

 

$

8,781

 

 

$

21,150

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

Cash paid for income taxes

 

$

35

 

 

$

 

Cash paid for interest

 

$

1,125

 

 

$