Asensus Surgical, Inc. (NYSE:ASXC) Q1 2023 Earnings Conference Call May 11, 2023 4:30 PM ET Company Participants Mark Klausner - Westwicke Partners Anthony Fernando - President, CEO & Director Shameze Rampertab - EVP & CFO Conference Call Participants Ross Osborn - Cantor Fitzgerald Li Chen - H.C. Wainwright & Co. RK Ramakanth - H.C. Wainwright & Co. Operator Good day, and welcome to the Asensus Surgical First Quarter Financial and Operating Results Conference Call. [Operator Instructions]. Please note, thi ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | |---------------------------------------------------------------------------------------|-----------------------------------------------------| | For the transition per ...

rd Oppenheimer 33 Annual Healthcare Conference March 13, 2023 ...

Revenue Performance - Product revenue for the year ended December 31, 2022 decreased to $4.3 million compared to $5.4 million for the year ended December 31, 2021, a decrease of approximately 20.4%[244] - Service revenue for the year ended December 31, 2022 decreased to $1.4 million compared to $1.5 million for the year ended December 31, 2021, a decrease of approximately 6.7%[244] - Total revenue for the year 2022 was $7,087,000, a decrease of 13.9% from $8,232,000 in 2021[307] - Total U.S. revenue decreased to $767 thousand in 2022 from $1.033 million in 2021, representing a decline of 25.7%[373] - Total revenue outside of the U.S. (OUS) was $6.320 million in 2022, down 12.2% from $7.199 million in 2021[373] Expenses and Losses - R&D expenses for the year ended December 31, 2022 increased 50% to $28.9 million compared to $19.3 million for the year ended December 31, 2021[249] - Sales and marketing expenses for the year ended December 31, 2022 increased 10% to $14.8 million compared to $13.4 million for the year ended December 31, 2021[250] - General and administrative expenses for the year ended December 31, 2022 increased 5% to $20.2 million compared to $19.3 million for the year ended December 31, 2021[251] - Net loss for 2022 was $(75,561,000), compared to a net loss of $(62,462,000) in 2021, representing a 21% increase in losses[307] - The company experienced a total loss from operations before taxes of $75.243 million in 2022, which is a decline from a loss of $62.237 million in 2021, representing a 20.9% increase in losses[410] Cash Flow and Financial Position - Cash and cash equivalents, excluding restricted cash, totaled approximately $74.4 million as of December 31, 2022, expected to meet cash needs into Q1 2024[256] - Net cash used in operating activities was $58.9 million in 2022, compared to $40.7 million in 2021, with a net loss of $75.6 million in 2022[262] - Cash and cash equivalents decreased to $6,329,000 in 2022 from $18,129,000 in 2021, a decline of 65%[304] - The company had an accumulated deficit of $860.9 million and working capital of $76.5 million as of December 31, 2022[317] - The company plans to obtain additional financing through equity sales, traditional loans, or strategic collaborations to support its operations[318] Assets and Liabilities - Total current assets decreased to $86,873,000 in 2022, down 23.4% from $113,297,000 in 2021[304] - Total liabilities decreased to $16,408,000 in 2022 from $17,227,000 in 2021, a reduction of 4.7%[304] - Stockholders' equity decreased to $99,645,000 in 2022 from $169,246,000 in 2021, a decline of 41%[304] - The net carrying amount of property and equipment was $9,542 thousand as of December 31, 2022, a decrease from $10,971 thousand in 2021, which is a decline of about 13.0%[396] - Total assets measured at fair value as of December 31, 2022, amounted to $75,530 thousand, compared to $136,980 thousand as of December 31, 2021, indicating a decrease of approximately 44.7%[385] Research and Development - The company anticipates continued investment in research and development to enhance the LUNA Surgical System and digital laparoscopy platform[248] - The Company plans to continue substantial investments in research and development for the LUNA System and digital solutions platform[267] - Research and development expenses rose to $28,942,000 in 2022, an increase of 49.5% from $19,348,000 in 2021[307] - Research and development expenses are expensed as incurred, focusing on engineering, product development, and regulatory expenses[363] Regulatory and Market Presence - The Senhance System is available for sale in multiple countries, including the U.S., Europe, Japan, and Taiwan, with regulatory approvals for various surgical procedures[232][233] - The company received FDA clearance for the ISU in March 2020, which is the only FDA cleared device for machine vision technology in abdominal robotic surgery[235] - For the year ended December 31, 2022, operations outside of the United States accounted for 89% of revenue, primarily concentrated in Europe[288] Stock and Compensation - Stock options granted in 2022 totaled 3.154 million shares, with a weighted average exercise price of $0.70[421] - The balance of stock options at December 31, 2022, was 7.585 million shares, with a weighted average exercise price of $4.22[421] - The company granted 6,996,822 restricted stock units in 2022, with an average grant date fair value of $0.71, resulting in 8,483,491 unvested restricted stock units by December 31, 2022[426] - Stock-based compensation expense totaled $8.416 million for the year ended December 31, 2022, a decrease from $9.429 million in 2021[428] Impairments and Contingencies - The Company recorded a property and equipment impairment charge of $1.4 million in 2022, associated with Senhance Systems under operating leases, with no impairment charge in 2021[253] - The Company recorded a non-cash asset impairment charge of $1.4 million for property and equipment during the year ended December 31, 2022[341] - The allowance for expected credit losses was $1.6 million as of December 31, 2022, compared to $1.7 million as of December 31, 2021[334] Taxation - The Company reported an income tax expense of $0.3 million in 2022, up from $0.2 million in 2021, mainly from profitable foreign jurisdictions[255] - The total income tax expense for 2022 was $318,000, compared to $225,000 in 2021, reflecting an increase of 41.3%[409] - The company had U.S. federal net operating loss carryforwards of $419.4 million as of December 31, 2022, with $253 million expected to expire unused due to limitations[412]

Financial Data and Key Metrics Changes - The company reported revenue of $2.6 million for Q3 2022, unchanged from Q3 2021, with system revenue of $1.2 million, lease revenue of $0.3 million, instruments and accessories revenue of $0.8 million, and services revenue of $0.3 million [12] - Total operating expenses increased to $17.2 million in Q3 2022 from $16.7 million in Q3 2021 [13] - Net loss attributable to common stockholders was $18.9 million, or $0.08 per share, compared to a net loss of $16.1 million, or $0.07 per share, in the same period last year [13] Business Line Data and Key Metrics Changes - The company installed four new Senhance systems in Q3 2022, with an additional system placement announced post-quarter, bringing the year-to-date total to five system initiations [8][21] - Procedure volumes increased by 27% year-over-year, with over 1,900 Senhance procedures completed as of September 30, 2022 [22] Market Data and Key Metrics Changes - The company has seen strong procedure volume trends in the U.S., with hospitals returning to normalized volumes and an increased number of surgeons using the Senhance system [23] - In Asia, COVID-related headwinds have resulted in a slower rebound in procedure volumes, but improvements are expected as conditions improve [24] Company Strategy and Development Direction - The company is focused on increasing awareness of the Senhance system and educating the surgical community through industry events and clinical publications [8][15] - The company aims to expand its global footprint, particularly in Japan and Germany, which are significant markets for medical devices [21][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving guidance for new system initiations, citing a robust pipeline and mature conversations with hospitals [31] - The company expects to see continued growth in procedure volumes and system installations, particularly in Europe and Asia [23][24] Other Important Information - The company received the Society of Laparoscopic and Robotic Surgeons 2022 Innovation of the Year Award for its Intelligent Surgical Unit [8] - The TRUST registry, the industry's largest robotic-assisted laparoscopic registry, has over 2,000 patients enrolled, providing valuable clinical data [16] Q&A Session Summary Question: What level of comfort do you have in hitting your target for system installations? - Management indicated a robust pipeline and mature conversations with hospitals, expressing confidence in meeting guidance numbers [31] Question: Can you quantify the transition from pilot to full commercial launch of articulating instruments? - Management stated that they are in the transition process and expect to see a ramp-up in clinical usage of the systems before the end of the year [33][34] Question: Can you provide more details on clinical data development and publication efforts? - Management highlighted the importance of real-world evidence and ongoing studies to compare clinical outcomes of Senhance versus traditional laparoscopy [35][36] Question: What are the timelines and expectations for the pediatric clearance submission? - Management expects to hear back regarding the FDA submission in the first half of 2023, following strong early clinical utilization in Europe [40]

Financial Data and Key Metrics Changes - For Q2 2022, the company reported revenue of $1 million, a decrease from $1.1 million in Q2 2021, with revenue breakdown including $0.3 million in lease revenue, $0.3 million in instruments and accessories, and $0.4 million in services [12] - Total operating expenses for Q2 2022 were $18.2 million, up from $14.8 million in Q2 2021 [13] - Net loss attributable to common stockholders was $19.6 million or $0.08 per share in Q2 2022, compared to a net loss of $13.2 million or $0.06 per share in Q2 2021 [13] - Adjusted net loss attributable to common stockholders was $17.3 million or $0.07 per share in Q2 2022, compared to an adjusted net loss of $12.7 million or $0.05 per share in Q2 2021 [13] - The company had cash and investments of approximately $103.8 million and working capital of $98.9 million as of June 30, 2022 [14] Business Line Data and Key Metrics Changes - Senhance case volumes increased by 34% year-over-year, primarily driven by growth in European sites [9] - The company installed one system year-to-date and has two additional system orders expected to be installed soon [9][20] - Procedure volumes were strong, with over 670 procedures performed in Q2 2022, totaling over 1,300 procedures for the first half of the year [22] Market Data and Key Metrics Changes - The company faced macro headwinds including hospital staffing shortages and inflation, impacting procedure volumes [8] - Despite challenges, Europe showed strong procedure volume trends, with general surgery having the most procedures across all geographies [22] - The company is refocusing commercial efforts on Western Europe due to the ongoing conflict in Eastern Europe [20] Company Strategy and Development Direction - The company aims to continue market development of the Senhance System and advance its product portfolio [15] - Plans include the commercial launch of 5-millimeter articulating instruments and submission of a 510(k) application for pediatric clearance in the U.S. [23][24] - The company is investing in cloud and data management capabilities to compile surgical data and enhance the Intelligent Surgical Unit (ISU) features [25][26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of macroeconomic factors on performance but expressed confidence in the long-term adoption of Senhance [21] - The company expects to install 8 to 10 new systems globally for the year, with a healthy pipeline in Europe, Japan, and the U.S. [21][30] - Management highlighted the importance of clinical publications and real-world data to support the Senhance platform's benefits [16][17] Other Important Information - The company attended several conferences to showcase the clinical performance of Senhance and its vision for Performance-Guided Surgery [10][11] - The TRUST registry, the largest robotic-assisted laparoscopic registry, continues to grow, providing valuable clinical data [17] Q&A Session Summary Question: Confidence in installing 8 to 10 devices for the year - Management confirmed one new system installed in Germany and two more expected soon, with Europe leading future installations [30] Question: Connection between procedures and revenue - Revenue connectivity depends on the type of arrangement, with a mix of leasing and consumables contributing to revenue [32] Question: Monitoring ROI of articulating instruments - Management noted strong market demand for articulated instruments and anticipated increased adoption and procedure growth [34] Question: Sales process duration and buyer attraction - Sales timelines vary, with some taking over 12 months; key attractions include the laparoscopic tool's familiarity, haptic feedback, and economic value [38] Question: Driving performance-guided surgery - The company is evolving technology and organizational structure to optimize procedure-specific solutions [40]

Asensus Surgical Inc. (NYSE:ASXC) Q1 2022 Earnings Conference Call May 4, 2022 4:30 PM ET Company Participants Mark Klausner - Westwicke Partners, Investor Relations Anthony Fernando - President & Chief Executive Officer Shameze Rampertab - Executive Vice President & Chief Financial Officer Conference Call Participants Swayampakula Ramakanth - H.C. Wainwright & Co. Operator Greetings and welcome to Asensus Surgical Inc. 2022 First Quarter Financial and Operating Results Conference Call. [Operator Instructio ...