Asensus Surgical(US:ASXC)2020-11-05 21:33Revenue Performance - Total revenue for September 2020 was $814,000, a decrease of 60.2% compared to $2,024,000 in September 2019[7] - Product revenue for September 2020 was $436,000, down 73.5% from $1,649,000 in the same period last year[7] - Service revenue increased slightly to $378,000 in September 2020, compared to $375,000 in September 2019, reflecting a 0.8% growth[7] - Total U.S. revenue for Q3 2020 was $289,000, compared to $603,000 in Q3 2019, reflecting a decline of approximately 52%[69] - Total OUS revenue for Q3 2020 was $525,000, down from $1.465 million in Q3 2019, representing a decrease of approximately 64%[69] - Nine customers accounted for 57% of revenue for the three months ended September 30, 2020[42] Cost and Expenses - Total cost of revenue for September 2020 was $1,423,000, a decrease of 58.7% from $3,446,000 in September 2019[7] - Operating expenses totaled $14,553,000 in September 2020, down from $96,427,000 in September 2019, indicating a significant reduction in costs[7] - The company reported stock-based compensation of $5,800 thousand for the nine months ended September 30, 2020, down from $9,727 thousand for the same period in 2019[15] - Stock-based compensation expense was approximately $1.9 million for Q3 2020, down from $3.4 million in Q3 2019, and $5.8 million for the nine months ended September 30, 2020, compared to $9.7 million for the same period in 2019[78] Net Loss and Financial Position - Net loss for September 2020 was $(15,082,000), compared to $(97,771,000) in September 2019, showing a 84.7% improvement[9] - The company reported a net loss of $(15,082,000) for the period ending September 30, 2020, compared to a net loss of $(13,840,000) for the previous period[13] - The company experienced a net loss of $(16,598,000) for the quarter ending March 31, 2020, which was a significant loss compared to previous quarters[13] - The Company incurred losses for the nine-month period ended September 30, 2020, and is forecasting additional losses through the year, resulting in a full valuation allowance for net deferred tax assets[122] Cash and Assets - Cash and cash equivalents increased to $19,964,000 as of September 30, 2020, up from $9,598,000 at the end of 2019[10] - Total assets as of September 30, 2020, were $80,144,000, an increase from $74,779,000 at the end of 2019[10] - Total Stockholders' Equity increased to $62,169,000 as of September 30, 2020, up from $55,535,000 at December 31, 2019, representing a growth of approximately 29.4%[11] - Total liabilities amounted to $19,244,000 as of September 30, 2020, compared to $17,975,000 at December 31, 2019, marking an increase of about 7.1%[11] Shareholder Information - The company reported a weighted average number of shares used in computing net loss per common share of 97,538 for the basic calculation[9] - The number of common shares outstanding increased to 99,879,000 as of September 30, 2020, from 20,691,000 at December 31, 2019, indicating a significant increase in share issuance[11] - The company issued 42,857,000 common shares net of issuance costs, contributing to the increase in stockholders' equity[13] Regulatory and Market Developments - The company received FDA clearance for the Intelligent Surgical Unit (ISU) in March 2020, marking a significant advancement in robotic surgery technology[22] - The company has received regulatory approvals for the Senhance System in Europe, the United States, and Japan, covering a total of 28 indicated procedures[20] - The company is focusing on increasing placements of the Senhance System through leasing arrangements rather than direct sales[23] - The company has seen a resumption of elective surgical procedures since the second quarter of 2020, but not at pre-pandemic levels[24] Research and Development - Research and development expenses are incurred in the design, development, testing, and enhancement of products, and are expensed as incurred[75] - Approximately 1,200 procedures have been conducted using the Senhance System in 2020, which is lower than the Company's goal due to the COVID-19 pandemic[26] - The Company expects the addition of general surgery indications to increase its addressable market by approximately 800,000 procedures[25] Debt and Financing - The Company received a Paycheck Protection Program loan of $2,815,200, which is recorded as debt on the balance sheet[126] - The Promissory Note has a two-year term with a 1.00% interest rate, maturing on April 27, 2022[127] - The Company repaid approximately $16.4 million under the Hercules Loan Agreement, including end of term fees of $1.4 million, to simplify its balance sheet[133] - The net proceeds from the March 2020 Public Offering were approximately $13.5 million after deducting underwriting discounts and commissions[146] Inventory and Impairment - The Company recorded a write-down of obsolete inventory totaling $7.4 million for the year ended December 31, 2019, with no such write-downs for the three and nine months ended September 30, 2020[116] - The Company recognized a $7.9 million impairment charge to its IPR&D assets during Q3 2019 due to fair value being lower than carrying value[53] - Goodwill impairment charge of $79.0 million was recorded in Q3 2019 as the Company's stock price declined significantly[54] Tax and Valuation - The estimated annual effective tax rate for the year ending December 31, 2020, is 2.2%, with an effective tax rate of 0.0% for the three months ended September 30, 2020[121] - The deferred tax benefit for the nine months ended September 30, 2020, was approximately $1.39 million, compared to $2.55 million for the same period in 2019[123]