TransMedics(TMDX) - 2020 Q2 - Quarterly Report

Financial Performance - Net revenue for the three months ended June 30, 2020, was $3,391,000, a decrease of 40% compared to $5,666,000 for the same period in 2019[20]. - Gross profit for the six months ended June 30, 2020, was $6,769,000, an increase of 15% from $5,906,000 in the same period of 2019[20]. - The net loss for the three months ended June 30, 2020, was $8,497,000, compared to a net loss of $9,195,000 for the same period in 2019, indicating a 7.6% improvement[20]. - For the fiscal six months ended June 30, 2020, the company reported a net loss of $17.3 million, compared to a net loss of $16.1 million for the same period in 2019[33]. - The company reported total net revenue of $3.391 million for the fiscal three months ended June 30, 2020, compared to $5.666 million for the same period in 2019, reflecting a decrease of approximately 40%[74]. - For the fiscal six months ended June 30, 2020, total net revenue was $10.921 million, an increase of about 5.6% compared to $10.342 million for the same period in 2019[74]. Assets and Liabilities - Total assets increased to $163,137,000 as of June 30, 2020, up from $105,299,000 on December 28, 2019, representing a 55% growth[17]. - The company had total liabilities of $49,377,000 as of June 30, 2020, a slight decrease from $50,650,000 on December 28, 2019[17]. - Total stockholders' equity rose to $113,760,000 as of June 30, 2020, up from $54,649,000 at the end of 2019, representing a 108% increase[17]. - Cash and cash equivalents increased to $51,152,000 as of June 30, 2020, compared to $20,092,000 as of December 28, 2019, marking a 154% increase[17]. - As of June 30, 2020, the company had cash, cash equivalents, and marketable securities of $139.4 million[184]. Operating Expenses - Operating expenses totaled $9,770,000 for the three months ended June 30, 2020, down from $11,038,000 in the same period of 2019, reflecting an 11% reduction[20]. - The company incurred significant operating losses since inception, primarily funded by proceeds from sales of preferred stock and common stock[184]. - Total operating expenses for the fiscal six months ended June 30, 2020 increased by $3.1 million to $22.6 million, primarily due to increased research and development costs[171]. Research and Development - Research and development expenses for the six months ended June 30, 2020, were $10,128,000, an increase of 16% from $8,669,000 in the same period of 2019[20]. - Total research, development, and clinical trials expenses decreased by $0.9 million to $3.9 million for the fiscal three months ended June 30, 2020, despite a $0.8 million increase in personnel-related costs[165]. Impact of COVID-19 - OCS product sales were negatively impacted by the COVID-19 pandemic in the second quarter of 2020, with anticipated continued negative effects for the remainder of 2020[45]. - The COVID-19 pandemic has caused disruptions in transplant procedures and clinical trials, negatively impacting revenue and operational activities[44]. - The company has observed a recovery in the frequency of transplant procedures, although not yet at pre-COVID-19 levels, and anticipates ongoing demand for organ transplantations[136]. Financing Activities - The company completed an underwritten public offering of 5,750,000 shares of common stock on May 26, 2020, raising approximately $75.0 million in net proceeds after deducting costs[39]. - Net cash provided by financing activities was $75.7 million for the fiscal six months ended June 30, 2020, compared to $95.4 million for the same period in 2019[192]. Revenue Recognition - The Company recognizes revenue primarily from sales of organ-specific disposable sets and OCS Consoles, with all performance obligations typically satisfied at the same time[57][58]. - The Company recognized revenue for OCS Perfusion Sets and OCS Solutions at the point of title transfer, which typically occurs upon delivery to the customer site[64]. - The Company’s revenue recognition policy applies uniformly whether sales are made directly to end customers or through distributors[76]. Market and Competition - The Company operates in a rapidly changing environment with risks including technological innovations by competitors and regulatory compliance[42]. - The company expects long-term revenue growth from future FDA approvals for OCS Heart and OCS Liver products, as well as increased non-U.S. sales[146]. Stock and Equity - The company has authorized the issuance of up to 25,000,000 shares of preferred stock, all of which is undesignated as of June 30, 2020[100]. - The company granted options for the purchase of 564,836 shares of common stock during the six months ended June 30, 2020, with a weighted average grant fair value of $7.89 per share[105]. Legal and Compliance - The company is not currently subject to any material legal proceedings[214]. - The company is classified as an emerging growth company and has opted to take advantage of an extended transition period for new accounting standards[208].