Acutus Medical(US:AFIB)2023-11-13 16:00Financial Performance - As of September 30, 2023, the company reported an accumulated deficit of $566.2 million and working capital of $57.9 million[176]. - Revenue for the three months ended September 30, 2023, was $5.2 million, a 44% increase from $3.6 million in the same period of 2022, driven by higher disposable sales and sales from left-heart access products through Medtronic[217]. - Revenue for the nine months ended September 30, 2023, was $14.7 million, a 29% increase from $11.4 million in the same period of 2022, primarily driven by higher disposable sales and increased sales from left-heart access products through Medtronic[230]. - The net loss for the three months ended September 30, 2023, was $13.2 million, a 35% improvement from a net loss of $20.4 million in the same period of 2022[215]. - Gross profit was negative $8.8 million for the nine months ended September 30, 2023, compared to negative $12.2 million for the same period in 2022, reflecting a gross margin improvement from negative 107% to negative 60%[231]. - Other net expense was $0.4 million for the nine months ended September 30, 2023, significantly reduced from $10.6 million in 2022, primarily due to a prior year loss on debt extinguishment[239]. Operational Changes - Following the restructuring, the company will wind down its mapping and ablation businesses and focus solely on manufacturing and distributing Medtronic's left-heart access product portfolio[175]. - The company reduced its workforce by approximately 65% as part of the restructuring plan aimed at simplifying operations and maximizing free cash flow[191]. - The company expects the restructuring to be substantially complete in the first quarter of 2024[175]. - The company plans to focus on manufacturing and distributing left-heart access products to Medtronic to generate revenue and earn associated payments[241]. Cash Flow and Liquidity - As of September 30, 2023, the company had cash, cash equivalents, restricted cash, and marketable securities totaling $45.5 million, down from $76.2 million at the end of 2022[240]. - For the nine months ended September 30, 2023, net cash used in operating activities was $45.1 million, a decrease of $26.9 million compared to the same period in 2022[252][253]. - Net cash provided by investing activities was $47.3 million, a decrease of $45.2 million from the nine months ended September 30, 2022, primarily due to a $33.0 million decrease in net proceeds from the Medtronic left-heart access portfolio sale[252][254]. - Net cash used in financing activities was $2.2 million, a decrease of $9.9 million from the nine months ended September 30, 2022[252][255]. - Management believes current cash resources are sufficient to fund operations for at least the next 12 months while exploring cost improvement opportunities[243]. Expenses - Cost of products sold for the three months ended September 30, 2023, was $8.6 million, a 24% increase from $7.0 million in the same period of 2022, with a gross margin of negative 64% compared to negative 91% in 2022[218]. - Research and development expenses decreased to $4.8 million for the three months ended September 30, 2023, down 19% from $5.9 million in 2022, due to reduced project-related spending and workforce reduction[219]. - Selling, general and administrative expenses were $7.4 million for the three months ended September 30, 2023, a 23% decrease from $9.7 million in 2022, primarily due to reduced compensation costs[220]. - Research and development expenses decreased by 19% to $17.7 million for the nine months ended September 30, 2023, down from $21.9 million in 2022, due to reduced project-related spending and workforce adjustments[232]. - Selling, general and administrative expenses were $26.3 million for the nine months ended September 30, 2023, a decrease of 31% from $38.2 million in 2022, attributed to lower professional fees and compensation costs[233]. Market and Competition - Future gross margins may fluctuate due to competition, demand from Medtronic, and other market factors[193]. - Approximately 41% of sales for the nine months ended September 30, 2023, were generated outside the United States, compared to 48% in 2022[199]. Corporate Governance and Compliance - The company was granted an additional 180-calendar day period until April 29, 2024, to regain compliance with the Nasdaq Bid Price Requirement[264]. - The company's common stock was transferred to The Nasdaq Capital Market on October 31, 2023, continuing to trade under the symbol "AFIB"[264]. - The company entered into Amendment No. 1 to the 2022 Credit Agreement, reducing the minimum liquidity requirement to $5 million for 18 months, which will increase to $20 million thereafter[249]. - Amendment No. 2 to the 2022 Credit Agreement requires the company to maintain a minimum liquidity of $10 million at all times[250]. - The company issued warrants to purchase up to 3,779,018 shares of common stock at an exercise price of $1.1114 per share for a period of eight years[251]. Acquisitions and Earnouts - The company achieved a $20.0 million OEM Earnout in October 2022 and a $17.0 million Transfer Earnout in December 2022, with respective payments received in November 2022 and January 2023[180]. - The earnout period for the acquisition of Rhythm Xience concluded on June 19, 2023, resulting in no contingent consideration liability recorded as of September 30, 2023[207]. - The final earnout payment of $1.9 million related to the acquisition of Rhythm Xience was made in July 2023[256].