Acutus Medical Reports Second Quarter 2023 Financial Results

CARLSBAD, Calif., Aug. 07, 2023 (GLOBE NEWSWIRE) -- Acutus Medical, Inc. (“Acutus” or the “Company”) (Nasdaq: AFIB), an arrhythmia management company focused on improving the way cardiac arrhythmias are diagnosed and treated, today reported results for the second quarter of 2023.

Recent Highlights:

• Second quarter revenue of $5.3 million grew 30% year-over-year, reflecting strong procedure volume growth and improved capital sales
• Quarterly AcQMap procedure volumes set a new record and increased 21% compared to the second quarter of 2022
• Received FDA 510K clearance for AcQMap 9 next generation software platform featuring advanced algorithms and automation to improve diagnostic capabilities and procedure workflow
• Significant improvements in non-GAAP gross margin and cash burn resulting from disciplined focus on operational excellence

“Our second quarter performance reflects significant progress on our key strategic initiatives to return our business to growth while driving further operational improvement. During the second quarter of 2023, we achieved record procedure volumes, as focused commercial execution, pull through from the AcQMap 8.5 software launch, and the positive results from the RECOVER AF study supported accelerated AcQMap adoption,” said David Roman, President & CEO of Acutus Medical. “The strategic actions we have successfully undertaken over the past year, along with our team’s crisp execution, are driving momentum in our business and enabling our mission to create a new paradigm for the diagnosis and treatment of complex cardiac arrhythmias.”

Second Quarter 2023 Financial Results

Revenue was $5.3 million for the second quarter of 2023, an increase of 30% compared to $4.1 million for the second quarter of 2022. The improvement over the same quarter last year was primarily driven by disposables sales, higher capital conversions, increases in service, rent and other revenue, and sales through the Company’s distribution agreement with Medtronic.

Non-GAAP gross margin was negative 49% for the second quarter of 2023 compared to negative 129% for the same quarter last year. The improvement was driven by higher production volumes, improved product and geographic mix, lower manufacturing variances, and a reduced manufacturing overhead structure.

Non-GAAP operating expenses were $14.5 million for the second quarter of 2023 compared with $19.7 million in the same quarter last year. The decrease in operating expenses resulted from the Company’s restructuring actions in the first half of 2022, reduced discretionary spend, and the reprioritization of certain research and development programs.

Non-GAAP net loss for the second quarter of 2023 was $17.6 million, or $0.60 per share on a weighted average basic and diluted outstanding share count of 29.0 million, compared to non-GAAP net loss of $26.2 million, or $0.93 per share on a weighted average basic and diluted outstanding share count of 28.3 million, for the second quarter of 2022.

Cash, cash equivalents, marketable securities and restricted cash were $61.5 million as of June 30, 2023.

2023 Outlook

The company now expects full year 2023 revenue to be in a range from $20.0-$22.0 million.

Non-GAAP Financial Measures

This press release includes references to non-GAAP net loss and non-GAAP basic and diluted net loss per share, which are non-GAAP financial measures, to provide information that may assist investors in understanding the Company’s financial results and assessing its prospects for future performance. The Company believes these non-GAAP financial measures are important indicators of its operating performance because they exclude items that are primarily non-cash accounting line items unrelated to, and may not be indicative of, the Company’s core operating results. These non-GAAP financial measures, as Acutus calculates them, may not necessarily be comparable to similarly titled measures of other companies and may not be appropriate measures for comparing the performance of other companies relative to the Company. These non-GAAP financial results are not intended to represent and should not be considered to be more meaningful measures than, or alternatives to, measures of operating performance as determined in accordance with GAAP. Non-GAAP net loss is defined as net loss before income taxes, adjusted for stock-based compensation, amortization of acquisition-related intangibles, employee retention credit, goodwill impairment, restructuring charges, changes in the fair value of contingent consideration, gain on sale of business, loss on debt extinguishment and change in fair value of warrant liability and other adjustments. To the extent such non-GAAP financial measures are used in the future, the Company expects to calculate them using a consistent method from period to period. A reconciliation of the most directly comparable GAAP financial measure to the non-GAAP financial measure has been provided under the heading “Reconciliation of GAAP Results to Non-GAAP Results” in the financial statement tables attached to this press release.

Webcast and Conference Call Information

Acutus will host a conference call to discuss the second quarter 2023 financial results after market close on Monday, August 7, 2023 at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time. To access the live call via telephone, please register in advance using the link: https://register.vevent.com/register/BI93bb82b6296f43ae9eb227af3e9a6f7f. Upon registering, each participant will receive an email confirmation with dial-in numbers and a unique personal PIN that can be used to join the call. The live webinar of the call may be accessed at https://ir.acutusmedical.com.

About Acutus

Acutus is an arrhythmia management company focused on improving the way cardiac arrhythmias are diagnosed and treated. Acutus is committed to advancing the field of electrophysiology with a unique array of products and technologies which will enable more physicians to treat more patients more efficiently and effectively. Through internal product development, acquisitions and global partnerships, Acutus has established a global sales presence delivering a broad portfolio of highly differentiated electrophysiology products that provide its customers with a complete solution for catheter-based treatment of cardiac arrhythmias. Founded in 2011, Acutus is based in Carlsbad, California.

Caution Regarding Forward-Looking Statements

This press release includes statements that may constitute “forward-looking” statements, usually containing the words “believe,” “estimate,” “project,” “expect” or similar expressions. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, the Company’s ability to continue to manage expenses and cash burn rate at sustainable levels, continued acceptance of its products in the marketplace, the effect of global economic conditions on the ability and willingness of customers to purchase the Company’s systems and the timing of such purchases, competitive factors, changes resulting from healthcare policy in the United States and globally including changes in government reimbursement of procedures, dependence upon third-party vendors and distributors, timing of regulatory approvals, the impact of the coronavirus (COVID-19) pandemic and Acutus’ response to it and other risks discussed in the Company’s periodic and other filings with the Securities and Exchange Commission. By making these forward-looking statements, Acutus undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.

Investor Contact:	Media Contact:
Caroline Corner	Rhiannon Pickus
Westwicke ICR	Acutus Medical, Inc.
D: 415-202-5678	M: 442-232-6094
caroline.corner@westwicke.com	Rhiannon.Pickus@acutus.com

ACUTUS MEDICAL, INC. Condensed Consolidated Balance Sheets (in thousands, except per share amounts)
	June 30, 2023				December 31, 2022
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	23,055			$	25,584
Marketable securities, short-term		31,461				44,863
Restricted cash, short-term		7,002				5,764
Accounts receivable		7,670				21,085
Inventory		15,671				13,327
Employer retention credit receivable		—				4,703
Prepaid expenses and other current assets		2,444				2,541
Total current assets		87,303				117,867
Property and equipment, net		7,245				9,221
Right-of-use asset, net		3,533				3,872
Intangible assets, net		1,483				1,583
Other assets		731				897
Total assets	$	100,295			$	133,440
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	5,492			$	4,721
Accrued liabilities		9,759				9,686
Contingent consideration, short-term		—				1,800
Operating lease liabilities, short-term		466				319
Warrant liability		2,504				3,346
Total current liabilities		18,221				19,872
Operating lease liabilities, long-term		3,679				4,103
Long-term debt		34,634				34,434
Other long-term liabilities		20				12
Total liabilities		56,554				58,421
Commitments and contingencies
Stockholders' equity
Preferred stock, $0.001 par value; 5,000,000 shares authorized as of June 30, 2023 and December 31, 2022; 6,666 shares of the preferred stock, designated as Series A Common Equivalent Preferred Stock, are issued and outstanding as of June 30, 2023 and December 31, 2022		—				—
Common stock, $0.001 par value; 260,000,000 shares authorized as of June 30, 2023 and December 31, 2022; 29,206,570 and 28,554,656 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively		29				29
Additional paid-in capital		597,578				594,173
Accumulated deficit		(552,975	)			(518,314	)
Accumulated other comprehensive loss		(891	)			(869	)
Total stockholders' equity		43,741				75,019
Total liabilities and stockholders' equity	$	100,295			$	133,440

ACUTUS MEDICAL, INC. Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (in thousands, except per share amounts)
	Three Months Ended June 30,								Six Months Ended June 30,
		2023				2022				2023				2022
	(unaudited)
Revenue	$	5,289			$	4,076			$	9,458			$	7,757
Cost of products sold		8,063				9,697				14,852				16,638
Gross profit		(2,774	)			(5,621	)			(5,394	)			(8,881	)
Operating expenses (income):
Research and development		6,799				7,935				12,916				15,938
Selling, general and administrative		9,284				14,143				18,849				28,528
Goodwill impairment		—				—				—				12,026
Restructuring		463				—				475				949
Change in fair value of contingent consideration		(77	)			948				123				955
Gain on sale of business		(2,072	)			(43,575	)			(3,279	)			(43,575	)
Total operating expenses (income)		14,397				(20,549	)			29,084				14,821
Income (loss) from operations		(17,171	)			14,928				(34,478	)			(23,702	)
Other income (expense):
Loss on debt extinguishment		—				(7,947	)			—				(7,947	)
Change in fair value of warrant liability		(604	)			—				842				—
Interest income		824				27				1,676				51
Interest expense		(1,395	)			(1,290	)			(2,701	)			(2,701	)
Total other expense, net		(1,175	)			(9,210	)			(183	)			(10,597	)
(Loss) income before income taxes		(18,346	)			5,718				(34,661	)			(34,299	)
Income tax benefit		—				—				—				—
Net (loss) income	$	(18,346	)		$	5,718			$	(34,661	)		$	(34,299	)
Other comprehensive income (loss):
Unrealized gain (loss) on marketable securities		(8	)			18				4				(39	)
Foreign currency translation adjustment		(85	)			(387	)			(26	)			(553	)
Comprehensive income (loss)	$	(18,439	)		$	5,349			$	(34,683	)		$	(34,891	)
Basic net income (loss) per common share	$	(0.63	)		$	0.16			$	(1.20	)		$	(1.22	)
Diluted net income (loss) per common share	$	(0.63	)		$	0.16			$	(1.20	)		$	(1.22	)
Basic weighted average shares outstanding		29,039,732				28,339,362				28,902,808				28,229,338
Diluted weighted average shares outstanding		29,039,732				28,349,429				28,902,808				28,229,338

ACUTUS MEDICAL, INC. Condensed Consolidated Statements of Cash Flows (in thousands)
	Six Months Ended June 30,
		2023				2022
	(unaudited)
Cash flows from operating activities
Net loss	$	(34,661	)		$	(34,299	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense		2,473				3,145
AcQMap Systems converted to sales		238				110
Sales-type lease gain		(310	)			(57	)
Amortization of intangible assets		100				320
Non-cash stock-based compensation expense		3,639				5,613
(Accretion of discounts) amortization of premiums on marketable securities, net		(1,037	)			264
Amortization of debt issuance cost		212				641
Amortization of operating lease right-of-use assets		339				321
Loss on debt extinguishment		—				7,947
Goodwill impairment		—				12,026
Gain on sale of business, net		(3,279	)			(43,575	)
Direct costs paid related to sale of business		—				(2,488	)
Change in fair value of warrant liability		(842	)			—
Loss on disposal of property and equipment		277				—
Change in fair value of contingent consideration		123				955
Changes in operating assets and liabilities:
Accounts receivable		(204	)			1,037
Inventory		(2,344	)			1,101
Employer retention credit receivable		4,703				—
Prepaid expenses and other current assets		432				(3,592	)
Other assets		452				223
Accounts payable		824				236
Accrued liabilities		(1,963	)			(386	)
Operating lease liabilities		(277	)			(203	)
Other long-term liabilities		8				(45	)
Net cash used in operating activities		(31,097	)			(50,706	)
Cash flows from investing activities
Proceeds from sale of business		17,000				50,000
Purchases of available-for-sale marketable securities		(33,880	)			—
Sales of available-for-sale marketable securities		—				13,099
Maturities of available-for-sale marketable securities		48,250				27,787
Purchases of property and equipment		(984	)			(1,718	)
Net cash provided by investing activities		30,386				89,168
Cash flows from financing activities
Repayment of debt		—				(44,550	)
Penalty fees paid for early prepayment of debt		—				(1,074	)
Borrowing under new debt		—				35,000
Payment of debt issuance costs		—				(624	)
Proceeds from the exercise of stock options		4				66
Repurchase of common shares to pay employee withholding taxes		(263	)			(45	)
Proceeds from employee stock purchase plan		25				182
Payment of contingent consideration		—				(598	)
Net cash used in financing activities		(234	)			(11,643	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(346	)			(323	)
Net change in cash, cash equivalents and restricted cash		(1,291	)			26,496
Cash, cash equivalents and restricted cash, at the beginning of the period		31,348				24,221
Cash, cash equivalents and restricted cash, at the end of the period	$	30,057			$	50,717
Supplemental disclosure of cash flow information:
Cash paid for interest	$	2,458			$	2,073
	Six Months Ended June 30,
		2023				2022
	(unaudited)
Supplemental disclosure of noncash investing and financing activities:
Accounts receivable from sale of business	$	3,381			$	—
Change in unrealized (gain) loss on marketable securities	$	(4	)		$	39
Change in unpaid purchases of property and equipment	$	(54	)		$	42
Contingent consideration escrow release	$	—			$	157
Net book value on AcQMap system sales-type leases	$	238			$	110
Amount of debt proceeds allocated to warrant liability	$	—			$	3,379
Unpaid transaction costs from sale of business	$	—			$	429
Unpaid debt issuance costs	$	—			$	177

ACUTUS MEDICAL, INC. Reconciliation of GAAP Results to Non-GAAP Results (in thousands) (unaudited)
Three Months Ended June 30, 2023		Cost of Products Sold				Research and Development				Selling, General and Administrative				Loss from Operations				Other Expense, Net				Net Loss				Basic and Diluted EPS
Reported		$	8,063			$	6,799			$	9,284			$	(17,171	)		$	(1,175	)		$	(18,346	)		$	(0.63	)
Amortization of acquired intangibles			(50	)			—				—				50				—				50				0.00
Stock-based compensation			(153	)			(336	)			(1,245	)			1,734				—				1,734				0.06
Restructuring charges			—				—				—				463				—				463				0.02
Change in fair value of warrant liability			—				—				—				—				604				604				0.02
Change in fair value of contingent consideration			—				—				—				(77	)			—				(77	)			0.00
Gain on sale of business			—				—				—				(2,072	)			—				(2,072	)			(0.07	)
Adjusted		$	7,860			$	6,463			$	8,039			$	(17,073	)		$	(571	)		$	(17,644	)		$	(0.60	)
Three Months Ended June 30, 2022		Cost of Products Sold				Research and Development				Selling, General and Administrative				Income (Loss) from Operations				Other Expense, Net				Net Income (Loss)				Net income allocated to common stockholders				Basic and Diluted EPS
Reported		$	9,697			$	7,935			$	14,143			$	14,928			$	(9,210	)		$	5,718			$	4,521			$	0.16
Amortization of acquired intangibles			(155	)			—				(5	)			160				—				160				160				0.01
Stock-based compensation			(225	)			(554	)			(1,802	)			2,581				—				2,581				2,581				0.09
Change in fair value of contingent consideration			—				—				—				948				—				948				948				0.03
Gain on sale of business			—				—				—				(43,575	)			—				(43,575	)			(43,575	)			(1.54	)
Loss on debt extinguishment			—				—				—				—				7,947				7,947				7,947				0.28
Net income allocated to participating securities			—				—				—				—				—				—				1,197				0.04
Adjusted		$	9,317			$	7,381			$	12,336			$	(24,958	)		$	(1,263	)		$	(26,221	)		$	(26,221	)		$	(0.93	)

ACUTUS MEDICAL, INC.
Key Business Metrics
(unaudited)

Installed Base and Procedure Volumes

The total installed base which includes AcQMap Systems as of June 30, 2023 and 2022 are as follows:

	As of June 30,
		2023				2022
Acutus
U.S.		27				37
Outside the U.S.		51				38
Total Acutus net system placements		78				75

Procedure volumes for the three and six months ended June 30, 2023 and 2022 are as follows:

	Three Months Ended								Six Months Ended
	June 30,								June 30,
		2023				2022				2023				2022
Procedure volumes		584				481				1,035				948

Revenue

The following table sets forth the Company’s revenue for disposables, systems and service/other for the three and six months ended June 30, 2023 and 2022 (in thousands):

	Three Months Ended								Six Months Ended
	June 30,								June 30,
		2023				2022				2023				2022
Disposables	$	3,914			$	3,334			$	7,340			$	6,545
Systems		691				346				691				346
Service / other		684				396				1,427				866
Total revenue	$	5,289			$	4,076			$	9,458			$	7,757

The following table presents revenue by geographic location for the three and six months ended June 30, 2023 and 2022 (in thousands):

	Three Months Ended								Six Months Ended
	June 30,								June 30,
		2023				2022				2023				2022
United States	$	3,125			$	2,037			$	5,373			$	4,060
Outside the United States		2,164				2,039				4,085				3,697
Total revenue	$	5,289			$	4,076			$	9,458			$	7,757