asxc20240331

asxc20240331_10q.htm

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, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 0-19437

ASENSUS SURGICAL, INC.

(Exact name of registrant as specified in its charter)

Delaware

11-2962080

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

1 TW Alexander Drive, Suite 160, Durham, NC 27703

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (919) 765-8400

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated Filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol

Name of each exchange on which registered

Common Stock

$0.001 par value per share

ASXC

NYSE American

The number of shares outstanding of the registrant’s common stock, as of May 7, 2024 was 272,331,675.

Table of Contents

ASENSUS SURGICAL, INC.

TABLE OF CONTENTS FOR FORM 10-Q

PART I.	FINANCIAL INFORMATION	2

Item 1.	Financial Statements
	Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited)	2
	Condensed Consolidated Balance Sheets (unaudited)	3
	Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited)	4
	Condensed Consolidated Statements of Cash Flows (unaudited)	5
	Notes to Condensed Consolidated Financial Statements (unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22
Item 4.	Controls and Procedures	23

PART II.	OTHER INFORMATION	23

Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3.	Defaults Upon Senior Securities	25
Item 4.	Mine Safety Disclosures	25
Item 5.	Other Information	25
Item 6.	Exhibits	26

	SIGNATURES	27

Table of Contents

PART 1. FINANCIAL INFORMATION

Item 1. Financial Statements

Asensus Surgical, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except per share amounts)

(unaudited)

	Three Months Ended
	March 31,
	2024			2023
Revenue:
Product	$	313		$	293
Service		285			195
Lease		525			488
Total revenue		1,123			976

Cost of revenue:
Product		1,681			1,225
Service		452			749
Lease		923			973
Total cost of revenue		3,056			2,947
Gross loss		(1,933	)		(1,971	)

Operating expenses:
Research and development		8,091			10,139
Sales and marketing		3,642			4,553
General and administrative		4,374			5,468
Amortization of intangible assets		114			112
Change in fair value of contingent consideration		6,480			105
Total operating expenses		22,701			20,377
Operating loss		(24,634	)		(22,348	)
Other income (expense), net
Change in fair value of warrant liabilities		2,116			-
Interest income		126			439
Other expense, net		(59	)		(218	)
Total other income (expense), net		2,183			221
Loss before income taxes		(22,451	)		(22,127	)
Income tax expense		(46	)		(91	)
Net loss		(22,497	)		(22,218	)

Net loss per common share attributable to common stockholders - basic and diluted	$	(0.08	)	$	(0.09	)
Weighted average number of shares used in computing net loss per common share - basic and diluted		269,265			238,280

Comprehensive loss:
Net loss		(22,497	)		(22,218	)
Foreign currency translation (loss) gain		(494	)		550
Unrealized gain on available-for-sale investments		8			307
Comprehensive loss	$	(22,983	)	$	(21,361	)

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

Asensus Surgical, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except for share data)

(unaudited)

	March 31, 2024			December 31, 2023
Assets
Current Assets:
Cash and cash equivalents	$	6,995		$	17,096
Short-term investments, available-for-sale		994			3,971
Accounts receivable, net		675			3,508
Inventories		5,958			7,172
Prepaid expenses		3,314			3,143
Other current assets		1,312			1,496
Total Current Assets		19,248			36,386

Restricted cash		1,483			1,642
Inventories, net of current portion		3,954			4,043
Property and equipment, net		8,630			8,959
Intellectual property, net		1,114			1,237
Net deferred tax assets		37			44
Operating lease right-of-use assets, net		4,926			5,165
Other long-term assets		1,422			1,610
Total Assets	$	40,814		$	59,086

Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable	$	4,036		$	4,145
Accrued employee compensation and benefits		3,814			5,390
Accrued expenses and other current liabilities		1,243			1,636
Contingent consideration, current		8,700			-
Operating lease liabilities, current		1,056			1,036
Deferred revenue		439			421
Total Current Liabilities		19,288			12,628

Long-Term Liabilities:
Deferred revenue - less current portion		330			290
Contingent consideration		-			2,220
Warrant liabilities		3,772			5,888
Noncurrent operating lease liabilities		4,400			4,646
Total Liabilities		27,790			25,672

Commitments and Contingencies (Note 14)

Stockholders' Equity:
Common stock $0.001 par value, 750,000,000 shares authorized at March 31, 2024 and December 31, 2023; 271,986,369 and 264,921,526 issued and outstanding at March 31, 2024 and December 31, 2023, respectively		272			265
Preferred stock, $0.01 par value, 25,000,000 shares authorized, no shares issued and outstanding at March 31, 2024 and December 31, 2023		-			-
Additional paid-in capital		975,715			973,129
Accumulated deficit		(961,865	)		(939,368	)
Accumulated other comprehensive loss		(1,098	)		(612	)
Total Stockholders' Equity		13,024			33,414
Total Liabilities and Stockholders' Equity	$	40,814		$	59,086

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

Asensus Surgical, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(in thousands)

(unaudited)

	Common Stock				Treasury Stock						Additional Paid-			Accumulated			Accumulated Other Comprehensive			Total Stockholders'
	Shares		Amount		Shares			Amount			in Capital			Deficit			Income (Loss)			Equity
Balance, December 31, 2023		264,922	$	265		-		$	-		$	973,129		$	(939,368	)	$	(612	)	$	33,414
Stock-based compensation		-		-		-			-			1,745			-			-			1,745
Issuance of common stock related to vesting of restricted stock units		4,012		4		-			-			-			-			-			4
Shares withheld related to net share settlement of equity awards		-		-		640			1			(135	)		-			-			(134	)
Cancellation of treasury stock		-		-		(640	)		(1	)		-			-			-			(1	)
Issuance of common stock, net of issuance costs		3,052		3								976									979
Other comprehensive income		-		-		-			-			-			-			(486	)		(486	)
Net loss		-		-		-			-			-			(22,497	)		-			(22,497	)
Balance, March 31, 2024		271,986		272		-		$	-		$	975,715		$	(961,865	)	$	(1,098	)	$	13,024

Balance, December 31, 2022		236,895	$	237		-		$	-		$	962,731		$	(860,935	)	$	(2,388	)	$	99,645
Stock-based compensation		-		-		-			-			1,916			-			-			1,916
Exercise of stock options		13		-		-			-			5			-			-			5
Issuance of common stock related to vesting of restricted stock units		2,434		2		-			-			-			-			-			2
Shares withheld related to net share settlement of equity awards		-		-		649			1			(490	)		-			-			(489	)
Cancellation of treasury stock		-		-		(649	)		(1	)		-			-			-			(1	)
Other comprehensive income		-		-		-			-			-			-			857			857
Net loss		-		-		-			-			-			(22,218	)		-			(22,218	)
Balance, March 31, 2023		239,342	$	239		-		$	-		$	964,162		$	(883,153	)	$	(1,531	)	$	79,717

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

Asensus Surgical, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

	Three Months Ended March 31,
	2024			2023
Cash Flows from Operating Activities:
Net loss	$	(22,497	)	$	(22,218	)
Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities:
Depreciation		841			813
Amortization of intangible assets		114			112
Accretion of discounts and premiums on investments, net		(15	)		(89	)
Stock-based compensation		1,745			1,916
Deferred tax expense		-			91
Bad debt expense		(2	)		-
Change in inventory reserves		959			(374	)
Change in fair value of warrant liabilities		(2,116	)		-
Change in fair value of contingent consideration		6,480			105

Changes in operating assets and liabilities:
Accounts receivable		2,776			1,607
Inventories		(559	)		203
Operating lease right-of-use assets		177			187
Prepaid expenses		(183	)		250
Other current and long-term assets		313			(27	)
Accounts payable		(74	)		1,608
Accrued employee compensation and benefits		(1,523	)		(1,120	)
Accrued expenses and other current liabilities		(359	)		(93	)
Deferred revenue		73			(13	)
Operating lease liabilities		(158	)		(206	)
Net cash and cash equivalents used in operating activities		(14,008	)		(17,248	)

Cash Flows from Investing Activities:
Purchase of available-for-sale investments		-			(2,949	)
Proceeds from maturities of available-for-sale investments		3,000			32,750
Purchase of property and equipment		-			(64	)
Net cash and cash equivalents provided by investing activities		3,000			29,737

Cash Flows from Financing Activities:
Proceeds from issuance of common stock, net of issuance costs		982			-
Taxes paid related to net share settlement of vesting of restricted stock units		(171	)		(488	)
Proceeds from exercise of stock options		-			5
Net cash and cash equivalents provided by (used in) financing activities		811			(483	)

Effect of exchange rate changes on cash and cash equivalents		(63	)		403
Net (decrease) increase in cash, cash equivalents and restricted cash		(10,260	)		12,409
Cash, cash equivalents and restricted cash, beginning of period		18,738			7,470

SEC Form 10-Q filed by Asensus Surgical Inc.