augx-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 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: 001-40890

AUGMEDIX, INC.

(Exact name of registrant as specified in its charter)


Delaware						83-3299164
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

111 Sutter Street, Suite 1300, San Francisco, California						94104
(Address of principal executive offices)						(Zip Code)

Registrant’s telephone number, including area code: (888) 669-4885

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

Title of each class

Trading Symbol (s)

Name on each exchange on which registered

Common Stock, $0.0001 par value per share

AUGX

The Nasdaq Stock Market LLC

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 ☑

There were 49,243,752 shares of the registrant’s common stock outstanding as of August 7, 2024.

Table of Contents

AUGMEDIX, INC.

Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2024

TABLE OF CONTENTS


		Page
PART I - FINANCIAL INFORMATION		1

Item 1.	Financial Statements (Unaudited).	1

	Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023	1

	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six months ended June 30, 2024 and 2023	2

	Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the Three and Six months ended June 30, 2024 and 2023	3

	Condensed Consolidated Statements of Cash Flows for the Six Months ended June 30, 2024 and 2023	5

	Notes to Unaudited Interim Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	21

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	32

Item 4.	Controls and Procedures.	33

PART II - OTHER INFORMATION		35

Item 1.	Legal Proceedings.	35

Item 1A.	Risk Factors.	35

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	38

Item 3.	Defaults Upon Senior Securities.	38

Item 4.	Mine Safety Disclosures.	38

Item 5.	Other Information.	38

Item 6.	Exhibits.	38

SIGNATURES		41

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

Augmedix, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

(unaudited)


	June 30, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	28,220	$	46,217
Restricted cash	—		125
Accounts receivable, net of allowance for credit losses of $204 and $110 at June 30, 2024 and December 31, 2023, respectively	9,252		8,572
Prepaid expenses and other current assets	2,453		1,909
Total current assets	39,925		56,823
Property and equipment, net	3,333		3,739
Operating lease right of use asset	4,431		5,220
Restricted cash, non-current	5,207		—
Deposits and other assets	776		930
Total assets	$	53,672	$	66,712

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	881	$	721
Accrued expenses and other current liabilities	6,929		6,589
Deferred revenue	8,902		8,963
Customer deposits	851		851
Operating lease liability, current portion	1,432		1,494
Loan payable, current portion	5,000		5,000
Total current liabilities	23,995		23,618
Operating lease liability, net of current portion	3,303		4,049
Loan payable, net of current portion	15,540		15,303
Other liabilities	360		421
Total liabilities	$	43,198	$	43,391
Commitments and contingencies (Note 12)
Stockholders’ equity:
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding	—		—
Common stock, $0.0001 par value; 500,000,000 shares authorized; 49,080,486 and 48,613,714 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively	5		5
Additional paid-in capital	171,480		169,197
Accumulated deficit	(159,911)		(144,962)
Accumulated other comprehensive loss	(1,100)		(919)
Total stockholders' equity	10,474		23,321
Total liabilities and stockholders' equity	$	53,672	$	66,712

See accompanying notes to Condensed Consolidated Financial Statements.

Augmedix, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenues	$	13,664	$	10,780	$	27,136	$	20,408
Cost of revenues	7,209		5,715		14,340		10,957
Gross profit	6,455		5,065		12,796		9,451
Operating expenses:
General and administrative	7,013		4,760		12,360		8,967
Sales and marketing	3,749		2,649		7,313		5,212
Research and development	4,418		2,590		8,250		5,300
Total operating expenses	15,180		9,999		27,923		19,479
Loss from operations	(8,725)		(4,934)		(15,127)		(10,028)
Other income (expense):
Interest expense	(639)		(558)		(1,255)		(966)
Interest income	410		276		913		438


Change in fair value of warrant liability	—		(69)		—		(69)
Other	590		303		527		437
Total other income (expense), net	361		(48)		185		(160)
Net loss before income taxes	(8,364)		(4,982)		(14,942)		(10,188)
Income tax expense	86		51		7		84
Net loss	(8,450)		(5,033)		$	(14,949)	$	(10,272)
Other comprehensive income (loss):
Foreign exchange translation adjustment	(194)		(298)		(181)		(331)
Total comprehensive loss	$	(8,644)	$	(5,331)	$	(15,130)	$	(10,603)
Net loss per share of common stock, basic and diluted	$	(0.16)	$	(0.12)	$	(0.28)	$	(0.25)
Weighted average shares of common stock outstanding, basic and diluted	53,387,349		43,607,984		53,223,008		40,566,425

See accompanying notes to Condensed Consolidated Financial Statements.

Augmedix, Inc. and Subsidiaries

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

(In thousands, except share and per share amounts)

(unaudited)


	Stockholders’ Equity
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	Shares	Amount
Balance at December 31, 2023	48,613,714	$	5	$	169,197	$	(144,962)	$	(919)	$	23,321
Exercise of common stock options	62,535	—		59		—		—		59
Exercise of common stock warrants	94,804	—		—		—		—		—
Share-based compensation expense	—	—		885		—		—		885
Foreign currency translation adjustment	—	—		—		—		13		13
Net loss	—	—		—		(6,499)		—		(6,499)
Balance as of March 31, 2024	48,771,053	$	5	$	170,141	$	(151,461)	$	(906)	$	17,779
Exercise of common stock options	210,533	—		154		—		—		154
Issuance of common stock for settlement of restricted stock units and stock awards	98,900	—		—		—		—		—
Stock-based compensation	—	—		1,152		—		—		1,152
Change in fair value of the warrant	—	—		33		—		—		33
Foreign currency translation adjustment	—	—		—		—		(194)		(194)
Net loss	—	—		—		(8,450)		—		(8,450)
Balance at June 30, 2024	49,080,486	$	5	$	171,480	$	(159,911)	$	(1,100)	$	10,474


	Stockholders’ Equity (Deficit)
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity (Deficit)
	Shares	Amount
Balance at December 31, 2022	37,442,663	$	4	$	127,693	$	(125,791)	$	(440)	$	1,466
Exercise of common stock options	112,252	—		85		—		—		85
Share-based compensation expense	—	—		533		—		—		533
Foreign currency translation adjustment	—	—		—		—		(33)		(33)
Net loss	—	—		—		(5,239)		—		(5,239)
Balance as of March 31, 2023	37,554,915	$	4	$	128,311	$	(131,030)	$	(473)	$	(3,188)
Issuance of common stock and warrants, net of issuance costs	3,125,000	—		11,845		—		—		11,845
Exercise of common stock options	82,121			93						93
Stock-based compensation	—	—		570		—		—		570
Exercise of common stock warrants	38,042	—		—		—		—		—
Foreign currency translation adjustment	—	—		—		—		(298)		(298)
Net loss	—	—		—		(5,033)		—		(5,033)
Balance as of June 30, 2023	40,800,078	$	4	$	140,819	$	(136,063)	$	(771)	$	3,989

See accompanying notes to Condensed Consolidated Financial Statements.

Augmedix, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands, except share and per share amounts)

(unaudited)


	Six Months Ended June 30,
	2024		2023
Cash flows from operating activities:
Net loss	$	(14,949)	$	(10,272)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	855		541
Share-based compensation	2,037		1,098
Non-cash interest expense	390		255
Loss on disposal of property and equipment	49		—
Change in fair value of warrant liability	—		69
Non-cash lease expenses	601		437
Provision for bad debt	188		26
Changes in operating assets and liabilities:
Accounts receivable	(868)		(3,105)
Prepaid expenses and other current assets	(549)		(250)
Deposits and other assets	81		(442)
Accounts payable	399		(102)
Accrued expenses and other liabilities	399		(567)
Deferred revenue	(61)		604
Customer deposits	—		(38)
Lease liability	(617)		(429)
Net cash used in operating activities	(12,045)		(12,175)
Cash flows from investing activities:
Purchase of property and equipment	(930)		(1,475)
Proceeds from the sale of property and equipment	27		—
Net cash used in investing activities	(903)		(1,475)
Cash flows from financing activities:
Proceeds from loan payable	—		5,000
Payment of financing costs	(80)		(55)
Proceeds from issuance of common stock and warrants, net of issuance costs	—		11,845
Proceeds from exercise of stock options	213		179
Net cash provided by financing activities	133		16,969
Effect of exchange rate changes on cash and restricted cash	(100)		(47)
Net decrease in cash, cash equivalents and restricted cash	(12,915)		3,272
Cash, cash equivalents and restricted cash at beginning of period	46,342		21,988
Cash, cash equivalents and restricted cash at end of period	$	33,427	$	25,260
Supplemental disclosure of cash flow information:
Cash paid for interest	$	864	$	667
Cash paid for income taxes	$	56	$	8
Cash paid for operating lease liabilities	$	716	$	485

Supplemental schedule of non-cash investing and financing activities:
Purchases of property and equipment in accounts payable	$	289	$	155


Operating lease right-of-use asset exchanged for operating lease liability	$	—	$	2,498
Fair value of warrants issued in connection with loan	$	—	$	492
Change in fair value of warrants in connection with loan amendment	$	33	$	—

	June 30,
	2024		2023
Cash and cash equivalents	$	28,220	$	24,551
Restricted cash	—		125
Restricted cash, non-current	5,207		584
Total cash, cash equivalents and restricted cash	$33,427		$25,260

See accompanying notes to Condensed Consolidated Financial Statements.

Augmedix, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(unaudited)

1. Organization and Basis of Presentation

Augmedix, Inc. (the “Company”, “we” or “our”) was incorporated in 2013 and launched its commercial real-time, remote documentation services in 2014. The Company delivers ambient artificial intelligence (AI) medical documentation and data solutions to healthcare systems, physician practices, hospitals, and telemedicine clinicians. Clinicians access our applications through mobile devices.

The Company is headquartered in San Francisco, CA, with offices in three (3) countries around the world.

Liquidity

The Company has historically funded its operations primarily by debt and equity financings, and revenue earned from our customers.

In April of 2023, the Company raised $11.8 million in net proceeds after direct financing costs of $191 thousand, from the issuance of 3,125,000 shares of common stock, a warrant to purchase 4,375,273 shares of common stock at an exercise price of $0.0001 per share, and a warrant to purchase 1,875,069 common stock at an exercise price of $1.75 per share. Additionally, in November of 2023, the Company issued 7,187,500 shares of common stock and raised net proceeds of $26.3 million, after underwriter's commissions and direct financing costs of $2.5 million. As of June 30, 2024, the Company’s existing sources of liquidity included cash and cash equivalents of $28.2 million plus up to $5.0 million in incremental capital available through the SVB Loan Agreement (as defined below).

The Company has incurred negative cash flows from operating activities and losses from operations in the past as reflected in the accumulated deficit of $159.9 million as of June 30, 2024. We expect losses and negative cash flows to continue, primarily as a result of continued research, development and marketing efforts. We believe our cash balance will provide sufficient resources to meet our working capital needs for over twelve months from the filing date of the Form 10-Q for the three and six months ended June 30, 2024 . Over the longer term, if we do not generate sufficient revenue from new and existing products, we may have to obtain additional debt or equity financing and reduce expenditures. There is no assurance that if we require additional future financing that such financing will be available on terms which are acceptable to us, or at all.

Basis of Presentation and Principles of Consolidation

The accompanying unaudited interim condensed consolidated financial statements are presented in U.S. dollars and have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission, (“SEC”), for interim reporting. Certain information and note disclosures included in the Company’s annual financial statements have been condensed or omitted pursuant to such rules and regulations. The accompanying unaudited interim condensed consolidated financial statements include the accounts of Augmedix, Inc. and its wholly-owned subsidiaries, Augmedix Operating Corporation, Augmedix Bangladesh Limited, and Augmedix Solutions Private Limited. All intercompany accounts and transactions have been eliminated in consolidation.

In the opinion of management, the accompanying Condensed Consolidated Financial Statements reflect all adjustments of a normal, recurring nature considered necessary for a fair presentation of the Company's consolidated financial position, results of operations, comprehensive loss, and cash flows for the interim periods presented. The interim results for the three and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2024.

The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and related notes as of and for the year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 26, 2024.

Augmedix, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(unaudited)

Risks and Uncertainties

The Company is subject to a number of risks associated with companies at a similar stage with international operations, including dependence on key personnel, competition from similar products and larger companies, ongoing changes within the industry, ability to obtain adequate financing to support growth, the ability to attract and retain additional qualified personnel to manage the anticipated growth of the Company, the ability to manage international operations including changes in regulations, and general economic conditions, including economic volatility caused by the uncertain direction of interest rates.

Use of Estimates

The preparation of the unaudited interim condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the unaudited interim condensed consolidated financial statements and reported amounts of revenue and expenses during the reporting period. The Company’s significant estimates and judgments relate to the incremental borrowing rate used to measure operating lease liabilities and right of use assets, and stock-based compensation, including expected volatility used to measure the fair value of stock options and stock appreciation rights. Actual results could differ from those estimates.

2. Summary of Significant Accounting Policies

The Company’s significant accounting policies are discussed in “Consolidated Financial Statements — Note 2. Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. There have been no significant changes to these policies during the three months ended June 30, 2024, except for updated information related to the accounting policies below.

Restricted Cash

Restricted cash represents amounts held on deposit at a commercial bank used to secure the Company’s credit card facility. This facility was closed in the second quarter of 2024. Restricted cash, non-current as of June 30, 2024, represents a cash deposit that collateralizes the term loan as more fully described in note 6 - Debt, and a letter of credit in the name of the Company’s landlord pursuant to a certain operating lease.

Government Grant Income

From time to time, the Company may receive grant income from the Bangladesh Government related to our operations in Bangladesh. The Company records this grant income when received and the grants are recorded in the other category of other income (expense), net on the condensed consolidated statement of operations. The Company recorded grant income of $431 thousand and $78 thousand during the three months ended June 30, 2024 and 2023, respectively, and $431 thousand and $78 thousand during the six months ended June 30, 2024 and 2023.

Advertising Costs

All advertising costs are expensed as incurred and included in sales and marketing expenses. Advertising expenses incurred by the Company were $319 thousand and $210 thousand for the three months ended June 30, 2024 and 2023, respectively and $583 thousand and $428 thousand for the six months ended June 30, 2024 and 2023.

Augmedix, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(unaudited)

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-07, Improvements to Reportable Segment Disclosures (“ASU 2023-07”). The amendments expand segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker, the amount and description of other segment items, permits companies to disclose more than one measure of segment profit or loss, and requires all annual segment disclosures to be included in the interim periods. The amendments do not change how an entity identifies its operating segments, aggregates those operating segments, or applies quantitative thresholds to determine its reportable segments. The amendments are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the potential impact of adopting this new guidance on the consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. The Company is currently evaluating the potential impact of adopting this new guidance on the consolidated financial statements and related disclosures.

3. Revenue, Accounts Receivable and Significant Customers

The Company derives nearly all of its revenue through a recurring subscription model. The Company enters into contracts with its customers that typically have an initial term of one year. Most customers are invoiced in advance and must generally pay an upfront implementation fee. The upfront implementation fee is deferred and recognized over the initial contract term and any customer prepayments are deferred and included in the accompanying consolidated balance sheets in deferred revenue. Revenues are recognized over time as we provide our services to our customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services.

Changes in the contract liability, which solely includes deferred revenue, were as follows:


	Six Months Ended June 30, 2024		Year Ended December 31, 2023
Balance, beginning of period	$	8,963	$	7,254
Deferral of revenue	23,687		42,846
Recognition of unearned revenue	(23,748)		(41,137)
Balance, end of period	$	8,902	$	8,963

Deferred revenues consist of billings or payments received in advance of revenue recognized for the Company’s services, as described above, and are recognized as revenue when earned. The

SEC Form 10-Q filed by Augmedix Inc.