GlobeNewswire Inc | Nov 11, 2021 04:01PM EST

November 11, 2021

CARLSBAD, Calif., Nov. 11, 2021 (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 third quarter of 2021.

Recent Highlights:

-- Significant progress was achieved in our three core technology categories: Left heart access: Revenues advanced three-fold in the third quarter versus prior year; initiated launch in our Europe and UK direct businessesMapping and therapy guidance: Initiated limited release of groundbreaking software upgrade AcQMap 8 with automated region of interest locatorTherapy: Initiated Pulsed Filed Ablation (PFA) CE Mark study with first cases in Prague, Czech Republic -- Reported revenue of $4.6 million in the third quarter of 2021, compared to $3.2 million in the same quarter last year, led by increased procedure volumes and adoption of AcQMap globally -- Ended the third quarter with an installed base of 71 AcQMap mapping consoles. Within the quarter, several consoles were repositioned to different hospitals to drive higher utilization rates and procedure volumes

During the quarter, we further strengthened our portfolio and market position in our left heart access, mapping and therapy guidance, and therapy categories, said Vince Burgess, President & CEO of Acutus. Our innovative left heart access product line has been very well received by electrophysiologists and structural heart specialists, and we continue to expand our product offering in this area. In mapping and therapy guidance, our software team delivered a first-in-the-industry mapping software upgrade with automated region of interest locators that helps physicians better tailor their therapy for each patient while minimizing destruction of healthy tissue. In therapy, we continued to install therapeutic ablation systems in Europe and the U.S. in support of our EU market launch and clinical trial activities, and now have nearly 40 of these systems in place. We also made significant strides with our integrated PFA therapy system allowing us to initiate enrollment in our Pulsed Field Ablation CE mark trial this week in the Czech Republic.

Mr. Burgess continued While we have made meaningful progress advancing our pipeline and technology leadership strategy, we have seen ongoing challenges in the external environment as well as gaps in our own commercial execution. With end-markets stabilizing in the fourth quarter, we are intensifying our commercial focus to drive higher account penetration and expanded product adoption across all three of our technology categories.

Third Quarter 2021 Financial ResultsRevenue was $4.6 million for the third quarter of 2021, compared to $3.2 million in the third quarter last year. The improvement over the same quarter last year was driven by increased direct sales of Acutus disposables and higher procedure volumes, as well as increased distributor sales through the Companys partner, Biotronik. Gross margin on a GAAP basis was negative 86% for the third quarter of 2021, compared with negative 62% in the same quarter last year. The change was driven by unfavorable product and geographic mix. We continue to make significant investments in our manufacturing infrastructure to support rapid adoption of our broad product portfolio and to position us to scale in-house production as our business grows. As production volumes increase over time and we recognize the benefits of cost optimization initiatives, we expect our gross margin to improve.

Operating expenses on a GAAP basis were $23.2 million for the third quarter of 2021, compared with $24.3 million in the same quarter last year. The decrease was primarily driven by a change in fair value of the contingent consideration related to the acquisition of Rhythm Xience, partially offset by increases driven by the expansion of Acutus research and development team.

Net loss on a GAAP basis was $28.5 million for the third quarter of 2021 and net loss per share was $0.94 on a weighted average basic and diluted outstanding share count of 30.5 million, compared to $31.2 million and a net loss per share of $1.95 on a weighted average basic and diluted outstanding share count of 16.1 million in the same period of the prior year. Excluding amortization of acquired intangibles, non-cash stock-based compensation expense, remeasurement of the warrant liability, and changes in the fair value of contingent consideration, the Companys non-GAAP net loss for the third quarter of 2021 was $26.7 million, or $0.87 per share, compared to $21.0 million, or $0.90 per share, after giving effect to the pro forma conversion of convertible preferred stock for the third quarter of 2020.

Cash, cash equivalents, marketable securities and restricted cash were $134.7 million as of September30, 2021. Our secondary equity offering, which was completed in July, resulted in additional net cash proceeds of $82.7 million.

Outlook andCOVID-19Headwinds associated with COVID-19 have moderated in recent weeks; however, there remains meaningful uncertainty - and limited precedent - to predict the duration or sustainability of a recovery. Management continues to view the current situation with COVID-19 as being fluid, and the potential impact on the Companys business from hospital and government actions in response to potential resurgences in COVID-19 cases, COVID-19-related hospital admissions, restrictions on lab access and new technology assessments and hospital staffing shortages are all factors that could influence performance for the foreseeable future. Taking into consideration year-to-date results, external factors, and business performance, management now projects full year sales to range between $17.0 and $17.5 million.

Non-GAAPFinancial MeasuresThis press release includes references to non-GAAP net loss and non-GAAP net loss per share, which are non-GAAP financial measures, to provide information that may assist investors in understanding the Companys 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 Companys 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, acquisition related costs, discontinued operations, asset impairments, non-operating items, restructuring charges, stock repurchases 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 InformationAcutus will host a conference call to discuss the third quarter 2021 financial results after market close on Thursday, November 11, 2021 at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time. The conference call can be accessed live over the phone (833) 570-1131 for U.S. callers or (914) 987-7078 for international callers, using conference ID: 7373938. The live webinar can be accessed at https://ir.acutusmedical.com.

About Acutus Medical, Inc.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 StatementsThis 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 Companys 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 Companys 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 Companys 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 Holly WindlerWestwicke ICR M: 619-929-1275D: 415-202-5678 media@acutusmedical.comcaroline.corner@westwicke.com

Acutus Medical, Inc.Consolidated Balance Sheets

September December 31, 30,(in thousands, except per share amounts) 2021 2020 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 58,492 $ 25,234 Marketable securities, short-term 71,962 105,839 Restricted cash 150 150 Accounts receivable 4,190 2,160 Inventory 14,962 12,958 Prepaid expenses and other current assets 6,045 5,047 Total current assets 155,801 151,388 Marketable securities, long-term 4,061 8,726 Property and equipment, net 14,595 12,356 Right-of-use assets, net 4,682 1,669 Intangible assets, net 5,173 5,653 Goodwill 12,026 12,026 Other assets 1,086 717 Total assets $ 197,424 $ 192,535 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 6,417 $ 8,266 Accrued liabilities 9,398 7,308 Contingent consideration, short-term 1,900 5,400 Operating lease liabilities, short-term 466 933 Total current liabilities 18,181 21,907 Operating lease liabilities, long-term 4,695 1,134 Long-term debt 40,043 39,011 Contingent consideration, long-term 800 3,900 Other long-term liabilities 18 ? Total liabilities 63,737 65,952 Stockholders' equity Preferred stock, $0.001 par value ? ? Common stock, $0.001 par value 28 28 Additional paid-in capital 581,133 487,290 Accumulated deficit (447,434 ) (361,015 )Accumulated other comprehensive income (loss) (40 ) 280 Total stockholders' equity 133,687 126,583 Total liabilities and stockholders' equity $ 197,424 $ 192,535

Acutus Medical, Inc.Consolidated Statements of Operations and Comprehensive Loss

Three Months Ended Nine Months Ended September 30, September 30,(in thousands, exceptshare and per share 2021 2020 2021 2020amounts) (unaudited) (unaudited)Revenue $ 4,601 $ 3,173 $ 12,901 $ 5,890 Costs and operating expenses:Cost of products sold 8,539 5,141 22,986 10,998 Research and 9,299 8,343 27,843 24,492 developmentSelling, general and 15,805 15,833 47,658 35,193 administrativeChange in fair valueof contingent (1,953 ) 118 (3,364 ) (1,466 )considerationTotal costs and 31,690 29,435 95,123 69,217 operating expensesLoss from operations (27,089 ) (26,262 ) (82,222 ) (63,327 ) Other income (expense):Change in fair value ? (3,683 ) ? (5,555 )of warrant liabilityInterest income 19 23 88 393 Interest expense (1,441 ) (1,366 ) (4,285 ) (4,090 )Total other expense, (1,422 ) (5,026 ) (4,197 ) (9,252 )netLoss before income (28,511 ) (31,288 ) (86,419 ) (72,579 )taxesIncome tax benefit ? ? ? ? Net loss $ (28,511 ) $ (31,288 ) $ (86,419 ) $ (72,579 ) Other comprehensive income (loss)Unrealized loss on (13 ) (9 ) (3 ) (50 )marketable securitiesForeign currency (183 ) 78 (317 ) 147 translation adjustmentComprehensive loss $ (28,707 ) $ (31,219 ) $ (86,739 ) $ (72,482 ) Net loss per commonshare, basic and $ (0.94 ) $ (1.95 ) $ (2.99 ) $ (12.36 )dilutedWeighted averageshares outstanding, 30,460,466 16,080,467 28,890,382 5,870,861 basic and diluted

Acutus Medical, Inc.Consolidated Statements of Cash Flows

Nine Months Ended September 30,(in thousands) 2021 2020 (unaudited)Cash flows from operating activities Net loss $ (86,419 ) $ (72,579 )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation expense 4,227 1,754 Amortization of intangible assets 480 330 Stock-based compensation expense 10,263 9,272 Amortization of premiums/(accretion of discounts) on 1,011 113 marketable securities, netAmortization of debt issuance costs 1,032 518 Amortization of right-of-use assets 496 507 Change in fair value of warrant liability ? 5,555 Change in fair value of contingent consideration (3,364 ) (1,466 )Changes in operating assets and liabilities: Accounts receivable (2,030 ) (1,630 )Inventory (2,004 ) (1,865 )Prepaid expenses and other current assets (59 ) (2,729 )Other assets (369 ) (387 )Accounts payable (1,813 ) 753 Accrued liabilities 1,862 1,423 Operating lease liabilities (432 ) (615 )Other long-term liabilities 18 8 Net cash used in operating activities (77,101 ) (61,038 ) Cash flows from investing activities Purchases of available-for-sale marketable securities (70,020 ) (108,528 )Sales of available-for-sale marketable securities 8,590 17,095 Maturities of available-for-sale marketable securities 98,507 45,000 Purchases of property and equipment (6,587 ) (7,822 )Net cash provided by (used in) investing activities 30,490 (54,255 ) Cash flows from financing activities Payment of deferred offering costs (572 ) ? Payment of contingent consideration (3,152 ) (2,636 )Proceeds from the issuance of common stock, net of 82,664 166,286 issuance costsProceeds from stock options exercises 703 350 Proceeds from Employee Stock Purchase Plan 440 ? Net cash provided by financing activities 80,083 164,000 Effect of exchange rate changes on cash, cash (214 ) 143 equivalents and restricted cashNet change in cash, cash equivalents and restricted 33,258 48,850 cashCash, cash equivalents and restricted cash, at the 25,384 9,602 beginning of the periodCash, cash equivalents and restricted cash, at the end $ 58,642 $ 58,452 of the period

Acutus Medical, Inc.Reconciliation of GAAP Results toNon-GAAPResults(Unaudited)

Three Months Cost of Research Selling, Other Basic andEnded products and general and Loss from expenses, Net loss dilutedSeptember 30, sold development administrative operations net EPS2021Reported $ 8,539 $ 9,299 $ 15,805 $ (27,089 ) $ (1,422 ) $ (28,511 ) $ (0.94 )Amortizationof acquired (155 ) ? (5 ) 160 ? 160 0.01 intangiblesStock-based (243 ) (567 ) (2,767 ) 3,577 ? 3,577 0.12 compensationChange infair value of ? ? ? (1,953 ) ? (1,953 ) (0.06 )contingentconsiderationAdjusted $ 8,141 $ 8,732 $ 13,033 $ (25,305 ) $ (1,422 ) $ (26,727 ) $ (0.87 )

Three Months Cost of Selling, Other Basic andEnded products Research and general and Loss from expenses, Net loss dilutedSeptember 30, sold development administrative operations net EPS2020Reported $ 5,141 $ 8,343 $ 15,833 $ (26,262 ) $ (5,026 ) $ (31,288 ) $ (1.95 )Adjustmentfor assumedconversion of ? ? ? ? ? ? 0.61 convertiblepreferredstockAmortizationof acquired ? ? (110 ) 110 ? 110 ? intangiblesStock-based (127 ) (239 ) (6,008 ) 6,374 ? 6,374 0.27 compensationChange infair value of ? ? ? 118 ? 118 0.01 contingentconsiderationChange infair value of ? ? ? ? 3,683 3,683 0.16 warrantliabilityAdjusted $ 5,014 $ 8,104 $ 9,715 $ (19,660 ) $ (1,343 ) $ (21,003 ) $ (0.90 )

Three Months Ended September 30, 2021 2020Denominator Weighted average shares of common stock outstanding 30,460,466 16,080,467 used in GAAP per share calculationsAdjustments to reflect the assumed conversion of ? 7,205,624 convertible preferred stock ^(1)Shares used in non-GAAP per share calculations 30,460,466 23,286,091

Assumes the conversion of outstanding shares of convertible preferred stock(1) into shares of common stock as if such conversion had occurred at the beginning of the period or their issuance dates, if later.

Acutus Medical, Inc.Key Business Metrics

Installed Base

The total installed base as of September 30, 2021 and 2020 is set forth in the table below:

As of September 30, 2021 2020 (unaudited)Acutus Direct U.S. 42 29 Outside U.S. 18 15 Total Acutus Direct 60 44 Biotronik 11 5 Total installed base 71 49

The net increase in installed base for the three and nine months ended September 30, 2021 and 2020, exclusive of transfers between Acutus and Biotronik, is set forth in the table below:

Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 (unaudited) (unaudited)Acutus Direct U.S. ? 9 5 19 Outside U.S. ? 2 4 3 Total Acutus Direct ? 11 9 22 Net systems to 1 ? 4 ? BiotronikTotal net system 1 11 13 22 placements

Revenue

The following table sets forth the Companys revenue for disposables, systems and service/other for the three and nine months ended September 30, 2021 and 2020 (in thousands):

Three Month Ended Nine Month Ended September September 30, 30, 2021 2020 2021 2020 (unaudited) (unaudited)Acutus Direct Disposables $ 2,437 $ 1,680 $ 7,036 $ 3,599 Systems 341 965 1,626 1,485 Service/Other 123 29 191 47 Total Acutus direct 2,901 2,674 8,853 5,131 revenueDistribution 1,700 499 4,048 759 agreementsTotal revenue $ 4,601 $ 3,173 $ 12,901 $ 5,890

The following table provides revenue by geographic location for the three and nine months ended September 30, 2021 and 2020 (in thousands):

Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 (unaudited) (unaudited)Acutus Direct United States $ 2,164 $ 1,790 $ 5,976 $ 3,103 Outside the United States 737 884 2,877 2,028 Total Acutus direct 2,901 2,674 8,853 5,131 revenueDistribution Agreements United States 25 77 281 92 Outside the United States 1,675 422 3,767 667 Total revenue through 1,700 499 4,048 759 distribution agreementsTotal revenue $ 4,601 $ 3,173 $ 12,901 $ 5,890