Full Press Release Details
Unaudited Pro Forma Condensed Consolidated
Financial Information
June 30, 2022, Acutus Medical, Inc. ("Acutus" or the "Company") completed the first closing (the "First
Closing") in connection with its previously announced transaction with Medtronic, Inc. (together with its affiliates, "Medtronic"),
in accordance with the Asset Purchase Agreement (the "Agreement") executed on April 26, 2022, pursuant to which the Company
agreed to sell to Medtronic certain transseptal access and sheath assets. The assets transferred to Medtronic upon the First Closing (the
"Assets") include patents, trademarks, patent and trademark applications, know-how, copyrights, prototypes and other intellectual
property owned or licensed by the Company, business records and documents (including regulatory and clinical materials) and manufacturing
equipment related to the AcQCross line of sheath-compatible septal crossing devices, AcQGuide MINI integrated crossing device
and sheath, AcQGuide FLEX Steerable Introducer with integrated transseptal dilator and needle, and AcQGuide VUE steerable sheaths
The following unaudited pro
forma condensed consolidated financial statements are intended to show how the First Closing might have affected the historical financial
statements of Acutus if the First Closing had been completed at an earlier time as indicated therein. The unaudited pro
forma condensed consolidated financial statements have been prepared in accordance with Article 11 of Regulation S-X and were derived
from the Company's historical consolidated financial statements and are being presented to give effect to the First Closing. The unaudited pro
forma condensed consolidated financial statements should be read in conjunction with:
| i. | The accompanying notes to the unaudited pro forma condensed consolidated financial statements; | |
| ii. | The audited historical financial statements of the Company and its subsidiaries, the accompanying notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 30, 2022; and | |
| ii. | The un audited interim historical consolidated financial statements of the Company and its subsidiaries, the accompanying notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in the Company's Quarterly Report on Form 10-Q for the three months ended March 31, 2022 filed with the SEC on May 12, 2022. |
forma condensed consolidated financial statements of the Company are based on available information and assumptions that the Company's
management believes are reasonable as of the date of this filing, as further described in the notes thereto. The unaudited pro
forma condensed consolidated statements of operations for the year ended December 31, 2021 and the three months ended March 31, 2022 present
the Company's results as if the First Closing had occurred on January 1, 2021, the beginning of the earliest period presented. The unaudited pro
forma condensed consolidated balance sheet as of March 31, 2022 reflects the Company's assets, liabilities, and equity as if the
First Closing had occurred on March 31, 2022.
The unaudited pro forma condensed consolidated
financial statements do not purport to represent the Company's actual consolidated results of operations or financial condition
had the First Closing occurred on the dates assumed, nor are they indicative of the Company's future consolidated results of operations
or financial condition.
Article 11 of Regulation S-X requires that pro
forma financial information include the following pro forma adjustments to the historical financial statements of the registrant
| Transaction Accounting Adjustments - Adjustments that reflect only the application of required accounting to the acquisition, disposition , or other transaction. | ||
| Autonomous Entity Adjustments - Adjustments that are necessary to reflect the operations and financial position of the registrant if the registrant was previously part of another entity. There are no autonomous entity adjustments included in the pro forma financial information since the Company currently operates, and after the completion of the transaction will continue to operate, as an independent, standalone entity . |
In addition, Regulation
S-X permits registrants to reflect adjustments that depict synergies and dis-synergies of the acquisitions and dispositions for which
pro forma effect is being given in our disclosures as management adjustments. The unaudited pro forma condensed consolidated
financial statements do not include management adjustments to reflect any potential synergies that may be achievable, or dis-synergy costs
that may occur, in connection with the sale of the Assets. We have determined not to reflect such adjustments because we do not believe
presenting such adjustments would enhance an understanding of the pro forma effects of the First Closing.
The transaction accounting
adjustments to reflect the sale of the Assets in the unaudited pro forma condensed consolidated financial statements include:
forma condensed consolidated financial statements are presented for informational purposes only and are based upon estimates by the Company's
management, which are based upon available information and certain assumptions that the Company's management believes are reasonable
as of the date of this filing. The unaudited pro forma condensed consolidated financial statements are not intended to be indicative
of the actual financial position or results of operations that would have been achieved had the First Closing been consummated as of the
dates indicated above, nor does it purport to indicate results which may be attained in the future. Actual amounts could differ materially
from these estimates.
ACUTUS MEDICAL, INC.
Consolidated Balance Sheet
As of March 31, 2022
| Historical Acutus | Transaction Accounting Adjustments | |||||||||||||||
| (a) | (b) | Notes | Pro Forma | |||||||||||||
| (in thousands) | ||||||||||||||||
| ASSETS | ||||||||||||||||
| Current assets: | ||||||||||||||||
| Cash and cash equivalents | $ | 12,319 | $ | 43,500 | (1) | $ | 55,819 | |||||||||
| Marketable securities, short-term | 62,292 | - | 62,292 | |||||||||||||
| Restricted cash | 150 | 150 | ||||||||||||||
| Accounts receivable | 2,978 | - | 2,978 | |||||||||||||
| Inventory | 17,620 | - | 17,620 | |||||||||||||
| Prepaid expenses and other current assets | 9,064 | - | 9,064 | |||||||||||||
| Total current assets | 104,423 | 43,500 | 147,923 | |||||||||||||
| Marketable securities, long-term | 4,014 | - | 4,014 | |||||||||||||
| Restricted cash, long-term | - | 4,000 | (1) | 4,000 | ||||||||||||
| Property and equipment, net | 12,962 | (504 | ) | (1) | 12,458 | |||||||||||
| Right-of-use assets, net | 4,358 | - | 4,358 | |||||||||||||
| Intangible assets, net | 4,853 | (3,120 | ) | (1) | 1,733 | |||||||||||
| Other assets | 1,032 | - | 1,032 | |||||||||||||
| Total assets | $ | 131,642 | $ | 43,876 | $ | 175,518 | ||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||
| Current liabilities: | ||||||||||||||||
| Accounts payable | $ | 4,781 | $ | - | $ | 4,781 | ||||||||||
| Accrued liabilities | 10,632 | - | 10,632 | |||||||||||||
| Contingent consideration, short-term | 1,400 | - | 1,400 | |||||||||||||
| Operating lease liabilities, short-term | 501 | - | 501 | |||||||||||||
| Total current liabilities | 17,314 | - | 17,314 | |||||||||||||
| Operating lease liabilities, long-term | 4,471 | - | 4,471 | |||||||||||||
| Long-term debt | 40,793 | - | 40,793 | |||||||||||||
| Contingent consideration, long-term | 300 | - | 300 | |||||||||||||
| Other long-term liabilities | 2 | - | 2 | |||||||||||||
| Total liabilities | 62,880 | - | 62,880 | |||||||||||||
| Commitments and contingencies | ||||||||||||||||
| Stockholders' equity | ||||||||||||||||
| Preferred stock, $0.001 par value | - | - | ||||||||||||||
| Common stock, $0.001 par value | 28 | - | 28 | |||||||||||||
| Additional paid-in capital | 587,889 | - | 587,889 | |||||||||||||
| Accumulated deficit | (518,715 | ) | 43,876 | (1) | (474,839 | ) | ||||||||||
| Accumulated other comprehensive loss | (440 | ) | - | (440 | ) | |||||||||||
| Total stockholders' equity | 68,762 | 43,876 | 112,638 | |||||||||||||
| Total liabilities and stockholders' equity | $ | 131,642 | $ | 43,876 | $ | 175,518 |
See accompanying notes
to the unaudited pro forma condensed consolidated financial statements.
ACUTUS MEDICAL, INC.
Consolidated Statement of Operations
For the three months
ended March 31, 2022
| Historical Acutus | Transaction Accounting Adjustments | |||||||||||||||
| (a) | (b) | Notes | Pro Forma | |||||||||||||
| (in thousands, except share and per share amounts) | ||||||||||||||||
| Revenue | $ | 3,681 | $ | (629 | ) | (2) | $ | 3,052 | ||||||||
| Costs and operating expenses | ||||||||||||||||
| Cost of products sold | 6,941 | (517 | ) | (2) | 6,424 | |||||||||||
| Research and development | 8,003 | (190 | ) | (2) | 7,813 | |||||||||||
| Selling, general and administrative | 14,385 | (150 | ) | (2) | 14,235 | |||||||||||
| Goodwill impairment | 12,026 | - | 12,026 | |||||||||||||
| Restructuring | 949 | - | 949 | |||||||||||||
| Change in fair value of contingent consideration | 7 | - | 7 | |||||||||||||
| Total costs and operating expenses | 42,311 | (857 | ) | 41,454 | ||||||||||||
| Loss from operations | (38,630 | ) | 228 | (38,402 | ) | |||||||||||
| Total other expense, net | ||||||||||||||||
| Interest income | 24 | - | 24 | |||||||||||||
| Interest expense | (1,411 | ) | - | (1,411 | ) | |||||||||||
| Total other expense, net | (1,387 | ) | - | (1,387 | ) | |||||||||||
| Loss before income taxes | (40,017 | ) | 228 | (39,789 | ) | |||||||||||
| Income tax benefit | - | - | - | |||||||||||||
| Net loss | $ | (40,017 | ) | $ | 228 | $ | (39,789 | ) | ||||||||
| Net loss per common share, basic and diluted | $ | (1.42 | ) | $ | (1.42 | ) | ||||||||||
| Weighted average shares outstanding, basic and diluted | 28,118,090 | 28,118,090 |
See accompanying notes
to the unaudited pro forma condensed consolidated financial statements.
ACUTUS MEDICAL, INC.
Consolidated Statement of Operations
| Historical Acutus | Transaction Accounting Adjustments | |||||||||||||||
| (a) | (b) | Notes | Pro Forma | |||||||||||||
| (in thousands, except share and per share amounts) | ||||||||||||||||
| Revenue | $ | 17,263 | $ | (1,967 | ) | (2) | $ | 15,296 | ||||||||
| Costs and operating expenses | ||||||||||||||||
| Cost of products sold | 32,925 | (1,845 | ) | (2) | 31,080 | |||||||||||
| Research and development | 36,683 | (890 | ) | (2) | 35,793 | |||||||||||
| Selling, general and administrative | 63,523 | (574 | ) | (2) | 62,949 | |||||||||||
| Gain on sale | - | (43,226 | ) | (2) | (43,226 | ) | ||||||||||
| Change in fair value of contingent consideration | (3,746 | ) | - | (3,746 | ) | |||||||||||
| Total cost and operating expenses | 129,385 | (46,535 | ) | 82,850 | ||||||||||||
| Loss from operations | (112,122 | ) | 44,568 | (67,554 | ) | |||||||||||
| Total other expense, net | ||||||||||||||||
| Interest income | 116 | - | 116 | |||||||||||||
| Interest expense | (5,677 | ) | - | (5,677 | ) | |||||||||||
| Total other expense, net | (5,561 | ) | - | (5,561 | ) | |||||||||||
| Loss before income taxes | (117,683 | ) | 44,568 | (73,115 | ) | |||||||||||
| Income tax benefit | - | - | - | |||||||||||||
| Net loss | $ | (117,683 | ) | $ | 44,568 | $ | (73,115 | ) | ||||||||
| Net loss per common share, basic and diluted | $ | (4.11 | ) | $ | (2.55 | ) | ||||||||||
| Weighted average shares outstanding, basic and diluted | 28,654,313 | 28,654,313 |
See accompanying notes
to the unaudited pro forma condensed consolidated financial statements.
Notes to the Unaudited Pro Forma Condensed
Consolidated Financial Statements
June 30, 2022, Acutus Medical, Inc. ("Acutus" or the "Company") completed the first closing (the "First
Closing") in connection with its previously announced transaction with Medtronic, Inc. (together with its affiliates, "Medtronic"),
in accordance with the Asset Purchase Agreement (the "Agreement") executed on April 26, 2022, and pursuant to which the Company
agreed to sell to Medtronic certain transseptal access and sheath assets. The assets transferred to Medtronic upon the First Closing (the
"Assets") include patents, trademarks, patent and trademark applications, know-how, copyrights, prototypes and other intellectual
property owned or licensed by the Company, business records and documents (including regulatory and clinical materials) and manufacturing
equipment related to the AcQCross line of sheath-compatible septal crossing devices, AcQGuide MINI integrated crossing device
and sheath, AcQGuide FLEX Steerable Introducer with integrated transseptal dilator and needle, and AcQGuide VUE steerable sheaths
(the "Products"). Pursuant to the Agreement, Medtronic paid $50.0 million at the First Closing for, among other things,
intellectual property rights to the Products and certain equipment used in the manufacturing of the Products, of which $4.0 million was
paid into an indemnity escrow account for a period of 18 months following the First Closing. The Company is also eligible to receive the
following contingent cash consideration pursuant to the Agreement:
None of the above milestones
were achieved as of June 30, 2022.
A second closing would occur on a date determined
by Medtronic but no later than the fourth anniversary of the First Closing, subject to the satisfaction of customary closing conditions
(the "Second Closing"). The Agreement provides that the Company may continue to sell the Products to third parties prior to
achievement of the OEM Earnout. Following achievement of the OEM Earnout, the Company would manufacture the Products exclusively for Medtronic
pursuant to a distribution agreement executed between the parties. At the Second Closing, Medtronic would acquire certain additional assets
relating to the Products, primarily supplier agreements and permits and design and specification files required for Medtronic to become
the manufacturer of record of the Products.
forma condensed consolidated financial statements reflect the following: