Delaware
|
|
0-19437
|
|
11-2962080
|
(State or other jurisdiction of incorporation or organization)
|
|
(Commission
File Number)
|
|
(I.R.S. Employer
Identification Number) |
Title of each class
|
|
Trading symbol
|
|
Name of each exchange on which registered
|
Common Stock
$0.001 par value per share |
|
TRXC
|
|
NYSE American
|
|
|
|
|
|
|
|
|
|
|
|
TransEnterix, Inc.
|
||
|
|
|
||||
Date: May 19, 2020
|
|
|
|
/s/ Anthony Fernando
|
||
|
|
|
|
Anthony Fernando
|
||
|
|
|
|
President and CEO
|
•
|
Obtained FDA 510(k) clearance for First Machine Vision System in Robotic Surgery in March 2020
|
•
|
Received CE Mark approval for Pediatric indication for Senhance® Surgical System on February 12, 2020
|
•
|
Raised approximately $15 million in gross proceeds in an underwritten public offering in March of 2020 and $11.6 million in ATM offering gross proceeds since January 2020
|
•
|
Increased the number of procedures performed with Senhance by 43% in the first quarter of 2020 as compared to the first quarter of 2019
|
•
|
Reduced anticipated cash burn during 2020 by approximately 35% as a result of restructuring and cost saving initiatives
|
•
|
Employee safety, including remote working for applicable employees, as well as establishing safe working environments, in accordance with all federal, state, local and foreign directives.
|
•
|
Expense reduction measures, including cash compensation reductions for certain members of the management team; partial furloughs of our commercial, clinical, and service organizations; a reduction in travel and training spending; cancellation of participation in all trade shows in 2020; and, as previously announced, conversion of Board compensation to all equity compensation, and
|
•
|
Adding cash to the balance sheet to fund payroll costs and other approved expenses through the receipt of approximately $2.8 million in the form of a loan under the Paycheck Protection Program.
|
|
|
Three Months Ended
|
|
|||||||
|
|
March 31,
|
|
|||||||
|
|
2020
|
|
|
2019
|
|
||||
Revenue:
|
|
|
|
|
|
|
|
|
||
Product
|
|
$
|
242
|
|
|
|
$
|
1,829
|
|
|
Service
|
|
|
358
|
|
|
|
|
352
|
|
|
Total revenue
|
|
|
600
|
|
|
|
|
2,181
|
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
||
Product
|
|
|
913
|
|
|
|
|
1,273
|
|
|
Service
|
|
|
825
|
|
|
|
|
1,194
|
|
|
Total cost of revenue
|
|
|
1,738
|
|
|
|
|
2,467
|
|
|
Gross loss
|
|
|
(1,138
|
|
)
|
|
|
(286
|
|
)
|
Operating Expenses
|
|
|
|
|
|
|
|
|
||
Research and development
|
|
|
3,934
|
|
|
|
|
5,655
|
|
|
Sales and marketing
|
|
|
4,253
|
|
|
|
|
7,674
|
|
|
General and administrative
|
|
|
3,349
|
|
|
|
|
4,560
|
|
|
Amortization of intangible assets
|
|
|
2,564
|
|
|
|
|
2,611
|
|
|
Change in fair value of contingent consideration
|
|
|
1,056
|
|
|
|
|
998
|
|
|
Restructuring and other charges
|
|
|
858
|
|
|
|
|
—
|
|
|
Acquisition related costs
|
|
|
—
|
|
|
|
|
45
|
|
|
Loss from sale of SurgiBot assets, net
|
|
|
—
|
|
|
|
|
97
|
|
|
Total Operating Expenses
|
|
|
16,014
|
|
|
|
|
21,640
|
|
|
Operating Loss
|
|
|
(17,152
|
|
)
|
|
|
(21,926
|
|
)
|
Other Income (Expense)
|
|
|
|
|
|
|
|
|
||
Change in fair value of warrant liabilities
|
|
|
(155
|
|
)
|
|
|
(106
|
|
)
|
Interest income
|
|
|
27
|
|
|
|
|
318
|
|
|
Interest expense
|
|
|
—
|
|
|
|
|
(1,116
|
|
)
|
Other expense
|
|
|
(15
|
|
)
|
|
|
(305
|
|
)
|
Total Other Income (Expense), net
|
|
|
(143
|
|
)
|
|
|
(1,209
|
|
)
|
Loss before income taxes
|
|
$
|
(17,295
|
|
)
|
|
$
|
(23,135
|
|
)
|
Income tax benefit
|
|
|
697
|
|
|
|
|
610
|
|
|
Net loss
|
|
$
|
(16,598
|
|
)
|
|
$
|
(22,525
|
|
)
|
Deemed dividend related to beneficial conversion feature of preferred stock
|
|
|
(412
|
|
)
|
|
|
—
|
|
|
Net loss attributable to common stockholders
|
|
$
|
(17,010
|
|
)
|
|
$
|
(22,525
|
|
)
|
Other comprehensive loss
|
|
|
|
|
|
|
|
|
||
Net loss
|
|
$
|
(16,598
|
|
)
|
|
$
|
(22,525
|
|
)
|
Foreign currency translation loss
|
|
|
(872
|
|
)
|
|
|
(1,949
|
|
)
|
Comprehensive loss
|
|
$
|
(17,470
|
|
)
|
|
$
|
(24,474
|
|
)
|
Net loss per common share attributable to common stockholders – basic and diluted
|
|
$
|
(0.59
|
|
)
|
|
$
|
(1.35
|
|
)
|
Weighted average number of shares used in computing net loss per common share – basic and diluted
|
|
|
28,906
|
|
|
|
|
16,677
|
|
|
|
|
March 31,
|
|
|
December 31,
|
|
||||
|
|
2020
|
|
|
2019
|
|
||||
|
|
(Unaudited)
|
|
|
|
|
|
|||
Assets
|
|
|
|
|
|
|
|
|
||
Current Assets
|
|
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
21,816
|
|
|
|
$
|
9,598
|
|
|
Accounts receivable, net
|
|
|
951
|
|
|
|
|
620
|
|
|
Inventories
|
|
|
9,829
|
|
|
|
|
10,653
|
|
|
Other current assets
|
|
|
7,341
|
|
|
|
|
7,084
|
|
|
Total Current Assets
|
|
|
39,937
|
|
|
|
|
27,955
|
|
|
Restricted cash
|
|
|
925
|
|
|
|
|
969
|
|
|
Inventories, net of current portion
|
|
|
7,201
|
|
|
|
|
7,594
|
|
|
Property and equipment, net
|
|
|
6,060
|
|
|
|
|
4,706
|
|
|
Intellectual property, net
|
|
|
27,939
|
|
|
|
|
28,596
|
|
|
In-process research and development
|
|
|
—
|
|
|
|
|
2,470
|
|
|
Other long term assets
|
|
|
2,168
|
|
|
|
|
2,489
|
|
|
Total Assets
|
|
$
|
84,230
|
|
|
|
$
|
74,779
|
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
||
Current Liabilities
|
|
|
|
|
|
|
|
|
||
Accounts payable
|
|
$
|
4,047
|
|
|
|
$
|
3,579
|
|
|
Accrued expenses
|
|
|
8,026
|
|
|
|
|
8,553
|
|
|
Deferred revenue – current portion
|
|
|
903
|
|
|
|
|
818
|
|
|
Contingent consideration – current portion
|
|
|
72
|
|
|
|
|
73
|
|
|
Total Current Liabilities
|
|
|
13,048
|
|
|
|
|
13,023
|
|
|
Long Term Liabilities
|
|
|
|
|
|
|
|
|
||
Deferred revenue – less current portion
|
|
|
13
|
|
|
|
|
27
|
|
|
Contingent consideration – less current portion
|
|
|
2,068
|
|
|
|
|
1,011
|
|
|
Warrant liabilities
|
|
|
73
|
|
|
|
|
2,388
|
|
|
Net deferred tax liabilities
|
|
|
649
|
|
|
|
|
1,392
|
|
|
Other long term liabilities
|
|
|
1,217
|
|
|
|
|
1,403
|
|
|
Total Liabilities
|
|
|
17,068
|
|
|
|
|
19,244
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
|
|
|
||
Stockholders’ Equity
|
|
|
|
|
|
|
|
|
||
Common stock $0.001 par value, 750,000,000 shares authorized at
March 31, 2020 and December 31, 2019; 47,078,314 and
20,691,301 shares issued and outstanding at March 31, 2020 and
December 31, 2019, respectively
|
|
|
47
|
|
|
|
|
21
|
|
|
Preferred stock $0.01 par value, 25,000,000 shares authorized, including 7,937,057 and 0 shares of Series A Convertible Preferred Stock at March 31, 2020 and December 31, 2019, and 4,884,117 and 0 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively
|
|
|
49
|
|
|
|
|
—
|
|
|
Additional paid-in capital
|
|
|
749,506
|
|
|
|
|
720,484
|
|
|
Accumulated deficit
|
|
|
(680,198
|
|
)
|
|
|
(663,600
|
|
)
|
Accumulated other comprehensive loss
|
|
|
(2,242
|
|
)
|
|
|
(1,370
|
|
)
|
Total Stockholders’ Equity
|
|
|
67,162
|
|
|
|
|
55,535
|
|
|
Total Liabilities and Stockholders’ Equity
|
|
$
|
84,230
|
|
|
|
$
|
74,779
|
|
|
|
|
Three Months Ended
|
|
|||||||
|
|
March 31,
|
|
|||||||
|
|
2020
|
|
|
2019
|
|
||||
Operating Activities
|
|
|
(Unaudited)
|
|
|
|
|
|
||
Net loss
|
|
$
|
(16,598
|
|
)
|
|
$
|
(22,525
|
|
)
|
Adjustments to reconcile net loss to net cash and cash equivalents used in
operating activities:
|
|
|
|
|
|
|
|
|
||
Loss from sale of SurgiBot assets, net
|
|
|
—
|
|
|
|
|
97
|
|
|
Depreciation
|
|
|
570
|
|
|
|
|
563
|
|
|
Amortization of intangible assets
|
|
|
2,564
|
|
|
|
|
2,611
|
|
|
Amortization of debt discount and debt issuance costs
|
|
|
—
|
|
|
|
|
330
|
|
|
Amortization of short-term investment discount
|
|
|
—
|
|
|
|
|
(220)
|
|
|
Stock-based compensation
|
|
|
1,923
|
|
|
|
|
2,981
|
|
|
Interest expense on deferred consideration – MST acquisition
|
|
|
—
|
|
|
|
|
204
|
|
|
Deferred tax benefit
|
|
|
(697
|
|
)
|
|
|
(610
|
|
)
|
Change in fair value of warrant liabilities
|
|
|
155
|
|
|
|
|
106
|
|
|
Change in fair value of contingent consideration
|
|
|
1,056
|
|
|
|
|
998
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
||
Accounts receivable
|
|
|
(340
|
|
)
|
|
|
(129
|
|
)
|
Inventories
|
|
|
(1,063
|
|
)
|
|
|
(4,621
|
|
)
|
Other current and long term assets
|
|
|
(76
|
|
)
|
|
|
(2,663
|
|
)
|
Accounts payable
|
|
|
509
|
|
|
|
|
286
|
|
|
Accrued expenses
|
|
|
(433
|
|
)
|
|
|
(2,518
|
|
)
|
Deferred revenue
|
|
|
83
|
|
|
|
|
(197
|
|
)
|
Other long term liabilities
|
|
|
(130
|
|
)
|
|
|
1,112
|
|
|
Net cash and cash equivalents used in operating activities
|
|
|
(12,477
|
|
)
|
|
|
(24,195
|
|
)
|
Investing Activities
|
|
|
|
|
|
|
|
|
||
Purchase of short-term investments
|
|
|
—
|
|
|
|
|
(10,894
|
|
)
|
Proceeds from maturities of short-term investments
|
|
|
—
|
|
|
|
|
40,000
|
|
|
Purchase of property and equipment
|
|
|
(2
|
|
)
|
|
|
(118
|
|
)
|
Net cash and cash equivalents (used in) provided by investing activities
|
|
|
(2
|
|
)
|
|
|
28,988
|
|
|
Financing Activities
|
|
|
|
|
|
|
|
|
||
Proceeds from issuance of common stock, preferred stock and warrants under 2020 financing, net of issuance costs
|
|
|
13,525
|
|
|
|
|
—
|
|
|
Proceeds from issuance of common stock and warrants, net of issuance costs
|
|
|
11,212
|
|
|
|
|
—
|
|
|
Taxes paid related to net share settlement of vesting of restricted stock units
|
|
|
(33
|
|
)
|
|
|
(499
|
|
)
|
Proceeds from exercise of stock options and warrants
|
|
|
—
|
|
|
|
|
236
|
|
|
Net cash and cash equivalents provided by (used in) financing activities
|
|
|
24,704
|
|
|
|
|
(263
|
|
)
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
(51
|
|
)
|
|
|
(58
|
|
)
|
Net increase in cash, cash equivalents and restricted cash
|
|
|
12,174
|
|
|
|
|
4,472
|
|
|
Cash, cash equivalents and restricted cash, beginning of period
|
|
|
10,567
|
|
|
|
|
21,651
|
|
|
Cash, cash equivalents and restricted cash, end of period
|
|
$
|
22,741
|
|
|
|
$
|
26,123
|
|
|
Supplemental Disclosure for Cash Flow Information
|
|
|
|
|
|
|
|
|
||
Interest paid
|
|
$
|
—
|
|
|
|
$
|
750
|
|
|
Supplemental Schedule of Non-cash Investing and Financing Activities
|
|
|
|
|
|
|
|
|
||
Transfer of inventories to property and equipment
|
|
$
|
1,958
|
|
|
|
$
|
86
|
|
|
Exchange of common stock for Series B Warrants
|
|
$
|
2,470
|
|
|
|
|
—
|
|
|
Transfer of in-process research and development to intellectual property
|
|
$
|
2,425
|
|
|
|
|
—
|
|
|
Conversion of preferred stock to common stock
|
|
$
|
30
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Measures
|
|
|
||||||||||
Adjusted Net Loss and Net Loss per Share
|
|
|
||||||||||
(in thousands except per share amounts)
|
|
|
||||||||||
(Unaudited)
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|||||
|
|
|
Three Months Ended
|
|
|
|||||||
|
|
|
March 31,
|
|
|
|||||||
|
|
2020
|
|
2019
|
|
|||||||
(Unaudited, U.S. Dollars, in thousands)
|
|
|
|
|
|
|
||||||
Net Loss Attributable to Common Stockholders (GAAP)
|
$
|
(17,010)
|
|
|
$
|
(22,525)
|
|
|
||||
|
|
|
|
|
|
|
|
|||||
Adjustments
|
|
|
|
|
|
|
||||||
|
Loss from sale of SurgiBot assets, net
|
|
—
|
|
|
|
97
|
|
|
|||
|
Amortization of intangible assets
|
|
2,564
|
|
|
|
2,611
|
|
|
|||
|
Change in fair value of contingent consideration
|
|
1,056
|
|
|
|
998
|
|
|
|||
|
Acquisition related costs
|
|
—
|
|
|
|
45
|
|
|
|||
|
Change in fair value of warrant liabilities
|
|
155
|
|
|
|
106
|
|
|
|||
|
Restructuring and other charges
|
|
858
|
|
|
|
—
|
|
|
|||
|
Deemed dividend related to beneficial conversion feature of preferred stock
|
|
412
|
|
|
|
—
|
|
|
|||
Adjusted Net Loss Attributable to Common Stockholders (Non-GAAP)
|
$
|
(11,965)
|
|
|
$
|
(18,668)
|
|
|
||||
|
|
|
|
|
|
|
|
|||||
|
|
|
Three Months Ended
|
|
|
|||||||
|
|
|
March 31,
|
|
|
|||||||
|
2020
|
|
2019
|
|
||||||||
(Unaudited, per basic share)
|
|
|
|
|
||||||||
Net Loss Attributable to Common Stockholders (GAAP)
|
$
|
(0.590)
|
|
|
$
|
(1.350)
|
|
|
||||
|
|
|
|
|
|
|
|
|||||
Adjustments
|
|
|
|
|
|
|
||||||
|
Loss from sale of SurgiBot assets, net
|
|
—
|
|
|
|
0.00
|
|
|
|||
|
Amortization of intangible assets
|
|
0.09
|
|
|
|
0.16
|
|
|
|||
|
Change in fair value of contingent consideration
|
|
0.04
|
|
|
|
0.06
|
|
|
|||
|
Acquisition related costs
|
|
—
|
|
|
|
0.00
|
|
|
|||
|
Change in fair value of warrant liabilities
|
|
0.01
|
|
|
|
0.01
|
|
|
|||
|
Restructuring and other charges
|
|
0.03
|
|
|
|
—
|
|
|
|||
|
Deemed dividend related to beneficial conversion feature of preferred stock
|
|
0.01
|
|
|
|
—
|
|
|
|||
Adjusted Net Loss Attributable to Common Stockholders (Non-GAAP)
|
$
|
(0.410)
|
|
|
$
|
(1.120)
|
|
|
a)
|
Loss from sale of SurgiBot assets relates to additional outside service costs to transfer the assets in connection with the sale of SurgiBot assets to Great Belief International Limited.
|
b)
|
Intangible assets that are amortized consist of developed technology and purchased patent rights recorded at cost and amortized over 5 to 10 years.
|
c)
|
Contingent consideration in connection with the acquisition of the Senhance System in 2015 is recorded as a liability and is the estimate of the fair value of potential milestone payments related to business acquisitions. Contingent consideration is measured at fair value using a discounted cash flow model utilizing significant unobservable inputs including the probability of achieving each of the potential milestones and an estimated discount rate associated with the risks of the expected cash flows attributable to the various milestones. Significant increases or decreases in any of the probabilities of success or changes in expected timelines for achievement of any of these milestones would result in a significantly higher or lower fair value of these milestones, respectively, and commensurate changes to the associated liability. The contingent consideration is revalued at each reporting period and changes in fair value are recognized in the consolidated statements of operations and comprehensive loss.
|
d)
|
Acquisition related costs were incurred in connection with the MST purchase agreement and consist of legal, accounting, and other costs.
|
e)
|
The Company’s Series B Warrants are measured at fair value using a simulation model which takes into account, as of the valuation date, factors including the current exercise price, the expected life of the warrant, the current price of the underlying stock, its expected volatility, holding cost and the risk-free interest rate for the term of the warrant. The warrant liability is revalued at each reporting period or upon exercise and changes in fair value are recognized in the consolidated statements of operations and comprehensive loss.
|
f)
|
During the fourth quarter of 2019, we announced the implementation of a restructuring plan to reduce operating expenses as we continue the global market development of the Senhance platform. During March 2020, the Company continued the restructuring efforts with additional headcount reductions which resulted in $0.9 million related to severance costs.
|
g)
|
During the first quarter of 2020, the Company closed an underwritten public offering under which it issued, as part of units and the exercise of an over-allotment option, 25,367,646 Series C Warrants, each to acquire one share of Common Stock at an exercise price of $0.68 per share, and 25,367,646 Series D Warrants, each to acquire one share of Common Stock at an exercise price of $0.68 per share. The Company concluded that the Series C Warrants and Series D Warrants are considered equity instruments. The fair value of the Series C and Series D Warrants on the issuance date was determined using a Black-Scholes Merton model. The unit proceeds were then allocated to the Series A preferred stock, Series C Warrants, and Series D Warrants, respectively, based on their relative fair values. As a result, the Company determined that a beneficial conversion feature was created by the difference between the effective conversion price of the preferred stock of $0.37 and the fair value of the Company's common stock as of the issuance date of $0.42. The Company therefore recorded a beneficial conversion charge of $0.4 million as an immediate charge to earnings available to common stockholders for the three months ended March 31, 2020.
|