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Table of Contents

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 June 30, 2023

 

OR

 

☐

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 August 7, 2023 was 263,874,871.

 

 

 
Table of Contents

 

 

ASENSUS SURGICAL, INC.

 

TABLE OF CONTENTS FOR FORM 10-Q

 

PART I.

FINANCIAL INFORMATION

  
     

Item 1.

Financial Statements

  
 

Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited)

2
 

Condensed Consolidated Balance Sheets (unaudited)

3
 

Condensed Consolidated Statements of 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

16

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

23

Item 4.

Controls and Procedures

23
     

PART II.

OTHER INFORMATION

24
     

Item 1.

Legal Proceedings

24

Item 1A.

Risk Factors

24

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

24

Item 3.

Defaults Upon Senior Securities

24

Item 4.

Mine Safety Disclosures

24

Item 5.

Other Information

24

Item 6.

Exhibits

25
     
 

SIGNATURES

26

 

i
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

    

Six Months Ended

  
   

June 30,

    

June 30,

  
   

2023

    

2022

    

2023

    

2022

  

Revenue:

                                

Product

   $ 298     $ 254     $ 591     $ 601  

Service

     289       424       484       732  

Lease

     494       316       982       727  

Total revenue

     1,081       994       2,057       2,060  
                                 

Cost of revenue:

                                

Product

     1,612       883       2,837       1,259  

Service

     519       646       1,268       1,141  

Lease

     943       818       1,916       1,770  

Total cost of revenue

     3,074       2,347       6,021       4,170  

Gross loss

     (1,993 )     (1,353 )     (3,964 )     (2,110 )
                                 

Operating expenses:

                                

Research and development

     8,980       7,253       19,119       13,681  

Sales and marketing

     4,449       3,602       9,002       7,321  

General and administrative

     5,124       4,992       10,592       10,525  

Amortization of intangible assets

     114       2,533       226       5,203  

Change in fair value of contingent consideration

     203       (598 )     308       (752 )

Impairment of property and equipment

     -       432       -       432  

Total operating expenses

     18,870       18,214       39,247       36,410  

Operating loss

     (20,863 )     (19,567 )     (43,211 )     (38,520 )
                                 

Interest income

     431       260       870       515  

Interest expense

     -       (141 )     -       (341 )

Other expense, net

     (242 )     (86 )     (460 )     (232 )

Total other income (expense), net

     189       33       410       (58 )

Loss before income taxes

     (20,674 )     (19,534 )     (42,801 )     (38,578 )

Income tax benefit (expense)

     12       (85 )     (79 )     (169 )

Net loss

     (20,662 )     (19,619 )     (42,880 )     (38,747 )
                                 

Net loss per common share attributable to common stockholders - basic and diluted

   $ (0.09 )   $ (0.08 )   $ (0.18 )   $ (0.16 )

Weighted average number of shares used in computing net loss per common share - basic and diluted

     239,570       236,505       238,929       236,201  
                                 

Comprehensive loss:

                                

Net loss

     (20,662 )     (19,619 )     (42,880 )     (38,747 )

Foreign currency translation gain (loss)

     175       (1,713 )     725       (2,363 )

Unrealized gain (loss) on available-for-sale investments

     99       (144 )     406       (696 )

Comprehensive loss

   $ (20,388 )   $ (21,476 )   $ (41,749 )   $ (41,806 )

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

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Asensus Surgical, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except for share data)

(unaudited)

 

  

June 30, 2023

  

December 31, 2022

 

Assets

        

Current Assets:

        

Cash and cash equivalents

 $7,675  $6,329 

Short-term investments, available-for-sale

  32,297   64,195 

Accounts receivable, net

  660   2,256 

Inventory

  9,083   8,284 

Prepaid expenses

  3,149   3,584 

Employee retention tax credit receivable

  554   554 

Other current assets

  1,492   1,671 

Total Current Assets

  54,910   86,873 
         

Restricted cash

  1,354   1,141 

Long-term investments, available-for-sale

  -   3,865 

Inventory, net of current portion

  4,939   5,469 

Property and equipment, net

  8,815   9,542 

Intellectual property, net

  1,411   1,576 

Net deferred tax assets

  155   174 

Operating lease right-of-use assets, net

  4,888   4,950 

Other long-term assets

  1,899   2,463 

Total Assets

 $78,371  $116,053 
         

Liabilities and Stockholders' Equity

        

Current Liabilities:

        

Accounts payable

 $4,281  $3,348 

Accrued employee compensation and benefits

  3,887   4,508 

Accrued expenses and other current liabilities

  1,284   1,293 

Operating lease liabilities - current portion

  819   800 

Deferred revenue

  376   465 

Total Current Liabilities

  10,647   10,414 
         

Long-Term Liabilities:

        

Contingent consideration

  1,564   1,256 

Noncurrent operating lease liabilities

  4,657   4,738 

Total Liabilities

  16,868   16,408 
         

Commitments and Contingencies (Note 14)

          
         

Stockholders' Equity:

        

Common stock $0.001 par value, 750,000,000 shares authorized at June 30, 2023 and December 31, 2022; 239,970,041 and 236,895,440 issued and outstanding at June 30, 2023 and December 31, 2022, respectively

  240   237 

Preferred stock, $0.01 par value, 25,000,000 shares authorized, no shares issued and outstanding at June 30, 2023 and December 31, 2022

  -   - 

Additional paid-in capital

  966,335   962,731 

Accumulated deficit

  (903,815)  (860,935)

Accumulated other comprehensive loss

  (1,257)  (2,388)

Total Stockholders' Equity

  61,503   99,645 

Total Liabilities and Stockholders' Equity

 $78,371  $116,053 

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

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Asensus Surgical, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(in thousands)

(unaudited)

 

   

Common Stock

    

Treasury Stock

                                  
   

Shares

    

Amount

    

Shares

    

Amount

    

Additional Paid-

in Capital

    

Accumulated

Deficit

    

Accumulated

Other Comprehensive Income (Loss)

    

Total

Stockholders' Equity

  

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  

Stock-based compensation

     -       -       -       -       1,978       -       -       1,978  

Issuance of common stock related to vesting of restricted stock units

     273       -       -       -       -       -       -       -  

Issuance of common stock, net of issuance costs

     355       1       -       -       195       -       -       196  

Other comprehensive income

     -       -       -       -       -       -       274       274  

Net loss

     -       -       -       -       -       (20,662 )     -       (20,662 )

Balance, June 30, 2023

     239,970     $ 240       -     $ -     $ 966,335     $ (903,815 )   $ (1,257 )   $ 61,503  
                                                                 

Balance, December 31, 2021

     235,219     $ 235       -     $ -     $ 954,649     $ (785,374 )   $ (264 )   $ 169,246  

Stock-based compensation

     -       -       -       -       2,245       -       -       2,245  

Exercise of stock options

     30       -       -       -       12       -       -       12  

Issuance of common stock related to vesting of restricted stock units

     1,166       1       -       -       -       -       -       1  

Shares withheld related to net share settlement of equity awards

     -       -       436       -       (349 )     -       -       (349 )

Cancellation of treasury stock

     -       -       (436 )     -       -       -       -       -  

Other comprehensive loss

     -       -       -       -       -       -       (1,202 )     (1,202 )

Net loss

     -       -       -       -       -       (19,128 )     -       (19,128 )

Balance, March 31, 2022

     236,415     $ 236       -     $ -     $ 956,557     $ (804,502 )   $ (1,466 )   $ 150,825  

Stock-based compensation

     -       -       -       -       2,083       -       -       2,083  

Exercise of stock options

     13       -       -       -       6       -       -       6  

Issuance of common stock related to vesting of restricted stock units

     192       1       -       -       -       -       -       1  

Other comprehensive loss

     -       -       -       -       -       -       (1,857 )     (1,857 )

Net loss

     -       -       -       -       -       (19,619 )     -       (19,619 )

Balance, June 30, 2022

     236,620     $ 237       -     $ -     $ 958,646     $ (824,121 )   $ (3,323 )   $ 131,439  

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

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Asensus Surgical, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

 

   

Six Months Ended June 30,

  
   

2023

    

2022

  

Operating Activities:

                

Net loss

   $ (42,880 )   $ (38,747 )

Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities:

                

Depreciation

     1,652       1,720  

Amortization of intangible assets

     226       5,203  

Amortization of discounts and premiums on investments, net

     (298 )     444  

Stock-based compensation

     3,894       4,328  

Deferred tax expense

     79       169  

Bad debt expense

     -       9  

Change in inventory reserves

     459       (567 )

Property and equipment impairment

     -       432  

Loss on disposal of property and equipment

     -       97  

Change in fair value of contingent consideration

     308       (752 )
                 

Changes in operating assets and liabilities:

                

Accounts receivable

     1,614       (8 )

Inventory

     (1,240 )     (1,933 )

Operating lease right-of-use assets

     40       409  

Prepaid expenses

     409       189  

Other current and long-term assets

     340       (1,169 )

Accounts payable

     961       524  

Accrued employee compensation and benefits

     (577 )     (284 )

Accrued expenses and other current liabilities

     (55 )     -  

Deferred revenue

     (94 )     (4 )

Operating lease liabilities

     (42 )     (290 )

Net cash and cash equivalents used in operating activities

     (35,204 )     (30,230 )
                 

Investing Activities:

                

Purchase of available-for-sale investments

     (12,268 )     (17,792 )

Proceeds from maturities of available-for-sale investments

     48,735       41,408  

Purchase of property and equipment

     (166 )     (443 )

Net cash and cash equivalents provided by investing activities

     36,301       23,173  
                 

Financing Activities:

                

Proceeds from issuance of common stock, net of issuance costs

     196       -  

Taxes paid related to net share settlement of vesting of restricted stock units

     (490 )     (349 )

Proceeds from exercise of stock options

     5       18  

Net cash and cash equivalents used in financing activities

     (289 )     (331 )
                 

Effect of exchange rate changes on cash and cash equivalents

     751       239  

Net increase (decrease) in cash, cash equivalents and restricted cash

     1,559       (7,149 )

Cash, cash equivalents and restricted cash, beginning of period

     7,470       19,283  

Cash, cash equivalents and restricted cash, end of period

   $ 9,029     $ 12,134  
                 

Supplemental Disclosure for Cash Flow Information

                

Cash paid for leases

   $ 655     $ 549  

Cash paid for taxes

   $ 262     $ 65  
                 

Supplemental Schedule of Non-cash Investing and Financing Activities:

                

Transfer of inventory to property and equipment

   $ 802     $ 724  

Lease liabilities arising from obtaining right-of-use assets

   $ 417     $ -  

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

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Asensus Surgical, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

 

1.

Description of Business

 

Asensus Surgical, Inc. (the "Company") is a medical device company that is digitizing the interface between the surgeon and the patient to pioneer a new era of Performance-Guided Surgery™ by unlocking clinical intelligence for surgeons to enable consistently superior outcomes and a new standard of surgery. Based upon the foundations of digital laparoscopy and the Senhance® Surgical System, the Company is developing the LUNA™ Surgical System, a next generation robotic and instrument system as a foundation of its digital surgery solution. These systems will be powered by the Intelligent Surgical Unit™ (ISU™) to increase surgeon’s control and reduce variability of surgical outcomes. With the addition of machine vision, augmented intelligence, and deep learning capabilities throughout the surgical experience, we intend to holistically address the current clinical, cognitive and economic shortcomings that drive surgical outcomes and value-based healthcare. The Company continues market development for and commercialization of the Senhance System, which digitizes laparoscopic minimally invasive surgery, or MIS. The Senhance System is the first and only digital, multi-port laparoscopic platform designed to maintain laparoscopic MIS standards while providing digital benefits such as haptic feedback, robotic precision, comfortable ergonomics, advanced instrumentation including 3mm microlaparoscopic instruments, 5mm articulating instruments, eye-sensing camera control and fully reusable standard instruments to help maintain per-procedure costs similar to traditional laparoscopy.

 

 

2.

Summary of Significant Accounting Policies

 

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and include the accounts of the Company and its direct and indirect wholly owned subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. The results reported in these unaudited interim condensed consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for any subsequent period or for the entire year. These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Fiscal Year 2022 Form 10-K. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in the accompanying interim condensed consolidated financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, except as otherwise indicated, necessary for a fair statement of its financial position, results of operations, and cash flows of the Company for all periods presented.

 

Going Concern

The Company's condensed consolidated financial statements are prepared using U.S. GAAP applicable to a going concern basis of accounting, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. The Company had an accumulated deficit of $903.8 million and working capital of $44.3 million as of June 30, 2023. The Company has not established sufficient sales revenues to cover its operating costs and requires additional capital to proceed with its operating plan. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable.

 

The Company will need to obtain additional financing to execute its business plan. Management's plan to obtain additional resources for the Company may include additional sales of equity, traditional financing, such as loans, entry into strategic collaborations, entry into an out-licensing arrangement or provision of additional distribution rights in some or all of its markets. However, management cannot provide any assurance that the Company will be successful in accomplishing any or all of its plans. The ability to successfully resolve these factors raise substantial doubt about the Company’s ability to meet its existing obligations, and to continue as a going concern within one year from the date that these financial statements are issued. The condensed consolidated financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

 

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its direct and indirect wholly owned subsidiaries, Asensus Surgical US, Inc., Asensus International, Inc., Asensus Surgical Italia S.r.l., Asensus Surgical Europe S.à r.l., Asensus Surgical Taiwan Ltd., Asensus Surgical Japan K.K., Asensus Surgical Israel Ltd., Asensus Surgical Netherlands B.V., and Asensus Surgical Canada, Inc. All inter-company accounts and transactions have been eliminated in consolidation.

 

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Risk and Uncertainties

The Company is subject to risks similar to other similarly sized companies in the medical device industry. These risks include, without limitation: the historical lack of profitability; the Company’s ability to raise additional capital; its ability to successfully develop, clinically test and commercialize its products and products in development; negative impacts on the Company's operations caused by the COVID-19 pandemic and other geopolitical factors; the success of its market development efforts; the timing and outcome of the regulatory review process for its products; changes in the healthcare regulatory environments of the United States, the European Union, Japan, Taiwan, and other countries in which the Company operates or intends to operate; its ability to attract and retain key management, marketing and scientific personnel; its ability to successfully prepare, file, prosecute, maintain, defend and enforce patent claims and other intellectual property rights; its ability to successfully transition from a research and development company to a marketing, sales and distribution company; competition in the market for robotic surgical devices; and its ability to identify and pursue development of additional products.

 

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include impairment considerations for long-lived assets, fair value estimates related to contingent consideration, stock-based compensation expense, revenue recognition, short-term and long-term investments, excess and obsolete inventory reserves, inventory classification between current and non-current, measurement of lease liabilities and corresponding right-of-use (“ROU”) assets, and deferred tax asset valuation allowances.

 

Significant Accounting Policies

There have been no new or material changes to the significant accounting policies discussed in the Company’s audited financial statements and the notes thereto included in the Fiscal Year 2022 Form 10-K.

 

Impact of Recently Issued Accounting Standards

The Company has evaluated issued ASUs not yet adopted and believes the adoption of these standards will not have a material impact on its consolidated financial statements.

 

 

3.

Revenue Recognition

 

The following table presents revenue disaggregated by type and geography:

 

  

Three Months Ended June 30,

  

Six Months Ended June 30,

 
  

2023

  

2022

  

2023

  

2022

 
  

(in thousands)

  

(in thousands)

 

U.S.

                

Systems

 $-  $-  $-  $- 

Instruments and accessories

  38   18   98   82 

Services

  76   75   151   149 

Leases

  19   51   90   164 

Total U.S. revenue

  133   144   339   395 
                 

Outside of U.S. ("OUS")

                

Systems

  -   -   -   - 

Instruments and accessories

  260   236   493   519 

Services

  213   349   333   583 

Leases

  475   265   892   563 

Total OUS revenue

  948   850   1,718   1,665 
                 

Total

                

Systems

  -   -   -   - 

Instruments and accessories

  298   254   591   601 

Services

  289   424   484   732 

Leases

  494   316   982   727 

Total revenue

 $1,081  $994  $2,057  $2,060 

 

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Remaining Performance Obligations

The transaction price allocated to remaining performance obligations relates to amounts allocated to products and services for which the revenue has not yet been recognized. A significant portion of this amount relates to service obligations performed under the Company's system sales contracts that will be invoiced and recognized as revenue in future periods. The transaction price allocated to remaining performance obligations as of June 30, 2023 was $0.8 million, which is expected to be recognized over one to four years. 

 

Contract Assets and Liabilities

Deferred revenue for the periods presented was primarily related to service obligations, for which the service fees are billed up-front, generally annually. The associated deferred revenue is generally recognized ratably over the service period. The Company did not have any significant impairment losses on its contract assets (included in accounts receivable, net in the consolidated balance sheets) for the periods presented.

 

Revenue recognized for the three months ended June 30, 2023 and 2022 that was included in the deferred revenue balance at the beginning of each reporting period was $0.1 million and $0.3 million, respectively. Revenue recognized for the six months ended June 30, 2023 and 2022 that was included in the deferred revenue balance at the beginning of each reporting period was $0.3 million and $0.5 million, respectively.

 

The following information summarizes the Company’s contract assets and liabilities:

 

  

As of

 
  

June 30, 2023

  

December 31, 2022

 
  (in thousands) 

Contract Assets

 $70  $116 

Deferred Revenue

 $376  $465 

 

Senhance System Leasing

The Company enters into lease arrangements with certain qualified customers. Revenue related to arrangements including lease elements are allocated to lease and non-lease elements based on their relative standalone selling prices. Lease elements generally include a Senhance System, while non-lease elements generally include instruments, accessories, and services. For some lease arrangements, the customers are provided with the right to purchase the leased Senhance System at some point during and/or at the end of the lease term. In some arrangements lease payments are based on the usage of the Senhance System. For the three and six months ended June 30, 2023, and 2022, variable lease revenue related to usage-based arrangements was not material.  

 

Accounts Receivable

Accounts receivable are recorded at net realizable value, which includes an allowance for expected credit losses. The allowance for expected credit losses is based on the Company’s assessment of the collectability of customer accounts. The Company regularly reviews the allowance by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. The allowance for expected credit losses was $1.6 million and $1.6 million as of June 30, 2023 and December 31, 2022, respectively. The Company recorded immaterial amounts for expected credit losses during the three and six months ended June 30, 2023 and 2022.

 

The Company had two customers that accounted for 43% and 13%, respectively, of the Company’s net accounts receivable as of June 30, 2023. The Company had one customer that accounted for 69% of the Company’s net accounts receivable as of December 31, 2022.

 

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4.

Fair Value

 

The following are categories of assets and liabilities measured at fair value on a recurring basis using quoted prices in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3):

 

   

June 30, 2023

  
   

(in thousands)

  
                                 

Description

  

Quoted Prices in

Active Markets for

Identical Assets

(Level 1)

    

Significant Other

Observable Inputs

(Level 2)

    

Significant

Unobservable

Inputs (Level 3)

    

Total

  

Assets measured at fair value

                                

Cash and cash equivalents (1)

   $ 7,675     $ -     $ -     $ 7,675  

Restricted cash

     1,354       -       -       1,354  

Short-term investments

     -       32,297       -       32,297  

Total assets measured at fair value

   $ 9,029     $ 32,297     $ -     $ 41,326  

Liabilities measured at fair value

                                

Contingent consideration

   $ -     $ -     $ 1,564     $ 1,564  

Total liabilities measured at fair value

   $ -     $ -     $ 1,564     $ 1,564  

 

(1) Includes investments that are readily convertible to cash with original maturities of 90 days or less.

 

 

   

December 31, 2022

  
   

(in thousands)

  
                                 

Description

  

Quoted Prices in

Active Markets for

Identical Assets

(Level 1)

    

Significant Other

Observable Inputs

(Level 2)

    

Significant

Unobservable

Inputs (Level 3)

    

Total

  

Assets measured at fair value

                                

Cash and cash equivalents (1)

   $ 6,329     $ -     $ -     $ 6,329  

Restricted cash

     1,141       -       -       1,141  

Short-term investments

     -       64,195       -       64,195  

Long-term investments

     -       3,865       -       3,865  

Total assets measured at fair value

   $ 7,470     $ 68,060     $ -     $ 75,530  

Liabilities measured at fair value

                                

Contingent consideration

   $ -     $ -     $ 1,256     $ 1,256  

Total liabilities measured at fair value

   $ -     $ -     $ 1,256     $ 1,256  

 

(1) Includes investments that are readily convertible to cash with original maturities of 90 days or less.

 

 

The carrying values of accounts receivable, prepaid expenses, employee retention tax credit receivable, other current assets, accounts payable, accrued employee compensation and benefits, accrued expenses and other current liabilities, and deferred revenue as of June 30, 2023, and December 31, 2022, approximate their fair values due to the short-term nature of these items.

 

The Company’s financial liabilities measured at fair value on a recurring basis consisted of contingent consideration payable to Three Heads Investment S.r.l., related to the Company’s 2015 acquisition of the Senhance System from an assignor to Three Heads Investment S.r.l. (the “Senhance Acquisition”). Adjustments associated with the change in fair value of contingent consideration are included in the Company’s condensed consolidated statements of operations and comprehensive loss.

 

The following table presents quantitative information about the inputs and valuation methodologies used for the Company’s fair value measurements for contingent consideration utilizing a Monte-Carlo simulation as of June 30, 2023 and December 31, 2022:

 

 

Valuation

Methodology

 

Significant Unobservable

Input

 

June 30, 2023

  

December 31, 2022

 
            

Contingent consideration

Probability weighted income approach

 

Milestone dates

 

2032

  

2032

 
   

Discount rate

  15.0%   16.5% 
   

Revenue volatility

  45.0%   45.0% 
   

EUR-to-USD exchange rate

  1.09   1.07 

 

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The following table presents the current and long-term portion of the contingent consideration as of June 30, 2023 and summarizes the change in fair value, as determined by Level 3 inputs for the contingent consideration for the six months ended June 30, 2023:

 

   

Fair Value

Measurement at

Reporting Date

(Level 3)

  
   

(in thousands)

  
   

Contingent

consideration

  

Balance at December 31, 2022

   $ 1,256  

Change in fair value

     308  

Balance at June 30, 2023

   $ 1,564  
         

Reported as:

        

Current portion

   $ -  

Long-term portion

     1,564  

Balance at June 30, 2023

   $ 1,564  

 

During the six months ended June 30, 2023, there were no transfers of assets or liabilities between Level 1, Level 2, or Level 3 of fair value categories.

 

 

5.

Investments, available-for-sale

 

The aggregate fair values of investment securities along with cumulative unrealized gains and losses determined on an individual investment security basis and included in accumulated other comprehensive loss in the consolidated balance sheets are as follows:

 

  

June 30, 2023

 
  

(in thousands)

 
                         
  

Amortized

Cost

  

Unrealized

Gain

  

Unrealized

Loss

  

Fair Value

  

Short-term investments

  

Long-term investments

 

Commercial Paper

 $2,986  $-  $(5) $2,981  $2,981  $- 

Corporate Bonds

  16,025   -   (83)  15,942   15,942   - 

U.S. Treasuries

  12,386   -   (5)  12,381   12,381   - 

U.S. Government Agencies

  999   -   (6)  993   993   - 

Total Investments

 $32,396  $-  $(99) $32,297  $32,297  $- 

 

 

  

December 31, 2022

 
  

(in thousands)

 
                         
  

Amortized

Cost

  

Unrealized

Gain

  

Unrealized

Loss

  

Fair Value

  

Short-term investments

  

Long-term investments

 

Commercial Paper

 $12,364  $-  $(49) $12,315  $12,315  $- 

Corporate Bonds

  55,201   -   (447)  54,754   50,889   3,865 

U.S. Government Agencies

  999   -   (8)  991   991   - 

Total Investments

 $68,564  $-  $(504) $68,060  $64,195  $3,865 

 

As of June 30, 2023, contractual maturities of available-for-sale investments were one year or less. Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations. There were no sales of investments or gross realized gains or losses for the three or six months ended June 30, 2023 or 2022.

 

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6.

Inventory

 

The components of inventory are as follows:

 

   

June 30, 2023

  
   

(in thousands)

  
   

Gross

Carrying

Amount

    

Reserve Balance

    

Net

Carrying

Amount

  

Finished goods

   $ 15,899     $ (4,221 )   $ 11,678  

Raw materials

     4,770       (2,426 )     2,344  

Total inventory

   $ 20,669     $ (6,647 )   $ 14,022  
                         

Current Portion

   $ 10,318     $ (1,235 )   $ 9,083  

Long-term portion

     10,351       (5,412 )     4,939  

Total inventory

   $ 20,669     $ (6,647 )   $ 14,022  

 

   

December 31, 2022

  
   

(in thousands)

  
   

Gross

Carrying

Amount

    

Reserve Balance

    

Net

Carrying

Amount

  

Finished goods

   $ 15,337     $ (4,129 )   $ 11,208  

Raw materials

     4,718       (2,173 )     2,545  

Total inventory

   $ 20,055     $ (6,302 )   $ 13,753  
                         

Current Portion

   $ 9,399     $ (1,115 )   $ 8,284  

Long-term portion

     10,656       (5,187 )     5,469  

Total inventory

   $ 20,055     $ (6,302 )   $ 13,753  

 
 

7.

Intellectual Property

 

The components of gross intellectual property, accumulated amortization, and net intellectual property are as follows:

 

  

June 30, 2023

 
  

(in thousands)

 
  

Gross

Carrying

Amount

  

Accumulated

Amortization

  

Foreign

Currency

Translation

Impact

  

Net

Carrying

Amount

 

Developed technology

 $68,838  $(66,732) $(852) $1,254 

Technology and patents purchased

  400   (259)  16   157 

Total intellectual property

 $69,238  $(66,991) $(836) $1,411 

 

  

December 31, 2022

 
  

(in thousands)

 
  

Gross

Carrying

Amount

  

Accumulated

Amortization

  

Foreign

Currency

Translation

Impact

  

Net

Carrying

Amount

 

Developed technology

 $68,838  $(66,562) $(874) $1,402 

Technology and patents purchased

  400   (239)  13   174 

Total intellectual property

 $69,238  $(66,801) $(861) $1,576 

 

The weighted average remaining useful life of the developed technology and technology and patents purchased was 3.7 years and 3.8 years, respectively, as of June 30, 2023. The weighted average remaining useful life of the developed technology and technology and patents purchased was 4.2 years and 4.3 years, respectively as of December 31, 2022.

 

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8.

Leases

 

Lessee Information

Components of operating lease expense recorded in general and administrative expense in the condensed consolidated statements of operations and comprehensive loss were as follows (in thousands):

 

   

Three Months Ended June 30,

   

Six Months Ended March 31,

 
   

2023

    

2022

    

2023

    

2022

  
                                 

Long-term Operating

   $ 479     $ 386     $ 930     $ 785  

 

 

Supplemental balance sheet information related to operating leases was as follows:

 

   

June 30, 2023

    

December 31, 2022

  

Weighted-average remaining lease term (in years)

       6.4           6.8    

Weighted-average discount rate

       8.9%           8.4%    

Incremental borrowing rate

     7.1% - 16.0%       6.1% - 14.5%  

 

Maturities of operating lease obligations as of June 30, 2023 were as follows (in thousands):

 

Fiscal Year

        

Remainder of 2023

   $ 577  

2024

     1,257  

2025

     1,180  

2026

     976  

2027

     896  

2028 and thereafter

     2,200  

Total minimum lease payments

   $ 7,086  

Less: Amount of lease payments representing interest

     (1,610 )

Present value of future minimum lease payments

   $ 5,476  

 
 

9.

Accrued Expenses

 

Accrued expenses and other current liabilities consisted of the following (in thousands):

 

   

June 30, 2023

    

December 31, 2022

  

Income and other taxes payable

   $ 680     $ 839  

Legal and professional fees

     326       275  

Royalties

     118       24  

Consulting services

     160       155  

Total accrued expenses and other current liabilities

   $ 1,284     $ 1,293  

 
 

10.

Income Taxes

 

Income taxes have been accounted for using the asset and liability method in accordance with ASC 740 “Income Taxes”. The Company computes its interim provision for income taxes by applying the estimated annual effective tax rate method. The Company estimates an annual effective tax rate of (0.3)% for the year ending December 31, 2023. This rate does not include the impact of any discrete items. The Company’s effective tax rate for the three months ended June 30, 2023 and 2022 was 0.1% and (0.4)%, respectively. The Company’s effective tax rate for the six months ended June 30, 2023 and 2022 was (0.2)% and (0.4)%, respectively.

 

The Company incurred losses for the three and six months ended June 30, 2023, and is forecasting additional losses through the year, resulting in an estimated net loss for both financial statement and tax purposes for the year ending December 31, 2023. Due to the Company’s history of losses, there is not sufficient evidence to record a net deferred tax asset associated with the U.S., Luxembourg, Swiss, Italian, Taiwanese, and Canadian operations. Accordingly, a full valuation allowance has been recorded related to the net deferred tax assets in those jurisdictions.

 

The total tax expense during the three months ended June 30, 2023 and 2022, was a benefit of approximately $12,000 and an expense of $85,000, respectively. The total tax expense during the six months ended June 30, 2023 and 2022, was approximately $79,000 and $169,000, respectively.

 

At June 30, 2023 the Company had no unrecognized tax benefits that would affect the Company’s effective tax rate.

 

The FASB Staff Q&A, Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income (“GILTI”), states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or to provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. The Company has elected to account for GILTI as a period expense in the year the tax is incurred. The Company does not expect a GILTI inclusion for 2023; no GILTI tax has been recorded for the six months ended June 30, 2023 or 2022, respectively.

 

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11.

Stock-Based Compensation

 

Incentive Compensation Plan Information

 

On June 6, 2023, at the 2023 Annual Meeting of Stockholders, the Company’s stockholders voted to approve an amendment and restatement of the Company’s Incentive Compensation Plan (“the Plan”) to increase the number of shares reserved for issuance under the Plan by 22,000,000 shares. As a result of this amendment, shares authorized for issuance under the Plan increased to 54,072,307 shares.

 

Stock Options

 

The following table summarizes options outstanding as of June 30, 2023, as well as activity, including grants to non-employees, for the six months ended June 30, 2023:

 

  

Number of

Shares

  

Weighted-

Average Exercise

Price

  

Weighted-Average

Remaining

Contractual Term

(Years)

  

Aggregate

Intrinsic Value

(Millions)

 

Outstanding at December 31, 2022

  7,584,967  $4.22   5.31     

Granted

  3,047,615  $0.71         

Exercised

  (13,300) $0.38         

Cancelled

  (16,762) $27.89         

Forfeited

  (106) $15.86         

Outstanding at June 30, 2023

  10,602,414  $3.18   5.34  $0.2 

Vested or expected to vest at June 30, 2023

  10,028,804  $3.32   5.29  $0.2 

Exercisable at June 30, 2023

  5,411,149  $5.31   4.58  $0.2 

 

The fair value of options granted were estimated using the Black-Scholes-Merton option pricing model based on the assumptions in the table below:

 

   

Six Months Ended June 30,

 
   

2023

    

2022

  

Expected volatility

     124% - 130%       128% - 133%  

Risk-free interest rate

     3.53% - 4.14%       1.25% - 2.98%  

Expected life (in years)

     3.8 - 4.5       4.3 - 4.5  

Expected dividend yield

       0%           0%    

Weighted average grant date fair value

   $     0.59     $     0.61  

 

Restricted Stock Units

 

The following table summarizes information about restricted stock units outstanding as of June 30, 2023, as well as activity, including performance restricted stock units, for the six months ended June 30, 2023:

 

   

Number of

Shares

    

Weighted-

Average Grant

Date Fair Value

  

Outstanding at December 31, 2022

     8,483,491     $ 1.04  

Granted

     8,163,060     $ 0.72  

Vested

     (3,355,753 )   $ 1.13  

Forfeited

     (352,110 )   $ 0.82  

Outstanding at June 30, 2023

     12,938,688     $ 0.82  

 

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Performance-Based Restricted Stock Units

 

In 2023 and 2022, the Company granted performance-based restricted stock units. In particular, the number of shares earnable under the 2023 and 2022 awards is based on achieving certain operational targets by December 31, 2023 and October 1, 2023, respectively. These operational targets have been achieved for the awards granted in 2022, therefore the 2022 performance-based restricted stock units are fully earned and remain subject to three-year time-based vesting requirements. The Company has not yet achieved the operational targets required for the awards granted in 2023.

 

Stock-Based Compensation Expense

 

The following table summarizes non-cash stock-based compensation expense by award type for the three and six months ended June 30, 2023 and 2022:

 

   

Three Months Ended June 30,

   

Six Months Ended June 30,

 
   

2023

    

2022

    

2023

    

2022

  
    (in thousands)     (in thousands)  

Stock options

   $ 591     $ 924     $ 1,256     $ 1,901  

Restricted stock units

     977       822       1,836       1,707  

Performance restricted stock units

     410       337       802       720  
    $ 1,978     $ 2,083     $ 3,894     $ 4,328  

 

As of June 30, 2023, the Company had future stock-based compensation expense of approximately $2.5 million related to unvested stock options, which is expected to be recognized over an estimated weighted-average period of approximately 1.9 years. As of June 30, 2023, the unrecognized stock-based compensation expense related to unvested restricted stock units and performance restricted stock units was approximately $6.5 million, which is expected to be recognized over a weighted average period of approximately 1.6 years.

 

 

12.

Equity Offerings

 

2022 ATM Offering

 

On  March 18, 2022, the Company entered into a Controlled Equity Offering Sales Agreement (the “2022 Sales Agreement”) with Cantor Fitzgerald & Co. (“Cantor”) and Oppenheimer & Co. Inc. (“Oppenheimer”), collectively, “the Agents”. The Company commenced an at-the-market offering (the “2022 ATM Offering”) pursuant to which the Company could offer and sell, from time to time, at its option, shares of its common stock for an aggregate offering price of up to $100.0 million. The aggregate compensation payable to the Agents was 3.0% of the aggregate gross proceeds from each sale of the Company’s common stock.

 

The following table presents details about common stock issued pursuant to the 2022 ATM Offering (in thousands, except share and per share amounts):

 

  

For the Three Months

Ended June 30, 2023

  

For the Six Months

Ended June 30, 2023

 

Shares of common stock issued

  355,072   355,072 

Average price per share

 $0.57  $0.57 

Gross proceeds

 $202  $202 

Commission paid to Agents

 $(6) $(6)

Net proceeds

 $196  $196 

 
 

13.

Basic and Diluted Net Loss per Share

 

Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed giving effect to all potential dilutive common shares that were outstanding during the period when the effect is dilutive. Potential dilutive common shares consist of incremental shares issuable upon exercise of stock options, restricted stock units, and warrants. No adjustments have been made to the basic weighted average outstanding common shares figures for the three and six months ended June 30, 2023 or 2022 as the assumed exercise of outstanding options, warrants and restricted stock units would be anti-dilutive.

 

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Potential common shares not included in the computation of diluted net loss per share are as follows:

 

   

June 30,

  
   

2023

    

2022

  

Stock options

     10,602,414       7,112,573  

Stock warrants

     1,021,076       1,120,300  

Nonvested restricted stock units

     12,938,688       7,985,275  

Total

     24,562,178       16,218,148  

 
 

14.

Commitments and Contingencies

 

License and Supply Agreements

The Company has purchase orders with various suppliers for certain tooling, supplies, contract engineering and research services. Commitments related to these agreements and purchase orders are as follows (in thousands):

 

Fiscal Year

        

2023 (remaining six months)

   $ 6,310  

2024

     1,019  

2025

     315  

2026

     303  

Total commitments

   $ 7,947  

 
 

15.

Segments and Geographic Areas

 

The Company operates in one business segment—the research, development, and sale of medical devices to improve minimally invasive surgery. The Company’s chief operating decision maker (determined to be the Chief Executive Officer) does not manage any part of the Company separately, and the allocation of resources and assessment of performance are based on the Company’s consolidated operating results.

 

The following table presents long-lived assets (which include property and equipment and operating lease assets) by geographic area:

 

 

  

June 30, 2023

  

December 31, 2022

 

U.S.

  38%  39%

EMEA

  60%  57%

Asia

  2%  4%

Total

  100%  100%

 

The following table presents revenue by geographic area based on the country in which the customer is based:

 

  

Three Months Ended June 30,

  

Six Months Ended June 30,

 
  

2023

  

2022

  

2023

  

2022

 
                 
                 

US

  12%  15%  16%  19%

EMEA

  67%  63%  62%  56%

Asia

  21%  22%  22%  25%

Total

  100%  100%  100%  100%

 

For the three and six months ended June 30, 2023, no customers accounted for more than 10% of revenue. For the three months ended June 30, 2022, the Company had one customer who accounted for 10% of revenue. For the six months ended June 30, 2022, no customers accounted for more than 10% of revenue.

 

 

16.

Related Party Transactions

 

In March 2018, Asensus Surgical Europe S.à r.l entered into a Service Supply Agreement with 1 Med S.A. for certain regulatory consulting services. Andrea Biffi, a current member of the Company’s Board of Directors, owns a non-controlling interest in 1 Med S.A. Expenses under the Service Supply Agreement were approximately $52,000 and $68,000 for the three months ended June 30, 2023 and 2022, respectively, and $71,000 and $141,000 for the six months ended June 31, 2023 and 2022, respectively.

 

 

17.

Subsequent Events

 

On July 27, 2023, the Company sold, in a registered direct offering, an aggregate of 23,809,524 shares of common stock and accompanying warrants to purchase one share of common stock at a combined purchase price of $0.42 per share. The Company expects to receive aggregate gross proceeds from the offering of $10.0 million, before deducting approximately $0.9 million of placement agent’s fees and estimated offering expenses. The warrants have an exercise price of $0.42 per share, are immediately exercisable and will expire five years following the date of issuance.

 

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FORWARD-LOOKING STATEMENTS

In addition to historical financial information, this Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, that concern matters that involve risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. These forward-looking statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact contained in this report, including statements regarding future events, our future financial performance, our future business strategy and the plans and objectives of management for future operations, are forward-looking statements. We have attempted to identify forward-looking statements by terminology including “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “in the event that,” “may,” “plans,” “potential,” “predicts,” “should” or “will” or the negative of these terms or other comparable terminology. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements, including our ability to grow utilization of our Senhance Systems and our ability to advance development of our next-generation products and our collaborations with third parties. Readers are urged to carefully review and consider the various disclosures made by us, which attempt to advise interested parties of the risks, uncertainties, and other factors that affect our business, operating results, financial condition and stock price, including, without limitation, the disclosures made under the captions “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Financial Statements,” “Notes to Condensed Consolidated Financial Statements “and “Risk Factors” in this report, as well as the disclosures made in the Asensus Surgical, Inc. Annual Report on Form 10-K for the year ended December 31, 2022 (the “Fiscal Year 2022 Form 10-K”), and other filings we make with the Securities and Exchange Commission (the “SEC”). Furthermore, such forward-looking statements speak only as of the date of this report. We expressly disclaim any intent or obligation to update any forward-looking statements after the date hereof to conform such statements to actual results or to changes in our opinions or expectations except as required by applicable law. References in this report to “we,” “our,” “us,” or the “Company” refer to Asensus Surgical, Inc., including its subsidiaries Asensus Surgical US, Inc., Asensus International, Inc., Asensus Surgical Italia S.r.l., Asensus Surgical Europe S.àr.l., Asensus Surgical Taiwan Ltd., Asensus Surgical Japan K.K., Asensus Surgical Israel Ltd., Asensus Surgical Netherlands B.V., and Asensus Surgical Canada, Inc.

 

Any disclosure in this report regarding the receipt of CE Mark or Section 510(k) clearance for any of the Company’s products does not mean or infer any endorsement of the Company’s products by any government agency including, without limitation, the U.S. Food and Drug Administration, or FDA.

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

The following discussion of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the related notes to our condensed consolidated financial statements included in this report. The following discussion contains forward-looking statements. See cautionary note regarding “Forward-Looking Statements” above.

 

Overview

 

We are a medical device company that is digitizing the interface between the surgeon and patient to pioneer a new era of what we call “Performance-Guided Surgery™” by unlocking clinical intelligence for surgeons to enable consistently superior outcomes and a new standard of surgery. Based upon the foundations of digital laparoscopy and the Senhance® Surgical System, the Company is developing the LUNA™ Surgical System, a next generation robotic and instrument system as a foundation of its digital surgery solution. These systems will be powered by the Intelligent Surgical Unit™ (ISU™) to increase surgeon control and reduce surgical variability. With the addition of machine vision, augmented intelligence, and deep learning capabilities throughout the surgical experience, we intend to holistically address the current clinical, cognitive and economic shortcomings that drive surgical outcomes and value-based healthcare.

 

Our strategy is to focus on the realization of Performance-Guided Surgery through the continued collection of surgical data via the ISU and Asensus Cloud leveraging the Senhance System and by other means of non-robotic laparoscopic surgery, while completing the design and development of the LUNA System and its capabilities.

 

We continue market development for and commercialization of the Senhance System, which digitizes laparoscopic minimally invasive surgery, or MIS. The Senhance System is the first and only digital, multi-port laparoscopic platform designed to maintain laparoscopic MIS standards while providing digital benefits such as haptic feedback, robotic precision, comfortable ergonomics, advanced instrumentation including 3mm microlaparoscopic instruments, 5mm articulating instruments, eye-sensing camera control and fully-reusable standard instruments to help maintain per-procedure costs similar to traditional laparoscopy.

 

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The Senhance System is available for sale in Europe, the United States, Japan, Taiwan, Russia (to the extent lawful), and select other countries.

 

 

•

The Senhance System has a CE Mark in Europe for adult and pediatric laparoscopic abdominal and pelvic surgery, as well as limited thoracic surgeries excluding cardiac and vascular surgery.

 

 

•

In the United States, the Company has received 510(k) clearance from the FDA for use of the Senhance System in general laparoscopic surgical procedures and laparoscopic gynecologic surgery in a total of 31 indicated procedures, including benign and oncologic procedures, laparoscopic inguinal, hiatal and paraesophageal hernia, sleeve gastrectomy and laparoscopic cholecystectomy surgery.

 

 

•

In Japan, the Company has received regulatory approval and reimbursement for 124 laparoscopic procedures.

 

 

•

The Senhance System received its registration certificate by the Russian medical device regulatory agency, Roszdravnadzor, in December 2020, allowing for its sale and utilization throughout the Russian Federation.

 

We also enter into lease arrangements with certain qualified customers. For some lease arrangements, the customers are provided with the right to purchase the leased Senhance System during or at the end of the lease term ("Lease Buyout").

 

We received FDA clearance in March 2020 for our ISU. We believe it is the only FDA cleared device for machine vision technology in abdominal robotic surgery. On September 23, 2020, we announced the first surgical procedures successfully completed using the ISU. In January 2021, we received CE Mark for the ISU. In 2022, we received FDA clearance for advanced features of the ISU, and received CE Mark for such enhancements in January 2023.

 

In February 2020, we received CE Mark for the Senhance System and related instruments for pediatric use indications in CE Mark territories. We received FDA clearance in March 2023 for the pediatric indication for the Senhance System. The expanded indication allows accessibility to more surgeons and patients, as well as expanding our potential market to include pediatric hospitals. We anticipate the robotic precision provided by the Senhance System, coupled with the already available 3mm instruments and haptic feedback will prove to be an effective tool in surgery with smaller patients.

 

In 2020, we obtained regulatory clearance for the Senhance ultrasonic system in both Taiwan and Japan. We also received clearance for the ISU in Japan.

 

On July 28, 2021, the Company announced that it received FDA clearance for 5mm diameter articulating instruments, offering better access to difficult-to-reach areas of the anatomy by providing two additional degrees of freedom. These instruments have previously received CE Mark for use in the EU.

 

On February 21, 2023, we held an investor day to describe our focus on developing a next generation robotic system we call the LUNA Surgical System and the ongoing developments in our Performance-Guided Surgery platform. Performance-Guided Surgery is comprised of three strategic pillars:

 

 

●

enhanced robotic precision and manipulation capabilities, via the Senhance System today and, when developed and approved, the LUNA System;
 

●

expanded intra-operative augmented intelligence clinical decision support guidance for the surgeon via the ISU; and
 

●

integration of cloud and big data to harness best practices across pre-, intra- and post-operative settings, and make it available to surgeons around the world via the Asensus Cloud.

 

The Company believes that future outcomes of minimally invasive laparoscopic surgery will be enhanced through its combination of more advanced tools and robotic functionality, which are designed to: (i) empower surgeons with improved precision, dexterity and visualization; (ii) improve patient satisfaction and enable a desirable post-operative recovery; and (iii) provide a cost-effective robotic system, as compared to existing alternatives today, for a wide range of clinical indications.

 

From our inception, we devoted a substantial percentage of our resources to research and development and start-up activities, consisting primarily of product design and development, clinical studies, manufacturing, recruiting qualified personnel and raising capital.  We are a data driven company that expects to continue to invest in research and development, market development, and generation and analysis of clinical evidence as we implement our strategy. As a result, we will need to generate significant revenue in order to achieve profitability. We expect to continue to invest in research and development and market development as we implement our strategy.

 

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Since inception, we have incurred substantial losses from operations and had negative cash flows from operating activities. As of June 30, 2023, we had an accumulated deficit of $903.8 million, and there is substantial doubt about our ability to continue as a going concern. We operate in one business segment.

 

Recent Financing Transactions

 

At-the -Market Offering

 

On March 18, 2022, the Company entered a Controlled Equity Offering Sales Agreement (the “2022 Sales Agreement”), with Cantor Fitzgerald & Co., and Oppenheimer & Co. Inc, collectively, “the Agents”.  The Company commenced an at-the-market offering (the “2022 ATM Offering”) pursuant to which the Company could offer and sell, from time to time, at its option, shares of its common stock for an aggregate offering price of up to $100.0 million. During the three and six months ended June 30, 2023, the Company sold 355,072 shares of common stock for an aggregate net proceeds of $0.2 million.

 

Registered Direct Offering

 

On July 27, 2023, the Company sold, in a registered direct offering, an aggregate of 23,809,524 shares of common stock and accompanying warrants to purchase one share of common stock at a combined purchase price of $0.42 per share. The Company expects to receive aggregate gross proceeds from the offering of $10.0 million before deducting approximately $0.9 million of placement agent’s fees and estimated offering expenses. The warrants have an exercise price of $0.42 per share, are immediately exercisable and will expire five years following the date of issuance.

 

Results of Operations - Comparison of Three Months Ended June 30, 2023 and 2022

 

Revenue

Both in the second quarter of 2023 and 2022, our revenue consisted of ongoing Senhance Systems’ leasing payments, sales of instruments and accessories, and services revenue for Senhance Systems sold in Europe, Asia, and the U.S. in prior periods.

 

Product revenue for the three months ended June 30, 2023 and 2022 remained constant at approximately $0.3 million.

 

Service revenue for the three months ended June 30, 2023 decreased to $0.3 million compared to $0.4 million for the three months ended June 30, 2022.

 

Lease revenue for the three months ended June 30, 2023 increased to $0.5 million compared to $0.3 million for the three months ended June 30, 2022. The $0.2 million increase primarily relates to an increase in the number of lease placements.

 

Cost of Revenue

Cost of revenue consists of contract manufacturing, materials, labor, and manufacturing overhead incurred internally to produce the products. Shipping and handling costs incurred by the Company are included in cost of revenue. We expense all inventory excess and obsolescence provisions as cost of revenue. The manufacturing overhead costs include the cost of quality assurance, material procurement, inventory control, facilities, equipment depreciation and operations supervision and management.

 

Product cost for the three months ended June 30, 2023 increased to $1.6 million as compared to $0.9 million for the three months ended June 30, 2022. The $0.7 million increase primarily consists of (i) $0.3 million increase in inventory costs as a result of inventory write-downs, (ii) $0.2 million increase in employee compensation costs due to current and new business initiatives, and (iii) $0.2 million increase in expensed manufacturing overhead costs due to lower than normal production level during the period.

 

Service cost for the three months ended June 30, 2023 decreased to $0.5 million as compared to $0.6 million for the three months ended June 30, 2022. The $0.1 million decrease relates to a decrease in materials costs. Cost of revenue exceeds revenue primarily due to part replacements under maintenance plans, which are expensed when incurred, along with salaries for the field service teams.

 

Lease cost for the three months ended June 30, 2023 increased to $0.9 million as compared to $0.8 million for the three months ended June 30, 2022. The $0.1 million increase primarily relates to an increase in the number of lease placements.

 

Research and Development

Research and development, or R&D, expenses primarily consist of engineering, product development and regulatory expenses incurred in the design, development, testing and enhancement of our products and legal services associated with our efforts to obtain and maintain broad protection for the intellectual property related to our products. In future periods, we expect R&D expenses to continue to substantially increase as we invest in the LUNA System and our digital laparoscopy platform. R&D expenses are expensed as incurred.

 

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R&D expenses for the three months ended June 30, 2023 increased 23% to $9.0 million as compared to $7.3 million for the three months ended June 30, 2022 as we continue to invest in basic research, clinical evaluations, and product development in the areas of robotics and digital technologies supporting the LUNA System, the ISU and our digital laparoscopy platform. All activities are in the effort of building the future for Performance-Guided Surgery. The $1.7 million increase primarily relates to increased expenses related to contract engineering services, consulting, and other outside services of $0.8 million. The change was also driven by increased personnel costs of $0.5 million, primarily as a result of additional headcount, and increased supplies costs of $0.4 million.

 

Sales and Marketing

Sales and marketing expenses include costs for sales and marketing and clinical support personnel, travel, demonstration product, market development, physician training, tradeshows, marketing clinical evaluations and consulting expenses.

 

Sales and marketing expenses for the three months ended June 30, 2023 increased 22% to $4.4 million compared to $3.6 million for the three months ended June 30, 2022. The $0.8 million increase was primarily related to increased employee-related costs of $0.7 million due to an increase in headcount, and increased travel costs of $0.1 million.

 

General and Administrative

General and administrative expenses consist of personnel costs related to the executive, finance, legal, IT and human resource functions, as well as professional service fees, legal fees, accounting fees, insurance costs, and general corporate expenses.

 

General and administrative expenses for the three months ended June 30, 2023 and 2022 remained relatively constant at approximately $5.1 million and $5.0 million, respectively.

 

Amortization of Intangible Assets

Amortization of intangible assets for the three months ended June 30, 2023 decreased to $0.1 million compared to $2.5 million for the three months ended June 30, 2022. The $2.4 million decrease is primarily related to the reduction in the amortizable intangible assets base as two developed technologies intangible assets were fully amortized during the year ended December 31, 2022.

 

Change in Fair Value of Contingent Consideration

The change in fair value of contingent consideration in connection with the Senhance Acquisition was a $0.2 million increase for the three months ended June 30, 2023 compared to a $0.6 million decrease for the three months ended June 30, 2022. The increase was primarily due to changes in market assumptions and the discount rate utilized.

 

Impairment of Property and Equipment

During the three months ended June 30, 2022, the Company recorded an impairment charge of $0.4 million to reduce the carrying value of property and equipment to its estimated fair value. The property and equipment is associated with operating leases that did not elect to renew their agreements. No impairment charge was recognized for the six months ended June 30, 2023.

 

Other Income (Expense), net

Other income for the three months ended June 30, 2023 increased to $0.2 million income compared to approximately $33,000 income for the three months ended June 30, 2022. The change primarily related to changes in interest expense, and amortization and accretion income related to investments.

 

Income Tax Expense

The Company recorded $12,000 income tax benefit for the three months ended June 30, 2023, compared to $85,000 income tax expense for the three months ended June 30, 2022. Income tax expense consisted primarily of current income taxes related to profitable foreign jurisdictions in Japan, Israel, and the Netherlands.

 

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Results of Operations – Comparison of Six Months Ended June 30, 2023 and 2022

 

Revenue

In the six months ended June 30, 2023 and 2022, our revenue consisted of ongoing Senhance Systems’ leasing payments, sales of instruments and accessories, and services revenue for Senhance Systems sold in Europe, Asia, and the U.S. in prior periods.

 

Product revenue for the six months ended June 30, 2023 and 2022 remained constant at approximately $0.6 million.

 

Service revenue for the six months ended June 30, 2023 decreased to $0.5 million compared to $0.7 million for the six months ended June 30, 2022. The $0.2 million decrease was due to a decrease in the number of Senhance Systems under service contracts.

 

Lease revenue for the six months ended June 30, 2023 increased to $1.0 compared to $0.7 million for the six months ended June 30, 2022. The $0.3 million increase was the result of additional lease placements in the second six months of 2022.

 

Cost of Revenue

Cost of revenue consists of contract manufacturing, materials, labor, and manufacturing overhead incurred internally to produce the products. Shipping and handling costs incurred by the Company are included in cost of revenue. We expense all inventory excess and obsolescence provisions as cost of revenue. The manufacturing overhead costs include the cost of quality assurance, material procurement, inventory control, facilities, equipment depreciation and operations supervision and management.

 

Product cost for the six months ended June 30, 2023 increased to $2.8 million as compared to $1.3 million for the six months ended June 30, 2022. The $1.5 million increase primarily consists of (i) $0.7 million increase in inventory costs as a result of inventory write-downs, (ii) $0.4 million increase in employee compensation costs due to current and new business initiatives, and (iii) $0.4 million increase in expensed manufacturing overhead costs due to lower than normal production level during the period.

 

Service cost for the six months ended June 30, 2023 increased to $1.3 million as compared to $1.1 million for the six months ended June 30, 2022. The $0.2 million increase primarily relates to an increase in material costs. Cost of revenue exceeds revenue primarily due to part replacements under maintenance plans, which are expensed when incurred, along with salaries for the field service teams.

 

Lease cost for the six months ended June 30, 2023 and 2022 increased to $1.9 million as compared to $1.8 million for the six months ended June 30, 2022. The $0.1 million increase primarily relates to an increase in the number of lease placements.

 

Research and Development

R&D expenses primarily consist of engineering, product development and regulatory expenses incurred in the design, development, testing and enhancement of our products and legal services associated with our efforts to obtain and maintain broad protection for the intellectual property related to our products. In future periods, we expect R&D expenses to continue to substantially increase as we invest in the LUNA System and our digital laparoscopy platform. R&D expenses are expensed as incurred.

 

R&D expenses for the six months ended June 30, 2023 increased 39% to $19.1 million as compared to $13.7 million for the six months ended June 30, 2022 as we continue to invest in basic research, clinical evaluations, and product development in the areas of robotics and digital technologies supporting the LUNA System and our digital laparoscopy platform. All activities are in the effort of building the future for Performance-Guided Surgery. The $5.4 million increase primarily relates to increased contract engineering services, consulting, and other outside services of $3.3 million. The change was also driven by increased personnel costs of $1.1 million, driven by additional headcount, and increased supplies costs of $1.0 million.

 

Sales and Marketing

Sales and marketing expenses include costs for sales, marketing and clinical personnel, travel, demonstration product, market development, physician training, tradeshows, marketing clinical studies and consulting expenses.

 

Sales and marketing expenses for the six months ended June 30, 2023 increased 23% to $9.0 million compared to $7.3 million for the six months ended June 30, 2022. The $1.7 million increase was primarily related to increased employee-related costs of $1.4 million due to an increase in headcount, increased travel costs of $0.2 million, and increased supplies expenses of $0.1 million.

 

General and Administrative

General and administrative expenses consist of personnel costs related to the executive, finance, legal, IT and human resource functions, as well as professional service fees, legal fees, accounting fees, insurance costs, and general corporate expenses.

 

General and administrative expenses for the six months ended June 30, 2023 increased slightly to $10.6 million compared to $10.5 million for the six months ended June 30, 2022.

 

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Amortization of Intangible Assets

Amortization of intangible assets for the six months ended June 30, 2023 decreased to $0.2 million compared to $5.2 million for the six months ended June 30, 2022. The $5.0 million decrease is primarily related to two developed technologies intangible assets that fully amortized during the year ended December 31, 2022.

 

Change in Fair Value of Contingent Consideration

The change in fair value of contingent consideration in connection with the Senhance Acquisition was a $0.3 million increase for the six months ended June 30, 2023 compared to a $0.8 million decrease for the six months ended June 30, 2022. The increase was primarily due to changes in market assumptions and the discount rate utilized.

 

Impairment of Property and Equipment

During the six months ended June 30, 2022, the Company recorded an impairment charge of $0.4 million to reduce the carrying value of property and equipment to its estimated fair value. The property and equipment is associated with operating leases that did not elect to renew their agreements. No impairment charge was recognized for the six months ended June 30, 2023.

 

Other Income (Expense), net

Other income for the six months ended June 30, 2023 increased by $0.5 million to $0.4 million income compared to $0.1 million expense for the six months ended June 30, 2022. The change was primarily related to changes in interest expense and amortization and accretion income on investments.

 

Income Tax Expense

The Company recognized $0.1 million income tax expense for the six months ended June 30, 2023, compared to $0.2 million income tax expense for the six months ended June 30, 2022. Income tax expense consisted primarily of current income taxes related to profitable foreign jurisdictions in Japan, Israel, and the Netherlands.

 

Liquidity and Capital Resources

 

Going Concern

The Company’s consolidated financial statements are prepared using U.S. GAAP applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company had an accumulated deficit of $903.8 million and working capital of $44.3 million as of June 30, 2023. The Company has not established sufficient revenues to cover its operating costs and will require additional capital to continue as a going concern. As of June 30, 2023, the Company had cash, cash equivalents, and short-term investments, excluding restricted cash, of approximately $40.0 million. We believe that our existing cash, cash equivalents, and short-term investments, together with cash received from product, service, and lease sales will be sufficient to meet our anticipated cash needs through late second quarter of 2024. 

 

The Company will need to obtain additional financing to proceed with its business plan. Management's plan to obtain additional resources for the Company may include additional sales of equity, traditional financing, such as loans, entry into a strategic collaboration, entry into an out-licensing arrangement or provision of additional distribution rights in some or all of our markets. The Company is also seeking to reduce its costs while maintaining the implementation of its strategic plan. However, management cannot provide any assurance that the Company will be successful in accomplishing any or all of its plans. If sufficient funds are not received on a timely basis, the Company would then need to reduce costs further and/or pursue a plan to license or sell its assets, seek to be acquired by another entity, cease operations and/or seek bankruptcy protection. The ability to successfully resolve these factors raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date that these financial statements are issued. The consolidated financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

 

The Company is subject to risks similar to other similarly sized companies in the medical device industry. These risks include, without limitation: the historical lack of profitability; the Company’s ability to grow its placements and increase utilization of the Senhance System by customers, the Company’s ability to raise additional capital; its ability to successfully develop, clinically test and commercialize its products and products in development; negative impacts on the Company's operations caused by the COVID-19 pandemic and other geopolitical factors; the success of its market development efforts; the timing and outcome of the regulatory review process for its products; changes in the healthcare regulatory environments of the United States, the European Union, Japan, Taiwan and other countries in which the Company operates or intends to operate; its ability to attract and retain key management, marketing and scientific personnel; its ability to successfully prepare, file, prosecute, maintain, defend and enforce patent claims and other intellectual property rights; its ability to successfully transition from a research and development company to a marketing, sales and distribution concern; competition in the market for robotic and digital surgical devices; and its ability to identify and pursue development of additional products.

 

Sources of Liquidity

Our principal sources of liquidity to date have been cash proceeds from issuance of common stock pursuant to public offerings, incurrence of debt and proceeds from sales and maturities of investments.

 

Our cash flows for the six months ended June 30, 2023 and 2022 were are follows:

 

   

Six Months Ended June 30,

  

(Unaudited, in millions)

  

2023

    

2022

  

Net cash (used in) provided by

                

Operating activities

   $ (35.2 )   $ (30.2 )

Investing activities

     36.3       23.2  

Financing activities

     (0.3 )     (0.3 )

Effect of exchange rate changes on cash and cash equivalents

     0.8       0.2  

Net increase in cash, cash equivalents and restricted cash

   $ 1.6     $ (7.1 )

 

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Operating Activities

For the six months ended June 30, 2023, cash used in operating activities of $35.2 million consisted of a net loss of $42.9 million, changes in operating assets and liabilities of $1.4 million, and non-cash items of $6.3 million. The non-cash items primarily consisted of $3.9 million of stock-based compensation expense, $1.9 million of depreciation and amortization expense, $0.3 million of change in fair value of contingent consideration, and $0.5 million change in inventory reserve, partially offset by $0.3 million in amortization of discounts and premiums on investments. The increase in cash from changes in operating assets and liabilities primarily relates to a $1.0 million increase in accounts payable, a $1.6 million decrease in accounts receivable, a $0.4 million decrease in prepaid expenses and a $0.3 million decrease in other current and long-term assets, , partially offset by a $0.6 million decrease in accrued employee compensation and benefits and a $1.2 million increase in inventory.

 

For the six months ended June 30, 2022, cash used in operating activities of $30.2 million consisted of a net loss of $38.7 million, changes in operating assets and liabilities of $2.6 million, offset by non-cash items of $11.1 million. The non-cash items primarily consisted of $5.2 million of amortization of intangible assets, $4.3 million of stock-based compensation expense, $1.7 million of depreciation, $0.4 million of net amortization of discounts and premiums on investments, $0.4 million in impairment of property and equipment, $0.2 million deferred tax expense, offset by $0.6 million change in inventory reserves and $0.8 million of change in fair value of contingent consideration. The decrease in cash from changes in operating assets and liabilities primarily relates to a $1.9 million increase in inventory net of transfers to property and equipment, $1.2 million increase in other current and long-term assets, $0.3 million decrease in accrued expenses, $0.3 million decrease in operating lease liabilities, offset by a $0.5 million increase in accounts payable, $0.4 million decrease in operating lease right-of-use assets, and a $0.2 million decrease in prepaid expenses.

 

Investing Activities

For the six months ended June 30, 2023, net cash provided by investing activities was $36.3 million. This amount consists of $48.7 million of proceeds from maturities of available-for-sale investments, offset by $12.3 million of purchases of available-for-sale investments and $0.2 million purchases of property and equipment.

 

For the six months ended June 30, 2022, net cash provided by investing activities was $23.2 million. This amount consists of $41.4 million of proceeds from maturities of available-for-sale investments, offset by $17.8 million of purchases of available-for-sale investments and $0.4 million purchases of property and equipment.

 

Financing Activities

For the six months ended June 30, 2023, net cash used in financing activities was $0.3 million, primarily related to taxes paid for the net share settlement of vesting of restricted stock units, partially offset by proceeds from issuance of common stock of $0.2 million.

 

For the six months ended June 30, 2022, net cash used in financing activities was $0.3 million, related to taxes paid for the net share settlement of vesting of restricted stock units.

 

Operating Capital and Capital Expenditure Requirements

 

We intend to spend substantial amounts on research and development activities, including product development, regulatory and compliance, and clinical studies in support of the development of the LUNA System and our digital solutions platform. We intend to use financing opportunities strategically to continue to strengthen our financial position.

 

Cash and cash equivalents held by our foreign subsidiaries totaled $3.1 million as of June 30, 2023, including restricted cash. We do not intend or currently foresee a need to repatriate cash and cash equivalents held by our foreign subsidiaries. If these funds are needed in the United States, we believe that the potential U.S. tax impact to repatriate these funds would be immaterial.

 

Critical Accounting Estimates

 

The discussion and analysis of our financial condition and results of operations set forth above under the headings “Results of Operations” and “Liquidity and Capital Resources” have been prepared in accordance with U.S. GAAP and should be read in conjunction with our consolidated financial statements and notes thereto appearing in this Form 10-Q and in the Fiscal Year 2022 Form 10-K. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our critical accounting estimates, including identifiable intangible assets, contingent consideration, stock-based compensation, inventory, revenue recognition and income taxes. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. A more detailed discussion on the application of these and other accounting policies can be found in Note 2 in the Notes to the condensed consolidated Financial Statements in this Form 10-Q. Actual results may differ from these estimates under different assumptions and conditions. There have been no new or material changes to the critical accounting estimates discussed in our Fiscal Year 2022 Form 10-K, that are of significance, or potential significance, to us.

 

While all accounting policies impact the consolidated financial statements, certain policies may be viewed as critical. Critical accounting estimates are those that are both most important to the portrayal of financial condition and results of operations and that require management’s most subjective or complex judgments and estimates. Our management believes the policies that fall within this category are the estimates on accounting for identifiable intangible assets, contingent consideration, stock-based compensation, inventory, revenue recognition and income taxes.

 

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Item 3.

Quantitative and Qualitative Disclosures about Market Risk

 

We are exposed to changes in foreign currency exchange rates. Operations outside of the United States accounted for 84% and 81% of revenue for the six months ended June 30, 2023 and 2022, respectively, and are concentrated principally in Europe. We translate the revenue and expenses of our foreign operations using average exchange rates prevailing during the period. The effect of a 10% change in the average foreign currency exchange rates among the U.S. dollar versus the Euro for the six months ended June 30, 2023, would result in revenue changing by $0.2 million. This change would not be material to our cash flows and our results of operations.

 

Item 4.

Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2023. We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding required disclosure. Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on such evaluation, our Chief Executive Officer and Executive Vice President and Chief Financial Officer concluded that, as of June 30, 2023, our disclosure controls and procedures were not effective due to the material weakness in internal control over financial reporting, described below.

 

Changes in Internal Controls Over Financial Reporting

 

Other than the remediation efforts described below, there were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

Material Weakness in Internal Control over Financial Reporting

 

During the year ended December 31, 2022, management identified a deficiency constituting a material weakness related to the design and implementation of information technology general controls (“ITGCs”) related to the implementation of our new global enterprise resource planning system (“ERP”) utilized in the preparation of our consolidated financial statements. Specifically, we did not design and maintain user access controls to adequately restrict user and privileged access to the financial application and data to appropriate Company personnel.

 

The material weakness identified above did not result in any identified misstatements to our consolidated interim financial statements, and our management has concluded that the consolidated financial statements present fairly, in all material respects, our financial position, results of operations, and cash flows in conformity with U.S. GAAP.

 

Remediation Efforts

 

We have commenced measures to remediate the identified material weakness. Management has been and will continue designing and implementing an improved process for requesting, authorizing, and reviewing user access to key systems which impact our financial reporting, including identifying access to roles where manual business process controls may be required. This implementation will include the addition of detection controls which will include the review of user access and activity logs related to systems that were accessed. We will also enhance the training of our personnel regarding their roles and responsibilities within the information technology general controls objectives and activities. The material weakness will not be considered remediated until management designs and implements effective controls that operate for a sufficient period of time for management to conclude, through testing, that the controls are operating effectively. The material weakness is not considered remediated as of June 30, 2023 as remediation efforts are ongoing.

 

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PART II. OTHER INFORMATION

 

Item 1

Legal Proceedings.

 

None.

 

Item 1A

Risk Factors.

 

Reference is made to the Risk Factors included in our Fiscal Year 2022 Form 10-K. There have been no material changes to our risk factors from those disclosed under “Risk Factors” in Part I, Item 1A of our Fiscal Year 2022 Form 10-K.

 

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds.

 

None.

 

Item 3

Defaults Upon Senior Securities.

 

None.

 

Item 4

Mine Safety Disclosures.

 

Not applicable.

 

Item 5

Other Information.

 

None.

 

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Item 6.

EXHIBITS

 

 

 

Exhibit

No.

  

Description

4.1

  

Form of Common Stock Purchase Warrant, issued July 31, 2023 (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, filed with the Securities and Exchange Commission (the “Commission”) on July 28, 2023).

10.1

  

Form of Securities Purchase Agreement, dated as of July 28, 2023, by and among the Company and the Purchasers signatory thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the Commission on July 28, 2023).  

10.2

!

Amended and Restated Incentive Compensation Plan of the Company (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the Commission on June 6, 2023).

31.1 *

  

Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a).
     

31.2 *

  

Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a).
     

32.1 *

  

Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
     

32.2 *

  

Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
     

101.INS *

  

Inline XBRL Instance Document.
     

101.SCH* *

  

Inline XBRL Taxonomy Extension Schema Document.
     

101.CAL* *

  

Inline XBRL Taxonomy Extension Calculation Linkbase Document.
     

101.DEF* *

  

Inline XBRL Taxonomy Extension Definition Linkbase Document.
     

101.LAB* *

  

Inline XBRL Taxonomy Extension Label Linkbase Document.
     

  101.PRE *

  

Inline XBRL Taxonomy Extension Presentation Linkbase Document.
     

104

  

The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, formatted in Inline XBRL (included in Exhibit 101).

 

!         Management or compensatory plan.

*         Filed herewith.

 

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SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

     

Asensus Surgical, Inc.
       

Date: August 10, 2023

  

By:

/s/ Anthony Fernando
   

Anthony Fernando
   

President and Chief Executive Officer
       

Date: August 10, 2023

  

By:

/s/ Shameze Rampertab
   

Shameze Rampertab
   

Executive Vice President and Chief Financial Officer

 

26

EXHIBIT 31.1

 

SECTION 302

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

 

I, Anthony Fernando, certify that:

 

(1)          I have reviewed this Quarterly Report on Form 10-Q of Asensus Surgical, Inc.;

 

(2)          Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

(3)          Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

(4)         The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

 

(a)          Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)          Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)          Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)           Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 

(5)          The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 

(a)           All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

(b)           Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

 

    August 10, 2023
     
 

By:

/s/ Anthony Fernando
 

        

Anthony Fernando,

President and Chief Executive Officer

(Principal Executive Officer)   

 

 

 

EXHIBIT 31.2

 

SECTION 302

CERTIFICATION OF CHIEF FINANCIAL OFFICER

 

I, Shameze Rampertab, certify that:

 

(1)          I have reviewed this Quarterly Report on Form 10-Q of Asensus Surgical, Inc.;

 

(2)          Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

(3)          Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

(4)         The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

 

(a)          Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)          Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)          Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)           Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 

(5)          The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 

(a)           All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

(b)           Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

 

    August 10, 2023
     
 

By:

/s/ Shameze Rampertab
 

        

Shameze Rampertab

Executive Vice President and Chief Financial Officer

(Principal Financial Officer and Principal Accounting

Officer)

 

 

 

EXHIBIT 32.1

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Anthony Fernando, hereby certify pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and 18 U.S.C. Section 1350, that the Quarterly Report on Form 10-Q of Asensus Surgical, Inc. (the “Company”) for the quarterly period ended June 30, 2023 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. 

 

 

 

 

 

By:

/s/ Anthony Fernando
 

Anthony Fernando, President and Chief Executive Officer (Principal Executive Officer)

 

August 10, 2023

 

The certification set forth above is being furnished as an Exhibit solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as part of the Report or as a separate disclosure document of Asensus Surgical, Inc. or the certifying officers.

 

 

 

EXHIBIT 32.2

 

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Shameze Rampertab, hereby certify pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and 18 U.S.C. Section 1350, that the Quarterly Report on Form 10-Q of Asensus Surgical, Inc. (the “Company”) for the quarterly period ended June 30, 2023 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. 

 

 

 

 

 

By:

/s/ Shameze Rampertab
 

Shameze Rampertab, Executive Vice President and Chief Financial Officer (Principal Financial Officer

and Principal Accounting Officer)

 

August 10, 2023

 

The certification set forth above is being furnished as an Exhibit solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as part of the Report or as a separate disclosure document of Asensus Surgical, Inc. or the certifying officers.

 

 

 

 
v3.23.2
Document And Entity Information - shares
 6 Months Ended
Jun. 30, 2023
Aug. 07, 2023
Document Information [Line Items]    
Entity Central Index Key 0000876378  
Entity Registrant Name ASENSUS SURGICAL, INC.  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2023  
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Jun. 30, 2023  
Document Transition Report false  
Entity File Number 0-19437  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 11-2962080  
Entity Address, Address Line One 1 TW Alexander Drive, Suite 160  
Entity Address, City or Town Durham  
Entity Address, State or Province NC  
Entity Address, Postal Zip Code 27703  
City Area Code 919  
Local Phone Number 765-8400  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Title of 12(b) Security Common Stock $0.001 par value per share  
Trading Symbol ASXC  
Security Exchange Name NYSEAMER  
Entity Common Stock, Shares Outstanding   263,874,871
v3.23.2
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)
shares in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Revenue:        
Revenue $ 1,081,000 $ 994,000 $ 2,057,000 $ 2,060,000
Cost of revenue:        
Cost of revenue 3,074,000 2,347,000 6,021,000 4,170,000
Gross loss (1,993,000) (1,353,000) (3,964,000) (2,110,000)
Operating expenses:        
Research and development 8,980,000 7,253,000 19,119,000 13,681,000
Sales and marketing 4,449,000 3,602,000 9,002,000 7,321,000
General and administrative 5,124,000 4,992,000 10,592,000 10,525,000
Amortization of intangible assets 114,000 2,533,000 226,000 5,203,000
Change in fair value of contingent consideration 203,000 (598,000) 308,000 (752,000)
Property and equipment impairment 0 432,000 0 432,000
Total operating expenses 18,870,000 18,214,000 39,247,000 36,410,000
Operating loss (20,863,000) (19,567,000) (43,211,000) (38,520,000)
Interest income 431,000 260,000 870,000 515,000
Interest expense 0 (141,000) 0 (341,000)
Other expense, net (242,000) (86,000) (460,000) (232,000)
Total other income (expense), net 189,000 33,000 410,000 (58,000)
Loss before income taxes (20,674,000) (19,534,000) (42,801,000) (38,578,000)
Income tax benefit (expense) 12,000 (85,000) (79,000) (169,000)
Net loss $ (20,662,000) $ (19,619,000) $ (42,880,000) $ (38,747,000)
Net loss per common share attributable to common stockholders - basic and diluted (in dollars per share) $ (0.09) $ (0.08) $ (0.18) $ (0.16)
Weighted average number of shares used in computing net loss per common share - basic and diluted (in shares) 239,570 236,505 238,929 236,201
Comprehensive loss:        
Net loss $ (20,662,000) $ (19,619,000) $ (42,880,000) $ (38,747,000)
Foreign currency translation gain (loss) 175,000 (1,713,000) 725,000 (2,363,000)
Unrealized gain (loss) on available-for-sale investments 99,000 (144,000) 406,000 (696,000)
Comprehensive loss (20,388,000) (21,476,000) (41,749,000) (41,806,000)
Product [Member]        
Revenue:        
Revenue 298,000 254,000 591,000 601,000
Cost of revenue:        
Cost of revenue 1,612,000 883,000 2,837,000 1,259,000
Service [Member]        
Revenue:        
Revenue 289,000 424,000 484,000 732,000
Cost of revenue:        
Cost of revenue 519,000 646,000 1,268,000 1,141,000
Lease [Member]        
Revenue:        
Revenue 494,000 316,000 982,000 727,000
Cost of revenue:        
Cost of revenue $ 943,000 $ 818,000 $ 1,916,000 $ 1,770,000
v3.23.2
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)
$ in Thousands
Jun. 30, 2023
Dec. 31, 2022
Current Assets:    
Cash and cash equivalents $ 7,675 $ 6,329
Short-term investments, available-for-sale 32,297 64,195
Accounts receivable, net 660 2,256
Inventory 9,083 8,284
Prepaid expenses 3,149 3,584
Employee retention tax credit receivable 554 554
Other current assets 1,492 1,671
Total Current Assets 54,910 86,873
Restricted cash 1,354 1,141
Long-term investments, available-for-sale 0 3,865
Inventory, net of current portion 4,939 5,469
Property and equipment, net 8,815 9,542
Intellectual property, net 1,411 1,576
Net deferred tax assets 155 174
Operating lease right-of-use assets, net 4,888 4,950
Other long-term assets 1,899 2,463
Total Assets 78,371 116,053
Current Liabilities:    
Accounts payable 4,281 3,348
Accrued employee compensation and benefits 3,887 4,508
Accrued expenses and other current liabilities 1,284 1,293
Operating lease liabilities - current portion 819 800
Deferred revenue 376 465
Total Current Liabilities 10,647 10,414
Long-Term Liabilities:    
Contingent consideration 1,564 1,256
Noncurrent operating lease liabilities 4,657 4,738
Total Liabilities 16,868 16,408
Commitments and Contingencies (Note 14)
Stockholders' Equity:    
Common stock $0.001 par value, 750,000,000 shares authorized at June 30, 2023 and December 31, 2022; 239,970,041 and 236,895,440 issued and outstanding at June 30, 2023 and December 31, 2022, respectively 240 237
Preferred stock, $0.01 par value, 25,000,000 shares authorized, no shares issued and outstanding at June 30, 2023 and December 31, 2022 0 0
Additional paid-in capital 966,335 962,731
Accumulated deficit (903,815) (860,935)
Accumulated other comprehensive loss (1,257) (2,388)
Total Stockholders' Equity 61,503 99,645
Total Liabilities and Stockholders' Equity 78,371 116,053
Intellectual Property [Member]    
Current Assets:    
Intellectual property, net $ 1,411 $ 1,576
v3.23.2
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares
Jun. 30, 2023
Dec. 31, 2022
Common stock, par value (in dollars per share) $ 0.001 $ 0.001
Common stock, shares authorized (in shares) 750,000,000 750,000,000
Common stock, shares issued (in shares) 239,970,041 236,895,440
Common stock, shares outstanding (in shares) 239,970,041 236,895,440
Preferred stock, par value (in dollars per share) $ 0.01 $ 0.01
Preferred stock, shares authorized (in shares) 25,000,000 25,000,000
Preferred stock, shares issued (in shares) 0 0
Preferred stock, shares outstanding (in shares) 0 0
v3.23.2
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)
$ in Thousands
Common Stock [Member]
Treasury Stock, Common [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
AOCI Attributable to Parent [Member]
Total
Balance (in shares) at Dec. 31, 2021 235,219,000 0        
Balance at Dec. 31, 2021 $ 235 $ 0 $ 954,649 $ (785,374) $ (264) $ 169,246
Stock-based compensation $ 0 $ 0 2,245 0 0 2,245
Exercise of stock options (in shares) 30,000 0        
Exercise of stock options $ 0 $ 0 12 0 0 12
Issuance of common stock related to vesting of restricted stock units (in shares) 1,166,000 0        
Issuance of common stock related to vesting of restricted stock units $ 1 $ 0 0 0 0 1
Shares withheld related to net share settlement of equity awards (in shares) 0 436,000        
Shares withheld related to net share settlement of equity awards $ 0 $ 0 (349) 0 0 (349)
Cancellation of treasury stock (in shares) 0 (436,000)        
Cancellation of treasury stock $ 0 $ 0 0 0 0 (0)
Cancellation of treasury stock 0 0 0 0 0 0
Other comprehensive income (loss) 0 0 0 0 (1,202) (1,202)
Net loss $ 0 $ 0 0 (19,128) 0 (19,128)
Balance (in shares) at Mar. 31, 2022 236,415,000 0        
Balance at Mar. 31, 2022 $ 236 $ 0 956,557 (804,502) (1,466) 150,825
Balance (in shares) at Dec. 31, 2021 235,219,000 0        
Balance at Dec. 31, 2021 $ 235 $ 0 954,649 (785,374) (264) 169,246
Net loss           (38,747)
Balance (in shares) at Jun. 30, 2022 236,620,000 0        
Balance at Jun. 30, 2022 $ 237 $ 0 958,646 (824,121) (3,323) 131,439
Balance (in shares) at Mar. 31, 2022 236,415,000 0        
Balance at Mar. 31, 2022 $ 236 $ 0 956,557 (804,502) (1,466) 150,825
Stock-based compensation $ 0 $ 0 2,083 0 0 2,083
Exercise of stock options (in shares) 13,000 0        
Exercise of stock options $ 0 $ 0 6 0 0 6
Issuance of common stock related to vesting of restricted stock units (in shares) 192,000 0        
Issuance of common stock related to vesting of restricted stock units $ 1 $ 0 0 0 0 1
Other comprehensive income (loss) 0     0 (1,857) (1,857)
Net loss $ 0 $ 0 0 (19,619) 0 (19,619)
Balance (in shares) at Jun. 30, 2022 236,620,000 0        
Balance at Jun. 30, 2022 $ 237 $ 0 958,646 (824,121) (3,323) 131,439
Balance (in shares) at Dec. 31, 2022 236,895,000 0        
Balance at Dec. 31, 2022 $ 237 $ 0 962,731 (860,935) (2,388) 99,645
Stock-based compensation $ 0   1,916 0 0 1,916
Exercise of stock options (in shares) 13,000 0        
Exercise of stock options $ 0 $ 0 5 0 0 5
Issuance of common stock related to vesting of restricted stock units (in shares) 2,434,000 0        
Issuance of common stock related to vesting of restricted stock units $ 2 $ 0 0 0 0 2
Shares withheld related to net share settlement of equity awards (in shares) 0 649,000        
Shares withheld related to net share settlement of equity awards $ 0 $ 1 (490) 0 0 (489)
Cancellation of treasury stock (in shares) 0 (649,000)        
Cancellation of treasury stock $ 0 $ (1) 0 0 0 1
Cancellation of treasury stock 0 1 0 0 0 (1)
Other comprehensive income (loss) 0 0 0 0 857 857
Net loss $ 0 $ 0   (22,218) 0 (22,218)
Balance (in shares) at Mar. 31, 2023 239,342,000 0        
Balance at Mar. 31, 2023 $ 239 $ 0 964,162 (883,153) (1,531) 79,717
Balance (in shares) at Dec. 31, 2022 236,895,000 0        
Balance at Dec. 31, 2022 $ 237 $ 0 962,731 (860,935) (2,388) $ 99,645
Exercise of stock options (in shares)           13,300
Net loss           $ (42,880)
Balance (in shares) at Jun. 30, 2023 239,970,000 0        
Balance at Jun. 30, 2023 $ 240 $ 0 966,335 (903,815) (1,257) 61,503
Balance (in shares) at Mar. 31, 2023 239,342,000 0        
Balance at Mar. 31, 2023 $ 239 $ 0 964,162 (883,153) (1,531) 79,717
Stock-based compensation $ 0 $ 0 1,978 0 0 1,978
Issuance of common stock related to vesting of restricted stock units (in shares) 273,000 0        
Issuance of common stock related to vesting of restricted stock units $ 0 $ 0 0 0 0 0
Other comprehensive income (loss) 0 0 0 0 274 274
Net loss $ 0 $ 0 0 (20,662) 0 (20,662)
Issuance of common stock, net of issuance costs (in shares) 355,000 0        
Issuance of common stock, net of issuance costs $ 1 $ 0 195 0 0 196
Balance (in shares) at Jun. 30, 2023 239,970,000 0        
Balance at Jun. 30, 2023 $ 240 $ 0 $ 966,335 $ (903,815) $ (1,257) $ 61,503
v3.23.2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Operating Activities:    
Net loss $ (42,880) $ (38,747)
Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities:    
Depreciation 1,652 1,720
Amortization of intangible assets 226 5,203
Amortization of discounts and premiums on investments, net (298) 444
Stock-based compensation 3,894 4,328
Deferred tax expense 79 169
Bad debt expense 0 9
Change in inventory reserves 459 (567)
Property and equipment impairment 0 432
Loss on disposal of property and equipment 0 97
Change in fair value of contingent consideration 308 (752)
Changes in operating assets and liabilities:    
Accounts receivable 1,614 (8)
Inventory (1,240) (1,933)
Operating lease right-of-use assets 40 409
Prepaid expenses 409 189
Other current and long-term assets 340 (1,169)
Accounts payable 961 524
Accrued employee compensation and benefits (577) (284)
Accrued expenses and other current liabilities (55) 0
Deferred revenue (94) (4)
Operating lease liabilities (42) (290)
Net cash and cash equivalents used in operating activities (35,204) (30,230)
Investing Activities:    
Purchase of available-for-sale investments (12,268) (17,792)
Proceeds from maturities of available-for-sale investments 48,735 41,408
Purchase of property and equipment (166) (443)
Net cash and cash equivalents provided by investing activities 36,301 23,173
Financing Activities:    
Proceeds from issuance of common stock, net of issuance costs 196 0
Taxes paid related to net share settlement of vesting of restricted stock units (490) (349)
Proceeds from exercise of stock options 5 18
Net cash and cash equivalents used in financing activities (289) (331)
Effect of exchange rate changes on cash and cash equivalents 751 239
Net increase (decrease) in cash, cash equivalents and restricted cash 1,559 (7,149)
Cash, cash equivalents and restricted cash, beginning of period 7,470 19,283
Cash, cash equivalents and restricted cash, end of period 9,029 12,134
Supplemental Disclosure for Cash Flow Information    
Cash paid for leases 655 549
Cash paid for taxes 262 65
Supplemental Schedule of Non-cash Investing and Financing Activities:    
Transfer of inventory to property and equipment 802 724
Lease liabilities arising from obtaining right-of-use assets $ 417 $ 0
v3.23.2
Note 1 - Description of Business
 6 Months Ended
Jun. 30, 2023
Notes to Financial Statements  
Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block]

1.

Description of Business

 

Asensus Surgical, Inc. (the "Company") is a medical device company that is digitizing the interface between the surgeon and the patient to pioneer a new era of Performance-Guided Surgery™ by unlocking clinical intelligence for surgeons to enable consistently superior outcomes and a new standard of surgery. Based upon the foundations of digital laparoscopy and the Senhance® Surgical System, the Company is developing the LUNA™ Surgical System, a next generation robotic and instrument system as a foundation of its digital surgery solution. These systems will be powered by the Intelligent Surgical Unit™ (ISU™) to increase surgeon’s control and reduce variability of surgical outcomes. With the addition of machine vision, augmented intelligence, and deep learning capabilities throughout the surgical experience, we intend to holistically address the current clinical, cognitive and economic shortcomings that drive surgical outcomes and value-based healthcare. The Company continues market development for and commercialization of the Senhance System, which digitizes laparoscopic minimally invasive surgery, or MIS. The Senhance System is the first and only digital, multi-port laparoscopic platform designed to maintain laparoscopic MIS standards while providing digital benefits such as haptic feedback, robotic precision, comfortable ergonomics, advanced instrumentation including 3mm microlaparoscopic instruments, 5mm articulating instruments, eye-sensing camera control and fully reusable standard instruments to help maintain per-procedure costs similar to traditional laparoscopy.
v3.23.2
Note 2 - Summary of Significant Accounting Policies
 6 Months Ended
Jun. 30, 2023
Notes to Financial Statements  
Significant Accounting Policies [Text Block]

2.

Summary of Significant Accounting Policies

 

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and include the accounts of the Company and its direct and indirect wholly owned subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. The results reported in these unaudited interim condensed consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for any subsequent period or for the entire year. These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Fiscal Year 2022 Form 10-K. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in the accompanying interim condensed consolidated financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, except as otherwise indicated, necessary for a fair statement of its financial position, results of operations, and cash flows of the Company for all periods presented.

 

Going Concern

The Company's condensed consolidated financial statements are prepared using U.S. GAAP applicable to a going concern basis of accounting, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. The Company had an accumulated deficit of $903.8 million and working capital of $44.3 million as of June 30, 2023. The Company has not established sufficient sales revenues to cover its operating costs and requires additional capital to proceed with its operating plan. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable.

 

The Company will need to obtain additional financing to execute its business plan. Management's plan to obtain additional resources for the Company may include additional sales of equity, traditional financing, such as loans, entry into strategic collaborations, entry into an out-licensing arrangement or provision of additional distribution rights in some or all of its markets. However, management cannot provide any assurance that the Company will be successful in accomplishing any or all of its plans. The ability to successfully resolve these factors raise substantial doubt about the Company’s ability to meet its existing obligations, and to continue as a going concern within one year from the date that these financial statements are issued. The condensed consolidated financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

 

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its direct and indirect wholly owned subsidiaries, Asensus Surgical US, Inc., Asensus International, Inc., Asensus Surgical Italia S.r.l., Asensus Surgical Europe S.à r.l., Asensus Surgical Taiwan Ltd., Asensus Surgical Japan K.K., Asensus Surgical Israel Ltd., Asensus Surgical Netherlands B.V., and Asensus Surgical Canada, Inc. All inter-company accounts and transactions have been eliminated in consolidation.

 

Risk and Uncertainties

The Company is subject to risks similar to other similarly sized companies in the medical device industry. These risks include, without limitation: the historical lack of profitability; the Company’s ability to raise additional capital; its ability to successfully develop, clinically test and commercialize its products and products in development; negative impacts on the Company's operations caused by the COVID-19 pandemic and other geopolitical factors; the success of its market development efforts; the timing and outcome of the regulatory review process for its products; changes in the healthcare regulatory environments of the United States, the European Union, Japan, Taiwan, and other countries in which the Company operates or intends to operate; its ability to attract and retain key management, marketing and scientific personnel; its ability to successfully prepare, file, prosecute, maintain, defend and enforce patent claims and other intellectual property rights; its ability to successfully transition from a research and development company to a marketing, sales and distribution company; competition in the market for robotic surgical devices; and its ability to identify and pursue development of additional products.

 

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include impairment considerations for long-lived assets, fair value estimates related to contingent consideration, stock-based compensation expense, revenue recognition, short-term and long-term investments, excess and obsolete inventory reserves, inventory classification between current and non-current, measurement of lease liabilities and corresponding right-of-use (“ROU”) assets, and deferred tax asset valuation allowances.

 

Significant Accounting Policies

There have been no new or material changes to the significant accounting policies discussed in the Company’s audited financial statements and the notes thereto included in the Fiscal Year 2022 Form 10-K.

 

Impact of Recently Issued Accounting Standards

The Company has evaluated issued ASUs not yet adopted and believes the adoption of these standards will not have a material impact on its consolidated financial statements.
v3.23.2
Note 3 - Revenue Recognition
 6 Months Ended
Jun. 30, 2023
Notes to Financial Statements  
Revenue from Contract with Customer [Text Block]

3.

Revenue Recognition

 

The following table presents revenue disaggregated by type and geography:

 

  

Three Months Ended June 30,

  

Six Months Ended June 30,

 
  

2023

  

2022

  

2023

  

2022

 
  

(in thousands)

  

(in thousands)

 

U.S.

                

Systems

 $-  $-  $-  $- 

Instruments and accessories

  38   18   98   82 

Services

  76   75   151   149 

Leases

  19   51   90   164 

Total U.S. revenue

  133   144   339   395 
                 

Outside of U.S. ("OUS")

                

Systems

  -   -   -   - 

Instruments and accessories

  260   236   493   519 

Services

  213   349   333   583 

Leases

  475   265   892   563 

Total OUS revenue

  948   850   1,718   1,665 
                 

Total

                

Systems

  -   -   -   - 

Instruments and accessories

  298   254   591   601 

Services

  289   424   484   732 

Leases

  494   316   982   727 

Total revenue

 $1,081  $994  $2,057  $2,060 

 

Remaining Performance Obligations

The transaction price allocated to remaining performance obligations relates to amounts allocated to products and services for which the revenue has not yet been recognized. A significant portion of this amount relates to service obligations performed under the Company's system sales contracts that will be invoiced and recognized as revenue in future periods. The transaction price allocated to remaining performance obligations as of June 30, 2023 was $0.8 million, which is expected to be recognized over one to four years. 

 

Contract Assets and Liabilities

Deferred revenue for the periods presented was primarily related to service obligations, for which the service fees are billed up-front, generally annually. The associated deferred revenue is generally recognized ratably over the service period. The Company did not have any significant impairment losses on its contract assets (included in accounts receivable, net in the consolidated balance sheets) for the periods presented.

 

Revenue recognized for the three months ended June 30, 2023 and 2022 that was included in the deferred revenue balance at the beginning of each reporting period was $0.1 million and $0.3 million, respectively. Revenue recognized for the six months ended June 30, 2023 and 2022 that was included in the deferred revenue balance at the beginning of each reporting period was $0.3 million and $0.5 million, respectively.

 

The following information summarizes the Company’s contract assets and liabilities:

 

  

As of

 
  

June 30, 2023

  

December 31, 2022

 
  (in thousands) 

Contract Assets

 $70  $116 

Deferred Revenue

 $376  $465 

 

Senhance System Leasing

The Company enters into lease arrangements with certain qualified customers. Revenue related to arrangements including lease elements are allocated to lease and non-lease elements based on their relative standalone selling prices. Lease elements generally include a Senhance System, while non-lease elements generally include instruments, accessories, and services. For some lease arrangements, the customers are provided with the right to purchase the leased Senhance System at some point during and/or at the end of the lease term. In some arrangements lease payments are based on the usage of the Senhance System. For the three and six months ended June 30, 2023, and 2022, variable lease revenue related to usage-based arrangements was not material.  

 

Accounts Receivable

Accounts receivable are recorded at net realizable value, which includes an allowance for expected credit losses. The allowance for expected credit losses is based on the Company’s assessment of the collectability of customer accounts. The Company regularly reviews the allowance by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. The allowance for expected credit losses was $1.6 million and $1.6 million as of June 30, 2023 and December 31, 2022, respectively. The Company recorded immaterial amounts for expected credit losses during the three and six months ended June 30, 2023 and 2022.

 

The Company had two customers that accounted for 43% and 13%, respectively, of the Company’s net accounts receivable as of June 30, 2023. The Company had one customer that accounted for 69% of the Company’s net accounts receivable as of December 31, 2022.

 
v3.23.2
Note 4 - Fair Value
 6 Months Ended
Jun. 30, 2023
Notes to Financial Statements  
Fair Value Disclosures [Text Block]

4.

Fair Value

 

The following are categories of assets and liabilities measured at fair value on a recurring basis using quoted prices in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3):

 

   

June 30, 2023

  
   

(in thousands)

  
                                 

Description

  

Quoted Prices in

Active Markets for

Identical Assets

(Level 1)

    

Significant Other

Observable Inputs

(Level 2)

    

Significant

Unobservable

Inputs (Level 3)

    

Total

  

Assets measured at fair value

                                

Cash and cash equivalents (1)

   $ 7,675     $ -     $ -     $ 7,675  

Restricted cash

     1,354       -       -       1,354  

Short-term investments

     -       32,297       -       32,297  

Total assets measured at fair value

   $ 9,029     $ 32,297     $ -     $ 41,326  

Liabilities measured at fair value

                                

Contingent consideration

   $ -     $ -     $ 1,564     $ 1,564  

Total liabilities measured at fair value

   $ -     $ -     $ 1,564     $ 1,564  

 

(1) Includes investments that are readily convertible to cash with original maturities of 90 days or less.

 

 

   

December 31, 2022

  
   

(in thousands)

  
                                 

Description

  

Quoted Prices in

Active Markets for

Identical Assets

(Level 1)

    

Significant Other

Observable Inputs

(Level 2)

    

Significant

Unobservable

Inputs (Level 3)

    

Total

  

Assets measured at fair value

                                

Cash and cash equivalents (1)

   $ 6,329     $ -     $ -     $ 6,329  

Restricted cash

     1,141       -       -       1,141  

Short-term investments

     -       64,195       -       64,195  

Long-term investments

     -       3,865       -       3,865  

Total assets measured at fair value

   $ 7,470     $ 68,060     $ -     $ 75,530  

Liabilities measured at fair value

                                

Contingent consideration

   $ -     $ -     $ 1,256     $ 1,256  

Total liabilities measured at fair value

   $ -     $ -     $ 1,256     $ 1,256  

 

(1) Includes investments that are readily convertible to cash with original maturities of 90 days or less.

 

 

The carrying values of accounts receivable, prepaid expenses, employee retention tax credit receivable, other current assets, accounts payable, accrued employee compensation and benefits, accrued expenses and other current liabilities, and deferred revenue as of June 30, 2023, and December 31, 2022, approximate their fair values due to the short-term nature of these items.

 

The Company’s financial liabilities measured at fair value on a recurring basis consisted of contingent consideration payable to Three Heads Investment S.r.l., related to the Company’s 2015 acquisition of the Senhance System from an assignor to Three Heads Investment S.r.l. (the “Senhance Acquisition”). Adjustments associated with the change in fair value of contingent consideration are included in the Company’s condensed consolidated statements of operations and comprehensive loss.

 

The following table presents quantitative information about the inputs and valuation methodologies used for the Company’s fair value measurements for contingent consideration utilizing a Monte-Carlo simulation as of June 30, 2023 and December 31, 2022:

 

 

Valuation

Methodology

 

Significant Unobservable

Input

 

June 30, 2023

  

December 31, 2022

 
            

Contingent consideration

Probability weighted income approach

 

Milestone dates

 

2032

  

2032

 
   

Discount rate

  15.0%   16.5% 
   

Revenue volatility

  45.0%   45.0% 
   

EUR-to-USD exchange rate

  1.09   1.07 

 

The following table presents the current and long-term portion of the contingent consideration as of June 30, 2023 and summarizes the change in fair value, as determined by Level 3 inputs for the contingent consideration for the six months ended June 30, 2023:

 

   

Fair Value

Measurement at

Reporting Date

(Level 3)

  
   

(in thousands)

  
   

Contingent

consideration

  

Balance at December 31, 2022

   $ 1,256  

Change in fair value

     308  

Balance at June 30, 2023

   $ 1,564  
         

Reported as:

        

Current portion

   $ -  

Long-term portion

     1,564  

Balance at June 30, 2023

   $ 1,564  

 

During the six months ended June 30, 2023, there were no transfers of assets or liabilities between Level 1, Level 2, or Level 3 of fair value categories.
v3.23.2
Note 5 - Investments, Available-for-sale
 6 Months Ended
Jun. 30, 2023
Notes to Financial Statements  
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

5.

Investments, available-for-sale

 

The aggregate fair values of investment securities along with cumulative unrealized gains and losses determined on an individual investment security basis and included in accumulated other comprehensive loss in the consolidated balance sheets are as follows:

 

  

June 30, 2023

 
  

(in thousands)

 
                         
  

Amortized

Cost

  

Unrealized

Gain

  

Unrealized

Loss

  

Fair Value

  

Short-term investments

  

Long-term investments

 

Commercial Paper

 $2,986  $-  $(5) $2,981  $2,981  $- 

Corporate Bonds

  16,025   -   (83)  15,942   15,942   - 

U.S. Treasuries

  12,386   -   (5)  12,381   12,381   - 

U.S. Government Agencies

  999   -   (6)  993   993   - 

Total Investments

 $32,396  $-  $(99) $32,297  $32,297  $- 

 

 

  

December 31, 2022

 
  

(in thousands)

 
                         
  

Amortized

Cost

  

Unrealized

Gain

  

Unrealized

Loss

  

Fair Value

  

Short-term investments

  

Long-term investments

 

Commercial Paper

 $12,364  $-  $(49) $12,315  $12,315  $- 

Corporate Bonds

  55,201   -   (447)  54,754   50,889   3,865 

U.S. Government Agencies

  999   -   (8)  991   991   - 

Total Investments

 $68,564  $-  $(504) $68,060  $64,195  $3,865 

 

As of June 30, 2023, contractual maturities of available-for-sale investments were one year or less. Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations. There were no sales of investments or gross realized gains or losses for the three or six months ended June 30, 2023 or 2022.

 
v3.23.2
Note 6 - Inventory
 6 Months Ended
Jun. 30, 2023
Notes to Financial Statements  
Inventory Disclosure [Text Block]

6.

Inventory

 

The components of inventory are as follows:

 

   

June 30, 2023

  
   

(in thousands)

  
   

Gross

Carrying

Amount

    

Reserve Balance

    

Net

Carrying

Amount

  

Finished goods

   $ 15,899     $ (4,221 )   $ 11,678  

Raw materials

     4,770       (2,426 )     2,344  

Total inventory

   $ 20,669     $ (6,647 )   $ 14,022  
                         

Current Portion

   $ 10,318     $ (1,235 )   $ 9,083  

Long-term portion

     10,351       (5,412 )     4,939  

Total inventory

   $ 20,669     $ (6,647 )   $ 14,022  

 

   

December 31, 2022

  
   

(in thousands)

  
   

Gross

Carrying

Amount

    

Reserve Balance

    

Net

Carrying

Amount

  

Finished goods

   $ 15,337     $ (4,129 )   $ 11,208  

Raw materials

     4,718       (2,173 )     2,545  

Total inventory

   $ 20,055     $ (6,302 )   $ 13,753  
                         

Current Portion

   $ 9,399     $ (1,115 )   $ 8,284  

Long-term portion

     10,656       (5,187 )     5,469  

Total inventory

   $ 20,055     $ (6,302 )   $ 13,753  

 
v3.23.2
Note 7 - Intellectual Property
 6 Months Ended
Jun. 30, 2023
Notes to Financial Statements  
Intangible Assets Disclosure [Text Block]

7.

Intellectual Property

 

The components of gross intellectual property, accumulated amortization, and net intellectual property are as follows:

 

  

June 30, 2023

 
  

(in thousands)

 
  

Gross

Carrying

Amount

  

Accumulated

Amortization

  

Foreign

Currency

Translation

Impact

  

Net

Carrying

Amount

 

Developed technology

 $68,838  $(66,732) $(852) $1,254 

Technology and patents purchased

  400   (259)  16   157 

Total intellectual property

 $69,238  $(66,991) $(836) $1,411 

 

  

December 31, 2022

 
  

(in thousands)

 
  

Gross

Carrying

Amount

  

Accumulated

Amortization

  

Foreign

Currency

Translation

Impact

  

Net

Carrying

Amount

 

Developed technology

 $68,838  $(66,562) $(874) $1,402 

Technology and patents purchased

  400   (239)  13   174 

Total intellectual property

 $69,238  $(66,801) $(861) $1,576 

 

The weighted average remaining useful life of the developed technology and technology and patents purchased was 3.7 years and 3.8 years, respectively, as of June 30, 2023. The weighted average remaining useful life of the developed technology and technology and patents purchased was 4.2 years and 4.3 years, respectively as of December 31, 2022.

 
v3.23.2
Note 8 - Leases
 6 Months Ended
Jun. 30, 2023
Notes to Financial Statements  
Lessee, Operating Leases [Text Block]

8.

Leases

 

Lessee Information

Components of operating lease expense recorded in general and administrative expense in the condensed consolidated statements of operations and comprehensive loss were as follows (in thousands):

 

   

Three Months Ended June 30,

   

Six Months Ended March 31,

 
   

2023

    

2022

    

2023

    

2022

  
                                 

Long-term Operating

   $ 479     $ 386     $ 930     $ 785  

 

 

Supplemental balance sheet information related to operating leases was as follows:

 

   

June 30, 2023

    

December 31, 2022

  

Weighted-average remaining lease term (in years)

       6.4           6.8    

Weighted-average discount rate

       8.9%           8.4%    

Incremental borrowing rate

     7.1% - 16.0%       6.1% - 14.5%  

 

Maturities of operating lease obligations as of June 30, 2023 were as follows (in thousands):

 

Fiscal Year

        

Remainder of 2023

   $ 577  

2024

     1,257  

2025

     1,180  

2026

     976  

2027

     896  

2028 and thereafter

     2,200  

Total minimum lease payments

   $ 7,086  

Less: Amount of lease payments representing interest

     (1,610 )

Present value of future minimum lease payments

   $ 5,476  

 
v3.23.2
Note 9 - Accrued Expenses
 6 Months Ended
Jun. 30, 2023
Notes to Financial Statements  
Accrued Liabilities [Text Block]

9.

Accrued Expenses

 

Accrued expenses and other current liabilities consisted of the following (in thousands):

 

   

June 30, 2023

    

December 31, 2022

  

Income and other taxes payable

   $ 680     $ 839  

Legal and professional fees

     326       275  

Royalties

     118       24  

Consulting services

     160       155  

Total accrued expenses and other current liabilities

   $ 1,284     $ 1,293  

 
v3.23.2
Note 10 - Income Taxes
 6 Months Ended
Jun. 30, 2023
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

10.

Income Taxes

 

Income taxes have been accounted for using the asset and liability method in accordance with ASC 740 “Income Taxes”. The Company computes its interim provision for income taxes by applying the estimated annual effective tax rate method. The Company estimates an annual effective tax rate of (0.3)% for the year ending December 31, 2023. This rate does not include the impact of any discrete items. The Company’s effective tax rate for the three months ended June 30, 2023 and 2022 was 0.1% and (0.4)%, respectively. The Company’s effective tax rate for the six months ended June 30, 2023 and 2022 was (0.2)% and (0.4)%, respectively.

 

The Company incurred losses for the three and six months ended June 30, 2023, and is forecasting additional losses through the year, resulting in an estimated net loss for both financial statement and tax purposes for the year ending December 31, 2023. Due to the Company’s history of losses, there is not sufficient evidence to record a net deferred tax asset associated with the U.S., Luxembourg, Swiss, Italian, Taiwanese, and Canadian operations. Accordingly, a full valuation allowance has been recorded related to the net deferred tax assets in those jurisdictions.

 

The total tax expense during the three months ended June 30, 2023 and 2022, was a benefit of approximately $12,000 and an expense of $85,000, respectively. The total tax expense during the six months ended June 30, 2023 and 2022, was approximately $79,000 and $169,000, respectively.

 

At June 30, 2023 the Company had no unrecognized tax benefits that would affect the Company’s effective tax rate.

 

The FASB Staff Q&A, Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income (“GILTI”), states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or to provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. The Company has elected to account for GILTI as a period expense in the year the tax is incurred. The Company does not expect a GILTI inclusion for 2023; no GILTI tax has been recorded for the six months ended June 30, 2023 or 2022, respectively.

 
v3.23.2
Note 11 - Stock-based Compensation
 6 Months Ended
Jun. 30, 2023
Notes to Financial Statements  
Share-Based Payment Arrangement [Text Block]

11.

Stock-Based Compensation

 

Incentive Compensation Plan Information

 

On June 6, 2023, at the 2023 Annual Meeting of Stockholders, the Company’s stockholders voted to approve an amendment and restatement of the Company’s Incentive Compensation Plan (“the Plan”) to increase the number of shares reserved for issuance under the Plan by 22,000,000 shares. As a result of this amendment, shares authorized for issuance under the Plan increased to 54,072,307 shares.

 

Stock Options

 

The following table summarizes options outstanding as of June 30, 2023, as well as activity, including grants to non-employees, for the six months ended June 30, 2023:

 

  

Number of

Shares

  

Weighted-

Average Exercise

Price

  

Weighted-Average

Remaining

Contractual Term

(Years)

  

Aggregate

Intrinsic Value

(Millions)

 

Outstanding at December 31, 2022

  7,584,967  $4.22   5.31     

Granted

  3,047,615  $0.71         

Exercised

  (13,300) $0.38         

Cancelled

  (16,762) $27.89         

Forfeited

  (106) $15.86         

Outstanding at June 30, 2023

  10,602,414  $3.18   5.34  $0.2 

Vested or expected to vest at June 30, 2023

  10,028,804  $3.32   5.29  $0.2 

Exercisable at June 30, 2023

  5,411,149  $5.31   4.58  $0.2 

 

The fair value of options granted were estimated using the Black-Scholes-Merton option pricing model based on the assumptions in the table below:

 

   

Six Months Ended June 30,

 
   

2023

    

2022

  

Expected volatility

     124% - 130%       128% - 133%  

Risk-free interest rate

     3.53% - 4.14%       1.25% - 2.98%  

Expected life (in years)

     3.8 - 4.5       4.3 - 4.5  

Expected dividend yield

       0%           0%    

Weighted average grant date fair value

   $     0.59     $     0.61  

 

Restricted Stock Units

 

The following table summarizes information about restricted stock units outstanding as of June 30, 2023, as well as activity, including performance restricted stock units, for the six months ended June 30, 2023:

 

   

Number of

Shares

    

Weighted-

Average Grant

Date Fair Value

  

Outstanding at December 31, 2022

     8,483,491     $ 1.04  

Granted

     8,163,060     $ 0.72  

Vested

     (3,355,753 )   $ 1.13  

Forfeited

     (352,110 )   $ 0.82  

Outstanding at June 30, 2023

     12,938,688     $ 0.82  

 

Performance-Based Restricted Stock Units

 

In 2023 and 2022, the Company granted performance-based restricted stock units. In particular, the number of shares earnable under the 2023 and 2022 awards is based on achieving certain operational targets by December 31, 2023 and October 1, 2023, respectively. These operational targets have been achieved for the awards granted in 2022, therefore the 2022 performance-based restricted stock units are fully earned and remain subject to three-year time-based vesting requirements. The Company has not yet achieved the operational targets required for the awards granted in 2023.

 

Stock-Based Compensation Expense

 

The following table summarizes non-cash stock-based compensation expense by award type for the three and six months ended June 30, 2023 and 2022:

 

   

Three Months Ended June 30,

   

Six Months Ended June 30,

 
   

2023

    

2022

    

2023

    

2022

  
    (in thousands)     (in thousands)  

Stock options

   $ 591     $ 924     $ 1,256     $ 1,901  

Restricted stock units

     977       822       1,836       1,707  

Performance restricted stock units

     410       337       802       720  
    $ 1,978     $ 2,083     $ 3,894     $ 4,328  

 

As of June 30, 2023, the Company had future stock-based compensation expense of approximately $2.5 million related to unvested stock options, which is expected to be recognized over an estimated weighted-average period of approximately 1.9 years. As of June 30, 2023, the unrecognized stock-based compensation expense related to unvested restricted stock units and performance restricted stock units was approximately $6.5 million, which is expected to be recognized over a weighted average period of approximately 1.6 years.
v3.23.2
Note 12 - Equity Offerings
 6 Months Ended
Jun. 30, 2023
Notes to Financial Statements  
Equity Offerings [Text Block]

12.

Equity Offerings

 

2022 ATM Offering

 

On  March 18, 2022, the Company entered into a Controlled Equity Offering Sales Agreement (the “2022 Sales Agreement”) with Cantor Fitzgerald & Co. (“Cantor”) and Oppenheimer & Co. Inc. (“Oppenheimer”), collectively, “the Agents”. The Company commenced an at-the-market offering (the “2022 ATM Offering”) pursuant to which the Company could offer and sell, from time to time, at its option, shares of its common stock for an aggregate offering price of up to $100.0 million. The aggregate compensation payable to the Agents was 3.0% of the aggregate gross proceeds from each sale of the Company’s common stock.

 

The following table presents details about common stock issued pursuant to the 2022 ATM Offering (in thousands, except share and per share amounts):

 

  

For the Three Months

Ended June 30, 2023

  

For the Six Months

Ended June 30, 2023

 

Shares of common stock issued

  355,072   355,072 

Average price per share

 $0.57  $0.57 

Gross proceeds

 $202  $202 

Commission paid to Agents

 $(6) $(6)

Net proceeds

 $196  $196 

 
v3.23.2
Note 13 - Basic and Diluted Net Loss Per Share
 6 Months Ended
Jun. 30, 2023
Notes to Financial Statements  
Earnings Per Share [Text Block]

13.

Basic and Diluted Net Loss per Share

 

Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed giving effect to all potential dilutive common shares that were outstanding during the period when the effect is dilutive. Potential dilutive common shares consist of incremental shares issuable upon exercise of stock options, restricted stock units, and warrants. No adjustments have been made to the basic weighted average outstanding common shares figures for the three and six months ended June 30, 2023 or 2022 as the assumed exercise of outstanding options, warrants and restricted stock units would be anti-dilutive.

 

Potential common shares not included in the computation of diluted net loss per share are as follows:

 

   

June 30,

  
   

2023

    

2022

  

Stock options

     10,602,414       7,112,573  

Stock warrants

     1,021,076       1,120,300  

Nonvested restricted stock units

     12,938,688       7,985,275  

Total

     24,562,178       16,218,148  

 
v3.23.2
Note 14 - Commitments and Contingencies
 6 Months Ended
Jun. 30, 2023
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]

14.

Commitments and Contingencies

 

License and Supply Agreements

The Company has purchase orders with various suppliers for certain tooling, supplies, contract engineering and research services. Commitments related to these agreements and purchase orders are as follows (in thousands):

 

Fiscal Year

        

2023 (remaining six months)

   $ 6,310  

2024

     1,019  

2025

     315  

2026

     303  

Total commitments

   $ 7,947  

 
v3.23.2
Note 15 - Segments and Geographic Areas
 6 Months Ended
Jun. 30, 2023
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

15.

Segments and Geographic Areas

 

The Company operates in one business segment—the research, development, and sale of medical devices to improve minimally invasive surgery. The Company’s chief operating decision maker (determined to be the Chief Executive Officer) does not manage any part of the Company separately, and the allocation of resources and assessment of performance are based on the Company’s consolidated operating results.

 

The following table presents long-lived assets (which include property and equipment and operating lease assets) by geographic area:

 

 

  

June 30, 2023

  

December 31, 2022

 

U.S.

  38%  39%

EMEA

  60%  57%

Asia

  2%  4%

Total

  100%  100%

 

The following table presents revenue by geographic area based on the country in which the customer is based:

 

  

Three Months Ended June 30,

  

Six Months Ended June 30,

 
  

2023

  

2022

  

2023

  

2022

 
                 
                 

US

  12%  15%  16%  19%

EMEA

  67%  63%  62%  56%

Asia

  21%  22%  22%  25%

Total

  100%  100%  100%  100%

 

For the three and six months ended June 30, 2023, no customers accounted for more than 10% of revenue. For the three months ended June 30, 2022, the Company had one customer who accounted for 10% of revenue. For the six months ended June 30, 2022, no customers accounted for more than 10% of revenue.
v3.23.2
Note 16 - Related Party Transactions
 6 Months Ended
Jun. 30, 2023
Notes to Financial Statements  
Related Party Transactions Disclosure [Text Block]

16.

Related Party Transactions

 

In March 2018, Asensus Surgical Europe S.à r.l entered into a Service Supply Agreement with 1 Med S.A. for certain regulatory consulting services. Andrea Biffi, a current member of the Company’s Board of Directors, owns a non-controlling interest in 1 Med S.A. Expenses under the Service Supply Agreement were approximately $52,000 and $68,000 for the three months ended June 30, 2023 and 2022, respectively, and $71,000 and $141,000 for the six months ended June 31, 2023 and 2022, respectively.
v3.23.2
Note 17 - Subsequent Events
 6 Months Ended
Jun. 30, 2023
Notes to Financial Statements  
Subsequent Events [Text Block]

17.

Subsequent Events

 

On July 27, 2023, the Company sold, in a registered direct offering, an aggregate of 23,809,524 shares of common stock and accompanying warrants to purchase one share of common stock at a combined purchase price of $0.42 per share. The Company expects to receive aggregate gross proceeds from the offering of $10.0 million, before deducting approximately $0.9 million of placement agent’s fees and estimated offering expenses. The warrants have an exercise price of $0.42 per share, are immediately exercisable and will expire five years following the date of issuance.

 
v3.23.2
Significant Accounting Policies (Policies)
 6 Months Ended
Jun. 30, 2023
Accounting Policies [Abstract]  
Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and include the accounts of the Company and its direct and indirect wholly owned subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. The results reported in these unaudited interim condensed consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for any subsequent period or for the entire year. These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Fiscal Year 2022 Form 10-K. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in the accompanying interim condensed consolidated financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, except as otherwise indicated, necessary for a fair statement of its financial position, results of operations, and cash flows of the Company for all periods presented.

 
Substantial Doubt about Going Concern [Policy Text Block]

Going Concern

The Company's condensed consolidated financial statements are prepared using U.S. GAAP applicable to a going concern basis of accounting, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. The Company had an accumulated deficit of $903.8 million and working capital of $44.3 million as of June 30, 2023. The Company has not established sufficient sales revenues to cover its operating costs and requires additional capital to proceed with its operating plan. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable.

 

The Company will need to obtain additional financing to execute its business plan. Management's plan to obtain additional resources for the Company may include additional sales of equity, traditional financing, such as loans, entry into strategic collaborations, entry into an out-licensing arrangement or provision of additional distribution rights in some or all of its markets. However, management cannot provide any assurance that the Company will be successful in accomplishing any or all of its plans. The ability to successfully resolve these factors raise substantial doubt about the Company’s ability to meet its existing obligations, and to continue as a going concern within one year from the date that these financial statements are issued. The condensed consolidated financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

 
Consolidation, Policy [Policy Text Block]

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its direct and indirect wholly owned subsidiaries, Asensus Surgical US, Inc., Asensus International, Inc., Asensus Surgical Italia S.r.l., Asensus Surgical Europe S.à r.l., Asensus Surgical Taiwan Ltd., Asensus Surgical Japan K.K., Asensus Surgical Israel Ltd., Asensus Surgical Netherlands B.V., and Asensus Surgical Canada, Inc. All inter-company accounts and transactions have been eliminated in consolidation.

 
Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include impairment considerations for long-lived assets, fair value estimates related to contingent consideration, stock-based compensation expense, revenue recognition, short-term and long-term investments, excess and obsolete inventory reserves, inventory classification between current and non-current, measurement of lease liabilities and corresponding right-of-use (“ROU”) assets, and deferred tax asset valuation allowances.

 
New Accounting Pronouncements, Policy [Policy Text Block]

Impact of Recently Issued Accounting Standards

The Company has evaluated issued ASUs not yet adopted and believes the adoption of these standards will not have a material impact on its consolidated financial statements.
v3.23.2
Note 3 - Revenue Recognition (Tables)
 6 Months Ended
Jun. 30, 2023
Notes Tables  
Disaggregation of Revenue [Table Text Block]
  

Three Months Ended June 30,

  

Six Months Ended June 30,

 
  

2023

  

2022

  

2023

  

2022

 
  

(in thousands)

  

(in thousands)

 

U.S.

                

Systems

 $-  $-  $-  $- 

Instruments and accessories

  38   18   98   82 

Services

  76   75   151   149 

Leases

  19   51   90   164 

Total U.S. revenue

  133   144   339   395 
                 

Outside of U.S. ("OUS")

                

Systems

  -   -   -   - 

Instruments and accessories

  260   236   493   519 

Services

  213   349   333   583 

Leases

  475   265   892   563 

Total OUS revenue

  948   850   1,718   1,665 
                 

Total

                

Systems

  -   -   -   - 

Instruments and accessories

  298   254   591   601 

Services

  289   424   484   732 

Leases

  494   316   982   727 

Total revenue

 $1,081  $994  $2,057  $2,060 
Contract with Customer, Contract Asset, Contract Liability, and Receivable [Table Text Block]
  

As of

 
  

June 30, 2023

  

December 31, 2022

 
  (in thousands) 

Contract Assets

 $70  $116 

Deferred Revenue

 $376  $465 
v3.23.2
Note 4 - Fair Value (Tables)
 6 Months Ended
Jun. 30, 2023
Notes Tables  
Fair Value, Assets Measured on Recurring Basis [Table Text Block]
   

June 30, 2023

  
   

(in thousands)

  
                                 

Description

  

Quoted Prices in

Active Markets for

Identical Assets

(Level 1)

    

Significant Other

Observable Inputs

(Level 2)

    

Significant

Unobservable

Inputs (Level 3)

    

Total

  

Assets measured at fair value

                                

Cash and cash equivalents (1)

   $ 7,675     $ -     $ -     $ 7,675  

Restricted cash

     1,354       -       -       1,354  

Short-term investments

     -       32,297       -       32,297  

Total assets measured at fair value

   $ 9,029     $ 32,297     $ -     $ 41,326  

Liabilities measured at fair value

                                

Contingent consideration

   $ -     $ -     $ 1,564     $ 1,564  

Total liabilities measured at fair value

   $ -     $ -     $ 1,564     $ 1,564  
   

December 31, 2022

  
   

(in thousands)

  
                                 

Description

  

Quoted Prices in

Active Markets for

Identical Assets

(Level 1)

    

Significant Other

Observable Inputs

(Level 2)

    

Significant

Unobservable

Inputs (Level 3)

    

Total

  

Assets measured at fair value

                                

Cash and cash equivalents (1)

   $ 6,329     $ -     $ -     $ 6,329  

Restricted cash

     1,141       -       -       1,141  

Short-term investments

     -       64,195       -       64,195  

Long-term investments

     -       3,865       -       3,865  

Total assets measured at fair value

   $ 7,470     $ 68,060     $ -     $ 75,530  

Liabilities measured at fair value

                                

Contingent consideration

   $ -     $ -     $ 1,256     $ 1,256  

Total liabilities measured at fair value

   $ -     $ -     $ 1,256     $ 1,256  
Fair Value Measurement Inputs and Valuation Techniques [Table Text Block]
 

Valuation

Methodology

 

Significant Unobservable

Input

 

June 30, 2023

  

December 31, 2022

 
            

Contingent consideration

Probability weighted income approach

 

Milestone dates

 

2032

  

2032

 
   

Discount rate

  15.0%   16.5% 
   

Revenue volatility

  45.0%   45.0% 
   

EUR-to-USD exchange rate

  1.09   1.07 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]
   

Fair Value

Measurement at

Reporting Date

(Level 3)

  
   

(in thousands)

  
   

Contingent

consideration

  

Balance at December 31, 2022

   $ 1,256  

Change in fair value

     308  

Balance at June 30, 2023

   $ 1,564  
         

Reported as:

        

Current portion

   $ -  

Long-term portion

     1,564  

Balance at June 30, 2023

   $ 1,564  
v3.23.2
Note 5 - Investments, Available-for-sale (Tables)
 6 Months Ended
Jun. 30, 2023
Notes Tables  
Debt Securities, Available-for-Sale [Table Text Block]
  

June 30, 2023

 
  

(in thousands)

 
                         
  

Amortized

Cost

  

Unrealized

Gain

  

Unrealized

Loss

  

Fair Value

  

Short-term investments

  

Long-term investments

 

Commercial Paper

 $2,986  $-  $(5) $2,981  $2,981  $- 

Corporate Bonds

  16,025   -   (83)  15,942   15,942   - 

U.S. Treasuries

  12,386   -   (5)  12,381   12,381   - 

U.S. Government Agencies

  999   -   (6)  993   993   - 

Total Investments

 $32,396  $-  $(99) $32,297  $32,297  $- 
  

December 31, 2022

 
  

(in thousands)

 
                         
  

Amortized

Cost

  

Unrealized

Gain

  

Unrealized

Loss

  

Fair Value

  

Short-term investments

  

Long-term investments

 

Commercial Paper

 $12,364  $-  $(49) $12,315  $12,315  $- 

Corporate Bonds

  55,201   -   (447)  54,754   50,889   3,865 

U.S. Government Agencies

  999   -   (8)  991   991   - 

Total Investments

 $68,564  $-  $(504) $68,060  $64,195  $3,865 
v3.23.2
Note 6 - Inventory (Tables)
 6 Months Ended
Jun. 30, 2023
Notes Tables  
Schedule of Inventory, Current [Table Text Block]
   

June 30, 2023

  
   

(in thousands)

  
   

Gross

Carrying

Amount

    

Reserve Balance

    

Net

Carrying

Amount

  

Finished goods

   $ 15,899     $ (4,221 )   $ 11,678  

Raw materials

     4,770       (2,426 )     2,344  

Total inventory

   $ 20,669     $ (6,647 )   $ 14,022  
                         

Current Portion

   $ 10,318     $ (1,235 )   $ 9,083  

Long-term portion

     10,351       (5,412 )     4,939  

Total inventory

   $ 20,669     $ (6,647 )   $ 14,022  
   

December 31, 2022

  
   

(in thousands)

  
   

Gross

Carrying

Amount

    

Reserve Balance

    

Net

Carrying

Amount

  

Finished goods

   $ 15,337     $ (4,129 )   $ 11,208  

Raw materials

     4,718       (2,173 )     2,545  

Total inventory

   $ 20,055     $ (6,302 )   $ 13,753  
                         

Current Portion

   $ 9,399     $ (1,115 )   $ 8,284  

Long-term portion

     10,656       (5,187 )     5,469  

Total inventory

   $ 20,055     $ (6,302 )   $ 13,753  
v3.23.2
Note 7 - Intellectual Property (Tables)
 6 Months Ended
Jun. 30, 2023
Notes Tables  
Schedule of Finite-Lived Intangible Assets [Table Text Block]
  

June 30, 2023

 
  

(in thousands)

 
  

Gross

Carrying

Amount

  

Accumulated

Amortization

  

Foreign

Currency

Translation

Impact

  

Net

Carrying

Amount

 

Developed technology

 $68,838  $(66,732) $(852) $1,254 

Technology and patents purchased

  400   (259)  16   157 

Total intellectual property

 $69,238  $(66,991) $(836) $1,411 
  

December 31, 2022

 
  

(in thousands)

 
  

Gross

Carrying

Amount

  

Accumulated

Amortization

  

Foreign

Currency

Translation

Impact

  

Net

Carrying

Amount

 

Developed technology

 $68,838  $(66,562) $(874) $1,402 

Technology and patents purchased

  400   (239)  13   174 

Total intellectual property

 $69,238  $(66,801) $(861) $1,576 
v3.23.2
Note 8 - Leases (Tables)
 6 Months Ended
Jun. 30, 2023
Notes Tables  
Lease, Cost [Table Text Block]
   

Three Months Ended June 30,

   

Six Months Ended March 31,

 
   

2023

    

2022

    

2023

    

2022

  
                                 

Long-term Operating

   $ 479     $ 386     $ 930     $ 785  
Lessee, Operating Lease, Disclosure [Table Text Block]
   

June 30, 2023

    

December 31, 2022

  

Weighted-average remaining lease term (in years)

       6.4           6.8    

Weighted-average discount rate

       8.9%           8.4%    

Incremental borrowing rate

     7.1% - 16.0%       6.1% - 14.5%  
Lessee, Operating Lease, Liability, to be Paid, Maturity [Table Text Block]

Fiscal Year

        

Remainder of 2023

   $ 577  

2024

     1,257  

2025

     1,180  

2026

     976  

2027

     896  

2028 and thereafter

     2,200  

Total minimum lease payments

   $ 7,086  

Less: Amount of lease payments representing interest

     (1,610 )

Present value of future minimum lease payments

   $ 5,476  
v3.23.2
Note 9 - Accrued Expenses (Tables)
 6 Months Ended
Jun. 30, 2023
Notes Tables  
Schedule of Accrued Liabilities [Table Text Block]
   

June 30, 2023

    

December 31, 2022

  

Income and other taxes payable

   $ 680     $ 839  

Legal and professional fees

     326       275  

Royalties

     118       24  

Consulting services

     160       155  

Total accrued expenses and other current liabilities

   $ 1,284     $ 1,293  
v3.23.2
Note 11 - Stock-based Compensation (Tables)
 6 Months Ended
Jun. 30, 2023
Notes Tables  
Share-Based Payment Arrangement, Option, Activity [Table Text Block]
  

Number of

Shares

  

Weighted-

Average Exercise

Price

  

Weighted-Average

Remaining

Contractual Term

(Years)

  

Aggregate

Intrinsic Value

(Millions)

 

Outstanding at December 31, 2022

  7,584,967  $4.22   5.31     

Granted

  3,047,615  $0.71         

Exercised

  (13,300) $0.38         

Cancelled

  (16,762) $27.89         

Forfeited

  (106) $15.86         

Outstanding at June 30, 2023

  10,602,414  $3.18   5.34  $0.2 

Vested or expected to vest at June 30, 2023

  10,028,804  $3.32   5.29  $0.2 

Exercisable at June 30, 2023

  5,411,149  $5.31   4.58  $0.2 
Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]
   

Six Months Ended June 30,

 
   

2023

    

2022

  

Expected volatility

     124% - 130%       128% - 133%  

Risk-free interest rate

     3.53% - 4.14%       1.25% - 2.98%  

Expected life (in years)

     3.8 - 4.5       4.3 - 4.5  

Expected dividend yield

       0%           0%    

Weighted average grant date fair value

   $     0.59     $     0.61  
Share-Based Payment Arrangement, Restricted Stock Unit, Activity [Table Text Block]
   

Number of

Shares

    

Weighted-

Average Grant

Date Fair Value

  

Outstanding at December 31, 2022

     8,483,491     $ 1.04  

Granted

     8,163,060     $ 0.72  

Vested

     (3,355,753 )   $ 1.13  

Forfeited

     (352,110 )   $ 0.82  

Outstanding at June 30, 2023

     12,938,688     $ 0.82  
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block]
   

Three Months Ended June 30,

   

Six Months Ended June 30,

 
   

2023

    

2022

    

2023

    

2022

  
    (in thousands)     (in thousands)  

Stock options

   $ 591     $ 924     $ 1,256     $ 1,901  

Restricted stock units

     977       822       1,836       1,707  

Performance restricted stock units

     410       337       802       720  
    $ 1,978     $ 2,083     $ 3,894     $ 4,328  
v3.23.2
Note 12 - Equity Offerings (Tables)
 6 Months Ended
Jun. 30, 2023
Notes Tables  
Schedule of Common Stock Outstanding Roll Forward [Table Text Block]
  

For the Three Months

Ended June 30, 2023

  

For the Six Months

Ended June 30, 2023

 

Shares of common stock issued

  355,072   355,072 

Average price per share

 $0.57  $0.57 

Gross proceeds

 $202  $202 

Commission paid to Agents

 $(6) $(6)

Net proceeds

 $196  $196 
v3.23.2
Note 13 - Basic and Diluted Net Loss Per Share (Tables)
 6 Months Ended
Jun. 30, 2023
Notes Tables  
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]
   

June 30,

  
   

2023

    

2022

  

Stock options

     10,602,414       7,112,573  

Stock warrants

     1,021,076       1,120,300  

Nonvested restricted stock units

     12,938,688       7,985,275  

Total

     24,562,178       16,218,148  
v3.23.2
Note 14 - Commitments and Contingencies (Tables)
 6 Months Ended
Jun. 30, 2023
Notes Tables  
Contractual Obligation, Fiscal Year Maturity [Table Text Block]

Fiscal Year

        

2023 (remaining six months)

   $ 6,310  

2024

     1,019  

2025

     315  

2026

     303  

Total commitments

   $ 7,947  
v3.23.2
Note 15 - Segments and Geographic Areas (Tables)
 6 Months Ended
Jun. 30, 2023
Notes Tables  
Long-Lived Assets by Geographic Areas [Table Text Block]
  

June 30, 2023

  

December 31, 2022

 

U.S.

  38%  39%

EMEA

  60%  57%

Asia

  2%  4%

Total

  100%  100%
Revenue from External Customers by Geographic Areas [Table Text Block]
  

Three Months Ended June 30,

  

Six Months Ended June 30,

 
  

2023

  

2022

  

2023

  

2022

 
                 
                 

US

  12%  15%  16%  19%

EMEA

  67%  63%  62%  56%

Asia

  21%  22%  22%  25%

Total

  100%  100%  100%  100%
v3.23.2
Note 2 - Summary of Significant Accounting Policies (Details Textual) - USD ($)
$ in Thousands
Jun. 30, 2023
Dec. 31, 2022
Retained Earnings (Accumulated Deficit) $ (903,815) $ (860,935)
Working Capital $ 44,300  
v3.23.2
Note 3 - Revenue Recognition 1 (Details Textual)
$ in Millions
 3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2023
USD ($)
Jun. 30, 2022
USD ($)
Jun. 30, 2023
USD ($)
Jun. 30, 2022
USD ($)
Dec. 31, 2022
USD ($)
Contract with Customer, Liability, Revenue Recognized $ 0.1 $ 0.3 $ 0.3 $ 0.5  
Accounts Receivable, Allowance for Credit Loss $ 1.6   $ 1.6   $ 1.6
Customer Concentration Risk [Member] | Accounts Receivable [Member]          
Number of Major Customers     2   1
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer One [Member]          
Concentration Risk, Percentage     43.00%    
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Two [Member]          
Concentration Risk, Percentage     13.00%    
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Three [Member]          
Concentration Risk, Percentage         69.00%
v3.23.2
Note 3 - Revenue Recognition 2 (Details Textual) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01
$ in Millions
Jun. 30, 2023
USD ($)
Revenue, Remaining Performance Obligation, Amount $ 0.8
Minimum [Member]  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period (Year) 1 year
Maximum [Member]  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period (Year) 4 years
v3.23.2
Note 3 - Revenue Recognition - Disaggregation of Revenue (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Revenue $ 1,081 $ 994 $ 2,057 $ 2,060
UNITED STATES        
Revenue 133 144 339 395
Non-US [Member]        
Revenue 948 850 1,718 1,665
Systems [Member]        
Revenue 0 0 0 0
Systems [Member] | UNITED STATES        
Revenue 0 0 0 0
Systems [Member] | Non-US [Member]        
Revenue 0 0 0 0
Instruments and Accessories [Member]        
Revenue 298 254 591 601
Instruments and Accessories [Member] | UNITED STATES        
Revenue 38 18 98 82
Instruments and Accessories [Member] | Non-US [Member]        
Revenue 260 236 493 519
Service [Member]        
Revenue 289 424 484 732
Service [Member] | UNITED STATES        
Revenue 76 75 151 149
Service [Member] | Non-US [Member]        
Revenue 213 349 333 583
Lease [Member]        
Revenue 494 316 982 727
Lease [Member] | UNITED STATES        
Revenue 19 51 90 164
Lease [Member] | Non-US [Member]        
Revenue $ 475 $ 265 $ 892 $ 563
v3.23.2
Note 3 - Revenue Recognition - Contract Assets and Liabilities (Details) - USD ($)
$ in Thousands
Jun. 30, 2023
Dec. 31, 2022
Contract Assets $ 70 $ 116
Deferred Revenue $ 376 $ 465
v3.23.2
Note 4 - Fair Value - Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($)
$ in Thousands
Jun. 30, 2023
Dec. 31, 2022
Cash and cash equivalents [1] $ 7,675 $ 6,329
Restricted cash 1,354 1,141
Short-term investments 32,297 64,195
Total assets measured at fair value 41,326 75,530
Contingent consideration 1,564 1,256
Total liabilities measured at fair value 1,564 1,256
Long-term investments 0 3,865
Fair Value, Inputs, Level 1 [Member]    
Cash and cash equivalents [1] 7,675 6,329
Restricted cash 1,354 1,141
Short-term investments 0 0
Total assets measured at fair value 9,029 7,470
Contingent consideration 0 0
Total liabilities measured at fair value 0 0
Long-term investments   0
Fair Value, Inputs, Level 2 [Member]    
Cash and cash equivalents [1] 0 0
Restricted cash 0 0
Short-term investments 32,297 64,195
Total assets measured at fair value 32,297 68,060
Contingent consideration 0 0
Total liabilities measured at fair value 0 0
Long-term investments   3,865
Fair Value, Inputs, Level 3 [Member]    
Cash and cash equivalents [1] 0 0
Restricted cash 0 0
Short-term investments 0 0
Total assets measured at fair value 0 0
Contingent consideration 1,564 1,256
Total liabilities measured at fair value $ 1,564 1,256
Long-term investments   $ 0
[1] Includes investments that are readily convertible to cash with original maturities of 90 days or less.
v3.23.2
Note 4 - Fair Value - Quantitative Information about Inputs and Valuation Methodologies Used for Fair Value Measurements Classification (Details) - Senhance Surgical Robotic System Acquisition[Member] - Fair Value, Inputs, Level 3 [Member]
Jun. 30, 2023
Dec. 31, 2022
Milestone Date, Year [Member]    
Contingent consideration milestone dates Dec. 31, 2032 Dec. 31, 2032
Measurement Input, Discount Rate [Member]    
Contingent consideration, measurement input 0.150 0.165
Measurement Input, Price Volatility [Member]    
Contingent consideration, measurement input 0.450 0.450
Measurement Input, Currency Exchange Rate [Member]    
Contingent consideration, measurement input 1.09 1.07
v3.23.2
Note 4 - Fair Value - Summary of Change in Fair Value for Warrants and Contingent Consideration (Details) - USD ($)
$ in Thousands
 6 Months Ended
Jun. 30, 2023
Dec. 31, 2022
Balance $ 1,256  
Change in fair value 308  
Balance 1,564  
Current portion 0  
Long-term portion $ 1,564 $ 1,256
v3.23.2
Note 5 - Investments, Available-for-sale (Details Textual) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Proceeds from Sale of Debt Securities, Available-for-Sale $ 0 $ 0 $ 0 $ 0
v3.23.2
Note 5 - Investments, Available-for-sale - Summary of Investment Securities (Details) - USD ($)
$ in Thousands
Jun. 30, 2023
Dec. 31, 2022
Amortized Cost $ 32,396 $ 68,564
Unrealized Gain 0 0
Unrealized Loss (99) (504)
Fair Value 32,297 68,060
Short-term investments 32,297 64,195
Long-term investments 0 3,865
Commercial Paper [Member]    
Amortized Cost 2,986 12,364
Unrealized Gain 0 0
Unrealized Loss (5) (49)
Fair Value 2,981 12,315
Short-term investments 2,981 12,315
Long-term investments 0 0
Corporate Debt Securities [Member]    
Amortized Cost 16,025 55,201
Unrealized Gain 0 0
Unrealized Loss (83) (447)
Fair Value 15,942 54,754
Short-term investments 15,942 50,889
Long-term investments 0 3,865
US Treasury Securities [Member]    
Amortized Cost 12,386  
Unrealized Gain 0  
Unrealized Loss (5)  
Fair Value 12,381  
Short-term investments 12,381  
Long-term investments 0  
US Government Agencies Debt Securities [Member]    
Amortized Cost 999 999
Unrealized Gain 0 0
Unrealized Loss (6) (8)
Fair Value 993 991
Short-term investments 993 991
Long-term investments $ 0 $ 0
v3.23.2
Note 6 - Inventory - Components of Inventories (Details) - USD ($)
$ in Thousands
Jun. 30, 2023
Dec. 31, 2022
Finished goods, gross $ 15,899 $ 15,337
Finished goods, reserve (4,221) (4,129)
Finished goods, net 11,678 11,208
Raw materials, gross 4,770 4,718
Raw materials, reserve (2,426) (2,173)
Raw materials, net 2,344 2,545
Total inventory, gross 20,669 20,055
Total inventory, reserve (6,647) (6,302)
Total inventory, net 14,022 13,753
Current Portion, gross 10,318 9,399
Current Portion, reserve (1,235) (1,115)
Inventory 9,083 8,284
Long-term portion, gross 10,351 10,656
Long-term portion, reserve (5,412) (5,187)
Inventory, net of current portion $ 4,939 $ 5,469
v3.23.2
Note 7 - Intellectual Property (Details Textual) - Weighted Average [Member]
Jun. 30, 2023
Dec. 31, 2022
Developed Technology Rights [Member]    
Finite-Lived Intangible Assets, Remaining Amortization Period (Year) 3 years 8 months 12 days 4 years 2 months 12 days
Technology-Based Intangible Assets [Member]    
Finite-Lived Intangible Assets, Remaining Amortization Period (Year) 3 years 9 months 18 days 4 years 3 months 18 days
v3.23.2
Note 7 - Intellectual Property - Intellectual Property (Details) - USD ($)
$ in Thousands
Jun. 30, 2023
Dec. 31, 2022
Finite-Lived Intangible Assets, Gross $ 69,238 $ 69,238
Finite-Lived Intangible Assets, Accumulated Amortization (66,991) (66,801)
Finite-Lived Intangible Assets, Foreign Currency Translation Impact (836) (861)
Intellectual property, net 1,411 1,576
Developed Technology Rights [Member]    
Finite-Lived Intangible Assets, Gross 68,838 68,838
Finite-Lived Intangible Assets, Accumulated Amortization (66,732) (66,562)
Finite-Lived Intangible Assets, Foreign Currency Translation Impact (852) (874)
Intellectual property, net 1,254 1,402
Technology-Based Intangible Assets [Member]    
Finite-Lived Intangible Assets, Gross 400 400
Finite-Lived Intangible Assets, Accumulated Amortization (259) (239)
Finite-Lived Intangible Assets, Foreign Currency Translation Impact 16 13
Intellectual property, net $ 157 $ 174
v3.23.2
Note 8 - Leases - Components of Operating Lease Expense (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
General and Administrative Expense [Member]        
Long-term Operating $ 479 $ 386 $ 930 $ 785
v3.23.2
Note 8 - Leases -Supplemental Balance Sheet Information (Details)
Jun. 30, 2023
Dec. 31, 2022
Weighted-average remaining lease term (in years) (Year) 6 years 4 months 24 days 6 years 9 months 18 days
Weighted-average discount rate 8.90% 8.40%
Minimum [Member]    
Incremental borrowing rate 7.10% 6.10%
Maximum [Member]    
Incremental borrowing rate 16.00% 14.50%
v3.23.2
Note 8 - Leases - Minimum Lease Payments (Details)
$ in Thousands
Jun. 30, 2023
USD ($)
Remainder of 2023 $ 577
2024 1,257
2025 1,180
2026 976
2027 896
2028 and thereafter 2,200
Total minimum lease payments 7,086
Less: Amount of lease payments representing interest (1,610)
Present value of future minimum lease payments $ 5,476
v3.23.2
Note 9 - Accrued Expenses - Components of Accrued Expenses (Details) - USD ($)
$ in Thousands
Jun. 30, 2023
Dec. 31, 2022
Income and other taxes payable $ 680 $ 839
Legal and professional fees 326 275
Royalties 118 24
Consulting services 160 155
Total accrued expenses and other current liabilities $ 1,284 $ 1,293
v3.23.2
Note 10 - Income Taxes (Details Textual) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Dec. 31, 2023
Jun. 30, 2023
Jun. 30, 2022
Effective Income Tax Rate Reconciliation, Percent 0.10% (0.40%)   (0.20%) (0.40%)
Income Tax Expense (Benefit) $ (12,000) $ 85,000   $ 79,000 $ 169,000
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued, Total $ 0     $ 0  
Forecast [Member]          
Effective Income Tax Rate Reconciliation, Percent     (0.30%)    
v3.23.2
Note 11 - Stock-based Compensation (Details Textual) - USD ($)
$ in Millions
 6 Months Ended
Jun. 06, 2023
Jun. 30, 2023
Share-Based Payment Arrangement, Option [Member]    
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount   $ 2.5
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)   1 year 10 months 24 days
Restricted Stock Units (RSUs) [Member]    
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount   $ 6.5
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)   1 year 7 months 6 days
Incentive Compensation Plan [Member]    
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Additional Shares Authorized (in shares) 22,000,000  
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized (in shares) 54,072,307  
v3.23.2
Note 11 - Stock-based Compensation - Stock Option Activity (Details) - USD ($)
$ / shares in Units, $ in Millions
 6 Months Ended 12 Months Ended
Jun. 30, 2023
Dec. 31, 2022
Options, Outstanding, Number of Shares (in shares) 7,584,967  
Options, Outstanding, Weighted Average Exercise Price (in dollars per share) $ 4.22  
Options, Outstanding, Weighted Average Remaining Contractual Term (Year) 5 years 4 months 2 days 5 years 3 months 21 days
Options, Granted, Number of Shares (in shares) 3,047,615  
Options, Grants in Period, Weighted Average Exercise Price (in dollars per share) $ 0.71  
Options, Exercised, Number of Shares (in shares) (13,300)  
Options, Exercises in Period, Weighted Average Exercise Price (in dollars per share) $ 0.38  
Options, Cancelled, Number of Shares (in shares) (16,762)  
Options, Expirations in Period, Weighted Average Exercise Price (in dollars per share) $ 27.89  
Options, Forfeited, Number of Shares (in shares) (106)  
Options, Forfeitures in Period, Weighted Average Exercise Price (in dollars per share) $ 15.86  
Options, Outstanding, Number of Shares (in shares) 10,602,414 7,584,967
Outstanding at June 30, 2023 (in dollars per share) $ 3.18 $ 4.22
Options, Outstanding, Aggregate Intrinsic Value $ 0.2  
Options, Vested and Expected to Vest, Exercisable, Number of Shares (in shares) 10,028,804  
Options, Vested and Expected to Vest, Exercisable, Weighted Average Exercise Price (in dollars per share) $ 3.32  
Options, Vested and Expected to Vest, Exercisable, Weighted Average Remaining Contractual Term (Year) 5 years 3 months 14 days  
Options, Vested or Expected to Vest, Aggregate Intrinsic Value $ 0.2  
Options, Exercisable, Number of Shares (in shares) 5,411,149  
Options, Exercisable, Weighted Average Exercise Price (in dollars per share) $ 5.31  
Options, Exercisable, Weighted Average Remaining Contractual Term (Year) 4 years 6 months 29 days  
Options, Exercisable, Aggregate Intrinsic Value $ 0.2  
v3.23.2
Note 11 - Stock-based Compensation - Stock Option Valuation Assumptions (Details) - $ / shares
 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Expected dividend yield 0.00% 0.00%
Weighted average grant date fair value (in dollars per share) $ 0.59 $ 0.61
Minimum [Member]    
Expected volatility 124.00% 128.00%
Risk-free interest rate 3.53% 1.25%
Expected life (in years) (Year) 3 years 9 months 18 days 4 years 3 months 18 days
Maximum [Member]    
Expected volatility 130.00% 133.00%
Risk-free interest rate 4.14% 2.98%
Expected life (in years) (Year) 4 years 6 months 4 years 6 months
v3.23.2
Note 11 - Stock-based Compensation - RSU Activity (Details) - Restricted Stock Units (RSUs) [Member]
 6 Months Ended
Jun. 30, 2023
$ / shares
shares
Beginning of period, Restricted stock units, Unvested (in shares) | shares 8,483,491
Beginning of period, Restricted stock units, Unvested, weighted average grant date fair value (in dollars per share) | $ / shares $ 1.04
Restricted stock units, Granted (in shares) | shares 8,163,060
Restricted stock units, Granted, weighted average grant date fair value (in dollars per share) | $ / shares $ 0.72
Restricted stock units, Vested (in shares) | shares (3,355,753)
Restricted stock units, Vested, weighted average grant date fair value (in dollars per share) | $ / shares $ 1.13
Restricted stock units, Forfeited (in shares) | shares (352,110)
Restricted stock units, Forfeited, weighted average grant date fair value (in dollars per share) | $ / shares $ 0.82
Beginning of period, Restricted stock units, Unvested (in shares) | shares 12,938,688
Beginning of period, Restricted stock units, Unvested, weighted average grant date fair value (in dollars per share) | $ / shares $ 0.82
v3.23.2
Note 11 - Stock-based Compensation - Non-cash Share-based Compensation Expense (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Share-based compensation $ 1,978 $ 2,083 $ 3,894 $ 4,328
Share-Based Payment Arrangement, Option [Member]        
Share-based compensation 591 924 1,256 1,901
Restricted Stock Units (RSUs) [Member]        
Share-based compensation 977 822 1,836 1,707
Performance Restricted Stock Unit [Member]        
Share-based compensation $ 410 $ 337 $ 802 $ 720
v3.23.2
Note 12 - Equity Offerings (Details Textual) - The 2022 ATM Offering [Member]
$ in Billions
Mar. 18, 2022
USD ($)
Stock Offering Agreement, Maximum Share Value $ 0.1
Stock Offering Agreement, Commission, Percent 3.00%
v3.23.2
Note 12 - Equity Offerings - Summary of Sales Under Offering (Details) - USD ($)
$ / shares in Units, $ in Thousands
 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Net proceeds $ 196 $ 0
The 2022 ATM Offering [Member]    
Shares of common stock issued (in shares) 355,072 355,072
Gross proceeds $ 202 $ 202
Commission paid to Agents 6 6
Net proceeds $ 196 $ 196
The 2022 ATM Offering [Member] | Arithmetic Average [Member]    
Average price per share (in dollars per share) $ 0.57 $ 0.57
v3.23.2
Note 13 - Basic and Diluted Net Loss Per Share - Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares
 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share (in shares) 24,562,178 16,218,148
Share-Based Payment Arrangement, Option [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share (in shares) 10,602,414 7,112,573
Warrant [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share (in shares) 1,021,076 1,120,300
Restricted Stock Units (RSUs) [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share (in shares) 12,938,688 7,985,275
v3.23.2
Note 14 - Commitments and Contingencies - Purchase Orders Commitments (Details) - License and Supply Agreement [Member]
$ in Thousands
Jun. 30, 2023
USD ($)
2023 (remaining six months) $ 6,310
2024 1,019
2025 315
2026 303
Total commitments $ 7,947
v3.23.2
Note 15 - Segments and Geographic Areas (Details Textual)
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Number of Operating Segments     1  
Revenue Benchmark [Member] | Customer Concentration Risk [Member]        
Number of Major Customers 0 1 0 0
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | One Customer [Member]        
Concentration Risk, Percentage   10.00%    
v3.23.2
Note 15 - Segments and Geographic Areas - Consolidated Assets and Long Lived Assets by Geographic Area (Details) - Geographic Concentration Risk [Member] - Long-lived Assets [Member]
 6 Months Ended 12 Months Ended
Jun. 30, 2023
Dec. 31, 2022
UNITED STATES    
Percentage 38.00% 39.00%
EMEA [Member]    
Percentage 60.00% 57.00%
Asia [Member]    
Percentage 2.00% 4.00%
All Countries [Member]    
Percentage 100.00% 100.00%
v3.23.2
Note 15 - Segments and Geographic Areas - Sales by Geographic Area (Details) - Revenue Benchmark [Member] - Geographic Concentration Risk [Member]
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
UNITED STATES        
Concentration risk, percent 12.00% 15.00% 16.00% 19.00%
EMEA [Member]        
Concentration risk, percent 67.00% 63.00% 62.00% 56.00%
Asia [Member]        
Concentration risk, percent 21.00% 22.00% 22.00% 25.00%
All Countries [Member]        
Concentration risk, percent 100.00% 100.00% 100.00% 100.00%
v3.23.2
Note 16 - Related Party Transactions (Details Textual) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Asensus Surgical Europe S.à.R.L [Member] | 1 Med S.A. [Member] | Service Supply Agreement [Member]        
Operating Costs and Expenses $ 52,000 $ 68,000 $ 71,000 $ 141,000
v3.23.2
Note 17 - Subsequent Events (Details Textual) - Subsequent Event [Member]
$ / shares in Units, $ in Millions
Jul. 27, 2023
USD ($)
$ / shares
shares
Warrants Issued in Registered Direct Offering [Member]  
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right (in shares) | shares 1
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ / shares $ 0.42
Warrants and Rights Outstanding, Term (Year) 5 years
Common Stock Issued in Registered Direct Offering [Member]  
Stock Issued During Period, Shares, New Issues (in shares) | shares 23,809,524
Equity Offering, Combined Price Per Share (in dollars per share) | $ / shares $ 0.42
Proceeds from Issuance or Sale of Equity | $ $ 10.0
Adjustments to Additional Paid in Capital, Stock Issued, Issuance Costs | $ $ 0.9
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