Release Date: May 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Asensus Surgical Inc (ASXC, Financial) entered into a nonbinding letter of intent with Karl Storz for a potential acquisition, which could provide significant financial and strategic benefits.
- The company reported a slight increase in revenue for Q1 2024 compared to Q1 2023, indicating growth in their operations.
- Asensus Surgical Inc (ASXC) has received financing from Karl Storz, providing them with up to $10 million to support operations during the negotiation period.
- The Senhance system usage grew to nearly 900 procedures worldwide in Q1, showing increasing adoption and utilization of the company's technology.
- New program initiations, like the agreement with Sendai Topics Yuchai Hospital in Japan, demonstrate expanding market trust and adoption of Asensus Surgical Inc (ASXC)'s technology.
Negative Points
- Asensus Surgical Inc (ASXC) reported a net loss of $22.5 million in Q1 2024, indicating ongoing financial challenges.
- Despite slight revenue growth, the company's operating expenses increased from the previous year, contributing to the net loss.
- The potential acquisition by Karl Storz is still uncertain, with no definitive agreement currently in place.
- The company's cash reserves, excluding the recent financing, are only sufficient to sustain operations into Q3 2024, highlighting a potential risk of running out of funds if additional financing is not secured.
- The ongoing due diligence and negotiation processes with Karl Storz may divert focus and resources from other operational priorities.
Q & A Highlights
Q: Can you provide an update on the timeline and specifics of the exclusivity period with Karl Storz?
A: Anthony Fernando, President and CEO of Asensus Surgical, explained that they are currently seven weeks into the 10-week exclusivity period that began on March 28. The period involves ongoing due diligence, and further details will be shared as they become available.
Q: What will happen if Karl Storz decides not to proceed with the acquisition?
A: Anthony Fernando clarified that if the acquisition does not proceed, the $10 million provided by Karl Storz remains a secured promissory note, allowing Asensus Surgical to continue its operations as planned.
Q: Have there been any hesitations or changes in commercial activities due to the ongoing discussions with Karl Storz?
A: Anthony Fernando noted that there have been no challenges or hesitations in commercial activities. The potential acquisition is viewed positively in the field, and operations are continuing as usual.
Q: Can you discuss the trends in adoption and growth for the Senhance system in Japan?
A: Anthony Fernando highlighted that Japan is one of their fastest-growing markets, particularly in pediatrics. The company is seeing positive momentum in both system placements and case volume growth, with a strong pipeline for the rest of the year.
Q: How might Karl Storz utilize Asensus Surgical's assets, particularly regarding the integration or continuation of the Luna project?
A: Anthony Fernando stated that it is too early to discuss specific plans for integration as the current focus is on due diligence. Details on integration will be addressed in future updates.
Q: Will the potential acquisition by Karl Storz affect the timeline for the Luna project?
A: Anthony Fernando assured that the Luna project is progressing well and is on track. The potential acquisition is not expected to cause any shifts in the timeline for Luna's development and launch.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
