Asensus Surgical(ASXC) - 2022 Q4 - Annual Report

Revenue Performance - Product revenue for the year ended December 31, 2022 decreased to $4.3 million compared to$5.4 million for the year ended December 31, 2021, a decrease of approximately 20.4%[244] - Service revenue for the year ended December 31, 2022 decreased to $1.4 million compared to$1.5 million for the year ended December 31, 2021, a decrease of approximately 6.7%[244] - Total revenue for the year 2022 was $7,087,000, a decrease of 13.9$8,232,000 in 2021[307] - Total U.S. revenue decreased to $767 thousand in 2022 from$1.033 million in 2021, representing a decline of 25.7%[373] - Total revenue outside of the U.S. (OUS) was $6.320 million in 2022, down 12.2$7.199 million in 2021[373] Expenses and Losses - R&D expenses for the year ended December 31, 2022 increased 50% to $28.9 million compared to$19.3 million for the year ended December 31, 2021[249] - Sales and marketing expenses for the year ended December 31, 2022 increased 10% to $14.8 million compared to$13.4 million for the year ended December 31, 2021[250] - General and administrative expenses for the year ended December 31, 2022 increased 5% to $20.2 million compared to$19.3 million for the year ended December 31, 2021[251] - Net loss for 2022 was $(75,561,000), compared to a net loss of$(62,462,000) in 2021, representing a 21% increase in losses[307] - The company experienced a total loss from operations before taxes of $75.243 million in 2022, which is a decline from a loss of$62.237 million in 2021, representing a 20.9% increase in losses[410] Cash Flow and Financial Position - Cash and cash equivalents, excluding restricted cash, totaled approximately $74.4 million as of December 31, 2022, expected to meet cash needs into Q1 2024[256] - Net cash used in operating activities was$58.9 million in 2022, compared to $40.7 million in 2021, with a net loss of$75.6 million in 2022[262] - Cash and cash equivalents decreased to $6,329,000 in 2022 from$18,129,000 in 2021, a decline of 65%[304] - The company had an accumulated deficit of $860.9 million and working capital of$76.5 million as of December 31, 2022[317] - The company plans to obtain additional financing through equity sales, traditional loans, or strategic collaborations to support its operations[318] Assets and Liabilities - Total current assets decreased to $86,873,000 in 2022, down 23.4$113,297,000 in 2021[304] - Total liabilities decreased to $16,408,000 in 2022 from$17,227,000 in 2021, a reduction of 4.7%[304] - Stockholders' equity decreased to $99,645,000 in 2022 from$169,246,000 in 2021, a decline of 41%[304] - The net carrying amount of property and equipment was $9,542 thousand as of December 31, 2022, a decrease from$10,971 thousand in 2021, which is a decline of about 13.0%[396] - Total assets measured at fair value as of December 31, 2022, amounted to $75,530 thousand, compared to$136,980 thousand as of December 31, 2021, indicating a decrease of approximately 44.7%[385] Research and Development - The company anticipates continued investment in research and development to enhance the LUNA Surgical System and digital laparoscopy platform[248] - The Company plans to continue substantial investments in research and development for the LUNA System and digital solutions platform[267] - Research and development expenses rose to $28,942,000 in 2022, an increase of 49.5$19,348,000 in 2021[307] - Research and development expenses are expensed as incurred, focusing on engineering, product development, and regulatory expenses[363] Regulatory and Market Presence - The Senhance System is available for sale in multiple countries, including the U.S., Europe, Japan, and Taiwan, with regulatory approvals for various surgical procedures[232][233] - The company received FDA clearance for the ISU in March 2020, which is the only FDA cleared device for machine vision technology in abdominal robotic surgery[235] - For the year ended December 31, 2022, operations outside of the United States accounted for 89% of revenue, primarily concentrated in Europe[288] Stock and Compensation - Stock options granted in 2022 totaled 3.154 million shares, with a weighted average exercise price of $0.70[421] - The balance of stock options at December 31, 2022, was 7.585 million shares, with a weighted average exercise price of$4.22[421] - The company granted 6,996,822 restricted stock units in 2022, with an average grant date fair value of $0.71, resulting in 8,483,491 unvested restricted stock units by December 31, 2022[426] - Stock-based compensation expense totaled$8.416 million for the year ended December 31, 2022, a decrease from $9.429 million in 2021[428] Impairments and Contingencies - The Company recorded a property and equipment impairment charge of$1.4 million in 2022, associated with Senhance Systems under operating leases, with no impairment charge in 2021[253] - The Company recorded a non-cash asset impairment charge of $1.4 million for property and equipment during the year ended December 31, 2022[341] - The allowance for expected credit losses was$1.6 million as of December 31, 2022, compared to $1.7 million as of December 31, 2021[334] Taxation - The Company reported an income tax expense of$0.3 million in 2022, up from $0.2 million in 2021, mainly from profitable foreign jurisdictions[255] - The total income tax expense for 2022 was$318,000, compared to $225,000 in 2021, reflecting an increase of 41.3$419.4 million as of December 31, 2022, with $253 million expected to expire unused due to limitations[412]