Exhibit 99.1

TransEnterix, Inc. Reports Operating and Financial Results for the Fourth Quarter and Full Year 2019
March 16, 2020, at 4:05 PM EST

RESEARCH TRIANGLE PARK, N.C.--(BUSINESS WIRE)--Mar. 16, 2020 -- TransEnterix, Inc. (NYSE American: TRXC), a medical device company that is digitizing the interface between the surgeon and the patient to improve minimally invasive surgery, today announced its operating and financial results for the fourth quarter and full-year 2019.

Recent Highlights

Three hospitals initiated Senhance Digital Laparoscopy Programs thus far in 2020
Announced FDA 510(k) clearance for First Machine Vision System in Robotic Surgery on March 13, 2020
Raised approximately $15 million in gross proceeds in an underwritten public offering in March of 2020 and $11.6 million in ATM offering gross proceeds since January 2020
Entered into an equity line purchase agreement on February 10, 2020 with Lincoln Park Capital Fund, LLC which provides access to up to $25 million
Received CE Mark approval for Pediatric indication for Senhance® Surgical System on February 12, 2020
Continued to execute restructuring plan to reduce cash burn

“Since the beginning of the fourth quarter, we have made tremendous progress in building the foundation to drive adoption in 2020 and beyond,” said Anthony Fernando, President and CEO of TransEnterix. “Thus far in 2020, we have already seen the successful execution of our strategy - three hospitals have initiated Senhance digital laparoscopy programs in the first quarter and we have signed two incremental agreements with hospitals to begin programs in the second quarter. In addition, we have recently achieved multiple significant regulatory milestones and bolstered our balance sheet through the completion of financings. Looking to the balance of 2020, we believe we are well positioned to continue to execute on our strategy and bring transformative technology to surgeons, hospitals, and patients globally.”

Commercial and Clinical Update

Subsequent to the end of the fourth quarter, three hospitals initiated Senhance Digital Laparoscopy Programs, one in the U.S., one in the Europe, and one in Asia:

Ochsner Health System entered into an agreement to lease and utilize a Senhance System that has been installed at the Ochsner Baptist (a campus of Ochsner Medical Center) facility and first cases have been successfully completed.

Klinikum Esslingen, a hospital in southern Germany close to Stuttgart, entered into an agreement to lease and utilize a Senhance System and first cases have been successfully completed.

Kitakyushu General Hospital, a hospital in southwestern Japan, entered into an agreement to lease and utilize a Senhance System and first cases have been successfully completed.

In addition, the Company has signed two other agreements with hospitals, one in EMEA and one in Asia, who are on track to begin their respective Senhance programs during the second quarter of 2020.

Financing Updates

Completion of Underwritten Equity Offering

In March of 2020, the Company completed an underwritten public offering, raising gross proceeds of approximately $15.0 million. The offering consisted of (i) units of common stock and two warrants to purchase shares of common stock and (ii) units of convertible preferred stock and two warrants to purchase shares of common stock. The offering was comprised of 14,121,766 common shares, 7,937,057 preferred shares, and series C warrants to purchase 22,058,823 shares of common shares and series D warrants to purchase 22,058,823 shares of common shares at a combined price of $0.68 per unit. Each warrant has an exercise price of $0.68 per common share and is exercisable at any time on or after the date of issuance. The series C warrants have a term of one year from the date of issuance and the series D warrants have a five year term.

Common Stock Purchase Agreement with Lincoln Park Capital Fund, LLC

On February 10, 2020, the company announced that it had entered into an equity line purchase agreement with Lincoln Park Capital Fund, LLC a Chicago-based institutional investor. The Company will have the right, in its sole discretion, to sell to Lincoln Park up to $25.0 million in shares of the Company's common stock over a 36-month period.

At The Market Offering (ATM) Facility

Since the beginning of 2020, the Company has raised approximately $11.6 million at an average price per share of $1.73, through its ATM program.

Product Portfolio Initiatives

CE Mark Approval for Pediatric Indication for Senhance Surgical System

As the Company announced on February 12, 2020, the Company received CE Mark approval for an expanded indication to treat pediatric patients above 10kg (approximately 22 lbs) with the Senhance System. Pediatric surgery seeks to use the smallest instruments and scopes possible to minimize invasiveness but also maintain accuracy. The Senhance System is designed with instruments as small as 3mm and compatible with small scopes while also retaining the sense of touch through haptic feedback.

Received FDA 510(k) Clearance for First Machine Vision System in Robotic Surgery

On March 13, 2020, the Company announced that it had received FDA 510(k) clearance for its Intelligent Surgical Unit (ISU™) that enables machine vision capabilities on the Senhance System. The initial features of the ISU are designed to increase control in visualization beyond what has previously been available in digital laparoscopy or robotic surgery. The cleared Senhance System already features unique eye-tracking camera control and the new technology enables machine vision-driven control of the camera for a surgeon by responding to commands and recognizing certain objects and locations in the surgical field. The ISU hardware is also designed to be compatible with planned future augmented intelligence features such as scene cognition and surgical image analytics that are expected to continue to drive meaningful innovations in digital laparoscopy with Senhance.

Fourth Quarter Financial Results

For the three months ended December 31, 2019, the Company reported revenue of $0.7 million as compared to revenue of $7.5 million in the three months ended December 31, 2018. Revenue in the fourth quarter of 2019 included no system sales, $0.3 million in instruments and accessories, and $0.4 million in services.

For the three months ended December 31, 2019, total net operating expenses were $18.1 million, excluding the gain from the 2019 AutoLap sale, as compared to $20.1 million in the three months ended December 31, 2018.

For the three months ended December 31, 2019, net loss was $13.7 million, or $0.69 per share, as compared to a net loss of $6.4 million, or $0.39 per share, in the three months ended December 31, 2018.

For the three months ended December 31, 2019, the adjusted net loss was $16.4 million, or $0.83 per share, as compared to an adjusted net loss of $14.7 million, or $0.89 per share in the three months ended December 31, 2018, after adjusting for the following charges: net gain on the sale of the AutoLap assets, change in fair value of warrant liabilities, amortization of intangible assets, change in fair value of contingent consideration, restructuring and other charges, inventory write-down related to the restructuring plan, acquisition related costs, loss from sale of SurgiBot assets, and loss on extinguishment of debt. Adjusted net loss is a non-GAAP financial measure. See the reconciliation from GAAP to Non-GAAP Measures below.

The Company had cash and cash equivalents and restricted cash of approximately $10.6 million as of December 31, 2019.

As a result of restructuring, cost optimization efforts and recent ATM and equity financing, we believe that current cash on hand will be sufficient to meet our anticipated cash needs into the fourth quarter of 2020.

Pursuant to the disclosure requirements of the NYSE American Company Guide Section 610(b), the Company is reporting that its audited consolidated financial statements for the fiscal year ended December 31, 2019, included in the Company's Annual Report on Form 10-K expected to be filed with the Securities and Exchange Commission on March 16, 2020, contains an audit opinion from its independent registered public accounting firm that includes an explanatory paragraph related to the Company's ability to continue as a going concern.

2020 Corporate Objectives
The Company expects to make significant progress in 2020 as it continues to build out its leadership position in Digital Laparoscopy by focusing on the following key corporate objectives:

Expand the number of sites using the Senhance System in the United States, EMEA, and Japan and convert more existing sites into “foundational” sites that are on a rate to perform 100+ cases annually to drive meaningful clinical case volume growth;
Generate meaningful health economic data, primarily around the cost impact of Senhance relative to traditional laparoscopy as well as other surgical robotic systems; and,
Complete the following product portfolio initiatives:
launch the scene cognition and augmented intelligence module in the United States by mid-2020;
expand the European launch of 5mm Articulating Instruments and submit for U.S. clearance in the fourth quarter; and,
obtain a general surgery indication, including bariatrics in the U.S.

Although the Company is not primarily focused on revenue during 2020, for the full year 2020, the Company expects to report baseline revenue between $3.0 and $3.2 million. Any system sales would be in addition to such baseline revenue.

Conference Call

TransEnterix, Inc. will host a conference call on Monday, March 16, 2020, at 4:30 PM ET to discuss its fourth quarter and fiscal year 2019 operating and financial results. To listen to the conference call on your telephone, please dial 844-804-5261 for domestic callers and 612-979-9885 for international callers, and reference conference ID 5686095 approximately ten minutes prior to the start time. To access the live audio webcast or archived recording, use the following link http://ir.transenterix.com/events.cfm. The replay will be available on the Company’s website.

About TransEnterix

TransEnterix is a medical device company that is digitizing the interface between the surgeon and the patient to improve minimally invasive surgery by addressing the clinical and economic challenges associated with current laparoscopic and robotic options in today's value-based healthcare environment. The Company is focused on the market development activities for, and increasing utilization of, its Senhance Surgical System, which digitizes laparoscopic minimally invasive surgery. The system allows for robotic precision, haptic feedback, surgeon camera control via eye sensing and improved ergonomics while offering responsible economics. The Senhance Surgical System is available for sale in the US, the EU, Japan and select other countries. For more information, visit www.transenterix.com.
Non-GAAP Measures

The adjusted net loss and adjusted net loss per share presented in this press release are non-GAAP financial measures. The adjustments relate to net gain on the sale of the AutoLap assets, change in fair value of warrant liabilities, amortization of intangible assets, change in fair value of contingent consideration, inventory write down related to the restructuring plan, restructuring and other charges, acquisition-related costs, loss of extinguishment of debt, SurgiBot sale gain/loss, goodwill impairment, in-process research and development impairment, and reversal of transfer fee accrual. These financial measures are presented on a basis other than in accordance with U.S. generally accepted accounting principles ("Non-GAAP Measures"). In the tables that follow under "Reconciliation of Non-GAAP Measures,” we present adjusted net loss and adjusted net loss per share, reconciled to their comparable GAAP measures. These items are adjusted because they are not operational or because these charges are non-cash or non-recurring and management believes these adjustments are meaningful to understanding the Company's performance during the periods presented. These Non-GAAP Measures should be considered a supplement to, not a substitute for, or superior to, the corresponding financial measures calculated in accordance with GAAP.

Forward-Looking Statements

This press release includes statements relating to the current market development and operational plans for the Senhance System, as well as 2019 fourth quarter and full-year results and plans for 2020. These statements and other statements regarding our future plans and goals constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties that are often difficult to predict, are beyond our control and which may cause results to differ materially from expectations and include whether we are able to achieve desired results from our change in strategic focus, successfully reduce expenses through our restructuring, continue to finance the company and meet the operational goals we have set forth for 2020. For a discussion of the risks and uncertainties associated with TransEnterix's business, please review our filings with the Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K for the year ended December 31, 2019, which we expect to file with the SEC on or before the due date and our other filings we make with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which are based on our expectations as of the date of this press release and speak only as of the origination date of this press release. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
TransEnterix, Inc.
Consolidated Statements of Operations and Comprehensive Loss
(in thousands except per share amounts)
(Unaudited)

 
 
Three Months Ended
 
 
Twelve Months Ended
 
 
 
December 31,
 
 
December 31,
 
 
 
2019
 
 
2018
 
 
2019
 
 
2018
 
Revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Product
 
$
286

 
 
$
7,214

 
 
$
7,104

 
$
 
23,268

 
Service
 
 
402

 
 
 
310

 
 
 
1,427

 
 
 
834

 
Total revenue
 
 
688

 
 
 
7,524

 
 
 
8,531

 
 
 
24,102

 
Cost of revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Product
 
 
9,812

 
 
 
5,005

 
 
 
16,439

 
 
 
14,162

 
Service
 
 
1,071

 
 
 
630

 
 
 
4,292

 
 
 
2,009

 
Total cost of revenue
 
 
10,883

 
 
 
5,635

 
 
 
20,731

 
 
 
16,171

 
Gross (loss) profit
 
 
(10,195

)
 
 
1,889

 
 
 
(12,200

)
 
 
7,931

 
Operating Expenses (Income)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Research and development
 
 
4,634

 
 
 
6,439

 
 
 
22,468

 
 
 
21,823

 
Sales and marketing
 
 
5,584

 
 
 
7,901

 
 
 
28,014

 
 
 
25,736

 
General and administrative
 
 
3,799

 
 
 
3,865

 
 
 
18,758

 
 
 
13,854

 
Amortization of intangible assets
 
 
2,547

 
 
 
2,624

 
 
 
10,301

 
 
 
10,868

 
Change in fair value of contingent consideration
 
 
136

 
 
 
(1,092

)
 
 
(9,553

)
 
 
(1,011

)
Restructuring and other charges
 
 
1,374

 
 
 

 
 
 
1,374

 
 
 

 
Goodwill impairment
 
 

 
 
 

 
 
 
78,969

 
 
 

 
In-process research and development impairment
 
 

 
 
 

 
 
 
7,912

 
 
 

 
Acquisition related costs
 
 

 
 
 
302

 
 
 

 
 
 
647

 
Loss (gain) from sale of SurgiBot assets, net
 
 

 
 
 
75

 
 
 
97

 
 
 
(11,840

)
Gain from sale of Autolap assets, net
 
 
(15,965

)
 
 

 
 
 
(15,965

)
 
 

 
Reversal of transfer fee accrual
 
 

 
 
 

 
 
 

 
 
 
(2,994

)
Total Operating Expenses
 
 
2,109

 
 
 
20,114

 
 
 
142,375

 
 
 
57,083

 
Operating Loss
 
 
(12,304

)
 
 
(18,225

)
 
 
(154,575

)
 
 
(49,152

)
Other Income (Expense)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Change in fair value of warrant liabilities
 
 
(788

)
 
 
10,118

 
 
 
2,248

 
 
 
(14,320

)
Interest income
 
 
23

 
 
 
418

 
 
 
582

 
 
 
1,400

 
Interest expense
 
 
(1,206

)
 
 
(810

)
 
 
(4,613

)
 
 
(4,208

)
Other (expense) income
 
 
(32

)
 
 
1,235

 
 
 
(967

)
 
 
1,126

 
Total Other Expense, net
 
 
(2,003

)
 
 
10,961

 
 
 
(2,750

)
 
 
(16,002

)
Loss before income taxes
 
$
(14,307

)
 
$
(7,264

)
 
$
(157,325

)
 
$
(65,154

)
Income tax benefit
 
 
575

 
 
 
823

 
 
 
3,124

 
 
 
3,377

 
Net loss
 
$
(13,732

)
 
$
(6,441

)
 
$
(154,201

)
 
$
(61,777

)
Other comprehensive loss
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation gain (loss)
 
 
1,671

 
 
 
(1,039

)
 
 
(2,708

)
 
 
(3,690

)
Comprehensive loss
 
$
(12,061

)
 
$
(7,480

)
 
$
(156,909

)
 
$
(65,467

)
Net loss per share - basic and diluted
 
$
(0.69

)
 
$
(0.39

)
 
$
(8.69

)
 
$
(3.88

)
Weighted average common shares outstanding - basic and diluted
 
 
19,885

 
 
 
16,550

 
 
 
17,737

 
 
 
15,938

 












TransEnterix, Inc.
Consolidated Balance Sheets
(in thousands, except share amounts)

 
 
December 31,
 
 
December 31,
 
 
 
2019
 
 
2018
 
 
 
(Unaudited)

 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Current Assets
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
9,598

 
 
$
21,061

 
Short-term investments
 
 

 
 
 
51,790

 
Accounts receivable, net
 
 
620

 
 
 
8,560

 
Inventories
 
 
10,653

 
 
 
10,941

 
Interest receivable
 
 

 
 
 
26

 
Other current assets
 
 
7,084

 
 
 
9,205

 
Total Current Assets
 
 
27,955

 
 
 
101,583

 
Restricted cash
 
 
969

 
 
 
590

 
Inventories, net of current portion
 
 
7,594

 
 
 

 
Property and equipment, net
 
 
4,706

 
 
 
6,337

 
Intellectual property, net
 
 
28,596

 
 
 
39,716

 
In-process research and development
 
 
2,470

 
 
 
10,747

 
Goodwill
 
 

 
 
 
80,131

 
Other long term assets
 
 
2,489

 
 
 
203

 
Total Assets
 
$
74,779

 
 
$
239,307

 
Liabilities and Stockholders’ Equity
 
 
 
 
 
 
 
 
Current Liabilities
 
 
 
 
 
 
 
 
Accounts payable
 
$
3,579

 
 
$
4,433

 
Accrued expenses
 
 
8,553

 
 
 
9,619

 
Deferred revenue – current portion
 
 
818

 
 
 
1,733

 
Contingent consideration – current portion
 
 
73

 
 
 
72

 
Deferred consideration – MST Acquisition
 
 

 
 
 
5,962

 
Total Current Liabilities
 
 
13,023

 
 
 
21,819

 
Long Term Liabilities
 
 
 
 
 
 
 
 
Deferred revenue – less current portion
 
 
27

 
 
 
109

 
Contingent consideration – less current portion
 
 
1,011

 
 
 
10,565

 
Notes payable, net of debt discount
 
 

 
 
 
28,937

 
Warrant liabilities
 
 
2,388

 
 
 
4,636

 
Net deferred tax liabilities
 
 
1,392

 
 
 
4,720

 
Other long term liabilities
 
 
1,403

 
 
 

 
Total Liabilities
 
 
19,244

 
 
 
70,786

 
Commitments and Contingencies
 
 
 
 
 
 
 
 
Stockholders’ Equity
 
 
 
 
 
 
 
 
Common stock $0.001 par value, 750,000,000 shares authorized at
   December 31, 2019 and December 31, 2018; 20,691,301 and
   16,641,999 shares issued and outstanding at December 31, 2019 and
   December 31, 2018, respectively
 
 
21

 
 
 
17

 
Additional paid-in capital
 
 
720,484

 
 
 
676,572

 
Accumulated deficit
 
 
(663,600

)
 
 
(509,406

)
Accumulated other comprehensive (loss) income
 
 
(1,370

)
 
 
1,338

 
Total Stockholders’ Equity
 
 
55,535

 
 
 
168,521

 
Total Liabilities and Stockholders’ Equity
 
$
74,779

 
 
$
239,307

 




TransEnterix, Inc.
Consolidated Statements of Cash Flows
(in thousands)

 
 
Twelve Months Ended
 
 
 
December 31,
 
 
 
2019
 
 
2018
 
Operating Activities
 
 
(Unaudited)

 
 
 
 
 
Net loss
 
$
(154,201

)
 
$
(61,777

)
Adjustments to reconcile net loss to net cash and cash equivalents used in
   operating activities:
 
 
 
 
 
 
 
 
Gain from sale of AutoLap assets, net
 
 
(15,965

)
 
 

 
Loss (gain) from sale of SurgiBot assets, net
 
 
97

 
 
 
(11,840

)
Goodwill and intangible assets impairment
 
 
86,881

 
 
 

 
Depreciation
 
 
2,166

 
 
 
2,420

 
Amortization of intangible assets
 
 
10,301

 
 
 
10,868

 
Amortization of debt discount and debt issuance costs
 
 
1,513

 
 
 
725

 
Amortization of short-term investment discount
 
 
(327

)
 
 
(351)

 
Stock-based compensation
 
 
11,508

 
 
 
9,039

 
Inventory write-down related to restructuring
 
 
7,408

 
 
 

 
Inventory write-down
 
 
1,523

 
 
 
 
 
Bad debt expense
 
 
1,634

 
 
 

 
Interest expense on deferred consideration – MST acquisition
 
 
756

 
 
 

 
Deferred tax benefit
 
 
(3,224

)
 
 
(3,377

)
Loss on extinguishment of debt
 
 
1,006

 
 
 
1,400

 
Change in fair value of warrant liabilities
 
 
(2,248

)
 
 
14,320

 
Change in fair value of contingent consideration
 
 
(9,553

)
 
 
(1,011

)
Reversal of transfer fee accrual
 
 

 
 
 
(2,994

)
Changes in operating assets and liabilities, net of effect of acquisition:
 
 
 
 
 
 
 
 
Accounts receivable
 
 
6,083

 
 
 
(7,225

)
Interest receivable
 
 
26

 
 
 
54

 
Inventories
 
 
(16,404

)
 
 
(2,145

)
Other current and long term assets
 
 
(655

)
 
 
(325

)
Accounts payable
 
 
(668

)
 
 
767

 
Accrued expenses
 
 
(1,180

)
 
 
2,134

 
Deferred revenue
 
 
(959

)
 
 
825

 
Other long term liabilities
 
 
998

 
 
 

 
Net cash and cash equivalents used in operating activities
 
 
(73,484

)
 
 
(48,493

)
Investing Activities
 
 
 
 
 
 
 
 
Proceeds from sale of AutoLap assets
 
 
15,965

 
 
 

 
Purchase of short-term investments
 
 
(12,883

)
 
 
(55,439

)
Proceeds from maturities of short-term investments
 
 
65,000

 
 
 
4,000

 
Payment for acquisition of a business
 
 

 
 
 
(5,800

)
Proceeds related to sale of SurgiBot assets, net
 
 

 
 
 
4,496

 
Purchase of property and equipment
 
 
(437

)
 
 
(770

)
Proceeds from sale of property and equipment
 
 

 
 
 
32

 
Net cash and cash equivalents provided by (used in) investing activities
 
 
67,645

 
 
 
(53,481

)
Financing Activities
 
 
 
 
 
 
 
 
Payment of notes payable
 
 
(31,425

)
 
 
(15,305

)
Proceeds from issuance of debt and warrants, net of issuance costs
 
 

 
 
 
28,507

 
Payment of contingent consideration
 
 

 
 
 
(770

)
Proceeds from issuance of common stock and warrants, net of issuance costs
 
 
25,777

 
 
 
279

 
Taxes paid related to net share settlement of vesting of restricted stock units
 
 
(499

)
 
 
(1,662

)
Proceeds from issuance of common stock related to sale of SurgiBot assets
 
 

 
 
 
3,000

 
Proceeds from exercise of stock options and warrants
 
 
538

 
 
 
12,403

 
Net cash and cash equivalents (used in) provided by financing activities
 
 
(5,609

)
 
 
26,452

 
Effect of exchange rate changes on cash and cash equivalents
 
 
364

 
 
 
(433

)
Net (decrease) increase in cash, cash equivalents and restricted cash
 
 
(11,084

)
 
 
(75,955

)
Cash, cash equivalents and restricted cash, beginning of period
 
 
21,651

 
 
 
97,606

 
Cash, cash equivalents and restricted cash, end of period
 
$
10,567

 
 
$
21,651

 

Supplemental Disclosure for Cash Flow Information
 
 
 
 
 
 
 
 
Interest paid
 
$
2,187

 
 
$
1,730

 
Supplemental Schedule of Non-cash Investing and Financing Activities
 
 
 
 
 
 
 
 
Transfer of inventories to property and equipment
 
$
486

 
 
$
2,160

 
Transfer of property and equipment to inventories
 
$
323

 
 
$
637

 
Reclass of warrant liability to common stock and additional paid-in capital
 
$

 
 
$
23,774

 
Cashless exercise of warrants
 
$

 
 
$
4,272

 
Issuance of common stock related to MST acquisition
 
$
6,600

 
 
$
8,300

 
Proceeds from sale of AutoLap assets exchanged for settlement of Company obligations
 
$
1,000

 
 
$

 
Deferred consideration – MST acquisition
 
$

 
 
$
5,962

 





Reconciliation of Non-GAAP Measures
Adjusted Net Loss and Net Loss per Share
(in thousands except per share amounts)
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
Twelve Months Ended
 
 
 
December 31,
 
 
December 31,
 
 
2019
 
2018
 
2019
 
2018
(Unaudited, U.S. Dollars, in thousands)
 
 
 
 
 
 
 
 
 
 
 
Net loss (GAAP)
$
(13,732)

 
$
(6,441)

 
$
(154,201)

 
$
(61,777)

 
 
 
 
 
 
 
 
 
 
 
 
 
Adjustments
 
 
 
 
 
 
 
 
 
 
 
 
Gain from sale of AutoLap assets, net
 
(15,965)

 
 

 
 
(15,965)

 
 

 
Loss (gain) from sale of SurgiBot assets, net
 
           
 
 
75
 
 
97

 
 
(11,840)

 
Amortization of intangible assets
 
2,547

 
 
2,624

 
 
10,301

 
 
10,868

 
Change in fair value of contingent consideration
 
136

 
 
(1,092)

 
 
(9,553)

 
 
(1,011)

 
Acquisition related costs
 

 
 
302

 
 

 
 
647

 
Goodwill impairment
 

 
 

 
 
78,969

 
 

 
In-process research and development impairment
 

 
 

 
 
7,912

 
 

 
Reversal of transfer fee accrual
 

 
 

 
 

 
 
(2,994)

 
Change in fair value of warrant liabilities
 
788

 
 
(10,118)

 
 
(2,248)

 
 
14,320

 
Restructuring and other charges
 
1,374

 
 

 
 
1,374

 
 

 
Inventory write-down related to restructuring
 
7,408

 
 

 
 
7,408

 
 

 
Loss on extinguishment of debt
 
1,006

 
 

 
 
1,006

 
 
1,400

Adjusted net loss (Non-GAAP)
$
(16,438)

 
$
(14,650)

 
$
(74,900)

 
$
(50,387)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
Twelve Months Ended
 
 
 
December 31,
 
 
December 31,
(Unaudited, per basic share)
2019
 
2018
 
2019
 
2018
Net loss per share (GAAP)
$
(0.690)

 
$
(0.390)

 
$
(8.690)

 
$
(3.880)

 
 
 
 
 
 
 
 
 
 
 
 
 
Adjustments
 
 
 
 
 
 
 
 
 
 
 
 
Gain from sale of AutoLap assets, net
 
(0.800)

 
 

 
 
(0.900)

 
 

 
Loss (gain) from sale of SurgiBot assets, net
 

 
 
0.00

 
 
0.01

 
 
(0.740)

 
Amortization of intangible assets
 
0.13

 
 
0.16

 
 
0.58

 
 
0.68

 
Change in fair value of contingent consideration
 
0.01

 
 
(0.070)

 
 
(0.540)

 
 
(0.060)

 
Acquisition related costs
 

 
 
0.02

 
 

 
 
0.04

 
Goodwill impairment
 

 
 

 
 
4.45

 
 

 
In-process research and development impairment
 

 
 

 
 
0.45

 
 

 
Reversal of transfer fee accrual
 

 
 

 
 

 
 
(0.190)

 
Change in fair value of warrant liabilities
 
0.04

 
 
(0.610)

 
 
(0.130)

 
 
0.90

 
Restructuring and other charges
 
0.07

 
 

 
 
0.08

 
 

 
Inventory write-down related to restructuring
 
0.37

 
 

 
 
0.42

 
 

 
Loss on extinguishment of debt
 
0.05

 
 

 
 
0.06

 
 
0.09

Adjusted net loss per share (Non-GAAP)
$
(0.830)

 
$
(0.890)

 
$
(4.220)

 
$
(3.160)



The non-GAAP financial measures for the three and twelve months ended December 31, 2019 and 2018 provide management with additional insight into the Company’s results of operations from period to period without non-recurring and non-cash charges, and are calculated using the following adjustments:
a) The Company entered into an agreement with Great Belief International Limited to sell certain assets related to the AutoLap technology. The Company recorded a $16.0 million gain on the sale of the AutoLap assets during the three and twelve months ended December 31, 2019, which represented the proceeds received in excess of the carrying value of the assets, less contract costs.
b)   Gain from sale of SurgiBot assets relates to amounts received from Great Belief International Limited in excess of the carrying amount of the assets sold. Loss from sale of SurgiBot assets relates to additional outside service costs to transfer the assets.
c)   Intangible assets that are amortized consist of developed technology and purchased patent rights recorded at cost and amortized over 5 to 10 years.
d)   Contingent consideration in connection with the acquisition of the Senhance System in 2015 is recorded as a liability and is the estimate of the fair value of potential milestone payments related to business acquisitions. Contingent consideration is measured at fair value using a discounted cash flow model utilizing significant unobservable inputs including the probability of achieving each of the potential milestones and an estimated discount rate associated with the risks of the expected cash flows attributable to the various milestones. Significant increases or decreases in any of the probabilities of success or changes in expected timelines for achievement of any of these milestones would result in a significantly higher or lower fair value of these milestones, respectively, and commensurate changes to the associated liability. The contingent consideration is revalued at each reporting period and changes in fair value are recognized in the consolidated statements of operations and comprehensive loss.
e)   Acquisition related costs were incurred in connection with the MST purchase agreement and consist of legal, accounting, and other costs.
f) As of September 30, 2019, goodwill was deemed to be fully impaired, and the Company recorded an impairment charge of $79.0 million. As of September 30, 2019 IPR&D was deemed to be significantly impaired, and the Company recorded an impairment charge of $7.9 million. No impairment charges were recorded during the three or twelve months ended December 31, 2018 or the three months ended December 31, 2019.
g) In connection with the Senhance acquisition, the Company recorded an accrual in 2015 for potential assessment of additional transfer fees. In September 2018, the Company determined that the accrual was no longer required and reversed the accrual.
h)   The Company’s Series B Warrants are measured at fair value using a simulation model which takes into account, as of the valuation date, factors including the current exercise price, the expected life of the warrant, the current price of the underlying stock, its expected volatility, holding cost and the risk-free interest rate for the term of the warrant. The warrant liability is revalued at each reporting period or upon exercise and changes in fair value are recognized in the consolidated statements of operations and comprehensive loss.
i) During the fourth quarter of 2019, we announced the implementation of a restructuring plan to reduce operating expenses as we continue the global market development of the Senhance platform. The restructuring charges amounted to $8.8 million of which $7.4 million was an inventory write down and was included in cost of product revenue and $1.4 million related to employee severance costs and was included as restructuring and other charges in the consolidated statements of operations and comprehensive loss.
j) In May 2018 in connection with its entrance into the Hercules Loan Agreement, the Company repaid its existing loan and security agreement with Innovatus Life Sciences Lending Fund I, LP. The Company recognized a loss of $1.4 million on the extinguishment of notes payable which is included in interest expense on the consolidated statements of operations and comprehensive loss for the twelve months ended December 31, 2018. In November 2019, the Company entered into a payoff letter with Hercules Capital, Inc. to terminate the Hercules Loan Agreement, as amended. The Company repaid all amounts owed under the Hercules Loan Agreement and recognized a loss of $1.0 million on the extinguishment of notes payable which is included in interest expense on the consolidated statements of operations and comprehensive loss for the three and twelve months ended December 31, 2019.
Investors:
Mark Klausner, 443-213-0501
invest@transenterix.com
or
Media:
Terri Clevenger, 203-856-8297
terri.clevenger@icrinc.com



The following information was filed by Transenterix Inc. (TRXC) on Thursday, March 19, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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