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ASENSUS SURGICAL, INC.

(ASXC)
  Report
Real-time Estimate Cboe BZX  -  04:00 2022-10-06 pm EDT
0.4420 USD   +2.31%
09/28Asensus Surgical Announces St. Bernhard Hospital in Germany to Initiate Senhance Surgery Program
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09/28Asensus Surgical Announces St. Bernhard Hospital in Germany to Initiate Senhance Surgery Program
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09/12Asensus Surgical : Corporate Deck
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ASENSUS SURGICAL, INC. Management's Discussion and Analysis of Financial Conditions and Results of Operation (form 10-Q)

08/08/2022 | 05:09pm EDT

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" at the beginning of this report.



Overview


Asensus Surgical 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 to enable consistently superior outcomes and a new standard of surgery. This builds upon the foundation of Digital Laparoscopy with the Senhance® Surgical System powered by the Intelligent Surgical Unit™, or 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. The Company is focused on the market development for and commercialization of the Senhance Surgical 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.

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
    98 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").

On February 23, 2021, we changed our name from TransEnterix, Inc. to Asensus Surgical, Inc. as part of our strategy to utilize the Senhance System and ISU capabilities, along with our other augmented intelligence related offerings and instrumentation to unlock clinical intelligence to enable consistently superior outcomes and a new standard of surgery we are calling Performance-Guided Surgery. We believe our product offerings, and our digitization of the interface between the surgeon and the patient allows us to assist the surgeon in all aspects of laparoscopic surgery including:



  ? Pre-operative - in what we call "intelligent preparation," our machine
    learning models will take data from all the procedures done utilizing our
    current Senhance System with the ISU, such as tracking surgical motion and
    team interaction, to create a large and constantly improving database of
    surgeries and their outcomes to enable surgeons to best inform their approach
    and surgical setup.




  ? Intra-operative - we believe the Senhance System provides perceptive real-time
    guidance for intra-operative tasks, allowing any surgeon performing a
    procedure with the Senhance System to perform multiple tasks and benefit from
    the collective knowledge and rules-based performance of thousands of other
    successful Senhance-based procedures. Not only will this provide the surgeon
    with a pathway to better outcomes, but we also believe it will ultimately help
    reduce the cognitive load of the surgeons.




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  ? Post-operative - by tapping into the vast amount of data captured during
    procedures, surgeons and operating room staff will be able to get actionable
    assessments of their performance giving them the information needed to improve
    performance over time. We intend to establish a new standard of analytics to
    improve not only the skills of all surgeons but move towards
    best-practice-sharing that bridges the global surgeon community.



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 February 2020, we received CE Mark for the Senhance System and related instruments for pediatric use indications in CE Mark territories.

In 2020, we obtained regulatory clearance for the Senhance ultrasonic system in both Taiwan and Japan. We also received clearance for the ISU in both the U.S. and Japan. Finally, in the EU, we expanded our claims for the Senhance System to include pediatric patients, allowing accessibility to more surgeons and patients, as well as expanding our potential market to include pediatric hospitals in Europe. We anticipate the robotic precision provided by the Senhance System, coupled with the already available 3mm instruments will prove to be an effective tool in surgery with smaller patients.

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.

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, 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 expect to continue to invest in research and development and market development as we implement our strategy.

Since inception, we have been unprofitable. As of June 30, 2022, we had an accumulated deficit of $824.1 million. We operate in one business segment.

Recent Financing Transactions



At-the -Market Offerings


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. The Company commenced an at-the-market offering (the "2022 ATM Offering") pursuant to which the Company could sell from time to time, at its option, up to an aggregate of $100.0 million shares of the Company's common stock. No sales of common stock were made under the 2022 ATM Offering during the six months ended June 30, 2022.

Results of Operations - Comparison of Three Months Ended June 30, 2022 and 2021

Revenue

In the second quarter of 2022, our revenue consisted of ongoing System leasing payments, sales of instruments and accessories, and services revenue for Systems sold or placed in Europe, Asia, and the U.S. in prior periods.

Product revenue for the three months ended June 30, 2022 decreased to $0.3 million compared to $0.4 million for the three months ended June 30, 2021. Service revenue remained consistent at $0.4 million for the three months ended June 30, 2022 and 2021. Lease revenue remained consistent at $0.3 million for the three months ended June 30, 2022 and 2021. The fluctuations in revenue for the three months ended June 30, 2022 and 2021, were primarily the result of customer mix and fluctuations in exchange rates.




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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 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. We expect overhead costs as a percentage of revenues to decline as our production volume increases. We expect cost of revenue to increase in absolute dollars to the extent our revenues grow and as we continue to invest in our operational infrastructure to support anticipated growth.

Product cost for the three months ended June 30, 2022 decreased to $0.9 million as compared to $1.0 million for the three months ended June 30, 2021. The $0.1 million decrease primarily relates to a decrease in personnel-related costs.

Service cost remained consistent at $0.6 million for the three months ended June 30, 2022 and 2021.

Lease cost for the three months ended June 30, 2022 increased to $0.8 million as compared to $0.7 million for the three months ended June 30, 2021.

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 increase as we continue to invest in additional regulatory approvals as well as new products, instruments, and accessories to be offered with the Senhance System. R&D expenses are expensed as incurred.

R&D expenses for the three months ended June 30, 2022 increased 78% to $7.3 million as compared to $4.1 million for the three months ended June 30, 2021 as we continue to invest in basic research, clinical studies, and product development in the areas of robotics and digital technologies supporting the growth of the Senhance System and ISU digital and cloud capabilities. All activities are in the effort of building the future for Performance-Guided Surgery. The $3.2 million increase primarily relates to increased personnel costs of $1.5 million driven by additional headcount as well as the transfer of employees within functional areas due to the evolving nature and commercialization of our business. The change was also driven by an increase in contract engineering services, consulting, and other outside services of $1.0 million, increased supplies costs of $0.3 million, and increased miscellaneous costs of $0.4 million.




Sales and Marketing

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

Sales and marketing expenses for the three months ended June 30, 2022 and 2021 remained consistent at $3.6 million.

General and Administrative

General and administrative expenses consist of personnel costs related to the executive, finance, legal 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, 2022 increased 32% to $5.0 million compared to $3.8 million for the three months ended June 30, 2021. The $1.2 million increase was primarily related to increased personnel costs of $1.0 million driven by additional headcount as well as the transfer of employees within functional areas due to the evolving nature and commercialization of our business. The change was also driven by an increase in miscellaneous costs of $0.5 million, partially offset by a decrease in bad debt expense of $0.2 million, and a decrease in supplies costs of $0.1 million.

Amortization of Intangible Assets

Amortization of intangible assets for the three months ended June 30, 2022 decreased to $2.5 million compared to $2.9 million for the three months ended June 30, 2021. The $0.4 million decrease is primarily driven by changes in the foreign currency exchange rate.

Change in Fair Value of Contingent Consideration

The change in fair value of contingent consideration in connection with the Senhance Acquisition was a $0.6 million decrease for the three months ended June 30, 2022 compared to a $0.5 million increase for the three months ended June 30, 2021. The decrease was primarily due to changes in market assumptions utilized in the valuation of fair value of the contingent consideration.




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Property and Equipment Impairment

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 three months ended June 30, 2021.

Other Income (Expense)

Other income for the three months ended June 30, 2022 decreased to $0.0 million compared to $2.9 million for the three months ended June 30, 2021. Other income for the three months ended June 30, 2021 primarily related to the gain on extinguishment of debt of $2.8 million. No related income was recorded in the three months ended June 30, 2022.

Income Tax (Expense) Benefit

The Company recognized $0.1 million income tax expense for the three months ended June 30, 2022, compared to $0.0 million income tax expense for the three months ended June 30, 2021.

Results of Operations - Comparison of Six Months Ended June 30, 2022 and 2021

Revenue

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

Product revenue for the six months ended June 30, 2022 decreased to $0.6 million compared to $1.7 million for the six months ended June 30, 2021. The $1.1 million decrease was primarily the result of a Lease Buyout in the prior period.

Service revenue for the six months ended June 30,2022 decreased to $0.7 million compared to $0.8 million for the six months ended June 30, 2021. The $0.1 million decrease was the result of customer mix and fluctuations in exchange rates.

Lease revenue for the six months ended June 30, 2022 and 2021 remained consistent at $0.7 million.




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 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. We expect overhead costs as a percentage of revenues to decline as our production volume increases. We expect cost of revenue to increase in absolute dollars to the extent our revenues grow and as we continue to invest in our operational infrastructure to support anticipated growth.

Product cost for the six months ended June 30, 2022 decreased to $1.3 million as compared to $2.7 million for the six months ended June 30, 2021. The $1.4 million decrease primarily relates to a $0.7 million decrease in product costs driven by a Lease Buyout in the prior period and a $0.9 million decrease in personnel-related costs, partially offset by a $0.1 million increase in supplies costs and $0.1 million increase in freight expenses.

Service cost for the six months ended June 30, 2022 increased to $1.1 million as compared to $1.0 million for the six months ended June 30, 2021. The $0.1 million increase primarily relates to an increase in personnel-related 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, 2022 and 2021 remained consistent at $1.8 million.




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 increase moderately as we continue to invest in additional regulatory approvals as well as new products, instruments and accessories to be offered with the Senhance System. R&D expenses are expensed as incurred.




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R&D expenses for the six months ended June 30, 2022 increased 65% to $13.7 million as compared to $8.3 million for the six months ended June 30, 2021 as we continue to invest in basic research, clinical studies, and product development in the areas of robotics and digital technologies supporting the growth of the Senhance System and ISU digital and cloud capabilities. All activities are in the effort of building the future for Performance-Guided Surgery. The $5.4 million increase primarily relates to increased personnel costs of $2.5 million driven by additional headcount as well as the transfer of employees within functional areas due to the evolving nature and commercialization of our business. The change was also driven by an increase in contract engineering services, consulting, and other outside services costs of $1.9 million, increased supplies costs of $0.4 million, and increased miscellaneous costs of $0.6 million.




Sales and Marketing

Sales and marketing expenses include costs for sales and marketing 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, 2022 increased 11% to $7.3 million compared to $6.6 million for the six months ended June 30, 2021. The $0.7 million increase was primarily related to increased consulting costs of $0.5 million, increased travel costs of $0.5 million, partially offset by decreased supplies costs of $0.3 million.

General and Administrative

General and administrative expenses consist of personnel costs related to the executive, finance, legal 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, 2022 increased 35% to $10.5 million compared to $7.8 million for the six months ended June 30, 2021. The$2.7 million increase was primarily related to increased personnel costs of $1.9 million driven by additional headcount as well as the transfer of employees within functional areas due to the evolving nature and commercialization of our business. The change was also driven by an increase in software costs of $0.4 million, increased consulting costs of $0.2 million, and increased miscellaneous costs of $0.2 million.

Amortization of Intangible Assets

Amortization of intangible assets for the six months ended June 30, 2022 decreased to $5.2 million compared to $5.7 million for the six months ended June 30, 2021. The $0.5 million decrease is primarily driven by changes in the foreign currency exchange rate.

Change in Fair Value of Contingent Consideration

The change in fair value of contingent consideration in connection with the Senhance Acquisition was a $0.8 million decrease for the six months ended June 30, 2022 compared to a $0.7 million increase for the six months ended June 30, 2021. The decrease was primarily due to changes in market assumptions utilized in the valuation of fair value of the contingent consideration.

Property and Equipment Impairment

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, 2021.

Other Income (Expense)

The Company recognized $0.1 other expense for the six months ended June 30, 2022, compared to $0.9 million other income for the six months ended June 30, 2021. Other income for the six months ended June 30, 2021 primarily related to the gain on extinguishment of debt of $2.8 million, partially offset by the change in the fair value of Series B Warrants of $2.0 million. No related income or expense was recorded in the six months ended June 30, 2022.

Income Tax (Expense) Benefit

The Company recognized $0.2 million income tax expense for the six months ended June 30, 2022, compared to $0.0 million income tax benefit for the six months ended June 30, 2021.

Liquidity and Capital Resources

The Company had an accumulated deficit of $824.1 million and working capital of $98.9 million as of June 30, 2022. The Company has not established sufficient revenues to cover its operating costs and believes it will require additional capital in the future to proceed with its operating plan. As of June 30, 2022, the Company had cash, cash equivalents, short-term investments and long-term investments, excluding restricted cash, of approximately $103.8 million.

The Company believes the COVID-19 pandemic and other geopolitical factors will continue to negatively impact its operations and ability to implement its market development efforts, which will have a negative effect on its financial condition.




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While the Company believes that its existing cash, cash equivalents, short-term and long-term investments, as of June 30, 2022 and as of the date of filing, will be sufficient to sustain operations for at least the next 12 months from the issuance of these financial statements, the Company believes it will need to obtain additional financing in the future 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. However, management cannot provide any assurance that the Company will be successful in accomplishing any or all of its plans.

The Company is subject to risks similar to other similarly sized companies in the medical device industry. These risks include, without limitation: negative impacts on the Company's operations caused by the COVID-19 pandemic and other geopolitical factors; the historical lack of profitability; the Company's ability to increase utilization of the Senhance System and grow its placements, the Company's ability to raise additional capital; the success of its market development efforts; its ability to successfully develop, clinically test and commercialize its products; the timing and outcome of the regulatory review process for its products; changes in the health care and 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 surgical devices; and its ability to identify and pursue development of additional products.

Sources of Liquidity


Our principal sources of cash to date have been proceeds from public offerings
of common stock, incurrence of debt, the sale of equity securities held as
investments and asset sales.



Consolidated Cash Flow Data



                                                            Six Months Ended June 30,
(Unaudited, in millions)                                    2022                 2021
Net cash (used in) provided by
Operating activities                                   $        (30.2 )     $        (18.5 )
Investing activities                                             23.2                 (0.7 )
Financing activities                                             (0.3 )              160.1
Effect of exchange rate changes on cash and cash
equivalents                                                       0.2                 (0.3 )
Net (decrease) increase in cash, cash equivalents
and restricted cash                                    $         (7.1 )     $        140.6






Operating Activities

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.

For the six months ended June 30, 2021, cash used in operating activities of $18.5 million consisted of a net loss of $30.5 million offset by cash generated from work capital of $1.0 million and non-cash items of $11.1 million. The non-cash items primarily consisted of $3.6 million of stock-based compensation expense, $5.7 million of amortization of intangible assets, $2.0 million change in fair value of warrant liabilities, $1.6 million of depreciation, $0.7 million change in fair value of contingent consideration, and $0.3 million change in inventory reserves, offset by $2.8 million gain on extinguishment of debt. The increase in cash from changes in working capital primarily relates to a $3.1 million increase in operating lease liabilities, a $2.7 million decrease in other current and long-term assets, a $0.7 million increase in accounts payable, a $0.5 million decrease in prepaid expenses, and a $0.1 million decrease in accounts receivable, offset by a $3.0 million increase in operating lease right-of-use asset, a $1.7 million increase in inventory net of transfers of property and equipment, and a $1.4 million decrease in accrued expenses.




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Investing Activities

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.

For the six months ended June 30, 2021, net cash used in investing activities was $0.7 million, related to purchases of property and equipment.

Financing Activities

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.

For the six months ended June 30, 2021, net cash provided by financing activities was $160.1 million. The net change primarily related to $130.3 million in net proceeds from the issuance of common stock and $30.8 million aggregate proceeds from the exercise of Series B, C and D warrants, partially offset by $1.0 million of taxes paid related to 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. We intend to use financing opportunities strategically to continue to strengthen our financial position.

Cash and cash equivalents held by our foreign subsidiaries totaled $2.4 million as of June 30, 2022, 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 financial statements and notes thereto appearing in this Form 10-Q and in the Fiscal 2021 Form 10-K. The preparation of these 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 policies and 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 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 Annual Report on Form 10-K for the fiscal year ended December 31, 2021, that are of significance, or potential significance, to us.

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