ProSomnus Reports Record Fourth Quarter and Fiscal Year 2023 Financial Results
Recent Business Highlights
- Generated record revenues of
$7.8 million for the fourth quarter and$27.7 million for the fiscal year 2023, a 35% increase compared to$5.8 million for the fourth quarter 2022 and 43% increase compared to$19.4 million for fiscal year 2022. The quarter marked the eighth (8th) sequential quarter of record revenues. - Continued focus on implementing reductions in operating expenses. Operating expenses, excluding cost of revenue, decreased over 8% compared to operating expenses reported for the second quarter of 2024 and decreased nearly 19% as a percentage of revenue over the same period.
- Initiated comprehensive review of financing and strategic alternatives to strengthen the balance sheet and fund future growth initiatives.
- Demonstrated technical feasibility of the Company’s Next Generation Remote Patient Monitoring (RPM) device for Obstructive Sleep Apnea (OSA). Data from a recently completed pilot study demonstrated that an oximeter embedded in a precision intraoral medical device can accurately, safely, and continuously monitor SpO2.
- Submitted 510(k) Premarket Notification to
U.S. Food and Drug Administration for severe indication label expansion. Currently in substantive review phase. - Maintained >98% on time delivery and patient and provider satisfaction.
- Secured ISO 13485:2016 certification of the Company’s quality management system
“I am thrilled to announce another record revenue quarter and fiscal year for ProSomnus, as we establish the ProSomnus EVO® precision intraoral technology as a truly differentiated therapy for Obstructive Sleep Apnea,” said
Financial Results for the Fourth Quarter and Year Ended
Revenues increased to
Cost of revenue totaled
Sales and marketing expenses totaled
General and administrative expenses totaled
Research and development expenses totaled
Other income (expense) is comprised of interest expense and accounting charges associated with changes in fair values of certain assets and liabilities and charges associated with financings and debt restructuring. Total other expense for the year ended
Cash and restricted cash at
Conference Call and Webcast Information
Interested parties may register for the conference call at
About ProSomnus
ProSomnus (NASDAQ: OSA) is the leading non-CPAP therapy for the treatment of Obstructive Sleep Apnea, a serious medical disease affecting over 1 billion people worldwide, that is associated with comorbidities including heart failure, stroke, hypertension, morbid obesity, and type 2 diabetes. ProSomnus intraoral medical devices are engineered to precisely track the treatment plan and anatomy for each patient. Non-invasive, patient preferred and easy to use, ProSomnus devices have demonstrated excellent efficacy, safety, adherence, and overall outcomes in a growing body of clinical investigations. ProSomnus precision intraoral devices are FDA-cleared, patented, and covered by commercial medical insurance, Medicare, TRICARE and many Government-sponsored healthcare plans around the world, representing over 200 million covered lives. To learn more, visit www.ProSomnus.com.
Important Notice Regarding Forward-Looking Statements
This Press Release contains certain “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, both as amended. Statements that are not historical facts, including statements about the Company’s review of potential financing and strategic alternatives, the Company’s research and development efforts, the Company’s prospects for 2024, the Company’s mission of becoming the leader non-CPAP therapy for Obstructive Sleep Apnea and the Company’s ability to fine tune its operations, are forward-looking statements. The words “expect,” “believe,” “estimate,” “intend,” “plan” and similar expressions indicate forward-looking statements, although not all forward-looking statements contain these or similar identifying words.
These forward-looking statements are not guarantees of future performance and are subject to various risks and uncertainties, assumptions (including assumptions about general economic, market, industry and operational factors), known or unknown, which could cause the actual results to vary materially from those indicated or anticipated. Such risks and uncertainties include, but are not limited to: ProSomnus’s ability to continue as a going concern; ProSomnus’s ability raise additional capital to fund its business on acceptable terms or at all; ProSomnus’s ability to regain compliance with the covenants under its convertible notes; ProSomnus’s ability to negotiate and consummate a financing or other strategic transaction; changes in the competitive industries in which the Company operates and variations in operating performance across competitors; changes in laws and regulations affecting ProSomnus’s business; the risk of downturns in the market and ProSomnus’s industry; risks related to the uncertainty of the projected financial information with respect to ProSomnus; risks related to ProSomnus’s limited operating history and history of losses; the timing of expected business milestones; ProSomnus’s ability to implement its business plan and scale its business, which includes the recruitment of healthcare professionals to prescribe and dentists to deliver ProSomnus oral devices; the understanding and adoption by dentists and other healthcare professionals of ProSomnus oral devices for mild-to-moderate OSA; expectations concerning the effectiveness of OSA treatment using ProSomnus oral devices and the potential for patient relapse after completion of treatment; the potential financial benefits to dentists and other healthcare professionals from treating patients with ProSomnus oral devices and using ProSomnus’s monitoring tools; ProSomnus’s potential profit margin from sales of ProSomnus oral devices; ProSomnus’s ability to properly train dentists in the use of the ProSomnus oral devices and other services it offers in their dental practices; ProSomnus’s ability to formulate, implement and modify as necessary effective sales, marketing, and strategic initiatives to drive revenue growth; ProSomnus’s ability to expand internationally; the viability of ProSomnus’s intellectual property and intellectual property created in the future; acceptance by the marketplace of the products and services that ProSomnus markets; government regulations and ProSomnus’s ability to obtain applicable regulatory approvals and comply with government regulations, including under healthcare laws and the rules and regulations of the
PROSOMNUS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands) |
|||||||||||||||||||||||||
Three Month Period Ended | Three Month Period Ended | ||||||||||||||||||||||||
2023 | 2023 | 2022 | 2022 vs 2023 | ||||||||||||||||||||||
($) | (%) | ($) | (%) | ||||||||||||||||||||||
Revenue | $ | 7,838 | $ | 7,071 | $ | 5,792 | $ | 767 | 10.8 | % | $ | 2,046 | 35.3 | % | |||||||||||
Operating expenses | |||||||||||||||||||||||||
Cost of revenue | 4,133 | 3,580 | 2,687 | 553 | 15.4 | % | 1,446 | 53.8 | % | ||||||||||||||||
Sales and marketing | 3,378 | 3,240 | 2,415 | 138 | 4.3 | % | 963 | 39.9 | % | ||||||||||||||||
Research and development | 1,367 | 1,040 | 1,065 | 327 | 31.4 | % | 302 | 28.4 | % | ||||||||||||||||
General and administrative | 3,970 | 3,427 | 5,675 | 543 | 15.8 | % | (1,705 | ) | -30.0 | % | |||||||||||||||
Total operating expenses | 12,848 | 11,287 | 11,842 | 1,561 | 13.8 | % | 1,006 | 8.5 | % | ||||||||||||||||
Loss from operations | (5,010 | ) | (4,216 | ) | (6,050 | ) | (794 | ) | 18.8 | % | 1,040 | -17.2 | % | ||||||||||||
Other income (expense) | |||||||||||||||||||||||||
Interest expense | (1,481 | ) | (1,489 | ) | (2,405 | ) | 8 | -0.5 | % | 924 | -38.4 | % | |||||||||||||
Change in fair value of earnout liability | 110 | 3,880 | 9,260 | (3,770 | ) | -97.2 | % | (9,150 | ) | -98.8 | % | ||||||||||||||
Change in fair value of debt | 258 | 3,700 | 553 | (3,442 | ) | -93.0 | % | (295 | ) | -53.3 | % | ||||||||||||||
Change in fair value of warrant liability | 39 | 593 | 3,255 | (554 | ) | -93.4 | % | (3,216 | ) | -98.8 | % | ||||||||||||||
Loss on extinguishment of debt | (707 | ) | (9,743 | ) | (2,405 | ) | 9,036 | -92.7 | % | 1,698 | -70.6 | % | |||||||||||||
Other | (78 | ) | (3,964 | ) | - | 3,886 | -98.0 | % | (78 | ) | - | ||||||||||||||
Total other income (expense) | (1,859 | ) | (7,023 | ) | 8,258 | 5,164 | -73.5 | % | (10,117 | ) | -122.5 | % | |||||||||||||
Net loss | $ | (6,869 | ) | $ | (11,239 | ) | $ | 2,208 | $ | 4,370 | -38.9 | % | $ | (9,077 | ) | -411.1 | % | ||||||||
Year Ended | Year Ended | ||||||||||||||
2023 | 2022 | 2022 vs 2023 | |||||||||||||
($) | (%) | ||||||||||||||
Revenue | $ | 27,652 | $ | 19,393 | $ | 8,259 | 42.6 | % | |||||||
Operating expenses | |||||||||||||||
Cost of revenue | 13,641 | 9,127 | 4,514 | 49 | % | ||||||||||
Sales and marketing | 13,085 | 8,865 | 4,220 | 47.6 | % | ||||||||||
Research and development | 4,802 | 2,981 | 1,821 | 61.1 | % | ||||||||||
General and administrative | 15,230 | 9,895 | 5,335 | 53.9 | % | ||||||||||
Total operating expenses | 46,758 | 30,868 | 15,890 | 51.5 | % | ||||||||||
Loss from operations | (19,106 | ) | (11,475 | ) | (7,631 | ) | 66.5 | % | |||||||
Other income (expense) | |||||||||||||||
Interest expense | (5,382 | ) | (6,120 | ) | 738 | -12.1 | % | ||||||||
Change in fair value of earnout liability | 12,190 | 9,260 | 2,930 | 31.6 | % | ||||||||||
Change in fair value of debt | 1,328 | 553 | 775 | 140.1 | % | ||||||||||
Change in fair value of warrant liability | 1,896 | 3,235 | (1,339 | ) | -41.4 | % | |||||||||
Loss on extinguishment of debt | (10,450 | ) | (2,598 | ) | (7,852 | ) | 302.2 | % | |||||||
Other | (4,571 | ) | - | (4,571 | ) | - | |||||||||
Total other income (expense) | (4,989 | ) | 4,330 | (9,319 | ) | -215.2 | % | ||||||||
Net loss | $ | (24,095 | ) | $ | (7,145 | ) | $ | (16,950 | ) | 237.2 | % | ||||
PROSOMNUS, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share data) |
||||||
ASSETS | ||||||
Current assets: | ||||||
Cash, restricted cash and cash equivalents | $ | 7,063 | $ | 15,916 | ||
Accounts receivable, net | 3,839 | 2,843 | ||||
Inventory | 2,039 | 640 | ||||
Prepaid expenses and other current assets | 1,369 | 1,851 | ||||
Total current assets | 14,310 | 21,250 | ||||
Property and equipment, net | 3,358 | 2,404 | ||||
Finance lease right-of-use assets | 3,265 | 3,650 | ||||
Operating lease right-of-use assets | 5,069 | 5,633 | ||||
Other assets | 285 | 263 | ||||
Total assets | $ | 26,287 | $ | 33,200 | ||
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 4,047 | $ | 2,102 | ||
Accrued expenses and other current liabilities | 6,756 | 3,706 | ||||
Equipment financing obligation | 57 | 59 | ||||
Finance lease liabilities | 1,052 | 1,009 | ||||
Operating lease liabilities | 304 | 215 | ||||
Senior Convertible Notes at fair value, current portion | 2,125 | — | ||||
Total current liabilities | 14,341 | 7,091 | ||||
Equipment financing obligation, net of current portion | 129 | 186 | ||||
Finance lease liabilities, net of current portion | 2,009 | 2,081 | ||||
Operating lease liabilities, net of current portion | 5,221 | 5,526 | ||||
Senior Convertible Notes at fair value, net of current portion | 12,152 | 13,651 | ||||
Subordinated Convertible Notes at fair value | 18,320 | 10,356 | ||||
Earnout and warrant liability | 716 | 14,802 | ||||
Total liabilities | 52,888 | 53,693 | ||||
Commitments and contingencies | ||||||
Redeemable convertible preferred stock: | ||||||
11,555 | — | |||||
Stockholders’ deficit: | ||||||
Common Stock | 2 | 2 | ||||
Additional paid-in capital | 196,731 | 190,299 | ||||
Accumulated deficit | -234,889 | -210,794 | ||||
Total stockholders’ deficit | -38,156 | -20,493 | ||||
Total liabilities, redeemable convertible preferred stock and stockholders’ deficit | $ | 26,287 | $ | 33,200 | ||
Investor Contact
ICR Westwicke
Phone: +1.617.877.9641
Email: Mike.Cavanaugh@westwicke.com
Media Contact
ProSomnus
Phone: +1.925.360.2990
Email: HWhalen@ProSomnus.com
Source: ProSomnus Sleep Technologies, Inc.