10q10k10q10k.net

What changed in AtriCure, Inc.'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of AtriCure, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+296 added−292 removedSource: 10-K (2025-02-14) vs 10-K (2024-02-16)

Top changes in AtriCure, Inc.'s 2024 10-K

296 paragraphs added · 292 removed · 241 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

99 edited+17 added−6 removed107 unchanged
Biggest changeWe believe these training and education programs have increased awareness about the surgical treatment of Afib, and we will continue to make investments to serve our physician customers. As a result of the educational process, we believe that awareness of our technologies is growing and will result in the increased use of our products. Evaluate Acquisition Opportunities.
Biggest changeMore recently, we have implemented multidisciplinary training programs focused on 6 Table of Contents the heart team approach for creating and growing an arrhythmia treatment program and managing post-operative pain. We believe these training and education programs have increased awareness about the surgical treatment of Afib, and we will continue to make investments to serve our physician customers.
The device comes in two geometries (a rectangular configuration which encircles the targeted tissue and “V” shape which allows for an alternative lateral access) and a variety of lengths, which are matched to each patient's anatomy.
The device comes in two geometries: a rectangular configuration which encircles the targeted tissue and a “V” shape which allows for an alternative lateral access, and a variety of lengths which are matched to each patient's anatomy.
In that process, we review existing leaders and prospective leaders throughout the organization and determine next best steps for their future development. Employee development is an important part of the way we drive retention and foster a strong culture of learning.
In that process, we review existing leaders and prospective leaders throughout the organization and determine the next best steps for their future development. Employee development is an important part of the way we drive retention and foster a strong culture of learning.
Such filings are placed on our website as soon as reasonably practicable after they are filed or furnished, as the case may be, with the SEC. Our charters for our Audit, Compensation, Nominating and Corporate Governance, Strategy, and Compliance, Quality and Risk Committees and our Code of Conduct are available on our website.
Such filings are placed on our website as soon as reasonably practicable after they are filed or furnished, as the case may be, with the SEC. Charters for our Audit, Compensation, Nominating and Corporate Governance, Strategy, and Compliance, Quality and Risk Committees and our Code of Conduct are available on our website.
Our EPi-Sense ® System was studied through the CONVERGE clinical trial and was subsequently approved in 2021 by FDA for the treatment of patients with systemic, drug refractory, long-standing persistent Afib when augmented with an endocardial ablation catheter. Our EPi-Sense ST Guided Coagulation System was approved via PMA supplement in late 2022.
Our EPi-Sense System was studied through the CONVERGE clinical trial and approved in 2021 by FDA for the treatment of patients with systemic, drug refractory, long-standing persistent Afib when augmented with an endocardial ablation catheter. Our EPi-Sense ST Guided Coagulation System was approved via PMA supplement in late 2022.
Afib is an under-diagnosed condition due in large part to the fact that patients with Afib often have mild or no symptoms, and their Afib is diagnosed when they seek treatment for an associated condition, such as a structural heart disease or stroke.
Afib is also an under-diagnosed condition due in large part to the fact that patients with Afib often have mild or no symptoms, and their Afib is diagnosed when they seek treatment for an associated condition, such as a structural heart disease or stroke.
It is the most common cardiac arrhythmia encountered in clinical practice and results in high utilization of healthcare services and significant cost burden. Patients often progress from being in Afib intermittently (paroxysmal) to being in Afib continuously.
It is the most common cardiac arrhythmia encountered in clinical practice and results in high utilization of healthcare services and significant cost burden. Patients often progress from being in Afib intermittently (paroxysmal) to being in Afib continuously (non-paroxysmal).
It is also estimated that one in seven thoracic surgery patients develops an unhealthy post-procedural addiction to prescription narcotics, making alternative, non-opioid pain management modalities, such as Cryo Nerve Block, an increasingly important part of how physicians manage post-operative pain. We believe the market for our pain management ablation product represents a significant growth opportunity.
It is also estimated that one in seven thoracic surgery patients develops an unhealthy post-procedural addiction to prescription narcotics, making alternative, non-opioid pain management modalities, such as Cryo Nerve Block, an increasingly important part of how physicians manage post-operative pain. We believe the market for our pain management ablation products represents a significant growth opportunity.
Randomized, prospective, multi-center data from the CONVERGE™ IDE clinical trial, along with a number of other recent real-world studies performed by physician investigators, show that these long-standing persistent Afib patients can experience more than double the success rate by adding an ablation on the outside surface of the heart using AtriCure’s EPi-Sense ablation system.
Randomized, prospective, multi-center data from the CONVERGE™ IDE clinical trial, along with a number of other recent real-world studies performed by physician investigators, show that these long-standing persistent Afib patients can experience more than double the success rate by adding an ablation on the outside surface of the heart using our EPi-Sense ® ablation system.
Thus, we believe the EPi-Sense ablation system used as a minimally invasive or Hybrid AF TM therapy also represents a significant growth opportunity for the Company.
Thus, we believe the EPi-Sense ablation system used as a minimally invasive or Hybrid AF therapy also represents a significant growth opportunity for the Company.
More focused, local techniques include syringe injections between vertebrates and Cryo Nerve Block which uses cryothermic energy to ablate peripheral nerves, temporarily stopping the transmission of pain signals coming from the chest wall during surgery. The nerve “scaffolds” remain intact, allowing axons to regenerate and restore nerve function over time.
More focused, local techniques include syringe injections between vertebrates and Cryo Nerve Block which uses cryogenic energy to ablate peripheral nerves, temporarily stopping the transmission of pain signals coming from the chest wall during surgery. The nerve “scaffolds” remain intact, allowing axons to regenerate and restore nerve function over time.
Our international sales team includes approximately 60 employees focused on our direct markets, such as Germany, France, the United Kingdom, the Benelux region, Canada and Australia. We also maintain a network of distributors who market and sell our products in Asia and South America, as well as certain countries in Europe.
Our international sales team includes approximately 70 employees focused on our direct markets, such as Germany, France, the United Kingdom, the Benelux region, Canada and Australia. We also maintain a network of distributors who market and sell our products in Asia and South America, as well as certain countries in Europe.
Our primary competitor in the cardiac surgery market is Medtronic, plc, who provides surgical ablation products and LAAM devices used by physicians for the treatment of Afib and related conditions. For standalone treatment of Afib, several companies offer intracardiac catheter devices that are commonly used by electrophysiologists.
Our primary competitor in the cardiac surgery market is Medtronic, plc, who provides surgical ablation products and LAAM devices used by physicians for the treatment of Afib and related conditions. For standalone treatment of Afib, several companies offer endocardial catheter devices that are commonly used by electrophysiologists.
We only promote our products for uses described in their labeling as cleared or approved by relevant regulatory agencies, and train our sales force on the use of our products to the extent the products are cleared or approved. Our sales team in the United States has approximately 290 employees.
We only promote our products for uses described in their labeling as cleared or approved by relevant regulatory agencies, and train our sales force on the use of our products to the extent the products are cleared or approved. Our sales team in the United States has approximately 310 employees.
Similar to surgical ablation for Afib or surgical LAAM, cryoablation performed for post-operative pain 8 Table of Contents management is reimbursed as part of the primary procedure, open thoracic or cardiac surgery, MS-DRG. We believe hospital reimbursement rates are typically adequate in these situations. Physicians are reimbursed for their services separately under the Medicare Part B physician fee schedule.
Similar to surgical ablation for Afib or surgical LAAM, cryoablation performed for post-operative pain management is reimbursed as part of the primary procedure, open thoracic or cardiac surgery, MS-DRG. We believe hospital reimbursement rates are typically adequate in these situations. Physicians are reimbursed for their services separately under the Medicare Part B physician fee schedule.
To continue developing and commercializing our current and future products, we may license intellectual property from commercial or academic entities to obtain the rights to technology that is required for our research, development and commercialization activities. 11 Table of Contents All of our employees and technical consultants are required to execute confidentiality agreements in connection with their employment and consulting relationships with us.
To continue developing and commercializing our current and future products, we may license intellectual property from commercial or academic entities to obtain the rights to technology that is required for our research, development and commercialization activities. All of our employees and technical consultants are required to execute confidentiality agreements in connection with their employment and consulting relationships with us.
The appliers come in multiple forms tailored to specific procedural needs depending on the type of surgery and how the surgeon is accessing the heart. In the United States, our AtriClip LAA Exclusion System products are 510(k)-cleared with an indication for the exclusion of the LAA, performed under direct visualization and in conjunction with other cardiac surgical procedures.
The appliers come in multiple forms tailored to specific procedural needs depending on the type of surgery and how the surgeon is accessing the heart. 5 Table of Contents In the United States, our AtriClip LAA Exclusion System products are 510(k)-cleared with an indication for the exclusion of the LAA, performed under direct visualization and in conjunction with other cardiac surgical procedures.
In April 2021, we announced the PMA approval of the EPi-Sense System for treatment of symptomatic, drug-refractory, long-standing persistent atrial fibrillation, when augmented with an endocardial ablation catheter. We believe the Convergent procedure, or Hybrid AF therapy, provides the only compelling treatment option for a large and vastly underpenetrated population of Afib patients.
In April 2021, FDA granted PMA approval of the EPi-Sense System for treatment of symptomatic, drug-refractory, long-standing persistent atrial fibrillation, when augmented with an endocardial ablation catheter. We believe the Convergent procedure, or Hybrid AF therapy, provides the only compelling treatment option for a large and vastly underpenetrated population of long-standing persistent Afib patients.
The results of these studies have assessed efficacy, ease of use and safety endpoints. Products for cardiac tissue ablation include those that create scar tissue using radio frequency (RF) energy or cryothermic modalities. Our ablation products are part of platforms each consisting of disposable hand pieces which connect to either a RF generator or a cryothermic generator.
The results of these studies have assessed efficacy, ease of use and safety endpoints. Products for cardiac tissue ablation include those that create scar tissue using radio frequency (RF) energy or cryogenic (cryo) modalities. Our ablation products are part of platforms, each consisting of disposable hand pieces which connect to either a RF generator or a cryo generator.
Under this philosophy, we believe our leaders will better help attract, develop and retain talent. We are committed to identifying and developing the talents of our next-generation leaders, and conduct a 12 Table of Contents comprehensive Talent and Organization Planning to position AtriCure with appropriate organization and leadership capability to meet current and future business needs.
Under this philosophy, we believe our leaders will better help attract, develop and retain talent. We are committed to identifying and developing the talents of our next-generation leaders, and conduct a comprehensive Talent and Organization Planning to position AtriCure with appropriate organization and leadership capability to meet current and future business needs.
We recognize that the use of tobacco is linked to many adverse health effects, including those that impact the heart, and we offer our employees tobacco cessation programs. Since 2021, our Ohio office locations are entirely tobacco- and nicotine-free, and to the extent permitted in the states of our other offices, those locations are also entirely tobacco- and nicotine-free.
We recognize that the use of tobacco is linked to many adverse health effects, including those that impact the heart, and we offer our employees tobacco cessation programs. Since 2021, our Ohio office locations are entirely tobacco- and nicotine-free, and to the extent permitted in the local jurisdictions of our other offices, those locations are also tobacco- and nicotine-free.
We anticipate that substantially all our revenue for the foreseeable future will relate to products we currently sell or are in the process of developing. Our products enable cardiothoracic surgeons to perform surgical ablation procedures with faster, less invasive and less technically challenging approaches.
We anticipate that substantially all our revenue for the foreseeable future will relate to products we currently sell or are in the process of developing. Our products enable cardiothoracic surgeons to perform surgical ablation procedures with faster, less invasive and less technically challenging approaches and clinically proven results.
The continuous Afib patient population includes early persistent Afib, which lasts seven days to 6 months, persistent Afib, which lasts 6 months to one year, and long-standing persistent Afib, which lasts longer than one year. It is estimated that over 3.5 million people in the United States currently suffer from long-standing persistent Afib.
The continuous Afib patient population includes early persistent Afib, which lasts seven days to 6 months, persistent Afib, which lasts 6 months to one year, and long-standing persistent Afib, which lasts longer than one year. It is estimated that over 4 million people in the United States currently suffer from long-standing persistent Afib.
We do not expect or require the consultant to utilize or promote our products, and consultants are required to disclose their relationship with us as appropriate, such as when publishing an article in which one of our products is discussed.
We do not expect or require the consultant to utilize or promote our products, and consultants are required to disclose their relationship with us as 11 Table of Contents appropriate, such as when publishing an article in which one of our products is discussed.
FDA regulates the total product lifecycle from early design, development and testing, to manufacturing and commercialization activities, as well as post-market surveillance and reporting, including corrective actions, removals and recalls. Unless an exemption applies, most medical devices distributed in the United States require either 510(k) clearance or PMA from FDA. 510(k) Clearance Pathway .
FDA regulates the total product lifecycle from early design, development and testing, to manufacturing and commercialization activities, as well as post-market surveillance and reporting, including corrective actions, removals and recalls. Unless an exemption applies, most medical devices distributed in the United States require either 510(k) clearance or PMA from FDA. 9 Table of Contents 510(k) Clearance Pathway .
Because of the risk of stroke and the significant cost burden on the healthcare system, more and more surgeons are routinely addressing the LAA, both in patients who have Afib and in those who do not have Afib but may be at increased risk of developing the disease in the future.
Due to the risk of stroke and the significant cost burden on the healthcare system, more and more surgeons are routinely addressing the LAA, both in patients who have Afib and in those who do not have Afib but may be at increased risk of developing the disease in the future.
US Regulation: FDA regulations govern nearly all of the activities that we perform, or which are performed on our behalf, to ensure that medical products distributed domestically or exported internationally are safe and effective for their intended uses.
United States Regulation: FDA regulations govern nearly all of the activities that we perform, or which are performed on our behalf, to ensure that medical products distributed domestically or exported internationally are safe and effective for their intended uses.
The method for assessing conformity varies depending on the type and class of the product, but typically involves a combination of quality system assessment and product conformity 10 Table of Contents assessment by a third-party notified body, an independent and neutral institution appointed by a country to conduct the conformity assessment.
The method for assessing conformity varies depending on the type and class of the product, but typically involves a combination of quality system assessment and product conformity assessment by a third-party notified body, an independent and neutral institution appointed by a country to conduct the conformity assessment.
Over the past two decades, technology advancements have made surgical ablation more effective, repeatable and available to cardiac surgeons and electrophysiologists around the world.
Over the past two decades, technological advancements have made surgical ablation more effective, repeatable and available to cardiac surgeons and electrophysiologists around the world.
Educational Grants . FDA regulates the promotion of medical devices by manufacturers and prohibits the promotion by manufacturers of uses that are not within the approved or cleared labeling of the device.
FDA regulates the promotion of medical devices by manufacturers and prohibits the promotion by manufacturers of uses that are not within the approved or cleared labeling of the device.
Research and Product Development Our ongoing research and development activities support our business strategy to expand treatment options and increase awareness in our current markets, as well as enabling expansion into adjacent markets. We are engaged in developing and researching new and existing products or concepts, preclinical studies, clinical trials and other regulatory 6 Table of Contents activities.
Research and Product Development Our ongoing research and development activities support our business strategy to expand treatment options and increase awareness in our current markets, as well as enabling expansion into adjacent markets. We are engaged in developing and researching new and existing products or concepts, preclinical studies, clinical trials and other regulatory activities.
In addition, our employees have voted us as a Top Workplace eight times in the past nine years, and internationally, our employees have voted us a Great Place to Work for two consecutive years. We also promote employee retention and development by supporting internal movement to create accretive experiences for our employees.
In addition, our employees have voted us as a Top Workplace nine times in the past ten years, and internationally, our employees have voted us a Great Place to Work for three consecutive years. We also promote employee retention and development by supporting internal movement to create accretive experiences for our employees.
We are also required to obtain the written informed consent of patients in form and substance that complies with both FDA requirements and other human 9 Table of Contents subject protection regulations established by FDA. We must conduct our clinical studies in compliance with state and federal privacy laws, including the Health Insurance Portability and Accountability Act (HIPAA).
We are also required to obtain the written informed consent of patients in form and substance that complies with both FDA requirements and other human subject protection regulations established by FDA. We must conduct our clinical studies in compliance with state and federal privacy laws, including the Health Insurance Portability and Accountability Act (HIPAA). Educational Grants .
Societal guideline changes from the Society of Thoracic Surgeons (STS), Heart Rhythm Society (HRS) and American Association of Thoracic Surgery (AATS) now have Class I recommendations for concomitant surgical ablation, meaning that it is a “recommended” treatment for patients who have structural heart disease and Afib.
Societal guidelines from the Society of Thoracic Surgeons (STS), Heart Rhythm Society (HRS) and American Association of Thoracic Surgery (AATS) have Class I recommendations for concomitant surgical ablation, meaning that it is a “recommended” treatment for patients who have structural heart disease and Afib.
In January 2023, we enrolled our first patient; site initiation and enrollment is ongoing. HEAL-IST. In February 2022, FDA approved the protocol for the Hybrid Epicardial and Endocardial Sinus Node Sparing Ablation Therapy for Inappropriate Sinus Tachycardia (IST) clinical trial (HEAL-IST).
We enrolled our first patient in January 2023; site initiation and enrollment is ongoing and we expect to complete enrollment in 2025. HEAL-IST. In February 2022, FDA approved the protocol for the Hybrid Epicardial and Endocardial Sinus Node Sparing Ablation Therapy for Inappropriate Sinus Tachycardia (IST) clinical trial (HEAL-IST).
Cryo Nerve Block can be delivered using our cryoICE cryoSPHERE ® probe, which is specifically designed for Cryo Nerve Block therapy. Depending on the degree of invasiveness, physicians and their nursing staff will take advantage of multiple ways of managing pain for their patients.
Cryo Nerve Block can be delivered using our cryoICE cryoSPHERE probes, which are specifically designed for Cryo Nerve Block therapy. Depending on the degree of invasiveness, physicians and their nursing staff will take advantage of multiple ways of managing pain for their patients.
Adoption of the AdvaMed Code of Ethics for Interactions with Healthcare Professionals (the “AdvaMed Code”) by a medical device manufacturer is voluntary, and while the Office of the Inspector General and other federal and state healthcare regulatory agencies encourage its adoption and may look to the AdvaMed Code, they do not view adoption of the AdvaMed Code as proof of compliance with applicable laws.
Adoption of the AdvaMed Code of Ethics for Interactions with Healthcare Professionals (AdvaMed Code) 10 Table of Contents by a medical device manufacturer is voluntary, and while the Office of the Inspector General and other federal and state healthcare regulatory agencies encourage its adoption and may look to the AdvaMed Code, they do not view adoption of the AdvaMed Code as proof of compliance with applicable laws.
We have completed, and continue to invest in, clinical studies for the use of our ablation and LAAM products to treat Afib and reduce stroke. Leading cardiothoracic surgeons and electrophysiologists, including those who serve or who have served as consultants to us, have published results of preclinical and clinical studies utilizing our devices.
We have completed, and continue to invest in, clinical studies for the use of our ablation and LAAM products to treat Afib, reduce post-operative Afib, and prevent strokes. Leading cardiothoracic surgeons and electrophysiologists, including those who serve or who have served as consultants to us, have published results of preclinical and clinical studies utilizing our devices.
Currently, we are not aware of other companies in the United States who are pursuing cryothermic nerve block therapies for thoracic surgery. There are other companies outside of the United States who market their devices for a similar therapy. Third-Party Reimbursement Reimbursement for health care services in the United States is generally made by third-party payors.
Currently, we are not aware of other companies in the United States who are pursuing cryo nerve block therapies for thoracic surgery. There are other companies outside of the United States who market their devices for a similar therapy. 8 Table of Contents Third-Party Reimbursement Reimbursement for health care services in the United States is generally made by third-party payors.
In 2023, the American College of Cardiology (ACC), American Heart Association (AHA), American College of Clinical Pharmacy (ACCP), and HRS released Guidelines for Diagnosis and Management of Atrial Fibrillation, and upgraded Left Atrial Appendage 2 Table of Contents Management to the highest recommendation of Class 1 and now include Hybrid AF™ Therapy as a Class 2 recommendation.
During 2 Table of Contents 2023, the American College of Cardiology (ACC), American Heart Association (AHA), American College of Clinical Pharmacy (ACCP) and HRS released Guidelines for Diagnosis and Management of Atrial Fibrillation, and upgraded LAAM to the highest recommendation of Class 1 and now include Hybrid AF™ Therapy as a Class 2 recommendation.
Further, applications for Cryo Nerve Block outside of thoracic surgery use are being studied by physician investigators and represent future possible growth opportunities. 3 Table of Contents AtriCure Solutions and Products We believe that we are currently the market leader in the surgical treatment of Afib and left atrial appendage management, and pioneers of the application of Cryo Nerve Block in thoracic procedures.
Further, applications for Cryo Nerve Block outside of thoracic surgery use are being studied by physician investigators and represent future possible growth opportunities. 3 Table of Contents AtriCure Solutions and Products We believe that we are currently the market leader in the surgical treatment of Afib and LAAM, and pioneers of the application of Cryo Nerve Block in cardiothoracic surgical procedures.
Talent Attraction and Retention We attract top talent to AtriCure and provide mechanisms for them to take ownership of their career paths to support their career aspirations so they can build a long-term future with our company. Over the last five years, voluntary turnover rate among our employees has remained consistently below 10%, outperforming the industry average.
Talent Attraction and Retention We attract top talent to AtriCure, provide mechanisms for them to take ownership of their career paths and support their career aspirations to build a long-term future with our company. Over the last five years, the voluntary turnover rate among our employees has remained consistently below 12%, outperforming the industry average for medical device companies.
The various configurations provide the user with options to address patient specific procedure requirements or anatomy; however, all the clamps provide consistent performance using the same core technology. The parallel closure evenly compresses tissue and evacuates the blood and fluids from the energy pathway to make the ablation more effective.
We sell multiple configurations of our Isolator Synergy clamps. The various configurations provide the user with options to address patient specific procedure requirements or anatomy; however, all the clamps provide consistent performance using the same core technology. The parallel closure evenly compresses tissue and evacuates the blood and fluids from the energy pathway to make the ablation more effective.
The EPi-Sense Guided Coagulation System with VisiTrax technology and the new EPi-Sense ST ® Guided Coagulation System utilize monopolar RF energy for the coagulation of tissue. Our EPi-Sense devices are single-use disposable ablation devices capable of intraoperative cardiac signal sensing and recording when connected to an external recording device.
The EPi-Sense Guided Coagulation System and the EPi-Sense ST ® Guided Coagulation System utilize monopolar RF energy for the coagulation of tissue. The system consists of the device and an RF generator. Our EPi-Sense devices are single-use disposable ablation devices capable of intraoperative cardiac signal sensing and recording when connected to an external recording device.
Surgeons may utilize the cryoICE devices in combination with Isolator Synergy clamps or independently. 4 Table of Contents Our cryoablation devices are cleared for sale in the United States under FDA 510(k) clearances, bear the CE mark for commercial distribution throughout the member states of the European Union and other countries that comply with or mirror the Medical Device Directive.
Surgeons may utilize the cryoICE devices in combination with Isolator Synergy clamps or independently. 4 Table of Contents Our cryoablation devices are cleared for sale in the United States under FDA 510(k) clearances, and are in compliance with EU MDR and bear the CE mark for commercial distribution throughout the member states of the EU and other countries that comply with or mirror EU MDR.
We generally place this capital equipment with our direct customers and sell to our distributors. Products for open and minimally invasive ablation: • Isolator ® Synergy ™ Clamps . Our Isolator Synergy Ablation System clamps are single-use disposable RF products with jaws that close in a parallel fashion. We sell multiple configurations of our Isolator Synergy clamps.
We generally place this capital equipment with our direct customers and sell to our distributors. Products for open and minimally invasive ablation: • Isolator ® Synergy ™ Clamps . Our Isolator Synergy Ablation System clamps are single-use disposable RF products with jaws that close in a parallel fashion. The system consists of the clamp and an RF generator.
The AtriClip ® LAA Exclusion System includes various combinations of an implantable device (AtriClip) coupled to a single-use disposable applier. The AtriClip device is designed to exclude the left atrial appendage by mechanically clamping the appendage from the outside of the heart. The left atrial appendage has been shown to be a source of arrhythmias.
The AtriClip ® LAA Exclusion System includes various combinations of an implantable device (AtriClip) coupled to a single-use disposable applier. The AtriClip device is designed to exclude the left atrial appendage by mechanically clamping the appendage from the outside of the heart.
Our leaders lead from the front by creating an environment that fosters a sense of belonging and ignites passion within their team. This leader-led approach to building an equitable and inclusive workforce has a longstanding commitment to fostering a workplace that rejects discrimination, celebrates differences, and promotes equality.
Our leaders create an environment that fosters a sense of belonging and ignites passion within their team. This leader-led approach to building an equitable and inclusive workforce has a longstanding commitment to fostering a workplace that rejects discrimination, celebrates differences, and promotes equality.
Minimally invasive procedures are performed on a standalone basis, and often include multi-disciplinary or “hybrid” approaches, combining surgical procedures using AtriCure ablation and AtriCure LAAM products with catheter ablation performed by an electrophysiologist. Our pain management solutions are used by physicians to freeze nerves during cardiothoracic or thoracic surgical procedures.
Minimally invasive procedures are performed on a standalone basis, and often include multi-disciplinary or “hybrid” approaches, combining surgical procedures using our ablation and LAAM products with catheter ablation performed by an electrophysiologist. Our pain management solutions are used by physicians to freeze nerves during cardiothoracic or thoracic surgical procedures. Recovery from cardiothoracic and thoracic surgery can be complicated and painful.
We believe that our AtriClip system is safer, more effective and easier to use than other products and techniques for excluding the LAA during cardiac surgery. Therefore, we believe that the market for our ablation products and the AtriClip system represent significant growth opportunities.
We believe that our AtriClip system is safer, more effective and easier to use than other products and techniques for excluding the LAA during cardiac surgery. Therefore, we believe that the market for our AtriClip system represents a significant growth opportunity.
Scientific data that has been published on the effects of Cryo Nerve Block has generally shown a significant reduction in prescription of opioids, significantly reduced length of stay for patients in the hospital and other benefits.
Scientific data that has been published on the effects of Cryo Nerve Block therapy has generally shown a significant reduction in prescription of opioids, significantly reduced length of stay for patients in the hospital and reduced healthcare utilization costs.
Our strategy is to expand the treatment options for patients who suffer from Afib, have a high risk of stroke, or who suffer from post-operative pain, through the continued development of our technologies and expansion of our product offerings, clinical science investments and global commercial expansion. The key elements of our strategy include: New Product and Procedure Innovation.
Our strategy is to expand the treatment options for patients who suffer from Afib, have a high risk of stroke, may develop post-operative Afib, or who suffer from post-operative pain, through the continued development of our technologies and expansion of our product offerings, clinical science investments and global commercial expansion.
In open-heart procedures, the physician is performing heart surgery for other conditions, such as a mitral valve repair or a coronary artery bypass, and our products are used in conjunction with (“concomitant” to) such a procedure.
In open-heart procedures, the patient is undergoing heart surgery for other conditions, such as a mitral or aortic valve repair or a coronary artery bypass, and our products are used by physicians in conjunction with (“concomitant” to) such a procedure.
ITEM 1. BUSINESS Overview We are a leading innovator in treatments for atrial fibrillation (Afib), left atrial appendage (LAA) management and post-operative pain management. Afib is an irregular heartbeat, or arrhythmia, which affects over 37 million people worldwide, including more than eight million people in the United States, and is a growing epidemic.
ITEM 1. BUSINESS Overview We are a leading innovator in treatments for atrial fibrillation (Afib), left atrial appendage (LAA) management and post-operative pain management. Afib is an irregular heartbeat, or arrhythmia, which affects over 59 million people worldwide and is a growing epidemic.
The Code sets clear and transparent rules for the industry's relationships with HCPs and HCOs, including company events, third-party organized events, arrangements with consultants, gifts, research and financial support to medical education. We have adopted the MedTech Code and incorporated its principles in our standard operating procedures, employee training programs and relationships with medical professionals.
The Code sets clear and transparent rules for the industry's relationships with HCPs and HCOs, including company events, third-party organized events, arrangements with consultants, gifts, research and financial support to medical education. We have adopted the MedTech Code and incorporated its principles into our Global Health Care Compliance Manual, employee training programs and relationships with medical professionals.
Diversity, Equity, and Inclusion (DE&I) We are driven by the belief that diverse skills and experiences produce better outcomes and more innovative solutions to improve patients' lives. We have an ongoing commitment to advancing DE&I throughout our workplace and the communities in which we operate.
Lastly, we provide tuition reimbursement for employees pursuing undergraduate and graduate degrees. Diversity, Equity and Inclusion (DE&I) We are driven by the belief that diverse skills and experiences produce better outcomes and more innovative solutions to improve patients' lives. We have an ongoing commitment to advancing DE&I throughout our workplace and the communities in which we operate.
Our DEI framework guides our long-term vision and is grounded in the following objectives: • Attract and develop employees resembling the diversity of the communities, partners and patients we serve • Create a diverse talent pipeline by fostering awareness of STEM and healthcare careers for women and ethnically diverse groups • Foster a culture of inclusion and belonging where all employees are valued and empowered • Enhance DE&I understanding and behaviors through education and development • Increase awareness and advocate for diversity in medical research and clinical trials through healthcare partnerships • Explore opportunities to invest in local economic growth by supporting women and ethnically diverse groups, while collaborating with our partners to engage communities to promote heart health awareness Our DE&I efforts are overseen internally by our Chief Human Resources Officer who works with our leadership to further advance our commitment and programs by fostering employee understanding, intentionality and measurable processes.
Our DE&I framework guides our long-term vision and is grounded in the following objectives: • Attract and develop employees resembling the diversity of the communities and patients we serve. • Create a diverse talent pipeline by fostering awareness of STEM and healthcare careers for women and ethnically diverse groups. • Foster a culture of inclusion and belonging where all employees are valued and empowered. • Enhance DE&I understanding and behaviors through education and development. • Increase awareness and advocate for diversity in medical research and clinical trials through healthcare partnerships. • Collaborate with our partners to engage communities to promote heart health awareness. 13 Table of Contents Our DE&I efforts and programs advance our commitment by fostering employee understanding, intentionality and measurable processes.
The DEEP AF IDE pivotal trial evaluated the safety and efficacy of the AtriCure Bipolar System when used in a staged approach where a minimally invasive surgical ablation procedure is first performed. The patient undergoes the endocardial catheter procedure approximately 91-120 days later.
The two-year DEEP outcomes poster has been accepted for presentation at the 2025 AF Symposium. The DEEP AF IDE pivotal trial evaluated the safety and efficacy of the AtriCure Bipolar System when used in a staged approach where a minimally invasive surgical ablation procedure is first performed. The patient undergoes the endocardial catheter procedure approximately 91-120 days later.
Programs include our Emergency Site Action Plan for emergencies such as fire response, severe weather threats and shelter in place 13 Table of Contents incidents, as well as our Certified First Responders safety program that include Red Cross training of employees in CPR, AED Usage and First Aid practices.
We have implemented multiple safety programs and regularly perform safety hazard evaluations within our facilities. Programs include our Emergency Site Action Plan for emergencies such as fire response, severe weather threats and shelter in place incidents, as well as our Certified First Responders safety program that include Red Cross training of employees in CPR, AED Usage and First Aid practices.
In April 2022, we launched our most recent configuration, the ENCOMPASS ® clamp, following 510(k) clearance in July 2021. The ENCOMPASS clamp is indicated for cardiac soft tissue ablation. The configuration is designed to make concomitant surgical ablations more efficient and is expected to drive deeper penetration of cardiac surgery procedures. • Multifunctional Pens and Linear Ablation Devices .
In 2022, we launched the EnCompass ® clamp in the United States, following 510(k) clearance in 2021. The EnCompass clamp is indicated for cardiac soft tissue ablation and is designed to make concomitant surgical ablations more efficient and is expected to drive deeper penetration of cardiac surgery procedures.
All our pen and linear ablation devices are cleared for sale in the United States under FDA 510(k) clearances, with indications for the ablation of cardiac tissue and/or the treatment of cardiac arrhythmias.
Surgeons generally use one or more of our pen and linear devices in combination with Isolator Synergy clamps. Our pen and linear ablation devices are cleared for sale in the United States under FDA 510(k) clearances, with indications for the ablation of cardiac tissue and/or the treatment of cardiac arrhythmias.
The first patient enrollment in the trial occurred in June 2022; site initiation and enrollment is ongoing. We have invested in other clinical trials to validate the long-term results of procedures using our products and to support applications to regulatory agencies for expanded indications.
Site initiation and enrollment in the CONVERGE PAS is ongoing. We have and will continue to invest in other clinical trials to validate the long-term results of procedures using our products and to support applications to regulatory agencies for expanded indications.
It is estimated that approximately 350,000 to 450,000 Afib patients are treated by catheter ablation every year in the U.S., a number that is expected to grow 10 to 15% annually.
It is estimated that approximately 500,000 Afib patients are treated by catheter ablation every year in the United States, a number that is expected to grow well over 10% annually.
AtriCure is a member of MedTech Europe, a voluntary trade association for the medical technology industry including diagnostics, medical devices and digital health. MedTech Europe and its members are committed to a high level of ethical business practices and have put in place strict guidelines to advise medical technology manufacturers on how to collaborate ethically with healthcare professionals (HCPs).
MedTech Europe and its members are committed to a high level of ethical business practices and have put in place strict guidelines to advise medical technology manufacturers on how to collaborate ethically with healthcare professionals (HCPs).
The cryoSPHERE probe is 510(k) cleared for managing pain by temporarily ablating peripheral nerves and bears the CE mark for commercial distribution throughout the member states of the European Union and other countries that comply with or mirror the Medical Device Directive. Products for appendage management: • AtriClip System .
The cryoSPHERE probe is 510(k) cleared for managing pain by temporarily ablating peripheral nerves and is in compliance with EU MDR and bears the CE mark for commercial distribution throughout the member states of the EU and other countries that comply with or mirror EU MDR.
Certain products of our Isolator Synergy clamps bear the CE mark and may be commercially distributed throughout the member states of the European Union and other countries that comply with or mirror the Medical Device Directive. These products are available for sale in a number of other countries globally.
Certain products within our Isolator Synergy clamp line are in compliance with the European Union Medical Device Regulations (EU MDR) and bear the CE mark for commercial distribution throughout the member states of the European Union (EU) and other countries that comply with or mirror EU MDR. These products are available for sale in a number of other countries globally.
We have recruited and trained sales and physician education professionals to effectively communicate to our customers the unique features and benefits of our technologies as they relate to their indications for use. Our highly trained professionals meet with physicians at institutions around the world to provide education and technical training on the features, benefits and safe-and-effective use of our products.
Provide Training and Education. We have recruited and trained sales and physician education professionals to effectively communicate to our customers the unique features and benefits of our technologies as they relate to their indications for use.
In the past five years, the Society for Thoracic Surgeons (STS), Heart Rhythm Society (HRS), American College of Cardiology (ACC), American Heart Association (AHA) and American College of Clinical Pharmacy (ACCP) have released new guidelines on the surgical treatment of Afib in both open-heart and minimally-invasive settings. Provide Training and Education.
In the past seven years, the Society for Thoracic Surgeons (STS), Heart Rhythm Society (HRS), American College of Cardiology (ACC), American Heart Association (AHA), American College of Clinical Pharmacy (ACCP), European Society of Cardiology (ESC) and European Association of Cardio-Thoracic Surgery (EACTS) have released new guidelines on the surgical treatment of Afib in both open-heart and minimally-invasive settings, as well as the management of the left atrial appendage in surgical procedures.
These products are available for sale in a number of other countries globally. 5 Table of Contents The AtriClip LAA Exclusion System is currently being evaluated under the Left Atrial Appendage Exclusion for Prophylactic Stroke Reduction (LeAAPS™) IDE clinical trial. We sell additional products and enabling technologies that hold 510(k) approvals and/or bear the CE mark.
The AtriClip LAA Exclusion System is currently being evaluated under the Left Atrial Appendage Exclusion for Prophylactic Stroke Reduction (LeAAPS™) IDE clinical trial. We sell additional products and enabling technologies that hold 510(k) approvals, and certain products are in compliance with EU MDR and bear the CE mark for commercial distribution.
In the European Union, various directives regulate the design, manufacture and labeling of medical devices, and more stringent conformity assessment requirements have been put in place with the 2017 Medical Device Regulation, effective May 26, 2021.
We have incorporated these principles into our compliance policies and Global Health Care Compliance Manual, training programs, and business practices. Conformity Assessment Pathway . In the European Union, various directives regulate the design, manufacture and labeling of medical devices, and more stringent conformity assessment requirements have been put in place with the 2017 Medical Device Regulation, effective May 26, 2021.
Today, we estimate that less than 20% of those candidates are being treated with surgical ablation. In addition, Afib is thought to be responsible for approximately 15% to 20% of the estimated 800,000 strokes that occur annually in the United States. According to the American Heart Association, the risk of stroke is five times higher in people with Afib.
Today, we estimate that less than 20% of those candidates are being treated with surgical ablation. Therefore, we believe that the market for our ablation products represents a significant growth opportunity. In addition, Afib is thought to be responsible for approximately 15% to 20% of the estimated 800,000 strokes that occur annually in the United States.
The cryoICE cryoablation system is used in both open ablation procedures and cryoanalgesia. The system consists of the cryoICE BOX generator along with a variety of single-use disposable probes. The primary differences between these cryoablation probes is the form of the tissue-contacting distal end. The cryoICE devices enable the user to make linear ablations of varied lengths.
The system consists of the cryoICE BOX generator along with a variety of single-use disposable probes. The primary differences between these cryoablation probes is the form of the tissue-contacting distal end. The various configurations of cryoICE devices enable the user to make linear ablations of varied length, providing the surgeon with options to address the specific procedural objectives.
In addition to development programs for all employees, we have several functional development programs, such as the Engineering Development Program that offers four six-month rotations through different departments as part of our differentiated early pipeline talent development. Lastly, we provide tuition reimbursement for employees pursuing undergraduate and graduate degrees.
In addition to development programs for all employees, we have several functional development programs, such as the Engineering Development Program that offers four six-month rotations through different departments as part of our differentiated early pipeline talent development and the Sales Training Associates program focused on rotating talent within functions to support future commercial roles.
Certain products of our AtriClip LAA Exclusion System bear the CE mark for commercial distribution throughout the member states of the European Union and other countries that comply with or mirror the Medical Device Directive.
Certain products of our AtriClip LAA Exclusion System are in compliance with EU MDR and bear the CE mark for commercial distribution throughout the member states of the EU and other countries that comply with or mirror EU MDR. These products are available for sale in a number of other countries globally.
Market Overview Afib is the most commonly diagnosed sustained cardiac arrhythmia, with over one million diagnoses annually in the United States alone.
Dollars; direct sales transactions outside the United States are transacted in Euros, British Pounds, Canadian Dollars or Australian Dollars. Market Overview Afib is the most commonly diagnosed sustained cardiac arrhythmia, with over one million diagnoses annually in the United States alone.
We expect to continue to be opportunistic with respect to acquisitions. We evaluate acquisition opportunities on a variety of factors, including product innovation, clinical differentiation and other strategic and financial criteria.
As a result of the educational process, we believe that awareness of our technologies is growing and will result in the increased use of our products. Evaluate Acquisition Opportunities. We expect to continue to be opportunistic with respect to acquisitions. We evaluate acquisition opportunities on a variety of factors, including product innovation, clinical differentiation and other strategic and financial criteria.
We also sell our products through distributors who in turn sell our products to medical centers in other international markets. Our business is primarily transacted in U.S. Dollars; direct sales transactions outside the United States are transacted in Euros, British Pounds, Canadian Dollars or Australian Dollars.
We sell our products to medical centers through our direct sales force in the United States, Germany, France, the United Kingdom, the Benelux region, Canada and Australia. We also sell our products through distributors who in turn sell our products to medical centers in other international markets. Our business is primarily transacted in U.S.
The results from this single arm study demonstrated superior freedom from atrial arrhythmias for staged hybrid ablation compared to a pre-specified performance goal.
The results from this single arm study demonstrated superior freedom from atrial arrhythmias for staged hybrid ablation compared to a pre-specified performance goal. The Company is conducting analyses of additional trial data for publication, future development activities, or possible evaluation of label expansions.
We have invested in programs to drive ongoing career development and provide a range of training courses and online resources for employees, and opportunities for coaching and mentoring. Programs and offerings for development include AMPLIFY, our leadership development program for mid-level leaders across the company; and AtriCure YOUniversity, a series of competency-based courses for global employees.
We have invested in programs to drive ongoing career development and provide a range of training courses and online resources for employees, and opportunities for coaching and mentoring.
Human Capital Management Successful execution of our strategy is dependent on attracting, developing and retaining key employees and members of our management team. As of December 31, 2023, we had approximately 1,200 employees. Our Board of Directors, along with the Compensation Committee, provides oversight of the human capital management including demographics, diversity and inclusion efforts, and aspects of employee compensation.
Human Capital Management Successful execution of our strategy is dependent on attracting, developing and retaining key employees and members of our management team. As of December 31, 2024, we had approximately 1,300 employees.

… 42 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

75 edited+9 added−24 removed167 unchanged
Biggest changeWe may be subject to fines, injunctions and penalties if we are found to be promoting our products for unapproved or off-label uses. • Modifications to our products may require new clearances or approvals by FDA; failure to obtain such clearances or approvals where required could result in a recall of the modified products and limitation on future sales until cleared or approved. 15 Table of Contents • If we or our third-party vendors fail to comply with extensive FDA regulations relating to the manufacturing of our products we may be subject to fines, injunctions and penalties. • Any adverse finding, judgement, settlement or enforcement action against us as a result of the current qui tam lawsuit could negatively affect our business. • The use of products we sell may result in injuries or other adverse events that lead to product liability claims. • Our ability to compete in the marketplace could be affected if our intellectual property rights fail to provide meaningful commercial protection for our products. • Litigation and administrative proceedings over patent and other intellectual property rights are common in our industry, and any litigation or claim against us may cause us to incur substantial costs. • We are subject to various regulatory and other risks related to selling our products internationally which could harm our revenue. • Any allegation or determination of wrongdoing under the Foreign Corrupt Practices Act or other anti-corruption laws could have a material adverse effect on our business. • Compliance with European Union medical device regulation may limit our ability to sell our products in European markets.
Biggest changeWe may be subject to fines, injunctions and penalties if we are found to be promoting our products for unapproved or off-label uses. • Modifications to our products may require new clearances or approvals by FDA; failure to obtain such clearances or approvals where required could result in a recall of the modified products and limitation on future sales until cleared or approved. 15 Table of Contents • If we or our third-party vendors fail to comply with extensive FDA regulations relating to the manufacturing of our products, we may be subject to fines, injunctions and penalties. • The use of products we sell may result in injuries or other adverse events that lead to product liability claims. • Our ability to compete in the marketplace could be affected if our intellectual property rights fail to provide meaningful commercial protection for our products. • Litigation and administrative proceedings over patent and other intellectual property rights are common in our industry, and any litigation or claim against us may cause us to incur substantial costs. • We are subject to various regulatory and other risks related to selling our products internationally which could harm our revenue. • Any allegation or determination of wrongdoing under the Foreign Corrupt Practices Act or other anti-corruption laws could have a material adverse effect on our business. • The use of artificial intelligence technology by our employees or business partners could result in misuse or loss of proprietary information, violation of laws and regulations, or damage to our reputation and credibility.
FDA may not agree with our decisions regarding whether submissions were required. 24 Table of Contents If FDA were to disagree with us and require us to submit a 510(k), PMA or a PMA supplement for then-existing modifications, we could be required to cease promoting or to recall the modified product until we obtain clearance or approval.
FDA may not agree with our decisions regarding whether submissions were required. If FDA were to disagree with us and require us to submit a 510(k), PMA or a PMA supplement for then-existing modifications, we could be required to cease promoting or to recall the modified product until we obtain clearance or 24 Table of Contents approval.
Some healthcare providers have sought to consolidate and create new companies with greater market power, including hospitals. As the healthcare industry consolidates, competition to provide products and services has become and will continue to become more intense. This has resulted and likely will continue to result in greater pricing pressures and the exclusion of certain suppliers from important marketing segments.
Some healthcare providers have sought to consolidate and create new companies with greater market power, including hospitals. As the healthcare industry consolidates, competition to provide products and services has become and will continue to become more intense. This has resulted and likely will continue to result in greater pricing pressures and the exclusion of certain suppliers from important market segments.
Operational Risks • Unfavorable publicity relating to our business or industry could negatively impact our operations. • Reliance upon single and limited source third-party suppliers and service providers could harm our business if such third parties cannot provide materials or products or perform services for us in a timely manner. • Our manufacturing operations are highly centralized and disruption could harm our business. • If we fail to properly manage our anticipated growth, our business could suffer. • If we cannot retain our skilled and experienced officers and other employees, or recruit, hire, train and integrate sufficient additional qualified personnel, our business may suffer. • Disruptions of critical information systems or material breaches in the security of our systems could harm our business, customer relations and financial condition. • Our insurance may not cover our indemnification obligations and other liabilities associated with our operations.
Operational Risks • Unfavorable publicity relating to our business or industry could negatively impact our operations or stock price. • Reliance upon single and limited source third-party suppliers and service providers could harm our business if such third parties cannot provide materials or products or perform services for us in a timely manner. • Our manufacturing operations are highly centralized and disruption could harm our business. • If we fail to properly manage our anticipated growth, our business could suffer. • If we cannot retain our skilled and experienced officers and other employees, or recruit, hire, train and integrate sufficient additional qualified personnel, our business may suffer. • Disruptions of critical information systems or material breaches in the security of our systems could harm our business, customer relations and financial condition. • Our insurance may not cover our indemnification obligations and other liabilities associated with our operations.
Financial Risks • Our quarterly financial results are likely to fluctuate significantly. • We have a history of net losses, and we may never become profitable. • Governmental authorities may question our intercompany transfer pricing policies or change their laws in a manner that could increase our effective tax rate. • Our goodwill may become impaired which could adversely affect our financial performance. • We may take inventory-related charges as a result of inaccurate forecasting or estimates of product life cycles which would negatively affect our gross margins and results of operations. • We are subject to credit risk from our accounts receivable related to our sales. • We may be unable to comply with the covenants of our Loan Agreement.
Financial Risks • Our quarterly financial results are likely to fluctuate significantly. • We have a history of net losses, and we may never become profitable. • Governmental authorities may challenge our intercompany transfer pricing policies or change their laws in a manner that could increase our effective tax rate. • Our goodwill may become impaired which could adversely affect our financial performance. • We may take inventory-related charges as a result of inaccurate forecasting or estimates of product life cycles which would negatively affect our gross margins and results of operations. • We are subject to credit risk from our accounts receivable related to our sales. • We may be unable to comply with the covenants of our Loan Agreement.
We intend to grow our business outside of the United States, and to do so, we will need to attract additional distributors or hire direct sales personnel to expand the territories in which we sell our products. Independent distributors may terminate their relationship with us or devote insufficient sales efforts to our products.
We intend to grow our business outside of the United States, and to do so, we may need to attract additional distributors or hire direct sales personnel to expand the territories in which we sell our products. Independent distributors may terminate their relationship with us or devote insufficient sales efforts to our products.
Legal & Compliance Risks We spend considerable time and money complying with federal, state and foreign regulations in addition to FDA regulations, and, if we do not fully comply with such regulations, we could face substantial penalties. We are subject to extensive regulation by the federal government and foreign countries in which we conduct business.
Legal & Compliance Risks We spend considerable time and money complying with federal, state and foreign regulations in addition to FDA regulations, and, if we do not fully comply with such regulations, we could face substantial penalties. We are subject to extensive regulations by the federal government and foreign countries in which we conduct business.
The U.S. medical community’s acceptance of our products will depend upon our ability to demonstrate the safety and efficacy, advantages, long-term clinical performance and cost-effectiveness of our products.
The U.S. medical community’s acceptance of our products will depend upon our ability to demonstrate the safety and efficacy, advantages, short and long-term clinical performance and cost-effectiveness of our products.
There have been and may continue to be proposals by legislators, regulators and third-party payors to keep, contain or reduce healthcare costs.
There have been and may continue to be proposals by legislators, regulators and third-party payors to contain or reduce healthcare costs.
The FDA or other regulatory authorities may: • disagree with our trial design and our interpretation of data from preclinical studies and clinical trials; • change requirements for the approval or clearance of a product candidate even after reviewing and providing comment on a protocol for a pivotal clinical trial; • approve or clear a product candidate for fewer or more limited indications or uses than we request; • grant approval or clearance contingent on the performance of costly post-marketing clinical trials; or • not approve the labeling claims necessary or desirable for the successful commercialization of our product candidates.
The FDA or other regulatory authorities may: • disagree with our trial design and our interpretation of data from preclinical studies and clinical trials; • change requirements for the approval or clearance of a product even after reviewing and providing comment on a protocol for a pivotal clinical trial; • approve or clear a product for fewer or more limited indications or uses than we request; • grant approval or clearance contingent on the performance of costly post-marketing clinical trials; or • not approve the labeling claims necessary or desirable for the successful commercialization of our products.
If our goodwill becomes impaired, it could materially reduce the value of our assets and reduce our net income or increase our net loss for the year in which the impairment occurs. As of December 31, 2023, we had $234,781 in goodwill, which represents purchase price we paid in excess of the fair value of the net assets we acquired.
If our goodwill becomes impaired, it could materially reduce the value of our assets and reduce our net income or increase our net loss for the year in which the impairment occurs. As of December 31, 2024, we had $234,781 in goodwill, which represents purchase price we paid in excess of the fair value of the net assets we acquired.
In the past, companies that experience volatility in the market price of their securities have often faced securities class action litigation. Whether or not meritorious, litigation brought against us could result in substantial costs, divert our management’s attention and resources and harm our ability to grow our business.
In the past, companies that experienced volatility in the market price of their securities have often faced securities class action litigation. Whether or not meritorious, litigation brought against us could result in substantial costs, divert our management’s attention and resources and harm our ability to grow our business.
We may be required to demonstrate with substantial evidence through well-controlled clinical trials that our product candidates are either (i) safe and effective for use in a diverse population for their intended uses or (ii) are substantially equivalent to predicate devices under section 510(k) of the Food, Drug and Cosmetic Act (FDCA).
We may be required to demonstrate with substantial evidence through well-controlled clinical trials that our products are either (i) safe and effective for use in a diverse population for their intended uses or (ii) are substantially equivalent to predicate devices under section 510(k) of the Food, Drug and Cosmetic Act (FDCA).
Our failure, or the failure of our distributors, to comply with current or future foreign regulatory requirements, or the assertion by foreign authorities that we or our distributors have failed to comply, could result in adverse consequences, including enforcement actions, fines and penalties, recalls, cessation of sales, civil and criminal prosecution, and the consequences could be disproportionate to the relative contribution of our international operations to our results of operations.
Our failure, or the failure of our distributors, to comply with current or future 26 Table of Contents foreign regulatory requirements, or the assertion by foreign authorities that we or our distributors have failed to comply, could result in adverse consequences, including enforcement actions, fines and penalties, recalls, cessation of sales, civil and criminal prosecution, and the consequences could be disproportionate to the relative contribution of our international operations to our results of operations.
The laws that affect our ability to operate our business in addition to the FDCA and FDA regulations include, but are not limited to, the following: • the Federal Anti-Kickback Statute, which prohibits persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce either the referral of an individual, or furnishing or arranging for a good or service, for which payment may be made under federal healthcare programs such as the Medicare and Medicaid Programs; • the Federal False Claims Act, which prohibits submitting a false claim or causing the submission of a false claim to the government; • Medicare laws and regulations that prescribe the requirements for coverage and payment, including the amount of such payment, and laws prohibiting false claims for reimbursement under Medicare and Medicaid; • state consumer protection, fraud and business practice laws, including the California Consumer Privacy Act (“CCPA”), which among other things, requires disclosures to California consumers and provides consumers new abilities to opt out of certain sales of personal information; • state laws that prohibit the practice of medicine by non-doctors and by doctors not licensed in a particular state, and fee-splitting arrangements between doctors and non-doctors, as well as state law equivalents to the Anti-Kickback Statute and the Stark Law, which may not be limited to government-reimbursed items; • federal and state healthcare fraud and abuse laws or laws protecting the privacy of patient medical information, including the Health Insurance Portability and Accountability Act (HIPAA) which protects medical records and other personal health information by limiting their use and disclosure, giving individuals the right to access, amend and seek accounting reasonably necessary to accomplish the intended purpose; • laws and regulations, such as the General Data Protection Regulation in the European Union, that govern collection, use, disclosure, transfer and storage of personal data that we may collect from our employees, consultants or in conjunction with clinical trials; • the Federal Trade Commission Act and similar laws regulating advertising and consumer protection; and 22 Table of Contents • similar and other regulations outside the United States.
The laws that affect our ability to operate our business in addition to the FDCA and FDA regulations include, but are not limited to, the following: • the Federal Anti-Kickback Statute, which prohibits persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce either the referral of an individual, or furnishing or arranging for a good or service, for which payment may be made under federal healthcare programs such as the Medicare and Medicaid Programs; • the Federal False Claims Act, which prohibits submitting a false claim or causing the submission of a false claim to the government; • Medicare laws and regulations that prescribe the requirements for coverage and payment, including the amount of such payment, and laws prohibiting false claims for reimbursement under Medicare and Medicaid; • state consumer protection, fraud and business practice laws, including the California Consumer Privacy Act (“CCPA”), which among other things, requires disclosures to California consumers and provides consumers new abilities to opt out of certain sales of personal information; • state laws that prohibit the practice of medicine by non-doctors and by doctors not licensed in a particular state, and fee-splitting arrangements between doctors and non-doctors, as well as state law equivalents to the Anti-Kickback Statute and the Stark Law, which may not be limited to government-reimbursed items; • federal and state healthcare fraud and abuse laws or laws protecting the privacy of patient medical information, including the Health Insurance Portability and Accountability Act (HIPAA) which protects medical records and other personal health information by limiting their use and disclosure, giving individuals the right to access, amend and seek accounting reasonably necessary to accomplish the intended purpose; • laws and regulations, such as the General Data Protection Regulation in the European Union, that govern collection, use, disclosure, transfer and storage of personal data that we may collect from our employees, consultants or in conjunction with clinical trials; • the Federal Trade Commission Act and similar laws regulating advertising and consumer protection; and • similar and other regulations outside the United States. 22 Table of Contents Healthcare fraud and abuse regulations are complex, and even minor, inadvertent irregularities can potentially give rise to claims that a law has been violated.
Our customers’ ability to borrow money from their existing lenders or to obtain credit from other sources to purchase our products may be impaired, 18 Table of Contents resulting in a decrease in sales. We may experience diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites.
Our customers’ ability to borrow money from their existing lenders or to obtain credit from other sources to purchase our products may be impaired, resulting in a decrease in sales. We may experience diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites.
Negative data could affect the use of our products and harm our business and prospects. Conversely, positive results from clinical trial experience should not be relied upon as evidence that any of our products will gain market acceptance or that they will satisfy regulatory requirements for product approval.
Negative data could affect the use of our products and harm our business and prospects. 17 Table of Contents Conversely, positive results from clinical trial experience should not be relied upon as evidence that any of our products will gain market acceptance or that they will satisfy regulatory requirements for product approval.
We may also encounter interruption or delays in the operations of FDA or other regulatory authorities, which may impact review and approval timelines. We are unable to predict the extent to which current or future worldwide economic conditions may impact our business. Healthcare costs have risen significantly over the past decade.
We may also encounter interruption or delays in 18 Table of Contents the operations of FDA or other regulatory authorities, which may impact review and approval timelines. We are unable to predict the extent to which current or future worldwide economic conditions may impact our business. Healthcare costs have risen significantly over the past decade.
If sufficient securities analysts do not cover our common stock, the lack of research coverage may adversely affect the market price of our common stock. It may be difficult for companies such as ours, with a smaller market capitalization, to attract and 30 Table of Contents maintain sufficient independent financial analysts that will cover our common stock.
If sufficient securities analysts do not cover our common stock, the lack of research coverage may adversely affect the market price of our common stock. It may be difficult for companies such as ours, with a smaller market capitalization, to attract and maintain sufficient independent financial analysts that will cover our common stock.
Success in early clinical trials does not mean that future clinical trials will be successful because product candidates in later-stage clinical trials may fail to demonstrate sufficient safety and efficacy to the satisfaction of the FDA and other regulatory authorities despite having progressed through initial clinical trials.
Success in early clinical trials does not mean that future clinical trials will be successful because products in later-stage clinical trials may fail to demonstrate sufficient safety and efficacy to the satisfaction of the FDA and other regulatory authorities despite having progressed through initial clinical trials.
Any finding that the value of our goodwill has been impaired would require us to record an impairment charge which could materially reduce the value of our assets and reduce our net income or increase our net loss for the year in which the impairment charge occurs and increase our accumulated deficit.
Any finding that the value of our goodwill has been impaired would require us to record an impairment charge which could 28 Table of Contents materially reduce the value of our assets and reduce our net income or increase our net loss for the year in which the impairment charge occurs and increase our accumulated deficit.
While we rely on our personnel and information technology systems for inventory management, our personnel and 29 Table of Contents information technology systems may fail to adequately perform these functions or may experience an interruption. An excessive amount of inventory reduces our cash available for operations and may result in excess or obsolete materials.
While we rely on our personnel and information technology systems for inventory management, our personnel and information technology systems may fail to adequately perform these functions or may experience an interruption. An excessive amount of inventory reduces our cash available for operations and may result in excess or obsolete materials.
While we take precautions, such as qualifying a second building for manufacturing, we do not maintain a backup manufacturing facility outside of our Ohio campus, making us dependent on the current facilities and production workers for the continued operation of our business.
While we have taken precautions, such as qualifying a second building for manufacturing, we do not maintain a backup manufacturing facility outside of our Ohio campus, making us dependent on the current facilities and production workers for the continued operation of our business.
We cannot provide any assurance that the data collected during our clinical trials will be compelling to the medical community because it may not be scientifically meaningful, may identify unexpected safety concerns, and may not demonstrate that procedures utilizing our products are an attractive option when 17 Table of Contents compared against data from alternative procedures and products.
We cannot provide any assurance that the data collected during our clinical trials will be compelling to the medical community because it may not be scientifically meaningful, may identify unexpected safety concerns, and may not demonstrate that procedures utilizing our products are an attractive option when compared against data from alternative procedures and products.
Although our Isolator Synergy System and EPi-Sense System have received FDA approval for the treatment of some forms of Afib in certain procedures, we have not received FDA clearance or approval to promote our other products for the treatment of Afib or the prevention of stroke.
Although our Isolator Synergy System and EPi-Sense System have received FDA approval for the treatment of some forms of Afib in certain procedures, we have not received FDA clearance or approval to promote our other products for the treatment of Afib, prevention of stroke, or reduction of post-operative Afib.
Legal & Compliance Risks • We could face substantial penalties if we do not fully comply with federal, state and foreign regulations. • We may be subject to fines, injunctions and penalties if we fail to comply with extensive FDA regulations. • Unless and until we obtain additional FDA approval for our products, we will not be able to promote them for treatment of Afib and/or to prevent stroke, and our inability to maintain or grow our business could be harmed.
Legal & Compliance Risks • We could face substantial penalties if we do not fully comply with federal, state and foreign regulations. • We may be subject to fines, injunctions and penalties if we fail to comply with extensive FDA regulations. • Unless and until we obtain additional FDA approval for our products, we will not be able to promote them for treatment of Afib, prevention of stroke, or reduction of post-operative Afib, and our inability to maintain or grow our business could be harmed.
Industry Condition Risks • A prolonged downturn in macroeconomic conditions may materially adversely affect our business. • Rising healthcare costs may result in efforts by government and private payors to contain or reduce healthcare spending, including reimbursement for procedures that utilize our products. • Adverse changes in governmental and third-party payors’ policies toward coverage and reimbursement for surgical procedures would harm our ability to promote and sell our products.
Industry Condition Risks • A prolonged downturn in macroeconomic conditions may materially adversely affect our business. • Government and private payors may contain or reduce healthcare spending, including reimbursement for procedures that utilize our products. • Adverse changes in governmental and third-party payors’ policies toward coverage and reimbursement for surgical procedures would harm our ability to promote and sell our products.
Physicians may use our products in circumstances where they deem it medically appropriate, such as for the treatment of Afib or the reduction in stroke risk, even though FDA may not have approved or cleared our products to be marketed specifically for those indications.
Physicians may use our products in circumstances where they deem it medically appropriate, such as for the treatment Afib, prevention of stroke, or reduction of post-operative Afib, even though FDA may not have approved or cleared our products to be marketed specifically for those indications.
Unless the products are approved or cleared by FDA specifically for the treatment of Afib or prevention of stroke, we may not make claims about the safety or effectiveness of our products for such uses.
Unless the products are approved or cleared by FDA specifically for the treatment of Afib, prevention of stroke, or reduction of post-operative Afib, we may not make claims about the safety or effectiveness of our products for such uses.
Any failure by us to manage our growth effectively could have an adverse effect on our ability to achieve our development and commercialization goals. 20 Table of Contents To achieve our revenue goals, we must successfully increase production output as required by customer demand.
Any failure by us to manage our growth effectively could have an adverse effect on our ability to achieve our development and commercialization goals. To achieve our revenue goals, we must successfully increase production output as required by customer demand.
We expect that sales of these products will continue to account for a majority of our revenue for the foreseeable future and that our future revenue will depend on the increasing acceptance by the medical community of our products as standard of care for treating Afib, managing the LAA and managing pain with Cryo Nerve Block therapy.
We expect that sales of our ablation and LAAM products will continue to account for a majority of our revenue for the foreseeable future and that our future revenue will depend on the increasing acceptance by the medical community of our products as standard of care for treating Afib, managing the LAA and managing post-operative pain with Cryo Nerve Block therapy.
If we encounter difficulties growing the market for our products in the U.S., we may not be able to increase our revenue enough to achieve or sustain profitability, and our business and operating results will be seriously harmed.
If we encounter difficulties growing the market for our products in the United States, we may not be able to increase our revenue enough to achieve or sustain profitability, and our business and operating results will be seriously harmed.
The introduction of new products, procedures or clinical solutions, or our competitors obtaining FDA approvals or clearances, such as Medtronic's Penditure device, may result in price reductions, reduced margins, loss of market share, or may render our products obsolete, which could adversely affect our revenue and future profitability.
The introduction of new products, procedures or clinical solutions, or our competitors obtaining FDA approvals or clearances, may result in price reductions, reduced margins, loss of market share, or may render our products obsolete, which could adversely affect our revenue and future profitability.
Any product liability claim, even a meritless or unsuccessful one, would be time-consuming and expensive to defend and could result in the diversion of our management’s attention from our business and result in adverse publicity, withdrawal of clinical trial participants, injury to our reputation and loss of revenue. Any of these events could negatively affect our financial condition.
Any product liability claim, even a meritless or unsuccessful one, would be time-consuming and expensive to defend and could result in the diversion of our management’s attention from our business and result in adverse publicity, withdrawal of clinical trial participants, injury to our reputation and loss of revenue.
Unless and until we obtain additional FDA approval for our products, we will not be able to promote them for the treatment of Afib and/or to prevent stroke, and our ability to maintain and grow our business could be harmed.
Unless and until we obtain additional FDA approval for our products, we will not be able to promote them for the treatment of Afib, prevention of stroke, or reduction of post-operative Afib, and our ability to maintain and grow our business could be harmed.
All of these factors may harm our competitive position. 26 Table of Contents The medical device industry is characterized by extensive litigation and administrative proceedings over patent and other intellectual property rights and any litigation or claim against us may cause us to incur substantial costs, could place a significant strain on our financial resources, divert the attention of management from our business and harm our reputation.
The medical device industry is characterized by extensive litigation and administrative proceedings over patent and other intellectual property rights and any litigation or claim against us may cause us to incur substantial costs, could place a significant strain on our financial resources, divert the attention of management from our business and harm our reputation.
We may be subject to fines, penalties, injunctions and other sanctions if we are deemed to be promoting the use of our products for unapproved, or off-label, uses. Our business and future growth depend on the continued use of our products for the treatment of Afib.
We may be subject to fines, penalties, injunctions and other sanctions if we are deemed to be promoting the use of our products for unapproved, or off-label, uses. Our business and future growth depend on the continued use of our products for the treatment of Afib and/or reduction of Afib and related complications, such as stroke.
If our intellectual property does not provide significant protection against foreign or domestic competition, any current or future competitors could compete more directly with us, which could result in a decrease in our revenue and market share.
If our intellectual property does not provide significant protection against foreign or domestic competition, any current or future competitors could compete more directly with us, which could result in a decrease in our revenue and market share. All of these factors may harm our competitive position.
In addition, the ability of our independent distributors to borrow money from their existing lenders or to obtain credit from other sources to purchase our products may be impaired or our independent distributors could experience a significant change in their liquidity or financial condition, all of which could impair their ability to distribute our products and eventually lead to distributor turnover, and may adversely impact our sales.
In addition, the ability of our independent distributors to obtain financing to purchase our products may be impaired or our independent distributors could experience a significant change in their liquidity or financial condition, all of which could impair their ability to distribute our products and eventually lead to distributor turnover, and may adversely impact our sales.
These provisions include those: • authorizing the issuance without further approval of “blank check” preferred stock that could be issued by our board of directors to increase the number of outstanding shares and thwart a takeover attempt; • prohibiting cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates; • limiting the ability of stockholders to call special meetings of stockholders; • prohibiting stockholder action by written consent, thereby requiring all stockholder actions to be taken at a meeting of stockholders; and • establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings. 31 Table of Contents In addition, Section 203 of the Delaware General Corporation Law limits business combination transactions with 15% stockholders that have not been approved by our board of directors.
These provisions include the following: • authorizing the issuance without further approval of “blank check” preferred stock that could be issued by our board of directors to increase the number of outstanding shares and thwart a takeover attempt; • prohibiting cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates; • limiting the ability of stockholders to call special meetings of stockholders; • prohibiting stockholder action by written consent, thereby requiring all stockholder actions to be taken at a meeting of stockholders; and • establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings.
These distributors are owed amounts from public hospitals that are funded by their governments. Adverse financial conditions in these countries may negatively affect the length of time that it will take us to collect associated accounts receivable or impact the likelihood of ultimate collection. We may be unable to comply with the covenants of our Credit Agreement.
Adverse financial conditions in these countries may negatively affect the length of time that it will take us to collect associated accounts receivable or impact the likelihood of ultimate collection. We may be unable to comply with the covenants of our Credit Agreement.
Our success depends in large part on the medical community’s acceptance of our products in the United States, which is the largest revenue market in the world for medical devices. Our ablation and LAAM product sales in the United States generate the majority of our revenue.
Our success depends in large part on the medical community’s acceptance of our products in the United States, which is the largest revenue market in the world for medical devices.
Unless and until we obtain FDA clearance or approval for the use of our other products to treat Afib or prevent stroke, we, and others acting on our behalf, may not claim in the U.S. that such products are safe and effective for such uses or otherwise promote them for such uses. Similar restrictions also exist outside of the U.S.
Unless and until we obtain FDA clearance or approval for the use of our other products to treat Afib, prevent stroke, or reduce post-operative Afib, we, and others acting on our behalf, may not claim in the United States that such products are safe and effective for such uses or otherwise promote them for such uses.
We cannot assure you that one or more of these factors will not harm our business. 27 Table of Contents Due to the global nature of our business, we may be exposed to liabilities under the Foreign Corrupt Practices Act and various other anti-corruption laws, and any allegation or determination that we violated these laws could have a material adverse effect on our business.
Due to the global nature of our business, we may be exposed to liabilities under the Foreign Corrupt Practices Act and various other anti-corruption laws, and any allegation or determination that we violated these laws could have a material adverse effect on our business.
We could sustain damage to our reputation and customer and employee relationships, suffer disruptions to our business and incur increased operating costs including costs to mitigate any damage caused and protect against future damage, and be exposed to 21 Table of Contents additional regulatory scrutiny or penalties and to civil litigation and possible financial liability, any of which could have a material adverse effect on our business, operating margins, revenues and competitive position.
We could sustain damage to our reputation and customer and employee relationships, suffer disruptions to our business and incur increased operating costs including costs to mitigate any damage caused and protect against future damage, and be exposed to additional regulatory scrutiny or penalties and to civil litigation and possible financial liability, any of which could have a material adverse effect on our business, operating margins, revenues and competitive position. 21 Table of Contents We also rely in part on information technology to store information, interface with customers, maintain financial accuracy, secure our data and accurately produce our financial statements.
Department of Justice (USDOJ), which may include any of the following sanctions, among others: • warning letters, fines, injunctions, consent decrees and civil penalties; • repair, replacement, refunds, recall or seizure of our products; • operating restrictions, partial suspension or total shutdown of production; • suspension or termination of our clinical trials; • refusing or delaying our pending requests for 510(k) clearance or PMAs, new intended uses or modifications to existing products; • withdrawing 510(k) clearance or PMAs that have already been granted; and • criminal prosecution. 23 Table of Contents If any of these events were to occur, we could lose customers and our production, product sales, business, results of operations and financial condition would be harmed.
Department of Justice (USDOJ), which may include any of the following sanctions, among others: • warning letters, fines, injunctions, consent decrees and civil penalties; • repair, replacement, refunds, recall or seizure of our products; • operating restrictions, partial suspension or total shutdown of production; • suspension or termination of our clinical trials; • refusing or delaying our pending requests for 510(k) clearance or PMAs, new intended uses or modifications to existing products; • withdrawing 510(k) clearance or PMAs that have already been granted; and • criminal prosecution.
Additionally, our devices are sterilized prior to use using ethylene oxide at third-party sterilizers. Recently, certain sterilization facilities have experienced mandated temporary closures due to concerns over the impact of emissions of ethylene oxide from such facilities, and the Environmental Protection Agency has proposed regulations aimed at reducing hazardous air pollutants.
Recently, certain sterilization facilities have experienced voluntary or mandated temporary closures due to concerns over the impact of emissions of ethylene oxide from such facilities, and the Environmental Protection Agency has proposed regulations aimed at reducing hazardous air pollutants.
Furthermore, if we make downward revisions of our previously announced guidance, or if our publicly announced guidance of future operating results fails to meet expectations of securities analysts, investors, or other interested parties, the market price of our common stock could decline.
Furthermore, if we make downward revisions of our previously announced guidance, or if our publicly announced guidance of future operating results fails to meet expectations of securities analysts, investors, or other interested parties, the market price of our common stock could decline. 29 Table of Contents Securities analysts may not continue, or additional securities analysts may not initiate, coverage for our common stock or may issue negative reports.
These fluctuations may also affect our annual operating results and may cause those results to fluctuate unexpectedly from year to year. We have a history of net losses, and we may never become profitable.
These fluctuations may also affect our annual operating results and may cause those results to fluctuate unexpectedly from year to year. We have a history of net losses, and we may never become profitable. We have a history of net losses, including $44,698 in 2024, $30,438 in 2023, and $46,466 in 2022.
The continuing efforts of governments, insurance companies and other payors of healthcare costs to contain or reduce these costs, combined with closer scrutiny of such costs, could lead to patients being unable to obtain approval for payment from these third-party payors. The cost containment measures that healthcare providers are instituting both in the U.S. and internationally could harm our business.
The continuing efforts of governments, insurance companies and other payors of healthcare costs to contain or reduce these costs, combined with closer scrutiny of such costs, could lead to patients being unable to obtain approval for payment from these third-party payors.
Our accounts receivable in the United States are primarily due from public and private hospitals. Our accounts receivable outside the United States are primarily due from public and private hospitals and from independent distributors. Our historical write-offs of accounts receivable have not been significant.
Our accounts receivable in the United States are primarily due from public and private hospitals. Our accounts receivable outside the United States are primarily due from public and private hospitals and from independent distributors.
Our patent applications may not issue as patents at all or in a form that will be advantageous to us. Our issued patents and those that may be issued in the future may be challenged, invalidated or circumvented, which could limit our ability to stop competitors from marketing related products.
Our issued patents and those that may be issued in the future may be challenged, invalidated or circumvented, which could limit our ability to stop competitors from marketing related products.
Future growth will also impose significant added responsibilities on management, including the need to identify, recruit, train and integrate additional employees. In addition, rapid and significant growth will place a strain on our administrative and operational infrastructure.
Any such delay or increased expense could adversely affect our ability to generate revenues and adversely impact our operating results. Future growth will also impose significant added responsibilities on management, including the need to identify, recruit, train and integrate additional employees. In addition, rapid and significant growth will place a strain on our administrative and operational infrastructure.
We are also subject to medical device reporting regulations that require us to file reports with FDA if our products may have caused or contributed to a death or serious injury or, in the event of product malfunction, that if such malfunction were to recur, would likely cause or contribute to a death or serious injury.
If any of these events were to occur, we could lose customers and our production, product sales, business, results of operations and financial condition would be harmed. 23 Table of Contents We are also subject to medical device reporting regulations that require us to file reports with FDA if our products may have caused or contributed to a death or serious injury or, in the event of product malfunction, that if such malfunction were to recur, would likely cause or contribute to a death or serious injury.
Some analysts have already published statements that do not portray our technology, products or procedures using our products in a positive light and others may do so in the future.
This may have a negative impact on the market price of our common stock. Several securities analysts provide research coverage of our common stock. Some analysts have already published statements that do not portray our technology, products or procedures using our products in a positive light and others may do so in the future.
We believe that such publicity would potentially have a negative 19 Table of Contents impact on our business, results of operations and financial condition and our clinical studies, or cause other adverse effects, including a decline in the price of our stock.
We believe that such publicity would potentially have a negative impact on our business, results of operations and financial condition and our clinical studies, or cause other adverse effects, including a decline in the price of our stock. 19 Table of Contents We rely upon single and limited source third-party suppliers and third-party service providers, making us vulnerable to supply problems and price fluctuations which could harm our business.
We, FDA or the IRB may suspend a clinical trial at any time for various reasons, including a belief that the risks to study subjects outweigh the anticipated benefits.
We cannot assure you that any of our clinical trials will be completed in a timely manner or successfully or that the results obtained will be acceptable to FDA. We, FDA or the IRB may suspend a clinical trial at any time for various reasons, including a belief that the risks to study subjects outweigh the anticipated benefits.
Some healthcare providers in the U.S. have adopted or are considering a managed care system in which the providers contract to provide comprehensive healthcare for a fixed cost per person.
The cost containment measures that healthcare providers are instituting both in the United States and internationally could harm our business. Some healthcare providers in the United States have adopted or are considering a managed care system in which the providers contract to provide comprehensive healthcare for a fixed cost per person.
In the future, we may experience difficulties in increasing production, including problems with production yields and quality control, component supply and shortages of qualified personnel. These problems could result in delays in product availability and increases in expenses. Any such delay or increased expense could adversely affect our ability to generate revenues and adversely impact our operating results.
In the future, we may experience difficulties in increasing production, including problems with production yields and quality control, component supply and shortages of qualified personnel. These problems could result in delays in product 20 Table of Contents availability and increases in expenses.
In addition, the U.S. or other governments may seek to hold us liable for successor liability FCPA violations or violations of other anti-corruption laws committed by companies in which we invest or that we acquired or will acquire.
In addition, the U.S. or other governments may seek to hold us liable for successor liability FCPA violations or violations of other anti-corruption laws committed by companies in which we invest or that we acquired or will acquire. 27 Table of Contents The use of artificial intelligence ("AI") technology by our employees or business partners could result in misuse or loss of proprietary information, violation of laws and regulations, or damage to our reputation and credibility.
Our intellectual property rights may not provide meaningful commercial protection for our products, which could enable third parties to use our technology or methods, or very similar technology or methods, and could reduce our ability to compete. Our success depends significantly on our ability to protect our proprietary rights to the technologies used in our products.
Any of these events could negatively affect our financial condition. 25 Table of Contents Our intellectual property rights may not provide meaningful commercial protection for our products, which could enable third parties to use our technology or methods, or very similar technology or methods, and could reduce our ability to compete.
Anti-takeover provisions in our amended and restated certificate of incorporation and amended and restated bylaws and under Delaware law could inhibit a change in control or a change in management that stockholders consider favorable.
A negative reaction by investors and securities analysts to any sale of our equity securities could result in a decline in the trading price of our common stock. 30 Table of Contents Anti-takeover provisions in our amended and restated certificate of incorporation and amended and restated bylaws and under Delaware law could inhibit a change in control or a change in management that stockholders consider favorable.
There is no assurance that future clearances or approvals of our products will be granted or that current or future clearances or approvals will not be withdrawn. Failure to obtain a clearance or approval or loss of an existing clearance or approval, could hurt our ability to maintain and grow our business.
Failure to obtain a clearance or approval or loss of an existing clearance or approval, could hurt our ability to maintain and grow our business.
Furthermore, we may enter into capital raising transactions or issue shares in acquisitions at prices that represent a substantial discount to market price. A negative reaction by investors and securities analysts to any sale of our equity securities could result in a decline in the trading price of our common stock.
Furthermore, we may enter into capital raising transactions or issue shares in acquisitions at prices that represent a substantial discount to market price.
Our losses have had, and are expected to continue to have, an adverse impact on our working capital, total assets and accumulated deficit. Governmental authorities may question our intercompany transfer pricing policies or change their laws in a manner that could increase our effective tax rate or otherwise harm our business.
Governmental authorities may challenge our intercompany transfer pricing policies or change their laws in a manner that could increase our effective tax rate or otherwise harm our business.
Due to differing rates of adoption of our devices, our quarterly operating results may fluctuate significantly.
Financial Risks Our quarterly financial results are likely to fluctuate significantly because the pace of adoption of our products by clinicians is uncertain. Due to differing rates of adoption of our devices, our quarterly operating results may fluctuate significantly.
Our net losses have resulted principally from costs and expenses relating to sales, training and promotional efforts, research and development, clinical trials, seeking regulatory clearances and approvals and general operating expenses. We expect to continue to incur substantial expenditures and to potentially incur additional operating losses in the future as we further develop and commercialize our products.
As of December 31, 2024, we had an accumulated deficit of $401,755. Our net losses have resulted principally from costs and expenses relating to sales, training and promotional efforts, research and development, clinical trials, seeking regulatory clearances and approvals and general operating expenses.
Our exposure to each of these risks may increase our costs and require significant management attention.
Our exposure to each of these risks may increase our costs and require significant management attention. We cannot assure you that one or more of these factors will not harm our business.
In order to obtain additional FDA approvals to promote our products for the treatment of Afib or reduction in stroke risk, we will need to demonstrate in clinical trials that our products are safe and effective for such use.
In order to obtain additional FDA approvals to promote our products, we will need to demonstrate in clinical trials that our products are safe and effective for such use. Development of sufficient and appropriate clinical protocols to demonstrate quality, safety and efficacy may be required and we may not adequately develop such protocols to support approval.
We monitor the financial performance and credit worthiness of our customers so that we can properly assess and respond to changes in their credit profile. Our independent distributors operate in certain countries where economic conditions continue to present challenges to their businesses, and, thus, could place the amounts due to us at risk.
Our independent distributors operate in certain countries where economic conditions continue to present challenges to their businesses, and, thus, could place the amounts due to us at risk. These distributors are owed amounts from public hospitals that are funded by their governments.
We also rely in part on information technology to store information, interface with customers, maintain financial accuracy, secure our data and accurately produce our financial statements. In addition, some of our software systems are cloud-based data management applications, hosted by third-party service providers whose security and information technology systems are subject to similar risks.
In addition, some of our software systems are cloud-based data management applications, hosted by third-party service providers whose security and information technology systems are subject to similar risks. The failure to protect either our or our service providers’ information technology infrastructure could disrupt our operations.
We rely on patent protection, as well as a combination of copyright, trade secret and trademark laws and nondisclosure, confidentiality and other contractual restrictions to protect our proprietary technology. However, these legal means afford only limited protection and may not adequately protect our rights or permit us to gain or keep any competitive advantage.
Our success depends significantly on our ability to protect our proprietary rights to the technologies used in our products. We rely on patent protection, as well as a combination of copyright, trade secret and trademark laws and nondisclosure, confidentiality and other contractual restrictions to protect our proprietary technology.
If sales of our products do not continue to grow as we anticipate, we may not be able to achieve profitability. Our expansion efforts may prove to be more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses.
Our expansion efforts may prove to be more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses. Our losses have had, and are expected to continue to have, an adverse impact on our working capital, total assets and accumulated deficit.
Healthcare fraud and abuse regulations are complex, and even minor, inadvertent irregularities can potentially give rise to claims that a law has been violated. Any violations of these laws could result in a material adverse effect on our business, financial condition and results of operations.
Any violations of these laws could result in a material adverse effect on our business, financial condition and results of operations.
For example, we rely on one vendor to manufacture our RF generator, as well as separate vendors to manufacture our EPi-Sense System and related RF generator. It would be a time consuming and lengthy process to secure these products from an alternative supplier. We have significant concentrations with a limited number of vendors.
We rely on single and limited source third-party vendors for the manufacture and sterilization of components used in our products as well as third-party vendors for the manufacturing of our RF generator and our EPi-Sense System. We have significant concentrations with a limited number of vendors.
Removed
In 2023, Medtronic announced the FDA clearance of the Penditure TM Left Atrial Appendage Exclusion System.
Added
It would be a time consuming and lengthy process to secure these products from an alternative supplier. Additionally, our devices are sterilized prior to use using ethylene oxide at third-party sterilizers.
Removed
We rely upon single and limited source third-party suppliers and third-party service providers, making us vulnerable to supply problems and price fluctuations which could harm our business. We rely on single and limited source third-party vendors for the manufacture and sterilization of components used in our products.
Added
Similar restrictions also exist outside of the United States. There is no assurance that future clearances or approvals of our products will be granted or that current or future clearances or approvals will not be withdrawn.
Removed
The failure to protect either our or our service providers’ information technology infrastructure could disrupt our operations.

… 28 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

4 edited+0 added−0 removed17 unchanged
Biggest changeThe ERM process's risk assessment is presented to the Board of Directors. In 32 Table of Contents addition to assessing our own cybersecurity preparedness, we also consider cybersecurity risks associated with the use of third-party software and service providers.
Biggest changeThe ERM process's risk assessment is presented to the Board of Directors. In addition to assessing our own cybersecurity preparedness, we also consider cybersecurity risks associated with the use of third-party software and service providers. Such providers are subject to security risk assessments at time of onboarding, contract renewal and upon detection of an increase in risk profile.
In conducting the assessment, the team considers factors including, but not limited to: the probability of an adverse outcome; the potential significance of loss; the nature and extent of harm to individuals, customers, and vendors; the nature and extent of harm to our competitive position or reputation; and the possibility of litigation or regulatory investigations.
In conducting the assessment, the team considers 31 Table of Contents factors including, but not limited to: the probability of an adverse outcome; the potential significance of loss; the nature and extent of harm to individuals, customers, and vendors; the nature and extent of harm to our competitive position or reputation; and the possibility of litigation or regulatory investigations.
Our Vice President of IT has served in various roles in information technology and information security for over 20 years. Our information security team has an aggregate of more than 60 years of experience in information technology roles across several industries.
Our Vice President of IT has served in various roles in information technology and information security for over 20 years. Our information security team has an aggregate of more than 60 years of experience in information technology roles across several industries. 32 Table of Contents
Such providers are subject to security risk assessments at time of onboarding, contract renewal and upon detection of an increase in risk profile. On an annual basis we review System and Organization Controls (SOC) 1 or SOC 2 reports for third-party service providers deemed significant to our environment.
On an annual basis we review System and Organization Controls (SOC) 1 or SOC 2 reports for third-party service providers deemed significant to our environment.

Item 2. Properties

Properties — owned and leased real estate

4 edited+0 added−0 removed2 unchanged
Biggest changeThe Company believes that its existing facilities are adequate to meet its immediate needs and that suitable additional space will be available in the future on commercially reasonable terms as needed. 33 Table of Contents ITEM 3. LEGAL PROCEEDINGS We may from time to time become a party to additional legal proceedings that arise in the ordinary course of business.
Biggest changeWe intend to add new facilities as we grow, and we believe that suitable additional space will be available in the future on commercially reasonable terms as needed. ITEM 3. LEGAL PROCEEDINGS We may from time to time become a party to additional legal proceedings that arise in the ordinary course of business.
The Mason Distribution Warehouse is primarily used for warehousing and distribution activities and is approximately 40,000 square feet. The Mason Manufacturing Building is approximately 37,000 square feet and is used for manufacturing, quality and engineering activities. • Minnetonka, Minnesota – This location includes administrative, clinical, regulatory and product development space.
The Mason Distribution Warehouse is primarily used for warehousing and distribution activities and is approximately 52,000 square feet. The Mason Manufacturing Building is approximately 37,000 square feet and is used for manufacturing, quality and engineering activities. • Minnetonka, Minnesota – This location includes administrative, clinical, regulatory and product development space.
See Note 10 – Commitments and Contingencies to our Consolidated Financial Statements. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 34 Table of Contents PART II
See Note 11 – Commitments and Contingencies to our Consolidated Financial Statements. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 33 Table of Contents PART II
The space is approximately 9,000 square feet. • Hertogenbosch, Netherlands – This location is used for service activities and is approximately 19,000 square feet.
The space is approximately 9,000 square feet. • Hertogenbosch, Netherlands – This location is used for European service activities and is approximately 19,000 square feet. The Company believes that its existing facilities are adequate to meet its immediate needs.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+0 added−0 removed0 unchanged
Biggest changeStock performance shown in the above chart for our common stock is historical and should not be considered indicative of future price performance. 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 AtriCure, Inc. $ 100.00 $ 106.24 $ 181.93 $ 227.22 $ 145.03 $ 116.63 NASDAQ Composite $ 100.00 $ 136.69 $ 198.10 $ 242.03 $ 163.28 $ 236.17 NASDAQ Health Care $ 100.00 $ 110.75 $ 140.85 $ 126.71 $ 95.29 $ 96.06 ITEM 6. [RESERVED]
Biggest changeStock performance shown in the above chart for our common stock is historical and should not be considered indicative of future price performance. 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 AtriCure, Inc. $ 100.00 $ 171.24 $ 213.87 $ 136.51 $ 109.78 $ 94.00 NASDAQ Composite $ 100.00 $ 144.92 $ 177.06 $ 119.45 $ 172.77 $ 223.87 NASDAQ Health Care $ 100.00 $ 127.18 $ 114.41 $ 86.04 $ 86.74 $ 84.53 ITEM 6. [RESERVED] 34 Table of Contents
This graph assumes that $100.00 was invested on December 31, 2018, in our common stock, the NASDAQ Composite Index and the NASDAQ Health Care Index, and that all dividends are reinvested. No dividends have been declared or paid on our common stock.
This graph assumes that $100.00 was invested on December 31, 2019, in our common stock, the NASDAQ Composite Index and the NASDAQ Health Care Index, and that all dividends are reinvested. No dividends have been declared or paid on our common stock.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* Among AtriCure, Inc., the NASDAQ Composite Index and the NASDAQ Health Care Index *$100 invested on 12/31/18 in stock or index, including reinvestment of dividends. Fiscal year ending December 31.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* Among AtriCure, Inc., the NASDAQ Composite Index and the NASDAQ Health Care Index *$100 invested on 12/31/19 in stock or index, including reinvestment of dividends. Fiscal year ending December 31.
Performance Graph The following graph compares the cumulative total stockholder return on our common stock with the cumulative total return of the NASDAQ Composite Index (“NASDAQ Composite”) and the NASDAQ Health Care Index (“NASDAQ Health Care”) for the period beginning on December 31, 2018, and ending on December 31, 2023.
Performance Graph The following graph compares the cumulative total stockholder return on our common stock with the cumulative total return of the NASDAQ Composite Index (“NASDAQ Composite”) and the NASDAQ Health Care Index (“NASDAQ Health Care”) for the period beginning on December 31, 2019, and ending on December 31, 2024.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock Market Price Our common stock is traded on the NASDAQ Global Market under the symbol “ATRC.” As of February 13, 2024, the closing price of our common stock on the NASDAQ Global Market was $31.71 per share, and the number of stockholders of record was 67.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock Market Price Our common stock is traded on the NASDAQ Global Market under the symbol “ATRC.” As of February 11, 2025, the closing price of our common stock on the NASDAQ Global Market was $41.51 per share, and the number of stockholders of record was 59.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

45 edited+27 added−18 removed26 unchanged
Biggest changeResults of Operations Year Ended December 31, 2023 compared to December 31, 2022 The following table sets forth, for the periods indicated, our results of operations expressed as dollar amounts and as percentages of total revenue: Year Ended December 31, 2023 2022 % of % of Amount Revenue Amount Revenue Revenue $ 399,245 100.0 % 330,379 100.0 % Cost of revenue 98,875 24.8 84,439 25.6 Gross profit 300,370 75.2 245,940 74.4 Operating expense (benefit): Research and development expenses 73,915 18.5 57,337 17.4 Selling, general and administrative expenses 253,138 63.4 231,272 70.0 Total operating expenses 327,053 81.9 288,609 87.4 Loss from operations (26,683) (6.7) (42,669) (12.9) Other expense, net (3,164) (0.8) (3,529) (1.1) Loss before income tax expense (29,847) (7.5) (46,198) (14.0) Income tax expense 591 0.1 268 0.1 Net loss $ (30,438) (7.6) % $ (46,466) (14.1) % 37 Table of Contents Revenue.
Biggest changeThese societal guidelines are reflective of the scientific evidence suggesting that surgical and hybrid ablation is safe and effective for patients who have Afib. 36 Table of Contents Results of Operations Year Ended December 31, 2024 compared to December 31, 2023 The following table sets forth, for the periods indicated, our results of operations expressed as dollar amounts and as percentages of total revenue: Year Ended December 31, 2024 2023 % of % of Amount Revenue Amount Revenue Revenue $ 465,307 100.0 % 399,245 100.0 % Cost of revenue 117,783 25.3 98,875 24.8 Gross profit 347,524 74.7 300,370 75.2 Operating expense: Research and development expenses 96,178 20.7 73,915 18.5 Selling, general and administrative expenses 291,359 62.6 253,138 63.4 Total operating expenses 387,537 83.3 327,053 81.9 Loss from operations (40,013) (8.6) (26,683) (6.7) Other expense, net (3,661) (0.8) (3,164) (0.8) Loss before income tax expense (43,674) (9.4) (29,847) (7.5) Income tax expense 1,024 0.2 591 0.1 Net loss $ (44,698) (9.6) % $ (30,438) (7.6) % Revenue.
However, we have on file with the SEC a shelf registration statement which allows us to sell any combination of debt securities, common stock, preferred stock, warrants, depository shares and units in one or more offerings should we choose to do so in the future. We expect to maintain the effectiveness of the shelf registration statement for the foreseeable future.
However, we have a shelf registration statement on file with the SEC which allows us to sell any combination of debt securities, common stock, preferred stock, warrants, depository shares and units in one or more offerings should we choose to do so in the future. We expect to maintain the effectiveness of the shelf registration statement for the foreseeable future.
As of January 5, 2024, we entered into an asset-based credit agreement with JPMorgan Chase Bank, N.A. as Administrative Agent, JPMorgan Chase Bank, N.A. and Silicon Valley Bank, a division of First-Citizen Bank and Trust Company, as Joint Lead Arrangers and Joint Bookrunners (Credit Agreement) that provides for a $125,000 asset-based revolving credit facility (ABL Facility), with an option to increase the revolving commitment by an additional $40,000.
On January 5, 2024, we entered into an asset-based credit agreement with JPMorgan Chase Bank, N.A. as Administrative Agent, JPMorgan Chase Bank, N.A. and Silicon Valley Bank, a division of First-Citizen Bank and Trust Company, as Joint Lead Arrangers and Joint Bookrunners (Credit Agreement) that provides for a $125,000 asset-based revolving credit facility (ABL Facility), with an option to increase the revolving commitment by an additional $40,000.
Our ablation and left atrial appendage management (LAAM) products are used by physicians during both open-heart and minimally invasive procedures. In open-heart procedures, the physician is performing heart surgery for other conditions, and our products are used in conjunction with (or “concomitant” to) such a procedure.
Our ablation and left atrial appendage management products are used by physicians during both open-heart and minimally invasive procedures. In open-heart procedures, the physician is performing heart surgery for other conditions, and our products are used in conjunction with (or “concomitant” to) such a procedure.
We continue to evaluate additional measures to maintain financial flexibility, and we will continue to closely monitor macroeconomic conditions including, but not limited to, inflationary pressures, rising interest rates, and fluctuations in currency exchange rates that may impact our liquidity and access to capital resources. Credit facility.
We continue to evaluate additional measures to maintain financial flexibility, and we will continue to closely monitor macroeconomic conditions including, but not limited to, inflationary pressures, changing interest rates, and fluctuations in currency exchange rates that may impact our liquidity and access to capital resources. Credit facility.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Dollar and share amounts referenced in this Item 7 are in thousands, except per share amounts.) 35 Table of Contents The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying Consolidated Financial Statements and notes thereto contained in Item 8, “Financial Statements and Supplementary Data,” to provide an understanding of our results of operations, financial condition and cash flows.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Dollar and share amounts referenced in this Item 7 are in thousands, except per share amounts.) The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying Consolidated Financial Statements and notes thereto contained in Item 8, “Financial Statements and Supplementary Data,” to provide an understanding of our results of operations, financial condition and cash flows.
Income Taxes— Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.
Income Taxes— Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases along with operating loss and tax credit carryforwards.
Inflation Inflationary pressures may have an adverse impact on our results of operations or financial condition in the foreseeable future. Inflation has impacted our operating costs throughout 2023 and 2022.
Inflation Inflationary pressures may have an adverse impact on our results of operations or financial condition in the foreseeable future. Inflation has impacted our operating costs throughout 2024 and 2023.
This section of this Form 10-K generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions.
This section of this Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions.
Furthermore, we incur additional variable costs, including pass through costs from clinical trial sites. We expect to disburse between $14,000 and $17,000 of fixed and 39 Table of Contents variable costs based on estimated achievement of milestone payments, site initiation and trial enrollment within the next twelve months.
Furthermore, we incur additional variable costs, including pass through costs from clinical trial sites. We expect to disburse between $14,000 and $17,000 of fixed and variable costs based on estimated achievement of milestone payments, site initiation and trial enrollment within the next twelve months.
Year Ended December 31, 2022 compared to December 31, 2021 For a comparison of our results of operations for the years ended December 31, 2022 and December 31, 2021, see “Part II, Item 7.
Year Ended December 31, 2023 compared to December 31, 2022 For a comparison of our results of operations for the years ended December 31, 2023 and December 31, 2022, see “Part II, Item 7.
If we are unable to maintain these financing arrangements, we may be required to reduce the scope of our planned research and development, clinical activities and selling, training, education and marketing efforts. Historical Cash Flow Activity.
If we are unable to maintain these financing arrangements, we may be required to reduce the scope of our planned research and development, clinical activities and selling, training, education and marketing efforts. 39 Table of Contents Historical Cash Flow Activity.
Continued increases in our cost of revenue may affect our ability to maintain our gross margin if the selling prices of our products do not increase commensurately, while continued increases in our operating expenses may adversely affect our operating results and the 40 Table of Contents ability to make discretionary investments.
Continued increases in our cost of revenue may affect our ability to maintain our gross margin if selling prices of our products do not increase commensurately, while continued increases in our operating expenses may adversely affect our operating results and the ability to make discretionary investments.
In evaluating the need for a valuation allowance, the existence of cumulative losses in recent years is 41 Table of Contents significant objectively verifiable negative evidence that must be overcome by objectively-verifiable positive evidence to avoid the need for a valuation allowance.
In evaluating the need for a valuation allowance, the existence of cumulative losses in recent years is significant objectively verifiable negative evidence that must be overcome by objectively-verifiable positive evidence to avoid the need for a valuation allowance.
Revenue Recognition— Revenue is generated from the sale of medical devices. We recognize revenue in an amount that reflects the consideration we expect to be entitled to in exchange for those devices when control of promised devices is transferred to customers. We account for revenue in accordance with FASB ASC 606, “Revenue from Contracts with Customers”.
We recognize revenue in an amount that reflects the consideration we expect to be entitled to in exchange for those devices when control of promised devices is transferred to customers. We account for revenue in accordance with FASB ASC 606, “Revenue from Contracts with Customers”.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our annual report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 22, 2023. Overview We are a leading innovator in treatments for atrial fibrillation (Afib), left atrial appendage (LAA) management and post-operative pain management.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our annual report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 16, 2024. Overview We are a leading innovator in treatments for atrial fibrillation, left atrial appendage management and post-operative pain management.
Our future capital requirements depend on a number of factors, including, without limitation: market acceptance of our current and future products; investments in working capital; costs to develop and support our products, including professional training; costs to expand and support our sales and marketing efforts; operating and filing costs relating to changes in regulatory policies or laws; costs for clinical trials and to secure regulatory approval for new products; costs to prosecute, defend and enforce our intellectual property rights; maintenance and enhancements to our information systems and security; and possible acquisitions and joint ventures, including potential business integration costs.
Our future capital requirements depend on a number of factors, including, without limitation: market acceptance of our current and future products; investments in working capital; costs to develop and support our products, including professional training, clinical trials and contractual development costs; costs to expand and support our sales and marketing efforts; operating and filing costs required by regulatory policies or laws; costs for clinical trials and to secure regulatory approval for new products; costs to prosecute, defend and enforce our intellectual property rights; costs to defend against and/or resolve litigation or claims against us; maintenance and enhancements to our information systems and security; and possible acquisitions and joint ventures, including potential business integration costs.
Our corporate headquarters lease agreement requires a $1,250 letter of credit which renews annually and remains outstanding as of December 31, 2023. For additional information on the terms and conditions, as well as applicable interest and fee payments, see Note 8 – Indebtedness. Capital Expenditures.
Our corporate headquarters lease requires a $1,250 letter of credit which renews annually and remains outstanding as of December 31, 2024. 38 Table of Contents For additional information on the terms and conditions, as well as applicable interest and fee payments, see Note 9 – Indebtedness. Capital Expenditures.
See Note 2 – Fair Value. Sources of liquidity. We believe that our current cash, cash equivalents and investments, along with the cash we expect to generate or use for operations or access via our Credit Agreement, will be sufficient to meet our anticipated cash needs for working capital and capital expenditures for at least the next twelve months.
We believe that our current cash and cash equivalents, along with the cash we expect to generate or use for operations or access via our Credit Agreement, will be sufficient to meet our anticipated cash needs for working capital and capital expenditures for at least the next twelve months.
In 2023, the American College of Cardiology (ACC), American Heart Association (AHA), American College of Clinical Pharmacy (ACCP), and HRS released Guidelines for Diagnosis and Management of Atrial Fibrillation, and they upgraded Left Atrial Appendage Management to the highest recommendation of Class 1 and now include Hybrid AF™ Therapy as a Class 2 recommendation.
During 2023, the American College of Cardiology (ACC), American Heart Association (AHA), American College of Clinical Pharmacy (ACCP) and HRS released Guidelines for Diagnosis and Management of Atrial Fibrillation, and upgraded LAAM to the highest recommendation of Class 1 and included Hybrid AF Therapy as a Class 2 recommendation.
In 2022, the Company entered into a clinical trial management agreement for the LeAAPS clinical trial. The terms of the agreement require we make milestone payments upon achievement of various enrollment and project milestones over the estimated ten-year term, yet the agreement may be terminated early for any reason.
Our future obligations include both current and long-term obligations. In 2022, the Company entered into a clinical trial management agreement for the LeAAPS clinical trial. The terms of the agreement require payments upon achievement of various enrollment and project milestones over the estimated ten-year term, yet the agreement may be terminated early for any reason.
A minor portion of our cash is held in foreign banks to support our international operations. We had net working capital of $191,677 and an accumulated deficit of $357,057 as of December 31, 2023. Uses of liquidity and capital resources.
A minor portion of our cash is held in foreign banks to support our international operations. We had net working capital of $194,402 and an accumulated deficit of $401,755 as of December 31, 2024. Uses of liquidity and capital resources.
In the United States, we experienced growth in all key product lines as a result of deepening market penetration and expanding physician adoption.
We experienced growth in all key product lines as a result of deepening market penetration, continuing physician adoption and new product launches.
The borrowings bear interest at a rate per annum equal to, at the Company's election: (i) an alternate base rate (ABR) plus an applicable margin or (ii) an adjusted term secured overnight financing rate (SOFR) plus an applicable margin. At the time of closing, the Company borrowed $61,865 and had unused borrowing availability of approximately $61,885.
The borrowings bear interest at a rate per annum equal to, at the Company's election: (i) an alternate base rate (ABR) plus an applicable margin or (ii) an adjusted term secured overnight financing rate (SOFR) plus an applicable margin.
Historically there have been limited competitors in our key markets, but we have begun to see more entrants that may cause variability in 2024 results. Highlights of the strategic and operational advancements in 2023 include: PRODUCT INNOVATION.
Historically there have been limited competitors in our key markets, but new entrants are marketing and developing competing products, procedures, and/or clinical solutions that may cause variability in our results. Highlights of the strategic and operational advancements in 2024 include: PRODUCT INNOVATION.
In January 2023, the first patient was enrolled in the trial, and we ended 2023 with nearly 1,400 patients enrolled. Site initiation and enrollment is ongoing. ICE-AFIB.
In January 2023, the first patient was enrolled in the trial, and we ended 2024 with over 4,200 patients enrolled. Site initiation and enrollment is ongoing. BoxX-NoAF .
International revenue increased 23.5% (22.1% on a constant currency basis), across all franchises and major geographic regions. Revenue reported on a constant currency basis is a non-GAAP measure calculated by applying previous period foreign currency exchange rates, which are determined by the average daily exchange rate, to each of the comparable periods.
Revenue reported on a constant currency basis is a non-GAAP measure calculated by applying previous period foreign currency exchange rates, which are determined by the average daily exchange rate, to each of the comparable periods. Revenue is analyzed on a constant currency basis to better measure the comparability of results between periods.
These training methods ensure invaluable access to continuing education and awareness of our products and related procedures. During 2023, we launched new training courses for Advanced Practice Providers, pain management in pectus procedures, as well as a best practice course for developing arrhythmia programs, with a primary focus on Hybrid therapies.
During 2023, we launched new training courses for Advanced Practice Providers, pain management in pectus procedures, as well as a best practice course for developing arrhythmia programs, with a primary focus on Hybrid therapies. These trainings allow for collaborative, hands-on engagement with our physician partners and other healthcare professionals.
The following table summarizes our consolidated cash flow activities: Years Ended December 31, 2023 2022 Change Net cash provided by (used in) operating activities $ 4,484 $ (22,141) $ 26,625 Net cash provided by investing activities 21,817 44,006 (22,189) Net cash used in financing activities (32) (7,059) 7,027 Cash flows provided by (used in) operating activities.
The following table summarizes our consolidated cash flow activities: Years Ended December 31, 2024 2023 Change Net cash provided by operating activities $ 12,204 $ 4,484 $ 7,720 Net cash provided by investing activities 30,234 21,817 8,417 Net cash used in financing activities (3,603) (32) (3,571) Cash flows provided by operating activities.
Revenue is analyzed on a constant currency basis to better measure the comparability of results between periods. Because changes in foreign currency exchange rates have a non-operating impact on revenue, we believe that evaluating growth in revenue on a constant currency basis provides an additional and meaningful assessment of revenue to both management and investors.
Because changes in foreign currency exchange rates have a non-operating impact on revenue, we believe that evaluating growth in revenue on a constant currency basis provides an additional and meaningful assessment of revenue to both management and investors. 37 Table of Contents Cost of revenue and gross margin. Cost of revenue increased $18,908 primarily reflecting higher sales volumes.
We incur capital expenditures on an ongoing basis to continue investment in our growth and our ability to better serve our customers. Throughout 2021 through 2023, we continued expansion and renovation of our manufacturing and engineering facilities in our Mason, Ohio campus. Other Contractual Obligations. Our future obligations include both current and long-term obligations.
We incur capital expenditures on an ongoing basis to continue investment in our growth and our ability to better serve our customers. In recent years, we have expanded the manufacturing and engineering facilities in our Mason, Ohio campus and expect to continue to invest in facilities to support our growth. Other Contractual Obligations.
We have operating and finance leases primarily for our corporate offices, manufacturing and warehouse facilities and automobiles. Our finance leases consist primarily of principal and interest payments related to our Mason, Ohio headquarters building. As of December 31, 2023, we have current finance lease obligations of $1,086 and long-term obligations of $8,061.
Our finance leases consist primarily of principal and interest payments related to our Mason, Ohio headquarters building. As of December 31, 2024, current finance lease obligations are $1,186 and long-term obligations are $7,281. Our operating leases for office and warehouse space includes current obligations of $1,619 and long-term obligations of $4,579 as of December 31, 2024.
The following table sets forth, for the periods indicated, our revenue by product type and geography expressed as dollar amounts and the corresponding change in such revenues between periods, in both dollars and percentages: Year Ended December 31, Change 2023 2022 Amount % Open ablation $ 105,287 $ 86,119 $ 19,168 22.3 % Minimally invasive ablation 44,577 38,553 6,024 15.6 % Pain management 49,199 39,974 9,225 23.1 % Appendage management 134,481 112,555 21,926 19.5 % Total United States $ 333,544 $ 277,201 $ 56,343 20.3 % Total International 65,701 53,178 12,523 23.5 % Total Revenue $ 399,245 $ 330,379 $ 68,866 20.8 % Worldwide revenue increased 20.8% (20.6% on a constant currency basis).
The following table sets forth, for the periods indicated, our revenue by product type and geography expressed as dollar amounts and the corresponding change in such revenues between periods, in both dollars and percentages: Year Ended December 31, Change 2024 2023 Amount % Open ablation $ 123,647 $ 105,287 $ 18,360 17.4 % Minimally invasive ablation 45,737 44,577 1,160 2.6 % Pain management 61,844 49,199 12,645 25.7 % Appendage management 151,588 134,481 17,107 12.7 % Total United States $ 382,816 $ 333,544 $ 49,272 14.8 % Total International 82,491 65,701 16,790 25.6 % Total Revenue $ 465,307 $ 399,245 $ 66,062 16.5 % Worldwide revenue increased 16.5% as reported and on a constant currency basis.
On a periodic basis, we evaluate our estimates, using authoritative pronouncements, historical experience and other assumptions as the basis for making estimates. We have described our significant accounting policies in Note 1 – Description of Business and Summary of Significant Accounting Policies to our Consolidated Financial Statements included in this Form 10-K.
On a periodic basis, we evaluate our estimates, using authoritative pronouncements, historical experience and other assumptions as the basis for making estimates.
We believe the following critical accounting policies involve a significant level of estimation uncertainty and judgments that are reasonably likely to have a material impact on our Consolidated Financial Statements. We base our judgments and estimates on historical experience, current conditions and other reasonable factors. Actual results could differ from those estimates under different assumptions or conditions.
We base our judgments and estimates on historical experience, current conditions and other reasonable factors. Actual results could differ from those estimates under different assumptions or conditions. Revenue Recognition— Revenue is generated from the sale of medical devices.
Subject to the terms and conditions of the SentreHEART merger agreement, such contingent consideration would be paid in AtriCure common stock and cash, up to a specified maximum number of shares. As of December 31, 2023, we believe the likelihood of payment is remote, and the estimated fair value of the contingent consideration is $0.
For additional information, see Note 10 – Leases. We have a contractual obligation for a contingent consideration payment under the SentreHEART merger agreement that would be paid in AtriCure common stock and cash, up to a specified maximum number of shares.
Key products contributing to the increase in revenue in the United States were: • the ENCOMPASS ® clamp in open ablation, • Hybrid AF™ Therapy procedures using the EPi-Sense System in minimally invasive ablation, • the cryoSPHERE ® probe for post-operative pain management and • the AtriClip ® Flex⋅V ® for appendage management.
International revenue increased 25.6% as reported and on a constant currency basis, across all franchises and major geographic regions, while key products contributing to the increase in revenue in the United States were: • EnCompass clamp in open ablation, • cryoSPHERE probes for post-operative pain management and • AtriClip ® Flex⋅V ® for appendage management.
Expansion of product development, regulatory and clinical teams resulted in $7,413 of additional personnel costs, including variable compensation and share-based compensation. Clinical trial expenses increased $6,667 due to strong enrollment activity in the LeAAPS clinical trial throughout the year. Additionally, our expanding product pipeline and domestic and international regulatory submissions drove a $2,389 increase in spending.
Expansion of product development, regulatory and clinical teams resulted in additional headcount-related costs (including travel and share-based compensation) of $6,773. Clinical trial expenses increased $4,801 due to increased trial activity driven by our LeAAPS clinical trial.
These trainings allow for collaborative, hands-on engagement with our physician partners and other healthcare professionals. Additionally, our professional education courses continue to benefit from use of inanimate models or synthetic cadavers, known as CADets. These reusable CADets provide a sustainable alternative to the use of animals or cadavers, in addition to reducing spend on training programs. SOCIETY GUIDELINES.
Additionally, our professional education courses continue to be enhanced by the use of simulation models or synthetic cadavers, known as CADets. These reusable CADets provide a sustainable alternative to the use of cadaver specimens, in addition to increasing the efficiencies of education and more cost effective training alternatives.
In 2023, we realized significant global revenue growth and continued our strategic initiatives of product innovation, clinical science and expanding physician awareness and adoption through superior training and education. Our worldwide revenues for the year ended December 31, 2023 of $399,245 was an increase of 20.8% over the prior year driven by growing adoption across key product lines.
In 2024, we realized significant global revenue growth and continued our strategic initiatives of product innovation, clinical science and physician education and training to expand awareness and adoption.
Net cash from financing activities increased by $7,027 in 2023 compared to 2022, reflecting savings of $5,644 due to fewer shares repurchased at a lower value for payment of taxes on stock awards and an increase of $1,536 of proceeds from the employee stock purchase plan and stock option exercise activity.
Net cash used in financing activities increased by $3,571 in 2024 compared to 2023, driven by $1,686 payment for extinguishment of debt and financing fees, net of borrowings, and a $1,491 decrease in proceeds from stock option exercises and the employee stock purchase plan.
Cash used for working capital remained relatively flat year over year, with increased investment in inventories largely offset by increased accruals for annual variable compensation payments due to improved operating performance. Cash flows provided by investing activities.
Changes in non-cash expenses include $4,677 increase in share-based compensation, $3,920 increase in depreciation & amortization and $1,362 loss on extinguishment of debt. Cash used in working capital remained flat year over year due to moderating investments in inventory in 2024, offset by higher annual variable compensation due to improved operating performance. Cash flows provided by investing activities.
Net cash provided by investing activities decreased by $22,189 in 2023 compared to 2022, reflecting the $30,000 acquisition of intellectual property, partially offset by a $4,883 decrease in purchases of property and equipment following our 2022 manufacturing facilities expansion and $2,928 increase in net maturities of available-for-sale securities. Cash flows used in financing activities.
Net cash provided by investing activities increased by $8,417 in 2024 compared to 2023. This increase is attributable to a $18,000 decrease in cash paid for acquisitions year over year, offset by a $10,147 decrease in maturities of available-for-sale securities. Cash flows used in financing activities.
As a result of the new asset-based credit agreement with JPMorgan Chase Bank, N.A. entered into on January 5, 2024, unused borrowing availability increased to approximately $61,885 (see Note 8 – Indebtedness for related discussion). All cash equivalents and investments and most of our operating cash are held in United States financial institutions.
Liquidity and Capital Resources As of December 31, 2024, we had cash and cash equivalents of $122,721 and unused borrowing capacity of approximately $61,885 under our existing credit agreement. All cash equivalents and most of our operating cash are held in United States financial institutions.
Cost of revenue and gross margin. Cost of revenue increased $14,436 primarily reflecting higher sales volumes. The gross margin increase of 80 basis points was driven by favorable production efficiencies, partially offset by less favorable geographic and product mix. Research and development expenses. Research and development expenses increased $16,578, or 28.9%.
Gross margin decreased by 55 basis points driven by less favorable geographic and product mix, as well as an increase in product costs. Research and development expenses. Research and development expenses increased $22,263, or 30.1%.
Removed
We received final labeling approval for the next generation EPi-Sense ST device and began a limited launch evaluation in the fourth quarter of 2022, followed by full product launch in the second quarter of 2023. In October 2023, we received clearance for our next generation cryoSPHERE probe for pain management and expect to launch in the first quarter of 2024.
Added
Our worldwide revenues for the year ended December 31, 2024 of $465,307 was an increase of 16.5% over the prior year driven by growing adoption across key product lines as well as new product launches.
Removed
Additionally, we completed several 510k submissions to FDA for new products in development. We also continue to make significant progress on European Medical Device Regulation (EU MDR) clearance submissions for our products. As of the second quarter of 2023, all of our products have been submitted to our notified body under EU MDR.
Added
We continue to invest in research and development of new products and pursue regulatory approvals to market and sell globally across all franchises. • Open .
Removed
These activities are in addition to several research and development programs currently underway. CLINICAL SCIENCE. We continue to invest in studies to expand labeling claims, support various indications for our products and gather clinical data regarding our products. LeAAPS.
Added
Upon receiving regulatory approval during the third quarter of 2024, we began selling the EnCompass clamp in CE-marked countries in the European Union, representing a significant expansion of our open ablation franchise products in Europe. • Minimally invasive .
Removed
Trial enrollment was completed in the second quarter of 2023 for the ICE-AFIB clinical trial, which is designed to study the safety and efficacy of our cryoICE ® system for persistent and long-standing persistent Afib treatment during concomitant on-pump cardiac surgery. The trial provided for enrollment of up to 150 patients at up to 20 sites in the United States.
Added
In the first half of 2024, FDA granted 510(k) clearance for EPi-Ease, our Hybrid access device to facilitate guide-wire delivery, vacuum application and endoscope insertion.
Removed
Patient follow-up for twelve months post ablation required by the study protocol remains ongoing. 36 Table of Contents CEASE-AF. During the second quarter of 2023, results from our CEASE-AF trial were presented at the European Heart Rhythm Association meeting.
Added
During the third quarter, FDA granted 510(k) clearance for our EnCapture clamp, the newest in our line of Isolator Synergy Ablation System clamps, with enhanced geometry and features to facilitate engagement with intended cardiac tissue. • Pain management . During the second quarter of 2024, we launched the cryoSPHERE+ cryoablation probe for pain management in the United States.
Removed
CEASE-AF is a prospective, multi-center randomized control trial for persistent and long-standing persistent Afib treatment that demonstrated superior freedom from atrial arrhythmias for staged hybrid ablation compared to endocardial catheter ablation. DEEP AF. During the fourth quarter of 2023, 12-month follow-up results of enrolled patients from our DEEP AF IDE trial were presented at the American Heart Association meeting.
Added
The cryoSPHERE+ device leverages new technology that minimizes thermal loss by focusing energy at the ball tip, allowing for a reduction in freeze time by 25%. Further, the cryoSPHERE MAX probe was launched during the fourth quarter of 2024 and features a larger ball tip designed 35 Table of Contents to optimize Cryo Nerve Block therapy.
Removed
The DEEP AF IDE pivotal trial evaluated the safety and efficacy of the AtriCure Bipolar System when used in a staged approach where a minimally invasive surgical ablation procedure is first performed. The patient undergoes the endocardial catheter procedure approximately 91-120 days later.
Added
This new probe reduces freeze times by 50% when compared to the first generation cryoSPHERE cryoablation probe, and over 30% when compared to the cryoSPHERE+ probe. • Appendage management . We launched the AtriClip FLEX-Mini device in the United States during the third quarter of 2024.
Removed
The results from this single arm study for persistent and long-standing persistent Afib treatment demonstrated superior freedom from atrial arrhythmias for staged hybrid ablation compared to a pre-specified performance goal. TRAINING. Our professional education and marketing teams conduct virtual and in-person training programs for physicians and healthcare professionals.
Added
The AtriClip FLEX-Mini sets a new standard as the smallest profile for surgical LAA device on the market and builds upon the proven technology of our AtriClip platform, with ease of use and design simplicity that offers enhanced access and increased visibility for physicians. We also obtained additional international regulatory approvals for our AtriClip platform during the third quarter.
Removed
These societal guidelines are reflective of the scientific evidence suggesting that surgical and hybrid ablation is safe and effective for patients who have Afib.
Added
In China, we received approval to market and sell several models of our AtriClip Left Atrial Appendage Exclusion System from the National Medical Products Administration (NMPA) of China. In CE-marked countries in Europe, we received expanded indication for the AtriClip for use in patients at high risk of thromboembolism for whom left atrial appendage exclusion is warranted.
Removed
Selling, general and administrative expenses. Selling, general and administrative expenses increased $21,866, or 9.5%. Personnel costs increased $26,971 as a result of growth in headcount, variable compensation and share-based compensation. Trade shows and marketing activities increased $1,538 and other administrative and operating expenses increased $2,274 as compared to the prior year.
Added
Throughout 2024, we received several additional CE Mark certifications under the European Union Medical Device Regulation (EU MDR). As of December 31, 2024, substantially all of our products were cleared under EU MDR. During the fourth quarter of 2024, we entered into an exclusive licensing agreement with a third-party to co-develop and commercialize equipment incorporating pulsed field ablation.
Removed
This increase was offset by a $4,019 decrease in training costs as a result of growing efficiencies and enhancements to our global training programs and a net gain of $4,412 from non-recurring legal settlements during the first half of 2023.
Added
See Note 3 - Asset Acquisition for additional information. CLINICAL SCIENCE. We invest in studies to expand labeling claims, support various indications for our products and publish clinical data for therapies and procedures involving our products. During 2024, we supported the publication of 19 articles and 17 congress abstracts featuring clinical studies with our product. LeAAPS.
Removed
Legal settlement activity included a $7,500 gain from proceeds on a legal matter settled during the first quarter of 2023, partially offset by a $3,088 charge for settlement of an intellectual property matter during the second quarter of 2023. See Note 10 – Commitments and Contingencies for further information. Other income and expense.
Added
The EnCompass clamp and the AtriClip in Box Lesion and Left Atrial Appendage E X clusion Procedure for the Prevention of N ew O nset of A trial F ibrillation (BoxX-NoAF) IDE trial will evaluate the impact of concomitant ablation and LAA exclusion in non-AF patients for the reduction of post-operative AF (POAF) and Clinical AF.
Removed
Other income and expense consists primarily of net interest expense and net foreign currency transaction losses. Net interest expense was $3,133 for 2023 and $2,992 for 2022. 38 Table of Contents Liquidity and Capital Resources As of December 31, 2023, we had cash, cash equivalents and investments of $137,285 and borrowing capacity of approximately $28,750 under the SVB Credit Facility.
Added
This prospective, multi-center, multi-national randomized trial evaluates safety at 30 days post-procedure for POAF and secondary effectiveness for Clinical AF through three years. The trial provides for enrollment of up to 960 subjects. During the fourth quarter of 2024, FDA approved the trial protocol. We expect site initiation to begin by the end of 2025. TRAINING.
Removed
As of December 31, 2023, we had a Loan and Security Agreement with Silicon Valley Bank (SVB), (SVB Loan Agreement). The SVB Loan Agreement provides for a $60,000 term loan, with an option to make available an additional $30,000 in term loan borrowings, and a $30,000 revolving line of credit.
Added
Our professional education and marketing teams conduct a variety of virtual and in-person training programs for physicians and other healthcare professionals. These training methods ensure access to continuing education and awareness of our products and related procedures.
Removed
The Loan Agreement has a five-year term and expires November 2026. The term loan accrues interest at the Prime Rate plus 1.25% and is subject to an additional 3.00% fee on the term loan principal amount at maturity. We had unused borrowing capacity of approximately $28,750 under our revolving credit facility.
Added
In 2024, we continue to innovate physician training to improve accessibility and efficiency for our physician partners. We are currently piloting the use of live streaming to enable remote proctoring and case observation. SOCIETY GUIDELINES.
Removed
The proceeds of the ABL Facility were used to terminate the Company’s indebtedness under the SVB Loan Agreement. As a result of the new Credit Agreement, the $60,000 borrowings outstanding under the SVB Loan Agreement as of December 31, 2023 are classified as noncurrent in the Consolidated Balance Sheet.
Added
In 2024, the European Society of Cardiology (ESC) released Guidelines for Management of Atrial Fibrillation developed in collaboration with European Association of Cardio-Thoracic Surgery (EACTS), in which they upgraded LAAM to the highest Class 1 recommendation.
Removed
Our operating leases for office and warehouse space includes current obligations of $1,447 and long-term obligations of $3,307. For additional information, see Note 9 – Leases. We have contractual obligations for contingent consideration payments related to the SentreHEART acquisition.
Added
All major cardiac societal guidelines now include a Class 1 recommendation for surgical management of the left atrial appendage.
Removed
Net cash provided by operating activities increased $26,625 in 2023 as compared to 2022, largely reflecting the improvement in operating results of $16,028 driven by higher sales, improvements to gross and operating margin and a net gain from legal settlements.

… 10 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+2 added−3 removed7 unchanged
Biggest changeWe also sell our products to distributors who in turn sell our products to medical centers in Japan, China and other international markets. Our business is primarily transacted in U.S. Dollars; direct international sales transactions are transacted in Euros, British Pounds, Australian Dollars or Canadian Dollars. Sales to international distributors outside of Europe are under agreements primarily denominated in U.S.
Biggest changeDollars; direct international sales transactions are transacted in Euros, British Pounds, Australian Dollars or Canadian Dollars. Sales to international distributors outside of Europe are under agreements primarily denominated in U.S. Dollars. If products are priced in U.S. Dollars and competitors price their products in the local currency, an increase in the relative strength of the U.S.
Cash held in financial institutions in foreign countries is not significant. Although these depository accounts may exceed government insured depository limits, we have evaluated the credit worthiness of these applicable financial institutions and determined the risk of material financial loss due to the exposure of such credit risk to be minimal.
Cash held in financial institutions in foreign countries is not significant. Although these depository accounts may exceed government insured depository limits, we have evaluated the credit worthiness of these applicable financial institutions and determined the risk of material financial loss due to the exposure of such credit risk to be remote.
Dollar to the Canadian Dollar and local currencies of international trial sites may impact the cash outlay required for future milestone payments and variable pass-through costs under the clinical trial management agreement. 43 Table of Contents
Dollar to the Canadian Dollar and local currencies of international trial sites may impact the cash outlay required for future milestone payments and variable pass-through costs under the clinical trial management agreement. 42 Table of Contents
The terms of the agreement require we make fixed milestone payments upon achievement of various enrollment and project milestones over the estimated ten-year term. Additional variable costs, including pass through costs incurred at clinical trial sites, will be billed to us by the contracted party.
In 2022, we entered into a clinical trial management agreement for the LeAAPS clinical trial. The terms of the agreement require fixed payments upon achievement of various enrollment and project milestones over the estimated ten-year term. Additional variable costs, including pass through costs incurred at clinical trial sites, will be billed to us by the contracted party.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK (Amounts referenced in this Item 7A are in thousands, except per share amounts.) The Company is exposed to various market risks, which include potential losses arising from adverse changes in market rates and prices, such as foreign exchange fluctuations and changes in interest rates.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK (Amounts referenced in this Item 7A are in thousands, except per share amounts.) The Company is exposed to various market risks, which include potential losses arising from adverse changes in market rates and prices, such as foreign exchange fluctuations and changes in interest rates. 41 Table of Contents Credit and Interest Rate Risk The Company invests its cash primarily in money market accounts, U.S. government and agency obligations, corporate bonds, and asset-backed securities.
Products sold by AtriCure Europe, B.V. and its subsidiaries are primarily denominated in Euros or British Pounds. European product sales accounted for 9.4% and 9.0% of the Company’s total revenue for 2023 and 2022. Accordingly, the Company is exposed to exchange rate fluctuations between the Euro and the U.S. Dollar and between the British Pound and the Euro.
Dollar could result in the Company’s price not being competitive in a market where business is not transacted in U.S. Dollars. Products sold by AtriCure Europe, B.V. and its subsidiaries are primarily denominated in Euros or British Pounds. European product sales accounted for 10.4% and 9.4% of the Company’s total revenue for 2024 and 2023.
Dollars than was received before the rate increase went into effect. The Euro to U.S. Dollar conversion rate fluctuations may impact our reported revenue and expenses. In 2022, we entered into a clinical trial management agreement for the LeAAPS clinical trial.
Dollars, it will require more Euros to equal a specified amount of U.S. Dollars than before the rate increase. In such cases, the Company will receive less in U.S. Dollars than was received before the rate increase went into effect. The Euro to U.S. Dollar conversion rate fluctuations may impact our reported revenue and expenses.
To a lesser extent, the Company is also exposed to exchange rate fluctuations between the Australian and Canadian Dollars to the U.S. Dollar. For 2023 and 2022, foreign currency transaction losses of $(101) and $(559) were recorded primarily in connection with settlements of the intercompany balances and invoices transacted in British Pounds.
For 2024 and 2023, foreign currency transaction losses of $272 and $101 were recorded primarily in connection with settlements of the intercompany balances and invoices transacted in Euros, British Pounds, Australian Dollars or Canadian Dollars. For revenue denominated in Euros, if there is an increase in the rate at which Euros are exchanged for U.S.
Interest rate risk is highly sensitive due to many factors, including United States monetary and tax policies and United states and international economic factors beyond our control. Foreign Currency Exchange Rate Risk We sell our products to medical centers through our direct sales force in the United States, Germany, France, the United Kingdom, Australia and Canada.
Foreign Currency Exchange Rate Risk We sell our products to medical centers through our direct sales force in the United States, Germany, France, the United Kingdom, Australia and Canada. We also sell our products to distributors who in turn sell our products to medical centers in Japan, China and other international markets. Our business is primarily transacted in U.S.
Removed
Credit and Interest Rate Risk The Company invests its cash primarily in money market accounts, U.S. government and agency obligations, corporate bonds, and asset-backed securities.
Added
Interest rate risk is highly sensitive due to many factors, including United States monetary and tax policies and United states and international economic factors beyond our control. A hypothetical 100 basis-point (one percentage point) increase or decrease in interest rates compared to actual rates at December 31, 2024, would not have had a significant effect on our results.
Removed
Dollars. If products are priced in U.S. Dollars and competitors price their products in the local currency, an increase in the relative strength of the U.S. Dollar could result in the Company’s price not being competitive in a market where business is not transacted in U.S. Dollars.
Added
Accordingly, the Company is exposed to exchange rate fluctuations between the Euro and the U.S. Dollar and between the British Pound and the Euro. To a lesser extent, the Company is also exposed to exchange rate fluctuations between the Australian and Canadian Dollars to the U.S. Dollar.
Removed
For revenue denominated in Euros, if there is an increase in the rate at which Euros are exchanged for U.S. Dollars, it will 42 Table of Contents require more Euros to equal a specified amount of U.S. Dollars than before the rate increase. In such cases, the Company will receive less in U.S.

Other ATRC 10-K year-over-year comparisons