What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-02 compared with 2023-07-26 · 77 added, 67 removed, 471 unchanged (23% of the section changed)

4 unchanged sentences

(In Thousands, Except Per Share Amounts)

September 30,

2023 December 31,

2 unchanged sentences

Short-term investments 52,416 63,014

Accounts receivable, less allowance for credit losses of $ 230

Accounts receivable, less allowance for credit losses of $ 300 and $ 230

51,528 42,693

34 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

27 unchanged sentences

(In Thousands)

Three-Month Period Ended June 30, 2022

Three-Month Period Ended September 30, 2022

Deficit Accumulated

2 unchanged sentences

Stockholders’

Balance—March 31, 2022

Balance—June 30, 2022

46,423 $ 46 $ 771,185 $ ( 310,177 ) $ ( 4,344 ) $ 456,710

2 unchanged sentences

Net loss — — — ( 12,272 ) — ( 12,272 )

Balance—June 30, 2022

Balance—September 30, 2022

46,443 $ 46 $ 778,006 $ ( 322,449 ) $ ( 5,295 ) $ 450,308

Three-Month Period Ended June 30, 2023

Three-Month Period Ended September 30, 2023

Deficit Accumulated

2 unchanged sentences

Stockholders’

Balance—March 31, 2023

Balance—June 30, 2023

47,352 $ 47 $ 803,197 $ ( 338,213 ) $ ( 2,609 ) $ 462,422

2 unchanged sentences

Net loss — — — ( 9,055 ) — ( 9,055 )

Balance—June 30, 2023

Balance—September 30, 2023

47,392 $ 47 $ 812,238 $ ( 347,268 ) $ ( 2,184 ) $ 462,833

Six-Month Period Ended June 30, 2022

Nine-Month Period Ended September 30, 2022

Deficit Accumulated

7 unchanged sentences

Net loss — — — ( 42,296 ) — ( 42,296 )

Balance—June 30, 2022

Balance—September 30, 2022

46,443 $ 46 $ 778,006 $ ( 322,449 ) $ ( 5,295 ) $ 450,308

Six-Month Period Ended June 30, 2023

Nine-Month Period Ended September 30, 2023

Deficit Accumulated

7 unchanged sentences

Net loss — — — ( 20,649 ) — ( 20,649 )

Balance—June 30, 2023

Balance—September 30, 2023

47,392 $ 47 $ 812,238 $ ( 347,268 ) $ ( 2,184 ) $ 462,833

4 unchanged sentences

(In Thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities:

Net loss $ ( 20,649 ) $ ( 42,296 )

Adjustments to reconcile net loss to net cash used in operating activities:

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Share-based compensation expense 26,416 21,574

11 unchanged sentences

Other noncurrent assets and liabilities ( 400 ) ( 442 )

Net cash used in operating activities ( 1,068 ) ( 20,403 )

Net cash provided by (used in) operating activities 454 ( 22,187 )

Cash flows from investing activities:

35 unchanged sentences

The accompanying interim financial statements should be read in conjunction with the Company’s audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC.

Except as discussed herein, there have been no changes in the Company's significant accounting policies for the six months ended June 30, 2023 as compared to the significant accounting policies described in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

Except as discussed herein, there have been no changes in the Company's significant accounting policies for the nine months ended September 30, 2023 as compared to the significant accounting policies described in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

Use of Estimates —The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, including inventories, intangible assets, valuation allowance for deferred income tax assets, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense, including share-based compensation expense.

Estimates are based on historical experience, where applicable, and other assumptions believed to be reasonable by management.

Estimates are based on historical experience, where applicable, and other reasonable assumptions.

Actual results could differ from those estimates.

1 unchanged sentence

Accordingly, the Company has determined that it has a single operating segment.

The Company’s long-lived assets are located in the United States, except for $ 2,934 as of June 30, 2023 and $ 1,616 as of December 31, 2022 located primarily in Europe.

The Company’s long-lived assets are located in the United States, except for $ 2,933 as of September 30, 2023 and $ 1,616 as of December 31, 2022 located primarily in Europe.

Earnings Per Share —Basic and diluted net loss per share are computed by dividing the net loss by the weighted average number of common shares outstanding during the period.

Since the Company has experienced net losses for all periods presented, net loss per share excludes the effect of 1,839 and 1,548 shares as of June 30, 2023 and 2022 because they are anti-dilutive.

Since the Company has experienced net losses for all periods presented, net loss per share excludes the effect of 1,776 and 1,472 shares as of September 30, 2023 and 2022 because they are anti-dilutive.

Therefore, the number of shares used for basic and diluted net loss per share are the same.

1 unchanged sentence

The value of the portion of an award that is ultimately expected to vest is recognized as expense ratably over the service period.

Prior to January 1, 2023, the Company estimated forfeitures at the time of grant and revises them, as necessary, in subsequent periods as actual forfeitures differ from those estimates.

Prior to January 1, 2023, the Company estimated forfeitures at the time of grant and revised them, as necessary, in subsequent periods as actual forfeitures differ from those estimates.

Effective January 1, 2023, the Company's policy was amended to account for forfeitures as they occur rather than estimating at the time of grant, and the effect on income from continuing operations and retained earnings is not significant.

Intangible Assets— Technology intangible assets with determinable useful lives are amortized on a straight-line basis over the estimated fifteen year period benefited.

Patent intangible assets with determinable useful lives are amortized over the estimated useful life of 5 years in a pattern reflecting the estimated economic benefit of the asset to the Company.

Patent intangible assets with determinable useful lives are amortized over the estimated useful life of five years in a pattern reflecting the estimated economic benefit of the asset to the Company.

Amortization of technology intangible assets is recorded in selling, general and administrative expense, while amortization of patent intangible assets is recorded in cost of revenue.

The Company reviews intangible assets at least annually for impairment using its best estimates based on reasonable and

The Company reviews intangible assets at least annually for impairment using its best estimates based on reasonable and supportable assumptions and projections.

ATRICURE, INC.

2 unchanged sentences

(In Thousands, except per share amounts)

supportable assumptions and projections.

The Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) 820, “Fair Value Measurements and Disclosures” (ASC 820), defines fair value as the exchange price that would be received for an asset or paid to settle a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

6 unchanged sentences

• Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The following table represents the Company’s fair value hierarchy for its financial assets measured at fair value on a recurring basis as of June 30, 2023:

The following table represents the Company’s fair value hierarchy for its financial assets measured at fair value on a recurring basis as of September 30, 2023:

Quoted Prices in

10 unchanged sentences

Total assets $ 12,531 $ 116,386 $ — $ 128,917

There were no changes in the levels or methodology of measurement of financial assets and liabilities during the three and six months ended June 30, 2023.

There were no changes in the levels or methodology of measurement of financial assets and liabilities during the three and nine months ended September 30, 2023.

The following table represents the Company’s fair value hierarchy for its financial assets measured at fair value on a recurring basis as of December 31, 2022:

13 unchanged sentences

Contingent Consideration.

The Company’s contingent consideration arrangements arising from the SentreHEART acquisition obligate the Company to pay certain defined amounts to former shareholders of SentreHEART if specified milestones are met related to the aMAZE™ IDE clinical trial, including pre-market approval (PMA) approval and

The Company assessed the projected probability of payment

ATRICURE, INC.

2 unchanged sentences

(In Thousands, except per share amounts)

reimbursement for the therapy involving SentreHEART’s devices.

The Company assessed the projected probability of payment during the contractual achievement periods to be remote, resulting in no reported fair value as of June 30, 2023 and December 31, 2022.

Investments as of June 30, 2023 consisted of the following:

during the contractual achievement periods to be remote, resulting in no reported fair value as of September 30, 2023 and December 31, 2022.

Investments as of September 30, 2023 consisted of the following:

Cost Basis Unrealized

12 unchanged sentences

Total $ 118,221 $ ( 3,698 ) $ 114,523

The gross realized gains or losses from sales of available-for-sale investments were not significant in the three and six months ended June 30, 2023 and 2022.

The cost and fair value of investments in debt securities, by contractual maturity, as of June 30, 2023 were as follows:

The gross realized gains or losses from sales of available-for-sale investments were not significant in the three and nine months ended September 30, 2023 and 2022.

The cost and fair value of investments in debt securities, by contractual maturity, as of September 30, 2023 were as follows:

Available-for-sale

2 unchanged sentences

$ 51,670 $ 50,205

Due after 1 year through 5 years

Due after 5 years through 10 years

Instruments not due at a single maturity date 2,275 2,211

3 unchanged sentences

Inventories consist of the following:

September 30,

2023 December 31,

9 unchanged sentences

The following table provides a summary of the Company’s intangible assets:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Cost Accumulated

3 unchanged sentences

Total $ 76,470 $ 10,786 $ 46,470 $ 7,131

In May 2023, the Company acquired patents that will be amortized over an estimated useful life of 5 years.

In May 2023, the Company acquired patents that will be amortized over an estimated useful life of five years .

See Note 9 - Commitments and Contingencies for further information on the asset acquisition.

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

3 unchanged sentences

Future amortization expense is projected as follows:

2023 (excluding the six months ended June 30, 2023)

2023 (excluding the nine months ended September 30, 2023)

2028 and thereafter

2 unchanged sentences

Accrued liabilities consist of the following:

September 30,

2023 December 31,

6 unchanged sentences

Our primary banking relationship in the United States was with Silicon Valley Bank.

During the first quarter of 2023 all deposits and loans of Silicon Valley Bank were purchased by First-Citizens Bank & Trust Company, and our banking relationship is now with Silicon Valley Bank, a division of First-Citizens Bank & Trust Company as of March 31, 2023.

The Loan Agreement provides a $ 60,000 term loan, a $ 30,000 revolving line of credit, and an option for an additional $ 30,000 in term loan borrowings.

7 unchanged sentences

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.

The Company is accruing the 3.00 % fee over the term of the Loan Agreement, with $ 600 included in the outstanding loan balance as of June 30, 2023.

The Company is accruing the 3.00 % fee over the term of the Loan Agreement, with $ 690 included in the outstanding loan balance as of September 30, 2023.

Additionally, the unamortized original financing costs related to the term loan of $ 204 are netted against the outstanding loan balance in the Condensed Consolidated Balance Sheets and are amortized ratably over the term of the Loan Agreement.

1 unchanged sentence

Borrowing availability under the revolving credit facility is based on the lesser of $ 30,000 or a borrowing base calculation as defined by the Loan Agreement.

As of June 30, 2023, the Company had no borrowings under the revolving credit facility and had borrowing availability of $ 28,750 .

As of September 30, 2023, the Company had no borrowings under the revolving credit facility and had borrowing availability of $ 28,750 .

The Loan Agreement also provides for certain prepayment and early termination fees, as well as establishes a minimum liquidity covenant and dividend restrictions, along with other customary terms and conditions.

1 unchanged sentence

Future maturities of long-term debt, excluding the term loan final fee, are projected as follows:

2023 (excluding the six months ended June 30, 2023)

2023 (excluding the nine months ended September 30, 2023)

Total long-term debt, of which $ 18,333 is current and $ 41,667 is noncurrent

3 unchanged sentences

The weighted average remaining lease term and the discount rate for the reporting periods are as follows:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Operating Leases

4 unchanged sentences

Weighted average discount rate 6.92 % 6.92 %

A $ 1,250 letter of credit issued to the lessor of the Company's corporate headquarters building is renewed annually and remains outstanding as of June 30, 2023.

A $ 1,250 letter of credit issued to the lessor of the Company's corporate headquarters building is renewed annually and remains outstanding as of September 30, 2023.

ATRICURE, INC.

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

4 unchanged sentences

Total finance lease cost $ 421 $ 435 $ 1,276 $ 1,318

Short-term lease expense was not significant for the three and six months ended June 30, 2023 and 2022.

Supplemental cash flow information related to leases was as follows:

Six Months Ended

June 30, 2023 Six Months Ended

June 30, 2022

Short-term lease expense was not significant for the three and nine months ended September 30, 2023 and 2022.

Supplemental cash flow information related to leases is as follows:

Nine Months Ended

September 30, 2023 Nine Months Ended

September 30, 2022

Cash paid for amounts included in the measurement of lease liabilities:

5 unchanged sentences

Finance leases — 62

Supplemental balance sheet information related to leases was as follows:

June 30, 2023 December 31, 2022

Supplemental balance sheet information related to leases is as follows:

September 30, 2023 December 31, 2022

Operating Leases

14 unchanged sentences

(In Thousands, except per share amounts)

Future maturities of lease liabilities as of June 30, 2023 were as follows:

Future maturities of lease liabilities as of September 30, 2023 are as follows:

Operating Leases Finance Leases

2023 (excluding the six months ended June 30, 2023)

2023 (excluding the nine months ended September 30, 2023)

2024 1,270 1,689

27 unchanged sentences

While the Company is contesting the case, it is not possible to predict when this matter may be resolved or what impact, if any, the outcome of this matter might have on our consolidated financial position, results of operations, or cash flows.

On August 23, 2022, the Cleveland Clinic Foundation (“CCF”) and IDx Medical, Ltd.

On August 23, 2022, the Cleveland Clinic Foundation (Clinic) and IDx Medical, Ltd.

(IDx) filed a Demand for Arbitration against the Company with the American Arbitration Association (AAA), alleging that the Company breached certain provisions of the License Agreement dated December 9, 2003 among the Company, Clinic and IDx (License Agreement).

12 unchanged sentences

The release of the royalty obligations was valued at $ 432 .

The remaining $ 3,088 was allocated to the settlement and is included in selling, general and administrative expenses for the three months ended June 30, 2023.

The remaining $ 3,088 was allocated to the settlement and is included in selling, general and administrative expenses for the nine months ended September 30, 2023.

During the first quarter of 2023, the Company entered into a legal settlement for $ 7,500 in connection with the settlement of claims filed against a competitor.

The Company recorded a $ 3,500 gain for the three months ended June 30, 2023 and $ 7,500 for the six months ended June 30, 2023 for the proceeds received as a reduction to selling, general and administrative expenses.

The Company develops, manufactures and sells devices designed primarily for surgical ablation of cardiac tissue, exclusion of the left atrial appendage, and blocking post-operative pain by temporarily ablating peripheral nerves.

The Company recorded a $ 7,500 gain for the nine months ended September 30, 2023 for the proceeds received as a reduction to selling, general and administrative expenses.

The Company develops, manufactures and sells devices designed primarily for surgical ablation of cardiac tissue, exclusion of the left atrial appendage, and temporarily blocking post-operative pain by ablating peripheral nerves.

These devices are marketed to a broad base of medical centers globally.

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

7 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

11 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

11 unchanged sentences

The Company is unable to estimate the annual effective tax rate with sufficient precision to use the effective tax rate method, which requires a full-year projection of income.

The effective tax rate for the three months ended June 30, 2023 and 2022 was ( 1.9 %) and ( 0.3 %).

The effective tax rate for the six months ended June 30, 2023 and 2022 was ( 1.5 %) and ( 0.3 %).

The effective tax rate for the three months ended September 30, 2023 and 2022 was ( 0.5 %) and ( 0.4 %).

The effective tax rate for the nine months ended September 30, 2023 and 2022 was ( 1.1 %) and ( 0.4 %).

The Company’s worldwide effective tax rate differs from the US statutory rate of 21% primarily due to its valuation allowances.

10 unchanged sentences

The Compensation Committee of the Board of Directors, as the administrator of the 2023 Plan, has the authority to determine the terms of any awards, including the number of shares subject to each award, the exercisability of the awards and the form of consideration.

As of June 30, 2023, 2,287 shares of common stock have been reserved for issuance under the 2023 Plan, and 2,269 shares were available for future grants.

As of September 30, 2023, 2,287 shares of common stock have been reserved for issuance under the 2023 Plan, and 2,268 shares were available for future grants.

Employee Stock Purchase Plan

2 unchanged sentences

Participants may not purchase more than $ 25 of the Company’s common stock in a calendar year or more than 3 shares during an offering period.

As of June 30, 2023, there were 847 shares available for future issuance under the ESPP.

As of September 30, 2023, there were 847 shares available for future issuance under the ESPP.

ATRICURE, INC.

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

7 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

7 unchanged sentences

Balance at beginning of period $ ( 379 ) $ ( 669 ) $ ( 398 ) $ ( 61 )

Other comprehensive income (loss) before reclassifications 28 ( 527 ) 153 ( 787 )

Other comprehensive loss before reclassifications

( 286 ) ( 721 ) ( 133 ) ( 1,508 )

Amounts reclassified to other income (expense) 10 461 ( 124 ) 640

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements