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Item 1. Business

2024-02-16 compared with 2023-02-22 · 147 added, 131 removed, 308 unchanged (47% of the section changed)

We are a leading innovator in treatments for atrial fibrillation (Afib), left atrial appendage (LAA) management and post-operative pain.

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.

It is the most common cardiac arrhythmia encountered in clinical practice and results in high utilization of healthcare services.

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.

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 3.5 million people in the United States suffer from long-standing persistent Afib.

It is estimated that over 3.5 million people in the United States currently suffer from long-standing persistent Afib.

Afib often occurs in conjunction with other cardiovascular diseases, including hypertension, congestive heart failure, left ventricular dysfunction, coronary artery disease and valvular disease.

Our ablation and left atrial appendage management (LAAM) products are used by physicians during open-heart and minimally invasive procedures.

In open-heart procedures, physicians are typically performing heart surgery for other emergent heart conditions, and our products are used in conjunction with (or “concomitant” to) such a procedure.

Our cardiac ablation and left atrial appendage management (LAAM) products are used by physicians during open-heart and minimally invasive surgical procedures.

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.

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.

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Recovery from cardiothoracic and thoracic surgery can be complicated and painful.

Many surgeons use multi-modal pain management strategies that include various pain management techniques, including oral delivery of opioid and non-opioid pain medications.

Many surgeons use multi-modal pain management strategies that include oral delivery of opioid and non-opioid pain medications.

Our cryoICE cryoSPHERE ® probe for pain management (Cryo Nerve Block) provides temporary relief of post-operative pain, allowing the patient's body to heal after surgery while the nerves regenerate and sensation is regained.

We sell our products to medical centers through our direct sales force in the United States and in certain international markets, such as Germany, France, the United Kingdom, the Benelux region and Australia.

We also sell our products through distributors who in turn sell our products to medical centers in Japan, China and other international markets.

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.

direct sales transactions outside the United States are transacted in Euros, British Pounds or Australian 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 approximately 1.2 million diagnoses annually in the United States.

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 often only diagnosed when they seek treatment for an associated condition, such as a structural heart disease or stroke.

Afib is the most commonly diagnosed sustained cardiac arrhythmia, with over one million diagnoses annually in the United States alone.

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.

Symptoms of Afib may include heart palpitations, dizziness, fatigue and shortness of breath, and these symptoms may be debilitating and life threatening in some cases.

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We believe that increasing awareness of Afib and improved diagnostic screening will result in an increased number of patients diagnosed with Afib over time.

Also, since the prevalence of Afib increases with age, there will likely be an increase in the number of diagnosed Afib patients in the United States as the population ages.

We believe that these trends in the United States also apply globally.

Also, since the prevalence of Afib increases with age, there will likely be an increase in the number of diagnosed Afib patients globally as the world population ages.

Afib is a condition that doctors often find difficult to treat and, historically, there has been no widely accepted long-term cure for Afib.

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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.

In addition, guidelines for the treatment of more serious forms of Afib for patients without structural heart disease have also been introduced in the past several years.

These societal guidelines

are reflective of the scientific evidence suggesting that surgical and hybrid ablation is safe and effective for patients who have Afib.

Of the patients undergoing open-heart surgery globally on an annual basis, we estimate that over 300,000 are potential candidates for surgical ablation using our products.

Today, we estimate that less than 20% of those candidates are being treated, but we believe many are not treated in a manner that will cure them.

Guidelines for the treatment of more serious forms of Afib for patients without structural heart disease have also been introduced in the past several years.

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

Management to the highest recommendation of Class 1 and now include Hybrid AF™ Therapy as a Class 2 recommendation.

These societal guidelines are reflective of the scientific evidence suggesting that surgical and hybrid ablation is safe and effective for patients who have Afib.

Of the patients undergoing open-heart surgery globally on an annual basis, we estimate that over 300,000 are potential candidates for surgical ablation using our products, as they have pre-operative Afib.

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.

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Studies have also suggested that 90% of clots that cause strokes in patients who have Afib originate from within the LAA.

Recently, a very large independent international randomized trial, Left Atrial Appendage Occlusion Study (LAAOS) III, demonstrated a significant reduction in strokes when the LAA was managed during cardiac surgery.

Recently, a large independent international randomized trial, Left Atrial Appendage Occlusion Study (LAAOS) III, demonstrated a significant reduction in strokes when the LAA was managed during cardiac surgery.

Afib accounts for billions of dollars in hospitalization-related and office visit costs in the United States each year.

Indirect costs, such as the management of Afib-related strokes, are also believed to be significant.

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, but also in those who do not have Afib but may be at increased risk of developing the disease in the future.

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.

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 a significant growth opportunity.

Many Afib patients without other underlying structural heart disease, especially those with more advanced forms of the disease, are symptomatic and experience conditions such as palpitations, breathlessness and drowsiness.

Because of this, these patients tend to be motivated to seek treatment to alleviate their symptoms.

Many patients who are symptomatic are treated by an electrophysiologist using catheter ablation.

Catheter ablation is considered a percutaneous procedure that does not require the opening of the chest and involves catheters inserted through a small puncture in the groin.

Therefore, we believe that the market for our ablation products and the AtriClip system represent significant growth opportunities.

Many Afib patients without other underlying structural heart disease, especially those with more advanced forms of Afib, are symptomatic and experience conditions such as palpitations, breathlessness and drowsiness.

These patients tend to be motivated to seek treatment to alleviate their symptoms.

Patients who are symptomatic are often treated by an electrophysiologist using catheter ablation.

Catheter ablation is considered a percutaneous procedure that does not require the opening of the chest;

rather, catheters are inserted through a small puncture in the groin.

In addition to catheter ablation, there are other treatment options for patients with Afib, including pharmacological therapy (anti-arrhythmic drugs) and implantable pacemakers.

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While the majority of paroxysmal Afib patients treated by catheter ablation tend to experience freedom from Afib, less than a third of long-standing persistent patients treated by catheter ablation are cured of their Afib at one year, and it declines even more thereafter.

Recent randomized, prospective, multi-center data from the CONVERGE™ IDE clinical trial show that these long-standing persistent Afib patients can experience double the success rate by adding an ablation on the outside surface of the heart using AtriCure’s EPi-Sense ablation system.

Thus, we believe the EPi-Sense ablation system used as a minimally invasive or Hybrid AF TM therapy represents a significant growth opportunity for the Company.

Cardiothoracic and thoracic surgery involving an incision through the ribcage, typically referred to as thoracotomy access, can often result in significant post-operative pain and longer hospital recovery times as patients refrain from mobilizing their chest near the incision site.

It is estimated that each year approximately 150,0000 cardiac and thoracic procedures are performed in the United States.

Hospital recovery times can vary from two to eight days depending on the procedure, operative complications associated with the procedure, pain management protocol and other factors.

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.

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.

Thoracic surgery involving an incision through the ribcage, typically referred to as thoracotomy access, and cardiothoracic surgery can often result in significant post-operative pain and longer hospital recovery times as patients refrain from mobilizing their chest near the incision site.

It is estimated that each year approximately 150,0000 thoracic procedures and approximately 250,000 cardiothoracic procedures are performed in the United States.

Hospital recovery times can vary from two to fifteen days depending on the procedure, operative complications associated with the procedure, pain management protocol and other factors.

Most surgeons will employ a multi-modal pain management protocol that includes various pain management techniques, including techniques such as epidural delivery of medication directly around the spinal cord, intravenous or oral delivery of opioid and non-opioid pain medications, or other strategies.

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The nerve “scaffolds” remain intact, allowing axons to regenerate and restore nerve function over time.

Cryo Nerve Block can be delivered using our cryoICE cryoSPHERE ® probe, which is specifically designed for Cryo Nerve Block.

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.

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Both federal and local governments in the United States have proposed and implemented new regulations to curb the opioid overdose epidemic.

It is also estimated that one in seven cardiothoracic surgical 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.

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.

Further, applications for Cryo Nerve Block outside of thoracic surgery use are being studied by physician investigators and represent future possible growth opportunities.

AtriCure Solutions and Products

We believe that we are currently the market leader in the surgical treatment of Afib and pioneers of the application of Cryo Nerve Block in thoracic and cardiothoracic procedures.

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.

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 mimic all or portions of the cut and sew COX-MAZE procedure with faster, less invasive and less technically challenging approaches.

We have completed, and continue to invest in, clinical studies for the use of our

ablation and left atrial appendage management products to treat Afib and reduce stroke.

Our products enable cardiothoracic surgeons to perform surgical ablation procedures with faster, less invasive and less technically challenging approaches.

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.

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• Isolator ® Synergy ™ Clamps .

Our Isolator Synergy System generates the majority of our ablation-related revenue.

All our clamps are single-use disposable RF products with jaws that close in a parallel fashion.

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.

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however, all the clamps provide consistent performance using the same core technology.

The parallel closure compresses tissue and evacuates the blood and fluids from the energy pathway to make the ablation more effective.

The parallel closure evenly compresses tissue and evacuates the blood and fluids from the energy pathway to make the ablation more effective.

The Isolator Synergy Ablation System has been studied in multiple FDA approved clinical trials, including the previously completed ABLATE clinical trial which supported a pre-market approval (PMA) in 2011, as well as the ongoing DEEP AF IDE and HEAL-IST clinical trials.

Our Isolator Synergy Ablation System includes multiple configurations approved by the United States Food and Drug Administration (FDA) for the treatment of persistent and long-standing persistent Afib concomitant to other open-heart surgical procedures.

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These products are available for sale in a number of other countries globally.

The Isolator Synergy System has been studied in multiple FDA approved clinical trials, including the previously completed ABLATE clinical trial which supported a pre-market approval (PMA) in 2011, as well as the ongoing DEEP AF IDE pivotal trial and HEAL-IST clinical trial.

In April 2022, we launched our most recent configuration, the EnCompass ® clamp, following 510(k) clearance for ablation of cardiac tissue during cardiac surgery in July 2021.

The EnCompass clamp was cleared through the FDA 510(k) process and is indicated for cardiac soft tissue ablation.

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.

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Surgeons generally use one or more of our pen and linear devices in combination with Isolator Synergy clamps.

All our pen and 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.

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.

Our Isolator Synergy pens bear the CE mark, and most configurations may be commercially distributed throughout the member states of the European Union and other countries that comply with or mirror the Medical Device Directive.

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Products for minimally invasive ablation:

• EPi-Sense Guided Coagulation System with VisiTrax Technology .

The EPi-Sense Guided Coagulation System with VisiTrax technology utilizes monopolar RF energy for the coagulation of tissue.

The EPi-Sense device is a single-use disposable which is also capable of intraoperative cardiac signal sensing and recording when connected to an external recording device.

• EPi-Sense Systems .

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.

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.

Hybrid AF ™ Therapy is the only FDA-approved minimally invasive procedure to treat patients with long-standing persistent Afib and represents a proven option for patients with advanced disease.

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Sensation typically returns to the affected region of the chest after this period.

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.

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.

Products for appendage management:

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The AtriClip ® LAA Exclusion System includes various combinations of an implantable device (AtriClip) coupled to a single-use disposable applier.

The AtriClip is designed to exclude the left atrial appendage by mechanically clamping the appendage from the outside of the heart.

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.

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The LARIAT ® System is a solution for soft-tissue closure that includes a suture loop coupled to a single-use disposable applier.

The Lumitip™ dissector is used by surgeons to separate tissues to provide access to key anatomical structures that are

targeted for ablation.

The Lumitip™ dissector is used by surgeons to separate tissues to provide access to key anatomical structures that are targeted for ablation.

Other enabling technologies include our Glidepath™ guides for placement of our clamps, Subtle™ Cannula’s to support access for our EPi-Sense catheters and a line of reusable cardiac surgery instruments.

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We are passionately focused on healing the lives of patients affected by Afib and pain after surgery.

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, global commercial expansion and clinical science investments.

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 Innovation.

Our product development pipeline includes projects which extend and improve our existing products, as well as research and development projects for new technologies.

We plan to continue to develop new and innovative products, including those that allow us to enter new markets or expand our growth in existing markets.

Invest in Clinical Science.

New Product and Procedure Innovation.

Our product development pipeline includes projects which extend and improve our existing products, as well as research and development projects for new technologies and new procedural techniques.

We plan to continue to develop new and innovative products and procedures, including those that allow us to enter new markets or expand our growth in existing markets.

Investments in Clinical Science.

We continue to invest in landmark clinical trials to validate the long-term results of procedures using our products and to support applications to regulatory agencies for expanded indications.

We also make clinical research grants to support our product development efforts and expand the body of clinical evidence.

We believe publication of additional scientific evidence, in addition to robust ongoing research activities, will ultimately create an increased demand for our products.

Build Physician and Societal Relationships.

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We are partnering with leading surgical and cardiology societies to increase the awareness of Afib treatment options.

In the past five years, both the Society for Thoracic Surgeons and the Heart Rhythm Society have released new guidelines on the surgical treatment of Afib in both open-heart and minimally-invasive settings.

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.

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With the approval of the EPi-Sense System, we began programs to train physicians on the use of the EPi-Sense system in a hybrid approach to treating patients with long-standing persistent Afib.

More recently, we have implemented multidisciplinary training programs focused on 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.

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.

Expand Adoption of Our Products.

We believe that the catalysts for expanded adoption of our products include procedural advancements, such as the hybrid or multi-disciplinary procedure for treatment of long-standing persistent Afib, continued innovation and product development, training and education of new customers, and the publication of additional scientific evidence.

We also believe that ongoing research activities, including prospective clinical trials, new procedural techniques and anticipated presentations and publications will create an increased demand for 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 considerations.

We evaluate acquisition opportunities on a variety of factors, including product innovation, clinical differentiation and other strategic and financial criteria.

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.

We make significant investments in both product development and clinical science activities to drive the advancement and adoption of new therapies in the market place.

We are engaged in developing and researching new and existing products or concepts, preclinical studies, clinical trials and other regulatory

We make significant investments in both product development and clinical science activities to drive the advancement and adoption of new therapies in the marketplace.

In the United States, a significant risk device requires the prior submission of an application for an Investigational Device Exemption (IDE) to FDA for approval before initiating a clinical trial.

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Some trials require a feasibility study followed by a pivotal trial.

We are conducting several clinical trials to validate the long-term results of procedures using our products

and to support applications to regulatory agencies for expanded indications.

We are conducting several clinical trials to validate the long-term results of procedures using our products and to support applications to regulatory agencies for expanded indications.

In addition, we also conduct various studies to gather clinical data regarding our products.

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The trial provides for enrollment of up to 6,500 subjects at up to 250 sites worldwide.

In January 2023, we enrolled our first patient;

site initiation and enrollment is ongoing.

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site initiation and enrollment is ongoing.

We conducted the CONVERGE IDE clinical trial to evaluate the safety and efficacy of the EPi-Sense Guided Coagulation System with VisiTrax technology to treat symptomatic persistent and long-standing persistent Afib patients who are refractory or intolerant to at least one Class I and/or III anti-arrhythmic drug.

The CONVERGE IDE clinical trial proved the safety and efficacy of the EPi-Sense System to treat symptomatic persistent and long-standing persistent Afib patients who are refractory or intolerant to at least one Class I and/or III anti-arrhythmic drug.

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.

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site initiation and enrollment is ongoing.

The ICE-AFIB clinical trial is designed to study the safety and efficacy of the cryoICE ® system for persistent and long-standing persistent Afib treatment during concomitant on-pump cardiac surgery.

The trial provides for enrollment of up to 150 patients at up to 20 sites in the United States.

Enrollment began in January 2019 and remains 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.

The Company is in the process of analyzing data for publication, future development activities, or possible evaluation of label expansions.

These trials include the DEEP AF Pivotal Study, CEASE AF and aMAZE IDE clinical trials.

The trial provides for enrollment of up to 150 patients at up to 20 sites in the United States, which was completed in May 2023.

Patient follow-up for twelve months post ablation required by the study protocol remains ongoing.

During the second quarter of 2023, results from our CEASE-AF trial were presented at the European Heart Rhythm Association meeting and subsequently published in July 2023.

CEASE-AF is a prospective, multi-center randomized control trial that demonstrated superior freedom from atrial arrhythmias for staged hybrid ablation compared to endocardial catheter ablation.

During the fourth quarter of 2023, the 12-month follow-up results of enrolled patients from the DEEP AF Pivotal study were presented at the American Heart Association meeting.

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 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 in the process of analyzing additional trial data for publication, future development activities, or possible evaluation of label expansions.

Sales, Marketing and Medical Education

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We market and sell our products in selected countries outside of the United States through a combination of independent distributors and direct sales personnel.

Our international sales team includes approximately 50 employees focused on our direct markets, such as Germany, France, the United Kingdom, Australia and the Benelux region.

We also maintain a network of distributors who market and sell our products in Asia, South America and Canada, as well as certain countries in Europe.

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.

We continue to evaluate opportunities for further expansion into markets outside of the United States.

Our industry is competitive, is subject to change and can be significantly affected by new product introductions and other activities of industry participants.

We compete with other companies and divisions of companies that sell a single or limited number of competitive product lines or in certain geographies.

Our primary competitor in the cardiac surgery market is Medtronic, plc, who provides similar surgical ablation products to ours that have been adopted by physicians for the treatment of Afib and related conditions.

AtriCure has the only medical devices that are approved by FDA for treating long-standing persistent Afib:

the Isolator Synergy Ablation, the first medical device to receive FDA approval for the treatment of persistent Afib in a concomitant setting, and the EPi-Sense System, which received FDA approval for standalone treatment of Afib with Hybrid AF Therapy.

Several other companies offer intracardiac catheter devices that are commonly used by electrophysiologists to treat Afib.

However, our industry is competitive, is subject to change and can be significantly affected by new product introductions and other activities of industry participants.

We compete with other companies and divisions of companies that sell a single or limited number of competitive product lines or in certain geographies.

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.

These catheter devices are FDA-approved to treat the paroxysmal and persistent forms of Afib, but they are not FDA indicated to treat long-standing persistent Afib.

In particular, because Hybrid AF Therapy involves both epicardial and endocardial techniques, these catheters are complementary to our business, not competitive.

Our Hybrid AF Therapy involves both epicardial and endocardial techniques, therefore, these catheters are complementary to our business and not competitive.

We believe that our products improve treatment outcomes for patients with non-paroxysmal forms of Afib when combined with intracardiac catheter devices.

AtriCure is monitoring other companies who are conducting clinical trials that may support FDA approval of their devices to treat persistent and long-standing persistent Afib, although we are not aware of any ongoing FDA trials by other companies to study ablation of long-standing persistent Afib patients.

We are aware of other companies developing technology for cardiac tissue ablation and appendage management.

New product introductions, technological advances and regulatory clearances from competitors may impact the use of our products in cardiac procedures.

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We believe hospital reimbursement rates for sole therapy and concomitant therapy cardiac surgical ablation or surgical LAAM are adequate to cover the cost of our products even when multiple procedures are performed.

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 adequate in these situations.

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.

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There are category one CPT codes for both concomitant and standalone surgical Afib treatment, as well as surgical LAAM.

However, some providers utilize unlisted CPT codes to obtain reimbursement in these situations.

However, some providers utilize unlisted CPT codes to obtain reimbursement when no appropriate CPT code exists, such as Cryo Nerve Block ablation when used for post operative pain control.

In addition to the Medicare program, many private payors look to CMS policies as a guideline in setting their coverage policies and payment amounts.

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In addition, some private third-party payors require that certain procedures or the use of certain products be authorized in advance as a condition of reimbursement.

In some countries, cost containment initiatives and health care reforms include initiatives like governmental reviews of reimbursement rate benchmarks, which may significantly reduce reimbursement for procedures using our medical devices or deny coverage for those procedures altogether.

In some countries, cost containment initiatives and health care policies may significantly reduce reimbursement for procedures using our medical devices or deny coverage for those procedures altogether.

We are actively working to pursue market access in certain geographies, which includes applying for new reimbursement for therapies in which our devices are being used or pursuing specific reimbursement for utilization of our devices.

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Our clinical trials must be conducted under the oversight of an Institutional Review Board (IRB) for the relevant clinical trial sites and must comply with FDA regulations, including, but not limited to, those relating to current good clinical practices.

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 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).

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annual establishment registration and product listing;

good manufacturing practice for devices, referred to as the Quality System Regulation (QSR);

current good manufacturing practice for devices (GMP);

labeling requirements and advertising and promotion guidelines;

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and reporting certain device corrections and removals.

Our manufacturing facilities and processes are also subject to FDA inspections to ensure compliance with QSR.

Our manufacturing facilities and processes are also subject to FDA inspections to ensure compliance with Quality System Regulations (QSR).

In addition to FDA regulation, the advertising and promotion of certain medical devices are also regulated by the Federal Trade Commission and by state regulatory and enforcement authorities.

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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.

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.

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.

This third-party assessment includes a review of documentation related to the device that may be as extensive as the documentation requirements that the United States FDA requires for higher risk products.

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Successful completion of a conformity assessment procedure allows a manufacturer to issue a declaration of conformity with the requirements of the relevant directive and affix the CE mark to the device.

Devices that bear the CE mark may be commercially distributed throughout the member states of the European Union and other countries that comply with or mirror the medical device directives or medical device regulations.

Devices that bear the CE mark may be commercially distributed throughout the member states of the European Union and other countries that comply with or mirror the medical device regulations.

Pervasive and Continuing Regulation .

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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).

These guidelines are set out in the MedTech Europe Code of Ethical Business Practice (MedTech Code), which regulates all aspects of the industry's relationships with HCPs and healthcare organizations (HCOs).

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We seek patent protection relating to technologies and products we develop in both the United States and in selected foreign countries.

While we own much of our intellectual property, including patents, patent applications, trademarks, trade secrets, know-how and proprietary information, we also license patents and related technology of importance to the commercialization of our products.

While we own much of our intellectual property, including patents, patent applications, trademarks, trade secrets, know-how and proprietary information, we also license know-how and related technology of importance to the commercialization of our products.

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.

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We assemble, inspect, test and package the majority of our products at our facilities in Ohio, and our products are sterilized by third parties.

Purchased components are generally sourced from a single supplier, but alternatives to these suppliers are available in the event this would be needed.

Purchased components are often sourced from a single supplier, but alternatives to critical suppliers are available in the event this would be needed.

To minimize supply chain risks, we maintain inventory levels of components and raw materials specific to the respective part or device.

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Order quantities and lead times for components purchased from outside suppliers are based on our forecasts derived from historical demand and anticipated future demand.

Lead times may vary significantly depending on the size of the order, time required to fabricate and test the

components, specific supplier requirements and current market demand for the components and subassemblies.

Lead times may vary significantly depending on the size of the order, time required to fabricate and test the components, specific supplier requirements and current market demand for the components and raw materials.

To date, we have not experienced significant product availability or delay issues directly related to obtaining any of our components.

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We are an FDA-registered medical device manufacturer and certified to ISO 13485:2016.

We routinely conduct internal audits of our quality systems in accordance with various international standards.

In addition, we have successfully participated in the Medical Device Single Audit Program (MDSAP) and have been certified accordingly.

The MDSAP program is recognized in Australia, Brazil, Canada, Europe, Japan and the United States.

The MDSAP program is recognized in Australia, Brazil, Canada, Japan and the United States.

We are subject to numerous federal, state and local laws relating to such matters as laboratory practices, the experimental use of animals, the use and disposal of hazardous or potentially hazardous substances, safe working conditions, manufacturing practices, environmental protection and fire hazard control.

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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.

At AtriCure, our employees are crucial to the ongoing success of the company.

The skills, experience and industry knowledge of our employees significantly benefit our operations and performance.

We continuously evaluate, modify and enhance our internal processes to increase employee engagement, productivity and efficiency, as well as to recruit new employees to support our growth.

We had approximately 1,050 employees as of January 31, 2023.

None of the employees were represented by a labor union, and we have never experienced any employment-related work stoppages.

We consider our employee relations to be in good standing.

At AtriCure, the employee experience is crucial to the ongoing success of the company.

We work to provide a culture that augments the intrinsic rewards of our mission – one where employees feel valued and supported every day.

We strive to engage with our employees across every level of the organization, celebrate their personal milestones and cultivate a sense of trust and transparency.

Our culture provides opportunities for employees to feel a part of a community, and specific benefits such as paid leave for volunteering and individual recognition with “Heart of AtriCure” awards highlight our commitment to this culture.

Our employees have voted us as a Top Workplace seven times in the past eight years, and our culture is regularly cited in our internal engagement surveys as a leading positive attribute of the Company.

Our culture is a central asset to our Company.

Employee Compensation and Benefits

Recognizing the significance of our employees to our success, in 2022 we introduced a “people objective” to our annual incentive plan focused on attraction, development and retention of talent, in addition to strategic Diversity, Equity and Inclusion (DE&I) initiatives.

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.

We conduct engagement surveys of our employees at least annually with our last Organizational Health Survey resulting in above average results when compared to similar size companies.

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.

We have made focused efforts to attract diverse candidates in our pipeline and have expanded our recruiting channels to connect with new communities.

Talent Management and Development

Our philosophy of Talent Mastery is our aspirational commitment to spend as much time focusing on our talent as we do on our business strategies.

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.

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.

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.

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.

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 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 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.

This commitment is also reflected in the current makeup of our Board of Directors, which helps to set the “tone at the top” for our DE&I initiatives.

Compensation and Benefits

Competitive compensation and benefits are an integral part of our efforts to attract and retain world-class talent.

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We ensure compliance with all statutory and mandatory benefits which vary by country, such as medical, disability, retirement/pension, workers compensation, accident, social benefits and paid leave.

Diversity, Equity, and Inclusion

We have an ongoing commitment to advancing Diversity, Equity and Inclusion (DE&I) throughout our workplace and the communities in which we operate.

By honoring the dignity of each person, we foster a culture of inclusion and belonging where everyone is welcome.

We do this by embracing diverse voices and experiences, supporting programs and resources that build an authentic and respectful workplace and providing fair and equitable opportunities for each person to contribute meaningfully in both their work and their personal lives.

We believe our workforce needs to be diverse, and leverage the skills and perspectives of a variety of backgrounds and experiences.

To be a company that attracts, develops and retains top talent from all backgrounds and life experiences, we regularly evaluate and improve hiring practices to foster a more inclusive environment.

We strive to embed a culture where employees can bring their whole selves to work.

In addition to DE&I learning labs, we are also increasing responsibility and accountability to all executives to deliver results.

Our goal is to be a global leader and role model in equity and inclusion because it's good for our business and our people.

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.

This commitment is also reflected in the current makeup of our Board of Directors who was recognized by the National Association of Corporate Directors (NACD) as the winner of the 2022 Diversity, Equity & Inclusion Award in the Small Cap - Public Company category.

This award recognizes boards that have improved their governance and created long-term value for stakeholders by implementing forward-thinking diversity, equity, and inclusion practices.

We believe that the diversity of our Board of Directors helps to set the “tone at the top” for our DE&I initiatives.

Training and Development

Employee training and development is a priority at AtriCure.

We strive to create an environment where employees can realize their potential.

We provide a range of training courses and online resources, as well as developmental coaching and mentoring.

We have a regular monthly schedule of opportunities that allows employees to access both instructor-led classrooms and self-directed web-based courses.

We are committed to identifying and developing the talents of our next-generation leaders, and conduct a comprehensive review of our leadership team on an annual basis.

In that process, we review existing leaders and prospective leaders throughout the organization and determine next best steps for their future development.

Developmental opportunities for employees can range from leadership support to technical skill-building.

We also work to ensure all employees have access to training that is consistent with the competencies that are measured as part of performance management:

Delivering Results with Accountability, Initiative and Involvement, Teamwork and Support, and for those who manage people, Develop and Maintain High Performance Teams and Communication.

In addition to formalized training, we put emphasis on ensuring that we provide employees experiences that will enable them to build new skills that enable them to meet their career aspirations.

None of our employees are represented by a labor union, and we have never experienced any employment-related work stoppages.

We consider our employee relations to be in good standing.

Our attrition rate is historically lower than the industry average.

AtriCure has a strong company culture, which is reflected in our employee engagement and overall success.

Safety for All Employees

We are committed to maintaining a safe workplace and promoting the well-being of all of our employees.

We are committed to maintaining a safe workplace and promoting all our employees' well-being.

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.

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.

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.

As of 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.

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.

Available Information

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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-K

Item 1. Business