What changed in this filing

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Item 1. Financial Statements

2025-07-30 compared with 2025-04-30 · 114 added, 62 removed, 388 unchanged (31% of the section changed)

7 unchanged sentences

Cash and cash equivalents $ 117,796 $ 122,721

Accounts receivable, less allowance for credit losses of $ 550

Accounts receivable, less allowance for credit losses of $ 650 and $ 550

66,004 60,339

23 unchanged sentences

Additional paid-in capital 878,384 863,710

Accumulated other comprehensive loss ( 230 ) ( 1,035 )

Accumulated other comprehensive income (loss) 749 ( 1,035 )

Accumulated deficit ( 414,692 ) ( 401,755 )

7 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Revenue $ 136,139 $ 116,269 $ 259,759 $ 225,120

10 unchanged sentences

Loss on debt extinguishment

Other expense ( 180 ) ( 82 )

— — — ( 1,362 )

Other income (expense) 812 28 632 ( 54 )

Loss before income tax expense ( 5,929 ) ( 7,755 ) ( 12,437 ) ( 20,841 )

14 unchanged sentences

(In Thousands)

Three-Month Period Ended March 31, 2024

Three-Month Period Ended June 30, 2024

Deficit Accumulated

2 unchanged sentences

Stockholders’

Balance—December 31, 2023

Balance—March 31, 2024

48,381 $ 48 $ 827,288 $ ( 370,326 ) $ ( 697 ) $ 456,313

2 unchanged sentences

Net loss — — — ( 8,008 ) — ( 8,008 )

Balance—June 30, 2024

48,686 $ 49 $ 840,939 $ ( 378,334 ) $ ( 569 ) $ 462,085

Three-Month Period Ended June 30, 2025

Deficit Accumulated

Comprehensive

Income (Loss)

Stockholders’

Balance—March 31, 2025

49,493 $ 49 $ 863,302 $ ( 408,502 ) $ ( 230 ) $ 454,619

Three-Month Period Ended March 31, 2025

Impact of equity compensation plans 198 1 15,082 — — 15,083

Other comprehensive income — — — — 979 979

Net loss — — — ( 6,190 ) — ( 6,190 )

Balance—June 30, 2025

49,691 $ 50 $ 878,384 $ ( 414,692 ) $ 749 $ 464,491

Six-Month Period Ended June 30, 2024

Deficit Accumulated

7 unchanged sentences

Net loss — — — ( 21,277 ) — ( 21,277 )

Balance—March 31, 2025

Balance—June 30, 2024

48,686 $ 49 $ 840,939 $ ( 378,334 ) $ ( 569 ) $ 462,085

Six-Month Period Ended June 30, 2025

Deficit Accumulated

Comprehensive

Income (Loss)

Stockholders’

Balance—December 31, 2024

48,869 $ 49 $ 863,710 $ ( 401,755 ) $ ( 1,035 ) $ 460,969

Impact of equity compensation plans 822 1 14,674 — — 14,675

Other comprehensive income — — — — 1,784 1,784

Net loss — — — ( 12,937 ) — ( 12,937 )

Balance—June 30, 2025

49,691 $ 50 $ 878,384 $ ( 414,692 ) $ 749 $ 464,491

See accompanying notes to condensed consolidated financial statements.

3 unchanged sentences

(In Thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

Net loss $ ( 12,937 ) $ ( 21,277 )

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 21,001 19,656

4 unchanged sentences

Loss on debt extinguishment

Acquired in-process research and development expense 5,000 —

Other non-cash adjustments 311 534

6 unchanged sentences

Other noncurrent assets and liabilities ( 1,001 ) ( 575 )

Net cash used in operating activities ( 11,026 ) ( 21,016 )

Net cash provided by (used in) operating activities 10,591 ( 13,636 )

Cash flows from investing activities:

1 unchanged sentence

Purchases of property and equipment ( 4,843 ) ( 5,158 )

Proceeds from sale of property and equipment — 25

Acquisitions, including in-process research and development ( 5,000 ) —

Proceeds from capital grant 500 —

4 unchanged sentences

Payment of financing costs and bank fees

Proceeds from stock option exercises

Proceeds from stock option exercises and employee stock purchase plan 4,251 3,809

Shares repurchased for payment of taxes on stock awards ( 10,578 ) ( 6,696 )

1 unchanged sentence

Effect of exchange rate changes on cash and cash equivalents 733 ( 166 )

Net decrease in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

( 4,925 ) 21,725

22 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, 2024 filed with the SEC.

There have been no changes in the Company's significant accounting policies for the three months ended March 31, 2025 as compared to the significant accounting policies described in the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

There have been no changes in the Company's significant accounting policies for the six months ended June 30, 2025 as compared to the significant accounting policies described in the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

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, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense.

3 unchanged sentences

The Company has one business activity and operates as one operating segment:

the development, manufacture and sale of devices used by cardiothoracic and thoracic surgeons in surgical procedures, designed primarily for the ablation of cardiac tissue, the exclusion of the left atrial appendage and the ablation of peripheral nerves.

the development, manufacture and sale of devices used by physicians in surgical procedures, designed primarily for the ablation of cardiac tissue, the exclusion of the left atrial appendage and the ablation of peripheral nerves.

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

2 unchanged sentences

Revenue by product type and geographic area is included at Note 9 – Revenue.

The Company’s long-lived assets are located in the United States, except for $ 5,670 as of March 31, 2025 and $ 4,021 as of December 31, 2024 located primarily in Europe.

The Company’s long-lived assets are located in the United States, except for $ 6,033 as of June 30, 2025 and $ 4,021 as of December 31, 2024 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 3,008 and 2,615 shares as of March 31, 2025 and 2024 because they are anti-dilutive.

Since the Company has experienced net losses for all periods presented, net loss per share excludes the effect of 2,930 and 2,675 shares as of June 30, 2025 and 2024 because they are anti-dilutive.

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

10 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 March 31, 2025:

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, 2025:

Quoted Prices in

7 unchanged sentences

Total assets $ 106,132 $ — $ — $ 106,132

There were no changes in the levels or methodology of measurement of financial assets and liabilities during the three months ended March 31, 2025.

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, 2025.

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, 2024:

11 unchanged sentences

The PMA approval milestone expired December 31, 2023, while the achievement period for the reimbursement milestone expires on December 31, 2026.

The Company assessed the projected probability of payment during the contractual achievement periods to be remote, resulting in no reported fair value as of March 31, 2025 and December 31, 2024.

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, 2025 and December 31, 2024.

Inventories consist of the following:

10 unchanged sentences

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

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Cost Accumulated

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Cost of revenues $ 1,350 $ 1,125 $ 2,700 $ 2,250

Research and development expenses

761 760 1,521 1,498

Total $ 2,111 $ 1,885 $ 4,221 $ 3,748

Future amortization expense is projected as follows:

2025 (excluding the three months ended March 31, 2025)

2025 (excluding the six months ended June 30, 2025)

2030 and thereafter

22 unchanged sentences

The Credit Agreement contains mandatory prepayment provisions which require prepayment of amounts outstanding under the ABL Facility upon specified events or Availability shortfall.

As of March 31, 2025, the Company had borrowings of $ 61,865 and had borrowing capacity of $ 61,885 under the ABL facility.

As of June 30, 2025, the Company had borrowings of $ 61,865 and had borrowing capacity of $ 61,885 under the ABL facility.

Future maturities of long-term debt are projected as follows:

2025 (excluding the three months ended March 31, 2025) $ —

2025 (excluding the six months ended June 30, 2025) $ —

Total long-term debt, of which $ 61,865 is noncurrent

6 unchanged sentences

Participation and fronting fees are accrued and paid on a quarterly basis.

As of March 31, 2025, the effective interest rate on the ABL Facility was 6.92 %.

As of June 30, 2025, the effective interest rate on the ABL Facility was 7.16 %.

The ABL Facility is secured by the assets of the Company, consisting of personal, tangible or intangible property, including certain outstanding equity interests of the Company’s direct subsidiaries, subject to limitations specified in the Credit Agreement.

The Credit Agreement contains customary representations and warranties, events of default and financial, affirmative and negative covenants for facilities of this type, including but not limited to financial covenants relating to a fixed charge coverage ratio, a minimum liquidity requirement and a minimum excess availability requirement, and restrictions on indebtedness, liens, investments and acquisitions, asset dispositions, specified agreements, restricted payments and prepayment of certain indebtedness.

The Credit Agreement contains customary representations and warranties, events of default and financial, affirmative and negative covenants for facilities of this type, including but not limited to financial covenants relating to a fixed charge coverage ratio and minimum excess availability, and restrictions on indebtedness, liens, investments and acquisitions, asset dispositions, specified agreements, restricted payments and prepayment of certain indebtedness.

The Company has operating and finance leases for office, manufacturing and warehouse facilities and automobiles.

2 unchanged sentences

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

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Operating Leases

4 unchanged sentences

Weighted average discount rate 7.0 % 7.0 %

A letter of credit for $ 1,250 issued to the lessor of the Company's corporate headquarters building is renewed annually and remains outstanding as of June 30, 2025.

ATRICURE, INC.

2 unchanged sentences

(In Thousands, except per share amounts)

A letter of credit for $ 1,250 issued to the lessor of the Company's corporate headquarters building is renewed annually and remains outstanding as of March 31, 2025.

The components of lease expense are as follows:

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Operating lease cost $ 491 $ 384 $ 957 $ 764

3 unchanged sentences

Total finance lease cost $ 404 $ 428 $ 813 $ 840

Short-term lease expense was not significant for the three months ended March 31, 2025 and 2024.

Short-term lease expense was not significant for the three and six months ended June 30, 2025 and 2024.

Supplemental cash flow information related to leases is as follows:

Three Months Ended

March 31, 2025 Three Months Ended

March 31, 2024

Six Months Ended

June 30, 2025 Six Months Ended

June 30, 2024

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

5 unchanged sentences

Finance leases — 421

ATRICURE, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, except per share amounts)

Supplemental balance sheet information related to leases is as follows:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Operating Leases

12 unchanged sentences

Total finance lease liabilities $ 7,888 $ 8,467

Future maturities of lease liabilities as of March 31, 2025 are as follows:

ATRICURE, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, except per share amounts)

Future maturities of lease liabilities as of June 30, 2025 are as follows:

Operating Leases Finance Leases

2025 (excluding the three months ended March 31, 2025)

2025 (excluding the six months ended June 30, 2025)

$ 1,004 $ 875

10 unchanged sentences

The Company holds an exclusive licensing agreement (Cooperation Agreement) to co-develop and commercialize equipment incorporating pulsed field ablation (PFA) technology.

The Cooperation Agreement requires the Company to pay contingent consideration, settled in cash, with a maximum payout of $ 28,000 if all milestones are achieved successfully through the agreement term ending 2034.

The contingent consideration will be expensed when each milestone is paid or becomes payable as a result of achievement.

As of March 31, 2025, the milestones were not yet achieved and therefore, there is no financial impact during the period.

Payments made under this agreement were $ 5,000 for the three and six months ended June 30, 2025 and included as a component of research and development expense.

The agreement also contains provisions requiring future royalty payments on devices incorporating co-developed technology upon commercialization.

4 unchanged sentences

Furthermore, we incur additional variable costs, including pass through costs from clinical trial sites.

Payments made under this agreement were $ 4,112 and $ 2,787 for the three months ended March 31, 2025 and 2024.

ATRICURE, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, except per share amounts)

Payments made under this agreement were $ 3,375 and $ 3,362 for the three months ended June 30, 2025 and 2024 and $ 7,487 and $ 6,149 for the six months ended June 30, 2025 and 2024.

The Company may, from time to time, become a party to legal proceedings which are subject to many uncertainties.

3 unchanged sentences

The Company recognizes income from a favorable resolution of legal proceedings when the associated cash or assets are received.

On February 7, 2025, representatives for former securityholders of SentreHEART, Inc.

filed a complaint in the Delaware Court of Chancery naming the Company as a defendant.

On February 7, 2025, the representative for former securityholders of SentreHEART, Inc.

filed a complaint in the Delaware Court of Chancery naming the Company as a defendant, and on May 23, 2025 filed a first amended complaint.

The Company acquired SentreHEART, Inc.

1 unchanged sentence

The merger agreement provides for contingent consideration to be paid upon achievement of specified PMA and CPT reimbursement milestones by specified dates.

The complaint alleges breach of contract and a related claim for breach of the implied covenant of good faith and fair dealing resulting from the Company's alleged failure to use commercially reasonable efforts to obtain premarket approval from FDA for the LARIAT System.

The complaint seeks damages in the amount of the original PMA and CPT reimbursement milestones of up to $ 260,000 plus interest.

The amended complaint alleges breach of contract and a related claim for breach of the implied covenant of good faith and fair dealing resulting from the Company's alleged failure to use commercially reasonable efforts to obtain premarket approval from FDA for the LARIAT System.

The amended complaint seeks damages in the amount of the original PMA and CPT reimbursement milestones of up to $ 260,000 plus interest.

The Company intends to vigorously defend this claim.

A liability has not been recognized related to this matter because any potential loss is not currently probable or reasonably estimable.

ATRICURE, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, except per share amounts)

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

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Open ablation $ 36,468 $ 30,760 $ 69,776 $ 60,060

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Open ablation $ 10,349 $ 9,170 $ 19,344 $ 17,072

3 unchanged sentences

Total International $ 25,556 $ 20,730 $ 48,027 $ 39,332

ATRICURE, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, except per share amounts)

Revenue attributed to customer geographic locations is as follows:

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

United States $ 110,583 $ 95,539 $ 211,732 $ 185,788

10 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 March 31, 2025 and 2024 was ( 3.7 %) and ( 1.4 %).

The effective tax rate for the three months ended June 30, 2025 and 2024 was ( 4.4 %) and ( 3.3 %).

The effective tax rate for the six months ended June 30, 2025 and 2024 was ( 4.0 %) and ( 2.1 %).

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

ATRICURE, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, except per share amounts)

The Company's federal, state, local and foreign tax returns are routinely subject to review by various taxing authorities.

1 unchanged sentence

However, if required, the Company will recognize interest and penalties within income tax expense and within the related tax liability.

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act ("OBBBA").

Key elements of the Tax Cuts and Jobs Act are made permanent under the OBBBA, including 100% bonus depreciation, domestic research cost expensing and the business interest expense limitation.

FASB ASC 740, "Income Taxes", requires the effects of changes in tax rates and laws on tax balances to be recognized in the period in which the legislation is enacted.

As the date of enactment is after June 30, 2025, there is no financial impact as of and for the six-month period ended June 30, 2025.

The Company is currently evaluating the impact of the OBBBA on its consolidated financial statements.

EQUITY COMPENSATION PLANS

4 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 March 31, 2025, 4,087 shares of common stock have been reserved for issuance under the 2023 Plan, and 1,486 shares were available for future grants.

As of June 30, 2025, 5,787 shares of common stock have been reserved for issuance under the 2023 Plan, and 3,141 shares were available for future grants.

The Company issues registered shares of common stock for stock option exercises, restricted stock grants and performance share award payments.

3 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 March 31, 2025, there were 519 shares available for future issuance under the ESPP.

ATRICURE, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, except per share amounts)

As of June 30, 2025, there were 381 shares available for future issuance under the ESPP.

Share-Based Compensation Expense Information

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Cost of revenue $ 741 $ 628 $ 1,410 $ 1,158

2 unchanged sentences

Total $ 11,371 $ 10,391 $ 21,001 $ 19,656

ATRICURE, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, except per share amounts)

COMPREHENSIVE LOSS AND ACCUMULATED OTHER COMPREHENSIVE LOSS

In addition to net losses, comprehensive loss includes foreign currency translation adjustments and unrealized gains (losses) on investments.

Accumulated other comprehensive loss consisted of the following, net of tax:

Accumulated other comprehensive income (loss) consisted of the following, net of tax:

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Total accumulated other comprehensive loss at beginning of period $ ( 230 ) $ ( 697 ) $ ( 1,035 ) $ ( 993 )

6 unchanged sentences

Other comprehensive income (loss) before reclassifications

1,640 ( 125 ) 2,357 ( 388 )

Amounts reclassified to other income ( 661 ) 7 ( 573 ) 27

Balance at end of period $ 749 $ ( 554 ) $ 749 $ ( 554 )

Total accumulated other comprehensive loss at end of period $ ( 230 ) $ ( 697 )

Total accumulated other comprehensive income (loss) at end of period $ 749 $ ( 569 ) $ 749 $ ( 569 )

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