What changed in this filing

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Item 9A. Controls and Procedures

2025-02-27 compared with 2024-02-27 · 47 added, 29 removed, 194 unchanged (28% of the section changed)

5 unchanged sentences

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Based on the evaluation of our disclosure controls and procedures as of December 31, 2023, our President and Chief Executive Officer and our Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Internal Control Over Financial Reporting

Based on the evaluation of our disclosure controls and procedures as of December 31, 2024, our President and Chief Executive Officer and our Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were not effective due to the material weakness in internal control over financial reporting described below.

Notwithstanding the material weakness, and based on the additional analyses and other procedures management performed, we have concluded that our consolidated financial statements included in this Annual Report on Form 10-K present fairly, in all material respects, our financial position and results of operations and cash flows as of each of the dates, and for each of the periods, presented therein in accordance with generally accepted accounting principles in the United States of America.

Management’s Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our board of directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our board of directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.

Internal control over financial reporting includes policies and procedures that:

5 unchanged sentences

Our management conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2024 based on the criteria described in “Internal Control-Integrated Framework” (2013) issued by the Committee of Sponsoring Organization of the Treadway Commission.

Based on this assessment, management concluded that, as of December 31, 2023, our internal control over financial reporting was effective.

We have excluded Summit Aviation, Inc.

and its affiliated entity, Northside Property Group, LLC, or together Summit (“Summit”) from our assessment of the effectiveness of internal control over financial reporting as of December 31, 2023, because it was acquired in a purchase business combination during 2023.

The total assets and total revenue of Summit, which is a wholly-owned subsidiary, that are excluded from our assessment of internal control over financial reporting collectively represent approximately 2% and 2%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2023.

The effectiveness of our internal control over financial reporting as of December 31, 2023 has been audited by PricewaterhouseCoopers, LLP, an independent registered public accounting firm, as stated in their report which is included herein.

Based on this assessment, management concluded that, as of December 31, 2024, our internal control over financial reporting was not effective due to the material weakness described below.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The Company did not design and maintain effective controls over inventory movement within its manufacturing network.

Specifically, while effective controls are in place to verify the existence and accuracy of inventory as of year-end, effective controls were not designed and maintained to verify that inventory movements are appropriately recorded in the interim financial statements.

The material weakness resulted in immaterial misstatements to inventory, cost of net product revenue, selling, general and administrative expenses and research and development expenses, in the interim consolidated financial statements for the quarterly and year-to-date periods ended March 31, 2024, June 30, 2024 and September 30, 2024.

Additionally, the material weakness could result in a misstatement of the aforementioned accounts and disclosures that would result in a material misstatement to the interim consolidated financial statements that would not be prevented or detected.

The effectiveness of our internal control over financial reporting as of December 31, 2024 has been audited by PricewaterhouseCoopers, LLP, an independent registered public accounting firm, as stated in their report which appears in Item 8 of this Form 10-K.

Remediation Plan

We and our board of directors are committed to maintaining a strong internal control environment.

Management, with the oversight of the audit committee of our board of directors, is in the process of assessing and finalizing its plan for remediation for the material weakness described above.

We intend to remediate this material weakness as soon as possible, and we have begun assessing our design of internal controls to remediate the aforementioned control deficiency.

The Company will remediate by designing and implementing control activities to ensure the movement of inventory is timely and accurately recorded throughout the course of the year.

Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the three months ended December 31, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

No changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the three months ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other Information.

During our fiscal quarter ended December 31, 2023, one of our directors entered into a contract, instruction or written plan for the purchase or sale of our securities that is intended to satisfy the conditions specified in Rule 10b5-1(c) under the Exchange Act for an affirmative defense against liability for trading in securities on the basis of material nonpublic information.

During our fiscal quarter ended December 31, 2024, certain of our directors and officers entered into a contract, instruction or written plan for the purchase or sale of our securities that is intended to satisfy the conditions specified in Rule 10b5-1(c) under the Exchange Act for an affirmative defense against liability for trading in securities on the basis of material nonpublic information.

We refer to these contracts, instructions, and written plans as “Rule 10b5-1 trading plans” and each one as a “Rule 10b5-1 trading plan.”

We describe the material terms of this Rule 10b5-1 trading plan in the table below.

We describe the material terms of these Rule 10b5-1 trading plans in the table below.

Rule 10b5-1 Trading Plans

5 unchanged sentences

Trading Plan (2)

James Tobin ,

Chairman of the Board of Directors

Adoption 12/05/2024

Edward Basile

Adoption 11/06/2024

(1) The plan is subject to earlier termination under certain circumstances specified in the plan, including upon the sale or purchase (as applicable) of all shares subject to the plan and upon either party to a plan giving notice of termination within the time prescribed under the plan.

(2) Subject to adjustments for stock splits, stock combinations, stock dividends and other similar changes to our common stock.

(3) The maximum number of securities to be sold pursuant to the Rule 10b5-1 Trading Plan is equal to 33,269 , plus shares that may be received by Dr.

Khayal in connection with vesting of restricted stock units prior to the scheduled termination date.

Disclosures Regarding Foreign Jurisdictions that Prevent Inspections.

2 unchanged sentences

The information required by this Item 10 will be included in our Definitive Proxy Statement to be filed with the Securities and Exchange Commission, or SEC, with respect to our 2025 Annual Meeting of Stockholders and is incorporated herein by reference.

The Company has adopted an insider trading policy governing the purchase, sale and other dispositions of the Company’s securities that applies to the Company’s directors, officers, employees, and other covered persons.

The Company’s insider trading policy also applies to transactions by the Company in its securities.

The Company believes that its insider trading policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, and exchange listing standards applicable to the Company.

A copy of the Company’s insider trading policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K.

Executiv e Compensation.

12 unchanged sentences

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Loss

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Stockholders’ Equity

11 unchanged sentences

333-230736) filed with the SEC on April 5, 2019).

Warrant Agreement to Purchase Preferred Stock, dated as of September 11, 2015, between the Registrant and Hercules Technology Growth Capital, Inc.

(incorporated by reference to Exhibit 4.3 to the Registrant’s Registration Statement on Form S-1 (File No.

333-230736) filed with the SEC on April 5, 2019)

Warrant Agreement to Purchase Preferred Stock, dated as of August 4, 2016, between the Registrant and Hercules Technology Growth Capital, Inc.

(incorporated by reference to Exhibit 4.4 to the Registrant’s Registration Statement on Form S-1 (File No.

333-230736) filed with the SEC on April 5, 2019)

Description of Registered Securities (incorporated by reference to Exhibit 4.5 to the Registrant's Annual Report on Form 10-K (File No.

22 unchanged sentences

333-230736) filed with the SEC on April 5, 2019)

2019 Stock Incentive Plan (incorporated by reference to Exhibit 10.9 to the Registrant’s Registration Statement on Form S-1 (File No.

333-230736) filed with the SEC on April 22, 2019)

Amended and Restated 2019 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No.

001-38891) filed with the SEC on May 26, 2023)

Form of Incentive Stock Option Agreement under 2019 Stock Incentive Plan (incorporated by reference to Exhibit 10.10 to the Registrant’s Registration Statement on Form S-1 (File No.

51 unchanged sentences

Assumption Agreement, dated as of December 22, 2023, by Summit Aviation, Inc.

and Northside Property Group, LLC in favor of Canadian Imperial Bank of Commerce, as administrative agent and collateral agent for lenders party to the Credit Agreement, dated as of July 25, 2022, by and among TransMedics Group, Inc., the lenders party thereto and Canadian Imperial Bank of Commerce, as administrative agent.

001-38891) filed with the SEC on February 27, 2024).

Guarantee and Collateral Agreement, dated as of July 25, 2022, by and among TransMedics Group, Inc., TransMedics, Inc., TransMedics B.V.

5 unchanged sentences

333-230736) filed with the SEC on April 5, 2019)

Amendment to Executive Retention Agreement, be and between TransMedics, Inc.

Amendment to Executive Retention Agreement, by and between TransMedics, Inc.

and Stephen Gordon, dated April 10, 2020 (incorporated by reference to the Registrant’s Current Report on Form 8-K (File No.

4 unchanged sentences

001-38891) filed with the SEC on May 11, 2023).

Transition Agreement, by and between TransMedics, Inc.

and Stephen Gordon, dated December 2, 2024

Offer Letter dated as of November 26, 2024, by and between TransMedics, Inc.

and Gerardo Hernandez

Executive Retention Agreement, dated as of November 26, 2024, by and between the Registrant and Gerardo P.

Hernandez Omana

TransMedics Group, Inc.

Insider Trading Policy

Subsidiaries of the Registrant

7 unchanged sentences

TransMedics Group Inc.

Policy for Recoupment of Incentive Compensation

Policy for Recoupment of Incentive Compensation (incorporated by reference to Exhibit 97.1 to the Registrant’s Annual Report on Form 10-K (File No.

001-38891) filed with the SEC on February 27, 2024)

Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

12 unchanged sentences

February 27, 2025

/s/ Stephen Gordon

Stephen Gordon

/s/ Gerardo Hernandez

Gerardo Hernandez

Chief Financial Officer and Treasurer

4 unchanged sentences

February 27, 2025

/s/ Stephen Gordon

/s/ Gerardo Hernandez

Chief Financial Officer and Treasurer

February 27, 2025

Stephen Gordon

Gerardo Hernandez

Chairman of the Board of Directors

15 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-K

Item 9A. Controls and Procedures