AtriCure, Inc. (ATRC) 2023年10-K年度報告「NASDAQ」.pdf

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1、Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549_FORM 10-K_ ANNUAL REPORT UNDER SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31,2023 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1

2、934Commission File Number 000-51470_AtriCure,Inc.(Exact name of registrant as specified in its charter)_Delaware34-1940305State or other jurisdiction ofincorporation or organization(I.R.S.EmployerIdentification Number)7555 Innovation Way,Mason,OH45040(Address of principal executive offices)(Zip Code

3、)Registrants telephone number including area code:(513)755-4100Securities Registered Pursuant to Section 12(b)of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredCommon Stock,$.001 par valueATRCNASDAQ Global MarketSecurities Registered Pursuant to Section 12(g)of

4、the Act:None_Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d)of the Act.Yes No Indicate by check mark whether the regis

5、trant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during thepreceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past90 days.Yes N

6、o Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of RegulationS-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit such fi

7、les).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerginggrowth company.See definitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company”and“emerging growth

8、company”in Rule 12b-2 of theExchange Act.Large Accelerated Filer Accelerated Filer Non-Accelerated Filer Smaller Reporting Company Emerging Growth Company If an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition period for complying with a

9、ny new or revisedfinancial accounting standards provided pursuant to Section 13(a)of the Exchange Act:Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of its internal control overfinancial reporting under Section 4

10、04(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issued its auditreport.If securities are registered pursuant to Section 12(b)of the Act,indicate by check mark whether the financial statements of the registrant included in the filing reflectthe

11、 correction of an error to previously issued financial statements.Indicate by check mark whether any of those error corrections are restatements that are required a recovery analysis of incentive-based compensation received byany of the registrants executive officers during the relevant recovery per

12、iod pursuant to 240.10D-1(b).Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No The aggregate market value of the voting Common Stock held by non-affiliates of the registrant,based upon the closing sale price of the Common Stock on J

13、une 30,2023,the last business day of the registrants most recently completed second fiscal quarter as reported on the NASDAQ Global Market,was approximately$2,276.4 million.ClassOutstanding February 13,2024Common Stock,$.001 par value47,587,966_DOCUMENTS INCORPORATED BY REFERENCEItems 10,11,12,13 an

14、d 14 of Part III of this Form 10-K incorporate information by reference from the registrants definitive proxy statement to be filed with the Securitiesand Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10-K.2025/2/12 05:30atrc-20231231https:/www.sec.gov/Arc

15、hives/edgar/data/1323885/000132388524000016/atrc-20231231.htm1/922025/2/12 05:30atrc-20231231https:/www.sec.gov/Archives/edgar/data/1323885/000132388524000016/atrc-20231231.htm2/92Table of ContentsTABLE OF CONTENTSPART I2ITEM 1.BUSINESS2ITEM 1A.RISK FACTORS15ITEM 1B.UNRESOLVED STAFF COMMENTS32ITEM 1

16、C.CYBERSECURITY32ITEM 2.PROPERTIES33ITEM 3.LEGAL PROCEEDINGS34ITEM 4.MINE SAFETY DISCLOSURES34PART II35ITEM 5.MARKET FOR REGISTRANTS COMMON EQUITY,RELATED STOCKHOLDER MATTERSAND ISSUER PURCHASES OF EQUITY SECURITIES35ITEM 6.RESERVED35ITEM 7.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

17、ANDRESULTS OF OPERATIONS35ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK42ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA44ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING ANDFINANCIAL DISCLOSURE71ITEM 9A.CONTROLS AND PROCEDURES71ITEM 9B.OTHER INFORMATION73IT

18、EM 9C.DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS73PART III73ITEM 10.DIRECTORS,EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE73ITEM 11.EXECUTIVE COMPENSATION73ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ANDRELATED STOCKHOLDER MATTERS74ITEM 13.CERTAIN R

19、ELATIONSHIPS AND RELATED TRANSACTIONS,AND DIRECTORINDEPENDENCE74ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES74PART IV75ITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES75ITEM 16.FORM 10-K SUMMARY76SIGNATURES772025/2/12 05:30atrc-20231231https:/www.sec.gov/Archives/edgar/data/1323885/0001323885240

20、00016/atrc-20231231.htm3/92Table of ContentsSPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTSThis Form 10-K,including the sections titled“Managements Discussion and Analysis of Financial Condition and Results ofOperations”,“Risk Factors”and“Quantitative and Qualitative Disclosures about Market Risk”

21、contains forward-lookingstatements regarding our future performance.All forward-looking information is inherently uncertain and actual results may differmaterially from assumptions,estimates or expectations reflected or contained in the forward-looking statements as a result ofvarious factors,includ

22、ing those set forth under“Risk Factors”and elsewhere in this Form 10-K.There may be additional risks ofwhich we are not presently aware or that we currently believe are immaterial which could have an adverse impact on our business.Forward-looking statements often address our expected future business

23、,financial performance,financial condition and results ofoperations,and often contain words such as“intends,”“estimates,”“anticipates,”“hopes,”“projects,”“plans,”“expects,”“drives,”“seek,”“believes,”“see,”“focus,”“should,”“will,”“would,”“opportunity,”“outlook,”“could,”“can,”“may,”“future,”“predicts,

24、”“target,”“potential,”forecast,trend,might and similar expressions and the negative versions of thosewords,and may be identified by the context in which they are used.However,the absence of these words does not mean that astatement is not forward-looking.Forward-looking statements include,without li

25、mitation,statements that address activities,events,circumstances or developments that AtriCure expects,believes or anticipates will or may occur in the future,such as earningsestimates(including projections and guidance),other predictions of financial performance,launches by AtriCure of new products

26、,developments with competitors and market acceptance of AtriCures products.Such statements are based largely upon currentexpectations of AtriCure.Any forward-looking statement speaks only as of the date made.Reliance should not be placed onforward-looking statements because they involve known and un

27、known risks,uncertainties and other factors which may causeactual results,performance or achievements to differ materially from those expressed or implied.Forward-looking statements arebased on AtriCures experience and perception of current conditions,trends,expected future developments and other fa

28、ctors itbelieves are appropriate under the circumstances and are subject to numerous risks and uncertainties,many of which are beyondAtriCures control.In other words,these statements are not guarantees of future performance and inherently involve a wide rangeof risks and uncertainties that are diffi

29、cult to predict.With respect to the forward-looking statements,we claim the protection of thesafe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.These forward-looking statements speak only as of the date of this Form 10-K.We undertake no oblig

30、ation to publicly update or revise anyforward-looking statements,whether as a result of new information,future events or otherwise unless required by law.WEBSITE AND SOCIAL MEDIA DISCLOSUREWe use our website()and our corporate Facebook,Instagram,YouTube,LinkedIn and X(formerly knownas Twitter)accoun

31、ts as channels of distribution of company information.The information we post through these channels may bedeemed material.Accordingly,investors should monitor these channels,in addition to following our press releases,Securities andExchange Commission,or SEC,filings and public conference calls and

32、webcasts.The contents of our website and social mediachannels are not,however,a part of this report.TRADEMARKSWe own or have the rights to use various trademarks referred to in this Annual Report on Form 10-K,including IsolatorSynergy clamp,EPi-Sense coagulation device,ENCOMPASS,AtriClip FlexV,and c

33、ryoSPHERE probe,among others,and their respective logos.Solely for convenience,we may refer to trademarks in this Annual Report on Form 10-K without the and symbols.Such references are not intended to indicate,in any way,that we will not assert,to the fullest extent permitted bylaw,our rights to our

34、 trademarks.MARKET AND INDUSTRY INFORMATIONMarket data used throughout this Annual Report on Form 10-K is based on managements knowledge of the industry andgood faith estimates of management.All of managements estimates presented herein are based on industry sources,includinganalyst reports and mana

35、gements knowledge.We also relied,to the extent available,upon managements review of independentindustry surveys and publications prepared by a number of sources and other publicly available information.We are responsible forall of the disclosures in this Annual Report on Form 10-K,and while we belie

36、ve that each of the publications,studies and surveysused throughout this Annual Report on Form 10-K are prepared by reputable sources,we have not independently verified marketand industry data from third-party sources.All of the market data used in this Annual Report on Form 10-K involves a number o

37、f assumptions and limitations,and youare cautioned not to give undue weight to such estimates.While we believe the estimated market position,market opportunity andmarket size information included in this Annual Report on Form 10-K is generally reliable,such information,which in part isderived from m

38、anagements estimates and beliefs,is inherently uncertain and imprecise andTM TM2025/2/12 05:30atrc-20231231https:/www.sec.gov/Archives/edgar/data/1323885/000132388524000016/atrc-20231231.htm4/92Table of Contentshas not been verified by any independent source.Projections,assumptions and estimates of

39、our future performance and the futureperformance of the industry in which we operate are subject to a high degree of uncertainty and risk due to a variety of factors,including those described in“Item 1A.Risk Factors”of Part I of this Annual Report on Form 10-K and elsewhere in this AnnualReport on F

40、orm 10-K.These and other factors could cause results to differ materially from those expressed in our estimates andbeliefs and in the estimates prepared by independent parties.2025/2/12 05:30atrc-20231231https:/www.sec.gov/Archives/edgar/data/1323885/000132388524000016/atrc-20231231.htm5/92Table of

41、ContentsPART I(Dollar and share amounts referenced in this Part I are in thousands.)ITEM 1.BUSINESSOverviewWe 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

42、 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 arrhythmiaencountered in clinical practice and results in high utilization of healthcare services and significant cost burden.Patients often

43、progress from being in Afib intermittently(paroxysmal)to being in Afib continuously.The continuous Afib patient populationincludes 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 y

44、ear.It is estimated that over 3.5 million people in the United States currentlysuffer from long-standing persistent Afib.Afib often occurs in conjunction with other cardiovascular diseases,includinghypertension,congestive heart failure,left ventricular dysfunction,coronary artery disease and valvula

45、r disease.Our cardiac ablation and left atrial appendage management(LAAM)products are used by physicians during open-heart andminimally 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 art

46、ery bypass,and our products are used in conjunction with(“concomitant”to)such aprocedure.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 c

47、atheter ablation performedby an electrophysiologist.Our pain management solutions are used by physicians to freeze nerves during cardiothoracic or thoracic surgicalprocedures.Recovery from cardiothoracic and thoracic surgery can be complicated and painful.Many surgeons use multi-modalpain management

48、 strategies that include oral delivery of opioid and non-opioid pain medications.Our cryoICE cryoSPHEREprobe for pain management(Cryo Nerve Block)provides temporary relief of post-operative pain,allowing the patients body toheal after surgery while the nerves regenerate and sensation is regained.We

49、sell our products to medical centers through our direct sales force in the United States,Germany,France,the UnitedKingdom,the Benelux region,Canada and Australia.We also sell our products through distributors who in turn sell our products tomedical centers in other international markets.Our business

50、 is primarily transacted in U.S.Dollars;direct sales transactions outsidethe United States are transacted in Euros,British Pounds,Canadian Dollars or Australian Dollars.Market OverviewAfib is the most commonly diagnosed sustained cardiac arrhythmia,with over one million diagnoses annually in the Uni

51、tedStates alone.Afib is an under-diagnosed condition due in large part to the fact that patients with Afib often have mild or nosymptoms,and their Afib is diagnosed when they seek treatment for an associated condition,such as a structural heart disease orstroke.Symptoms of Afib may include heart pal

52、pitations,dizziness,fatigue and shortness of breath,and these symptoms may bedebilitating and life threatening in some cases.When a patient is in Afib,abnormal electrical impulses cause the atria,or upperchambers of the heart,to fibrillate,or beat rapidly,irregularly and in an uncoordinated fashion.

53、As a result,blood in the atria maybe in stasis,increasing the risk that a blood clot will form and cause a stroke or other serious complications.In patients with Afib,asignificant percentage of those clots can form inside of the LAA.We believe that increasing awareness of Afib and improveddiagnostic

54、 screening will result in an increased number of patients diagnosed with Afib over time.Also,since the prevalence ofAfib increases with age,there will likely be an increase in the number of diagnosed Afib patients globally as the world populationages.Afib is a condition that doctors often find diffi

55、cult to treat and,historically,there has been no widely accepted long-term curefor Afib.This difficulty is exacerbated with more serious forms of Afib,or persistent and long-standing persistent Afib.Over thepast two decades,technology advancements have made surgical ablation more effective,repeatabl

56、e and available to cardiacsurgeons and electrophysiologists around the world.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 forconcomitant surgical ablation,meaning that

57、 it is a“recommended”treatment for patients who have structural heart disease andAfib.Guidelines for the treatment of more serious forms of Afib for patients without structural heart disease have also beenintroduced in the past several years.In 2023,the American College of Cardiology(ACC),American H

58、eart Association(AHA),American College of Clinical Pharmacy(ACCP),and HRS released Guidelines for Diagnosis and Management of AtrialFibrillation,and upgraded Left Atrial Appendage2025/2/12 05:30atrc-20231231https:/www.sec.gov/Archives/edgar/data/1323885/000132388524000016/atrc-20231231.htm6/9222025/

59、2/12 05:30atrc-20231231https:/www.sec.gov/Archives/edgar/data/1323885/000132388524000016/atrc-20231231.htm7/92Table of ContentsManagement 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

60、evidence suggesting that surgical and hybrid ablation is safe and effectivefor patients who have Afib.Of the patients undergoing open-heart surgery globally on an annual basis,we estimate that over 300,000 are potentialcandidates for surgical ablation using our products,as they have pre-operative Af

61、ib.Today,we estimate that less than 20%of thosecandidates are being treated with surgical ablation.In addition,Afib is thought to be responsible for approximately 15%to 20%ofthe estimated 800,000 strokes that occur annually in the United States.According to the American Heart Association,the risk of

62、stroke is five times higher in people with Afib.Studies have also suggested that 90%of clots that cause strokes in patients whohave Afib originate from within the LAA.Recently,a large independent international randomized trial,Left Atrial AppendageOcclusion Study(LAAOS)III,demonstrated a significant

63、 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 th

64、e risk of stroke and the significantcost burden on the healthcare system,more and more surgeons are routinely addressing the LAA,both in patients who have Afiband in those who do not have Afib but may be at increased risk of developing the disease in the future.We believe that our AtriClipsystem is

65、safer,more effective and easier to use than other products and techniques for excluding the LAA during cardiac surgery.Therefore,we believe that the market for our ablation products and the AtriClip system represent significant growth opportunities.Many Afib patients without other underlying structu

66、ral heart disease,especially those with more advanced forms of Afib,aresymptomatic and experience conditions such as palpitations,breathlessness and drowsiness.These patients tend to be motivated toseek treatment to alleviate their symptoms.Patients who are symptomatic are often treated by an electr

67、ophysiologist using catheterablation.Catheter ablation is considered a percutaneous procedure that does not require the opening of the chest;rather,cathetersare inserted through a small puncture in the groin.In addition to catheter ablation,there are other treatment options for patientswith Afib,inc

68、luding pharmacological therapy(anti-arrhythmic drugs)and implantable pacemakers.It is estimated thatapproximately 350,000 to 450,000 Afib patients are treated by catheter ablation every year in the U.S.,a number that is expected togrow 10 to 15%annually.While the majority of paroxysmal Afib patients

69、 treated by catheter ablation tend to experience freedomfrom Afib,less than a third of long-standing persistent patients treated by catheter ablation are cured of their Afib at one year,and itdeclines even more thereafter.Randomized,prospective,multi-center data from the CONVERGE IDE clinical trial,

70、along with anumber of other recent real-world studies performed by physician investigators,show that these long-standing persistent Afibpatients can experience more than double the success rate by adding an ablation on the outside surface of the heart using AtriCuresEPi-Sense ablation system.Thus,we

71、 believe the EPi-Sense ablation system used as a minimally invasive or Hybrid AF therapyalso represents a significant growth opportunity for the Company.Thoracic surgery involving an incision through the ribcage,typically referred to as thoracotomy access,and cardiothoracicsurgery can often result i

72、n significant post-operative pain and longer hospital recovery times as patients refrain from mobilizingtheir chest near the incision site.It is estimated that each year approximately 150,0000 thoracic procedures and approximately250,000 cardiothoracic procedures are performed in the United States.H

73、ospital recovery times can vary from two to fifteen daysdepending 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,includ

74、ingtechniques 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.More focused,local techniques include syringe injections between vertebrates andCryo Nerve Block which uses cryothermic ene

75、rgy to ablate peripheral nerves,temporarily stopping the transmission of pain signalscoming from the chest wall during surgery.The nerve“scaffolds”remain intact,allowing axons to regenerate and restore nervefunction over time.Cryo Nerve Block can be delivered using our cryoICE cryoSPHERE probe,which

76、 is specifically designed forCryo Nerve Block therapy.Depending on the degree of invasiveness,physicians and their nursing staff will take advantage ofmultiple ways of managing pain for their patients.In recent years,prescription narcotics,or opioids,have come under heavyscrutiny due to their potent

77、ial for long-term dependency,overdose and possible death.Both federal and local governments in theUnited States have proposed and implemented new regulations to curb the opioid overdose epidemic.It is also estimated that one inseven thoracic surgery patients develops an unhealthy post-procedural add

78、iction 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.Fu

79、rther,applications for Cryo Nerve Block outside of thoracic surgery use are being studied by physician investigators andrepresent future possible growth opportunities.TM32025/2/12 05:30atrc-20231231https:/www.sec.gov/Archives/edgar/data/1323885/000132388524000016/atrc-20231231.htm8/92Table of Conten

80、tsAtriCure Solutions and ProductsWe 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 theforeseeable fu

81、ture will relate to products we currently sell or are in the process of developing.Our products enable cardiothoracicsurgeons to perform surgical ablation procedures with faster,less invasive and less technically challenging approaches.We havecompleted,and continue to invest in,clinical studies for

82、the use of our ablation and LAAM products to treat Afib and reducestroke.Leading cardiothoracic surgeons and electrophysiologists,including those who serve or who have served as consultants tous,have published results of preclinical and clinical studies utilizing our devices.The results of these stu

83、dies have assessedefficacy,ease of use and safety endpoints.Products for cardiac tissue ablation include those that create scar tissue using radio frequency(RF)energy or cryothermicmodalities.Our ablation products are part of platforms each consisting of disposable hand pieces which connect to eithe

84、r a RFgenerator or a cryothermic generator.We generally place this capital equipment with our direct customers and sell to ourdistributors.Products for open and minimally invasive ablation:Isolator Synergy Clamps.Our Isolator Synergy Ablation System clamps are single-use disposable RF productswith j

85、aws that close in a parallel fashion.We sell multiple configurations of our Isolator Synergy clamps.Thevarious configurations provide the user with options to address patient specific procedure requirements or anatomy;however,all the clamps provide consistent performance using the same core technolo

86、gy.The parallel closureevenly compresses tissue and evacuates the blood and fluids from the energy pathway to make the ablation moreeffective.The Isolator Synergy Ablation System has been studied in multiple FDA approved clinical trials,including the previously completed ABLATE clinical trial which

87、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 andDrug Administration(FDA)for the treatment of persistent and long-standing persistent

88、 Afib concomitant to otheropen-heart surgical procedures.Certain products of our Isolator Synergy clamps bear the CE mark and may becommercially distributed throughout the member states of the European Union and other countries that complywith or mirror the Medical Device Directive.These products ar

89、e available for sale in a number of other countriesglobally.In April 2022,we launched our most recent configuration,the ENCOMPASS clamp,following 510(k)clearancein July 2021.The ENCOMPASS clamp is indicated for cardiac soft tissue ablation.The configuration is designed tomake concomitant surgical ab

90、lations more efficient and is expected to drive deeper penetration of cardiac surgeryprocedures.Multifunctional Pens and Linear Ablation Devices.These devices are single-use disposable RF products thatcome in multiple configurations.The MAX Pen devices enable surgeons to evaluate cardiac arrhythmias

91、,performtemporary cardiac pacing,sensing and stimulation and ablate cardiac tissue with the same device.Surgeons canreadily toggle back and forth between these functions.The device comes in multiple configurations that haveunique tissue contacting and shaft lengths.The Coolrail device enables the us

92、er to make longer linear lines ofablation.Surgeons generally use one or more of our pen and linear devices in combination with Isolator Synergyclamps.All our pen and linear ablation devices are cleared for sale in the United States under FDA 510(k)clearances,withindications for the ablation of cardi

93、ac tissue and/or the treatment of cardiac arrhythmias.Our Isolator Synergy pensbear the CE mark,and most configurations may be commercially distributed throughout the member states of theEuropean Union and other countries that comply with or mirror the Medical Device Directive.These products areavai

94、lable for sale in a number of other countries globally.Products for open ablation:cryoICE Cryoablation System.The cryoICE cryoablation system is used in both open ablation procedures andcryoanalgesia.The system consists of the cryoICE BOX generator along with a variety of single-use disposableprobes

95、.The primary differences between these cryoablation probes is the form of the tissue-contacting distal end.The cryoICE devices enable the user to make linear ablations of varied lengths.Surgeons may utilize the cryoICEdevices in combination with Isolator Synergy clamps or independently.42025/2/12 05

96、:30atrc-20231231https:/www.sec.gov/Archives/edgar/data/1323885/000132388524000016/atrc-20231231.htm9/92Table of ContentsOur cryoablation devices are cleared for sale in the United States under FDA 510(k)clearances,bear the CE markfor commercial distribution throughout the member states of the Europe

97、an Union and other countries that complywith or mirror the Medical Device Directive.These products are available for sale in a number of other countriesglobally.The ICE-AFIB clinical trial is studying the safety and efficacy of the cryoICE system for persistent and long-standing persistent Afib trea

98、tment during concomitant on-pump cardiac surgery.Products for minimally invasive ablation:EPi-Sense Systems.The EPi-Sense Guided Coagulation System with VisiTrax technology and the new EPi-SenseST Guided Coagulation System utilize monopolar RF energy for the coagulation of tissue.Our EPi-Sense devic

99、esare single-use disposable ablation devices capable of intraoperative cardiac signal sensing and recording whenconnected to an external recording device.Our EPi-Sense System was studied through the CONVERGE clinical trial and was subsequently approved in 2021by FDA for the treatment of patients wit

100、h systemic,drug refractory,long-standing persistent Afib when augmentedwith an endocardial ablation catheter.Our EPi-Sense ST Guided Coagulation System was approved via PMAsupplement in late 2022.Hybrid AF Therapy is the only FDA-approved minimally invasive procedure to treatpatients with long-stand

101、ing persistent Afib and represents a proven option for patients with advanced disease.The EPi-Sense System bears the CE mark and is commercially distributed throughout the member states of theEuropean Union and other countries that comply with or mirror the Medical Device Directive.This system isava

102、ilable for sale in a number of other countries globally.Products for pain management:cryoSPHERE probe.The cryoSPHERE probe is used to apply cryothermic energy to targeted intercostalperipheral nerves in the ribcage in order to provide temporary pain relief.This technique,called Cryo Nerve Block,is a

103、pplied intraoperatively by cardiothoracic or thoracic surgeons and results in temporary pain relief for up to 90days after the procedure.Sensation typically returns to the affected region of the chest after this period.Scientificdata that has been published on the effects of Cryo Nerve Block has gen

104、erally shown a significant reduction inprescription of opioids,significantly reduced length of stay for patients in the hospital and other benefits.The cryoSPHERE probe is 510(k)cleared for managing pain by temporarily ablating peripheral nerves and bearsthe CE mark for commercial distribution throu

105、ghout the member states of the European Union and other countriesthat comply with or mirror the Medical Device Directive.Products for appendage management:AtriClip System.The AtriClip LAA Exclusion System includes various combinations of an implantable device(AtriClip)coupled to a single-use disposa

106、ble applier.The AtriClip device is designed to exclude the left atrialappendage by mechanically clamping the appendage from the outside of the heart.The left atrial appendage hasbeen shown to be a source of arrhythmias.The exclusion of the LAA eliminates blood flow between the left atrialappendage a

107、nd the atrium while avoiding contact with circulating blood and provides electrical isolation benefitsafter placement.We believe that the AtriClip system is potentially safer,more effective and easier to use than othertechniques for permanently excluding the left atrial appendage.The device comes in

108、 two geometries(a rectangularconfiguration which encircles the targeted tissue and“V”shape which allows for an alternative lateral access)and avariety of lengths,which are matched to each patients anatomy.The appliers come in multiple forms tailored tospecific procedural needs depending on the type

109、of surgery and how the surgeon is accessing the heart.In the United States,our AtriClip LAA Exclusion System products are 510(k)-cleared with an indication for theexclusion of the LAA,performed under direct visualization and in conjunction with other cardiac surgicalprocedures.Direct visualization,i

110、n this context,requires that the surgeon can see the heart directly,with or withoutassistance from a camera,endoscope or other appropriate viewing technologies.Certain products of our AtriClipLAA Exclusion System bear the CE mark for commercial distribution throughout the member states of theEuropea

111、n Union and other countries that comply with or mirror the Medical Device Directive.These products areavailable for sale in a number of other countries globally.52025/2/12 05:30atrc-20231231https:/www.sec.gov/Archives/edgar/data/1323885/000132388524000016/atrc-20231231.htm10/92Table of ContentsThe A

112、triClip LAA Exclusion System is currently being evaluated under the Left Atrial Appendage Exclusion forProphylactic Stroke Reduction(LeAAPS)IDE clinical trial.We sell additional products and enabling technologies that hold 510(k)approvals and/or bear the CE mark.The LARIATSystem is a solution for so

113、ft-tissue closure that includes a suture loop coupled to a single-use disposable applier.The Lumitipdissector is used by surgeons to separate tissues to provide access to key anatomical structures that are targeted for ablation.Otherenabling technologies include our Glidepath guides for placement of

114、 our clamps,Subtle Cannulas to support access for ourEPi-Sense catheters and a line of reusable cardiac surgery instruments.Business StrategyWe are passionately focused on healing the lives of patients affected by Afib and pain after surgery.Our strategy is to expandthe treatment options for patient

115、s who suffer from Afib,have a high risk of stroke,or who suffer from post-operative pain,throughthe continued development of our technologies and expansion of our product offerings,clinical science investments and globalcommercial expansion.The key elements of our strategy include:New Product and Pr

116、ocedure Innovation.Our product development pipeline includes projects which extend and improve ourexisting products,as well as research and development projects for new technologies and new procedural techniques.We plan tocontinue to develop new and innovative products and procedures,including those

117、 that allow us to enter new markets or expand ourgrowth in existing markets.Investments in Clinical Science.We continue to invest in landmark clinical trials to validate the long-term results ofprocedures using our products and to support applications to regulatory agencies for expanded indications.

118、We also make clinicalresearch grants to support our product development efforts and expand the body of clinical evidence.We believe publication ofadditional scientific evidence,in addition to robust ongoing research activities,will ultimately create an increased demand for ourproducts.Build Physicia

119、n and Societal Relationships.We have formed consulting relationships with cardiothoracic surgeons,cardiologists,electrophysiologists,stroke neurologists and thoracic surgeons who work with us to develop and evaluate ourproducts.Additionally,we regularly form advisory boards made up of key opinion le

120、aders in multiple specialties to provide input toour training and clinical programs.We are building these relationships along with extended care professionals such as nursepractitioners and advanced practice providers,to provide insight regarding treatment trends,input on future product direction an

121、deducation for providers involved in treating the disease.We are partnering with leading surgical and cardiology societies to increase the awareness of Afib treatment options.In thepast five years,the Society for Thoracic Surgeons(STS),Heart Rhythm Society(HRS),American College of Cardiology(ACC),Am

122、erican Heart Association(AHA)and American College of Clinical Pharmacy(ACCP)have released new guidelines on thesurgical treatment of Afib in both open-heart and minimally-invasive settings.Provide Training and Education.We have recruited and trained sales and physician education professionals to eff

123、ectivelycommunicate to our customers the unique features and benefits of our technologies as they relate to their indications for use.Ourhighly trained professionals meet with physicians at institutions around the world to provide education and technical training on thefeatures,benefits and safe-and

124、-effective use of our products.With the approval of our Isolator Synergy System,we instituted aprogram to train providers on the use of the Isolator Synergy System to treat persistent and long-standing persistent Afib in patientsundergoing open-heart surgery.With the approval of the EPi-Sense System

125、,we began programs to train physicians on the use ofthe EPi-Sense system in a hybrid approach to treating patients with long-standing persistent Afib.More recently,we haveimplemented multidisciplinary training programs focused on the heart team approach for creating and growing an arrhythmiatreatmen

126、t program and managing post-operative pain.We believe these training and education programs have increased awarenessabout the surgical treatment of Afib,and we will continue to make investments to serve our physician customers.As a result of theeducational process,we believe that awareness of our te

127、chnologies is growing and will result in the increased use of our products.Evaluate Acquisition Opportunities.We expect to continue to be opportunistic with respect to acquisitions.We evaluateacquisition opportunities on a variety of factors,including product innovation,clinical differentiation and

128、other strategic andfinancial criteria.Research and Product DevelopmentOur ongoing research and development activities support our business strategy to expand treatment options and increaseawareness in our current markets,as well as enabling expansion into adjacent markets.We are engaged in developin

129、g andresearching new and existing products or concepts,preclinical studies,clinical trials and other regulatory62025/2/12 05:30atrc-20231231https:/www.sec.gov/Archives/edgar/data/1323885/000132388524000016/atrc-20231231.htm11/92Table of Contentsactivities.We make significant investments in both prod

130、uct development and clinical science activities to drive the advancementand 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 DeviceExemption(IDE)to FDA for approval before initiating a c

131、linical trial.Clinical trials are required to support a pre-market approval(PMA)and are sometimes required for 510(k)clearance.Some trials require a feasibility study followed by a pivotal trial.We areconducting several clinical trials to validate the long-term results of procedures using our produc

132、ts and to support applications toregulatory agencies for expanded indications.In addition,we also conduct various studies to gather clinical data regarding ourproducts.Key trials and studies are:LeAAPS.In April 2022,FDA approved the protocol for the Left Atrial Appendage Exclusion for Prophylactic S

133、trokeReduction(LeAAPS)IDE clinical trial.The trial is designed to evaluate the effectiveness of prophylactic LAA exclusion using theAtriClip LAA Exclusion System for the prevention of ischemic stroke or systemic arterial embolism in cardiac surgery patientswithout pre-operative AF diagnosis who are

134、at risk for these events.This prospective,multicenter,randomized trial evaluates safetyat 30 days post-procedure to demonstrate no increased risk with LAA exclusion during cardiac surgery and effectiveness with aminimum follow-up of five years post procedure for all subjects.The trial provides for e

135、nrollment of up to 6,500 subjects at up to250 sites worldwide.In January 2023,we enrolled our first patient;site initiation and enrollment is ongoing.HEAL-IST.In February 2022,FDA approved the protocol for the Hybrid Epicardial and Endocardial Sinus Node SparingAblation Therapy for Inappropriate Sin

136、us Tachycardia(IST)clinical trial(HEAL-IST).The HEAL-IST clinical trial is designed tostudy the safety and efficacy of a hybrid sinus node sparing ablation procedure using the Isolator Synergy Surgical Ablation Systemfor the treatment of symptomatic,drug refractory or drug intolerant IST.The trial i

137、s a prospective,multicenter,single arm trial thatevaluates safety 30 days post-procedure and evaluates primary effectiveness of freedom from IST(as specified)at 12 months post-procedure.The trial provides for enrollment of up to 142 patients at up to 40 sites in the United States,United Kingdom andE

138、uropean Union.The first patient enrollment in the trial occurred in June 2022;site initiation and enrollment is ongoing.CONVERGE.The CONVERGE IDE clinical trial proved the safety and efficacy of the EPi-Sense System to treatsymptomatic persistent and long-standing persistent Afib patients who are re

139、fractory or intolerant to at least one Class I and/or IIIanti-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.We believe

140、theConvergent procedure,or Hybrid AF therapy,provides the only compelling treatment option for a large and vastly underpenetratedpopulation of Afib patients.The CONVERGE trial demonstrated superiority in the hybrid therapy arm compared to endocardialcatheter ablation alone.In patients diagnosed with

141、 long-standing persistent Afib,the therapy arm showed a 29%absolute differencein efficacy at 12 months(78%relative improvement)and an absolute difference of 35%at 18 months(110%relativeimprovement).There was also a 33%absolute difference in Afib burden reduction in favor of the Hybrid AF therapy at

142、12 months,which increased to 37%at 18 months.In April 2021,we also received approval from FDA to conduct the CONVERGE PostApproval Study(PAS).This study allows for 325 patients to be enrolled at up to 50 sites.The first patient enrollment in the trialoccurred in June 2022;site initiation and enrollm

143、ent is ongoing.We have invested in other clinical trials to validate the long-term results of procedures using our products and to supportapplications to regulatory agencies for expanded indications.The ICE-AFIB clinical trial is designed to study the safety andefficacy of the cryoICE system for per

144、sistent and long-standing persistent Afib treatment during concomitant on-pump cardiacsurgery.The trial provides for enrollment of up to 150 patients at up to 20 sites in the United States,which was completed in May2023.Patient follow-up for twelve months post ablation required by the study protocol

145、 remains ongoing.During the second quarterof 2023,results from our CEASE-AF trial were presented at the European Heart Rhythm Association meeting and subsequentlypublished in July 2023.CEASE-AF is a prospective,multi-center randomized control trial that demonstrated superior freedomfrom atrial arrhy

146、thmias for staged hybrid ablation compared to endocardial catheter ablation.During the fourth quarter of 2023,the12-month follow-up results of enrolled patients from the DEEP AF Pivotal study were presented at the American Heart Associationmeeting.The DEEP AF IDE pivotal trial evaluated the safety a

147、nd efficacy of the AtriCure Bipolar System when used in a stagedapproach where a minimally invasive surgical ablation procedure is first performed.The patient undergoes the endocardial catheterprocedure approximately 91-120 days later.The results from this single arm study demonstrated superior free

148、dom from atrialarrhythmias for staged hybrid ablation compared to a pre-specified performance goal.The Company is in the process of analyzingadditional trial data for publication,future development activities,or possible evaluation of label expansions.72025/2/12 05:30atrc-20231231https:/www.sec.gov/

149、Archives/edgar/data/1323885/000132388524000016/atrc-20231231.htm12/92Table of ContentsSales,Marketing and Medical EducationOur global sales and marketing efforts focus on educating physicians about our unique technologies and their clinicalbenefits.We only promote our products for uses described in

150、their labeling as cleared or approved by relevant regulatory agencies,and train our sales force on the use of our products to the extent the products are cleared or approved.Our sales team in the United States has approximately 290 employees.We select our sales personnel based on their expertise,exp

151、erience and reputation in the medical device industry and their knowledge of cardiac and thoracic surgery procedures andtechnologies.We market and sell our products in selected countries outside of the United States through a combination of independentdistributors and direct sales personnel.Our inte

152、rnational sales team includes approximately 60 employees focused on our directmarkets,such as Germany,France,the United Kingdom,the Benelux region,Canada and Australia.We also maintain a network ofdistributors who market and sell our products in Asia and South America,as well as certain countries in

153、 Europe.We continue toevaluate opportunities for further expansion into markets outside of the United States.CompetitionAtriCure has the only medical devices that are approved by FDA for treating long-standing persistent Afib:the IsolatorSynergy Ablation,the first medical device to receive FDA appro

154、val 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.However,ourindustry is competitive,is subject to change and can be significantly affected by new product introductions and ot

155、her activities ofindustry participants.We compete with other companies and divisions of companies that sell a single or limited number ofcompetitive product lines or in certain geographies.Our primary competitor in the cardiac surgery market is Medtronic,plc,whoprovides surgical ablation products an

156、d LAAM devices used by physicians for the treatment of Afib and related conditions.Forstandalone 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

157、 of Afib,but they are not FDA indicated totreat long-standing persistent Afib.Our Hybrid AF Therapy involves both epicardial and endocardial techniques,therefore,thesecatheters are complementary to our business and not competitive.We believe that our products improve treatment outcomes forpatients w

158、ith 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 totreat persistent and long-standing persistent Afib,although we are not aware of any ongoing FDA

159、 trials by other companies to studyablation of long-standing persistent Afib patients.We are aware of other companies developing technology for cardiac tissueablation and appendage management.New product introductions,technological advances and regulatory clearances fromcompetitors may impact the us

160、e of our products in cardiac procedures.In addition to the cardiac surgery market,we also considercompetition within the post-operative pain market.Currently,we are not aware of other companies in the United States who arepursuing cryothermic nerve block therapies for thoracic surgery.There are othe

161、r companies outside of the United States whomarket their devices for a similar therapy.Third-Party ReimbursementReimbursement for health care services in the United States is generally made by third-party payors.These payors includeprivate insurers and government insurance programs,such as Medicare

162、and Medicaid.The Medicare program,the largest singlepayor in the United States,is a federal health benefit program administered by the Centers for Medicare and Medicaid Services(CMS)and covers certain medical care items and services for eligible beneficiaries,primarily individuals over 65 years old,

163、as wellas chronically disabled individuals.Because Medicare beneficiaries comprise a large percentage of the populations for which ourproducts are used,and private insurers may follow the coverage and payment policies for Medicare,Medicares coding,coverageand payment policies for cardiothoracic surg

164、ical procedures are significant to our business.Medicares Part A program pays hospitals for inpatient services,such as cardiothoracic surgery,under the InpatientProspective Payment System,which provides a predetermined payment based on the patients discharge diagnoses and surgicalprocedure(s).Discha

165、rge diagnoses are grouped into Medicare Severity Diagnosis Related Groupings(MS-DRG).There are severalcardiac surgery MS-DRGs associated with the surgical treatment of Afib,with and without a concomitant open-heart procedure.When an ablation device and/or LAAM device is used during a concomitant ope

166、n-heart procedure,Medicares hospitalreimbursement is based upon the patients primary structural heart surgical procedure.In contrast,sole therapy minimally invasiveablation or surgical LAAM procedures typically are reimbursed under a general cardiac surgery or intracardiac procedure MS-DRG.We believ

167、e hospital reimbursement rates for sole therapy and concomitant therapy cardiac surgical ablation or surgicalLAAM are adequate to cover the cost of our products even when multiple procedures are performed.Similar to surgical ablationfor Afib or surgical LAAM,cryoablation performed for post-operative

168、 pain82025/2/12 05:30atrc-20231231https:/www.sec.gov/Archives/edgar/data/1323885/000132388524000016/atrc-20231231.htm13/922025/2/12 05:30atrc-20231231https:/www.sec.gov/Archives/edgar/data/1323885/000132388524000016/atrc-20231231.htm14/92Table of Contentsmanagement is reimbursed as part of the prima

169、ry procedure,open thoracic or cardiac surgery,MS-DRG.We believe hospitalreimbursement rates are typically adequate in these situations.Physicians are reimbursed for their services separately under the Medicare Part B physician fee schedule.When performing asurgical cardiac ablation with and without

170、a concomitant open-heart procedure,surgeons report Current Procedural Terminology(CPT)codes to receive a professional fee payment.Multiple CPT codes may be reported by a physician during a procedure ifmultiple procedures are performed.There are category one CPT codes for both concomitant and standal

171、one surgical Afib treatment,as well as surgical LAAM.However,some providers utilize unlisted CPT codes to obtain reimbursement when no appropriate CPTcode exists,such as Cryo Nerve Block ablation when used for post operative pain control.In addition to the Medicare program,many private payors look t

172、o CMS policies as a guideline in setting their coveragepolicies and payment amounts.The current coverage policies of these private payors may differ from the Medicare program,andpayment rates may be higher,lower,or the same as the Medicare program.In some cases,certain private payors adopt negativec

173、overage policies with respect to therapies involving our products.We provide private payors information on FDA labels and newpublished studies to support positive coverage policies.We also engage third-party reimbursement consultants that provide supportto our customers in the event of a coverage de

174、nial.Outside of the United States,third-party reimbursement varies widely by geography and by the type of therapy in which ourdevices are used.For example,even though a new medical device may have been approved for commercial distribution,we mayfind limited demand for the device until coverage and s

175、ufficient reimbursement levels have been obtained from governmental andprivate third-party payors.In addition,some private third-party payors require that certain procedures or the use of certain productsbe authorized in advance as a condition of reimbursement.In some countries,cost containment init

176、iatives and health care policiesmay significantly reduce reimbursement for procedures using our medical devices or deny coverage for those proceduresaltogether.We are actively working to pursue market access in certain geographies,which includes applying for newreimbursement for therapies in which o

177、ur devices are being used or pursuing specific reimbursement for utilization of our devices.Government RegulationOur products are medical devices and are subject to regulation in the United States by FDA and other federal agencies,andby comparable authorities in the European Union(EU)and other count

178、ries worldwide.US Regulation:FDA regulations govern nearly all of the activities that we perform,or which are performed on our behalf,to ensure thatmedical products distributed domestically or exported internationally are safe and effective for their intended uses.FDA regulatesthe total product life

179、cycle from early design,development and testing,to manufacturing and commercialization activities,as wellas post-market surveillance and reporting,including corrective actions,removals and recalls.Unless an exemption applies,mostmedical devices distributed in the United States require either 510(k)c

180、learance or PMA from FDA.510(k)Clearance Pathway.To obtain 510(k)clearance,we must submit a notification to FDA demonstrating that ourproposed device is substantially equivalent to a predicate device,i.e.,a previously cleared and legally marketed 510(k)device or adevice that was in commercial distri

181、bution before May 28,1976,for which FDA has not yet called for the submission of a PMA.Any modification to a 510(k)-cleared device that would constitute a major change in its intended use,or a change in its design ormanufacture that could significantly affect the safety or effectiveness of the devic

182、e,requires a new 510(k)clearance.Premarket Approval Pathway.A PMA must be submitted to FDA if the device cannot be cleared through the 510(k)process and is not otherwise exempt.A PMA must be supported by extensive data,including but not limited to technical,preclinical,clinical,real-world data,manuf

183、acturing and labeling,to demonstrate the safety and effectiveness of the device for itsintended use.A PMA supplement is required for changes affecting the safety or effectiveness of a PMA-approved device,includingbut not limited to new indications for use,a different manufacturing facility,or change

184、s in the manufacturing process,labeling,ordesign specifications or components of the device.Clinical Trials.Clinical trials are required to support a PMA and are sometimes required for 510(k)clearance.Clinical trialsare subject to extensive recordkeeping and reporting requirements.Our clinical trial

185、s must be conducted under the oversight of anInstitutional Review Board(IRB)for the relevant clinical trial sites and must comply with FDA regulations,including,but notlimited to,those relating to current good clinical practices.We are also required to obtain the written informed consent of patients

186、in form and substance that complies with both FDA requirements and other human92025/2/12 05:30atrc-20231231https:/www.sec.gov/Archives/edgar/data/1323885/000132388524000016/atrc-20231231.htm15/92Table of Contentssubject protection regulations established by FDA.We must conduct our clinical studies i

187、n compliance with state and federalprivacy laws,including the Health Insurance Portability and Accountability Act(HIPAA).Educational Grants.FDA regulates the promotion of medical devices by manufacturers and prohibits the promotion bymanufacturers of uses that are not within the approved or cleared

188、labeling of the device.FDA does not regulate the practice ofmedicine or the conduct or content of medical education conducted by third parties,which may include uses that are not withinapproved or cleared device labeling.Manufacturers may provide unrestricted financial support for independent third-

189、party medicaleducation programs in the form of educational grants intended to offset the cost of such programs.If the manufacturer controls orunduly influences the content of such programs,FDA considers those programs to be promotional activities by the manufacturerand thus subject to FDA regulation

190、 including promotional restrictions.We seek to ensure that our educational grants program isconducted in accordance with FDA criteria for independent educational activities.However,we cannot provide an assurance thatFDA or other government authorities would view the third-party programs we have supp

191、orted as being independent.Pervasive and Continuing Regulation.There are numerous regulatory requirements that apply after a product is cleared orapproved by FDA,including,but not limited to:annual establishment registration and product listing;current good manufacturingpractice for devices(GMP);lab

192、eling requirements and advertising and promotion guidelines;assessing the significance of anychanges to a device;monitoring and reporting serious and adverse events and certain device malfunctions;and reporting certaindevice corrections and removals.Our manufacturing facilities and processes are als

193、o subject to FDA inspections to ensurecompliance with Quality System Regulations(QSR).In addition to FDA regulation,the advertising and promotion of certain medical devices are also regulated by the FederalTrade Commission and by state regulatory and enforcement authorities.On occasion,promotional a

194、ctivities for FDA-regulatedproducts can be the subject of enforcement action brought under healthcare reimbursement laws and consumer protection statutes.In addition,under the Federal Lanham Act and similar state laws,competitors and others can initiate litigation relating toadvertising claims.Fraud

195、,Abuse and False Claims.We are directly and indirectly subject to various federal and state laws governing ourrelationship with healthcare providers.In particular,the Anti-Kickback Statute is a federal criminal law that applies broadly andprohibits the knowing and willful offer or payment of remuner

196、ation to induce or reward patient referrals or the generation ofbusiness involving any item or service payable by a federal health care program.The federal False Claims Act(FCA)imposes civilliability on any person or entity that submits,or causes the submission of,a false or fraudulent claim to the

197、United Statesgovernment.Damages under the FCA consist of the imposition of fines and penalties and can be significant.The FCA also allows aprivate individual or entity with knowledge of past or present fraud against the federal government to sue on behalf of thegovernment to recover the civil penalt

198、ies and treble damages.AtriCure is a member of the Advanced Medical Technology Association(AdvaMed),a voluntary United States tradeassociation for medical device manufacturers.This association has established guidelines and protocols for medical devicemanufacturers in their relationships with health

199、care professionals on matters including research and development,product trainingand education,grants and charitable contributions,support of third-party educational conferences and consulting arrangements.Adoption of the AdvaMed Code of Ethics for Interactions with Healthcare Professionals(the“Adva

200、Med Code”)by a medicaldevice manufacturer is voluntary,and while the Office of the Inspector General and other federal and state healthcare regulatoryagencies encourage its adoption and may look to the AdvaMed Code,they do not view adoption of the AdvaMed Code as proof ofcompliance with applicable l

201、aws.We have adopted the AdvaMed Code and incorporated its principles in our standard operatingprocedures,employee training programs and relationships with medical professionals.Regulation Outside of the United States:Sales of medical devices outside of the United States are subject to foreign govern

202、mental regulations which varysubstantially from country to country.The time required to obtain certification or approval by a foreign country may be longer orshorter than that required for FDA clearance or approval and the requirements may be different,but the general trend is towardincreasing regul

203、ation and greater requirements for the manufacturer to provide more bench testing and clinical evidence.Inaddition,regulatory agencies and authorities can halt distribution within the country or otherwise take action in accordance withlocal laws.Conformity Assessment Pathway.In the European Union,va

204、rious directives regulate the design,manufacture and labelingof medical devices,and more stringent conformity assessment requirements have been put in place with the 2017 Medical DeviceRegulation,effective May 26,2021.The method for assessing conformity varies depending on the type and class of the

205、product,but typically involves a combination of quality system assessment and product conformity102025/2/12 05:30atrc-20231231https:/www.sec.gov/Archives/edgar/data/1323885/000132388524000016/atrc-20231231.htm16/92Table of Contentsassessment by a third-party notified body,an independent and neutral

206、institution appointed by a country to conduct the conformityassessment.This third-party assessment includes a review of documentation related to the device that may be as extensive as thedocumentation requirements that the United States FDA requires for higher risk products.The notified body also au

207、dits themanufacturers quality system and performs a detailed review of the testing of the manufacturers device.Successful completion ofa conformity assessment procedure allows a manufacturer to issue a declaration of conformity with the requirements of the relevantdirective and affix the CE mark to

208、the device.Devices that bear the CE mark may be commercially distributed throughout themember states of the European Union and other countries that comply with or mirror the medical device regulations.Pervasive and Continuing Regulation.There are numerous regulatory requirements that apply after a p

209、roduct has beenapproved by the notified body for CE marking,including,but not limited to:labeling,advertising and promotion,reporting ofdevice modifications,monitoring the safety of the product and performing corrections and removals when necessary,maintaining“state of the art”requirements for the d

210、evices through compliance with standards,and obtaining recertification of the qualitysystem and individual device certificates on a periodic basis.AtriCure is a member of MedTech Europe,a voluntary trade association for the medical technology industry includingdiagnostics,medical devices and digital

211、 health.MedTech Europe and its members are committed to a high level of ethical businesspractices and have put in place strict guidelines to advise medical technology manufacturers on how to collaborate ethically withhealthcare professionals(HCPs).These guidelines are set out in the MedTech Europe C

212、ode of Ethical Business Practice(MedTechCode),which regulates all aspects of the industrys relationships with HCPs and healthcare organizations(HCOs).It covers medicaleducation and research and development.It also introduces an independent enforcement mechanism and transparency obligations.The Code

213、sets clear and transparent rules for the industrys relationships with HCPs and HCOs,including company events,third-party organized events,arrangements with consultants,gifts,research and financial support to medical education.We have adoptedthe MedTech Code and incorporated its principles in our sta

214、ndard operating procedures,employee training programs andrelationships with medical professionals.Consulting RelationshipsWe have developed consulting relationships with scientists and physicians throughout the world to support our research anddevelopment,clinical and training and education programs

215、.We work closely with these thought leaders to understand unmet needsand emerging applications for the treatment of Afib and other diseases and conditions.Our physician consulting agreements are intended to satisfy the requirements of the personal services“Safe Harbor”regulation as well as the AdvaM

216、ed Code and the MedTech Europe Code of Ethical Business Practice.As such,they provide forpayment of a fair market value fee only for legitimate services rendered to us.We do not expect or require the consultant to utilizeor promote our products,and consultants are required to disclose their relation

217、ship with us as appropriate,such as when publishingan article in which one of our products is discussed.Amounts paid to physicians in the United States are disclosed by us in annualreports submitted to CMS under the federal“Open Payments”law.Amounts paid to physicians in certain other countries are

218、alsodisclosed by us in reports submitted to various governmental agencies in those countries,in accordance with the laws of thejurisdictions where those physicians reside or practice,or where the payments are made.Intellectual PropertyProtection of our intellectual property is a priority for our bus

219、iness,and we rely on a combination of patent,copyright,trademark and trade secret laws to protect our interests.Our ability to protect and use our intellectual property rights in thecontinued development and commercialization of our technologies and products,operate without infringing the proprietar

220、y rightsof others,and prevent others from infringing our proprietary rights is important to our continued success.We will be able to protectour products and technologies from unauthorized use by third parties only to the extent that they are covered by valid andenforceable patents,trademarks or copy

221、rights,or are effectively maintained as trade secrets,know-how or other proprietaryinformation.We hold numerous issued United States and international patents.We also have multiple pending United States andinternational patent applications.We seek patent protection relating to technologies and produ

222、cts we develop in both the UnitedStates 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 know-how and related technology of importanceto the commerciali

223、zation of our products.To continue developing and commercializing our current and future products,we maylicense intellectual property from commercial or academic entities to obtain the rights to technology that is required for ourresearch,development and commercialization activities.112025/2/12 05:3

224、0atrc-20231231https:/www.sec.gov/Archives/edgar/data/1323885/000132388524000016/atrc-20231231.htm17/92Table of ContentsAll of our employees and technical consultants are required to execute confidentiality agreements in connection with theiremployment and consulting relationships with us.We also gen

225、erally require them to agree to disclose and assign to us allinventions conceived in connection with their relationship with us.We devote significant resources to obtaining patents and otherintellectual property and protecting our other proprietary information.If valid and enforceable,these patents

226、may give us a meansof blocking competitors from using infringing technology to compete directly with our products.We also have proprietaryinformation that may not be patentable.With respect to proprietary information that is not patentable,we have chosen to rely ontrade secret protection and confide

227、ntiality agreements to protect our interests.ManufacturingWe assemble,inspect,test and package the majority of our products at our facilities in Ohio,and our products are sterilizedby third parties.Purchased components are often sourced from a single supplier,but alternatives to critical suppliers a

228、re availablein the event this would be needed.To minimize supply chain risks,we maintain inventory levels of components and raw materials specific to the respective partor device.We assess tooling and equipment on an ongoing basis.Order quantities and lead times for components purchased fromoutside

229、suppliers are based on our forecasts derived from historical demand and anticipated future demand.Lead times may varysignificantly depending on the size of the order,time required to fabricate and test the components,specific supplier requirementsand current market demand for the components and raw

230、materials.To date,we have not experienced significant product availabilityor delay issues directly related to obtaining any of our components.We regularly audit our suppliers for compliance with our quality system requirements,the QSR and/or applicableInternational Organization of Standardization(IS

231、O)standards.We are an FDA-registered medical device manufacturer andcertified to ISO 13485:2016.We routinely conduct internal audits of our quality systems in accordance with various internationalstandards.In addition,we have successfully participated in the Medical Device Single Audit Program(MDSAP

232、)and have beencertified accordingly.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 useof animals,the use and disposal of hazardous or pote

233、ntially hazardous substances,safe working conditions,manufacturingpractices,environmental protection and fire hazard control.Human Capital ManagementSuccessful execution of our strategy is dependent on attracting,developing and retaining key employees and members of ourmanagement team.As of December

234、 31,2023,we had approximately 1,200 employees.Our Board of Directors,along with theCompensation Committee,provides oversight of the human capital management including demographics,diversity and inclusionefforts,and aspects of employee compensation.At AtriCure,our employees are crucial to the ongoing

235、 success of the company.The skills,experience and industryknowledge of our employees significantly benefit our operations and performance.We continuously evaluate,modify and enhanceour internal processes to increase employee engagement,productivity and efficiency,as well as to recruit new employees

236、to supportour growth.Recognizing the significance of our employees to our success,in 2022 we introduced a“people objective”to ourannual incentive plan focused on attraction,development and retention of talent,in addition to strategic Diversity,Equity andInclusion(DE&I)initiatives.Talent Attraction a

237、nd RetentionWe attract top talent to AtriCure and provide mechanisms for them to take ownership of their career paths to support theircareer aspirations so they can build a long-term future with our company.Over the last five years,voluntary turnover rate amongour employees has remained consistently

238、 below 10%,outperforming the industry average.We conduct engagement surveys of ouremployees at least annually with our last Organizational Health Survey resulting in above average results when compared tosimilar size companies.In addition,our employees have voted us as a Top Workplace eight times in

239、 the past nine years,andinternationally,our employees have voted us a Great Place to Work for two consecutive years.We also promote employee retentionand development by supporting internal movement to create accretive experiences for our employees.We have made focusedefforts to attract diverse candi

240、dates in our pipeline and have expanded our recruiting channels to connect with new communities.Talent Management and DevelopmentOur philosophy of Talent Mastery is our aspirational commitment to spend as much time focusing on our talent as we do onour business strategies.Under this philosophy,we be

241、lieve our leaders will better help attract,develop and retain talent.We arecommitted to identifying and developing the talents of our next-generation leaders,and conduct a122025/2/12 05:30atrc-20231231https:/www.sec.gov/Archives/edgar/data/1323885/000132388524000016/atrc-20231231.htm18/92Table of Co

242、ntentscomprehensive Talent and Organization Planning to position AtriCure with appropriate organization and leadership capability tomeet current and future business needs.In that process,we review existing leaders and prospective leaders throughout theorganization and determine next best steps for t

243、heir future development.Employee development is an important part of the way we drive retention and foster a strong culture of learning.We haveinvested in programs to drive ongoing career development and provide a range of training courses and online resources foremployees,and opportunities for coac

244、hing and mentoring.Programs and offerings for development include AMPLIFY,ourleadership 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 sever

245、al functionaldevelopment programs,such as the Engineering Development Program that offers four six-month rotations through differentdepartments as part of our differentiated early pipeline talent development.Lastly,we provide tuition reimbursement for employeespursuing undergraduate and graduate deg

246、rees.Diversity,Equity,and Inclusion(DE&I)We are driven by the belief that diverse skills and experiences produce better outcomes and more innovative solutions toimprove patients lives.We have an ongoing commitment to advancing DE&I throughout our workplace and the communities inwhich we operate.Our

247、leaders lead from the front by creating an environment that fosters a sense of belonging and ignites passionwithin their team.This leader-led approach to building an equitable and inclusive workforce has a longstanding commitment tofostering a workplace that rejects discrimination,celebrates differe

248、nces,and promotes equality.Our DEI framework guides ourlong-term vision and is grounded in the following objectives:Attract and develop employees resembling the diversity of the communities,partners and patients we serveCreate a diverse talent pipeline by fostering awareness of STEM and healthcare c

249、areers for women and ethnically diversegroupsFoster a culture of inclusion and belonging where all employees are valued and empoweredEnhance DE&I understanding and behaviors through education and developmentIncrease awareness and advocate for diversity in medical research and clinical trials through

250、 healthcare partnershipsExplore opportunities to invest in local economic growth by supporting women and ethnically diverse groups,whilecollaborating with our partners to engage communities to promote heart health awarenessOur DE&I efforts are overseen internally by our Chief Human Resources Officer

251、 who works with our leadership to furtheradvance our commitment and programs by fostering employee understanding,intentionality and measurable processes.Thiscommitment is also reflected in the current makeup of our Board of Directors,which helps to set the“tone at the top”for our DE&Iinitiatives.Com

252、pensation and BenefitsCompetitive compensation and benefits are an integral part of our efforts to attract and retain world-class talent.We arecommitted to regularly analyzing and evaluating the effectiveness of our compensation and benefit programs and benchmarkingour programs against the market an

253、d our industry peers.Annual pay increases and other forms of incentive compensation are basedon performance and market evaluation.Performance expectations are communicated to employees at the time of hiring,as well asupon internal transfer or promotion,and documented through our annual performance m

254、anagement process.Benefits for eligible U.S.-based employees include medical,dental and vision insurance;paid leave for vacation,illness andvolunteer time;parental leave,fertility and adoption assistance;a 401(k)retirement plan that includes a company matchingcontribution;a stock purchase plan enabl

255、ing employees to purchase AtriCure stock at a reduced price;and life and disabilityinsurance.Our international employee benefits vary due to local regulations and offerings.We ensure compliance with all statutoryand mandatory benefits which vary by country,such as medical,disability,retirement/pensi

256、on,workers compensation,accident,social benefits and paid leave.None of our employees are represented by a labor union,and we have never experienced anyemployment-related work stoppages.We consider our employee relations to be in good standing.Our attrition rate is historicallylower than the industr

257、y average.AtriCure has a strong company culture,which is reflected in our employee engagement and overallsuccess.Safety for All EmployeesWe are committed to maintaining a safe workplace and promoting all our employees well-being.We have implementedmultiple safety programs and regularly perform safet

258、y hazard evaluations within our facilities.Programs include our EmergencySite Action Plan for emergencies such as fire response,severe weather threats and shelter in place132025/2/12 05:30atrc-20231231https:/www.sec.gov/Archives/edgar/data/1323885/000132388524000016/atrc-20231231.htm19/922025/2/12 0

259、5:30atrc-20231231https:/www.sec.gov/Archives/edgar/data/1323885/000132388524000016/atrc-20231231.htm20/92Table of Contentsincidents,as well as our Certified First Responders safety program that include Red Cross training of employees in CPR,AEDUsage and First Aid practices.We recognize that the use

260、of tobacco is linked to many adverse health effects,including those thatimpact the heart,and we offer our employees tobacco cessation programs.Since 2021,our Ohio office locations are entirelytobacco-and nicotine-free,and to the extent permitted in the states of our other offices,those locations are

261、 also entirely tobacco-and nicotine-free.Available InformationOur principal executive offices are located at 7555 Innovation Way,Mason,Ohio and our telephone number is 513-755-4100.We are subject to the reporting requirements under the Securities Exchange Act of 1934.Consequently,we are required tof

262、ile reports and information with the Securities and Exchange Commission(SEC)including reports on the following forms:Form10-K,Form 10-Q,Form 8-K,and amendments to those reports filed or furnished pursuant to Section 13(a)or 15(d)of theSecurities Exchange Act of 1934.These reports and other informati

263、on concerning us may be accessed through the SECs website athttp:/www.sec.gov.You may also find,free of charge,on our website at http:/,electronic copies of our Form10-Ks,Form 10-Qs,Form 8-Ks and amendments to those reports filed or furnished pursuant to Section 13(a)or 15(d)of theSecurities Exchang

264、e Act of 1934.Such filings are placed on our website as soon as reasonably practicable after they are filed orfurnished,as the case may be,with the SEC.Our charters for our Audit,Compensation,Nominating and Corporate Governance,Strategy,and Compliance,Quality and Risk Committees and our Code of Cond

265、uct are available on our website.In the event thatwe grant a waiver under our Code of Conduct to any of our officers or directors or make any material amendments to the Code ofConduct,we will publish it on our website within four business days.Information on our website is not deemed to be a part of

266、 thisForm 10-K.142025/2/12 05:30atrc-20231231https:/www.sec.gov/Archives/edgar/data/1323885/000132388524000016/atrc-20231231.htm21/92Table of ContentsITEM 1A.RISK FACTORSThe following discussion of risk factors contains forward-looking statements.These risk factors may be important tounderstanding o

267、ther statements in this report.The following information should be carefully considered in addition to the otherinformation set forth in this report,including the Managements Discussion and Analysis of Financial Conditions and Results ofOperations section and Consolidated Financial Statements and ac

268、companying notes.If any of the risks or uncertainties describedbelow actually occur or continue to occur,our business,reputation,financial condition,results of operations,future prospects andstock price could be materially and adversely affected.The risks below are not the only risks we face and add

269、itional risks notcurrently known to us or that we presently deem immaterial may emerge or become material at any time and may negativelyimpact our business,reputation,financial condition,results of operations,future prospects or stock price.The order in which thesefactors appear should not be constr

270、ued to indicate their relative importance or priority.Risk Factors SummaryThe following is a summary of the principal risks that could adversely affect our business,operations,financial results and stockprice.Commercial Execution and Product Performance RisksFailure to achieve widespread market acce

271、ptance domestically may harm operating results.Competition from existing and new products and procedures may decrease our market share.Clinical data may be negative,or our trials may not satisfy requirements of regulatory authorities,slowing or reversing the rateof adoption or reducing use of our pr

272、oducts by the medical community.Reliance on independent distributors to sell our products in some international markets could adversely impact our sales.Industry Condition RisksA prolonged downturn in macroeconomic conditions may materially adversely affect our business.Rising healthcare costs may r

273、esult in efforts by government and private payors to contain or reduce healthcare spending,including reimbursement for procedures that utilize our products.Adverse changes in governmental and third-party payors policies toward coverage and reimbursement for surgical procedureswould harm our ability

274、to promote and sell our products.Operational RisksUnfavorable publicity relating to our business or industry could negatively impact our operations.Reliance upon single and limited source third-party suppliers and service providers could harm our business if such thirdparties cannot provide material

275、s or products or perform services for us in a timely manner.Our manufacturing operations are highly centralized and disruption could harm our business.If we fail to properly manage our anticipated growth,our business could suffer.If we cannot retain our skilled and experienced officers and other emp

276、loyees,or recruit,hire,train and integrate sufficientadditional qualified personnel,our business may suffer.Disruptions of critical information systems or material breaches in the security of our systems could harm our business,customer relations and financial condition.Our insurance may not cover o

277、ur indemnification obligations and other liabilities associated with our operations.Legal&Compliance RisksWe could face substantial penalties if we do not fully comply with federal,state and foreign regulations.We may be subject to fines,injunctions and penalties if we fail to comply with extensive

278、FDA regulations.Unless and until we obtain additional FDA approval for our products,we will not be able to promote them for treatment ofAfib and/or to prevent stroke,and our inability to maintain or grow our business could be harmed.We may be subject to fines,injunctions and penalties if we are foun

279、d to be promoting our products for unapproved or off-label uses.Modifications to our products may require new clearances or approvals by FDA;failure to obtain such clearances or approvalswhere required could result in a recall of the modified products and limitation on future sales until cleared or

280、approved.152025/2/12 05:30atrc-20231231https:/www.sec.gov/Archives/edgar/data/1323885/000132388524000016/atrc-20231231.htm22/92Table of ContentsIf we or our third-party vendors fail to comply with extensive FDA regulations relating to the manufacturing of our productswe may be subject to fines,injun

281、ctions and penalties.Any adverse finding,judgement,settlement or enforcement action against us as a result of the current qui tam lawsuit couldnegatively affect our business.The use of products we sell may result in injuries or other adverse events that lead to product liability claims.Our ability t

282、o compete in the marketplace could be affected if our intellectual property rights fail to provide meaningfulcommercial protection for our products.Litigation and administrative proceedings over patent and other intellectual property rights are common in our industry,andany litigation or claim again

283、st us may cause us to incur substantial costs.We are subject to various regulatory and other risks related to selling our products internationally which could harm ourrevenue.Any allegation or determination of wrongdoing under the Foreign Corrupt Practices Act or other anti-corruption laws couldhave

284、 a material adverse effect on our business.Compliance with European Union medical device regulation may limit our ability to sell our products in European markets.Financial RisksOur quarterly financial results are likely to fluctuate significantly.We have a history of net losses,and we may never bec

285、ome profitable.Governmental authorities may question our intercompany transfer pricing policies or change their laws in a manner that couldincrease our effective tax rate.Our goodwill may become impaired which could adversely affect our financial performance.We may take inventory-related charges as

286、a result of inaccurate forecasting or estimates of product life cycles which wouldnegatively affect our gross margins and results of operations.We are subject to credit risk from our accounts receivable related to our sales.We may be unable to comply with the covenants of our Loan Agreement.Common S

287、tock RisksWe may fail to achieve our publicly announced guidance about our business which could cause a decline in our stock price.Securities analysts may discontinue coverage for our common stock or issue reports which could have a negative impact on themarket price of our common stock.Our common s

288、tock may experience extreme fluctuations in the price and trading volume causing our stockholders to lose someor all of their investment.The sale of material amounts of common stock could encourage short sales by third parties and depress the price of ourcommon stock causing our stockholders to lose

289、 part or all of their investment.Stockholder ownership of our common stock may be diluted if we sell common stock in a capital raising transaction or issueshares in a future acquisition.Anti-takeover provisions in our amended and restated certificate of incorporation and amended and restated bylaws

290、and underDelaware law could inhibit a change in control or a change in management that stockholders consider favorable.Our stockholders must rely on stock appreciation for any return on investment as we do not expect to pay dividends in theforeseeable future.162025/2/12 05:30atrc-20231231https:/www.

291、sec.gov/Archives/edgar/data/1323885/000132388524000016/atrc-20231231.htm23/92Table of ContentsCommercial Execution and Product Performance RisksIf our products do not achieve widespread market acceptance in the United States,our operating results will be harmed,and we may not achieve or sustain prof

292、itability.Our success depends in large part on the medical communitys acceptance of our products in the United States,which is thelargest revenue market in the world for medical devices.Our ablation and LAAM product sales in the United States generate themajority of our revenue.We expect that sales

293、of these products will continue to account for a majority of our revenue for theforeseeable future and that our future revenue will depend on the increasing acceptance by the medical community of our productsas standard of care for treating Afib,managing the LAA and managing pain with Cryo Nerve Blo

294、ck therapy.The U.S.medicalcommunitys acceptance of our products will depend upon our ability to demonstrate the safety and efficacy,advantages,long-termclinical performance and cost-effectiveness of our products.In addition,acceptance of products for the treatment of Afib isdependent upon,among othe

295、r factors,the level of awareness and education of the medical community about the surgical treatmentof Afib and the existence,effectiveness and safety of our products.Market acceptance and adoption of our products for thetreatment of Afib also depends on the level of health insurer(including Medicar

296、e)reimbursement to physicians and hospitals forprocedures using our products.Negative publicity resulting from incidents involving our products,or similar products could have asignificant adverse effect on the overall acceptance of our products.If we encounter difficulties growing the market for our

297、products in the U.S.,we may not be able to increase our revenue enough to achieve or sustain profitability,and our business andoperating results will be seriously harmed.Competition from existing and new products and procedures may decrease our market share and may cause our revenue todecline,and co

298、uld adversely affect our operating results.The medical device industry,including the market for the treatment of Afib,is highly competitive,is subject to rapidtechnological change and can be significantly affected by new product introductions and promotional activities.There is noassurance that our

299、products will compete effectively against drugs,catheter-based ablation,implantable devices,other surgicalablation devices,other products or techniques to occlude the left atrial appendage or other products and techniques to manage post-operative pain.Our products may become obsolete prior to the en

300、d of their anticipated useful lives,or we may introduce newproducts or next-generation products prior to the end of the useful life of our current products,either of which may require us todispose of existing inventory and related capital equipment and/or write off their value or accelerate their de

301、preciation.In addition,other products may be sold at lower prices.Due to the size of our markets,we anticipate that new or existing competitors maydevelop competing products,procedures and/or clinical solutions.There are few barriers to prevent new entrants or existingcompetitors from developing pro

302、ducts to compete directly with ours.Companies also compete with us to attract qualified scientific,technical and commercial personnel as well as funding.Most of our competitors and potential competitors have greater financial,manufacturing,marketing and research and development capabilities than we

303、have,and may obtain FDA approval or clearance fortheir products.In 2023,Medtronic announced the FDA clearance of the Penditure Left Atrial Appendage Exclusion System.Theintroduction of new products,procedures or clinical solutions,or our competitors obtaining FDA approvals or clearances,such asMedtr

304、onics Penditure device,may result in price reductions,reduced margins,loss of market share,or may render our productsobsolete,which could adversely affect our revenue and future profitability.Any clinical data that is generated regarding our products may not be positive,and our current and planned c

305、linical trialsmay not satisfy the requirements of the FDA or other regulatory authorities.Our clinical trials are expensive to conduct,typically taking many years to complete and have uncertain outcomes.Delays inpatient enrollment or failure of patients to consent or continue to participate in a cli

306、nical trial may cause an increase in costs anddelays in the approval and attempted commercialization of our products or result in the failure of the clinical trial.Conductingsuccessful clinical studies may require the enrollment of large numbers of clinical sites and patients,and suitable patients m

307、ay bedifficult to identify and recruit.Patient enrollment in clinical trials and completion of patient participation and follow-up dependson many factors,including the size of the patient population;the nature of the trial protocol;the attractiveness of,or thediscomforts and risks associated with,th

308、e treatments received by enrolled subjects;the availability of appropriate clinical trialinvestigators,support staff,and proximity of patients to clinical sites;and the ability to comply with the eligibility and exclusioncriteria for participation in the clinical trial and patient compliance.Our pro

309、ducts will be measured on their efficacy.We cannot provide any assurance that the data collected during our clinicaltrials will be compelling to the medical community because it may not be scientifically meaningful,may identify unexpected safetyconcerns,and may not demonstrate that procedures utiliz

310、ing our products are an attractive option whenTM172025/2/12 05:30atrc-20231231https:/www.sec.gov/Archives/edgar/data/1323885/000132388524000016/atrc-20231231.htm24/92Table of Contentscompared against data from alternative procedures and products.Negative data could affect the use of our products and

311、 harm ourbusiness and prospects.Conversely,positive results from clinical trial experience should not be relied upon as evidence that any of our products willgain market acceptance or that they will satisfy regulatory requirements for product approval.There can be no assurance that theresults of stu

312、dies conducted by collaborators or other third parties will be viewed favorably or are indicative of our own futurestudy results.We may be required to demonstrate with substantial evidence through well-controlled clinical trials that our productcandidates are either(i)safe and effective for use in a

313、 diverse population for their intended uses or(ii)are substantially equivalentto predicate devices under section 510(k)of the Food,Drug and Cosmetic Act(FDCA).Success in early clinical trials does notmean that future clinical trials will be successful because product candidates in later-stage clinic

314、al trials may fail to demonstratesufficient safety and efficacy to the satisfaction of the FDA and other regulatory authorities despite having progressed throughinitial clinical trials.Our devices and products may not be approved or cleared even though clinical or other data,in our view,are adequate

315、 tosupport an approval or clearance.The FDA or other regulatory authorities may:disagree with our trial design and our interpretation of data from preclinical studies and clinical trials;change requirements for the approval or clearance of a product candidate even after reviewing and providing comme

316、nt on aprotocol for a pivotal clinical trial;approve or clear a product candidate for fewer or more limited indications or uses than we request;grant approval or clearance contingent on the performance of costly post-marketing clinical trials;ornot approve the labeling claims necessary or desirable

317、for the successful commercialization of our product candidates.These factors would affect the rate and extent to which our products are adopted in the medical community.We rely on independent distributors to market and sell our products in certain markets outside of the United States,and afailure of

318、 our independent distributors to successfully market our products or any disruption in their ability to do so mayadversely impact our sales.We depend on independent third-party distributors to sell our products in certain markets outside of the United States,and ifthese distributors do not perform,w

319、e may be unable to maintain or increase international revenue.We intend to grow our businessoutside of the United States,and to do so,we will need to attract additional distributors or hire direct sales personnel to expand theterritories in which we sell our products.Independent distributors may ter

320、minate their relationship with us or devote insufficientsales efforts to our products.We are not able to control our independent distributors,and they may not be successful in marketingour products.In addition,many of our independent distributors outside of the United States initially obtain and mai

321、ntain foreignregulatory approval for sale of our products in their respective countries.Our failure to maintain our relationships with ourindependent distributors outside of the United States,or our failure to recruit and retain additional skilled independent distributorsin these locations,could hav

322、e an adverse effect on our operations.Turnover among our independent distributors,even if replaced,may adversely affect our short-term financial results while we transition to new independent distributors or direct sales personnel.The ability of these independent distributors to market and sell our

323、products could also be adversely affected by unexpected events,including,but not limited to,power failures,nuclear events,local economic and political conditions,natural or other disasters andwar or terrorist activities.In addition,the ability of our independent distributors to borrow money from the

324、ir existing lenders or toobtain credit from other sources to purchase our products may be impaired or our independent distributors could experience asignificant change in their liquidity or financial condition,all of which could impair their ability to distribute our products andeventually lead to d

325、istributor turnover,and may adversely impact our sales.Industry Conditions RisksA prolonged downturn in macroeconomic conditions in which we operate may materially adversely affect our business.A prolonged economic downturn as a result of the collateral effects of inflationary pressures,increases in

326、 interest rates,slower economic activity,a future outbreak of COVID-19 or a similar infectious disease,among other factors,may adverselyimpact our business.Specifically,impacts to procedure volumes and hospital staffing may result in reductions of our revenue andmaterially and adversely affect our r

327、esults of operations and cash flows.Geopolitical issues around the world have impacted theglobal supply chain and could materially adversely affect global economic growth,disrupt discretionary spending habits andgenerally decrease demand for our products and services.Our customers ability to borrow

328、money from their existing lenders or toobtain credit from other sources to purchase our products may be impaired,182025/2/12 05:30atrc-20231231https:/www.sec.gov/Archives/edgar/data/1323885/000132388524000016/atrc-20231231.htm25/92Table of Contentsresulting in a decrease in sales.We may experience d

329、iversion of healthcare resources away from the conduct of clinical trials,including the diversion of hospitals serving as our clinical trial sites.We may also encounter interruption or delays in the operationsof FDA or other regulatory authorities,which may impact review and approval timelines.We ar

330、e unable to predict the extent towhich current or future worldwide economic conditions may impact our business.Healthcare costs have risen significantly over the past decade.There have been and may continue to be proposals bylegislators,regulators and third-party payors to keep,contain or reduce hea

331、lthcare costs.The continuing efforts of governments,insurance companies and other payors of healthcare costs to contain or reduce thesecosts,combined with closer scrutiny of such costs,could lead to patients being unable to obtain approval for payment from thesethird-party payors.The cost containmen

332、t measures that healthcare providers are instituting both in the U.S.and internationallycould harm our business.Some healthcare providers in the U.S.have adopted or are considering a managed care system in whichthe providers contract to provide comprehensive healthcare for a fixed cost per person.He

333、althcare providers may attempt to controlcosts by authorizing fewer elective surgical procedures,eliminating incremental procedure costs or by requiring the use of the leastexpensive devices possible,which could adversely affect the demand for our products or the price at which we can sell ourproducts.Some healthcare providers have sought to consolidate and create new companies with greater market