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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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68-0328265
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(State or other jurisdiction of
incorporation or organization)
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(IRS Employer
Identification No.)
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Title of each class
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Name of each exchange on which registered
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Common Stock, $0.001 par value
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The NASDAQ Stock Market, LLC
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Large accelerated filer
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o
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Accelerated filer
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x
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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PART I
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Page
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Item 1
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Business
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Company Overview
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2
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Market Overview and Opportunity
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2
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Our Strategy
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3
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Our Products
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3
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Our Product Evolution
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4
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Manufacturing Supply
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4
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Marketing and Sales
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5
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Competition
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5
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Clinical Trials and Product Development
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6
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Nellix Acquisition and Private Placement Transaction
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7
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Patents and Proprietary Information
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8
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Third Party Reimbursement
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8
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Government Regulation - Medical Devices
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8
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Government Regulation - Anti-Kickback Statue, Federal False Claims Act, and HIPAA
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9
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Product Liability
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11
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Employees
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11
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General Information
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11
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Item 1A
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Risks Related to our Business
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11
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Risks Related to our Financial Condition
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18
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Risks Related to Regulation of our Industry
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19
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Risks Related to Ownership of our Common Stock
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21
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Item 1B
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Item 2
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Item 3
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Item 4
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Mine Safety Disclosures
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PART II
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Item 5
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Item 6
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Item 7
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Item 7A
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Item 8
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Item 9
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Item 9A
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Item 9B
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Other Information
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PART III
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Item 10
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Item 11
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Item 12
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Item 13
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Item 14
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PART IV
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Item 15
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Schedule II
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Valuation and Qualifying Accounts
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Signatures
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•
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continued market acceptance of our endovascular systems;
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•
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our ability to successfully incorporate the technology obtained as part of the Nellix acquisition into our business;
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•
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the level and availability of third party payor reimbursement for our products;
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•
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our ability to effectively manage our anticipated growth;
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•
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our ability to protect our intellectual property rights and proprietary technologies;
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•
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our ability to operate without infringing the intellectual property rights and proprietary technology of third parties;
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•
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our ability to effectively develop new or complementary technologies;
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•
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development and management of our business and anticipated trends of our business;
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•
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our ability to attract, retain, and motivate qualified personnel;
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•
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our ability to manufacture product to meet demand;
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•
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the nature of regulatory requirements that apply to us, our suppliers, and competitors, and our ability to obtain and maintain any required regulatory approvals;
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•
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our ability to maintain adequate liquidity to fund our operational needs;
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•
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our ability to effectively compete with the products offered by our competitors;
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•
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general macroeconomic and world-wide business conditions; and
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•
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other risks set forth under “Risk Factors” in Item 1A of this Annual Report on Form 10-K.
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Item 1.
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Business
|
•
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The 30-day mortality rate of all patients in the study undergoing EVAR was approximately 1.2%, as compared to 4.8% for open surgical repair.
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•
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Patients treated by EVAR were three times as likely to be discharged to their homes rather than another rehabilitation facility as compared to patients treated with open repair. This results in substantial clinical and economic benefits for patients and payors alike.
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•
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The average hospital stay for patients in the study undergoing EVAR was 3.4 days versus 9.3 days for patients undergoing open surgical repair.
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•
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Focus exclusively on the aorta for the commercialization of innovative products.
|
•
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Design and manufacture devices that are easy to use and result in excellent clinical outcomes.
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•
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Provide exceptional clinical and technical support to physicians through an experienced and knowledgeable sales and marketing organization.
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•
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Anatomical Fixation
. Our ELG Device is unique in that the bifurcated device sits on the patient's natural aortoiliac bifurcation. This provides a solid foundation for the long-term stability of the device. Alternative ELG devices rely on hooks, barbs and radial force to anchor into the aorta (generally referred to as "proximal fixation") near the renal arteries. We believe anatomical fixation inhibits migration due to the
|
•
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Fully Supported
. The main body and limbs of our ELG Device are fully supported by a cobalt chromium alloy stent. The cobalt chromium alloy stent greatly reduces the risk of kinking of the device in even tortuous anatomies, eliminating the need for additional procedures or costly peripheral stents. Kinking may result in reduced blood flow and limb thrombosis.
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•
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Unique, Minimally Invasive Delivery System
. In the majority of procedures, our ELG System requires only a small surgical incision in one leg. The other leg needs only percutaneous placement of a non-surgical introducer sheath, three millimeters in diameter. Our competitors' ELG systems typically require surgical exposure of the femoral artery in both legs to introduce the multiple components. In addition, our unique delivery system permits our technology to be used in patients having small or very tortuous access vessels.
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•
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Preserves Aortic Bifurcation.
Our ELG Device allows for future endovascular procedures when continued access across the aortic bifurcation is required. Approximately 30% to 40% of AAA patients also have peripheral arterial disease (“PAD”). The preferred approach to treat a patient with PAD is to access from one side of the groin and to cross over the aortic bifurcation to treat the lesion on the other side. Our ELG Device is the only one presently available that preserves the physician's ability to go back over the aortic bifurcation for future interventions. This is a meaningful feature of our ELG System, as many AAA patients are today living longer and returning to the hospital for PAD procedures.
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•
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clinical effectiveness;
|
•
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product safety, reliability, and durability;
|
•
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ease of use;
|
•
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sales force experience and relationships; and
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•
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price.
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Manufacturer
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ELG System Name
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Design
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Fixation
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Endologix
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AFX & Intuitrak
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Long main body, short limbs
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Anatomical fixation
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Medtronic
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Endurant® & AneuRx®
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Short main body, long modular limbs
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Radial force, suprarenal stent and barbs
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Cook
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Zenith®
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Short main body, long modular limbs
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Radial force, suprarenal stent and barbs
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WL Gore
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Excluder®
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Short main body, long modular limbs
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Radial force and barbs
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a)
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The healthcare fraud statute prohibits knowingly and willfully executing a scheme to defraud any healthcare benefit program, including private payors. A violation of this statute is a felony and may result in fines, imprisonment, and/or exclusion from government sponsored programs.
|
b)
|
The false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious, or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. A violation of this statute is a felony and may result in fines or imprisonment.
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c)
|
Standards govern the conduct of certain electronic transmission of health care information and to protect the security and privacy of individually identifiable health information maintained or transmitted by health care providers, health plans, and health care clearinghouses. These standards include: (i) Standards for Electronic Transactions and (ii) Standards for Privacy and Security of Individually Identifiable Information.
|
i)
|
The Standards for Electronic Transactions establishes standards for common health care transactions such as claims information, plan eligibility, and payment information. It also establishes standards for the use of electronic signatures, unique identifiers for providers, employers, health plans, and individuals.
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ii)
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The Standards for Privacy of Individually Identifiable Information restrict our use and disclosure of certain individually identifiable health information. The HIPAA privacy and security regulations establish a uniform federal “floor” and do not supersede state laws that are more stringent or provide individuals with greater rights with respect to the privacy or security of, and access to, their records containing patient/private health information (“PHI”). As a result, we are required to comply with both HIPAA privacy regulations and varying state privacy and security laws, which include physical and electronic safeguard requirements. These laws contain significant fines and other penalties for wrongful use or disclosure of PHI.
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Item 1A.
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Risk Factors
|
•
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greater financial and human resources for product development, sales and marketing and patent litigation;
|
•
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greater name recognition;
|
•
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long established relationships with physicians, customers, and third-party payors;
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•
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additional lines of products, and the ability to offer rebates or bundle products to offer greater discounts or incentives;
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•
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more established sales and marketing programs, and distribution networks; and
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•
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greater experience in conducting research and development, manufacturing, clinical trials, preparing regulatory submissions, and obtaining regulatory clearance or approval for products and marketing approved products.
|
•
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the results of future clinical trials of the Nellix Device.
|
•
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the receipt of CE Mark approval of the Nellix Device from our European Union notified body;
|
•
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the receipt of approval from the FDA to sell the Nellix Device in the U.S.;
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•
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obtaining and maintaining patent rights relating to the Nellix technology; and
|
•
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building an effective direct sales and marketing organization in Europe.
|
•
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difficulties in enforcing or defending intellectual property rights;
|
•
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pricing pressure that we may experience internationally;
|
•
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a shortage of high-quality sales people and distributors;
|
•
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changes in third-party reimbursement policies that may require some of the patients who receive our products to directly absorb medical costs or that may necessitate the reduction of the selling prices of our products;
|
•
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the imposition of additional U.S. and foreign governmental controls or regulations;
|
•
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economic instability;
|
•
|
changes in duties and tariffs, license obligations and other non-tariff barriers to trade;
|
•
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the imposition of restrictions on the activities of foreign agents, representatives and distributors;
|
•
|
scrutiny of foreign tax authorities which could result in significant fines, penalties and additional taxes being imposed on us;
|
•
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laws and business practices favoring local companies;
|
•
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longer payment cycles;
|
•
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foreign currency translation adjustments;
|
•
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difficulties in maintaining consistency with our internal guidelines;
|
•
|
difficulties in enforcing agreements and collecting receivables through certain foreign legal systems;
|
•
|
the imposition of costly and lengthy new export licensing requirements;
|
•
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the imposition of U.S. or international sanctions against a country, company, person or entity with whom we do business that would restrict or prohibit continued business with the sanctioned country, company, person or entity; and
|
•
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the imposition of new trade restrictions.
|
•
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the FDA, institutional review boards or other regulatory authorities do not approve a clinical study protocol, force us to modify a previously approved protocol, or place a clinical study on hold;
|
•
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patients do not enroll in, or enroll at the expected rate, or complete a clinical study;
|
•
|
patients or investigators do not comply with study protocols;
|
•
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patients do not return for post-treatment follow-up at the expected rate;
|
•
|
patients experience serious or unexpected adverse side effects for a variety of reasons that may or may not be related to our products such as the advanced stage of co-morbidities that may exist at the time of treatment, causing a clinical study to be put on hold;
|
•
|
sites participating in an ongoing clinical study may withdraw, requiring us to engage new sites;
|
•
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difficulties or delays associated with establishing additional clinical sites;
|
•
|
third-party clinical investigators decline to participate in our clinical studies, do not perform the clinical studies on the anticipated schedule, or are inconsistent with the investigator agreement, clinical study protocol, good clinical practices, and other FDA and Institutional Review Board requirements;
|
•
|
third-party organizations do not perform data collection and analysis in a timely or accurate manner;
|
•
|
regulatory inspections of our clinical studies require us to undertake corrective action or suspend or terminate our clinical studies;
|
•
|
changes in federal, state, or foreign governmental statutes, regulations or policies;
|
•
|
interim results are inconclusive or unfavorable as to immediate and long-term safety or efficacy; or
|
•
|
the study design is inadequate to demonstrate safety and efficacy; or
|
•
|
do not meet the study endpoints.
|
•
|
failure of our supplier to comply with regulatory requirements;
|
•
|
any strike or work stoppage;
|
•
|
disruptions in shipping;
|
•
|
a natural disaster caused by fire, flood or earthquakes; or
|
•
|
a supply shortage experienced by our single source supplier.
|
•
|
we may fail to secure necessary patents prior to or after obtaining regulatory clearances, thereby permitting competitors to market competing products; and
|
•
|
our already-granted patents may be re-examined, re-issued or invalidated.
|
•
|
stop selling, making, or using products that use the disputed intellectual property;
|
•
|
obtain a license from the intellectual property owner to continue selling, making, licensing, or using products, which license may not be available on reasonable terms, or at all;
|
•
|
redesign our products, processes or services; or
|
•
|
subject us to significant liabilities to third parties.
|
•
|
John McDermott, our Chief Executive Officer and Director
|
•
|
Robert D. Mitchell, our President of International
|
•
|
Todd Abraham, our Vice President of Operations
|
•
|
Joseph A. DeJohn, our Vice President of Sales
|
•
|
Janet Fauls, our Vice President of Regulatory and Clinical Affairs
|
•
|
Leo M. Greenstein, our Vice President of Finance and Corporate Controller
|
•
|
Robert J. Krist, our Chief Financial Officer
|
•
|
David Lewis, our Vice President of Europe
|
•
|
Ralf Link, our Vice President of European Sales
|
•
|
Ruth Lyons, our Vice President of Global Marketing
|
•
|
Stefan G. Schreck, Ph.D., our Vice President of Technology
|
•
|
Gary I. Sorsher, our Vice President of Quality
|
•
|
Martin Tyler, our Vice President of International
|
•
|
the possibility that we will pay more than the value we derive from the acquisition, which could result in future non-cash impairment charges;
|
•
|
difficulties in integration of the operations, technologies, and products of the acquired companies, which may require significant attention of our management that otherwise would be available for the ongoing development of our business;
|
•
|
the assumption of certain known and unknown liabilities of the acquired companies; and
|
•
|
difficulties in retaining key relationships with employees, customers, partners, and suppliers of the acquired company.
|
•
|
the results of our commercialization efforts for our existing and future products;
|
•
|
the need for additional capital to fund future development programs;
|
•
|
the costs involved in obtaining and enforcing patents or any litigation by third parties regarding intellectual property;
|
•
|
the establishment of high volume manufacturing and increased sales and marketing capabilities; and
|
•
|
our success in entering into collaborative relationships with other parties.
|
•
|
properly identify and anticipate physicians and patient needs;
|
•
|
develop and introduce new products or product enhancements in a timely manner;
|
•
|
avoid infringing upon the intellectual property rights of third parties;
|
•
|
demonstrate, if required, the safety and efficacy of new products with data from preclinical studies and clinical trials;
|
•
|
obtain the necessary regulatory clearances or approvals for new products or product enhancements;
|
•
|
be fully FDA-compliant with marketing of new devices or modified products;
|
•
|
provide adequate training to potential users of our products;
|
•
|
receive adequate coverage and reimbursement for procedures performed with our products; and
|
•
|
develop an effective and FDA-compliant, dedicated marketing and distribution network.
|
•
|
FDA Regulations (Title 21 CFR);
|
•
|
European Union CE mark requirements;
|
•
|
Medical Device Quality Management System Requirements (ISO 13485:2003);
|
•
|
Occupational Safety and Health Administration requirements; and
|
•
|
California Department of Health Services requirements.
|
•
|
physician acceptance of our products;
|
•
|
the conduct and results of clinical trials;
|
•
|
the timing and expense of obtaining future regulatory approvals;
|
•
|
fluctuations in our expenses associated with expanding our operations;
|
•
|
the introduction of new products by our competitors;
|
•
|
supplier, manufacturing or quality problems with our devices;
|
•
|
the timing of stocking orders from our distributors;
|
•
|
changes in our pricing policies or in the pricing policies of our competitors or suppliers; and
|
•
|
changes in third-party payors' reimbursement policies.
|
•
|
announcements by us or our competitors concerning technological innovations;
|
•
|
introductions of new products;
|
•
|
FDA and foreign regulatory actions;
|
•
|
developments or disputes relating to patents or proprietary rights;
|
•
|
failure of our results of operations to meet the expectations of stock market analysts and investors;
|
•
|
changes in stock market analyst recommendations regarding our common stock;
|
•
|
changes in healthcare policy in the U.S. or other countries; and
|
•
|
general stock market conditions and other factors unrelated to our operating performance.
|
Item 1B.
|
Unresolved Staff Comments
|
Item 2.
|
Properties
|
Item 3.
|
Legal Proceedings
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
|
|
High
|
|
Low
|
||||
Year Ended December 31, 2010
|
|
|
|
||||
First Quarter
|
$
|
5.85
|
|
|
$
|
3.43
|
|
Second Quarter
|
5.28
|
|
|
4.17
|
|
||
Third Quarter
|
4.93
|
|
|
3.76
|
|
||
Fourth Quarter
|
7.53
|
|
|
4.43
|
|
||
Year Ended December 31, 2011
|
|
|
|
||||
First Quarter
|
$
|
7.26
|
|
|
$
|
5.50
|
|
Second Quarter
|
9.30
|
|
|
6.72
|
|
||
Third Quarter
|
11.17
|
|
|
7.64
|
|
||
Fourth Quarter
|
11.95
|
|
|
10.00
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
||||||||||
|
(In thousands, except per share data)
|
||||||||||||||||||
Consolidated Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
$
|
83,417
|
|
|
$
|
67,251
|
|
|
$
|
52,441
|
|
|
$
|
37,664
|
|
|
$
|
27,771
|
|
Cost of goods sold
|
18,746
|
|
|
15,030
|
|
|
13,181
|
|
|
10,380
|
|
|
10,539
|
|
|||||
Gross profit
|
64,671
|
|
|
52,221
|
|
|
39,260
|
|
|
27,284
|
|
|
17,232
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
|
16,738
|
|
|
8,997
|
|
|
4,454
|
|
|
3,512
|
|
|
3,690
|
|
|||||
Clinical and regulatory affairs
|
4,439
|
|
|
2,169
|
|
|
2,115
|
|
|
2,570
|
|
|
2,691
|
|
|||||
Marketing and sales
|
44,655
|
|
|
31,869
|
|
|
26,483
|
|
|
23,794
|
|
|
20,142
|
|
|||||
General and administrative
|
15,525
|
|
|
13,410
|
|
|
8,550
|
|
|
9,455
|
|
|
6,371
|
|
|||||
Contract termination
|
1,730
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
550
|
|
|||||
Total operating expenses
|
83,087
|
|
|
56,445
|
|
|
41,602
|
|
|
39,331
|
|
|
33,444
|
|
|||||
Loss from operations
|
(18,416
|
)
|
|
(4,224
|
)
|
|
(2,342
|
)
|
|
(12,047
|
)
|
|
(16,212
|
)
|
|||||
Other income (expense)
|
(10,400
|
)
|
|
(160
|
)
|
|
(71
|
)
|
|
27
|
|
|
1,139
|
|
|||||
Net loss before income tax
|
(28,816
|
)
|
|
(4,384
|
)
|
|
(2,413
|
)
|
|
(12,020
|
)
|
|
(15,073
|
)
|
|||||
Income tax (expense) benefit
|
86
|
|
|
15,037
|
|
|
(21
|
)
|
|
28
|
|
|
(2
|
)
|
|||||
Net income (loss)
|
$
|
(28,730
|
)
|
|
$
|
10,653
|
|
|
$
|
(2,434
|
)
|
|
$
|
(11,992
|
)
|
|
$
|
(15,075
|
)
|
Basic net income (loss) per share
|
$
|
(0.51
|
)
|
|
$
|
0.22
|
|
|
$
|
(0.05
|
)
|
|
$
|
(0.28
|
)
|
|
$
|
(0.35
|
)
|
Shares used in computing basic net income (loss) per share
|
56,592
|
|
|
48,902
|
|
|
45,194
|
|
|
43,045
|
|
|
42,796
|
|
|||||
Diluted net income (loss) per share
|
$
|
(0.51
|
)
|
|
$
|
0.21
|
|
|
$
|
(0.05
|
)
|
|
$
|
(0.28
|
)
|
|
$
|
(0.35
|
)
|
Shares used in computing diluted net income (loss) per share
|
56,592
|
|
|
50,544
|
|
|
45,194
|
|
|
43,045
|
|
|
42,796
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
December 31,
|
||||||||||||||||||
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, restricted cash and cash equivalents
|
$
|
20,035
|
|
|
$
|
38,191
|
|
|
$
|
24,065
|
|
|
$
|
8,111
|
|
|
$
|
9,228
|
|
Accounts receivable, net
|
$
|
15,542
|
|
|
$
|
12,212
|
|
|
$
|
8,342
|
|
|
$
|
6,371
|
|
|
$
|
4,527
|
|
Total assets
|
$
|
130,255
|
|
|
$
|
134,375
|
|
|
$
|
51,292
|
|
|
$
|
37,263
|
|
|
$
|
40,043
|
|
Total liabilities (excluding contingent consideration payable in common stock)
|
$
|
14,986
|
|
|
$
|
11,243
|
|
|
$
|
8,412
|
|
|
$
|
11,446
|
|
|
$
|
5,368
|
|
Accumulated deficit
|
$
|
(164,240
|
)
|
|
$
|
(135,510
|
)
|
|
$
|
(146,164
|
)
|
|
$
|
(143,730
|
)
|
|
$
|
(131,738
|
)
|
Total stockholders’ equity
|
$
|
76,569
|
|
|
$
|
93,903
|
|
|
$
|
42,880
|
|
|
$
|
25,817
|
|
|
$
|
34,675
|
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Focusing exclusively on the aorta for the commercialization of innovative medical devices.
|
•
|
Designing and manufacturing devices that are easy to use and result in excellent clinical outcomes.
|
•
|
Providing excellent clinical and technical support to physicians through an experienced and knowledgeable sales and marketing organization.
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2011
|
|
2010
|
|
2009
|
|||||||||||||||
Revenue
|
$
|
83,417
|
|
|
100.0
|
%
|
|
$
|
67,251
|
|
|
100.0
|
%
|
|
$
|
52,441
|
|
|
100.0
|
%
|
Cost of goods sold
|
18,746
|
|
|
22.5
|
%
|
|
15,030
|
|
|
22.3
|
%
|
|
13,181
|
|
|
25.1
|
%
|
|||
Gross profit
|
64,671
|
|
|
77.5
|
%
|
|
52,221
|
|
|
77.7
|
%
|
|
39,260
|
|
|
74.9
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Research and development
|
16,738
|
|
|
20.1
|
%
|
|
8,997
|
|
|
13.4
|
%
|
|
4,454
|
|
|
8.5
|
%
|
|||
Clinical and regulatory affairs
|
4,439
|
|
|
5.3
|
%
|
|
2,169
|
|
|
3.2
|
%
|
|
2,115
|
|
|
4.0
|
%
|
|||
Marketing and sales
|
44,655
|
|
|
53.5
|
%
|
|
31,869
|
|
|
47.4
|
%
|
|
26,483
|
|
|
50.5
|
%
|
|||
General and administrative
|
15,525
|
|
|
18.6
|
%
|
|
13,410
|
|
|
19.9
|
%
|
|
8,550
|
|
|
16.3
|
%
|
|||
Distribution contract termination
|
1,730
|
|
|
2.1
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
Total operating expenses
|
83,087
|
|
|
99.6
|
%
|
|
56,445
|
|
|
83.9
|
%
|
|
41,602
|
|
|
79.3
|
%
|
|||
Loss from operations
|
(18,416
|
)
|
|
(22.1
|
)%
|
|
(4,224
|
)
|
|
(6.3
|
)%
|
|
(2,342
|
)
|
|
(4.5
|
)%
|
|||
Total other expense
|
(10,400
|
)
|
|
(12.5
|
)%
|
|
(160
|
)
|
|
(0.2
|
)%
|
|
(71
|
)
|
|
(0.1
|
)%
|
|||
Net loss before income tax
|
(28,816
|
)
|
|
(34.5
|
)%
|
|
(4,384
|
)
|
|
(6.5
|
)%
|
|
(2,413
|
)
|
|
(4.6
|
)%
|
|||
Income tax (expense) benefit
|
86
|
|
|
0.1
|
%
|
|
15,037
|
|
|
22.4
|
%
|
|
(21
|
)
|
|
(0.04
|
)%
|
|||
Net income (loss)
|
$
|
(28,730
|
)
|
|
(34.4
|
)%
|
|
$
|
10,653
|
|
|
15.8
|
%
|
|
$
|
(2,434
|
)
|
|
(4.6
|
)%
|
|
|
Years Ended December 31,
|
|
|
|
|
|||||||||
|
|
2011
|
|
2010
|
|
Variance
|
|
Percent Change
|
|||||||
|
|
(in thousands)
|
|
|
|
|
|||||||||
Revenue
|
|
$
|
83,417
|
|
|
$
|
67,251
|
|
|
$
|
16,166
|
|
|
24.0
|
%
|
|
|
Years Ended December 31,
|
|
|
|
|
|||||||||
|
|
2011
|
|
2010
|
|
Variance
|
|
Percent Change
|
|||||||
|
|
(in thousands)
|
|
|
|
|
|||||||||
Cost of goods sold
|
|
$
|
18,746
|
|
|
$
|
15,030
|
|
|
$
|
3,716
|
|
|
24.7
|
%
|
Gross profit
|
|
64,671
|
|
|
52,221
|
|
|
12,450
|
|
|
23.8
|
%
|
|||
Gross margin percentage (gross profit as a percent of revenue)
|
|
77.5
|
%
|
|
77.7
|
%
|
|
(0.2
|
)%
|
|
|
|
|
Years Ended December 31,
|
|
|
|
|
|||||||||
|
|
2011
|
|
2010
|
|
Variance
|
|
Percent Change
|
|||||||
|
|
(in thousands)
|
|
|
|
|
|||||||||
Research and development
|
|
$
|
16,738
|
|
|
$
|
8,997
|
|
|
$
|
7,741
|
|
|
86.0
|
%
|
Clinical and regulatory affairs
|
|
4,439
|
|
|
2,169
|
|
|
2,270
|
|
|
104.7
|
%
|
|||
Marketing and sales
|
|
44,655
|
|
|
31,869
|
|
|
12,786
|
|
|
40.1
|
%
|
|||
General and administrative
|
|
15,525
|
|
|
13,410
|
|
|
2,115
|
|
|
15.8
|
%
|
|||
Distribution contract termination
|
|
1,730
|
|
|
—
|
|
|
1,730
|
|
|
N/A
|
|
|
|
Years Ended December 31,
|
|
|
|
|
|||||||||
|
|
2010
|
|
2009
|
|
Variance
|
|
Percent Change
|
|||||||
|
|
(in thousands)
|
|
|
|
|
|||||||||
Revenue
|
|
$
|
67,251
|
|
|
$
|
52,441
|
|
|
$
|
14,810
|
|
|
28.2
|
%
|
|
|
Years Ended December 31,
|
|
|
|
|
|||||||||
|
|
2010
|
|
2009
|
|
Variance
|
|
Percent Change
|
|||||||
|
|
(in thousands)
|
|
|
|
|
|||||||||
Cost of goods sold
|
|
$
|
15,030
|
|
|
$
|
13,181
|
|
|
$
|
1,849
|
|
|
14.0
|
%
|
Gross profit
|
|
52,221
|
|
|
39,260
|
|
|
12,961
|
|
|
33.0
|
%
|
|||
Gross margin percentage (gross profit as a percent of revenue)
|
|
77.7
|
%
|
|
74.9
|
%
|
|
2.8
|
%
|
|
|
|
|
Years Ended December 31,
|
|
|
|
|
|||||||||
|
|
2010
|
|
2009
|
|
Variance
|
|
Percent Change
|
|||||||
|
|
(in thousands)
|
|
|
|
|
|||||||||
Research and development
|
|
$
|
8,997
|
|
|
$
|
4,454
|
|
|
$
|
4,543
|
|
|
102.0
|
%
|
Clinical and regulatory affairs
|
|
2,169
|
|
|
2,115
|
|
|
54
|
|
|
2.6
|
%
|
|||
Marketing and sales
|
|
31,869
|
|
|
26,483
|
|
|
5,386
|
|
|
20.3
|
%
|
|||
General and administrative
|
|
13,410
|
|
|
8,550
|
|
|
4,860
|
|
|
56.8
|
%
|
|
December 31, 2011
|
|
December 31, 2010
|
||||
|
(in thousands, except financial metrics data)
|
||||||
Cash and cash equivalents
|
$
|
20,035
|
|
|
$
|
38,191
|
|
Accounts receivable, net
|
$
|
15,542
|
|
|
$
|
12,212
|
|
Total current liabilities
|
$
|
13,949
|
|
|
$
|
11,243
|
|
Working capital surplus (a)
|
$
|
41,155
|
|
|
$
|
48,585
|
|
Days sales outstanding (DSO) (b)
|
68
|
|
|
66
|
|
||
Current ratio (c)
|
4.0
|
|
|
5.3
|
|
•
|
the need for working capital to support our sales growth;
|
•
|
the need for additional capital to fund future development programs;
|
•
|
the need for additional capital to fund our sales force expansion
|
•
|
the need for additional capital to fund strategic acquisitions;
|
•
|
our requirements for additional facility space or manufacturing capacity;
|
•
|
our requirements for additional information technology infrastructure and systems; and
|
•
|
adverse outcomes from current or future litigation and the cost to defend such litigation.
|
|
Payment due by period at December 31, 2011
|
||||||||||||||||||
|
Total
|
|
Less than 1 Year
|
|
1 - 3 Years
|
|
3 - 5 Years
|
|
After 5 Years
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Operating lease obligations
|
$
|
1,783
|
|
|
$
|
653
|
|
|
$
|
1,130
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 8.
|
Financial Statements and Selected Supplementary Data
|
|
December 31,
|
||||||
|
2011
|
|
2010
|
||||
|
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
20,035
|
|
|
$
|
38,191
|
|
Accounts receivable, net of allowance for doubtful accounts of $161 and $118, respectively
|
15,542
|
|
|
12,212
|
|
||
Other receivables
|
405
|
|
|
515
|
|
||
Inventories
|
18,099
|
|
|
8,350
|
|
||
Prepaid expenses and other current assets
|
1,023
|
|
|
560
|
|
||
Total current assets
|
55,104
|
|
|
59,828
|
|
||
Property and equipment, net
|
4,454
|
|
|
2,429
|
|
||
Goodwill
|
27,073
|
|
|
27,073
|
|
||
Intangibles, net
|
43,439
|
|
|
44,863
|
|
||
Deposits and other assets
|
185
|
|
|
182
|
|
||
Total assets
|
$
|
130,255
|
|
|
$
|
134,375
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
6,377
|
|
|
$
|
3,623
|
|
Accrued payroll
|
6,569
|
|
|
5,310
|
|
||
Accrued expenses and other current liabilities
|
1,003
|
|
|
2,310
|
|
||
Total current liabilities
|
13,949
|
|
|
11,243
|
|
||
Deferred income taxes
|
1,029
|
|
|
1,029
|
|
||
Deferred rent
|
8
|
|
|
—
|
|
||
Contingently issuable common stock (Note 10)
|
38,700
|
|
|
28,200
|
|
||
Total liabilities
|
53,686
|
|
|
40,472
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Convertible preferred stock, $0.001 par value; 5,000,000 shares authorized. No shares issued and outstanding.
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value; 75,000,000 shares authorized, 58,577,484 and 56,896,000 shares issued, respectively. 58,082,784 and 56,401,000 shares outstanding respectively.
|
59
|
|
|
57
|
|
||
Additional paid-in capital
|
241,441
|
|
|
230,017
|
|
||
Accumulated other comprehensive loss
|
(30
|
)
|
|
—
|
|
||
Accumulated deficit
|
(164,240
|
)
|
|
(135,510
|
)
|
||
Treasury stock, at cost, 495,000 shares
|
(661
|
)
|
|
(661
|
)
|
||
Total stockholders’ equity
|
76,569
|
|
|
93,903
|
|
||
Total liabilities and stockholders’ equity
|
$
|
130,255
|
|
|
$
|
134,375
|
|
|
Year Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
Revenue
|
$
|
83,417
|
|
|
$
|
67,251
|
|
|
$
|
52,441
|
|
Cost of goods sold
|
18,746
|
|
|
15,030
|
|
|
13,181
|
|
|||
Gross profit
|
64,671
|
|
|
52,221
|
|
|
39,260
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
16,738
|
|
|
8,997
|
|
|
4,454
|
|
|||
Clinical and regulatory affairs
|
4,439
|
|
|
2,169
|
|
|
2,115
|
|
|||
Marketing and sales
|
44,655
|
|
|
31,869
|
|
|
26,483
|
|
|||
General and administrative
|
15,525
|
|
|
13,410
|
|
|
8,550
|
|
|||
Distribution contract termination
|
1,730
|
|
|
—
|
|
|
—
|
|
|||
Total operating costs and expenses
|
83,087
|
|
|
56,445
|
|
|
41,602
|
|
|||
Loss from operations
|
(18,416
|
)
|
|
(4,224
|
)
|
|
(2,342
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest income
|
23
|
|
|
30
|
|
|
48
|
|
|||
Interest expense
|
(32
|
)
|
|
(16
|
)
|
|
(192
|
)
|
|||
Gain on sale of equipment
|
141
|
|
|
—
|
|
|
—
|
|
|||
Other income (expense), net
|
(32
|
)
|
|
(174
|
)
|
|
73
|
|
|||
Change in fair value of contingent consideration related to acquisition (Note 10)
|
(10,500
|
)
|
|
—
|
|
|
—
|
|
|||
Total other expense
|
(10,400
|
)
|
|
(160
|
)
|
|
(71
|
)
|
|||
Net loss before income tax
|
(28,816
|
)
|
|
(4,384
|
)
|
|
(2,413
|
)
|
|||
Income tax (expense) benefit
|
86
|
|
|
15,037
|
|
|
(21
|
)
|
|||
Net income (loss)
|
$
|
(28,730
|
)
|
|
$
|
10,653
|
|
|
$
|
(2,434
|
)
|
Basic net income (loss) per share
|
$
|
(0.51
|
)
|
|
$
|
0.22
|
|
|
$
|
(0.05
|
)
|
Diluted net income (loss) per share
|
$
|
(0.51
|
)
|
|
$
|
0.21
|
|
|
$
|
(0.05
|
)
|
Shares used in computing basic net income (loss) per share
|
56,592
|
|
|
48,902
|
|
|
45,194
|
|
|||
Shares used in computing diluted net income (loss) per share
|
56,592
|
|
|
50,544
|
|
|
45,194
|
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Deficit |
|
Accumulated Other Comprehensive Loss
|
|
Treasury
Stock
|
|
Total Stockholders’
Equity
|
|
Comprehensive
Income (Loss)
|
|||||||||||||||||
|
Issued Shares
|
|
$0.001 Par Value
|
|
||||||||||||||||||||||||||
Balance at December 31, 2008
|
44,365
|
|
|
$
|
44
|
|
|
$
|
170,239
|
|
|
$
|
(143,730
|
)
|
|
$
|
—
|
|
|
$
|
(661
|
)
|
|
$
|
25,892
|
|
|
|
||
Exercise of common stock options
|
238
|
|
|
—
|
|
|
782
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
782
|
|
|
|
||||||||
Employee stock purchase plan
|
489
|
|
|
1
|
|
|
785
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
786
|
|
|
|
||||||||
Sale of common stock
|
3,900
|
|
|
4
|
|
|
14,773
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,777
|
|
|
|
||||||||
Amortization of employee stock compensation expense
|
—
|
|
|
—
|
|
|
2,272
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,272
|
|
|
|
||||||||
Grant of restricted stock
|
160
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
||||||||
Amortization expense of restricted stock
|
—
|
|
|
—
|
|
|
772
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
772
|
|
|
|
||||||||
Amortization expense of non-employee stock options
|
—
|
|
|
—
|
|
|
33
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33
|
|
|
|
||||||||
Comprehensive loss:
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
||||||||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,434
|
)
|
|
—
|
|
|
—
|
|
|
(2,434
|
)
|
|
$
|
(2,434
|
)
|
||||||
Comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(2,434
|
)
|
|||||||||||||
Balance at December 31, 2009
|
49,152
|
|
|
$
|
49
|
|
|
$
|
189,656
|
|
|
$
|
(146,164
|
)
|
|
$
|
—
|
|
|
$
|
(661
|
)
|
|
$
|
42,880
|
|
|
|
||
Exercise of common stock options
|
676
|
|
|
1
|
|
|
2,242
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,243
|
|
|
|
||||||||
Employee stock purchase plan
|
293
|
|
|
—
|
|
|
1,117
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,117
|
|
|
|
||||||||
Sale of common stock
|
3,171
|
|
|
3
|
|
|
14,987
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,990
|
|
|
|
||||||||
Issuance of common stock for acquisition
|
3,199
|
|
|
3
|
|
|
19,385
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,388
|
|
|
|
||||||||
Amortization of employee stock compensation expense
|
—
|
|
|
—
|
|
|
2,215
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,215
|
|
|
|
||||||||
Grant of restricted stock
|
405
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
|
||||||||
Amortization expense of restricted stock
|
—
|
|
|
—
|
|
|
422
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
422
|
|
|
|
||||||||
Amortization expense of non-employee stock options
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
|
||||||||
Comprehensive earnings:
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
||||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
10,653
|
|
|
—
|
|
|
—
|
|
|
10,653
|
|
|
$
|
10,653
|
|
||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
10,653
|
|
|||||||||||||
Balance at December 31, 2010
|
56,896
|
|
|
$
|
57
|
|
|
$
|
230,017
|
|
|
$
|
(135,510
|
)
|
|
$
|
—
|
|
|
$
|
(661
|
)
|
|
$
|
93,902
|
|
|
|
|
|
Exercise of common stock options
|
1,394
|
|
|
2
|
|
|
5,322
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,324
|
|
|
|
||||||||
Employee stock purchase plan
|
287
|
|
|
—
|
|
|
1,965
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,965
|
|
|
|
||||||||
Amortization of employee stock compensation expense
|
—
|
|
|
—
|
|
|
2,851
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,851
|
|
|
|
||||||||
Amortization expense of restricted stock
|
—
|
|
|
—
|
|
|
877
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
877
|
|
|
|
||||||||
Amortization expense of non-employee stock options
|
—
|
|
|
—
|
|
|
409
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
409
|
|
|
|
||||||||
Comprehensive loss:
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
||||||||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(28,730
|
)
|
|
—
|
|
|
—
|
|
|
(28,730
|
)
|
|
$
|
(28,730
|
)
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
|
—
|
|
|
(30
|
)
|
|
(30
|
)
|
|||||||
Comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(28,760
|
)
|
|||||||||||||
Balance at December 31, 2011
|
58,577
|
|
|
$
|
59
|
|
|
$
|
241,441
|
|
|
$
|
(164,240
|
)
|
|
$
|
(30
|
)
|
|
$
|
(661
|
)
|
|
$
|
76,569
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
December 31, 2011
|
|
December 31, 2010
|
|
December 31, 2009
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
(28,730
|
)
|
|
$
|
10,653
|
|
|
$
|
(2,434
|
)
|
Adjustments to reconcile net loss to net cash, provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Bad debt expense
|
62
|
|
|
39
|
|
|
103
|
|
|||
Income tax expense (benefit)
|
(86
|
)
|
|
(15,067
|
)
|
|
—
|
|
|||
Depreciation and amortization
|
2,729
|
|
|
2,444
|
|
|
2,765
|
|
|||
Stock-based compensation
|
4,136
|
|
|
2,546
|
|
|
3,092
|
|
|||
Change in fair value of contingent consideration related to acquisition (Note 10)
|
10,500
|
|
|
—
|
|
|
—
|
|
|||
Gain on sale of equipment
|
(141
|
)
|
|
—
|
|
|
—
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(3,392
|
)
|
|
(3,909
|
)
|
|
(2,074
|
)
|
|||
Inventories
|
(9,801
|
)
|
|
(2,964
|
)
|
|
1,686
|
|
|||
Prepaid expenses and other current assets
|
(153
|
)
|
|
(672
|
)
|
|
29
|
|
|||
Accounts payable
|
700
|
|
|
2,098
|
|
|
353
|
|
|||
Accrued payroll
|
1,597
|
|
|
498
|
|
|
2,183
|
|
|||
Accrued expenses and other current liabilities
|
189
|
|
|
243
|
|
|
(712
|
)
|
|||
Deferred rent
|
8
|
|
|
(22
|
)
|
|
6
|
|
|||
Net cash provided by (used in) operating activities
|
(22,382
|
)
|
|
(4,113
|
)
|
|
4,997
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Decrease in restricted cash equivalents
|
—
|
|
|
—
|
|
|
500
|
|
|||
Cash acquired in Nellix acquisition
|
—
|
|
|
698
|
|
|
—
|
|
|||
Purchases of property and equipment
|
(3,033
|
)
|
|
(861
|
)
|
|
(598
|
)
|
|||
Net cash used in investing activities
|
(3,033
|
)
|
|
(163
|
)
|
|
(98
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from sale of common stock, net of expenses
|
—
|
|
|
14,990
|
|
|
14,777
|
|
|||
Proceeds from sale of common stock under employee stock purchase plan
|
1,965
|
|
|
1,118
|
|
|
786
|
|
|||
Proceeds from exercise of stock options
|
5,324
|
|
|
2,347
|
|
|
782
|
|
|||
Repayments of long-term debt
|
—
|
|
|
(79
|
)
|
|
162
|
|
|||
Repayments under term loan and line of credit facilities
|
—
|
|
|
—
|
|
|
(5,000
|
)
|
|||
Net cash provided by financing activities
|
7,289
|
|
|
18,376
|
|
|
11,507
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(30
|
)
|
|
26
|
|
|
48
|
|
|||
Net decrease in cash and cash equivalents
|
(18,156
|
)
|
|
14,126
|
|
|
16,454
|
|
|||
Cash and cash equivalents, beginning of year
|
38,191
|
|
|
24,065
|
|
|
7,611
|
|
|||
Cash and cash equivalents, end of year
|
$
|
20,035
|
|
|
$
|
38,191
|
|
|
$
|
24,065
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Cash paid during the year for interest
|
$
|
32
|
|
|
$
|
16
|
|
|
$
|
192
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Shares issued for acquisition (Note 10)
|
$
|
—
|
|
|
$
|
19,385
|
|
|
$
|
—
|
|
(a)
|
Description of Business
|
|
Useful Life
|
Office furniture, computer hardware, software, and production equipment
|
Three to seven years
|
Leasehold improvements
|
Shorter of useful life or remaining term of lease, with expected extensions
|
|
Useful Life
|
Goodwill
|
Indefinite lived
|
In-process research and development
|
Indefinite lived until commercial launch of underlying technology, then amortized over its then remaining useful life on a straight-line basis
|
Developed technology
|
Ten years, amortized on a straight-line basis
|
Patent
|
Five years, amortized on a straight-line basis
|
•
|
The sales price for the Company's ELG System (including extensions and accessories) are established with the customer;
|
•
|
The Company's ELG System have been used in an EVAR procedure, or shipped to a distributor, as applicable; and
|
Ending balance, December 31, 2009
|
|
$
|
(97
|
)
|
Bad debt expense
|
|
(39
|
)
|
|
Write offs
|
|
18
|
|
|
Ending balance, December 31, 2010
|
|
$
|
(118
|
)
|
Bad debt expense
|
|
(62
|
)
|
|
Write offs
|
|
19
|
|
|
Ending balance, December 31, 2011
|
|
$
|
(161
|
)
|
|
December 31,
|
||||||
|
2011
|
|
2010
|
||||
Raw materials
|
$
|
3,260
|
|
|
$
|
2,051
|
|
Work in process
|
4,617
|
|
|
1,851
|
|
||
Finished goods
|
10,222
|
|
|
4,448
|
|
||
Inventories
|
$
|
18,099
|
|
|
$
|
8,350
|
|
|
December 31,
|
||||||
|
2011
|
|
2010
|
||||
Furniture and equipment
|
$
|
6,440
|
|
|
$
|
5,216
|
|
Computer hardware and software
|
1,023
|
|
|
801
|
|
||
Leasehold improvements
|
2,459
|
|
|
2,281
|
|
||
Construction in progress (software and related implementation, production equipment, and leasehold improvements)
|
1,133
|
|
|
19
|
|
||
Property and equipment, at cost
|
11,055
|
|
|
8,317
|
|
||
Less: accumulated depreciation and amortization
|
(6,601
|
)
|
|
(5,888
|
)
|
||
Property and equipment, net
|
$
|
4,454
|
|
|
$
|
2,429
|
|
|
December 31,
|
||||||
|
2011
|
|
2010
|
||||
Goodwill
|
$
|
27,073
|
|
|
$
|
27,073
|
|
|
|
|
|
||||
Intangible assets:
|
|
|
|
||||
Indefinite lived intangibles
|
|
|
|
||||
In-process research and development
|
$
|
40,100
|
|
|
$
|
40,100
|
|
Trademarks and trade names
|
2,708
|
|
|
2,708
|
|
||
|
|
|
|
||||
Finite lived intangibles
|
|
|
|
||||
Developed technology
|
$
|
14,050
|
|
|
$
|
14,050
|
|
Accumulated amortization
|
(13,465
|
)
|
|
(12,060
|
)
|
||
Developed technology, net
|
$
|
585
|
|
|
$
|
1,990
|
|
|
|
|
|
||||
Patent
|
100
|
|
|
100
|
|
||
Accumulated amortization
|
(54
|
)
|
|
(35
|
)
|
||
Patent, net
|
46
|
|
|
65
|
|
||
Intangible assets (excluding goodwill), net
|
$
|
43,439
|
|
|
$
|
44,863
|
|
|
Year Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
Cost of goods sold
|
$
|
209
|
|
|
$
|
188
|
|
|
$
|
177
|
|
Research and development & clinical and regulatory affairs
|
866
|
|
|
377
|
|
|
299
|
|
|||
Marketing and sales
|
1,097
|
|
|
919
|
|
|
989
|
|
|||
General and administrative
|
1,740
|
|
|
1,168
|
|
|
1,592
|
|
|||
Total stock-based compensation expense
|
$
|
3,912
|
|
|
$
|
2,652
|
|
|
$
|
3,057
|
|
|
Year Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
Average expected option life (in years) (a)
|
6.0
|
|
|
6.0
|
|
|
5.5
|
|
|||
Volatility (b)
|
56.6
|
%
|
|
56.4
|
%
|
|
55.8
|
%
|
|||
Risk-free interest rate (c)
|
2.0
|
%
|
|
2.4
|
%
|
|
2.5
|
%
|
|||
Dividend Yield (d)
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|||
Weighted-average grant-date fair value per stock option
|
$
|
8.38
|
|
|
$
|
4.53
|
|
|
$
|
3.56
|
|
|
Outstanding
|
|
Exercisable
|
|||||||||||||
Range of Exercise Prices
|
Granted
Stock Options
Outstanding
|
|
Weighted-
Average
Remaining
Contractual
Life (Years)
|
|
Weighted-
Average
Exercise
Price
|
|
Granted
Stock Options
Exercisable
|
|
Weighted-
Average
Exercise
Price
|
|||||||
$1.42 — $2.25
|
266,688
|
|
|
6.8
|
|
|
$
|
2.05
|
|
|
207,627
|
|
|
$
|
2.05
|
|
$2.26 — $2.62
|
304,279
|
|
|
6.3
|
|
|
2.55
|
|
|
271,675
|
|
|
2.55
|
|
||
$2.67 — $2.69
|
442,065
|
|
|
6.4
|
|
|
2.67
|
|
|
388,420
|
|
|
2.67
|
|
||
$2.75 — $3.16
|
326,602
|
|
|
6.2
|
|
|
2.87
|
|
|
315,873
|
|
|
2.87
|
|
||
$3.35 — $3.45
|
284,706
|
|
|
5.1
|
|
|
3.41
|
|
|
254,589
|
|
|
3.41
|
|
||
$3.46 — $3.90
|
423,248
|
|
|
6.6
|
|
|
3.56
|
|
|
239,333
|
|
|
3.62
|
|
||
$3.92 — $4.31
|
332,397
|
|
|
7.0
|
|
|
4.13
|
|
|
153,623
|
|
|
4.10
|
|
||
$4.32 — $4.51
|
1,088,425
|
|
|
7.7
|
|
|
4.39
|
|
|
495,361
|
|
|
4.36
|
|
||
$4.56 — $5.59
|
483,474
|
|
|
5.5
|
|
|
5.26
|
|
|
288,343
|
|
|
5.18
|
|
||
$5.72 — $7.12
|
556,304
|
|
|
6.0
|
|
|
6.24
|
|
|
255,131
|
|
|
6.09
|
|
||
$7.14 — $8.26
|
731,018
|
|
|
9.3
|
|
|
8.04
|
|
|
—
|
|
|
—
|
|
||
$8.57 — $11.68
|
317,328
|
|
|
9.7
|
|
|
10.06
|
|
|
12,500
|
|
|
11.53
|
|
||
$1.42 — $11.68
|
5,556,534
|
|
|
7.1
|
|
|
$
|
4.89
|
|
|
2,882,475
|
|
|
$
|
3.74
|
|
|
Years Ended December 31,
|
||||||||||||||||
|
2011
|
|
2010
|
||||||||||||||
|
Number of
Stock Options
|
|
Weighted
Average
Exercise Price
|
|
Aggregate Intrinsic Value*
|
|
Number of
Stock Options
|
|
Weighted
Average
Exercise Price
|
||||||||
Outstanding — January 1
|
5,914,884
|
|
|
$
|
3.91
|
|
|
|
|
5,466,144
|
|
|
$
|
3.71
|
|
||
Granted
|
1,264,333
|
|
|
8.38
|
|
|
|
|
1,424,376
|
|
|
4.53
|
|
||||
Exercised
|
1,393,794
|
|
|
3.84
|
|
|
|
|
598,840
|
|
|
3.92
|
|
||||
Forfeited
|
228,889
|
|
|
5.29
|
|
|
|
|
357,196
|
|
|
3.18
|
|
||||
Expired
|
—
|
|
|
—
|
|
|
|
|
19,600
|
|
|
7.01
|
|
||||
Outstanding — December 31
|
5,556,534
|
|
|
$
|
4.89
|
|
|
$
|
36,633
|
|
|
5,914,884
|
|
|
$
|
3.91
|
|
Vested — December 31
|
2,882,475
|
|
|
$
|
3.74
|
|
|
|
|
3,437,992
|
|
|
$
|
3.81
|
|
||
Vested and Expected to Vest — December 31
|
4,754,316
|
|
|
|
|
|
|
|
|
|
|
Number of
Restricted Stock Awards
|
|
Weighted Average
Fair
Value per Share at Grant Date
|
|
Grant Date Fair Value
|
|||||
Unvested as of December 31, 2008
|
525,000
|
|
|
|
|
|
||||
Granted
|
160,000
|
|
|
$
|
3.25
|
|
|
$
|
520
|
|
Unvested as of December 31, 2009
|
685,000
|
|
|
|
|
|
||||
Granted
|
518,045
|
|
|
$
|
5.95
|
|
|
$
|
3,082
|
|
Cancelled
|
(35,965
|
)
|
|
|
|
|
||||
Vested
|
(575,625
|
)
|
|
|
|
|
||||
Unvested as of December 31, 2010
|
591,455
|
|
|
|
|
|
||||
Granted
|
34,000
|
|
|
$
|
6.19
|
|
|
$
|
210
|
|
Canceled
|
(6,303
|
)
|
|
|
|
|
||||
Vested
|
(35,851
|
)
|
|
|
|
|
||||
Unvested as of December 31, 2011
|
583,301
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
Net income (loss)
|
$
|
(28,730
|
)
|
|
$
|
10,653
|
|
|
$
|
(2,434
|
)
|
Weighted average shares - basic
|
56,592
|
|
|
48,902
|
|
|
45,194
|
|
|||
Net income (loss) per share - basic
|
$
|
(0.51
|
)
|
|
$
|
0.22
|
|
|
$
|
(0.05
|
)
|
Weighted average shares - diluted
|
56,592
|
|
|
50,544
|
|
|
45,194
|
|
|||
Net income (loss) per share - diluted
|
$
|
(0.51
|
)
|
|
$
|
0.21
|
|
|
$
|
(0.05
|
)
|
|
Years Ended December 31,
|
|||||||
|
2011
|
|
2010
|
|
2009
|
|||
Common stock options
|
3,127
|
|
|
—
|
|
|
965
|
|
|
Years Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
United States
|
$
|
71,695
|
|
|
$
|
55,443
|
|
|
$
|
43,682
|
|
|
|
|
|
|
|
||||||
Europe:
|
|
|
|
|
|
||||||
Direct
|
839
|
|
|
—
|
|
|
—
|
|
|||
Distributor
|
3,339
|
|
|
4,402
|
|
|
3,028
|
|
|||
Total Europe
|
$
|
4,178
|
|
|
$
|
4,402
|
|
|
$
|
3,028
|
|
|
|
|
|
|
|
||||||
Rest of World ("ROW"):
|
|
|
|
|
|
||||||
Mexico and South America
|
4,395
|
|
|
4,072
|
|
|
2,861
|
|
|||
Asia
|
3,149
|
|
|
3,334
|
|
|
2,870
|
|
|||
Total ROW
|
$
|
7,544
|
|
|
$
|
7,406
|
|
|
$
|
5,731
|
|
|
|
|
|
|
|
||||||
Revenue
|
$
|
83,417
|
|
|
$
|
67,251
|
|
|
$
|
52,441
|
|
2012
|
$
|
653
|
|
2013
|
656
|
|
|
2014
|
474
|
|
|
2015 and thereafter
|
—
|
|
|
|
$
|
1,783
|
|
Independent Distributor's Country of Operation
|
|
Balance Included within Accounts Receivable, net, as of December 31, 2011
|
||
Italy
|
|
$
|
971
|
|
Greece
|
|
477
|
|
|
Total
|
|
$
|
1,448
|
|
|
For the years ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
Payments from the Company to AHH:
|
|
|
|
|
|
||||||
Physician and clinical research expenses
|
$
|
209
|
|
|
$
|
114
|
|
|
$
|
111
|
|
|
|
|
|
|
|
||||||
Company revenue derived from AHH
|
$
|
912
|
|
|
$
|
1,064
|
|
|
$
|
874
|
|
|
Fair Value of Contingently Issuable Common Stock
|
||
December 31, 2010
|
$
|
28,200
|
|
Fair value adjustment of Contingent Payment through December 31, 2011
|
10,500
|
|
|
December 31, 2011
|
$
|
38,700
|
|
|
Years Ended December 31,
|
||||||
|
2011
|
|
2010
|
||||
U.S.
|
$
|
(26,062
|
)
|
|
$
|
(4,384
|
)
|
Foreign (Europe)
|
(2,754
|
)
|
|
—
|
|
||
Net loss before income tax
|
$
|
(28,816
|
)
|
|
$
|
(4,384
|
)
|
|
Years Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
(148
|
)
|
|
$
|
49
|
|
|
$
|
1
|
|
State
|
27
|
|
|
20
|
|
|
20
|
|
|||
Foreign
|
35
|
|
|
—
|
|
|
—
|
|
|||
|
(86
|
)
|
|
69
|
|
|
21
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
—
|
|
|
(13,634
|
)
|
|
—
|
|
|||
State
|
—
|
|
|
(1,472
|
)
|
|
—
|
|
|||
Income tax expense (benefit)
|
$
|
(86
|
)
|
|
$
|
(15,037
|
)
|
|
$
|
21
|
|
|
Years Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
Income tax benefit at federal statutory rate
|
$
|
(9,797
|
)
|
|
$
|
(1,490
|
)
|
|
$
|
(827
|
)
|
State income tax expense (benefit) net of federal benefit
|
18
|
|
|
(1,458
|
)
|
|
20
|
|
|||
Meals and entertainment
|
264
|
|
|
182
|
|
|
114
|
|
|||
Research and development credits
|
(342
|
)
|
|
(327
|
)
|
|
(117
|
)
|
|||
Stock-based compensation
|
421
|
|
|
684
|
|
|
471
|
|
|||
Contingent consideration
|
3,570
|
|
|
—
|
|
|
—
|
|
|||
Foreign tax rate differential
|
1,025
|
|
|
—
|
|
|
—
|
|
|||
Net change in valuation allowance
|
4,097
|
|
|
(13,974
|
)
|
|
361
|
|
|||
Other, net
|
658
|
|
|
1,346
|
|
|
(1
|
)
|
|||
Income tax expense (benefit)
|
$
|
(86
|
)
|
|
$
|
(15,037
|
)
|
|
$
|
21
|
|
|
Years Ended December 31,
|
||||||
|
2011
|
|
2010
|
||||
Net operating loss carryforwards
|
$
|
53,366
|
|
|
$
|
48,976
|
|
Accrued expenses
|
474
|
|
|
503
|
|
||
Tax credits
|
8,953
|
|
|
8,673
|
|
||
Bad debt
|
61
|
|
|
44
|
|
||
Depreciation and amortization
|
758
|
|
|
672
|
|
||
Inventory
|
327
|
|
|
85
|
|
||
Capitalized research and development
|
31
|
|
|
89
|
|
||
Developed technology and trademark
|
(15,319
|
)
|
|
(15,855
|
)
|
||
Trademarks and tradenames
|
(1,029
|
)
|
|
(1,029
|
)
|
||
Deferred compensation
|
1,343
|
|
|
2,210
|
|
||
Other
|
150
|
|
|
226
|
|
||
Net deferred tax assets
|
49,115
|
|
|
44,594
|
|
||
Valuation allowance
|
(50,144
|
)
|
|
(45,623
|
)
|
||
Net deferred tax liability
|
$
|
(1,029
|
)
|
|
$
|
(1,029
|
)
|
Three Months Ended:
|
Revenue
|
|
Cost of goods sold
|
|
Operating expenses
|
|
Net income (loss)
|
|
Basic income (loss) per share
|
|
Diluted income (loss) per share
|
||||||||||||
December 31, 2011
|
$
|
23,392
|
|
|
$
|
5,394
|
|
|
$
|
21,262
|
|
|
$
|
(3,665
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(0.06
|
)
|
September 30, 2011
|
22,302
|
|
|
4,829
|
|
|
22,622
|
|
|
(5,149
|
)
|
|
(0.12
|
)
|
|
(0.12
|
)
|
||||||
June 30, 2011
|
19,175
|
|
|
4,150
|
|
|
20,202
|
|
|
(5,177
|
)
|
|
(0.24
|
)
|
|
(0.24
|
)
|
||||||
March 31, 2011
|
18,548
|
|
|
4,373
|
|
|
19,000
|
|
|
(4,825
|
)
|
|
(0.09
|
)
|
|
(0.09
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2010
|
$
|
19,243
|
|
|
$
|
4,236
|
|
|
$
|
18,315
|
|
|
$
|
11,724
|
|
|
$
|
0.23
|
|
|
$
|
0.22
|
|
September 30, 2010
|
17,874
|
|
|
3,822
|
|
|
14,578
|
|
|
(466
|
)
|
|
(0.01
|
)
|
|
(0.01
|
)
|
||||||
June 30, 2010
|
15,654
|
|
|
3,612
|
|
|
12,229
|
|
|
(380
|
)
|
|
(0.01
|
)
|
|
(0.01
|
)
|
||||||
March 31, 2010
|
14,480
|
|
|
3,361
|
|
|
11,323
|
|
|
(225
|
)
|
|
(0.00)
|
|
|
(0.00)
|
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Plan Category
|
Number of Securities
to be Issued upon
Exercise of
Outstanding Options
(a)
|
|
Weighted Average
Exercise Price of
Outstanding Options
(b)
|
|
Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation
Plans (Excluding
Securities Reflected
in Column A)
(c)
|
||||
Equity compensation plans approved by security holders:
|
|
|
|
|
|
||||
2006 Stock Incentive Plan
|
5,107,735
|
|
|
$
|
4.75
|
|
|
295,081
|
|
1996 Stock Option/ Stock Issuance Plan
|
518,100
|
|
|
$
|
5.62
|
|
|
—
|
|
2010 Stock Acquisition Plan
|
514,000
|
|
|
$
|
—
|
|
|
—
|
|
2006 Employee Stock Purchase Plan
|
—
|
|
|
$
|
—
|
|
|
451,117
|
|
Total
|
6,139,835
|
|
|
$
|
4.42
|
|
|
746,198
|
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accountant Fees and Services
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
Column A
|
Column B
|
|
Column C
|
|
Column D
|
|
Column E
|
||||||||||||
|
|
|
Additions
(Reductions)
|
|
|
|
|
||||||||||||
Description
|
Balance at
Beginning of
Period
|
|
Additions to Bad Debt Expense or Deferred Tax Asset
|
|
Charged
to Other
Accounts (2)
|
|
Deductions(1),(2)
|
|
Balance at
End of
Period
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Year ended December 31, 2011
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
$
|
118
|
|
|
$
|
62
|
|
|
$
|
—
|
|
|
$
|
(19
|
)
|
|
$
|
161
|
|
Income tax valuation allowance
|
$
|
45,623
|
|
|
$
|
4,521
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
50,144
|
|
Year ended December 31, 2010
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
$
|
97
|
|
|
$
|
39
|
|
|
$
|
—
|
|
|
$
|
(18
|
)
|
|
$
|
118
|
|
Income tax valuation allowance
|
$
|
47,990
|
|
|
$
|
—
|
|
|
$
|
15,106
|
|
|
$
|
(17,473
|
)
|
|
$
|
45,623
|
|
Year ended December 31, 2009
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
$
|
72
|
|
|
$
|
103
|
|
|
$
|
—
|
|
|
$
|
(78
|
)
|
|
$
|
97
|
|
Income tax valuation allowance
|
$
|
47,565
|
|
|
$
|
425
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
47,990
|
|
(1)
|
Deductions represent the actual write-off of accounts receivable balances.
|
(2)
|
Represents recording of deferred tax liability that is charged to goodwill related to the Nellix acquisition and associated release of valuation allowance.
|
Exhibit
|
|
|
|
Number
|
|
Description
|
|
|
|
|
|
2.1
|
|
|
Agreement and Plan of Merger and Reorganization, dated October 27, 2010, by and among Endologix, Inc., Nepal Acquisition Corporation, Nellix, Inc., certain of Nellix, Inc.’s stockholders listed therein and Essex Woodlands Health Ventures, Inc., as representative of Nellix, Inc.’s stockholders (Incorporated by reference to Exhibit 2.1 to Endologix, Inc. Current Report on Form 8-K, filed with the SEC on October 27, 2010).
|
|
|
|
|
3.1
|
|
|
Amended and Restated Certificate of Incorporation (Incorporated by reference to Exhibit 3.1 to Endologix, Inc. Quarterly Report on Form 10-Q, filed with the SEC on July 28, 2009).
|
|
|
|
|
3.2
|
|
|
Amended and Restated Bylaws, as amended (Incorporated by reference to Exhibit 3.1 to Endologix, Inc. Current Report on Form 8-K, filed with the SEC on December 14, 2010).
|
|
|
|
|
4.1
|
|
|
Specimen Certificate of Common Stock (Incorporated by reference to Exhibit 4.1 to Amendment No. 2 to Endologix, Inc. Registration Statement on Form S-1, No. 333-04560, filed with the SEC on June 10, 1996).
|
|
|
|
|
10.1
|
(1)
|
|
1997 Supplemental Stock Option Plan (Incorporated by reference to Exhibit 99.1 to Endologix, Inc. Registration Statement on Form S-8, No. 333-42161, filed with the SEC on December 12, 1997).
|
|
|
|
|
10.2
|
(1)
|
|
1996 Stock Option/Stock Issuance Plan (Incorporated by reference to Exhibit 4.1 to Endologix, Inc. Registration Statement on Form S-8, No. 333-122491, filed with the SEC on February 2, 2005).
|
|
|
|
|
10.3
|
(1)
|
|
2006 Stock Incentive Plan (Incorporated by reference to Exhibit 10.1 to Endologix, Inc. Current Report on Form 8-K, filed with the SEC on May 26, 2010).
|
|
|
|
|
10.4
|
(1)
|
|
Form of Stock Option Agreement under 2006 Stock Incentive Plan (Incorporated by reference to Exhibit 10.1 to Endologix, Inc. Quarterly Report on Form 10-Q, File No. 000-28440, filed with the SEC on November 9, 2006).
|
|
|
|
|
10.5
|
(1)
|
|
Form of Restricted Stock Award Agreement under 2006 Stock Incentive Plan (Incorporated by reference to Exhibit 10.2 to Endologix, Inc. Quarterly Report on Form 10-Q, File No. 000-28440, filed with the SEC on November 9, 2006).
|
|
|
|
|
10.6
|
(1)
|
|
2006 Employee Stock Purchase Plan (Incorporated by reference to Exhibit 10.1 to Endologix, Inc. Current Report on Form 8-K, filed with the SEC on June 17, 2009).
|
|
|
|
|
10.7
|
|
|
Form of Indemnification Agreement entered into with Endologix, Inc. officers and directors (Incorporated by reference to Exhibit 10.41 to Endologix Quarterly Report on Form 10-Q, File No. 000-28440, filed with the SEC on November 13, 2002).
|
|
|
|
|
10.8
|
|
|
Standard Industrial/Commercial Single-Tenant Lease — Net, dated November 2, 2004, by and between Endologix, Inc. and Del Monico Investments, Inc. (Incorporated by reference to Exhibit 10.46 to Endologix, Inc. Current Report on Form 8-K, File No. 000-28440, filed with the SEC on November 24, 2004).
|
10.8.1
|
|
|
Addendum No. 2 to Standard Industrial/Commercial Single-Tenant Lease — Net, by and between Endologix, Inc. and Del Monico Investments, Inc., dated June 9, 2009 (Incorporated by reference to Exhibit 10.1 to Endologix, Inc. Quarterly Report on Form 10-Q, filed with the SEC on November 2, 2009).
|
|
|
|
|
||
10.9
|
(1)
|
|
|
Offer Letter, dated April 28, 2008, between Endologix, Inc. and John McDermott (Incorporated by reference to Exhibit 10.1 to Endologix Current Report on Form 8-K, filed with the SEC on May 16, 2008).
|
|
|
|
||
10.10
|
(1)
|
|
|
Employment Agreement, dated as of December 29, 2008, by and between Endologix, Inc. and John McDermott (Incorporated by reference to Exhibit 10.1 to Endologix Current Report on Form 8-K, filed with the SEC on January 2, 2009).
|
|
|
|
||
10.11
|
(1)
|
|
|
Employment Agreement, dated as of December 29, 2008, by and between Endologix, Inc. and Robert J. Krist (Incorporated by reference to Exhibit 10.2 to Endologix Current Report on Form 8-K, filed with the SEC on January 2, 2009).
|
|
|
|
||
10.12
|
(1)
|
|
|
Employment Agreement, dated as of December 29, 2008, by and between Endologix, Inc. and Stefan G. Schreck, Ph.D. (Incorporated by reference to Exhibit 10.3 to Endologix, Inc. Current Report on Form 8-K, filed with the SEC on January 2, 2009).
|
|
|
|
||
10.13
|
(1)
|
|
|
Employment Agreement, dated as of December 29, 2008, by and between Endologix, Inc. and Janet Fauls (Incorporated by reference to Exhibit 10.4 to Endologix, Inc. Current Report on Form 8-K, filed with the SEC on January 2, 2009).
|
|
|
|
||
10.14
|
|
|
Standard Industrial/Commercial Multi -Tenant Lease — Net, by and between Endologix, Inc. and Four-In-One Associates, dated August 28, 2009 (Incorporated by reference to Exhibit 10.2 to Endologix, Inc. Quarterly Report on Form 10-Q, filed with the SEC on November 2, 2009).
|
|
|
|
|
||
10.15
|
|
|
Credit Agreement, dated October 30, 2009, by and between Endologix, Inc. and Wells Fargo Bank, National Association (Incorporated by reference to Exhibit 10.16 to Endologix, Inc. Annual Report on Form 10-K, filed with the SEC on March 5, 2010).
|
|
|
|
|
||
10.15.1
|
† (2)
|
|
|
Third Amendment to Credit Agreement, dated February 20, 2012, by and between Endologix, Inc. and Wells Fargo Bank, National Association.
|
10.16
|
(1)
|
|
|
Employment Agreement, dated as of April 13, 2009, by and between Endologix, Inc. and Joseph DeJohn (Incorporated by reference to Exhibit 10.17 to Endologix, Inc. Annual Report on Form 10-K, filed with the SEC on March 5, 2010).
|
|
|
|
||
10.17
|
|
|
Securities Purchase Agreement, dated as of October 27, 2010, by and between Endologix, Inc. and Essex Woodlands Health Ventures Fund VII, L.P. (Incorporated by reference to Exhibit 10.1 to Endologix, Inc. Current Report on Form 8-K, filed with the SEC on October 27, 2010).
|
|
|
|
|
|
|
10.17.1
|
|
|
Amendment to Securities Purchase Agreement, dated as of December 9, 2010, by and between Endologix, Inc. and Essex Woodlands Health Ventures Fund VII, L.P. (Incorporated by reference to Exhibit 10.1 to Endologix, Inc. Current Report on Form 8-K, filed with the SEC on December 14, 2010).
|
|
|
|
|
|
|
10.18
|
(1
|
)
|
|
Employment Agreement, dated as of December 10, 2010, by and between Endologix, Inc. and Robert D. Mitchell (Incorporated by reference to Exhibit 10.2 to Endologix, Inc. Current Report on Form 8-K, filed with the SEC on December 14, 2010).
|
|
|
|
|
|
10.19
|
† (2)
|
|
|
Cross License Agreement dated as of October 26, 2011, by and between Endologix, Inc. and Bard Peripheral Vascular, Inc.
|
|
|
|
|
|
14
|
|
|
Code of Ethics for Chief Executive Officer and Principal Financial Officers (Incorporated by reference to Exhibit 14 to Endologix, Inc. Annual Report on Form 10-K, No. 000-28440, filed with the SEC on March 26, 2004).
|
|
|
|
|
||
21.1
|
(2
|
)
|
|
List of Subsidiaries.
|
|
|
|
||
23.1
|
(2
|
)
|
|
Consent of Independent Registered Public Accounting Firm.
|
|
|
|
||
24.1
|
(2
|
)
|
|
Power of Attorney (included on signature page hereto).
|
|
|
|
||
31.1
|
(2
|
)
|
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934.
|
|
|
|
||
31.2
|
(2
|
)
|
|
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934.
|
|
|
|
||
32.1
|
(3
|
)
|
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14(b)/15d-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350.
|
|
|
|
||
32.2
|
(3
|
)
|
|
Certification of Chief Financial Officer Pursuant to Rule 13a-14(b)/15d-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350.
|
|
|
|
|
|
101.INS
|
(4
|
)
|
|
XBRL Instance Document
|
|
|
|
|
|
101.SCH
|
(4
|
)
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
101.CAL
|
(4
|
)
|
|
XBRL Taxonomy Extension Calculation Link Base Document
|
|
|
|
|
|
101.DEF
|
(4
|
)
|
|
XBRL Taxonomy Extension Definition Link Base Document
|
|
|
|
|
|
101.LAB
|
(4
|
)
|
|
XBRL Taxonomy Extension Label Link Base Document
|
101.PRE
|
(4
|
)
|
|
XBRL Taxonomy Extension Presentation Link Base Document
|
†
|
Portions of this exhibit are omitted and were filed separately with the Securities and Exchange Commission pursuant to Endologix application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934.
|
(1)
|
These exhibits are identified as management contracts or compensatory plans or arrangements of Endologix pursuant to Item 15(a)(3) of Form 10-K.
|
(2)
|
Filed herewith
|
(3)
|
Furnished herewith and not "filed" for purposes of Section 18 of the Securities Exchange Act of 1934.
|
(4)
|
Furnished herewith and not "filed" for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934.
|
ENDOLOGIX, INC.
|
||
|
|
|
By:
|
|
/
S
/ J
OHN
M
C
D
ERMOTT
|
|
|
John McDermott
Chief Executive Officer and Director
(Principal Executive Officer)
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
/s/ JOHN McDERMOTT
|
|
Chief Executive Officer and Director
|
|
March 6, 2012
|
(John McDermott)
|
|
(Principal Executive Officer)
|
|
|
|
|
|
||
/s/ ROBERT J. KRIST
|
|
Chief Financial Officer and Secretary
|
|
March 6, 2012
|
(Robert J. Krist)
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
||
/s/ FRANKLIN D. BROWN
|
|
Chairman of the Board
|
|
March 6, 2012
|
(Franklin D. Brown)
|
|
|
|
|
|
|
|
||
/s/ RODERICK DE GREEF
|
|
Director
|
|
March 6, 2012
|
(Roderick de Greef)
|
|
|
|
|
|
|
|
||
/s/ DAN LEMAITRE
|
|
Director
|
|
March 6, 2012
|
(Dan Lemaitre)
|
|
|
|
|
|
|
|
||
/s/ THOMAS C. WILDER
|
|
Director
|
|
March 6, 2012
|
(
Thomas C. Wilder
)
|
|
|
|
|
|
|
|
||
/s/ GUIDO J. NEELS
|
|
Director
|
|
March 6, 2012
|
(
Guido J. Neels
)
|
|
|
|
|
|
|
|
||
/s/ GREGORY D. WALLER
|
|
Director
|
|
March 6, 2012
|
(Gregory D. Waller)
|
|
|
|
|
|
ENDOLOGIX, INC.
|
|
|
|
|
|
By:
/S/ ROBERT KRIST
|
|
|
|
Title:
CFO
|
|
|
|
|
|
NELLIX, INC.
|
|
|
|
|
|
By:
/S/ JOHN MCDERMOTT
|
|
|
|
Title:
Officer and Director
|
|
|
|
|
|
WELLS FARGO BANK, NATIONAL ASSOCIATION
|
|
|
|
|
|
By:
/S/ JASON WELLS
|
|
|
|
Title:
Vice President
|
1.
|
CVD/RMS Acquisition Corp., a Delaware corporation.
|
2.
|
Endologix Deutschland GmbH, a German corporation.
|
3.
|
Nellix, Inc., a Delaware corporation.
|
4.
|
ELGX International Holdings C.V., a Dutch partnership.
|
5.
|
ELGX International Holdings GP, a Cayman Islands company.
|
6.
|
Endologix International Holdings B.V., a Dutch corporation.
|
7.
|
Endologix International IP, a Cayman Islands company.
|
8.
|
Endologix International B.V., a Dutch corporation.
|
1.
|
I have reviewed this Annual Report on Form 10-K of the Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ John McDermott
|
John McDermott
|
Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K of the Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Robert J. Krist
|
Robert J. Krist
|
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ John McDermott
|
John McDermott
|
Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Robert J. Krist
|
Robert J. Krist
|
Chief Financial Officer
|