|
|
|
|
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
68-0328265
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification Number)
|
Large accelerated filer
|
|
x
|
Accelerated filer
|
|
o
|
Non-accelerated filer
|
|
o
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
|
o
|
|
|
|
Emerging growth company
|
|
o
|
|
|
|
|
|
Item
|
Description
|
Page
|
|
|
|
|
||
Item 1.
|
|
|
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
|
||
Item 1.
|
||
Item 1A.
|
||
Item 6.
|
||
|
|
June 30,
|
|
December 31,
|
||||
|
2017
|
|
2016
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
|
|||
Cash and cash equivalents
|
$
|
81,641
|
|
|
$
|
26,120
|
|
Restricted cash
|
2,877
|
|
|
2,001
|
|
||
Marketable securities
|
10,000
|
|
|
20,988
|
|
||
Accounts receivable, net allowance for doubtful accounts of $994 and $1,037, respectively.
|
33,118
|
|
|
34,430
|
|
||
Other receivables
|
390
|
|
|
1,787
|
|
||
Inventories
|
43,555
|
|
|
41,160
|
|
||
Prepaid expenses and other current assets
|
4,235
|
|
|
3,359
|
|
||
Total current assets
|
$
|
175,816
|
|
|
$
|
129,845
|
|
Property and equipment, net
|
21,300
|
|
|
23,265
|
|
||
Goodwill
|
120,845
|
|
|
120,711
|
|
||
Intangibles, net
|
82,570
|
|
|
84,511
|
|
||
Deposits and other assets
|
1,536
|
|
|
1,352
|
|
||
Total assets
|
$
|
402,067
|
|
|
$
|
359,684
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
11,030
|
|
|
$
|
13,237
|
|
Accrued payroll
|
16,933
|
|
|
19,997
|
|
||
Accrued expenses and other current liabilities
|
10,001
|
|
|
11,668
|
|
||
Revolving line of credit
|
24,297
|
|
|
—
|
|
||
Total current liabilities
|
$
|
62,261
|
|
|
$
|
44,902
|
|
Deferred income taxes
|
879
|
|
|
879
|
|
||
Deferred rent
|
7,859
|
|
|
7,949
|
|
||
Other liabilities
|
4,194
|
|
|
3,783
|
|
||
Contingently issuable common stock
|
9,600
|
|
|
12,200
|
|
||
Debt
|
220,520
|
|
|
177,178
|
|
||
Total liabilities
|
$
|
305,313
|
|
|
$
|
246,891
|
|
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; 135,000,000 shares authorized. 83,638,895 and 82,986,244
shares issued, respectively. 83,426,656 and 82,774,005
shares outstanding, respectively.
|
84
|
|
|
83
|
|
||
Treasury stock, at cost, 212,239 shares.
|
(2,942
|
)
|
|
(2,942
|
)
|
||
Additional paid-in capital
|
588,194
|
|
|
567,765
|
|
||
Accumulated deficit
|
(491,207
|
)
|
|
(453,601
|
)
|
||
Accumulated other comprehensive income
|
2,625
|
|
|
1,488
|
|
||
Total stockholders’ equity
|
$
|
96,754
|
|
|
$
|
112,793
|
|
Total liabilities and stockholders’ equity
|
$
|
402,067
|
|
|
$
|
359,684
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenue
|
$
|
48,556
|
|
|
$
|
50,974
|
|
|
$
|
91,168
|
|
|
$
|
93,340
|
|
Cost of goods sold
|
16,332
|
|
|
21,515
|
|
|
30,302
|
|
|
35,940
|
|
||||
Gross profit
|
32,224
|
|
|
29,459
|
|
|
60,866
|
|
|
57,400
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development
|
5,734
|
|
|
7,714
|
|
|
11,264
|
|
|
15,559
|
|
||||
Clinical and regulatory affairs
|
2,740
|
|
|
4,022
|
|
|
6,575
|
|
|
7,905
|
|
||||
Marketing and sales
|
23,781
|
|
|
28,824
|
|
|
49,681
|
|
|
56,742
|
|
||||
General and administrative
|
7,904
|
|
|
10,210
|
|
|
16,777
|
|
|
20,156
|
|
||||
Restructuring costs
|
(29
|
)
|
|
790
|
|
|
137
|
|
|
8,114
|
|
||||
Settlement costs
|
—
|
|
|
—
|
|
|
—
|
|
|
4,650
|
|
||||
Contract termination and business acquisition expenses
|
—
|
|
|
1,127
|
|
|
—
|
|
|
5,905
|
|
||||
Total operating expenses
|
40,130
|
|
|
52,687
|
|
|
84,434
|
|
|
119,031
|
|
||||
Loss from operations
|
(7,906
|
)
|
|
(23,228
|
)
|
|
(23,568
|
)
|
|
(61,631
|
)
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Interest income
|
28
|
|
|
48
|
|
|
72
|
|
|
110
|
|
||||
Interest expense
|
(5,803
|
)
|
|
(3,815
|
)
|
|
(10,098
|
)
|
|
(7,597
|
)
|
||||
Other income (expense), net
|
223
|
|
|
(556
|
)
|
|
176
|
|
|
(912
|
)
|
||||
Change in fair value of contingent consideration related to acquisition
|
3,800
|
|
|
(100
|
)
|
|
2,600
|
|
|
(100
|
)
|
||||
Loss on debt extinguishment
|
(6,512
|
)
|
|
—
|
|
|
(6,512
|
)
|
|
—
|
|
||||
Change in fair value of derivative liabilities
|
—
|
|
|
(38,743
|
)
|
|
—
|
|
|
(43,831
|
)
|
||||
Total other income (expense)
|
(8,264
|
)
|
|
(43,166
|
)
|
|
(13,762
|
)
|
|
(52,330
|
)
|
||||
Net loss before income tax expense
|
(16,170
|
)
|
|
(66,394
|
)
|
|
(37,330
|
)
|
|
(113,961
|
)
|
||||
Income tax expense
|
(122
|
)
|
|
(443
|
)
|
|
(276
|
)
|
|
(546
|
)
|
||||
Net loss
|
$
|
(16,292
|
)
|
|
$
|
(66,837
|
)
|
|
$
|
(37,606
|
)
|
|
$
|
(114,507
|
)
|
Other comprehensive income (loss) foreign currency translation
|
781
|
|
|
1,019
|
|
|
1,137
|
|
|
914
|
|
||||
Comprehensive loss
|
$
|
(15,511
|
)
|
|
$
|
(65,818
|
)
|
|
$
|
(36,469
|
)
|
|
$
|
(113,593
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted net loss per share
|
$
|
(0.20
|
)
|
|
$
|
(0.81
|
)
|
|
$
|
(0.45
|
)
|
|
$
|
(1.44
|
)
|
Shares used in computing basic and diluted net loss per share
|
83,247
|
|
|
82,072
|
|
|
83,087
|
|
|
79,368
|
|
|
Six Months Ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(37,606
|
)
|
|
$
|
(114,507
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Bad debt expense
|
(89
|
)
|
|
—
|
|
||
Depreciation and amortization
|
4,645
|
|
|
4,229
|
|
||
Stock-based compensation
|
6,188
|
|
|
6,768
|
|
||
Change in fair value of derivative liabilities
|
—
|
|
|
43,831
|
|
||
Change in fair value of contingent consideration related to acquisition
|
(2,600
|
)
|
|
100
|
|
||
Accretion of interest & amortization of deferred financing costs on debt
|
5,004
|
|
|
4,603
|
|
||
Non-cash foreign exchange loss (gain)
|
(206
|
)
|
|
810
|
|
||
Non-cash loss on debt extinguishment
|
3,997
|
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Restricted cash
|
(876
|
)
|
|
—
|
|
||
Accounts receivable and other receivables
|
3,470
|
|
|
(2,445
|
)
|
||
Inventories
|
(2,174
|
)
|
|
3,557
|
|
||
Prepaid expenses and other current assets
|
(762
|
)
|
|
1,100
|
|
||
Accounts payable
|
(3,486
|
)
|
|
(5,812
|
)
|
||
Accrued payroll
|
(3,220
|
)
|
|
6,922
|
|
||
Accrued expenses and other liabilities
|
(1,092
|
)
|
|
1,889
|
|
||
Net cash used in operating activities
|
$
|
(28,807
|
)
|
|
$
|
(48,955
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
||
Purchases of marketable securities
|
—
|
|
|
(5,017
|
)
|
||
Maturities of marketable securities
|
11,000
|
|
|
19,350
|
|
||
Purchases of property and equipment
|
(833
|
)
|
|
(1,304
|
)
|
||
Acquisition of business, net of cash acquired of $0 and $24,012, respectively
|
—
|
|
|
(60,622
|
)
|
||
Net cash (used in) provided by investing activities
|
$
|
10,167
|
|
|
$
|
(47,593
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
||
Net proceeds from revolving line of credit
|
24,297
|
|
|
—
|
|
||
Deferred financing costs
|
(6,285
|
)
|
|
—
|
|
||
Proceeds from sale of common stock under employee stock purchase plan
|
1,681
|
|
|
1,826
|
|
||
Proceeds from exercise of stock options
|
449
|
|
|
1,777
|
|
||
Proceeds from issuance of debt
|
120,000
|
|
|
—
|
|
||
Repayment of debt
|
(66,613
|
)
|
|
—
|
|
||
Minimum tax withholding paid on behalf of employees for restricted stock units
|
—
|
|
|
(134
|
)
|
||
Net cash provided by financing activities
|
$
|
73,529
|
|
|
$
|
3,469
|
|
Effect of exchange rate changes on cash and cash equivalents
|
632
|
|
|
(26
|
)
|
||
Net (decrease) in cash and cash equivalents
|
$
|
55,521
|
|
|
$
|
(93,105
|
)
|
Cash and cash equivalents, beginning of period
|
26,120
|
|
|
124,553
|
|
||
Cash and cash equivalents, end of period
|
$
|
81,641
|
|
|
$
|
31,448
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash paid for interest
|
$
|
2,956
|
|
|
$
|
2,994
|
|
Cash paid for income taxes
|
$
|
565
|
|
|
$
|
167
|
|
Non-cash investing and financing activities:
|
|
|
|
||||
Acquisition of property and equipment included in accounts payable
|
$
|
26
|
|
|
$
|
—
|
|
Fair value of common stock issued for business acquisition
|
$
|
—
|
|
|
$
|
100,812
|
|
Fair value of warrants issued for business acquisition
|
$
|
—
|
|
|
$
|
44
|
|
Fair value of warrants issued in connection with the Facility Agreement
|
$
|
14,704
|
|
|
$
|
—
|
|
|
June 30,
2017 |
|
December 31,
2016 |
||||
Production equipment, molds, and office furniture
|
$
|
11,908
|
|
|
$
|
11,714
|
|
Computer hardware and software
|
8,746
|
|
|
8,162
|
|
||
Leasehold improvements
|
15,495
|
|
|
15,495
|
|
||
Construction in progress (software and related implementation, production equipment, and leasehold improvements)
|
842
|
|
|
839
|
|
||
Property and equipment, at cost
|
$
|
36,991
|
|
|
$
|
36,210
|
|
Accumulated depreciation
|
(15,691
|
)
|
|
(12,945
|
)
|
||
Property and equipment, net
|
$
|
21,300
|
|
|
$
|
23,265
|
|
|
June 30,
2017 |
|
December 31,
2016 |
||||
Raw materials
|
$
|
11,291
|
|
|
$
|
13,133
|
|
Work-in-process
|
11,767
|
|
|
10,139
|
|
||
Finished goods
|
20,497
|
|
|
17,888
|
|
||
Total Inventories
|
$
|
43,555
|
|
|
$
|
41,160
|
|
|
June 30,
2017 |
|
December 31,
2016 |
||||
Goodwill
|
$
|
120,845
|
|
|
$
|
120,711
|
|
|
|
|
|
|
|
||
Intangible assets:
|
|
|
|
|
|
||
Indefinite lived intangibles
|
|
|
|
|
|
||
Trademarks and trade names
|
$
|
2,708
|
|
|
$
|
2,708
|
|
In-process research and development
|
11,200
|
|
|
11,200
|
|
||
|
|
|
|
||||
Finite lived intangibles
|
|
|
|
|
|
||
Developed technology
|
$
|
67,600
|
|
|
$
|
67,600
|
|
Accumulated amortization
|
(5,375
|
)
|
|
(3,810
|
)
|
||
Developed technology, net
|
$
|
62,225
|
|
|
$
|
63,790
|
|
|
|
|
|
|
|
||
Customer relationships
|
$
|
7,500
|
|
|
$
|
7,500
|
|
Accumulated amortization
|
(1,063
|
)
|
|
(687
|
)
|
||
Customer relationships, net
|
$
|
6,437
|
|
|
$
|
6,813
|
|
|
|
|
|
|
|
||
Intangible assets (excluding goodwill), net
|
$
|
82,570
|
|
|
$
|
84,511
|
|
Balance at January 1, 2017
|
120,711
|
|
|
Foreign currency translation adjustment
|
134
|
|
|
Balance at June 30, 2017
|
$
|
120,845
|
|
Remainder of 2017
|
$
|
1,940
|
|
2018
|
3,978
|
|
|
2019
|
3,978
|
|
|
2020
|
4,996
|
|
|
2021
|
6,557
|
|
|
2022 & Thereafter
|
47,213
|
|
|
Total
|
$
|
68,662
|
|
|
June 30, 2017
|
||||||||||||||
|
Amortized
Cost |
|
Gross
Unrealized Gain |
|
Gross
Unrealized Loss |
|
Fair Value
|
||||||||
Agency bonds
|
$
|
3,999
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
3,998
|
|
Corporate bonds
|
6,001
|
|
|
—
|
|
|
(2
|
)
|
|
5,999
|
|
||||
Total
|
$
|
10,000
|
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
9,997
|
|
|
|
|
|
|
|
|
|
||||||||
|
December 31, 2016
|
||||||||||||||
|
Amortized
Cost |
|
Gross
Unrealized Gain |
|
Gross
Unrealized Loss |
|
Fair Value
|
||||||||
Agency bonds
|
$
|
6,488
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
6,490
|
|
Corporate bonds
|
10,513
|
|
|
—
|
|
|
(21
|
)
|
|
10,492
|
|
||||
Commercial paper
|
3,987
|
|
|
—
|
|
|
—
|
|
|
3,987
|
|
||||
Total
|
$
|
20,988
|
|
|
$
|
2
|
|
|
$
|
(21
|
)
|
|
$
|
20,969
|
|
|
Fair value measurement at reporting date using:
|
||||||||||||||
|
Quoted prices in
active markets for identical assets (Level 1) |
|
Significant other
observable inputs (Level 2) |
|
Significant
unobservable inputs (Level 3) |
|
Total
|
||||||||
At June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents
|
$
|
81,641
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
81,641
|
|
Restricted cash
|
$
|
2,877
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,877
|
|
Contingently issuable common stock
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,600
|
|
|
$
|
9,600
|
|
At December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents
|
$
|
26,120
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
26,120
|
|
Restricted cash
|
$
|
2,001
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,001
|
|
Contingently issuable common stock
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,200
|
|
|
$
|
12,200
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Cost of goods sold
|
$
|
304
|
|
|
$
|
259
|
|
|
$
|
473
|
|
|
$
|
532
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development
|
323
|
|
|
434
|
|
|
583
|
|
|
797
|
|
||||
Clinical and regulatory affairs
|
160
|
|
|
593
|
|
|
420
|
|
|
493
|
|
||||
Marketing and sales
|
1,283
|
|
|
1,261
|
|
|
2,341
|
|
|
2,391
|
|
||||
General and administrative
|
1,164
|
|
|
1,339
|
|
|
2,371
|
|
|
2,555
|
|
||||
Total operating expenses
|
$
|
2,930
|
|
|
$
|
3,627
|
|
|
$
|
5,715
|
|
|
$
|
6,236
|
|
Total
|
$
|
3,234
|
|
|
$
|
3,886
|
|
|
$
|
6,188
|
|
|
$
|
6,768
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net loss
|
$
|
(16,292
|
)
|
|
$
|
(66,837
|
)
|
|
$
|
(37,606
|
)
|
|
$
|
(114,507
|
)
|
Shares used in computing basic and diluted net loss per share
|
83,247
|
|
|
82,072
|
|
|
83,087
|
|
|
79,368
|
|
||||
Basic and diluted net loss per share
|
$
|
(0.20
|
)
|
|
$
|
(0.81
|
)
|
|
$
|
(0.45
|
)
|
|
$
|
(1.44
|
)
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
June 30,
|
|
June 30,
|
||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Common stock options
|
574
|
|
|
1,620
|
|
|
636
|
|
|
1,193
|
|
Restricted stock awards
|
121
|
|
|
135
|
|
|
120
|
|
|
131
|
|
Restricted stock units
|
207
|
|
|
438
|
|
|
248
|
|
|
299
|
|
Total
|
902
|
|
|
2,193
|
|
|
1,004
|
|
|
1,623
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
June 30,
|
|
June 30,
|
||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Conversion of the Notes
|
11,939
|
|
|
14,767
|
|
|
11,939
|
|
|
14,767
|
|
Deerfield Warrants
|
6,470
|
|
|
—
|
|
|
6,470
|
|
|
—
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||
United States
|
$
|
31,906
|
|
|
65.7%
|
|
$
|
36,283
|
|
|
71.2%
|
|
$
|
62,795
|
|
|
68.9%
|
|
$
|
66,151
|
|
|
70.9%
|
Total International
|
$
|
16,650
|
|
|
34.3%
|
|
$
|
14,691
|
|
|
28.8%
|
|
$
|
28,373
|
|
|
31.1%
|
|
$
|
27,189
|
|
|
29.1%
|
Revenue
|
$
|
48,556
|
|
|
100.0%
|
|
$
|
50,974
|
|
|
100.0%
|
|
$
|
91,168
|
|
|
100.0%
|
|
$
|
93,340
|
|
|
100.0%
|
Remainder of 2017
|
$
|
1,856
|
|
2018
|
3,317
|
|
|
2019
|
3,435
|
|
|
2020
|
3,659
|
|
|
2021
|
3,692
|
|
|
2022 and thereafter
|
21,821
|
|
|
Total
|
$
|
37,780
|
|
|
Fair Value of Contingently Issuable Common Stock
|
||
December 31, 2016
|
$
|
12,200
|
|
Fair Value Adjustment of Contingent Payment for the six months ended June 30, 2017
|
(2,600
|
)
|
|
June 30, 2017
|
$
|
9,600
|
|
|
One-time Termination Benefits
|
||
Accrual balance as of December 31, 2016
|
$
|
2,754
|
|
Restructuring charges
|
137
|
|
|
Utilization
|
(2,656
|
)
|
|
Accrual balance as of June 30, 2017
|
$
|
235
|
|
Cash consideration
|
$
|
84,634
|
|
Common stock consideration
|
100,812
|
||
Fair value of assumed TriVascular stock warrants
|
44
|
||
Total purchase consideration
|
$
|
185,490
|
|
Cash and cash equivalents
|
$
|
24,012
|
|
Short-term investments
|
3,008
|
|
|
Accounts receivable
|
5,780
|
|
|
Inventories
|
17,765
|
|
|
Prepaid expenses and other current assets
|
1,895
|
|
|
Property and equipment
|
3,152
|
|
|
Intangible assets
|
46,200
|
|
|
Other assets
|
317
|
|
|
Accounts payable
|
(2,214
|
)
|
|
Accrued liabilities and other
|
(6,450
|
)
|
|
Notes payable
|
(61
|
)
|
|
Net assets acquired
|
$
|
93,404
|
|
Goodwill
|
$
|
92,086
|
|
Total purchase consideration
|
$
|
185,490
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||
|
June 30, 2016
|
|
June 30, 2016
|
||||
Combined net sales
|
$
|
50,974
|
|
|
$
|
96,011
|
|
Combined net loss from continuing operations
|
(62,507
|
)
|
|
(110,730
|
)
|
||
Combined basic and diluted net loss per share
|
$
|
(0.76
|
)
|
|
$
|
(1.35
|
)
|
Item 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
risks associated with our merger with TriVascular Technologies, Inc. (“TriVascular”);
|
•
|
failure to realize the anticipated benefits from previous business combination transactions, including our acquisition
|
•
|
continued market acceptance, use and endorsement of our products;
|
•
|
quality problems with our products;
|
•
|
consolidation in the health care industry;
|
•
|
the success of our clinical trials relating to products under development;
|
•
|
our ability to maintain strong relationships with certain key physicians;
|
•
|
continued growth in the number of patients qualifying for treatment of abdominal aortic aneurysms through our products;
|
•
|
our ability to effectively compete with the products offered by our competitors;
|
•
|
the level and availability of third party payor reimbursement for our products;
|
•
|
our ability to effectively develop new or complementary products and technologies;
|
•
|
our ability to manufacture our endovascular systems to meet demand;
|
•
|
changes to our international operations including currency exchange rate fluctuations;
|
•
|
our ability to effectively manage our business and keep pace with our anticipated growth;
|
•
|
our ability to develop and retain a direct sales force in the United States and select European countries;
|
•
|
the nature of and any changes to domestic and foreign legislative, regulatory and other legal requirements that apply to us, our products, our suppliers and our competitors;
|
•
|
the timing of and our ability to obtain and maintain any required regulatory clearances and approvals;
|
•
|
our ability to protect our intellectual property rights and proprietary technologies;
|
•
|
our ability to operate our business without infringing the intellectual property rights and proprietary technology of third parties;
|
•
|
product liability claims;
|
•
|
pending and future litigation;
|
•
|
reputational damage to our products caused by the use, mis-use or off-label use of our products or government or voluntary recalls of our products;
|
•
|
our utilization of single source supplier for specialized components of our product lines;
|
•
|
our ability to attract, retain, and motivate qualified personnel;
|
•
|
our ability to make future acquisitions and successfully integrate any such future-acquired businesses;
|
•
|
our ability to maintain adequate liquidity to fund our operational needs and research and developments expenses;
|
•
|
our ability to identify and manage risks; and
|
•
|
general macroeconomic and world-wide business conditions.
|
•
|
Market Overview and Opportunity
|
•
|
Our Products
|
•
|
Manufacturing and Supply
|
•
|
Marketing and Sales
|
•
|
Competition
|
•
|
Product Developments and Clinical Trials
|
•
|
EVAS FORWARD
Global Registry - The objective of this registry was to assess the clinical outcomes of the Nellix® System for the endovascular repair of infrarenal abdominal aortic aneurysms (AAA) in an ‘all-comers,’ real world patient population. The first phase of the registry included 300 patients enrolled in 18 international centers. The first patient in the registry was treated in October 2013. In September 2014, we announced completion of patient enrollment in the EVAS FORWARD Global Registry. In November 2016, we announced updated data on 300 patients with a mean follow-up of 25 months. In November 2016, we also announced positive 2-year results from the Nellix EVAS FORWARD Global Registry. The following outcomes were presented at the annual VEITH meeting:
|
•
|
EVAS FORWARD IDE
- We developed this pivotal clinical trial to evaluate the safety and effectiveness of the Nellix EVAS System. This study is a prospective single arm study which enrolled 179 patients at 29 centers in the United States and Europe. In November 2014, we completed enrollment in the EVAS FORWARD IDE, and we submitted the one year results to the U.S. Food and Drug Administration (the “FDA”) in March 2016. In May 2016, we announced the results of the one year clinical data from the EVAS FORWARD IDE study that demonstrate that the Nellix EVAS System met the study primary endpoints for major adverse events at 30 days (safety) and treatment success at one year (effectiveness).
|
•
|
Freedom from all endoleaks (95%), all-cause mortality (92%), device-related reintervention (96%), AAA Sac growth (98%), migration (98%), and cardiovascular mortality (98%), among all patients.
|
•
|
ASCEND
Registry - In April 2016, we announced the first data presentation with one-year outcomes from the ASCEND Registry (Aneurysm Study for Complex AAA: Evaluation of Nellix Durability), a physician-initiated registry of the Nellix EVAS System used with aortic branch stent grafts for the treatment of patients with complex AAAs.
|
•
|
99% freedom from aneurysm-related mortality;
|
•
|
99% freedom from migration, rupture, and conversion;
|
•
|
97% freedom from Type I/III endoleak; and
|
•
|
Excellent freedom from secondary intervention for occlusion (97%), Type I endoleak (97%) and Type II endoleak 95%.
|
•
|
Low major adverse event (MAE) rate of 0.4%;
|
•
|
No ruptures, conversion, or secondary interventions;
|
•
|
99% and 100% freedom from type I and type III endoleak;
|
•
|
Fast-Track completed in 216 (87%) patients, with positive results compared to non-Fast-Track patients;
|
•
|
Procedure time of 84 minutes vs. 110 minutes;
|
•
|
General anesthesia use 0% vs. 18%;
|
•
|
ICU stay 0% vs. 32%; and
|
•
|
Mean hospital stay 1.2 vs. 1.9 days.
|
•
|
At least 28% greater EVAR eligibility for women with AAA
|
•
|
1.3% major adverse events, the lowest rate reported for EVAR, compared to other contemporary, prospective, post-market registries
|
•
|
No deaths
|
•
|
No proximal endoleaks
|
•
|
No limb occlusion
|
•
|
Low readmission rate of 3.9%
|
•
|
100% procedural success
|
•
|
Broad patient applicability, with 40% of the patients treated outside the labeled indications of other endovascular aortic repair (EVAR) devices;
|
•
|
Stable aortic neck diameters with an average expansion of 0.1%, compared to 25% as reported with other EVAR devices;
|
•
|
Lowest reported MAE rate across EVAR investigational device exemption (“IDE”) trials;
|
•
|
97% Freedom from secondary interventions related to type I endoleak; and
|
•
|
No migration, type III endoleaks or conversions.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||
Revenue
|
$
|
48,556
|
|
|
100.0%
|
|
$
|
50,974
|
|
|
100.0%
|
|
$
|
91,168
|
|
|
100.0%
|
|
$
|
93,340
|
|
|
100.0%
|
Cost of goods sold
|
16,332
|
|
|
33.6%
|
|
21,515
|
|
|
42.2%
|
|
30,302
|
|
|
33.2%
|
|
35,940
|
|
|
38.5%
|
||||
Gross profit
|
32,224
|
|
|
66.4%
|
|
29,459
|
|
|
57.8%
|
|
60,866
|
|
|
66.8%
|
|
57,400
|
|
|
61.5%
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Research and development
|
5,734
|
|
|
11.8%
|
|
7,714
|
|
|
15.1%
|
|
11,264
|
|
|
12.4%
|
|
15,559
|
|
|
16.7%
|
||||
Clinical and regulatory affairs
|
2,740
|
|
|
5.6%
|
|
4,022
|
|
|
7.9%
|
|
6,575
|
|
|
7.2%
|
|
7,905
|
|
|
8.5%
|
||||
Marketing and sales
|
23,781
|
|
|
49.0%
|
|
28,824
|
|
|
56.5%
|
|
49,681
|
|
|
54.5%
|
|
56,742
|
|
|
60.8%
|
||||
General and administrative
|
7,904
|
|
|
16.3%
|
|
10,210
|
|
|
20.0%
|
|
16,777
|
|
|
18.4%
|
|
20,156
|
|
|
21.6%
|
||||
Restructuring costs
|
(29
|
)
|
|
(0.1)%
|
|
790
|
|
|
1.5%
|
|
137
|
|
|
0.2%
|
|
8,114
|
|
|
8.7%
|
||||
Settlement costs
|
—
|
|
|
—%
|
|
—
|
|
|
—%
|
|
—
|
|
|
—%
|
|
4,650
|
|
|
5.0%
|
||||
Contract termination and business acquisition expenses
|
—
|
|
|
—%
|
|
1,127
|
|
|
2.2%
|
|
—
|
|
|
—%
|
|
5,905
|
|
|
6.3%
|
||||
Total operating expenses
|
40,130
|
|
|
82.6%
|
|
52,687
|
|
|
103.4%
|
|
84,434
|
|
|
92.6%
|
|
119,031
|
|
|
127.5%
|
||||
Loss from operations
|
(7,906
|
)
|
|
(16.3)%
|
|
(23,228
|
)
|
|
(45.6)%
|
|
(23,568
|
)
|
|
(25.9)%
|
|
(61,631
|
)
|
|
(66.0)%
|
||||
Total other income (expense)
|
(8,264
|
)
|
|
(17.0)%
|
|
(43,166
|
)
|
|
(84.7)%
|
|
(13,762
|
)
|
|
(15.1)%
|
|
(52,330
|
)
|
|
(56.1)%
|
||||
Net loss before income tax expense
|
(16,170
|
)
|
|
(33.3)%
|
|
(66,394
|
)
|
|
(130.3)%
|
|
(37,330
|
)
|
|
(40.9)%
|
|
(113,961
|
)
|
|
(122.1)%
|
||||
Income tax expense
|
(122
|
)
|
|
(0.3)%
|
|
(443
|
)
|
|
(0.9)%
|
|
(276
|
)
|
|
(0.3)%
|
|
(546
|
)
|
|
(0.6)%
|
||||
Net loss
|
$
|
(16,292
|
)
|
|
(33.6)%
|
|
$
|
(66,837
|
)
|
|
(131.1)%
|
|
$
|
(37,606
|
)
|
|
(41.2)%
|
|
$
|
(114,507
|
)
|
|
(122.7)%
|
|
Three Months Ended June 30,
|
|
|
|
|
||||||||
|
2017
|
|
2016
|
|
Variance
|
|
Percent Change
|
||||||
|
(in thousands)
|
|
|
|
|
||||||||
Revenue
|
$
|
48,556
|
|
|
$
|
50,974
|
|
|
$
|
(2,418
|
)
|
|
(4.7)%
|
|
Three Months Ended June 30,
|
|
|
|
|
|||||||||
|
2017
|
|
2016
|
|
Variance
|
|
Percent Change
|
|||||||
|
(in thousands)
|
|
|
|
|
|||||||||
Cost of goods sold
|
$
|
16,332
|
|
|
$
|
21,515
|
|
|
$
|
(5,183
|
)
|
|
(24.1
|
)%
|
Gross profit
|
32,224
|
|
|
29,459
|
|
|
2,765
|
|
|
9.4
|
%
|
|||
Gross margin percentage (gross profit as a percent of revenue)
|
66.4
|
%
|
|
57.8
|
%
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
|
||||||||
|
2017
|
|
2016
|
|
Variance
|
|
Percent Change
|
||||||
|
(in thousands)
|
|
|
|
|
||||||||
Research and development
|
$
|
5,734
|
|
|
$
|
7,714
|
|
|
$
|
(1,980
|
)
|
|
(25.7)%
|
Clinical and regulatory affairs
|
2,740
|
|
|
4,022
|
|
|
(1,282
|
)
|
|
(31.9)%
|
|||
Marketing and sales
|
23,781
|
|
|
28,824
|
|
|
(5,043
|
)
|
|
(17.5)%
|
|||
General and administrative
|
7,904
|
|
|
10,210
|
|
|
(2,306
|
)
|
|
(22.6)%
|
|||
Restructuring costs
|
(29
|
)
|
|
790
|
|
|
(819
|
)
|
|
(103.7)%
|
|||
Contract termination and business acquisition expenses
|
—
|
|
|
1,127
|
|
|
(1,127
|
)
|
|
(100.0)%
|
|
Three Months Ended June 30,
|
|
|
|
|
||||||||
|
2017
|
|
2016
|
|
Variance
|
|
Percent Change
|
||||||
|
(in thousands)
|
|
|
|
|
||||||||
Other income (expense), net
|
$
|
(8,264
|
)
|
|
$
|
(43,166
|
)
|
|
$
|
34,902
|
|
|
(80.9)%
|
|
Three Months Ended June 30,
|
|
|
|
|
||||||||
|
2017
|
|
2016
|
|
Variance
|
|
Percent Change
|
||||||
|
(in thousands)
|
|
|
|
|
||||||||
Income tax expense
|
$
|
(122
|
)
|
|
$
|
(443
|
)
|
|
$
|
321
|
|
|
(72.5)%
|
|
Six Months Ended June 30,
|
|
|
|
|
||||||||
|
2017
|
|
2016
|
|
Variance
|
|
Percent Change
|
||||||
|
(in thousands)
|
|
|
|
|
||||||||
Revenue
|
$
|
91,168
|
|
|
$
|
93,340
|
|
|
$
|
(2,172
|
)
|
|
(2.3)%
|
|
Six Months Ended June 30,
|
|
|
|
|
||||||||
|
2017
|
|
2016
|
|
Variance
|
|
Percent Change
|
||||||
|
(in thousands)
|
|
|
|
|
||||||||
Cost of goods sold
|
$
|
30,302
|
|
|
$
|
35,940
|
|
|
$
|
(5,638
|
)
|
|
(15.7)%
|
Gross profit
|
60,866
|
|
|
57,400
|
|
|
3,466
|
|
|
6.0%
|
|||
Gross margin percentage (gross profit as a percent of revenue)
|
66.8
|
%
|
|
61.5
|
%
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
||||||||
|
2017
|
|
2016
|
|
Variance
|
|
Percent Change
|
||||||
|
(in thousands)
|
|
|
|
|
||||||||
Research and development
|
$
|
11,264
|
|
|
$
|
15,559
|
|
|
$
|
(4,295
|
)
|
|
(27.6)%
|
Clinical and regulatory affairs
|
6,575
|
|
|
7,905
|
|
|
(1,330
|
)
|
|
(16.8)%
|
|||
Marketing and sales
|
49,681
|
|
|
56,742
|
|
|
(7,061
|
)
|
|
(12.4)%
|
|||
General and administrative
|
16,777
|
|
|
20,156
|
|
|
(3,379
|
)
|
|
(16.8)%
|
|||
Restructuring costs
|
137
|
|
|
8,114
|
|
|
(7,977
|
)
|
|
(98.3)%
|
|||
Settlement costs
|
—
|
|
|
4,650
|
|
|
(4,650
|
)
|
|
(100.0)%
|
|||
Contract termination and business acquisition expenses
|
—
|
|
|
5,905
|
|
|
(5,905
|
)
|
|
(100.0)%
|
|
Six Months Ended June 30,
|
|
|
|
|
||||||||
|
2017
|
|
2016
|
|
Variance
|
|
Percent Change
|
||||||
|
(in thousands)
|
|
|
|
|
||||||||
Other income (expense), net
|
$
|
(13,762
|
)
|
|
$
|
(3,809
|
)
|
|
$
|
(9,953
|
)
|
|
>100%
|
|
Six Months Ended June 30,
|
|
|
|
|
||||||||
|
2017
|
|
2016
|
|
Variance
|
|
Percent Change
|
||||||
|
(in thousands)
|
|
|
|
|
||||||||
Income tax (expense) benefit
|
$
|
(276
|
)
|
|
$
|
(175
|
)
|
|
$
|
(101
|
)
|
|
57.7%
|
|
June 30, 2017
|
|
December 31, 2016
|
|
June 30, 2016
|
||||||
|
(in thousands, except financial metrics data)
|
||||||||||
Cash and cash equivalents
|
$
|
81,641
|
|
|
$
|
26,120
|
|
|
$
|
31,448
|
|
Marketable securities
|
$
|
10,000
|
|
|
$
|
20,988
|
|
|
$
|
41,490
|
|
Accounts receivable, net
|
$
|
33,118
|
|
|
$
|
34,430
|
|
|
$
|
36,057
|
|
Total current assets
|
$
|
175,816
|
|
|
$
|
129,845
|
|
|
$
|
155,253
|
|
Total current liabilities
|
$
|
62,261
|
|
|
$
|
44,902
|
|
|
$
|
59,005
|
|
Working capital surplus (a)
|
$
|
113,555
|
|
|
$
|
84,943
|
|
|
$
|
96,248
|
|
Current ratio (b)
|
2.8
|
|
|
2.9
|
|
|
2.6
|
|
|||
Days sales outstanding ("DSO") (c)
|
62
|
|
|
67
|
|
|
64
|
|
|||
Inventory turnover (d)
|
1.5
|
|
|
2.0
|
|
|
2.0
|
|
•
|
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 potential litigation and the cost to defend such litigation.
|
|
Payments due by period
|
|
|
||||||||||||||||||
Contractual Obligations
|
Total
|
Remainder of 2017
|
2018
|
2019
|
2020
|
2021
|
2022 and thereafter
|
||||||||||||||
Long-term debt obligations
|
$
|
263,278
|
|
$
|
—
|
|
$
|
18,278
|
|
$
|
—
|
|
$
|
125,000
|
|
$
|
40,000
|
|
$
|
80,000
|
|
Interest on Senior Notes and Term Loan
|
56,613
|
|
6,382
|
|
12,832
|
|
12,421
|
|
12,444
|
|
6,962
|
|
5,572
|
|
|||||||
Operating lease obligations
|
37,780
|
|
1,856
|
|
3,317
|
|
3,435
|
|
3,659
|
|
3,692
|
|
21,821
|
|
|||||||
Total
|
$
|
357,671
|
|
$
|
8,238
|
|
$
|
34,427
|
|
$
|
15,856
|
|
$
|
141,103
|
|
$
|
50,654
|
|
$
|
107,393
|
|
Item 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|
Item 4.
|
CONTROLS AND PROCEDURES.
|
Item 1.
|
Legal Proceedings.
|
Item 1A.
|
Risk Factors.
|
Item 6.
|
Exhibit Index.
|
|
|
|
|
Incorporated by Reference
|
|
|
||||||
Exhibit Number
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit
|
|
Filing Date
|
|
Filed Herewith
|
4.1
|
|
Form of Warrant to Purchase Common Stock of Endologix, Inc., issued to Deerfield Private Design Fund IV, L.P., Deerfield International Master Fund, L.P., Deerfield Partners, L.P., and Deerfield Private Design Fund III, L.P., together with a schedule of holders and amounts (issued April 3, 2017).
|
|
8-K
|
|
000-28440
|
|
4.1
|
|
2017-04-05
|
|
|
4.2
|
|
Registration Rights Agreement, dated April 3, 2017, by and among Endologix, Inc., Deerfield Private Design Fund IV, L.P., Deerfield International Master Fund, L.P., Deerfield Partners, L.P., and Deerfield Private Design Fund III, L.P.
|
|
8-K
|
|
000-28440
|
|
4.2
|
|
2017-04-05
|
|
|
10.1
|
|
Facility Agreement, dated April 3, 2017, by and among Endologix, Inc., certain subsidiaries of Endologix, Inc., Deerfield Private Design Fund IV, L.P., Deerfield International Master Fund, L.P., Deerfield Partners, L.P., and Deerfield Private Design Fund III, L.P.
|
|
8-K
|
|
000-28440
|
|
10.1
|
|
2017-04-05
|
|
|
10.2
|
|
Credit and Security Agreement, dated April 3, 2017, by and among Endologix, Inc., certain subsidiaries of Endologix, Inc. and Deerfield ELGX Revolver, LLC.
|
|
8-K
|
|
000-28440
|
|
10.2
|
|
2017-04-05
|
|
|
10.3
|
|
2015 Stock Incentive Plan, as amended
|
|
8-K
|
|
000-28440
|
|
10.1
|
|
2017-06-02
|
|
|
10.4
|
|
Addendum No. 3 to Lease - Net, by and between Endologix, Inc. and Sonoma Airport Properties LLC, dated July 3, 2017.
|
|
|
|
|
|
|
|
|
|
X
|
31.1
|
|
Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
|
|
X
|
31.2
|
|
Certification of Principal Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
|
|
X
|
32.1*
|
|
Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
|
|
X
|
32.2*
|
|
Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
|
|
X
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
|
|
|
|
|
|
X
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
|
|
|
|
|
|
X
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
|
|
|
|
|
|
X
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
|
|
|
|
|
|
X
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Link Base Document
|
|
|
|
|
|
|
|
|
|
X
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
|
|
|
|
|
|
X
|
*
|
The certifications attached as Exhibits 32.1 and 32.2 that accompany this Quarterly Report pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, shall not be deemed “filed” by the registrant for purposes of Section 18 of the Exchange Act and are not to be incorporated by reference into any of the registrant’s filings under the Securities Act or the Exchange Act, irrespective of any general incorporation language contained in any such filing.
|
|
|
ENDOLOGIX, INC.
|
|
|
|
Date:
|
August 4, 2017
|
/s/ John McDermott
|
|
|
Chief Executive Officer
(Principal Executive Officer) |
|
|
|
|
|
|
Date:
|
August 4, 2017
|
/s/ Vaseem Mahboob
|
|
|
Chief Financial Officer (Principal Financial and Accounting Officer)
|
|
|
|
LANDLORD:
|
TENANT:
|
SONOMA AIRPORT PROPERTIES LLC,
a California limited liability company
By: /s/ Ron Profili
Name: Ron Profili
Title: Owner/Manager
|
TRIVASCULAR, INC.,
a California corporation
By: /s/ Vaseem Mahboob
Name: Vaseem Mahboob
Title: CFO
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Endologix, Inc.;
|
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 we 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 reporting purposes in accordance with generally accepted accounting principals;
|
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 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.
|
Date:
|
August 4, 2017
|
By:
|
/s/ John McDermott
|
|
|
|
John McDermott
|
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Endologix, Inc.;
|
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 we 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 reporting purposes in accordance with generally accepted accounting principals;
|
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 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.
|
Date:
|
August 4, 2017
|
By:
|
/s/ Vaseem Mahboob
|
|
|
|
Vaseem Mahboob
|
|
|
|
Chief Financial Officer (Principal Financial and Accounting Officer)
|
(1)
|
The Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 2017
(the “Quarterly Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 780(d)); and
|
(2)
|
The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
August 4, 2017
|
By:
|
/s/ John McDermott
|
|
|
|
John McDermott
|
|
|
|
Chief Executive Officer
|
(1)
|
The Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 2017
(the “Quarterly Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 780(d)); and
|
(2)
|
The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
August 4, 2017
|
By:
|
/s/ Vaseem Mahboob
|
|
|
|
Vaseem Mahboob
|
|
|
|
Chief Financial Officer (Principal Financial and Accounting Officer)
|