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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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41-1698056
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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1225 Old Highway 8 Northwest
St. Paul, Minnesota
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55112-6416
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(Address of principal executive offices)
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(Zip Code)
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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, One-tenth of One Cent ($0.001)
Par Value Per Share
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The NASDAQ Stock Market LLC
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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Page No.
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Item 1.
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Item 1A.
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Item 1B.
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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 14.
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Item 15.
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a control handle, which allows movement of the crown and predictable crown location;
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a flexible drive shaft with a diamond-grit-coated offset crown, which tracks and orbits over the guide wire; and
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a sheath, which covers the drive shaft and permits delivery of saline or medications to the treatment area.
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Speed.
An increase in speed creates a larger orbital radius, thus accommodating larger diameter vessels. Our current PAD Systems allow the user to choose between three rotational speeds. Our CAD System allows the user to choose between two rotational speeds.
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Crown Characteristics.
The crowns for the OAS are designed with various weights (as determined by crown geometry and material density) and are coated with diamond grit. The PAD Systems’ crowns are available in three configurations: classic, micro and solid. Physicians select crown sizes and configurations based on several case criteria, including reference vessel size, lesion length and degree of stenosis, stenosis morphology, and anatomy tortuosity. Physicians often use the classic or micro crown configuration in small, more tortuous vessels or when less aggressive sanding is desired. The solid crown configuration is designed with a tapered, leading edge for frontal sanding, which can be used in tight calcified disease. The PAD Systems are available with a 1.50 millimeter and 2.00 millimeter classic crown, and a 1.25 millimeter, 1.50 millimeter and 2.00 millimeter solid crown configuration. There is also a 1.25 millimeter micro crown available with the Diamondback 360 Peripheral device, which allows physicians options to treat very small arteries in the lower leg and foot. Catheter lengths are 145 centimeters and 60 centimeters, which address procedural approach and target lesion locations both above and below the knee and ankle. The shorter length catheters allow physicians an option to treat via retrograde pedal approach in addition to the common femoral artery access point. The PAD Systems are versatile. By adjusting the speed in conjunction with crown selection, multiple lesions and vessel sizes can be treated. The crown for the CAD System is available in one configuration: 1.25 millimeter classic.
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greater than 93% of particles were smaller than a red blood cell, and
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greater than 99% of particles were smaller than the lumen of the capillaries (which provide the connection between the arterial and venous system).
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98.3% of particulate is smaller than a red blood cell; and
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~2 microns in size.
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Differential Sanding Reduces Risk of Adverse Events
. The OAS is designed to differentiate between hard plaque and soft compliant arterial tissue. Arteries are composed of three tissue layers (from inside to out): the intima, media, and
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Eliminates Need for Distal Protection.
The small size of the particles produced during sanding avoids the need for ancillary distal protection devices, commonly used with directional cutting atherectomy devices. The small particulate size also significantly reduces the risk of macroembolization, or larger pieces of removed plaque capable of blocking blood flow downstream.
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Allows Continuous Blood Flow During Procedure.
The OAS allows for continuous blood flow while orbiting. Other devices may restrict blood flow due to the size of the catheter required or the use of distal protection devices, which could result in complications such as excessive heat and tissue damage.
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Efficacy Demonstrated for Both PAD and CAD Systems.
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◦
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Our pivotal OASIS clinical trial was a prospective 20-center study that involved 124 patients with 201 lesions treated by the Diamondback 360 PAD System. Performance targets were established cooperatively with the FDA before the trial began. Despite 55% of the lesions consisting of calcified plaque, the Diamondback 360 Peripheral successfully met the FDA's study endpoints. Because the Predator 360 and Stealth 360 mechanism of action is identical to that of the Diamondback 360 Peripheral, no additional efficacy trials were required by the FDA for 510(k) clearance of either of those PAD Systems.
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For the CAD System, our ORBIT II coronary OAS trial was designed to evaluate the safety and efficacy of OAS in treating severely calcified coronary lesions. The trial met both the primary safety and efficacy endpoints by significant margins. Preparation of severely calcified plaque with the OAS not only helped facilitate stent delivery, but also improved both acute and 30-day clinical outcomes compared with the outcomes of historic control subjects in this difficult-to-treat patient population. The pre-procedure mean minimal lumen diameter of 0.5 mm increased to 2.9 mm after the procedure. The primary safety endpoint was 89.6% freedom from 30-day MACE compared with the performance goal of 83%. The primary efficacy endpoint (residual stenosis <50% post-stent without in-hospital major adverse cardiac events) was 88.9% compared with the performance goal of 82%. Stent delivery was successful in 97.7% of cases; <50% stenosis was observed in 98.6% of subjects. Low rates of in-hospital Q-wave myocardial infarction (0.7%), cardiac death (0.2%), and target vessel revascularization (0.7%) were reported.
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Treats Difficult, Fibrotic and Calcified Lesions.
The OAS enables physicians to remove plaque from long, fibrotic, calcified or bifurcated lesions, as well as lesions with softer plaque, in peripheral arteries both above and below the knee. In the coronaries, the OAS enables physicians to treat complex, severely calcified lesions, enabling optimal stent placement in these difficult to treat lesions. To date, the coronary OAS is the only FDA-approved device for treatment of severely calcified coronary lesions.
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Orbital Motion Improves Lesion Compliance.
The orbiting action of the OAS removes the hard plaque in the artery by sanding. As the crown sands away the plaque, the lumen of the artery is opened and the vessel wall becomes more compliant. The orbital motion and speed of the crown increases, thus allowing for continuous reduction of plaque as the opening of the lumen increases during the operation of the devices.
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Differential Sanding Creates Smooth Lumens.
The differential sanding of the OAS creates a smooth surface lumen, or channel, inside the vessel. We believe that the smooth lumens created by the device increase the velocity of blood flow and decrease the resistance to blood flow, which may decrease the potential for restenosis, or renarrowing of the arteries.
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Utilizes Familiar Techniques.
Physicians using the OAS employ techniques similar to those used in angioplasty, which are familiar to interventional cardiologists, vascular surgeons and interventional radiologists who are trained in endovascular techniques. The devices' simple user interfaces require minimal additional training.
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Single Access Site to Complete Treatment.
The orbital technology and differential sanding process of the OAS allow for a single access site to treat multiple lesions, in most cases. In the peripheral vasculature, the OAS device is capable of treating multiple lesions in multiple arteries through a single access site, thus reducing the need for multiple devices or the need for multiple access sites.
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No Need for Collection Reservoir.
Because the particles of plaque sanded away are of such small sizes, the OAS does not require a collection reservoir that needs to be repeatedly emptied or cleaned during the procedure, or add time and cost to the procedure.
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Below-the-Knee and Behind-the-Knee Peripheral Artery Disease.
Arteries below and behind the knee are small in diameter and may be diffusely diseased, calcified or both. Reaching and treating these small vessels requires a low profile which several competitive devices do not offer. Behind-the-knee, or popliteal, lesions also present challenges if a stent is used because stents frequently fracture in this area due to the forces exerted on the vessels when the knee bends or flexes. The Diamondback 360 Peripheral is effective in treating those vessels, as demonstrated in our CALCIUM360 randomized clinical trial, where 100% of the lesions treated with the Diamondback 360 Peripheral were located below the knee. The Diamondback 360 60cm Peripheral OAS offers a shorter shaft length, a smaller profile and a more flexible shaft than the predecessors for improved ease of use, and uses a 4 French catheter that enables physicians to access lesions below-the-knee using retrograde access (access through the ankle or foot).
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Above-the-Knee Peripheral Artery Disease.
Arteries above the knee are typically longer, straighter and wider than below-the-knee vessels. Plaque in these arteries may also be diffuse, fibrotic and calcific. Physicians often use higher speeds or larger crown sizes of our products to treat lesions above the knee.
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Coronary Artery Disease.
The individuals more at risk for being diagnosed with CAD are those that are suffering from high blood pressure, abnormal cholesterol levels, diabetes, or have a family history of heart disease. Once CAD occurs, a fatty material called plaque builds up on the walls of arteries that supply blood to the heart. The plaque buildup causes the arteries to harden and narrow (atherosclerosis), reducing blood flow. The CAD System is the only atherectomy device indicated for severe coronary calcium.
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Short Procedure Time
The OAS has a short treatment time, typically less than two minutes.
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Single Crown Can Treat Various Lumen Sizes Limiting Hospital Inventory Costs
The OAS orbital mechanism of action allows one device to treat various diameter lumens inside the artery. Adjusting the rotational speed of the crown changes the orbit to create the desired lumen diameter, thereby potentially avoiding the need to use multiple catheters of different sizes to treat multiple lesions.
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Single Access Site May Reduce Procedural Time
Since the physician can treat multiple arteries through a single access site, this reduces the risk of bleeding complications that can occur during arterial access, ultimately reducing patient recovery time.
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Drive Adoption through Our Direct Sales Organization and Key Opinion Leaders.
We expect to continue to drive adoption of the OAS through our direct sales force in both hospital and office-based lab settings, which targets interventional cardiologists, vascular surgeons, and interventional radiologists. As a key element of our strategy, we focus on educating physicians about the disease state and our clinical data, and training physicians on OAS technology through our direct sales force and through seminars where physician industry leaders discuss case studies and treatment techniques using the devices.
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Collect Additional Clinical Evidence on Safety, Effectiveness and Economic Benefits of the OAS.
Physicians are increasingly requesting clinical study evidence to allow them to make treatment decisions to achieve the best possible short-term and long-term outcomes for their patients. We are focused on collecting and using clinical evidence to demonstrate the advantages of the OAS and drive physician acceptance.
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Enhance OAS and Expand Product Portfolio within the Market for Treatment of Peripheral and Coronary Arteries.
In addition to enhancing the OAS, we have expanded our product portfolio. We offer multiple accessory devices designed to complement the use of the OAS. We are continuing product development to further expand our portfolio of PAD and CAD treatment solutions.
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International Expansion.
CE Mark was granted for the Stealth 360 device in October 2014, we expect CE Mark for the CAD System in fiscal 2016, and we also anticipate approval for the next generation coronary OAS device in Japan during the fiscal 2017 timeframe. We are evaluating options for international expansion to maximize the coronary and peripheral market opportunities. Sales channels will be based on specific country dynamics. As a result, distributors, including potential strategic partners, and direct sales channels are being evaluated.
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Strategic Acquisitions and Partnerships
. In addition to adding to our product portfolio through internal development efforts, we intend to continue to explore the acquisition of other product lines, technologies or companies that may leverage our sales force or complement our strategic objectives. We also intend to explore distribution agreements, licensing transactions, and other strategic partnerships.
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Healthcare Policy and Reimbursements.
Our healthcare policy initiatives goal is to raise awareness with public and private payors, along with key medical societies, of the clinical and economic issues associated with peripheral and coronary arterial calcium. By educating payors and medical societies about the clinical advantages and cost effectiveness of our OAS technology, we believe we can sustain reimbursement coverage for our devices and ensure practice guidelines include appropriate treatment options for patients with arterial disease.
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OASIS.
In September 2005 our Investigational Device Exemption (“IDE”) was approved to begin OASIS, our pivotal U.S. study. OASIS was a 124-patient, 20-center, prospective study that began enrollment in January 2006. The primary efficacy study endpoint was absolute plaque reduction of the target lesions from baseline to immediately post-procedure. The primary safety endpoint was the cumulative incidence of Serious Adverse Events (“SAE”) at 30 days.
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CONFIRM. The CONFIRM series enrolled 3135 patients at over 200 U.S. institutions in order to evaluate the use of orbital atherectomy for the treatment of PAD. The CONFIRM registry confirmed that orbital atherectomy was safe and effective in a large registry of “all-comer” patients. Multiple sub-analyses have been performed and published on the CONFIRM series. There were no safety or efficacy differences for patients treated in outpatient based labs versus hospitals. The device was also found to be safe and effective for patients with diabetes or renal disease and in women and the elderly.
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TRUTH.
The study is a prospective, single-arm (non-randomized), post-market study that used intravascular ultrasound (“IVUS”) imaging and angiography to assess procedural outcomes in patients with symptomatic PAD and who are treated with the OAS and adjunctive balloon angioplasty. An independent IVUS Core Lab was used to provide adjudicated analyses for IVUS outcomes. TRUTH identified that the OAS can remove and modify calcified plaque. IVUS results suggested that the OAS also polishes plaque surface and changes plaque shape.
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CLARITY.
This pilot study is designed to identify the clinically appropriate endpoint(s) of a possible larger, statistically powered pivotal trial for treatment of patients with CLI. Enrolled patients had lesions of any morphology in vessels preventing direct blood perfusion to a foot wound. The study utilized five core labs, IVUS, and Fractional Flow Reserve for significant clinical rigor. CLARITY patients will be followed for one year.
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LIBERTY 360°
. We are currently enrolling up to 1,200 patients in our LIBERTY 360° clinical PAD study, which is a prospective, observational, multi-center clinical study to evaluate acute and long term clinical, quality of life and economic outcomes of various endovascular device intervention in patients with distal outflow PAD. This study is a novel trial that studies patients with all endovascular PAD treatments and will increase the understanding of the clinical and economic outcomes of endovascular treatment for Claudicants and CLI patients with PAD. Patients are currently enrolling into the LIBERTY 360° study and will be followed for up to five years.
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ORBIT I.
The ORBIT I feasibility study evaluated performance of the Diamondback 360° for the treatment of
de novo
calcified coronary lesions. The ORBIT I study completed in India in 2009 enrolled 50 patients. The endpoints were measured by device performance, MACE rate, and TLR at six months. Device performance success was 98%. The freedom from MACE at 30 days and at 6 months was 94% and 92% respectively. The 30-day and 6-month freedom from target lesion revascularization (“TLR”) was 98%. Three-year and 5-year freedom from MACE was 81.8% and 78.8%, respectively.
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ORBIT II.
In 2010, we began the ORBIT II pivotal study in the U.S, which evaluated the use of the CAD System in treating severely calcified coronary arteries. In October 2013, we received PMA from the FDA. ORBIT II was mandated by the FDA to be conducted as a single-arm study without a comparator arm, as no other device was approved to treat severely calcified arteries. One year ORBIT II study results were recently published in the American Journal of Cardiology. The 1-year freedom from MACE was 83.6%, freedom from target lesion revascularization was 95.3%, and freedom from cardiac death was 97%. The revascularization rate was significantly lower compared to historic controls. We continue to expand our coronary clinical data with long term clinical and economic data demonstrating positive results for patients treated with the CAD System. ORBIT II 2-year results and economic analysis were presented at the EuroPCR conference as a Late Breaking Clinical Trial in May 2015. Results demonstrated a 2-year freedom from TLR/target vessel revasularization (“TVR”) rate of 91.9% and freedom from MACE rate of 80.6% in this difficult-to-treat patient population. An economic analysis also demonstrated the cost of OAS would be fully covered by two years, with a possible extra $1,151 cost offset/savings per patient. This equated to
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COAST
. This is a prospective, single-arm, multi-center, global study designed to evaluate performance of the next generation coronary product, the Diamondback 360 Coronary Micro Crown OAS. We enrolled 100 subjects at 15 U.S. sites and five sites in Japan. After approval, the Diamondback 360 Coronary Micro Crown OAS will be an additional tool for the treatment of challenging coronary lesions and be the basis for receiving regulatory approval to market the device in Japan.
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educating physicians regarding the proper use and application of the OAS;
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clinical results showing safety and efficacy of our products;
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educating physicians on the prevalence and complications of calcium in PAD and CAD; and
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developing relationships with key opinion leaders.
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safety and efficacy even in calcified plaque;
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predictable clinical performance;
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availability of clinical data;
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ease of use;
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economic benefit;
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key opinion leader support and customer base;
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customer service and support; and
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adequate third-party reimbursement.
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the systems may not be safe or effective to the FDA’s satisfaction;
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the data from preclinical studies and clinical trials may be insufficient to support approval;
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the manufacturing process or facilities used may not meet applicable requirements; and
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changes in FDA approval policies or adoption of new regulations may require additional data.
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the FDA or other regulatory authorities do not approve a clinical trial protocol or a clinical trial (or a change to a previously approved protocol or trial that requires approval), or place a clinical trial on hold;
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patients do not enroll in clinical trials or follow up at the rate expected;
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patients do not comply with trial protocols or experience greater than expected adverse side effects;
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institutional review boards and third-party clinical investigators may delay or reject the trial protocol or changes to the trial protocol;
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third-party clinical investigators decline to participate in a trial or do not perform a trial on the anticipated schedule or consistent with the clinical trial protocol, investigator agreements, good clinical practices or other FDA requirements;
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third-party organizations do not perform data collection and analysis in a timely or accurate manner;
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regulatory inspections of the clinical trials or manufacturing facilities, which may, among other things, require corrective action or suspension or termination of the clinical trials;
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changes in governmental regulations or administrative actions;
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the interim or final results of the clinical trial are inconclusive or unfavorable as to safety or efficacy; or
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the FDA concludes that the trial design is inadequate to demonstrate safety and efficacy.
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establishment registration and device listing upon the commencement of manufacturing;
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the QSR, which requires manufacturers, including third-party manufacturers, to follow design, testing, control, documentation and other quality assurance procedures during medical device design and manufacturing processes;
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labeling regulations, which prohibit the promotion of products for unapproved or “off-label” uses and impose other restrictions on labeling and promotional activities;
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medical device reporting regulations, which require that manufacturers report to the FDA if a device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if malfunctions were to recur;
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corrections and removal reporting regulations, which require that manufacturers report to the FDA field corrections; and
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product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA caused by the device that may present a risk to health.
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warning letters or untitled letters;
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fines, injunctions and civil penalties;
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product recall or seizure;
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unanticipated expenditures;
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delays in clearing or approving or refusal to clear or approve products;
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withdrawal or suspension of FDA approval;
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orders for physician notification or device repair, replacement or refund;
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operating restrictions, partial suspension or total shutdown of production or clinical trials; or
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criminal prosecution.
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the actual and perceived effectiveness and reliability of our products;
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the prevalence and severity of any adverse patient events involving our products;
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the results of any clinical trials relating to use of our products;
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the availability, relative cost and perceived advantages and disadvantages of alternative technologies or treatment methods for conditions treated by our products;
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the degree to which treatments using our products are approved for reimbursement by public and private insurers;
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the degree to which physicians adopt the PAD and CAD Systems;
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the extent to which we are successful in educating physicians about PAD and CAD in general and the existence and benefits of the PAD and CAD Systems in particular;
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the strength of our marketing and distribution infrastructure; and
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the level of education and awareness among physicians and hospitals concerning our products.
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develop and patent processes or products earlier than we will;
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obtain regulatory clearances or approvals for competing medical device products more rapidly than we will;
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market their products more effectively than we will; or
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develop more effective or less expensive products or technologies that render our technology or products obsolete or non-competitive.
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announcements of technological or medical innovations for the treatment of vascular disease;
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quarterly variations in our or our competitors’ results of operations;
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failure to meet estimates or recommendations by securities analysts who cover our stock;
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accusations that we have violated a law or regulation;
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sales of large blocks of our common stock, including sales by our executive officers, directors and significant stockholders;
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changes in accounting principles;
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actual or anticipated changes in healthcare policy and reimbursement levels; and
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general market conditions and other factors, including factors unrelated to our operating performance or the operating performance of our competitors.
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warning or other letters from the FDA;
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fines, injunctions and civil penalties;
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product recall or seizure;
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unanticipated expenditures;
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delays in clearing or approving or refusal to clear or approve products;
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withdrawal or suspension of approval or clearance by the FDA or other regulatory bodies;
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orders for physician notification or device repair, replacement or refund;
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operating restrictions, partial suspension or total shutdown of production or clinical trials; and
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criminal prosecution.
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Name
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Age
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Position
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David L. Martin
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51
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President and Chief Executive Officer
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Laurence L. Betterley
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61
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Chief Financial Officer
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Kevin Kenny
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50
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Chief Operating Officer
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Paul Koehn
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52
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Senior Vice President of Quality and Operations
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Robert J. Thatcher
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60
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Chief Healthcare Policy Officer
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|
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Common Stock
|
||||||
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High
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Low
|
||||
Fiscal Year Ended June 30, 2015
|
|
|
|
||||
First quarter
|
$
|
32.57
|
|
|
$
|
23.59
|
|
Second quarter
|
31.33
|
|
|
23.15
|
|
||
Third quarter
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39.68
|
|
|
27.74
|
|
||
Fourth quarter
|
41.28
|
|
|
25.85
|
|
||
Fiscal Year Ended June 30, 2014
|
|
|
|
||||
First quarter
|
$
|
22.84
|
|
|
$
|
19.00
|
|
Second quarter
|
34.59
|
|
|
18.83
|
|
||
Third quarter
|
37.73
|
|
|
27.79
|
|
||
Fourth quarter
|
33.71
|
|
|
23.81
|
|
•
|
Interest Expense.
Interest expense (including premium and discount amortization) results from outstanding debt balances and debt premiums and discounts.
|
•
|
Interest Income.
Interest income is attributed to interest earned on deposits in investments that consist of money market funds.
|
•
|
Change in Fair Value of Debt Conversion Option.
Change in fair value of debt conversion option represents the period to period change in fair value of the debt conversion option associated with outstanding convertible debt.
|
•
|
Net Write-offs Upon Debt Conversion.
Net write-offs upon debt conversion are the result of the conversion of convertible debt, and include the write-off of the related debt conversion option and any unamortized debt premium or discount.
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•
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Other.
Other consists of miscellaneous non-operating expenses, including state taxes.
|
|
Year Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
$ Change
|
Percent
Change
|
|||||||
Net revenues
|
$
|
181,544
|
|
|
$
|
136,612
|
|
|
$
|
44,932
|
|
32.9
|
%
|
Cost of goods sold
|
39,520
|
|
|
31,041
|
|
|
8,479
|
|
27.3
|
|
|||
Gross profit
|
142,024
|
|
|
105,571
|
|
|
36,453
|
|
34.5
|
|
|||
Gross margin
|
78.2
|
%
|
|
77.3
|
%
|
|
0.9
|
%
|
1.2
|
|
|||
Expenses:
|
|
|
|
|
|
|
|||||||
Selling, general and administrative
|
143,684
|
|
|
117,994
|
|
|
25,690
|
|
21.8
|
|
|||
Research and development
|
30,977
|
|
|
21,066
|
|
|
9,911
|
|
47.0
|
|
|||
Total expenses
|
174,661
|
|
|
139,060
|
|
|
35,601
|
|
25.6
|
|
|||
Loss from operations
|
(32,637
|
)
|
|
(33,489
|
)
|
|
852
|
|
(2.5
|
)
|
|||
Interest and other, net
|
(185
|
)
|
|
(1,801
|
)
|
|
1,616
|
|
(89.7
|
)
|
|||
Net loss
|
$
|
(32,822
|
)
|
|
$
|
(35,290
|
)
|
|
$
|
2,468
|
|
(7.0
|
)
|
|
Year Ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
$ Change
|
Percent
Change
|
|||||||
Net revenues
|
$
|
136,612
|
|
|
$
|
103,897
|
|
|
$
|
32,715
|
|
31.5
|
%
|
Cost of goods sold
|
31,041
|
|
|
24,382
|
|
|
6,659
|
|
27.3
|
|
|||
Gross profit
|
105,571
|
|
|
79,515
|
|
|
26,056
|
|
32.8
|
|
|||
Gross margin
|
77.3
|
%
|
|
76.5
|
%
|
|
0.8
|
%
|
1.0
|
|
|||
Expenses:
|
|
|
|
|
|
|
|||||||
Selling, general and administrative
|
117,994
|
|
|
86,718
|
|
|
31,276
|
|
36.1
|
|
|||
Research and development
|
21,066
|
|
|
15,216
|
|
|
5,850
|
|
38.4
|
|
|||
Total expenses
|
139,060
|
|
|
101,934
|
|
|
37,126
|
|
36.4
|
|
|||
Loss from operations
|
(33,489
|
)
|
|
(22,419
|
)
|
|
(11,070
|
)
|
49.4
|
|
|||
Interest and other, net
|
(1,801
|
)
|
|
(1,618
|
)
|
|
(183
|
)
|
11.3
|
|
|||
Net loss
|
$
|
(35,290
|
)
|
|
$
|
(24,037
|
)
|
|
$
|
(11,253
|
)
|
46.8
|
|
|
Year Ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
Loss from operations
|
$
|
(32,637
|
)
|
|
$
|
(33,489
|
)
|
Add: Stock-based compensation
|
14,718
|
|
|
10,928
|
|
||
Add: Depreciation and amortization
|
2,321
|
|
|
1,367
|
|
||
Adjusted EBITDA
|
$
|
(15,598
|
)
|
|
$
|
(21,194
|
)
|
•
|
Stock-based compensation.
We exclude stock-based compensation expense from our non-GAAP financial measures primarily because such expense, while constituting an ongoing and recurring expense, is not an expense that requires cash settlement. Our management also believes that excluding this item from our non-GAAP results is useful to investors to understand its impact on our operational performance, liquidity and ability to make additional investments in the Company, and it allows for greater transparency to certain line items in our financial statements.
|
•
|
Depreciation and amortization expense.
We exclude depreciation and amortization expense from our non-GAAP financial measures primarily because such expenses, while constituting ongoing and recurring expenses, are not expenses that require cash settlement and are not used by our management to assess the core profitability of our business operations. Our management also believes that excluding these items from our non-GAAP results is useful to investors to understand our operational performance, liquidity and ability to make additional investments in the Company.
|
•
|
Items such as stock-based compensation do not directly affect our cash flow position; however, such items reflect economic costs to us and are not reflected in our Adjusted EBITDA and therefore these non-GAAP measures do not reflect the full economic effect of these items.
|
•
|
Non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles and therefore other companies may calculate similarly titled non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes.
|
•
|
Our management exercises judgment in determining which types of charges or other items should be excluded from the non-GAAP financial measures we use.
|
|
|
Shares Sold
|
|
Sale Price
|
|
Net Proceeds
(1)
|
||||
Offering Date
|
|
|
|
|
|
|
||||
November 26, 2013
|
|
3,000,000
|
|
$
|
30.00
|
|
|
$
|
84,369
|
|
March 25, 2013
|
|
2,300,000
|
|
$
|
17.60
|
|
|
$
|
38,209
|
|
•
|
the funding of clinical trials and studies;
|
•
|
expanding our sales and marketing organization;
|
•
|
physician education and awareness programs;
|
•
|
funding the commercialization of our coronary application;
|
•
|
expansion into international markets; and
|
•
|
development of new products.
|
•
|
Cash used in accounts receivable was
$10.6 million
,
$6.7 million
, and
$1.3 million
during the years ended
June 30, 2015
,
2014
, and
2013
, respectively. Cash used in accounts receivable is due to higher receivable balances from revenue growth, which has grown in each of the last three fiscal years.
|
•
|
Cash (used in) provided by inventory was
$(1.1) million
,
$(6.6) million
, and
$0.8 million
during the years ended
June 30, 2015
,
2014
, and
2013
, respectively. Cash used by inventory in fiscal 2015 and 2014 was due to higher levels of inventory for future sales growth, including the CAD System commercial launch, as well as timing of inventory purchases and sales. Cash provided by inventories in fiscal 2013 was primarily due to the timing of inventory purchases and sales.
|
•
|
Cash (used in) provided by prepaid expenses and other current assets was
$(1.2) million
,
$(0.6) million
, and
$0.9 million
during the years ended
June 30, 2015
,
2014
, and
2013
, respectively. Cash (used in) provided by prepaid expenses and other current assets was primarily due to payment timing of vendor deposits and other expenditures.
|
•
|
Cash provided by accounts payable was
$0.6 million
,
$2.4 million
, and
$1.5 million
during the years ended
June 30, 2015
,
2014
, and
2013
, respectively. Cash provided by accounts payable was primarily due to timing of purchases and vendor payments and overall increased levels of expenses.
|
•
|
Cash provided by accrued expenses and other liabilities was
$4.4 million
,
$6.7 million
, and
$2.5 million
during the years ended
June 30, 2015
,
2014
, and
2013
, respectively. Cash provided in fiscal 2015 was primarily due to the executive deferred compensation plan, higher payroll and vacation liabilities related to increased headcount, clinical study accruals for increased activity, and the general timing and payment of accruals. Cash provided by accrued expenses and other liabilities in fiscal 2014 was primarily related to increased incentive compensation related to performance above goals, higher accrued commissions due to increased sales, and higher payroll related expenses related to headcount and timing of payments. Cash provided by accrued expenses and other liabilities in fiscal 2013 was primarily related to the timing of payment of accruals.
|
•
|
Proceeds from the sale of common stock, net of issuance costs, of
$84.4 million
and $38.2 million during the years ended June 30,
2014
and 2013, respectively:
|
•
|
Exercise of stock options and warrants of
$2.2 million
,
$16.3 million
, and
$5.9 million
during the years ended
June 30, 2015
,
2014
, and
2013
, respectively;
|
•
|
Proceeds from long-term debt of
$4.8 million
and
$4.5 million
during the years ended June 30,
2014
and
2013
, respectively; and
|
•
|
Employee stock purchase plan purchases of
$2.9 million
,
$3.4 million
, and
$1.8 million
during the years ended
June 30, 2015
,
2014
, and
2013
, respectively.
|
|
Payments Due by Period (in thousands)
|
||||||||||||||||||
Contractual Obligations
|
Total
|
|
Less Than
1 Year
|
|
1-3
Years
|
|
3-5
Years
|
|
More Than
5 Years
|
||||||||||
Operating leases
(1)
|
$
|
2,651
|
|
|
$
|
770
|
|
|
$
|
1,065
|
|
|
$
|
816
|
|
|
$
|
—
|
|
Purchase commitments
(2)
|
10,903
|
|
|
10,903
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
13,554
|
|
|
$
|
11,673
|
|
|
$
|
1,065
|
|
|
$
|
816
|
|
|
$
|
—
|
|
(1)
|
The amounts represent future minimum payments under a non-cancellable operating leases for our offices and production facility along with equipment.
|
(2)
|
This amount represents the estimated remaining minimum payments on open purchase orders, as well as the final payment on the construction of our new corporate headquarters.
|
|
Page
|
F-1
|
|
F-2
|
|
F-3
|
|
F-4
|
|
F-5
|
|
F-6
|
|
F-7
|
|
June 30,
2015 |
|
June 30,
2014 |
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
83,842
|
|
|
$
|
126,592
|
|
Accounts receivable, net
|
30,830
|
|
|
21,383
|
|
||
Inventories
|
13,966
|
|
|
12,890
|
|
||
Marketable securities
|
1,876
|
|
|
—
|
|
||
Prepaid expenses and other current assets
|
3,380
|
|
|
1,846
|
|
||
Total current assets
|
133,894
|
|
|
162,711
|
|
||
Property and equipment, net
|
32,883
|
|
|
15,297
|
|
||
Patents, net
|
4,511
|
|
|
3,823
|
|
||
Other assets
|
40
|
|
|
70
|
|
||
Total assets
|
$
|
171,328
|
|
|
$
|
181,901
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Current maturities of long-term debt
|
$
|
—
|
|
|
$
|
2,400
|
|
Accounts payable
|
9,763
|
|
|
9,703
|
|
||
Accrued expenses
|
20,125
|
|
|
17,626
|
|
||
Total current liabilities
|
29,888
|
|
|
29,729
|
|
||
Long-term liabilities
|
|
|
|
||||
Other liabilities
|
2,005
|
|
|
117
|
|
||
Total liabilities
|
31,893
|
|
|
29,846
|
|
||
Commitments and contingencies
|
|
|
|
||||
Common stock, $0.001 par value at June 30, 2015 and 2014; authorized 100,000,000 common shares at June 30, 2015 and 2014; issued and outstanding 31,898,124 at June 30, 2015 and 31,084,742 at June 30, 2014
|
32
|
|
|
31
|
|
||
Additional paid in capital
|
410,700
|
|
|
390,589
|
|
||
Accumulated other comprehensive income
|
90
|
|
|
—
|
|
||
Accumulated deficit
|
(271,387
|
)
|
|
(238,565
|
)
|
||
Total stockholders’ equity
|
139,435
|
|
|
152,055
|
|
||
Total liabilities and stockholders’ equity
|
$
|
171,328
|
|
|
$
|
181,901
|
|
|
Year Ended June 30,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net revenues
|
$
|
181,544
|
|
|
$
|
136,612
|
|
|
$
|
103,897
|
|
Cost of goods sold
|
39,520
|
|
|
31,041
|
|
|
24,382
|
|
|||
Gross profit
|
142,024
|
|
|
105,571
|
|
|
79,515
|
|
|||
Expenses:
|
|
|
|
|
|
||||||
Selling, general and administrative
|
143,684
|
|
|
117,994
|
|
|
86,718
|
|
|||
Research and development
|
30,977
|
|
|
21,066
|
|
|
15,216
|
|
|||
Total expenses
|
174,661
|
|
|
139,060
|
|
|
101,934
|
|
|||
Loss from operations
|
(32,637
|
)
|
|
(33,489
|
)
|
|
(22,419
|
)
|
|||
Interest and other, net
|
(185
|
)
|
|
(1,801
|
)
|
|
(1,618
|
)
|
|||
Net loss
|
$
|
(32,822
|
)
|
|
$
|
(35,290
|
)
|
|
$
|
(24,037
|
)
|
|
|
|
|
|
|
||||||
Net loss per common share:
|
|
|
|
|
|
||||||
Basic and diluted
|
$
|
(1.04
|
)
|
|
$
|
(1.25
|
)
|
|
$
|
(1.11
|
)
|
|
|
|
|
|
|
||||||
Weighted average common shares used in computation:
|
|
|
|
|
|
||||||
Basic and diluted
|
31,547,711
|
|
|
28,295,758
|
|
|
21,685,932
|
|
|
Year Ended June 30,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net loss
|
$
|
(32,822
|
)
|
|
$
|
(35,290
|
)
|
|
$
|
(24,037
|
)
|
Other comprehensive income:
|
|
|
|
|
|
||||||
Unrealized gain on available for sale securities
|
90
|
|
|
—
|
|
|
—
|
|
|||
Comprehensive loss
|
$
|
(32,732
|
)
|
|
$
|
(35,290
|
)
|
|
$
|
(24,037
|
)
|
|
Common Stock
|
|
Additional
Paid In
Capital
|
|
Warrants
|
|
Accumulated Other Comprehensive Income
|
|
Accumulated
Deficit
|
|
Total
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
||||||||||||||||||||
Balances at June 30, 2012
|
20,089,556
|
|
|
$
|
20
|
|
|
$
|
201,793
|
|
|
$
|
9,614
|
|
|
$
|
—
|
|
|
$
|
(179,238
|
)
|
|
$
|
32,189
|
|
Stock-based compensation related to restricted stock awards, net
|
799,465
|
|
|
1
|
|
|
7,240
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,241
|
|
||||||
Exercise of stock options and warrants at $7.90-$13.98 per share
|
681,889
|
|
|
1
|
|
|
7,179
|
|
|
(1,253
|
)
|
|
—
|
|
|
—
|
|
|
5,927
|
|
||||||
Employee stock purchase plan activity
|
180,000
|
|
|
—
|
|
|
2,403
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,403
|
|
||||||
Conversion of convertible debt
|
331,115
|
|
|
—
|
|
|
4,900
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,900
|
|
||||||
Sale of common stock, net of issuance costs of $2,125
|
2,300,000
|
|
|
2
|
|
|
38,207
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38,209
|
|
||||||
Net loss and comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,037
|
)
|
|
(24,037
|
)
|
||||||
Balances at June 30, 2013
|
24,382,025
|
|
|
$
|
24
|
|
|
$
|
261,722
|
|
|
$
|
8,361
|
|
|
$
|
—
|
|
|
$
|
(203,275
|
)
|
|
$
|
66,832
|
|
Stock-based compensation related to restricted stock awards, net
|
695,968
|
|
|
1
|
|
|
10,083
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,084
|
|
||||||
Exercise of stock options and warrants at $5.01-$18.55 per share
|
2,535,813
|
|
|
3
|
|
|
24,528
|
|
|
(8,269
|
)
|
|
—
|
|
|
—
|
|
|
16,262
|
|
||||||
Expiration of common stock warrants
|
—
|
|
|
—
|
|
|
92
|
|
|
(92
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Employee stock purchase plan activity
|
149,839
|
|
|
—
|
|
|
4,546
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,546
|
|
||||||
Conversion of convertible debt
|
321,097
|
|
|
—
|
|
|
5,252
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,252
|
|
||||||
Sale of common stock, net of issuance costs of $5,631
|
3,000,000
|
|
|
3
|
|
|
84,366
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
84,369
|
|
||||||
Net loss and comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(35,290
|
)
|
|
(35,290
|
)
|
||||||
Balances at June 30, 2014
|
31,084,742
|
|
|
$
|
31
|
|
|
$
|
390,589
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(238,565
|
)
|
|
$
|
152,055
|
|
Stock-based compensation related to restricted stock awards, net
|
469,575
|
|
|
1
|
|
|
14,088
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,089
|
|
||||||
Exercise of stock options at $5.01- $12.37 per share
|
222,937
|
|
|
—
|
|
|
2,152
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,152
|
|
||||||
Employee stock purchase plan activity
|
120,870
|
|
|
—
|
|
|
3,871
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,871
|
|
||||||
Unrealized gain on marketable securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
90
|
|
|
—
|
|
|
90
|
|
||||||
Net loss and comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32,822
|
)
|
|
(32,822
|
)
|
||||||
Balances at June 30, 2015
|
31,898,124
|
|
|
$
|
32
|
|
|
$
|
410,700
|
|
|
$
|
—
|
|
|
$
|
90
|
|
|
$
|
(271,387
|
)
|
|
$
|
139,435
|
|
|
Year Ended June 30,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Cash flows from operating activities
|
|
||||||||||
Net loss
|
$
|
(32,822
|
)
|
|
$
|
(35,290
|
)
|
|
$
|
(24,037
|
)
|
Adjustments to reconcile net loss to net cash used in operations
|
|
|
|
|
|
||||||
Depreciation of property and equipment
|
2,150
|
|
|
1,243
|
|
|
903
|
|
|||
Provision for doubtful accounts
|
1,121
|
|
|
65
|
|
|
195
|
|
|||
Amortization of patents
|
171
|
|
|
124
|
|
|
70
|
|
|||
Write-off of patent costs
|
43
|
|
|
64
|
|
|
130
|
|
|||
Amortization of discount (premium) on debt, net
|
—
|
|
|
137
|
|
|
(59
|
)
|
|||
Debt conversion and valuation of conversion options, net
|
—
|
|
|
716
|
|
|
181
|
|
|||
Loss on disposal of property and equipment
|
121
|
|
|
—
|
|
|
—
|
|
|||
Stock-based compensation
|
14,718
|
|
|
10,928
|
|
|
7,442
|
|
|||
Changes in assets and liabilities
|
|
|
|
|
|
||||||
Accounts receivable
|
(10,568
|
)
|
|
(6,718
|
)
|
|
(1,281
|
)
|
|||
Inventories
|
(1,076
|
)
|
|
(6,647
|
)
|
|
818
|
|
|||
Prepaid expenses and other assets
|
(1,183
|
)
|
|
(564
|
)
|
|
925
|
|
|||
Accounts payable
|
581
|
|
|
2,375
|
|
|
1,467
|
|
|||
Accrued expenses and other liabilities
|
4,387
|
|
|
6,729
|
|
|
2,481
|
|
|||
Net cash used in operations
|
(22,357
|
)
|
|
(26,838
|
)
|
|
(10,765
|
)
|
|||
Cash flows from investing activities
|
|
||||||||||
Expenditures for property and equipment
|
(20,325
|
)
|
|
(12,717
|
)
|
|
(1,672
|
)
|
|||
Purchases of marketable securities
|
(2,112
|
)
|
|
—
|
|
|
—
|
|
|||
Sales of marketable securities
|
365
|
|
|
—
|
|
|
—
|
|
|||
Patent acquisition costs
|
(955
|
)
|
|
(702
|
)
|
|
(783
|
)
|
|||
Net cash used in investing activities
|
(23,027
|
)
|
|
(13,419
|
)
|
|
(2,455
|
)
|
|||
Cash flows from financing activities
|
|
||||||||||
Proceeds from the employee stock purchase plan
|
2,882
|
|
|
3,371
|
|
|
1,752
|
|
|||
Exercise of stock options and warrants
|
2,152
|
|
|
16,262
|
|
|
5,927
|
|
|||
Proceeds from borrowings
|
—
|
|
|
4,800
|
|
|
4,500
|
|
|||
Payments on borrowings
|
(2,400
|
)
|
|
(9,850
|
)
|
|
(4,800
|
)
|
|||
Proceeds from sale of common stock, net of issuance costs
|
—
|
|
|
84,369
|
|
|
38,209
|
|
|||
Net cash provided by financing activities
|
2,634
|
|
|
98,952
|
|
|
45,588
|
|
|||
Net change in cash and cash equivalents
|
(42,750
|
)
|
|
58,695
|
|
|
32,368
|
|
|||
Cash and cash equivalents
|
|
||||||||||
Beginning of period
|
126,592
|
|
|
67,897
|
|
|
35,529
|
|
|||
End of period
|
$
|
83,842
|
|
|
$
|
126,592
|
|
|
$
|
67,897
|
|
Noncash investing and financing activities
|
|
||||||||||
Equipment included in accounts payable
|
$
|
469
|
|
|
$
|
825
|
|
|
$
|
66
|
|
Patent costs included in accounts payable
|
52
|
|
|
90
|
|
|
43
|
|
|||
Conversion of convertible debt
|
—
|
|
|
5,252
|
|
|
4,900
|
|
|||
Premium on convertible debt
|
—
|
|
|
—
|
|
|
304
|
|
|||
Beneficial conversion feature on convertible debt
|
—
|
|
|
—
|
|
|
108
|
|
|||
Net exercise of common stock warrants
|
—
|
|
|
4,322
|
|
|
1,130
|
|
|||
Issuance and expiration of common stock warrants
|
—
|
|
|
92
|
|
|
—
|
|
|||
Supplemental cash flow information
|
|
||||||||||
Interest paid
|
$
|
23
|
|
|
$
|
534
|
|
|
$
|
1,132
|
|
|
Amount
|
||
Balances at June 30, 2013
|
$
|
458
|
|
Provision for doubtful accounts
|
65
|
|
|
Write-offs
|
(72
|
)
|
|
Balances at June 30, 2014
|
451
|
|
|
Provision for doubtful accounts
|
1,121
|
|
|
Write-offs
|
(135
|
)
|
|
Balances at June 30, 2015
|
$
|
1,437
|
|
|
Amount
|
||
Balances at June 30, 2013
|
$
|
116
|
|
Provision
|
308
|
|
|
Claims
|
(308
|
)
|
|
Balances at June 30, 2014
|
116
|
|
|
Provision
|
377
|
|
|
Claims
|
(367
|
)
|
|
Balances at June 30, 2015
|
$
|
126
|
|
|
June 30,
|
||||||
|
2015
|
|
2014
|
||||
Accounts receivable
|
$
|
32,267
|
|
|
$
|
21,834
|
|
Less: Allowance for doubtful accounts
|
(1,437
|
)
|
|
(451
|
)
|
||
Total Accounts receivable
|
$
|
30,830
|
|
|
$
|
21,383
|
|
|
June 30,
|
||||||
|
2015
|
|
2014
|
||||
Raw materials
|
$
|
7,292
|
|
|
$
|
5,879
|
|
Work in process
|
1,108
|
|
|
855
|
|
||
Finished goods
|
5,566
|
|
|
6,156
|
|
||
Total Inventories
|
$
|
13,966
|
|
|
$
|
12,890
|
|
|
June 30,
|
||||||
|
2015
|
|
2014
|
||||
Land
|
$
|
500
|
|
|
$
|
500
|
|
Building
|
22,468
|
|
|
—
|
|
||
Equipment
|
11,745
|
|
|
6,436
|
|
||
Furniture
|
2,581
|
|
|
626
|
|
||
Leasehold improvements
|
110
|
|
|
233
|
|
||
Construction in progress
|
1,218
|
|
|
11,499
|
|
||
|
38,622
|
|
|
19,294
|
|
||
Less: Accumulated depreciation
|
(5,739
|
)
|
|
(3,997
|
)
|
||
Total Property and equipment, net
|
$
|
32,883
|
|
|
$
|
15,297
|
|
|
June 30,
|
||||||
|
2015
|
|
2014
|
||||
Patents
|
$
|
5,388
|
|
|
$
|
4,529
|
|
Less: Accumulated amortization
|
(877
|
)
|
|
(706
|
)
|
||
Total Patents, net
|
$
|
4,511
|
|
|
$
|
3,823
|
|
2016
|
$
|
166
|
|
2017
|
187
|
|
|
2018
|
182
|
|
|
2019
|
174
|
|
|
2020
|
170
|
|
|
Thereafter
|
3,632
|
|
|
|
$
|
4,511
|
|
|
June 30,
|
||||||
|
2015
|
|
2014
|
||||
Salaries and bonus
|
$
|
3,961
|
|
|
$
|
5,244
|
|
Commissions
|
5,387
|
|
|
6,069
|
|
||
Accrued vacation
|
3,770
|
|
|
2,843
|
|
||
Accrued excise, sales and other taxes
|
3,217
|
|
|
1,812
|
|
||
Clinical studies
|
2,446
|
|
|
1,117
|
|
||
Other
|
1,344
|
|
|
541
|
|
||
Total Accrued expenses
|
$
|
20,125
|
|
|
$
|
17,626
|
|
Date of Conversion
|
Amount Converted
|
|
Shares Issued Upon Conversion
|
|||
August 14, 2013
|
$
|
500
|
|
|
32,679
|
|
October 15, 2013
|
$
|
1,000
|
|
|
65,530
|
|
October 23, 2013
|
$
|
1,500
|
|
|
96,586
|
|
November 13, 2013
|
$
|
1,150
|
|
|
72,784
|
|
December 3, 2013
|
$
|
850
|
|
|
53,518
|
|
|
Year Ended June 30,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Interest expense, net of premium amortization
|
$
|
(23
|
)
|
|
$
|
(1,034
|
)
|
|
$
|
(1,345
|
)
|
Change in fair value of conversion options
|
—
|
|
|
(61
|
)
|
|
370
|
|
|||
Net write-offs upon conversion (option and unamortized premium)
|
—
|
|
|
(655
|
)
|
|
(551
|
)
|
|||
Other
|
(162
|
)
|
|
(51
|
)
|
|
(92
|
)
|
|||
Total Interest and other, net
|
$
|
(185
|
)
|
|
$
|
(1,801
|
)
|
|
$
|
(1,618
|
)
|
Offering Date
|
|
Shares Sold
|
|
Sale Price
|
|
Net Proceeds
(1)
|
||||
November 26, 2013
|
|
3,000,000
|
|
$
|
30.00
|
|
|
$
|
84,369
|
|
March 25, 2013
|
|
2,300,000
|
|
$
|
17.60
|
|
|
$
|
38,209
|
|
|
Warrants
Outstanding
|
|
Price Range
per Share
|
||
Warrants outstanding at June 30, 2012
|
2,457,433
|
|
|
$
|
8.78 - 61.30
|
Exercised
|
(362,861
|
)
|
|
$
|
8.83 - 9.80
|
Expired
|
(2,854
|
)
|
|
$
|
—
|
Warrants outstanding at June 30, 2013
|
2,091,718
|
|
|
$
|
8.78 - 61.30
|
Exercised
|
(2,063,904
|
)
|
|
$
|
8.78 - 9.33
|
Expired
|
(27,814
|
)
|
|
$
|
8.83 - 61.30
|
Warrants outstanding at June 30, 2014
|
—
|
|
|
|
|
|
Number of
Options
|
|
Weighted Average
Exercise Price
|
|||
Options outstanding at June 30, 2012
|
2,371,198
|
|
|
$
|
10.31
|
|
Exercised
|
(533,954
|
)
|
|
$
|
11.59
|
|
Forfeited or expired
|
(97,581
|
)
|
|
$
|
12.49
|
|
Options outstanding at June 30, 2013
|
1,739,663
|
|
|
$
|
9.79
|
|
Exercised
|
(816,854
|
)
|
|
$
|
9.38
|
|
Forfeited or expired
|
—
|
|
|
$
|
—
|
|
Options outstanding at June 30, 2014
|
922,809
|
|
|
$
|
10.16
|
|
Exercised
|
(222,937
|
)
|
|
$
|
9.65
|
|
Forfeited or expired
|
—
|
|
|
$
|
—
|
|
Options outstanding at June 30, 2015
|
699,872
|
|
|
$
|
10.32
|
|
Performance Measurement
|
|
2015
|
|
2014
|
|
2013
|
|||
Total shareholder return
|
|
76,112
|
|
|
53,566
|
|
|
67,854
|
|
Annual revenue growth
|
|
76,112
|
|
|
53,566
|
|
|
67,854
|
|
|
Number of
Shares
|
|
Weighted Average
Grant Date
Fair Value
|
|||
Restricted stock awards outstanding at June 30, 2012
|
1,244,830
|
|
|
$
|
9.08
|
|
Granted
|
880,282
|
|
|
$
|
11.46
|
|
Forfeited
|
(123,494
|
)
|
|
$
|
9.31
|
|
Vested
|
(571,488
|
)
|
|
$
|
8.76
|
|
Restricted stock awards outstanding at June 30, 2013
|
1,430,130
|
|
|
$
|
10.78
|
|
Granted
|
741,039
|
|
|
$
|
21.28
|
|
Forfeited
|
(106,742
|
)
|
|
$
|
14.04
|
|
Vested
|
(788,024
|
)
|
|
$
|
10.47
|
|
Restricted stock awards outstanding at June 30, 2014
|
1,276,403
|
|
|
$
|
17.37
|
|
Granted
|
514,296
|
|
|
$
|
30.01
|
|
Forfeited
|
(119,081
|
)
|
|
$
|
21.43
|
|
Vested
|
(676,295
|
)
|
|
$
|
17.31
|
|
Restricted stock awards outstanding at June 30, 2015
|
995,323
|
|
|
$
|
21.31
|
|
|
Number of
Shares
|
|
Weighted Average
Grant Date
Fair Value
|
|||
Restricted stock units outstanding at June 30, 2012
|
284,467
|
|
|
$
|
7.67
|
|
Granted
|
70,883
|
|
|
$
|
9.41
|
|
Forfeited
|
(42,677
|
)
|
|
$
|
7.03
|
|
Restricted stock units outstanding at June 30, 2013
|
312,673
|
|
|
$
|
8.15
|
|
Granted
|
45,228
|
|
|
$
|
21.87
|
|
Converted to common stock
|
(61,770
|
)
|
|
$
|
8.90
|
|
Restricted stock units outstanding at June 30, 2014
|
296,131
|
|
|
$
|
10.09
|
|
Granted
|
41,172
|
|
|
$
|
29.57
|
|
Converted to common stock
|
(74,360
|
)
|
|
$
|
11.90
|
|
Restricted stock units outstanding at June 30, 2015
|
262,943
|
|
|
$
|
12.62
|
|
|
Restricted
Stock
Awards
|
|
Employee Stock Purchase Plan
|
|
Restricted
Stock
Units
|
|
Total
|
||||||||
Cost of goods sold
|
$
|
937
|
|
|
$
|
64
|
|
|
$
|
—
|
|
|
$
|
1,001
|
|
Selling, general and administrative
|
10,486
|
|
|
825
|
|
|
917
|
|
|
12,228
|
|
||||
Research and development
|
1,388
|
|
|
101
|
|
|
—
|
|
|
1,489
|
|
||||
Total
|
$
|
12,811
|
|
|
$
|
990
|
|
|
$
|
917
|
|
|
$
|
14,718
|
|
|
Restricted
Stock
Awards
|
|
Employee Stock Purchase Plan
|
|
Restricted
Stock
Units
|
|
Total
|
||||||||
Cost of goods sold
|
$
|
576
|
|
|
$
|
91
|
|
|
$
|
—
|
|
|
$
|
667
|
|
Selling, general and administrative
|
7,403
|
|
|
998
|
|
|
770
|
|
|
9,171
|
|
||||
Research and development
|
1,003
|
|
|
87
|
|
|
—
|
|
|
1,090
|
|
||||
Total
|
$
|
8,982
|
|
|
$
|
1,176
|
|
|
$
|
770
|
|
|
$
|
10,928
|
|
|
Restricted Stock Awards
|
|
Employee Stock Purchase Plan
|
|
Restricted
Stock
Units
|
|
Total
|
||||||||
Cost of goods sold
|
$
|
392
|
|
|
$
|
35
|
|
|
$
|
—
|
|
|
$
|
427
|
|
Selling, general and administrative
|
4,954
|
|
|
596
|
|
|
667
|
|
|
6,217
|
|
||||
Research and development
|
780
|
|
|
18
|
|
|
—
|
|
|
798
|
|
||||
Total
|
$
|
6,126
|
|
|
$
|
649
|
|
|
$
|
667
|
|
|
$
|
7,442
|
|
Reserved
|
2,030,000
|
|
Granted
|
(171,411
|
)
|
Forfeited, expired or cancelled
|
5,866
|
|
Shares available for grant at June 30, 2015
(a)
|
1,864,455
|
|
(a)
|
Excludes the effect of shares granted, exercised, forfeited or expired related to activity from shares granted outside of the 2014 Plan.
|
|
Amortized Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair Value
|
||||
Mutual funds
|
1,786
|
|
|
90
|
|
|
—
|
|
|
1,876
|
|
Total short-term investments
|
1,786
|
|
|
90
|
|
|
—
|
|
|
1,876
|
|
|
|
|
Fair Value Measurements Using Inputs Considered as
|
||||||||
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||
Mutual funds
|
1,876
|
|
|
1,275
|
|
|
601
|
|
|
—
|
|
Total short-term investments
|
1,876
|
|
|
1,275
|
|
|
601
|
|
|
—
|
|
|
June 30,
|
||||||
|
2015
|
|
2014
|
||||
Deferred tax assets
|
|
|
|
||||
Stock-based compensation
|
$
|
4,166
|
|
|
$
|
4,135
|
|
Accrued expenses
|
2,374
|
|
|
1,779
|
|
||
Inventories
|
356
|
|
|
639
|
|
||
Compensation accruals
|
695
|
|
|
—
|
|
||
Depreciation and amortization
|
318
|
|
|
266
|
|
||
Other
|
582
|
|
|
238
|
|
||
Research and development credit carryforwards
|
4,102
|
|
|
3,825
|
|
||
Net operating loss carryforwards
|
71,726
|
|
|
57,817
|
|
||
Total deferred tax assets
|
84,319
|
|
|
68,699
|
|
||
Valuation allowance
|
(84,319
|
)
|
|
(68,699
|
)
|
||
Net deferred tax assets
|
$
|
—
|
|
|
$
|
—
|
|
Balance at June 30, 2013
|
$
|
64,811
|
|
Additions
|
3,888
|
|
|
Balance at June 30, 2014
|
68,699
|
|
|
Additions
|
15,620
|
|
|
Balance at June 30, 2015
|
$
|
84,319
|
|
Balance at July 1, 2013
|
$
|
392
|
|
Increases related to prior year tax positions
|
28
|
|
|
Increases related to current year tax positions
|
38
|
|
|
Balance at June 30, 2014
|
458
|
|
|
Increases related to prior year tax positions
|
4
|
|
|
Increases related to current year tax positions
|
32
|
|
|
Balance at June 30, 2015
|
$
|
494
|
|
2016
|
$
|
770
|
|
2017
|
548
|
|
|
2018
|
517
|
|
|
2019
|
466
|
|
|
2020
|
350
|
|
|
Thereafter
|
—
|
|
|
|
$
|
2,651
|
|
|
Year Ended June 30,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Numerator
|
|
|
|
|
|
||||||
Net loss
|
$
|
(32,822
|
)
|
|
$
|
(35,290
|
)
|
|
$
|
(24,037
|
)
|
Denominator
|
|
|
|
|
|
||||||
Weighted average common shares — basic
|
31,547,711
|
|
|
28,295,758
|
|
|
21,685,932
|
|
|||
Effect of dilutive stock options and warrants
(a)(b)(c)(d)
|
—
|
|
|
—
|
|
|
—
|
|
|||
Weighted average common shares outstanding — diluted
|
31,547,711
|
|
|
28,295,758
|
|
|
21,685,932
|
|
|||
|
|
|
|
|
|
||||||
Net loss per common share — basic and diluted
|
$
|
(1.04
|
)
|
|
$
|
(1.25
|
)
|
|
$
|
(1.11
|
)
|
(a)
|
At
June 30, 2015
,
2014
, and
2013
;
0
,
0
, and
2,091,718
, warrants, respectively, were outstanding. The effect of the shares that would be issued upon exercise of these warrants has been excluded from the calculation of diluted loss per share, because those shares are anti-dilutive.
|
(b)
|
At
June 30, 2015
,
2014
, and
2013
;
699,872
,
922,809
, and
1,739,663
stock options, respectively, were outstanding. The effect of the shares that would be issued upon exercise of these options has been excluded from the calculation of diluted loss per share, because those shares are anti-dilutive.
|
(c)
|
At
June 30, 2015
,
2014
, and
2013
;
0
,
0
and
321,099
additional shares of common stock were issuable upon the conversion of outstanding convertible debt agreements. The effect of the shares that would be issued upon conversion of these debt agreements has been excluded from the calculation of diluted loss per share because those shares are anti-dilutive.
|
(d)
|
At
June 30, 2015
,
2014
, and
2013
;
262,943
,
296,131
and
312,673
additional shares of common stock were issuable upon the settlement of outstanding restricted stock units. The effect of the shares that would be issued upon settlement of these restricted stock units has been excluded from the calculation of diluted loss per share because those shares are anti-dilutive.
|
|
2015
|
||||||||||||||||||
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Total
|
||||||||||
Net revenue
|
$
|
41,354
|
|
|
$
|
44,732
|
|
|
$
|
47,004
|
|
|
$
|
48,454
|
|
|
$
|
181,544
|
|
Gross profit
|
$
|
32,469
|
|
|
$
|
35,386
|
|
|
$
|
36,588
|
|
|
$
|
37,581
|
|
|
$
|
142,024
|
|
Net loss
|
$
|
(8,224
|
)
|
|
$
|
(5,273
|
)
|
|
$
|
(10,656
|
)
|
|
$
|
(8,669
|
)
|
|
$
|
(32,822
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss per common share (basic & diluted)
(1)
|
$
|
(0.26
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
(0.34
|
)
|
|
$
|
(0.27
|
)
|
|
$
|
(1.04
|
)
|
|
2014
|
||||||||||||||||||
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Total
|
||||||||||
Net revenue
|
$
|
29,766
|
|
|
$
|
32,337
|
|
|
$
|
34,945
|
|
|
$
|
39,564
|
|
|
$
|
136,612
|
|
Gross profit
|
$
|
22,902
|
|
|
$
|
25,024
|
|
|
$
|
27,196
|
|
|
$
|
30,449
|
|
|
$
|
105,571
|
|
Net loss
|
$
|
(7,292
|
)
|
|
$
|
(8,658
|
)
|
|
$
|
(9,712
|
)
|
|
$
|
(9,628
|
)
|
|
$
|
(35,290
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss per common share (basic & diluted)
(1)
|
$
|
(0.29
|
)
|
|
$
|
(0.32
|
)
|
|
$
|
(0.32
|
)
|
|
$
|
(0.31
|
)
|
|
$
|
(1.25
|
)
|
Name
|
|
2016 Base
Salary
|
||
David L. Martin
|
|
$
|
630,000
|
|
Laurence L. Betterley
|
|
$
|
368,095
|
|
Kevin J. Kenny
|
|
$
|
430,000
|
|
Robert J. Thatcher
|
|
$
|
344,292
|
|
Paul Koehn
|
|
$
|
327,928
|
|
Name/Title
|
|
Time-Based
|
|
Revenue Growth
|
|
Stockholder Return
|
|||
David L. Martin
President and Chief Executive Officer
|
|
37,358
|
|
|
56,036
|
|
|
56,036
|
|
Laurence L. Betterley
Chief Financial Officer
|
|
14,032
|
|
|
21,048
|
|
|
21,047
|
|
Kevin Kenny
Chief Operating Officer |
|
12,749
|
|
|
19,124
|
|
|
19,123
|
|
Robert J. Thatcher
Chief Healthcare Policy Officer
|
|
10,208
|
|
|
15,312
|
|
|
15,312
|
|
Paul Koehn
Senior Vice President of Quality and Operations
|
|
6,945
|
|
|
10,418
|
|
|
10,417
|
|
(1)
|
Financial Statements. The following financial statements are included in Part II, Item 8 of this Annual Report on Form 10-K:
|
•
|
Report of Independent Registered Public Accounting Firm
|
•
|
Consolidated Balance Sheets as of
June 30, 2015
and
2014
|
•
|
Consolidated Statements of Operations for the years ended
June 30, 2015
,
2014
and
2013
|
•
|
Consolidated Statements of Comprehensive Loss for the years ended
June 30, 2015
,
2014
and
2013
|
•
|
Consolidated Statements of Stockholders’ Equity and Comprehensive Loss for the years ended
June 30, 2015
,
2014
and
2013
|
•
|
Consolidated Statements of Cash Flows for the years ended
June 30, 2015
,
2014
and
2013
|
•
|
Notes to Consolidated Financial Statements
|
•
|
All financial statement schedules have been omitted, because they are not applicable, are not required, or the information is included in the Financial Statements or Notes thereto
|
|
CARDIOVASCULAR SYSTEMS, INC.
|
||
|
|
|
|
Date: August 27, 2015
|
By:
|
|
/s/ David L. Martin
|
|
|
|
David L. Martin
|
|
|
|
President and Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
/s/ David L. Martin
|
|
President, Chief Executive Officer and Director (principal executive officer)
|
|
August 27, 2015
|
David L. Martin
|
|
|
||
|
|
|
||
/s/ Laurence L. Betterley
|
|
Chief Financial Officer (principal
financial and accounting officer)
|
|
August 27, 2015
|
Laurence L. Betterley
|
|
|
||
|
|
|
||
/s/ Scott Bartos
|
|
Director
|
|
August 27, 2015
|
Scott Bartos
|
|
|
||
|
|
|
||
/s/ Brent G. Blackey
|
|
Director
|
|
August 27, 2015
|
Brent G. Blackey
|
|
|
||
|
|
|
||
/s/ Edward Brown
|
|
Director
|
|
August 27, 2015
|
Edward Brown
|
|
|
||
|
|
|
||
/s/ William E. Cohn
|
|
Director
|
|
August 27, 2015
|
William E. Cohn
|
|
|
||
|
|
|
||
/s/ Augustine Lawlor
|
|
Director
|
|
August 27, 2015
|
Augustine Lawlor
|
|
|
||
|
|
|
||
/s/ Leslie Trigg
|
|
Director
|
|
August 27, 2015
|
Leslie Trigg
|
|
|
||
|
|
|
||
/s/ Scott Ward
|
|
Director
|
|
August 27, 2015
|
Scott Ward
|
|
|
Exhibit
No.
|
|
Description
|
3.1
|
|
Restated Certificate of Incorporation, as amended.
(7)
|
3.2
|
|
Amended and Restated Bylaws.
(23)
|
4.1
|
|
Specimen Common Stock Certificate.
(2)
|
4.2
|
|
Registration Rights Agreement by and among Cardiovascular Systems, Inc. and certain of its stockholders, dated as of March 16, 2009.
(1)
|
10.1
|
|
Lease, dated September 26, 2005, by and between Cardiovascular Systems, Inc., a Minnesota corporation, and Industrial Equities Group LLC.
(3)
|
10.2
|
|
First Amendment to the Lease, dated February 20, 2007, by and between Cardiovascular Systems, Inc., a Minnesota corporation, and Industrial Equities Group LLC.
(3)
|
10.3
|
|
Second Amendment to the Lease, dated March 9, 2007, by and between Cardiovascular Systems, Inc., a Minnesota corporation, and Industrial Equities Group LLC.
(3)
|
10.4
|
|
Third Amendment to the Lease, dated September 26, 2007, by and between Cardiovascular Systems, Inc., a Minnesota corporation, and Industrial Equities Group LLC.
(3)
|
10.5
|
|
Assumption of Lease, dated March 23, 2009 by Cardiovascular Systems, Inc.
(7)
|
10.6†
|
|
Employment Agreement, dated December 19, 2006, by and between Cardiovascular Systems, Inc., a Minnesota corporation, and David L. Martin.
(3)
|
10.7†
|
|
Employment Agreement, dated April 7, 2008, by and between Cardiovascular Systems, Inc., a Minnesota corporation, and Laurence L. Betterley.
(3)
|
10.8†
|
|
Employment Agreement, dated May 9, 2011, by and between Cardiovascular Systems, Inc. and Kevin J. Kenny.
(13)
|
10.9†
|
|
Form of Standard Employment Agreement.
(3)
|
10.10†*
|
|
Fiscal Year 2016 Executive Officer Base Salaries.
|
10.11†*
|
|
Fiscal 2016 Executive Officer Bonus Plan and Equity Compensation.
|
10.12†*
|
|
Fiscal Year 2016 Director Compensation Arrangements.
|
10.13†
|
|
Form of Director and Officer Indemnification Agreement.
(7)
|
10.14†
|
|
Cardiovascular Systems, Inc. Amended and Restated 2007 Equity Incentive Plan.
(5)
|
10.15†
|
|
Form of Incentive Stock Option Agreement under the Amended and Restated 2007 Equity Incentive Plan.
(7)
|
10.16†
|
|
Form of Non-Qualified Stock Option Agreement under the Amended and Restated 2007 Equity Incentive Plan.
(7)
|
10.17†
|
|
Form of Restricted Stock Agreement under the Amended and Restated 2007 Equity Incentive Plan.
(13)
|
10.18†
|
|
Form of Restricted Stock Unit Agreement under the Amended and Restated 2007 Equity Incentive Plan.
(13)
|
10.19†
|
|
Form of Performance Share Award under the Amended and Restated 2007 Equity Incentive Plan.
(7)
|
10.20†
|
|
Form of Performance Unit Award under the Amended and Restated 2007 Equity Incentive Plan.
(7)
|
10.21†
|
|
Form of Stock Appreciation Rights Agreement under the Amended and Restated 2007 Equity Incentive Plan.
(7)
|
10.22†
|
|
2003 Stock Option Plan of Cardiovascular Systems, Inc., a Minnesota corporation, as amended.
(3)
|
10.23†
|
|
Form of Incentive Stock Option Agreement under the 2003 Stock Option Plan of Cardiovascular Systems, Inc., a Minnesota corporation.
(3)
|
Exhibit
No.
|
|
Description
|
10.24†
|
|
Form of Nonqualified Stock Option Agreement under the 2003 Stock Option Plan of Cardiovascular Systems, Inc., a Minnesota corporation.
(3)
|
10.25†
|
|
Cardiovascular Systems, Inc. Amended and Restated 2006 Employee Stock Purchase Plan.
(6)
|
10.26
|
|
Corporate Job Creation Agreement between Pearland Economic Development Corporation and Cardiovascular Systems, Inc., dated June 17, 2009.
(4)
|
10.27
|
|
Build-To-Suit Lease Agreement between Pearland Economic Development Corporation and Cardiovascular Systems, Inc., dated September 9, 2009.
(4)
|
10.28
|
|
Letter Agreement between Silicon Valley Bank and Cardiovascular Systems, Inc., dated September 9, 2009.
(4)
|
10.29
|
|
Amended and Restated Loan and Security Agreement, dated March 29, 2010, by and between Cardiovascular Systems, Inc. and Silicon Valley Bank.
(8)
|
10.30
|
|
Loan and Security Agreement, dated April 14, 2010, by and between Cardiovascular Systems, Inc. and Partners for Growth III, L.P.
(8)
|
10.31
|
|
Intellectual Property Security Agreement, dated April 14, 2010, by and between Cardiovascular Systems, Inc. and Partners for Growth III, L.P.
(8)
|
10.32
|
|
Copyright Collateral Agreement and Notice, dated April 14, 2010, by and between Cardiovascular Systems, Inc. and Partners for Growth III, L.P.
(8)
|
10.33
|
|
Domain Rights Collateral Agreement and Notice, dated April 14, 2010, by and between Cardiovascular Systems, Inc. and Partners for Growth III, L.P.
(8)
|
10.34
|
|
Patent Collateral Agreement and Notice, dated April 14, 2010, by and between Cardiovascular Systems, Inc. and Partners for Growth III, L.P.
(8)
|
10.35
|
|
Trademark Collateral Agreement and Notice, dated April 14, 2010, by and between Cardiovascular Systems, Inc. and Partners for Growth III, L.P.
(8)
|
10.36
|
|
Letter Agreement, dated April 14, 2010, by and between Cardiovascular Systems, Inc. and Partners for Growth III, L.P.
(8)
|
10.37
|
|
Modification No.1 dated August 23, 2011 to Loan and Security Agreement with Partners for Growth III, L.P.
(11)
|
10.38
|
|
First Amendment to Loan and Security Agreement, dated as of December 27, 2011, by and between the Company and Silicon Valley Bank.
(12)
|
10.39
|
|
Modification No. 2 to Loan and Security Agreement, dated as of December 27, 2011, by and between the Company and Partners for Growth III, L.P.
(12)
|
10.40
|
|
Fourth Amendment to Lease, dated March 23, 2012, by and between the Company and Industrial Equities Group LLC.
(13)
|
10.41
|
|
Second Amendment to Loan and Security Agreement, dated June 29, 2012, by and between the Company and Silicon Valley Bank.
(14)
|
10.42
|
|
Modification No. 3 to Loan and Security Agreement, dated as of June 30, 2012, by and between the Company and Partners for Growth III, L.P.
(14)
|
10.43
|
|
Amendment to Corporate Job Creation Agreement, dated effective July 2, 2012, by and between the Company and Pearland Economic Development Corporation.
(14)
|
10.44†
|
|
Amendment to Employment Agreement, dated December 31, 2012, by and between the Company and David L. Martin.
(15)
|
10.45†
|
|
Amendment to Employment Agreement, dated December 31, 2012, by and between the Company and Laurence L. Betterley.
(15)
|
10.46†
|
|
Amendment to Employment Agreement, dated December 31, 2012, by and between the Company and Kevin J. Kenny.
(15)
|
Exhibit
No.
|
|
Description
|
10.47†
|
|
Amended and Restated Executive Officer Severance Plan.
(22)
|
10.48
|
|
Third Amendment to Loan and Security Agreement, dated May 10, 2013, by and between the Company and Silicon Valley Bank.
(16)
|
10.49
|
|
Modification No. 4 to Loan and Security Agreement, dated as of May 10, 2013, by and between the Company and Partners for Growth III, L.P.
(16)
|
10.50†
|
|
Cardiovascular Systems, Inc. Deferred Compensation Plan.
(17)
|
10.51†
|
|
Transition Agreement between Cardiovascular Systems, Inc. and James Flaherty.
(18)
|
10.52+
|
|
Purchasing Agreement, effective August 1, 2014, between Cardiovascular Systems, Inc. and Healthtrust Purchasing Group, L.P.
(19)
|
10.53
|
|
Fourth Amendment to Loan and Security Agreement, dated June 26, 2014, by and between Cardiovascular Systems, Inc. and Silicon Valley Bank.
(19)
|
10.54
|
|
Development Services Agreement, dated June 11, 2014, by and between Cardiovascular Systems, Inc. and Ryan Companies US, Inc.
(19)
|
10.55
|
|
Contract for Private Redevelopment, dated June 11, 2014, by and among Cardiovascular Systems, Inc., Ryan Companies US, Inc. and The City of New Brighton.
(19)
|
10.56
|
|
Design Build Cost Plus Construction Contract, dated June 11, 2014, by and between Cardiovascular Systems, Inc. and Ryan Companies US, Inc.
(19)
|
10.57
|
|
Fifth Amendment to Loan and Security Agreement, dated September 29, 2014, by and between Cardiovascular Systems, Inc. and Silicon Valley Bank.
(20)
|
10.58
|
|
Separation Agreement and Release, dated September 30, 2014, between Cardiovascular Systems, Inc. and James Flaherty.
(20)
|
10.59†*
|
|
Cardiovascular Systems, Inc. 2014 Equity Incentive Plan, as amended.
|
10.60†
|
|
Form of Restricted Stock Agreement for Time-Based Awards under the 2014 Equity Incentive Plan.
(21)
|
10.61†
|
|
Form of Restricted Stock Agreement for Performance-Based Awards under the 2014 Equity Incentive Plan.
(21)
|
10.62
|
|
Amendment No. 2 to Employment Agreement, dated February 4, 2015, by and between Cardiovascular Systems Inc. and Kevin J. Kenny.
(22)
|
10.63
|
|
Cardiovascular Systems, Inc. Amended Executive Officer Severance Plan.
(22)
|
10.64
|
|
Form of Restricted Stock Unit Agreement for Directors under the 2014 Equity Incentive Plan.
(22)
|
10.65
|
|
Form of Restricted Stock Agreement with Immediate Vesting under the 2014 Equity Incentive Plan.
(22)
|
23.1*
|
|
Consent of PricewaterhouseCoopers LLP.
|
24.1*
|
|
Power of Attorney (included on the signature page).
|
31.1*
|
|
Certification of principal executive officer required by Rule 13a-14(a).
|
31.2*
|
|
Certification of principal financial officer required by Rule 13a-14(a).
|
32.1**
|
|
Section 1350 Certification of principal executive officer.
|
32.2**
|
|
Section 1350 Certification of principal financial officer.
|
101**
|
|
Financial statements from the annual report on Form 10-K of the Company for the year ended June 30, 2015, formatted, in XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Changes in Stockholders' Equity (Deficiency) and Comprehensive Loss, (iv) the Consolidated Statements of Cash Flows, and (v) the Notes to Financial Statements.
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
†
|
Compensatory plan or agreement.
|
+
|
Confidential treatment has been granted for certain portions omitted from this exhibit pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
|
(1)
|
Previously filed with the SEC as an Exhibit to and incorporated herein by reference from the Company's Current Report on Form 8-K filed on March 18, 2009.
|
(2)
|
Previously filed with the SEC as an Exhibit to and incorporated herein by reference from the Company's Current Report on Form 10-Q filed on May 8, 2014.
|
(3)
|
Previously filed with the SEC as an Exhibit to and incorporated herein by reference from CSI Minnesota, Inc.'s Registration Statement on Form S-1, File No. 333-148798.
|
(4)
|
Previously filed with the SEC as an Exhibit to and incorporated herein by reference from the Company's Annual Report on Form 10-K filed on September 29, 2009.
|
(5)
|
Previously filed with the SEC as an Exhibit to and incorporated herein by reference from the Company's Registration Statement on Form S-8, File No. 333-158755.
|
(6)
|
Previously filed with the SEC as an Exhibit to and incorporated herein by reference from the Company's Registration Statement on Form S-8, File No. 333-158987.
|
(7)
|
Previously filed with the SEC as an Exhibit to and incorporated herein by reference from the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2009.
|
(8)
|
Previously filed with the SEC as an Exhibit to and incorporated herein by reference from the Company's Quarterly Report on Form 10-Q filed on May 14, 2010.
|
(9)
|
Previously filed with the SEC as an Exhibit to and incorporated herein by reference from the Company's Annual Report on Form 10-K filed on September 28, 2010.
|
(10)
|
Previously filed with the SEC as an Exhibit to and incorporated herein by reference from the Company's Annual Report on Form 10-K filed on September 12, 2011.
|
(11)
|
Previously filed with the SEC as an Exhibit to and incorporated herein by reference from the Company's Quarterly Report on Form 10-Q filed on November 8, 2011.
|
(12)
|
Previously filed with the SEC as an Exhibit to and incorporated herein by reference from the Company's Quarterly Report on Form 10-Q filed on February 9, 2012.
|
(13)
|
Previously filed with the SEC as an Exhibit to and incorporated herein by reference from the Company's Quarterly Report on Form 10-Q filed on May 8, 2012.
|
(14)
|
Previously filed with the SEC as an Exhibit to and incorporated herein by reference from the Company's Annual Report on Form 10-K filed September 10, 2012.
|
(15)
|
Previously filed with the SEC as an Exhibit to and incorporated herein by reference from the Company's Quarterly Report on Form 10-Q filed February 8, 2013.
|
(16)
|
Previously filed with the SEC as an Exhibit to and incorporated herein by reference from the Company's Annual Report on Form 10-K filed September 11, 2013.
|
(17)
|
Previously filed with the SEC as an Exhibit to and incorporated herein by reference from the Company's Current Report on Form 8-K filed December 17, 2013.
|
(18)
|
Previously filed with the SEC as an Exhibit to and incorporated herein by reference from the Company's Quarterly Report on Form 10-Q filed May 8, 2014.
|
(19)
|
Previously filed with the SEC as an Exhibit to and incorporated herein by reference from the Company's Annual Report on Form 10-K filed August 26, 2014.
|
(20)
|
Previously filed with the SEC as an Exhibit to and incorporated herein by reference from the Company's Quarterly Report on Form 10-Q filed November 7, 2014.
|
(21)
|
Previously filed with the SEC as an Exhibit to and incorporated herein by reference from the Company's Current Report on Form 8-K filed November 14, 2014.
|
(22)
|
Previously filed with the SEC as an Exhibit to and incorporated herein by reference from the Company's Quarterly Report on Form 10-Q filed May 8, 2015.
|
(23)
|
Previously filed with the SEC as an Exhibit to and incorporated herein by reference from the Company's Current Report on Form 8-K filed May 21, 2015.
|
Name/Title
|
|
FY2016 Salary
|
|
|||
David L. Martin
President and Chief Executive Officer
|
|
|
$
|
630,000
|
|
|
Laurence L. Betterley
Chief Financial Officer
|
|
|
$
|
368,095
|
|
|
Kevin Kenny
Chief Operating Officer |
|
|
$
|
430,000
|
|
|
Robert J. Thatcher
Chief Healthcare Policy Officer
|
|
|
$
|
344,292
|
|
|
Paul Koehn
Senior Vice President of Quality and Operations
|
|
|
$
|
327,928
|
|
|
Name/Title
|
|
Time-Based
|
|
Revenue Growth
|
|
Stockholder Return
|
|||
David L. Martin
President and Chief Executive Officer
|
|
37,358
|
|
|
56,036
|
|
|
56,036
|
|
Laurence L. Betterley
Chief Financial Officer
|
|
14,032
|
|
|
21,048
|
|
|
21,047
|
|
Kevin Kenny
Chief Operating Officer |
|
12,749
|
|
|
19,124
|
|
|
19,123
|
|
Robert J. Thatcher
Chief Healthcare Policy Officer
|
|
10,208
|
|
|
15,312
|
|
|
15,312
|
|
Paul Koehn
Senior Vice President of Quality and Operations
|
|
6,945
|
|
|
10,418
|
|
|
10,417
|
|
●
|
|
|
Retainers of $40,000 for service as a board member; $20,000 for service as a chairman of a board committee; $10,000 for service as a member of a board committee; and $1,200 per board or committee meeting attended in the event that more than twelve of such meetings are held during the period. Directors may irrevocably elect, in advance of each fiscal year, to receive these fees in cash, in common stock of the Company or a combination thereof, or in restricted stock units (“RSUs”). Each director electing to receive fees in RSUs shall at the time of such election also irrevocably select the date of settlement of the RSU. On the settlement date, RSUs may be settled, at the Company’s discretion, in cash or in shares of common stock or a combination thereof.
|
●
|
|
|
An RSU award with a value of $125,000 payable, in the Company’s discretion, in cash or in shares of common stock. The Company will provide for the RSU payment, whether paid in cash or shares of common stock, to be made (in a lump sum if paid in cash) within 30 days following the six-month anniversary of the termination of the director’s board membership.
|
1.
|
I have reviewed this annual report on Form 10-K of Cardiovascular Systems, 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 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/ David L. Martin
|
David L. Martin
President and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Cardiovascular Systems, 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 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/ Laurence L. Betterley
|
Laurence L. Betterley
Chief Financial Officer
|
/s/ David L. Martin
|
David L. Martin
President and Chief Executive Officer
|
By:
/s/ Laurence L. Betterley
|
Laurence L. Betterley
|
Chief Financial Officer
|