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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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Emerging growth company
o
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(Do not check if a smaller reporting company)
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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 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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•
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an electrically-powered control handle, which allows movement of the crown and predictable crown location;
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•
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a flexible drive shaft with an eccentrically mounted diamond-coated crown, which tracks and orbits over the guide wire; and
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•
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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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•
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Speed.
An increase in speed creates a larger orbital radius, thus accommodating larger diameter vessels. Our Peripheral OAS allows the user to choose between three rotational speeds. Our Coronary OAS Classic Crown allows the user to choose between two rotational speeds, in addition to engaging a recently added Glide Assist
®
feature, which is an innovative solution that facilitates device tracking, provides easier device repositioning, and provides enhanced performance in challenging anatomies.
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•
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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 particles. The Peripheral OAS 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. The crown for the Coronary OAS is available in two configurations: 1.25 millimeter Classic Crown (currently sold in the United States), and the 1.25 millimeter Micro Crown (currently sold in Japan).
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•
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Differential Sanding Reduces Risk of Adverse Events
. The OAS is designed to differentiate between hard, non-compliant plaque and soft, compliant arterial tissue. Arteries are composed of three tissue layers (from inside to out): the intima, media, and adventitia. The eccentrically mounted diamond-coated crown at the working end of the device engages and removes plaque from the artery wall with minimal likelihood of penetrating or damaging the fragile intima, or inner layer of the arterial wall because soft, compliant tissue flexes away from the crown.
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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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•
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Allows Continuous Blood Flow During Procedure.
The OAS allows for continuous blood flow while orbiting, as well as constant flushing of particulates during treatment. 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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•
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Benefits of Smaller Sheaths.
The Diamondback 360 Peripheral OAS portfolio is uniquely compatible with 4 French (“Fr”) to 6Fr sheaths. Centrifugal force enables the OAS to treat large vessels through small sheaths; for example, it can treat up to 5mm vessel through a 4Fr sheath. Smaller sheaths may be associated with fewer bleeding complications, shortened post-procedure ambulation time and reduced radiation exposure.
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Efficacy Demonstrated for Both Peripheral OAS and Coronary OAS.
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◦
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Peripheral OAS -
Our pivotal OASIS clinical trial was designed to evaluate the safety and effectiveness of the OAS in treating patients with symptomatic PAD. 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 OAS successfully met the study endpoints.
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◦
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Coronary OAS
- Our pivotal ORBIT II Coronary OAS trial was designed to evaluate the safety and efficacy of the OAS in treating
de novo
severely calcified coronary lesions. The trial met both the primary safety and efficacy endpoints by significant margins. Preparation of severely calcified plaque with the Coronary OAS not only helped facilitate stent delivery, but also improved both peri-procedural and 30-day clinical outcomes compared with the outcomes of historic control subjects in this difficult-to-treat patient population.
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Treats Difficult, Fibrotic and Calcified Lesions.
The Peripheral OAS enables physicians to remove plaque from long, fibrotic, or calcified lesions, as well as bifurcated lesions or lesions with softer plaque, in peripheral arteries both above and below the knee. In the coronary arteries, the Coronary OAS enables physicians to treat complex, severely calcified lesions, enabling stent placement in these difficult to treat lesions. To date, the Coronary OAS is the only FDA-approved device approved specifically 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, while the centrifugal motion of the eccentrically mounted crown creates pulsatile forces. Compliance change is achieved as the OAS differentiates between hard, diseased plaque and healthy, compliant arterial tissue, a concept that we refer to as “differential sanding.” The diamond-coated crown preferentially engages and sands away harder material, but is designed to not damage more compliant healthy parts of the artery, which flex away from the crown. Physicians position the crown at the site of a lesion containing arterial plaque and orbit the crown against it to sand away the superficial, or surface, plaque and create a smooth lumen, or channel, in the vessel. In addition, the crown’s rotating eccentric mass and orbital motion deliver pulsatile mechanical energy into the vessel wall. These pulsatile forces may break up deeper plaque and contribute to compliance change of the diseased segment of the artery.
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Differential Sanding Creates Smooth Lumens.
The differential sanding of the OAS creates a smooth lumen surface, 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 re-narrowing of the arteries.
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Set Up Time.
Given the relative simplicity of the OAS, physicians and lab staff can usually set up and begin using the device in under two minutes.
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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 Crown Treats Multiple Lesions in Various Sized Vessels.
Centrifugal force unique to the OAS allows for a single access site to treat multiple lesions, in most cases. In the coronary arteries, Coronary OAS is the only atherectomy device able to treat 2.5 to 4mm vessels with one device through a 6Fr radial approach. In the peripheral vasculature, the OAS 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, which would potentially 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 stenosed, calcified or both. Reaching and treating these small vessels requires a low profile, which most 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 OAS is effective in treating those vessels. The Peripheral OAS offers a shorter shaft length (60cm), a smaller profile and a more flexible shaft than the predecessors for improved ease of use, and includes a 4-Fr catheter that enables physicians to access lesions below-the-knee using retrograde access through arteries in 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. Our newest Peripheral OAS innovation includes the addition of extended length OAS that can treat above-the-knee disease through trans-radial access (access through the radial artery in the wrist). The ability to treat the larger above-the-knee arteries with OAS via the small trans-radial access sites is made possible by the unique features of the OAS including its small crossing profile and ability to orbit at higher speeds for treatment of larger vessels.
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•
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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, renal insufficiency, or have a family history of heart disease. The pathogenesis of CAD is marked by the accumulation of a fatty material called plaque 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 Coronary OAS is the only atherectomy device specifically 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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•
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Single Crown Can Treat Various Lumen Sizes Helping Limit Hospital 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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Trans-Radial Access Provides Multiple Benefits.
The low profile of the OAS allows for trans-radial access with benefits to both physicians and patients. Radial access can enable treatment of complex, calcified coronary and, often, peripheral arteries that are challenging to access. In addition, the radial access site is associated with lower vascular and bleeding complication rates, faster patient recovery time, and the ability to treat bilateral disease in one setting, address obese patients and work around previous, compromised access sites. For patients, this contributes to comfort during- and post-operation, earlier ambulation, reduced risk of infection, and faster healing.
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Retrograde Access Treatment Option Benefits.
Many of the patients treated with the Peripheral OAS have advanced PAD and suffer from CLI. These patients often have complex, calcified lesions in their lower leg, which are challenging to access and treat using the traditional femoral artery access site. If left untreated, these cases may result in lower limb amputation. Our family of 1.25mm Peripheral OASs with 4Fr compatibility allows for more options to treat those lesions by providing a low-profile system that is fully compatible with alternative access sites in the foot or ankle. Smaller sheaths have been shown to reduce procedure times and decrease complications.
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Drive Adoption through Our Direct U.S. Sales Organization, Medical Education and Key Opinion Leaders.
We expect to continue to drive adoption of the OAS in both hospital and office-based lab settings through the strong support of a clinically knowledgeable direct U.S. sales force focused on the needs of interventional cardiologists, vascular surgeons, interventional radiologists and their cath lab teams. A key element of our strategy is a focus on educating and training physicians about disease states, our clinical data, and proper use and application of OAS technology through programs delivered via physician faculty, our direct sales force and seminars where physician industry leaders discuss case studies and treatment techniques using the devices.
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Build a Strong Portfolio of Clinical Evidence on Safety, Effectiveness and Economic Benefits of the OAS.
Physicians and payors are increasingly interested in clinical and economic evidence to support decisions regarding optimal treatment of patients. We are focused on conducting robust clinical studies that provide insight into and demonstrate the effectiveness of the OAS in treating complex peripheral and coronary artery disease. We believe that demonstrating the clinical advantages and cost-effectiveness of our OAS technology is critical to support physician adoption of the OAS, drive best clinical practice, and sustain ongoing reimbursement coverage for our devices.
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Enhance OAS and Expand Product Portfolio within the Market for Treatment of Peripheral and Coronary Arteries.
In addition to continued innovation and product development on our peripheral and coronary OAS platforms, we are growing our product portfolio to offer new accessories and devices that improve outcomes and expand the patient population we can treat. See “Pursue Strategic Acquisitions and Partnerships” and “Research and Development Activities - Development Activities” for descriptions of new products in development.
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•
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Expand Internationally.
In November 2016, we signed an exclusive distribution agreement with Medikit Co., Ltd. to sell the Diamondback 360
Coronary OAS Micro Crown in Japan. In March 2017, we received approval of that device from Japan’s MHLW. In February 2018, we announced reimbursement approval and our first commercially treated patient in Japan. This represented our first entry into the international market, and most importantly, an opportunity to provide physicians in Japan with a cost-effective treatment option for the difficult-to-treat patient population with severely calcified coronary lesions.
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•
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Pursue Strategic Acquisitions and Partnerships
. In addition to adding to our product portfolio through internal development efforts, we are opportunistically seeking ways to expand our portfolio through acquisitions, distribution agreements, licensing transactions, manufacturing agreements and other strategic partnerships to add new product lines and technologies that leverage our sales expertise and footprint or complement our strategic objectives. In January 2018, we announced an exclusive U.S. distribution agreement with OrbusNeich to offer their full line of semi-compliant, non-compliant and specialty balloons for both coronary and peripheral vascular procedures. Currently we are focused on offering their coronary balloons, including the Sapphire
®
II Pro, which obtained FDA clearance in March 2018 as the first and only 1.0mm coronary balloon available in the United States. In addition, we entered into an agreement with Integer Holdings Corporation to manufacture our ZILIENT™ peripheral guidewires, which are designed to provide tip resilience and crossability in challenging peripheral arterial lesions. Finally, we entered into an agreement with Aerolase Corp. for the co-development of a new laser atherectomy device for physicians to use in more effectively treating multiple forms of arterial disease.
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LIBERTY 360°. This prospective, observational, multi-center clinical study is evaluating the procedural and long-term clinical, quality of life and economic outcomes of endovascular device interventions, including orbital atherectomy, for the treatment of PAD. We expect the results from this study to increase our understanding of the clinical and economic outcomes of endovascular treatment for PAD patients, including those with the most advanced form of the disease, Rutherford Class 6. Enrollment of 1,204 subjects at 51 sites in the United States was completed in February 2016.
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OPTIMIZE BTK. This pilot, hypothesis generating, non-powered, multi-center, randomized clinical study conducted in Europe is designed to gather preliminary exploratory data regarding the acute and long-term clinical outcomes of orbital atherectomy with adjunctive DCB angioplasty versus DCB angioplasty alone in PAD patients with calcified, below-the-knee lesions. We completed enrollment of fifty evaluable patients in May 2018, and these patients will be followed for up to two years.
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ECLIPSE. This post-market, randomized one-to-one, multi-center trial is designed to evaluate vessel preparation with Coronary OAS Classic Crown compared to conventional angioplasty technique prior to drug-eluting stent implantation for the treatment of severely calcified lesions. Approximately 2,000 subjects will be enrolled at approximately 150 sites in the United States and subjects will be followed for up to two years. The co-primary endpoints of acute minimum stent area (assessed by optical coherence tomography in a subset of equally randomized 500 subjects) and one-year target vessel failure are powered to demonstrate superiority of OAS vessel preparation vs. conventional angioplasty.
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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 (or severely calcified plaque in the coronaries);
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low profile and alternative access site capabilities;
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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.
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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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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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•
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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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•
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orders for physician notification or device repair, replacement or refund;
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•
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operating restrictions, partial suspension or total shutdown of production or clinical trials; or
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•
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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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Scott R. Ward
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58
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Chairman, President and Chief Executive Officer
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Jeffrey S. Points
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41
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Chief Financial Officer
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Rhonda J. Robb
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50
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Chief Operating Officer
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Laura J. Gillund
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57
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Chief Talent Officer
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Alexander Rosenstein
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46
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General Counsel and Corporate Secretary
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Sandra M. Sedo
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54
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Chief Compliance Officer
|
•
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the actual and perceived effectiveness and reliability of our products;
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•
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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 our products;
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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 our products in particular;
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the strength of our marketing and distribution infrastructure;
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the level of education and awareness among physicians and hospitals concerning our products; and
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our reputation among physicians and hospitals.
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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;
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sell their products at lower prices than we do; 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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failure to meet our own financial estimates;
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accusations that we have violated a law or regulation;
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recalls of our products;
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significant litigation;
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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;
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developments relating to our competitors and markets; 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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•
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delays in clearing or approving or refusal to clear or approve products;
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•
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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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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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||||||
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High
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Low
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||||
Fiscal Year Ended June 30, 2018
|
|
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||||
First quarter
|
$
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33.11
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|
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$
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26.62
|
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Second quarter
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29.47
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|
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23.00
|
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||
Third quarter
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27.80
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20.58
|
|
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Fourth quarter
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34.51
|
|
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20.89
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|
||
Fiscal Year Ended June 30, 2017
|
|
|
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||||
First quarter
|
$
|
25.22
|
|
|
$
|
18.00
|
|
Second quarter
|
27.38
|
|
|
21.29
|
|
||
Third quarter
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29.70
|
|
|
23.28
|
|
||
Fourth quarter
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33.11
|
|
|
27.73
|
|
|
Year Ended June 30,
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||||||||||||
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2018
|
|
2017
|
|
Change
|
Percent
Change
|
|||||||
Net revenues
|
$
|
217,043
|
|
|
$
|
204,906
|
|
|
$
|
12,137
|
|
5.9
|
%
|
Cost of goods sold
|
39,484
|
|
|
39,441
|
|
|
43
|
|
0.1
|
|
|||
Gross profit
|
177,559
|
|
|
165,465
|
|
|
12,094
|
|
7.3
|
|
|||
Gross margin
|
81.8
|
%
|
|
80.8
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%
|
|
1.0
|
%
|
1.2
|
|
|||
Expenses:
|
|
|
|
|
|
|
|||||||
Selling, general and administrative
|
148,569
|
|
|
144,096
|
|
|
4,473
|
|
3.1
|
|
|||
Research and development
|
26,756
|
|
|
22,911
|
|
|
3,845
|
|
16.8
|
|
|||
Total expenses
|
175,325
|
|
|
167,007
|
|
|
8,318
|
|
5.0
|
|
|||
Income (loss) from operations
|
2,234
|
|
|
(1,542
|
)
|
|
3,776
|
|
(244.9
|
)
|
|||
Other (income) and expense, net
|
390
|
|
|
164
|
|
|
226
|
|
137.8
|
|
|||
Income (loss) before income taxes
|
1,844
|
|
|
(1,706
|
)
|
|
3,550
|
|
(208.1
|
)
|
|||
Provision for income taxes
|
132
|
|
|
86
|
|
|
46
|
|
53.5
|
|
|||
Net income (loss)
|
$
|
1,712
|
|
|
$
|
(1,792
|
)
|
|
$
|
3,504
|
|
(195.5
|
)
|
|
Year Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
Change
|
Percent
Change
|
|||||||
Net revenues
|
$
|
204,906
|
|
|
$
|
178,184
|
|
|
$
|
26,722
|
|
15.0
|
%
|
Cost of goods sold
|
39,441
|
|
|
35,421
|
|
|
4,020
|
|
11.3
|
|
|||
Gross profit
|
165,465
|
|
|
142,763
|
|
|
22,702
|
|
15.9
|
|
|||
Gross margin
|
80.8
|
%
|
|
80.1
|
%
|
|
0.7
|
%
|
0.9
|
|
|||
Expenses:
|
|
|
|
|
|
|
|||||||
Selling, general and administrative
|
144,096
|
|
|
162,542
|
|
|
(18,446
|
)
|
(11.3
|
)
|
|||
Research and development
|
22,911
|
|
|
25,934
|
|
|
(3,023
|
)
|
(11.7
|
)
|
|||
Restructuring
|
—
|
|
|
2,364
|
|
|
(2,364
|
)
|
100.0
|
|
|||
Legal Settlement
|
—
|
|
|
8,000
|
|
|
(8,000
|
)
|
100.0
|
|
|||
Total expenses
|
167,007
|
|
|
198,840
|
|
|
(31,833
|
)
|
(16.0
|
)
|
|||
Loss from operations
|
(1,542
|
)
|
|
(56,077
|
)
|
|
54,535
|
|
(97.3
|
)
|
|||
Other (income) and expense, net
|
164
|
|
|
(145
|
)
|
|
309
|
|
(213.1
|
)
|
|||
Loss before income taxes
|
(1,706
|
)
|
|
(55,932
|
)
|
|
54,226
|
|
(96.9
|
)
|
|||
Provision for income taxes
|
86
|
|
|
92
|
|
|
(6
|
)
|
(6.5
|
)
|
|||
Net loss
|
$
|
(1,792
|
)
|
|
$
|
(56,024
|
)
|
|
$
|
54,232
|
|
(96.8
|
)
|
|
Year Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
Net income (loss)
|
$
|
1,712
|
|
|
$
|
(1,792
|
)
|
Less: Other (income) and expense, net
|
390
|
|
|
164
|
|
||
Less: Provision for income taxes
|
132
|
|
|
86
|
|
||
Income (loss) from operations
|
2,234
|
|
|
(1,542
|
)
|
||
Add: Stock-based compensation
|
10,302
|
|
|
10,354
|
|
||
Add: Depreciation and amortization
|
3,934
|
|
|
4,135
|
|
||
Adjusted EBITDA
|
$
|
16,470
|
|
|
$
|
12,947
|
|
•
|
Stock-based compensation
. Our management believes that excluding this item from our non-GAAP results is useful to investors to understand the application of stock-based compensation guidance and its impact on our operational performance and ability to make additional investments in our company, and it allows for greater transparency to certain line items in our financial statements.
|
•
|
Depreciation and amortization expense
. Our management believes that excluding these items from our non-GAAP results is useful to investors to understand our operational performance and ability to make additional investments in our 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.
|
|
Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net cash provided by (used in) operating activities
|
$
|
9,674
|
|
|
$
|
19,588
|
|
|
$
|
(23,583
|
)
|
Net cash used in investing activities
|
(5,095
|
)
|
|
(1,779
|
)
|
|
(3,769
|
)
|
|||
Net cash provided by financing activities
|
3,769
|
|
|
29,465
|
|
|
4,148
|
|
|||
Net change in cash and cash equivalents
|
$
|
8,348
|
|
|
$
|
47,274
|
|
|
$
|
(23,204
|
)
|
•
|
Cash (used in) provided by accounts receivable of
$(2.9) million
,
$(5.8) million
, and
$7.3 million
during the years ended
June 30, 2018
,
2017
, and
2016
, respectively, was primarily due to the amount and timing of revenue during the periods.
|
•
|
Cash provided by (used in) inventories was
$292,000
,
$543,000
, and
$(3.5) million
during the years ended
June 30, 2018
,
2017
, and
2016
, respectively. Cash provided by inventory during the years ended June 30, 2018 and 2017 was primarily due to lower inventory levels from improved inventory management. Cash used by inventory during fiscal 2016 was due to higher levels of inventory for future sales growth and new product launches, as well as timing of inventory purchases and sales.
|
•
|
Cash provided by (used in) prepaid expenses and other current assets was
$2.3 million
,
$(1.8) million
, and
$728,000
during the years ended
June 30, 2018
,
2017
, and
2016
, respectively, primarily due to payment timing of vendor deposits and other expenditures. During the year ended June 30, 2018, we also received proceeds from an insurance receivable related to a litigation settlement payment.
|
•
|
Cash provided by (used in) accounts payable of
$104,000
,
$1.8 million
, and
$(970,000)
during the years ended
June 30, 2018
,
2017
, and
2016
, respectively, was primarily due to the amount and timing of purchases and vendor payments.
|
•
|
Cash (used in) provided by accrued expenses and other liabilities was
$(6.6) million
,
$725,000
, and
$10.9 million
during the years ended
June 30, 2018
,
2017
, and
2016
, respectively. Cash used during the year ended June 30, 2018 was primarily due to the amount and timing of compensation payments, as well as a litigation settlement payment. Cash provided during the year ended June 30, 2017, was primarily due to the amount and timing of compensation payments. Cash provided during the year ended June 30, 2016 was primarily due to the restructuring accrual, benefits related to our former CEO’s departure, and the DOJ legal settlement expense.
|
•
|
Cash provided by deferred revenue was $189,000 and $10.0 million during the years ended June 30, 2018 and 2017. During the year ended June 30, 2017, Medikit made an upfront payment of $10.0 million to us in connection with the exclusive distribution agreement with Medikit to sell our Coronary and Peripheral OAS in Japan. Medikit also provides advance payments for orders under the terms of the agreement, and, therefore, deferred revenue is recorded until products are accepted by Medikit.
|
•
|
the funding of clinical trials and studies;
|
•
|
sales and marketing programs;
|
•
|
expansion into international markets; and
|
•
|
development of new products.
|
|
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)
|
$
|
906
|
|
|
$
|
510
|
|
|
$
|
396
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Financing obligation
(2)
|
28,397
|
|
|
1,699
|
|
|
3,553
|
|
|
3,770
|
|
|
19,375
|
|
|||||
Purchase commitments
(3)
|
18,323
|
|
|
18,323
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Legal settlement
(4)
|
2,314
|
|
|
1,847
|
|
|
467
|
|
|
—
|
|
|
—
|
|
|||||
Severance payments
(5)
|
975
|
|
|
934
|
|
|
41
|
|
|
—
|
|
|
—
|
|
|||||
Other
(6)
|
66
|
|
|
66
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
50,981
|
|
|
$
|
23,379
|
|
|
$
|
4,457
|
|
|
$
|
3,770
|
|
|
$
|
19,375
|
|
(1)
|
The amounts represent future minimum payments under a non-cancellable operating lease for our Texas production facility along with equipment leases.
|
(2)
|
The amounts represent future minimum payments due under the capital lease related to the sale leaseback of our Facility.
|
(3)
|
The amount represents open purchase orders as of June 30, 2018.
|
(4)
|
Consists of payments and related interest associated with the DOJ settlement discussed above.
|
(5)
|
Includes severance related to various severance agreements.
|
(6)
|
Other includes service agreements.
|
|
Page
|
F-1
|
|
F-2
|
|
F-3
|
|
F-4
|
|
F-5
|
|
F-6
|
|
F-7
|
|
June 30,
2018 |
|
June 30,
2017 |
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
116,260
|
|
|
$
|
107,912
|
|
Accounts receivable, net
|
31,225
|
|
|
28,472
|
|
||
Inventories
|
16,605
|
|
|
16,897
|
|
||
Marketable securities
|
544
|
|
|
704
|
|
||
Prepaid expenses and other current assets
|
2,977
|
|
|
5,074
|
|
||
Total current assets
|
167,611
|
|
|
159,059
|
|
||
Property and equipment, net
|
27,744
|
|
|
29,696
|
|
||
Patents, net
|
5,231
|
|
|
5,056
|
|
||
Other assets
|
2,766
|
|
|
129
|
|
||
Total assets
|
$
|
203,352
|
|
|
$
|
193,940
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
10,441
|
|
|
10,736
|
|
||
Accrued expenses
|
25,776
|
|
|
30,236
|
|
||
Deferred revenue
|
1,243
|
|
|
—
|
|
||
Total current liabilities
|
37,460
|
|
|
40,972
|
|
||
Long-term liabilities
|
|
|
|
||||
Financing obligation
|
21,064
|
|
|
21,100
|
|
||
Deferred revenue
|
8,946
|
|
|
10,000
|
|
||
Other liabilities
|
1,412
|
|
|
3,479
|
|
||
Total liabilities
|
68,882
|
|
|
75,551
|
|
||
Commitments and contingencies
|
|
|
|
||||
Common stock, $0.001 par value; authorized 100,000,000 common shares; issued and outstanding 33,360,032 at June 30, 2018 and 32,849,563 at June 30, 2017
|
33
|
|
|
33
|
|
||
Additional paid in capital
|
461,927
|
|
|
447,559
|
|
||
Accumulated other comprehensive income
|
101
|
|
|
100
|
|
||
Accumulated deficit
|
(327,591
|
)
|
|
(329,303
|
)
|
||
Total stockholders’ equity
|
134,470
|
|
|
118,389
|
|
||
Total liabilities and stockholders’ equity
|
$
|
203,352
|
|
|
$
|
193,940
|
|
|
Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net revenues
|
$
|
217,043
|
|
|
$
|
204,906
|
|
|
$
|
178,184
|
|
Cost of goods sold
|
39,484
|
|
|
39,441
|
|
|
35,421
|
|
|||
Gross profit
|
177,559
|
|
|
165,465
|
|
|
142,763
|
|
|||
Expenses:
|
|
|
|
|
|
||||||
Selling, general and administrative
|
148,569
|
|
|
144,096
|
|
|
162,542
|
|
|||
Research and development
|
26,756
|
|
|
22,911
|
|
|
25,934
|
|
|||
Restructuring
|
—
|
|
|
—
|
|
|
2,364
|
|
|||
Legal settlement
|
—
|
|
|
—
|
|
|
8,000
|
|
|||
Total expenses
|
175,325
|
|
|
167,007
|
|
|
198,840
|
|
|||
Income (loss) from operations
|
2,234
|
|
|
(1,542
|
)
|
|
(56,077
|
)
|
|||
Other (income) expense, net:
|
|
|
|
|
|
||||||
Interest expense
|
1,717
|
|
|
500
|
|
|
—
|
|
|||
Interest income and other, net
|
(1,327
|
)
|
|
(336
|
)
|
|
(145
|
)
|
|||
Total other (income) expense, net
|
390
|
|
|
164
|
|
|
(145
|
)
|
|||
Income (loss) before income taxes
|
1,844
|
|
|
(1,706
|
)
|
|
(55,932
|
)
|
|||
Provision for income taxes
|
132
|
|
|
86
|
|
|
92
|
|
|||
Net income (loss)
|
$
|
1,712
|
|
|
$
|
(1,792
|
)
|
|
$
|
(56,024
|
)
|
|
|
|
|
|
|
||||||
Basic earnings per share
|
$
|
0.05
|
|
|
$
|
(0.06
|
)
|
|
$
|
(1.72
|
)
|
Diluted earnings per share
|
$
|
0.05
|
|
|
$
|
(0.06
|
)
|
|
$
|
(1.72
|
)
|
|
|
|
|
|
|
||||||
Basic weighted average shares outstanding
|
33,145,140
|
|
|
32,373,709
|
|
|
32,537,621
|
|
|||
Diluted weighted average shares outstanding
|
33,614,260
|
|
|
32,373,709
|
|
|
32,537,621
|
|
|
Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net income (loss)
|
$
|
1,712
|
|
|
$
|
(1,792
|
)
|
|
$
|
(56,024
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Unrealized gain on available for sale securities
|
35
|
|
|
66
|
|
|
20
|
|
|||
Adjustment for net gain realized and included in interest income and other, net
|
(34
|
)
|
|
(6
|
)
|
|
(70
|
)
|
|||
Total change in unrealized gain (loss) on available for sale securities
|
1
|
|
|
60
|
|
|
(50
|
)
|
|||
Comprehensive income (loss)
|
$
|
1,713
|
|
|
$
|
(1,732
|
)
|
|
$
|
(56,074
|
)
|
|
Common Stock
|
|
Additional
Paid In
Capital
|
|
Accumulated Other Comprehensive Income
|
|
Accumulated
Deficit
|
|
Total
|
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|
||||||||||||||||
Balances at June 30, 2015
|
31,898,124
|
|
|
$
|
32
|
|
|
$
|
410,700
|
|
|
$
|
90
|
|
|
$
|
(271,387
|
)
|
|
$
|
139,435
|
|
Stock-based compensation related to restricted stock awards, net
|
557,756
|
|
|
1
|
|
|
11,985
|
|
|
—
|
|
|
—
|
|
|
11,986
|
|
|||||
Exercise of stock options at $7.90-$12.37 per share
|
87,817
|
|
|
—
|
|
|
1,006
|
|
|
—
|
|
|
—
|
|
|
1,006
|
|
|||||
Employee stock purchase plan activity
|
248,800
|
|
|
—
|
|
|
4,544
|
|
|
—
|
|
|
—
|
|
|
4,544
|
|
|||||
Unrealized gain on marketable securities
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
20
|
|
|||||
Net gain reclassified from accumulated other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
(70
|
)
|
|
—
|
|
|
(70
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(56,024
|
)
|
|
(56,024
|
)
|
|||||
Balances at June 30, 2016
|
32,792,497
|
|
|
$
|
33
|
|
|
$
|
428,235
|
|
|
$
|
40
|
|
|
$
|
(327,411
|
)
|
|
$
|
100,897
|
|
Stock-based compensation related to restricted stock awards, net
|
(635,018
|
)
|
|
—
|
|
|
9,412
|
|
|
—
|
|
|
—
|
|
|
9,412
|
|
|||||
Exercise of stock options at $7.90-$12.15 per share
|
515,164
|
|
|
—
|
|
|
5,362
|
|
|
—
|
|
|
(100
|
)
|
|
5,262
|
|
|||||
Employee stock purchase plan activity
|
176,920
|
|
|
—
|
|
|
4,550
|
|
|
—
|
|
|
—
|
|
|
4,550
|
|
|||||
Unrealized gain on marketable securities
|
—
|
|
|
—
|
|
|
—
|
|
|
66
|
|
|
—
|
|
|
66
|
|
|||||
Net gain reclassified from accumulated other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,792
|
)
|
|
(1,792
|
)
|
|||||
Balances at June 30, 2017
|
32,849,563
|
|
|
$
|
33
|
|
|
$
|
447,559
|
|
|
$
|
100
|
|
|
$
|
(329,303
|
)
|
|
$
|
118,389
|
|
Stock-based compensation related to restricted stock awards, net
|
295,650
|
|
|
—
|
|
|
9,546
|
|
|
—
|
|
|
—
|
|
|
9,546
|
|
|||||
Exercise of stock options at $7.90-$12.15 per share
|
55,880
|
|
|
—
|
|
|
514
|
|
|
—
|
|
|
—
|
|
|
514
|
|
|||||
Employee stock purchase plan activity
|
158,939
|
|
|
—
|
|
|
4,308
|
|
|
—
|
|
|
—
|
|
|
4,308
|
|
|||||
Unrealized gain on marketable securities
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
—
|
|
|
35
|
|
|||||
Net gain reclassified from accumulated other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
(34
|
)
|
|
—
|
|
|
(34
|
)
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,712
|
|
|
1,712
|
|
|||||
Balances at June 30, 2018
|
33,360,032
|
|
|
$
|
33
|
|
|
$
|
461,927
|
|
|
$
|
101
|
|
|
$
|
(327,591
|
)
|
|
$
|
134,470
|
|
|
Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities
|
|
||||||||||
Net income (loss)
|
$
|
1,712
|
|
|
$
|
(1,792
|
)
|
|
$
|
(56,024
|
)
|
Adjustments to reconcile net income (loss) to net cash used in operations
|
|
|
|
|
|
||||||
Depreciation of property and equipment
|
3,730
|
|
|
3,917
|
|
|
3,686
|
|
|||
Provision for (recovery of) doubtful accounts (including note receivable)
|
(225
|
)
|
|
465
|
|
|
725
|
|
|||
Amortization of patents
|
204
|
|
|
218
|
|
|
231
|
|
|||
Write-off of patent costs
|
497
|
|
|
733
|
|
|
168
|
|
|||
Loss on disposal of property and equipment
|
16
|
|
|
158
|
|
|
170
|
|
|||
Stock-based compensation
|
10,302
|
|
|
10,354
|
|
|
12,977
|
|
|||
Other
|
—
|
|
|
138
|
|
|
—
|
|
|||
Changes in assets and liabilities
|
|
|
|
|
|
||||||
Accounts receivable
|
(2,878
|
)
|
|
(5,809
|
)
|
|
7,327
|
|
|||
Inventories
|
292
|
|
|
543
|
|
|
(3,474
|
)
|
|||
Prepaid expenses and other assets
|
2,308
|
|
|
(1,823
|
)
|
|
728
|
|
|||
Accounts payable
|
104
|
|
|
1,761
|
|
|
(970
|
)
|
|||
Accrued expenses and other liabilities
|
(6,577
|
)
|
|
725
|
|
|
10,873
|
|
|||
Deferred revenue
|
189
|
|
|
10,000
|
|
|
—
|
|
|||
Net cash provided by (used in) operating activities
|
9,674
|
|
|
19,588
|
|
|
(23,583
|
)
|
|||
Cash flows from investing activities
|
|
||||||||||
Expenditures for property and equipment
|
(1,956
|
)
|
|
(981
|
)
|
|
(3,818
|
)
|
|||
Purchase of investment
|
(2,538
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from (issuance of) convertible note receivable
|
318
|
|
|
—
|
|
|
(350
|
)
|
|||
Purchases of marketable securities
|
—
|
|
|
—
|
|
|
(37
|
)
|
|||
Sales of marketable securities
|
194
|
|
|
46
|
|
|
1,249
|
|
|||
Costs incurred in connection with patents
|
(1,113
|
)
|
|
(844
|
)
|
|
(813
|
)
|
|||
Net cash used in investing activities
|
(5,095
|
)
|
|
(1,779
|
)
|
|
(3,769
|
)
|
|||
Cash flows from financing activities
|
|
||||||||||
Proceeds from the employee stock purchase plan
|
3,242
|
|
|
3,254
|
|
|
3,142
|
|
|||
Exercise of stock options
|
513
|
|
|
5,263
|
|
|
1,006
|
|
|||
Proceeds from financing
|
|
|
|
20,944
|
|
|
—
|
|
|||
Other
|
14
|
|
|
4
|
|
|
—
|
|
|||
Net cash provided by financing activities
|
3,769
|
|
|
29,465
|
|
|
4,148
|
|
|||
Net change in cash and cash equivalents
|
8,348
|
|
|
47,274
|
|
|
(23,204
|
)
|
|||
Cash and cash equivalents
|
|
||||||||||
Beginning of period
|
107,912
|
|
|
60,638
|
|
|
83,842
|
|
|||
End of period
|
$
|
116,260
|
|
|
$
|
107,912
|
|
|
$
|
60,638
|
|
Noncash investing and financing activities
|
|
||||||||||
Change in equipment included in accounts payable
|
$
|
162
|
|
|
$
|
(319
|
)
|
|
$
|
(374
|
)
|
Change in patent costs included in accounts payable
|
$
|
237
|
|
|
$
|
(150
|
)
|
|
$
|
87
|
|
Supplemental cash flow information
|
|
||||||||||
Interest paid
|
$
|
1,717
|
|
|
$
|
500
|
|
|
$
|
—
|
|
|
Amount
|
||
Balances at June 30, 2015
|
$
|
1,437
|
|
Provision for doubtful accounts
|
375
|
|
|
Write-offs
|
(1,100
|
)
|
|
Balance at June 30, 2016
|
712
|
|
|
Provision for doubtful accounts
|
465
|
|
|
Write-offs
|
(313
|
)
|
|
Balance at June 30, 2017
|
864
|
|
|
Provision for doubtful accounts
|
125
|
|
|
Write-offs
|
(189
|
)
|
|
Balance at June 30, 2018
|
$
|
800
|
|
|
Amount
|
||
Balances at June 30, 2015
|
$
|
126
|
|
Provision
|
490
|
|
|
Claims
|
(471
|
)
|
|
Balance at June 30, 2016
|
145
|
|
|
Provision
|
1,733
|
|
|
Claims
|
(1,361
|
)
|
|
Balance at June 30, 2017
|
517
|
|
|
Provision
|
328
|
|
|
Claims
|
(713
|
)
|
|
Balance at June 30, 2018
|
$
|
132
|
|
|
June 30,
|
||||||
|
2018
|
|
2017
|
||||
Accounts receivable
|
$
|
32,025
|
|
|
$
|
29,336
|
|
Less: Allowance for doubtful accounts
|
(800
|
)
|
|
(864
|
)
|
||
Accounts receivable, net
|
$
|
31,225
|
|
|
$
|
28,472
|
|
|
June 30,
|
||||||
|
2018
|
|
2017
|
||||
Raw materials
|
$
|
6,820
|
|
|
$
|
7,898
|
|
Work in process
|
1,315
|
|
|
1,221
|
|
||
Finished goods
|
8,470
|
|
|
7,778
|
|
||
Inventories
|
$
|
16,605
|
|
|
$
|
16,897
|
|
|
June 30,
|
||||||
|
2018
|
|
2017
|
||||
Land
|
$
|
500
|
|
|
$
|
500
|
|
Building
|
22,420
|
|
|
22,420
|
|
||
Equipment
|
16,510
|
|
|
16,502
|
|
||
Furniture
|
2,709
|
|
|
2,709
|
|
||
Leasehold improvements
|
438
|
|
|
86
|
|
||
Construction in progress
|
1,110
|
|
|
421
|
|
||
|
43,687
|
|
|
42,638
|
|
||
Less: Accumulated depreciation
|
(15,943
|
)
|
|
(12,942
|
)
|
||
Total Property and equipment, net
|
$
|
27,744
|
|
|
$
|
29,696
|
|
|
June 30,
|
||||||
|
2018
|
|
2017
|
||||
Patents
|
$
|
6,435
|
|
|
$
|
6,056
|
|
Less: Accumulated amortization
|
(1,204
|
)
|
|
(1,000
|
)
|
||
Total Patents, net
|
$
|
5,231
|
|
|
$
|
5,056
|
|
2019
|
$
|
199
|
|
2020
|
193
|
|
|
2021
|
191
|
|
|
2022
|
181
|
|
|
2023
|
174
|
|
|
Thereafter
|
4,293
|
|
|
|
$
|
5,231
|
|
|
June 30,
|
||||||
|
2018
|
|
2017
|
||||
Commissions
|
$
|
7,234
|
|
|
$
|
8,217
|
|
Salaries and bonus
|
6,624
|
|
|
8,247
|
|
||
Accrued vacation
|
3,557
|
|
|
3,436
|
|
||
Accrued excise, sales and other taxes
|
3,522
|
|
|
3,497
|
|
||
Legal settlement
|
1,847
|
|
|
1,814
|
|
||
Clinical studies
|
1,422
|
|
|
657
|
|
||
Accrued litigation
|
—
|
|
|
2,600
|
|
||
Other accrued expenses
|
1,570
|
|
|
1,768
|
|
||
Total Accrued expenses
|
$
|
25,776
|
|
|
$
|
30,236
|
|
|
June 30,
|
||||||
|
2018
|
|
2017
|
||||
Legal settlement
|
$
|
467
|
|
|
$
|
2,314
|
|
Deferred compensation
|
395
|
|
|
519
|
|
||
Deferred grant incentive
|
460
|
|
|
473
|
|
||
Other liabilities
|
90
|
|
|
173
|
|
||
Total Other liabilities
|
$
|
1,412
|
|
|
$
|
3,479
|
|
2019
|
$
|
1,699
|
|
2020
|
1,750
|
|
|
2021
|
1,803
|
|
|
2022
|
1,857
|
|
|
2023
|
1,913
|
|
|
Thereafter
|
19,375
|
|
|
|
$
|
28,397
|
|
|
|
|
Fair Value Measurements as of June 30, 2018 Using Inputs Considered as
|
||||||||||
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
Mutual funds
|
$
|
544
|
|
|
199
|
|
|
345
|
|
|
$
|
—
|
|
Total marketable securities
|
$
|
544
|
|
|
199
|
|
|
345
|
|
|
$
|
—
|
|
|
|
|
Fair Value Measurements as of June 30, 2017 Using Inputs Considered as
|
||||||||||
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
Mutual funds
|
$
|
704
|
|
|
281
|
|
|
423
|
|
|
$
|
—
|
|
Total marketable securities
|
$
|
704
|
|
|
281
|
|
|
423
|
|
|
$
|
—
|
|
|
Number of
Options
|
|
Weighted Average
Exercise Price
|
|||
Options outstanding at June 30, 2015
|
699,872
|
|
|
$
|
10.32
|
|
Exercised
|
(87,817
|
)
|
|
$
|
11.46
|
|
Forfeited or expired
|
(5,176
|
)
|
|
$
|
12.37
|
|
Options outstanding at June 30, 2016
|
606,879
|
|
|
$
|
10.14
|
|
Exercised
|
(519,297
|
)
|
|
$
|
10.33
|
|
Expired
|
(9,381
|
)
|
|
$
|
8.83
|
|
Options outstanding at June 30, 2017
|
78,201
|
|
|
$
|
9.07
|
|
Exercised
|
(55,880
|
)
|
|
$
|
9.20
|
|
Options outstanding at June 30, 2018
|
22,321
|
|
|
$
|
8.75
|
|
|
Number of
Shares
|
|
Weighted Average
Grant Date
Fair Value
|
|||
Outstanding at June 30, 2015
|
843,094
|
|
|
$
|
25.16
|
|
Granted
|
522,415
|
|
|
$
|
19.30
|
|
Forfeited
|
(230,710
|
)
|
|
$
|
24.83
|
|
Vested
|
(487,226
|
)
|
|
$
|
22.27
|
|
Outstanding at June 30, 2016
|
647,573
|
|
|
$
|
23.24
|
|
Granted
|
258,346
|
|
|
$
|
21.80
|
|
Forfeited
|
(103,140
|
)
|
|
$
|
22.11
|
|
Vested
|
(316,195
|
)
|
|
$
|
24.21
|
|
Outstanding at June 30, 2017
|
486,584
|
|
|
$
|
21.26
|
|
Granted
|
290,856
|
|
|
$
|
27.93
|
|
Forfeited
|
(68,499
|
)
|
|
$
|
22.76
|
|
Vested
|
(253,725
|
)
|
|
$
|
22.87
|
|
Outstanding at June 30, 2018
|
455,216
|
|
|
$
|
24.77
|
|
Performance Measurement
|
|
2018
|
|
2017
|
|
2016
|
|||
Total shareholder return
|
|
278,889
|
|
|
336,826
|
|
|
156,509
|
|
Annual revenue growth
|
|
N/A
|
|
|
N/A
|
|
|
156,509
|
|
|
Number of
Shares |
|
Weighted Average
Grant Date Fair Value |
|||
Outstanding at June 30, 2015
|
152,224
|
|
|
$
|
22.03
|
|
Granted
|
313,018
|
|
|
$
|
16.67
|
|
Forfeited
|
(52,680
|
)
|
|
$
|
28.64
|
|
Vested
|
(102,451
|
)
|
|
$
|
25.58
|
|
Outstanding at June 30, 2016
|
310,111
|
|
|
$
|
16.67
|
|
Granted
|
336,826
|
|
|
$
|
11.97
|
|
Forfeited
|
(328,353
|
)
|
|
$
|
16.41
|
|
Outstanding at June 30, 2017
|
318,584
|
|
|
$
|
11.97
|
|
Granted
|
278,889
|
|
|
$
|
13.63
|
|
Forfeited
|
(66,295
|
)
|
|
$
|
13.17
|
|
Outstanding at June 30, 2018
|
531,178
|
|
|
$
|
12.69
|
|
|
Number of
Shares
|
|
Weighted Average
Grant Date
Fair Value
|
|||
Restricted stock units outstanding at June 30, 2015
|
262,943
|
|
|
$
|
12.62
|
|
Granted
|
47,586
|
|
|
$
|
22.27
|
|
Converted to common stock
|
(5,713
|
)
|
|
$
|
22.18
|
|
Restricted stock units outstanding at June 30, 2016
|
304,816
|
|
|
$
|
13.95
|
|
Granted
|
54,064
|
|
|
$
|
21.21
|
|
Forfeited
|
(2,974
|
)
|
|
$
|
21.01
|
|
Converted to common stock
|
(6,476
|
)
|
|
$
|
29.34
|
|
Restricted stock units outstanding at June 30, 2017
|
349,430
|
|
|
$
|
14.73
|
|
Granted
|
28,364
|
|
|
$
|
31.02
|
|
Converted to common stock
|
(41,925
|
)
|
|
$
|
16.07
|
|
Restricted stock units outstanding at June 30, 2018
|
335,869
|
|
|
$
|
15.94
|
|
Year Ended June 30, 2018
|
|
Restricted
Stock
Awards
|
|
Employee Stock Purchase Plan
|
|
Restricted
Stock
Units
|
|
Total
|
||||||||
Cost of goods sold
|
|
$
|
207
|
|
|
$
|
68
|
|
|
$
|
—
|
|
|
$
|
275
|
|
Selling, general and administrative
|
|
7,462
|
|
|
848
|
|
|
750
|
|
|
9,060
|
|
||||
Research and development
|
|
817
|
|
|
150
|
|
|
—
|
|
|
967
|
|
||||
Total stock-based compensation expense
|
|
$
|
8,486
|
|
|
$
|
1,066
|
|
|
$
|
750
|
|
|
$
|
10,302
|
|
Year Ended June 30, 2017
|
|
Restricted
Stock
Awards
|
|
Employee Stock Purchase Plan
|
|
Restricted
Stock
Units
|
|
Total
|
||||||||
Cost of goods sold
|
|
$
|
588
|
|
|
$
|
101
|
|
|
$
|
—
|
|
|
$
|
689
|
|
Selling, general and administrative
|
|
6,568
|
|
|
1,065
|
|
|
1,024
|
|
|
8,657
|
|
||||
Research and development
|
|
879
|
|
|
129
|
|
|
—
|
|
|
1,008
|
|
||||
Total stock-based compensation expense
|
|
$
|
8,035
|
|
|
$
|
1,295
|
|
|
$
|
1,024
|
|
|
$
|
10,354
|
|
Year Ended June 30, 2016
|
|
Restricted Stock Awards
|
|
Employee Stock Purchase Plan
|
|
Restricted
Stock
Units
|
|
Total
|
||||||||
Cost of goods sold
|
|
$
|
679
|
|
|
$
|
115
|
|
|
$
|
—
|
|
|
$
|
794
|
|
Selling, general and administrative
|
|
8,215
|
|
|
1,167
|
|
|
1,000
|
|
|
10,382
|
|
||||
Research and development
|
|
1,681
|
|
|
120
|
|
|
—
|
|
|
1,801
|
|
||||
Total stock-based compensation expense
|
|
$
|
10,575
|
|
|
$
|
1,402
|
|
|
$
|
1,000
|
|
|
$
|
12,977
|
|
Reserved
|
3,607,523
|
|
Transferred from 2014 Plan
|
(1,057,523
|
)
|
Granted
|
(81,060
|
)
|
Forfeited or cancelled
|
95,525
|
|
Shares available for grant at June 30, 2018
|
2,564,465
|
|
|
June 30,
|
||||||
|
2018
|
|
2017
|
||||
Deferred tax assets
|
|
|
|
||||
Stock-based compensation
|
$
|
2,505
|
|
|
$
|
5,107
|
|
Deferred revenue
|
2,351
|
|
|
—
|
|
||
Accrued expenses
|
970
|
|
|
1,650
|
|
||
Inventories
|
305
|
|
|
433
|
|
||
Compensation accruals
|
133
|
|
|
261
|
|
||
Depreciation and amortization
|
320
|
|
|
409
|
|
||
Other
|
397
|
|
|
1,019
|
|
||
Research and development credit carryforwards
|
5,048
|
|
|
4,650
|
|
||
Net operating loss carryforwards
|
64,101
|
|
|
87,502
|
|
||
Total deferred tax assets
|
76,130
|
|
|
101,031
|
|
||
Valuation allowance
|
(76,130
|
)
|
|
(101,031
|
)
|
||
Net deferred tax assets
|
$
|
—
|
|
|
$
|
—
|
|
Balances at June 30, 2015
|
$
|
84,319
|
|
Additions
|
16,898
|
|
|
Balance at June 30, 2016
|
101,217
|
|
|
Reductions
|
(186
|
)
|
|
Balance at June 30, 2017
|
101,031
|
|
|
Reductions
|
(24,901
|
)
|
|
Balance at June 30, 2018
|
$
|
76,130
|
|
Balances at June 30, 2015
|
$
|
494
|
|
Increases related to prior year tax positions
|
10
|
|
|
Increases related to current year tax positions
|
41
|
|
|
Balances at June 30, 2016
|
545
|
|
|
Decreases related to prior year tax positions
|
(8
|
)
|
|
Increases related to current year tax positions
|
33
|
|
|
Balance at June 30, 2017
|
570
|
|
|
Decreases related to prior year tax positions
|
(3
|
)
|
|
Increases related to current year tax positions
|
30
|
|
|
Balance at June 30, 2018
|
$
|
597
|
|
2019
|
$
|
510
|
|
2020
|
376
|
|
|
2021
|
20
|
|
|
2022
|
—
|
|
|
2023
|
—
|
|
|
Thereafter
|
—
|
|
|
|
$
|
906
|
|
|
Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Numerator
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
1,712
|
|
|
$
|
(1,792
|
)
|
|
$
|
(56,024
|
)
|
Income allocated to participating securities
|
(19
|
)
|
|
—
|
|
|
—
|
|
|||
Net income (loss) available to common stockholders
|
$
|
1,693
|
|
|
$
|
(1,792
|
)
|
|
$
|
(56,024
|
)
|
Denominator
|
|
|
|
|
|
||||||
Weighted average common shares outstanding — basic
|
33,145,140
|
|
|
32,373,709
|
|
|
32,537,621
|
|
|||
Effect of dilutive stock options
(1)
|
15,039
|
|
|
—
|
|
|
—
|
|
|||
Effect of dilutive restricted stock units
(2)
|
335,869
|
|
|
—
|
|
|
—
|
|
|||
Effect of performance-based restricted stock awards
(3)
|
118,212
|
|
|
—
|
|
|
—
|
|
|||
Weighted average common shares outstanding — diluted
|
33,614,260
|
|
|
32,373,709
|
|
|
32,537,621
|
|
|||
|
|
|
|
|
|
||||||
Earnings per common share — basic
|
$
|
0.05
|
|
|
$
|
(0.06
|
)
|
|
$
|
(1.72
|
)
|
Earnings per common share — diluted
|
$
|
0.05
|
|
|
$
|
(0.06
|
)
|
|
$
|
(1.72
|
)
|
|
|
|
|
|
|
(1)
|
At
June 30, 2018
,
2017
, and
2016
;
22,321
,
78,201
, and
606,879
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.
|
(2)
|
At
June 30, 2018
,
2017
, and
2016
;
335,869
,
349,430
and
304,816
additional shares of common stock, respectively, 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.
|
(3)
|
At
June 30, 2018
and
2017
,
531,178
and
318,584
, respectively, of performance-based restricted stock awards were outstanding. The effect of the shares that would be issued upon vesting of these awards has been excluded from the calculation of diluted loss per share because those shares are anti-dilutive.
|
|
2018
|
||||||||||||||||||
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Total
|
||||||||||
Net revenue
|
$
|
49,676
|
|
|
$
|
52,628
|
|
|
$
|
55,587
|
|
|
$
|
59,152
|
|
|
$
|
217,043
|
|
Gross profit
|
$
|
40,474
|
|
|
$
|
43,129
|
|
|
$
|
45,618
|
|
|
$
|
48,338
|
|
|
$
|
177,559
|
|
Net income (loss)
|
$
|
(1,977
|
)
|
|
$
|
(413
|
)
|
|
$
|
365
|
|
|
$
|
3,737
|
|
|
$
|
1,712
|
|
Earnings per common share - basic
(1)
|
$
|
(0.06
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
0.01
|
|
|
$
|
0.11
|
|
|
$
|
0.05
|
|
Earnings per common share - diluted
(1)
|
$
|
(0.06
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
0.01
|
|
|
$
|
0.11
|
|
|
$
|
0.05
|
|
|
2017
|
||||||||||||||||||
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Total
|
||||||||||
Net revenue
|
$
|
49,800
|
|
|
$
|
50,043
|
|
|
$
|
52,144
|
|
|
$
|
52,919
|
|
|
$
|
204,906
|
|
Gross profit
|
$
|
40,334
|
|
|
$
|
40,880
|
|
|
$
|
41,005
|
|
|
$
|
43,246
|
|
|
$
|
165,465
|
|
Net income (loss)
|
$
|
(1,858
|
)
|
|
$
|
1,043
|
|
|
$
|
(1,749
|
)
|
|
$
|
772
|
|
|
$
|
(1,792
|
)
|
Earnings per common share - basic
(1)
|
$
|
(0.06
|
)
|
|
$
|
0.03
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.02
|
|
|
$
|
(0.06
|
)
|
Earnings per common share - diluted
(1)
|
$
|
(0.06
|
)
|
|
$
|
0.03
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.02
|
|
|
$
|
(0.06
|
)
|
(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, 2018
and
2017
|
•
|
Consolidated Statements of Operations for the years ended
June 30, 2018
,
2017
and
2016
|
•
|
Consolidated Statements of Comprehensive Loss for the years ended
June 30, 2018
,
2017
and
2016
|
•
|
Consolidated Statements of Stockholders’ Equity for the years ended
June 30, 2018
,
2017
and
2016
|
•
|
Consolidated Statements of Cash Flows for the years ended
June 30, 2018
,
2017
and
2016
|
•
|
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
|
Exhibit
No.
|
|
Description
|
3.1
|
|
|
3.2
|
|
|
4.1
|
|
|
4.2
|
|
|
10.1†
|
|
|
10.2†
|
|
|
10.3†
|
|
|
10.4†*
|
|
|
10.5†*
|
|
|
10.6†*
|
|
|
10.7†
|
|
|
10.8†
|
|
|
10.9†
|
|
Exhibit
No.
|
|
Description
|
10.10†
|
|
|
10.11†
|
|
|
10.12†
|
|
|
10.13†
|
|
|
10.14†
|
|
|
10.15†
|
|
|
10.16
|
|
|
10.17
|
|
|
10.18+
|
|
|
10.19†
|
|
|
10.20†
|
|
|
10.21†
|
|
|
10.22†
|
|
|
10.23†
|
|
|
10.24†
|
|
|
10.25†
|
|
|
10.26†*
|
|
|
10.27†
|
|
|
10.28†
|
|
Exhibit
No.
|
|
Description
|
10.29†
|
|
|
10.30
|
|
|
10.31+
|
|
|
10.32
|
|
|
10.33
|
|
|
10.34†
|
|
|
10.35†
|
|
|
10.36†
|
|
|
10.37
|
|
|
10.38
|
|
|
10.39
|
|
|
10.40
|
|
|
10.41
|
|
|
10.42
|
|
|
10.43
|
|
|
10.44†
|
|
|
10.45†
|
|
|
10.46†
|
|
|
|
|
|
Exhibit
No.
|
|
Description
|
10.47†
|
|
|
10.48†
|
|
|
10.49†
|
|
|
10.50†
|
|
|
10.51†
|
|
|
10.52†
|
|
|
10.53†
|
|
|
10.54†
|
|
|
10.55†
|
|
|
10.56+
|
|
|
10.57*
|
|
|
23.1*
|
|
|
24.1*
|
|
|
31.1*
|
|
|
31.2*
|
|
|
32.1**
|
|
|
32.2**
|
|
|
101**
|
|
Financial statements from the Annual Report on Form 10-K of the Company for the year ended June 30, 2018, formatted, in Extensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Loss, (iv) the Consolidated Statements of Changes in Stockholders’ Equity, (v) the Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements.
|
+
|
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.
|
|
CARDIOVASCULAR SYSTEMS, INC.
|
||
|
|
|
|
Date: August 23, 2018
|
By:
|
|
/s/ Scott R. Ward
|
|
|
|
Scott R. Ward
|
|
|
|
Chairman, President and Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
/s/ Scott R. Ward
|
|
Chairman, President and Chief Executive Officer (principal executive officer)
|
|
August 23, 2018
|
Scott R. Ward
|
|
|
||
|
|
|
||
/s/ Jeffrey S. Points
|
|
Chief Financial Officer (principal financial and accounting officer)
|
|
August 23, 2018
|
Jeffrey S. Points
|
|
|
||
|
|
|
||
/s/ Martha Goldberg Aronson
|
|
Director
|
|
August 23, 2018
|
Martha Goldberg Aronson
|
|
|
||
|
|
|
||
/s/ Scott Bartos
|
|
Director
|
|
August 23, 2018
|
Scott Bartos
|
|
|
||
|
|
|
||
/s/ Brent G. Blackey
|
|
Director
|
|
August 23, 2018
|
Brent G. Blackey
|
|
|
||
|
|
|
||
/s/ Edward Brown
|
|
Director
|
|
August 23, 2018
|
Edward Brown
|
|
|
||
|
|
|
||
/s/ William E. Cohn
|
|
Director
|
|
August 23, 2018
|
William E. Cohn
|
|
|
||
|
|
|
||
/s/ Augustine Lawlor
|
|
Director
|
|
August 23, 2018
|
Augustine Lawlor
|
|
|
||
|
|
|
Name/Title
|
|
FY2019 Salary
|
|
|||
Scott R. Ward
Chairman, President and Chief Executive Officer
|
|
|
$
|
670,000
|
|
|
Jeffrey S. Points
Chief Financial Officer
|
|
|
$
|
302,500
|
|
|
Rhonda J. Robb
Chief Operating Officer |
|
|
$
|
463,500
|
|
|
Laura J. Gillund
Chief Talent Officer
|
|
|
$
|
315,655
|
|
|
Alexander Rosenstein
General Counsel and Corporate Secretary |
|
|
$
|
317,623
|
|
|
Sandra M. Sedo
Chief Compliance Officer
|
|
|
$
|
283,608
|
|
|
●
|
|
|
Retainers of $45,000 for service as a Board member; $22,000 for service as the chair of the Audit committee; $20,000 for service as a chair of a Board committee other than the Audit 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 12 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 $135,000 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.
|
(a)
|
A merger or consolidation to which the Company is a party if the individuals and entities who were stockholders of the Company immediately prior to the effective date of such merger or consolidation have, immediately following the effective date of such merger or consolidation, beneficial ownership (as defined in Rule 13d‑3 under the Securities Exchange Act of 1934) of less than fifty percent (50%) of the total combined voting power of all classes of securities issued by the surviving corporation for the election of directors of the surviving corporation;
|
(b)
|
The acquisition of direct or indirect beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of securities of the Company by any person or entity or by a group of associated persons or entities acting in concert in one or a series of transactions, which causes the aggregate beneficial ownership of such person, entity or group to equal or exceed twenty percent (20%) or more of the total combined voting power of all classes of the Company’s then issued and outstanding securities;
|
(c)
|
The sale of the properties and assets of the Company substantially as an entirety, to any person or entity that is not a wholly-owned subsidiary of the Company;
|
(d)
|
The stockholders of the Company approve any plan or proposal for the liquidation of the Company;
|
(e)
|
A change in the composition of the Board of the Company at any time during any consecutive twenty-four (24) month period such that the “Continuity Directors” no longer constitute at least a seventy percent (70%) majority of the Board. For purposes of this event, “Continuity Directors” means those members of the Board who were directors at the beginning of such consecutive twenty-four (24) month period and any directors whose election was unanimously approved by the directors serving at the beginning of such 24 month period; or
|
(f)
|
The Company enters into a letter of intent, an agreement in principle or a definitive agreement relating to an event described in Sections (a), (b), (c), (d) or (e) above that ultimately results in such a Change of Control, or a tender or exchange offer or proxy contest is commenced that ultimately results in an event described in Sections (b) or (e) above.
|
(a)
|
a material diminution in Executive’s Base Salary as in effect immediately prior to a Change of Control;
|
(b)
|
a material diminution in the Executive’s authority, duties or responsibilities as in effect immediately prior to a Change of Control;
|
(c)
|
a material diminution in the authority, duties, or responsibilities of the supervisor to whom Executive reports as in effect immediately prior to a Change of Control, including a requirement that Executive report to a corporate officer or employee instead of the Board of Directors (or similar governing body);
|
(d)
|
a material diminution in the budget over which Executive retains authority as in effect immediately prior to a Change of Control;
|
(e)
|
requiring Executive to be based at a location that is more than fifty (50) miles from the location of Executive’s principal office immediately prior to a Change of Control;
|
(f)
|
the Company’s failure to provide Executive with the same target bonus opportunity as in effect immediately prior to a Change of Control;
|
(g)
|
the Company’s failure to provide Executive with employee benefit plans (including, but not limited to, a qualified retirement plan, equity compensation plans or similar arrangements, life insurance, health insurance, disability insurance and other fringe benefit plans) that provide substantially similar benefits in the aggregate as the benefits provided to Executive immediately prior to a Change of Control; or
|
(h)
|
any other action or inaction that constitutes a material breach by the Company of any agreement under which Executive provides services.
|
Plan Sponsor/Plan Administrator
|
Cardiovascular Systems, Inc.
1225 Old Highway 8 NW
St. Paul, MN 55112
(651) 259-1600
|
Employer Identification Number
|
41-1698056
|
Plan Number
|
502
|
Plan Year
|
July 1 through June 30
|
Type of Plan
|
Welfare benefit plan providing severance benefits to certain officers
|
Type of Administration
|
The Plan is administered by the Plan Administrator
|
Claims Administrator
|
Cardiovascular Systems, Inc.
|
Agent for Service of Legal Process
|
Cardiovascular Systems, Inc.
|
Funding
|
The Plan is funded through the general assets of the Company
|
Administrator Discretion
|
The Plan Administrator has discretionary authority to interpret, apply and enforce all provisions of the Plan, for example: determining an Executive Officer’s eligibility to participate in the Plan, an Executive Officer’s base pay, whether an Executive Officer is entitled to severance pay and the amount of any such payment.
|
X.
|
Claims Procedures
|
•
|
State the reason(s) why the Executive Officer’s claim for benefits was denied;
|
•
|
Specifically refer to any Plan provisions that formed the basis for the Company’s decision;
|
•
|
Describe any additional material or information necessary for the Executive Officer to perfect his or her claim and why that material or information is necessary; and
|
•
|
Describe the procedures the Executive Officer must follow to have his or her claim reviewed further, including the Executive Officer’s right to bring a civil action under ERISA in the event of an adverse decision.
|
•
|
State the reason(s) why the Executive Officer’s claim for benefits was denied;
|
•
|
Specifically refer to any Plan provisions that formed the basis for the Company’s decision;
|
•
|
Inform the Executive Officer that he or she may have reasonable access to all documents, records and other materials relevant to his or her claim, and may request copies at no charge; and
|
•
|
Inform the Executive Officer of his or her right to bring a civil action under ERISA.
|
(a)
|
Examine, without charge, at the Plan Administrator’s office and at other specified locations, such as worksites, all documents governing this Plan, including insurance contracts and collective bargaining agreements, if any, filed by the Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration.
|
(b)
|
Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of this Plan, including insurance contracts and collective bargaining agreements, if any, and updated summary plan description. The Administrator may make a reasonable charge for the copies.
|
(c)
|
Receive a summary of the Plan’s annual financial report. The Plan Administrator is required by law to furnish each participant with a copy of this summary annual report.
|
Executive
|
Severance Period
|
Chief Executive Officer
|
24 months
|
Section 16 Officers
|
18 months
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Senior Vice Presidents/Executive Vice Presidents
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15 months
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Vice Presidents and Other Corporate Officers
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12 months
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Area Vice Presidents and Other Employees Designated by the Compensation Committee
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6 months or such other period as designated by the Compensation Committee
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I.
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Amended Terms
. The Landlord and the Tenant agree that the following provisions of the Agreement are hereby amended as follows:
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II.
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Agreement to Remain in Force. Other than the provisions of the Agreement expressly amended herein, the Agreement shall remain in full force and its enforceability shall be unaffected by this Amendment.
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1.
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I have reviewed this annual report on Form 10-K of Cardiovascular Systems, Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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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):
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a)
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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
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b)
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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.
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/s/ Scott R. Ward
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Scott R. Ward
Chairman, President and Chief Executive Officer
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1.
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I have reviewed this annual report on Form 10-K of Cardiovascular Systems, Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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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):
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a)
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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
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b)
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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.
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/s/ Jeffrey S. Points
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Jeffrey S. Points
Chief Financial Officer
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/s/ Scott R. Ward
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Scott R. Ward
Chairman, President and Chief Executive Officer
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By:
/s/ Jeffrey S. Points
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Jeffrey S. Points
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Chief Financial Officer
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