10-Q 1 atrc-20220331.htm 10-Q atrc-20220331
Dec 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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
_____________________________________________
FORM 10-Q
______________________________________________
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
or
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from_____________to_____________
Commission File Number 000-51470
_____________________________________________
AtriCure, Inc.
(Exact name of Registrant as specified in its charter)
_____________________________________________
Delaware34-1940305
(State or other jurisdiction of
incorporation)
(IRS Employer
Identification No.)
7555 Innovation Way
Mason, OH 45040
(Address of principal executive offices)
(513) 755-4100
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
_____________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $.001 par valueATRCNASDAQ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated FilerxAccelerated Filer¨Emerging growth company¨
Non-Accelerated Filer¨Smaller reporting company¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act: ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): YES ¨ NO x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class
Outstanding at May 2, 2022
Common Stock, $.001 par value
46,287,944


Table of Contents
Page


PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ATRICURE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Per Share Amounts)
(Unaudited)
 March 31,
2022
December 31,
2021
Assets
Current assets:
Cash and cash equivalents $28,141$43,654
Short-term investments 83,25675,436
Accounts receivable, less allowance for credit losses of $1,096
40,87833,021
Inventories 40,76238,964
Prepaid and other current assets 6,5705,001
Total current assets 199,607196,076
Long-term investments70,514104,338
Property and equipment, net 32,86731,409
Operating lease right-of-use assets4,5094,761
Intangible assets, net 42,02042,992
Goodwill 234,781234,781
Other noncurrent assets 685955
Total Assets $584,983$615,312
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $20,294$18,597
Accrued liabilities 25,32136,092
Current maturities of leases1,7601,756
Total current liabilities 47,37556,445
Long-term debt59,84859,741
Finance lease liabilities9,84510,082
Operating lease liabilities3,8654,068
Other noncurrent liabilities 1,2251,220
Total Liabilities 122,158131,556
Commitments and contingencies (Note 8)
Stockholders’ Equity:
Common stock, $0.001 par value, 90,000 shares authorized and 46,268 and 46,016 issued and outstanding
4646
Additional paid-in capital 761,580764,811
Accumulated other comprehensive loss(3,465)(948)
Accumulated deficit (295,336)(280,153)
Total Stockholders’ Equity 462,825483,756
Total Liabilities and Stockholders’ Equity $584,983$615,312
See accompanying notes to condensed consolidated financial statements.
3

ATRICURE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In Thousands, Except Per Share Amounts)
(Unaudited)
Three Months Ended
March 31,
20222021
Revenue $74,576 $59,275 
Cost of revenue 18,981 14,735 
Gross profit 55,595 44,540 
Operating expenses:
Research and development expenses 13,629 11,217 
Selling, general and administrative expenses56,116 49,208 
Total operating expenses69,745 60,425 
Loss from operations(14,150)(15,885)
Other income (expense):
Interest expense (1,000)(1,189)
Interest income 116 134 
Other (93)54 
Loss before income tax expense(15,127)(16,886)
Income tax expense56 31 
Net loss$(15,183)$(16,917)
Basic and diluted net loss per share$(0.33)$(0.38)
Weighted average shares outstanding—basic and diluted 45,528 44,632 
Comprehensive loss:
Unrealized loss on investments$(2,339)$(31)
Foreign currency translation adjustment (178)(299)
Other comprehensive loss(2,517)(330)
Net loss(15,183)(16,917)
Comprehensive loss, net of tax$(17,700)$(17,247)
See accompanying notes to condensed consolidated financial statements.
4

ATRICURE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In Thousands)
(Unaudited)
 Three Months Ended March 31, 2021
 
Common Stock
Additional
Paid-in
Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders’
Equity
 
Shares
Amount
Balance—December 31, 2020
45,346 $45 $742,389 $(330,352)$312 $412,394 
Impact of equity compensation plans277 1 (3,905)— — (3,904)
Other comprehensive loss— — — — (330)(330)
Net loss— — — (16,917)— (16,917)
Balance—March 31, 2021
45,623 $46 $738,484 $(347,269)$(18)$391,243 
 
 Three Months Ended March 31, 2022
 
Common Stock
Additional
Paid-in
Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders’
Equity
 
Shares
Amount
Balance—December 31, 2021
46,016 $46 $764,811 $(280,153)$(948)$483,756 
Impact of equity compensation plans252  (3,231)— — (3,231)
Other comprehensive loss— — — — (2,517)(2,517)
Net loss— — — (15,183)— (15,183)
Balance—March 31, 2022
46,268 $46 $761,580 $(295,336)$(3,465)$462,825 
See accompanying notes to condensed consolidated financial statements.
5

ATRICURE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Three Months Ended
March 31,
20222021
Cash flows from operating activities:
Net loss $(15,183)$(16,917)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation expense 7,049 6,604 
Depreciation 1,895 1,884 
Amortization of intangible assets 972 238 
Amortization of deferred financing costs 128 124 
Loss on disposal of property and equipment 18 17 
Amortization of investments 559 555 
Change in fair value of contingent consideration  2,500 
Other non-cash adjustments to income320 254 
Changes in operating assets and liabilities:
Accounts receivable (7,950)(6,696)
Inventories (1,934)(1,264)
Other current assets (1,581)(891)
Accounts payable 1,729 2,835 
Accrued liabilities (10,701)1,799 
Other noncurrent assets and liabilities 47 (358)
Net cash used in operating activities(24,632)(9,316)
Cash flows from investing activities:
Sales and maturities of available-for-sale securities 23,103 64,913 
Purchases of property and equipment (3,381)(1,326)
Net cash provided by investing activities19,722 63,587 
Cash flows from financing activities:
Payments on leases (217)(198)
Proceeds from stock option exercises355 4,588 
Shares repurchased for payment of taxes on stock awards (10,635)(15,097)
Net cash used in financing activities(10,497)(10,707)
Effect of exchange rate changes on cash and cash equivalents (106)(128)
Net (decrease) increase in cash and cash equivalents (15,513)43,436 
Cash and cash equivalents—beginning of period 43,654 41,944 
Cash and cash equivalents—end of period $28,141 $85,380 
Supplemental cash flow information:
Cash paid for interest $866 $1,066 
Cash paid for income taxes, net of refunds 50 47 
Non-cash investing and financing activities:
Accrued purchases of property and equipment 1,558 239 
See accompanying notes to condensed consolidated financial statements.
6

ATRICURE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, except per share amounts)
(Unaudited)

1.DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of the Business—The “Company” or “AtriCure” consists of AtriCure, Inc. and its wholly-owned subsidiaries. The Company is a leading innovator in surgical treatments and therapies for atrial fibrillation (Afib), left atrial appendage (LAA) management and post-operative pain management and sells its products to medical centers globally through its direct sales force and distributors.
Basis of Presentation—The accompanying interim financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (SEC). The accompanying interim financial statements are unaudited, but in the opinion of the Company’s management, contain all normal, recurring adjustments considered necessary to present fairly the financial position, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States of America (GAAP) applicable to interim periods. Certain information and footnote disclosures included in annual financial statements prepared in accordance with GAAP have been omitted or condensed. The Company believes the disclosures herein are adequate to make the information presented not misleading. Results of operations are not necessarily indicative of the results expected for the full year or for any future period.
The accompanying interim financial statements should be read in conjunction with the Company’s audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC. All intercompany accounts and transactions have been eliminated in consolidation.
There have been no changes in the Company's significant accounting policies for the three months ended March 31, 2022 as compared to the significant accounting policies described in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC.
Use of Estimates—The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, including intangible assets, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Estimates are based on historical experience, where applicable, and other assumptions believed to be reasonable by management. Actual results could differ from those estimates.
Segments—The chief operating decision maker for the Company is the Chief Executive Officer. The Chief Executive Officer reviews financial information presented on a consolidated basis, accompanied only by information about revenue by product type and geographic area, for purposes of allocating resources and evaluating financial performance. Accordingly, the Company has determined that it has a single operating segment. The Company’s long-lived assets are located primarily in the United States, except for $1,321 as of March 31, 2022 and $1,399 as of December 31, 2021 located primarily in Europe.
Net Loss Per Share—Basic and diluted net loss per share is computed by dividing the net loss by the weighted average number of shares of common shares outstanding during the period. Since the Company has experienced net losses for all periods presented, net loss per share excludes the effect of 1,567 and 1,955 stock options, restricted shares, restricted stock units and performance award shares as of March 31, 2022 and 2021 because they are anti-dilutive. Therefore, the number of shares calculated for basic net loss per share is also used for the diluted net loss per share calculation.
2.FAIR VALUE
The Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) 820, “Fair Value Measurements and Disclosures” (ASC 820), defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value:
Level 1—Quoted prices in active markets for identical assets or liabilities.
Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
7

ATRICURE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, except per share amounts)
(Unaudited)
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The following table represents the Company’s fair value hierarchy for its financial assets measured at fair value on a recurring basis as of March 31, 2022:
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant Other
Unobservable
Inputs (Level 3)
Total
Assets:
Money market funds $$25,244$$25,244
Commercial paper 22,98922,989
Government and agency obligations31,91931,919
Corporate bonds 84,05984,059
Asset-backed securities14,80314,803
Total assets $31,919$147,095$$179,014
There were no changes in the levels or methodology of measurement of financial assets and liabilities during the three months ended March 31, 2022.
The following table represents the Company’s fair value hierarchy for its financial assets measured at fair value on a recurring basis as of December 31, 2021:
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant Other
Unobservable
Inputs (Level 3)
Total
Assets:
Money market funds $$38,360$$38,360
Commercial paper 22,97822,978
Government and agency obligations32,69032,690
Corporate bonds 95,84595,845
Asset-backed securities28,26128,261
Total assets $32,690$185,444$$218,134
Contingent Consideration. The Company’s contingent consideration arrangements arising from the SentreHEART acquisition obligate the Company to pay certain defined amounts to former shareholders of SentreHEART if specified milestones are met related to the aMAZE IDE clinical trial, including PMA approval and reimbursement for the therapy involving SentreHEART’s devices. The Company has assessed the projected probability of payment during the contractual achievement periods to be remote, resulting in no remaining fair value as of March 31, 2022 and December 31, 2021.
3.INVENTORIES
Inventories consist of the following:
March 31,
2022
December 31,
2021
Raw materials $13,709$12,653
Work in process 2,4972,064
Finished goods 24,55624,247
Total$40,762$38,964
8

ATRICURE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, except per share amounts)
(Unaudited)
4.INTANGIBLE ASSETS
The following table provides a summary of the Company’s intangible assets:
  March 31, 2022 December 31, 2021
Estimated Useful LifeCost Accumulated
Amortization
CostAccumulated
Amortization
Technology
10 - 15 years
$55,712$13,692$55,712$12,720
Total $55,712$13,692$55,712$12,720
Amortization expense of intangible assets was $972 and $238 for the three months ended March 31, 2022 and 2021. Future amortization expense is projected as follows:
2022 (excluding the three months ended March 31, 2022)
$2,681
20232,953
20242,953
20252,953
20262,953
2027 and thereafter
27,527
Total $42,020
5.ACCRUED LIABILITIES
Accrued liabilities consist of the following:
 March 31,
2022
 December 31,
2021
Accrued compensation and employee-related expenses$20,305$30,990
Sales returns and allowances2,1732,416
Accrued taxes and value-added taxes payable1,5921,452
Accrued royalties 774754
Other accrued liabilities 477480
Total $25,321$36,092
6.INDEBTEDNESS
Credit Facility. The Company has a Loan and Security Agreement, as amended and modified effective November 1, 2021 (Loan Agreement) with Silicon Valley Bank (SVB). The Loan Agreement includes a $60,000 term loan, a $30,000 revolving line of credit, and an option to make available an additional $30,000 in term loan borrowings. The Loan Agreement has a five year term, expiring November 2026.
Principal payments under the Loan Agreement are to be made ratably commencing 24 months after inception through the loan's maturity date. At the option of the Company, the commencement of term loan principal payments may be extended an additional twelve months. The term loan accrues interest at the Prime Rate plus 1.25% and is subject to an additional 3.00% fee on the term loan principal amount at maturity. The Company is accruing the 3.00% fee over the term of the Loan Agreement, with $150 included in the outstanding loan balance as of March 31, 2022. Additionally, the unamortized original financing costs related to the term loan of $302 are netted against the outstanding loan balance in the Condensed Consolidated Balance Sheets and are amortized ratably over the term of the Loan Agreement.
The revolving line of credit is subject to an annual facility fee of 0.20% of the revolving line of credit, and any borrowings thereunder bear interest at the Prime Rate. Borrowing availability under the revolving credit facility is based on the lesser of $30,000 or a borrowing base calculation as defined by the Loan Agreement. As of March 31, 2022, the Company had no borrowings under the revolving credit facility and had borrowing availability of approximately $28,750. Financing costs related
9

ATRICURE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, except per share amounts)
(Unaudited)
to the revolving line of credit are included in other assets in the Condensed Consolidated Balance Sheets and amortized ratably over the twelve-month period of the annual fee.
The Loan Agreement also provides for certain prepayment and early termination fees, as well as establishes a minimum liquidity covenant and dividend restrictions, along with other customary terms and conditions. Specified assets have been pledged as collateral.
Future maturities of long-term debt, excluding the term loan final fee, are projected as follows:
2022 (excluding the three months ended March 31, 2022)
$
20233,333
202420,000
202520,000
202616,667
Total long-term debt$60,000
7.LEASES
The Company has operating and finance leases for offices, manufacturing and warehouse facilities and computer equipment. The Company’s leases have remaining lease terms of less than one year to nine years. Options to renew or extend leases beyond their initial term have been excluded from measurement of the ROU assets and lease liabilities for the majority of leases as exercise is not reasonably certain.
The weighted average remaining lease term and the discount rate for the reporting periods are as follows:
March 31, 2022December 31, 2021
Operating Leases
Weighted average remaining lease term (years)5.03.6
Weighted average discount rate4.69%4.69%
Finance leases
Weighted average remaining lease term (years)8.48.6
Weighted average discount rate6.92%6.91%
A $1,250 letter of credit issued to the lessor of the Company's corporate headquarters building is renewed annually and remains outstanding as of March 31, 2022.
The components of lease expense are as follows:
 Three Months Ended
March 31,
 20222021
Operating lease cost$286 $279 
 
Finance lease cost:
Amortization of right-of-use assets169 256 
Interest on lease liabilities189 203 
Total finance lease cost$358 $459 
Short-term lease expense was not significant for the three months ended March 31, 2022 and 2021.
10

ATRICURE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, except per share amounts)
(Unaudited)
Supplemental cash flow information related to leases was as follows:
Three Months Ended
March 31, 2022
Three Months Ended
March 31, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$251 $331 
Operating cash flows from finance leases189 203 
Financing cash flows from finance leases217 198 
No right-of-use assets were obtained in exchange for lease obligations during the three months ended March 31, 2022 and 2021.
Supplemental balance sheet information related to leases was as follows:
March 31, 2022December 31, 2021
Operating Leases
Operating lease right-of-use assets$4,509 $4,761 
Current maturities of leases845 861 
Operating lease liabilities3,865 4,068 
Total operating lease liabilities$4,710 $4,929 
Finance Leases
Property and equipment, at cost$14,607 $14,607 
Accumulated depreciation(6,285)(6,116)
Property and equipment, net $8,322 $8,491 
Current maturities of leases$915 $895 
Finance lease liabilities9,845 10,082 
Total finance lease liabilities$10,760 $10,977 
Maturities of lease liabilities as of March 31, 2022 were as follows:
Operating LeasesFinance Leases
2022 (excluding the three months ended March 31, 2022)
$610 $1,223 
20231,160 1,652 
20241,164 1,674 
2025920 1,625 
2026592 1,657 
2027 and thereafter
868 6,515 
Total payments $5,314 $14,346 
Less imputed interest(604)(3,586)
Total$4,710 $10,760 
11

ATRICURE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, except per share amounts)
(Unaudited)
8.COMMITMENTS AND CONTINGENCIES
Royalty Agreements. The Company has a royalty agreement in place with terms that include payment of royalties of 5% of specified product sales. The agreement terminates the later of 2023 or upon expiration of the underlying patents or patent applications, which is expected to occur after 2023. Parties to the royalty agreement have the right at any time to terminate the agreement immediately for cause. Royalty expense of $794 and $722 was recorded as a component of Cost of Revenue in the accompanying Condensed and Consolidated Statement of Operations for the three months ended March 31, 2022 and 2021.
Purchase Agreements. The Company enters into standard purchase agreements with vendors in the ordinary course of business, generally with terms that allow cancellation.
Legal. The Company may, from time to time, become a party to legal proceedings. Such matters are subject to many uncertainties and to outcomes of which the financial impacts are not predictable with assurance and that may not be known for extended periods of time. A liability is established once management determines a loss is probable and an amount can be reasonably estimated.
The Company received a Civil Investigative Demand (CID) from the U.S. Department of Justice (USDOJ) in December 2017 stating that it is investigating the Company to determine whether the Company has violated the False Claims Act, relating to the promotion of certain medical devices related to the treatment of atrial fibrillation for off-label use and submitted or caused to be submitted false claims to certain federal and state health care programs for medically unnecessary healthcare services related to the treatment of atrial fibrillation. The CID covers the period from January 2010 to December 2017 and required the production of documents and answers to written interrogatories. The Company had no knowledge of the investigation prior to receipt of the CID. The Company maintains rigorous policies and procedures to promote compliance with the False Claims Act and other applicable regulatory requirements. The Company provided the USDOJ with documents and answers to the written interrogatories. In March 2021, USDOJ informed the Company that its investigation was based on a lawsuit brought on behalf of the United States and the various state and local government under the qui tam provisions of federal and certain state and local False Claims Acts. Although the USDOJ and all of the state and local governments declined to intervene, the relator continues to pursue the case. While the Company is vigorously contesting the case, it is not possible to predict when this matter may be resolved or what impact, if any, the outcome of this matter might have on our consolidated financial position, results of operations, or cash flows.
During the first quarter, the Company received a notice of breach under a license agreement regarding its potential underpayment of royalties. The notice asserts that the Company's calculation of royalties payable under the license agreement throughout the agreement term did not include sales of all products that were subject to royalties. The Company disputes the basis of the claim and any potential underpayment. While a loss related to this claim is possible, the Company does not believe such loss is probable or estimable at this time.
9.REVENUE
The Company develops, manufactures and sells devices designed primarily for the surgical ablation of cardiac tissue, the exclusion of the left atrial appendage, and blocking pain by temporarily ablating peripheral nerves. These devices are developed and marketed to a broad base of medical centers globally. The Company recognizes revenue when control of promised goods is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods.
In the quarter ended March 31, 2022, the Company changed the presentation of its disaggregated revenue within the notes to the Condensed Consolidated Financial Statements to align with current product line offerings. Specifically, pain management revenue, representing sales of the cryoSPHERE® product, was historically presented within open ablation revenue and is now a separately stated revenue product type. Valve revenue, historically presented as a separate product type revenue, is now included in open ablation revenue. Revenue amounts for comparative prior fiscal periods have been reclassified to conform to the current period presentation.
12

ATRICURE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, except per share amounts)
(Unaudited)
Revenue reclassified by product type for 2021 is as follows:
Three Months Ended
March 31, 2021June 30, 2021September 30, 2021December 31, 2021
United States Revenue:
Open ablation$17,439 $19,503 $17,893 $17,561 
Minimally invasive ablation8,385 9,702 9,990 11,303 
Pain management3,898 5,709 6,253 6,927 
Total ablation29,722 34,914 34,136 35,791 
Appendage management20,587 25,156 23,401 25,424 
Total United States$50,309 $60,070 $57,537 $61,215 
International Revenue:
Open ablation$4,434 $5,526 $6,690 $6,544 
Minimally invasive ablation1,274 1,575 1,849 1,711 
Pain management 11 11 39 
Total ablation5,708 7,112 8,550 8,294 
Appendage management3,258 4,194 4,373 3,709 
Total International$8,966 $11,306 $12,923 $12,003 
Total revenue$59,275 $71,376 $70,460 $73,218 
United States revenue by product type is as follows:
Three Months Ended
March 31,
20222021
Open ablation $18,974$17,439
Minimally invasive ablation 8,6158,385
Pain management8,0143,898
Total ablation$35,603$29,722
Appendage management26,66920,587
Total United States$62,272$50,309
International revenue by product type is as follows:
 Three Months Ended
March 31,
 20222021
Open ablation $6,492$4,434
Minimally invasive ablation 1,5331,274
Pain management140
Total ablation$8,165$5,708
Appendage management4,1393,258
Total International $12,304$8,966
13

ATRICURE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, except per share amounts)
(Unaudited)
Revenue attributed to customer geographic locations is as follows:
Three Months Ended
March 31,
20222021
United States$62,272$50,309
Europe7,2375,766
Asia4,5572,873
Other International510327
Total International12,3048,966
Total revenue$74,576$59,275
10.INCOME TAX PROVISION
The Company files federal, state and foreign income tax returns in jurisdictions with varying statutes of limitations. The Company uses the asset and liability method to determine its provision for income taxes. The Company’s provision for income taxes in interim periods is computed by applying the discrete method and is based on financial results through the end of the interim period. The Company determined that using the discrete method is more appropriate than using the annual effective tax rate method. The Company is unable to estimate the annual effective tax rate with sufficient precision to use the effective tax rate method, which requires a full-year projection of income. The effective tax rate for the three months ended March 31, 2022 and 2021 was (0.37%) and (0.18%). The Company’s worldwide effective tax rate differs from the US statutory rate of 21% primarily due to the Company’s valuation allowance.
Federal, state and local returns of the Company are routinely subject to review by various taxing authorities. The Company has not accrued any interest and penalties related to unrecognized income tax benefits as a result of offsetting of net operating losses. However, if required, the Company will recognize interest and penalties within income tax expense and within the related tax liability.
11.EQUITY COMPENSATION PLANS
The Company has two share-based incentive plans: the 2014 Stock Incentive Plan (2014 Plan) and the 2019 Employee Stock Purchase Plan (ESPP).
Stock Incentive Plan
Under the 2014 Plan, the Board of Directors may grant incentive stock options to Company employees and may grant restricted stock awards, restricted stock units, nonstatutory stock options, performance share awards and stock appreciation rights to Company employees, directors and consultants. The Compensation Committee of the Board of Directors, as the administrator of the 2014 Plan, has the authority to determine the terms of any awards, including the number of shares subject to each award, the exercisability of the awards and the form of consideration. As of March 31, 2022, 12,899 shares of common stock had been reserved for issuance under the 2014 Plan, and 1,152 shares were available for future grants.
Employee Stock Purchase Plan
Under the ESPP, shares of the Company’s common stock may be purchased at a discount (15%) of the lesser of the closing price of the Company’s common stock on the first or last trading days of the offering period. The offering period (currently six months) and the offering price are subject to change. Participants may not purchase a value of more than $25 of the Company’s common stock in a calendar year and may not purchase more than 3 shares during an offering period. As of March 31, 2022, there were 305 shares available for future issuance under the ESPP.
14

ATRICURE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, except per share amounts)
(Unaudited)
Share-Based Compensation Expense Information
The following table summarizes the allocation of share-based compensation expense:
Three Months Ended
March 31,
20222021
Cost of revenue $571 $419 
Research and development expenses 1,130 937 
Selling, general and administrative expenses 5,348 5,248 
Total $7,049 $6,604 
12.COMPREHENSIVE LOSS AND ACCUMULATED OTHER COMPREHENSIVE LOSS
In addition to net losses, comprehensive loss includes foreign currency translation adjustments and unrealized gains (losses) on investments.
Accumulated other comprehensive loss consisted of the following, net of tax:
Three Months Ended
March 31,
20222021
Total accumulated other comprehensive (loss) income at beginning of period$(948)$312 
Unrealized Gains (Losses) on Investments
Balance at beginning of period$(887)$54
Other comprehensive loss before reclassifications(2,339)(31)
Amounts reclassified from accumulated other comprehensive loss to other income (expense)
Balance at end of period$(3,226)$23
Foreign Currency Translation Adjustment
Balance at beginning of period$(61)$258 
Other comprehensive loss before reclassifications(261)(298)
Amounts reclassified from accumulated other comprehensive loss to other income (expense)83(1)
Balance at end of period$(239)$(41)
Total accumulated other comprehensive loss at end of period$(3,465)$(18)
15

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
(Dollar amounts referenced in this Item 2 are in thousands, except per share amounts.)
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying Condensed Consolidated Financial Statements and notes thereto contained in Item 1 of Part I of this Form 10-Q and our audited financial statements and notes thereto as of and for the year ended December 31, 2021 included in our Form 10-K filed with the Securities and Exchange Commission (SEC) to provide an understanding of our results of operations, financial condition and cash flows.
Forward-Looking Statements
This Form 10-Q, including the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors,” contains forward-looking statements regarding our future performance. All forward-looking information is inherently uncertain and actual results may differ materially from assumptions, estimates or expectations reflected or contained in the forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and elsewhere in this quarterly report on Form 10-Q, and in our annual report on Form 10-K for the year ended December 31, 2021. There may be additional risks of which we are not presently aware or that we currently believe are immaterial which could have an adverse impact on our business. Forward-looking statements address our expected future business, financial performance, financial condition and results of operations, and often contain words such as “intends,” “estimates,” “anticipates,” “hopes,” “projects,” “plans,” “expects,” “seek,” “believes,” “see,” “should,” “will,” “would,” “could,” “can,” “may,” “future,” “predicts,” “target,” and similar expressions and the negative versions thereof. Such statements are based only upon current expectations of AtriCure. Any forward-looking statement speaks only as of the date made. Reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to differ materially from those expressed or implied. Forward-looking statements include statements that address activities, events, circumstances or developments that AtriCure expects, believes or anticipates will or may occur in the future. Forward-looking statements are based on AtriCure’s experience and perception of current conditions, trends, expected future developments and other factors it believes are appropriate under the circumstances and are subject to numerous risks and uncertainties, many of which are beyond AtriCure’s control including developments related to the COVID-19 pandemic, as discussed herein. With respect to the forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. These forward-looking statements speak only as of the date of this Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statements to reflect new information or future events or otherwise unless required by law.
Overview
We are a leading innovator in treatments for atrial fibrillation (Afib), left atrial appendage (LAA) management and post-operative pain management. According to the American Heart Association, Afib affects 1-2% of the population in the United States. It is the most common cardiac arrhythmia, or irregular heartbeat, encountered in clinical practice and results in high utilization of healthcare services. Patients often progress from being in Afib intermittently (paroxysmal) to being in Afib continuously. The continuous Afib patient population includes persistent Afib, which lasts seven days to one year, and long-standing persistent Afib, which lasts longer than one year. Afib often occurs in conjunction with other cardiovascular diseases, including hypertension, congestive heart failure, left ventricular dysfunction, coronary artery disease and valvular disease. Our ablation and left atrial appendage management (LAAM) products are used by physicians during both open-heart and minimally invasive procedures. In open-heart procedures, the physician is performing heart surgery for other conditions, and our products are used in conjunction with (“concomitant” to) such a procedure. Minimally invasive procedures are performed on a standalone basis, and often include multi-disciplinary or “hybrid” approaches, combining both surgical procedures using AtriCure ablation and LAAM products and catheter ablation.
We believe that we are currently the market leader in the surgical treatment of Afib. Our Isolator® Synergy™ Ablation System is approved by the United States Food and Drug Administration (FDA) for the treatment of persistent and long-standing persistent Afib concomitant to other open-heart surgical procedures. The EPi-Sense® System is approved by FDA to treat patients with long-standing persistent Afib. All of our other ablation devices are cleared for sale in the United States under FDA 510(k) clearances, including our other radio frequency (RF) and cryoablation products, which are indicated for the ablation of cardiac tissue and/or the treatment of cardiac arrhythmias. In addition, certain of our cryoablation probes are cleared for managing pain by temporarily ablating peripheral nerves, or Cryo Nerve Block therapy. Our AtriClip® LAA Exclusion System products are 510(k)-cleared with an indication for the exclusion of the LAA, performed under direct visualization and in conjunction with other cardiac surgical procedures. Direct visualization, in this context, requires that the surgeon is able to see the heart directly, with or without assistance from a camera, endoscope or other appropriate viewing technologies. The LARIAT® system is cleared under the 510(k) process for soft tissue ligation. Several of our products are currently being studied
16

to expand labeling claims or to support indications specifically for the treatment of Afib. Our Isolator Synergy clamps, Isolator Synergy pens, Coolrail® linear pen, cryoablation devices, cryoSPHERE® probe, certain products of the AtriClip LAA Exclusion System, COBRA Fusion® Ablation System, the EPi-Sense® system and LARIAT Suture Delivery Device bear the CE mark and may be commercially distributed throughout the member states of the European Union and other countries that comply with or mirror the Medical Device Directive. Our Isolator Synergy clamps, Isolator Synergy pens, Coolrail linear pen, cryoablation devices and certain products of the AtriClip LAA Exclusion System are available in select Asia-Pacific countries. We anticipate that substantially all of our revenue for the foreseeable future will relate to products we currently sell or are in the process of developing.
We sell our products to medical centers through our direct sales force in the United States and in certain international markets, such as Germany, France, the United Kingdom and the Benelux region. We also sell our products through distributors who in turn sell our products to medical centers in other international markets. Our business is primarily transacted in U.S. Dollars, with certain exceptions. The majority of direct sales transactions outside the United States are transacted in Euros or the British Pound.
Recent Developments
During early 2022, we experienced variability and intermittent demand for our products as non-emergent procedures were deferred in order to preserve resources for COVID-19 patients and caregivers and hospital staffing was impacted by the pandemic and related factors. We expect this variability to continue as we operate in many geographic regions with diverse restrictions that are impacted as new COVID-19 variants emerge. However, we saw many regions stabilize at the end of the first quarter of 2022 with improvements in procedure volumes. Despite the challenging environment resulting from the pandemic, we continue to build on our strategic initiatives of product innovation, investing in clinical science and expanding awareness and adoption by providing superior training and education.
PRODUCT INNOVATION. Recently, we announced the launch of the new EnCompass Clamp®, following the receipt of 510(k) clearance for ablation of cardiac tissue during cardiac surgery in July 2021. The EnCompass clamp marks innovation in our core open ablation market and is designed to make concomitant surgical ablations more efficient. It is expected to drive deeper penetration of cardiac surgery procedures.
CLINICAL SCIENCE. We continue to invest in studies to expand labeling claims or support indications for the treatment of Afib, and we also conduct various studies to gather clinical data regarding our products.
HEAL-IST. In February 2022, FDA approved the protocol for the Hybrid Epicardial and Endocardial Sinus Node Sparing Ablation Therapy for Inappropriate Sinus Tachycardia, (HEAL-IST) clinical trial. The HEAL-IST clinical trial is designed to study the safety and efficacy of a hybrid sinus node sparing ablation procedure using the Isolator Synergy Surgical Ablation System for the treatment of symptomatic, drug refractory or drug intolerant IST. The trial is a prospective, multicenter, single arm trial that evaluates safety 30 days post-procedure and evaluates primary effectiveness of freedom from IST at 12 months post-procedure. The trial provides for enrollment of up to 142 patients at up to 40 sites in the United States, United Kingdom and European Union. The Company anticipates enrollment to begin this year.
LeAAPS. In April 2022, FDA approved the protocol for the Left Atrial Appendage Exclusion for Prophylactic Stroke Reduction (LeAAPS) IDE clinical trial. The trial is designed to evaluate the effectiveness of prophylactic LAA exclusion using the AtriClip LAA Exclusion System for the prevention of ischemic stroke or systemic arterial embolism in cardiac surgery patients without pre-operative AF diagnosis who are at risk for these events. The trial is a prospective, multicenter, randomized trial that evaluates safety at 30 days post-procedure to demonstrate no increased risk with LAA exclusion during cardiac surgery. The trial provides for enrollment of up to 6,500 subjects at up to 250 sites worldwide. The Company anticipates enrollment to begin this year.
TRAINING. Our professional education and marketing teams conduct virtual, in-person and mobile training for physicians and our sales team. These training methods ensure invaluable access to continuing education and awareness of our products and related procedures. The 2021 FDA approval of the EPi-Sense system has enabled us to educate and train physicians on the benefits of Hybrid AF™ therapy in treating long-standing persistent Afib patients. Our Hybrid Training Course is co-sponsored by the Hearth Rhythm Society (HRS).
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Results of Operations
Three months ended March 31, 2022 compared to three months ended March 31, 2021
The following table sets forth, for the periods indicated, our results of operations expressed as dollar amounts and as percentages of revenue:
Three Months Ended
March 31,
20222021
Amount % of
Revenues
Amount % of
Revenues
Revenue $74,576 100.0  %$59,275 100.0  %
Cost of revenue 18,981 25.5  %14,735 24.9  %
Gross profit 55,595 74.5  %44,540 75.1  %
Operating expenses:
Research and development expenses13,629 18.3  %11,217 18.9  %
Selling, general and administrative expenses56,116 75.2  %49,208 83.0  %
Total operating expenses 69,745 93.5  %60,425 101.9  %
Loss from operations (14,150)(19.0) %(15,885)(26.8) %
Other expense, net: (977)(1.3) %(1,001)(1.7) %
Loss before income tax expense (15,127)(20.3) %(16,886)(28.5) %
Income tax expense 56 0.1  %31 0.1  %
Net loss$(15,183)(20.4) %$(16,917)(28.5) %
Revenue. The following table sets forth, for the periods indicated, our revenue by product type and geography expressed as dollar amounts and the corresponding change in such revenues between periods, in both dollars and percentages:
Three Months Ended
March 31,
Change
20222021Amount%
Open ablation$18,974 $17,439 $1,535 8.8  %
Minimally invasive ablation8,615 8,385 230 2.7  %
Pain management8,014 3,898 4,116 105.6  %
Appendage management26,669 20,587 6,082 29.5  %
Total United States$62,272 $50,309 $11,963 23.8  %
Total International12,304 8,966 3,338 37.2  %
Total revenue$74,576 $59,275 $15,301 25.8  %
Worldwide revenue increased 25.8% (26.7% on a constant currency basis). In the United States, we experienced growth across key product lines and franchises. Appendage management and pain management sales increases were driven by sales of the AtriClip® Flex⋅V® device and cryoSPHERE® probe. The soft launch of the new EnCompass Clamp contributed to the open ablation sales growth, while adoption of the EPi-Sense® System alone drove increases in minimally invasive ablation. International sales increased 37.2% (43.1% on a constant currency basis), rising across all major franchises due primarily to the Asian markets and our direct markets in the United Kingdom and Germany.
Revenue reported on a constant currency basis is a non-GAAP measure and is calculated by applying previous period foreign currency (Euro) exchange rates, which are determined by the average daily Euro to Dollar exchange rate, to each of the comparable periods. Revenue is analyzed on a constant currency basis to better measure the comparability of results between periods. Because changes in foreign currency exchange rates have a non-operating impact on revenue, we believe that evaluating growth in revenue on a constant currency basis provides an additional and meaningful assessment of revenue to both management and investors.
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Cost of revenue and gross margin. Cost of revenue increased $4,246, reflecting higher sales volumes, while gross margin decreased approximately 60 basis points, reflecting geographic and product mix between periods and cost increases.
Research and development expenses. Research and development expenses increased $2,412 or 21.5%. Personnel costs grew $995 from increased headcount as we continue to build our product development, regulatory and clinical teams and travel activity resumes. Amortization of the technology asset related to the PMA resulting from the CONVERGE IDE clinical trial, which commenced in April 2021, drove higher depreciation and amortization expense of $730. Finally, share-based compensation increased $193 compared with the prior period.
Selling, general and administrative expenses. Selling, general and administrative expenses increased $6,908, or 14.0%. Additional headcount and travel activities of $5,301 drove the increase in expenses, primarily reflecting the expansion of our sales and training teams, while meetings, trainings and tradeshow activities contributed $2,915 of the increase as we saw further transition from virtual to in-person events. Other operating costs, including IT, legal and administrative expenses grew $768 as compared to the prior period. Partially offsetting these increases was a $2,500 charge for the change in fair value of the SentreHEART contingent consideration liability in 2021.
Other income (expense). Other income and expense consists primarily of net interest expense and foreign currency transaction gains and losses. Net interest expense increased $171 driven by lower interest income from a decline in investment yields partially offset by lower interest expense on the term loan, stemming from the November 2021 refinancing.
Liquidity and Capital Resources
As of March 31, 2022, the Company had cash, cash equivalents and investments of $181,911 and outstanding debt of $60,000. We had unused borrowing capacity of approximately $28,750 under our revolving credit facility. Most of our operating cash and all cash equivalents and investments are held by United States financial institutions. We had net working capital of $152,232 and an accumulated deficit of $295,336 as of March 31, 2022.
Three Months Ended March 31,
20222021Change
(dollars in thousands)
Net cash used in operating activities$(24,632)$(9,316)$15,316 
Net cash provided by investing activities19,722 63,587 (43,865)
Net cash used in financing activities(10,497)(10,707)(210)
Cash flows used in operating activities. Net cash used in operating activities increased $15,316 in 2022 compared to 2021. This change is driven by the fluctuation in working capital and other assets and liabilities of $15,815, driven by the $12,500 reduction in accrued liabilities primarily as a result of higher annual variable compensation payments due to improved operating performance and a $1,254 increase in accounts receivable as a result of sales growth. The remaining fluctuation is a decrease in the net loss of $1,734, driven by a decrease in non-cash expenses of $1,235. Fluctuation in non-cash expenses is largely the $2,500 non-cash impact for the fair value adjustment of the SentreHEART contingent consideration liability in 2021, offset partially by amortization of the CONVERGE technology asset.
Cash flows provided by investing activities. Net cash provided by investing activities decreased by $43,865 in 2022 compared to 2021, due to a decrease in sales and maturities of available-for-sale securities of $41,810, offset by an increase of $2,055 for the purchase of property and equipment to support our new product introductions and construction costs to expand our manufacturing facilities.
Cash flows used in financing activities. Net cash used in financing activities decreased by $210 in 2022 due primarily to lower stock option exercise activity of $4,233 offset by a decrease of $4,462 in cash tax payments from restricted and performance share vesting.
Credit facility. Our Loan and Security Agreement, as amended and modified effective November 1, 2021 (Loan Agreement) with Silicon Valley Bank (SVB) provides for a $60,000 term loan, a $30,000 revolving line of credit, and an option to make available an additional $30,000 in term loan borrowings. The Loan Agreement has a five year term, expiring November 2026. Principal payments are to be made ratably commencing 24 months after the inception of the loan through the loan's maturity date. At the option of the Company, the commencement of term loan principal payments may be extended an additional twelve months. The term loan accrues interest at the Prime Rate plus 1.25% and is subject to an additional 3.00% fee on the term loan principal amount at maturity. As of March 31, 2022, our outstanding debt was $60,000 and is classified as
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noncurrent. We had unused borrowing capacity of approximately $28,750 under our revolving credit facility. For additional information on the terms and conditions, as well as applicable interest and fee payments, see Note 6 — Indebtedness.
Our corporate headquarters lease agreement requires a $1,250 letter of credit which renews annually and remains outstanding as of March 31, 2022.
Uses of liquidity and capital resources. Our executive officers and Board of Directors review our funding sources and future capital requirements in connection with our annual operating plan and periodic updates to the plan. Our future capital requirements depend on a number of factors, including, without limitation: market acceptance of our current and future products; costs to develop and support our products, including professional training; future expenses to expand and support our sales and marketing efforts; operating and filing costs relating to changes in regulatory policies or laws; costs for clinical trials and to secure regulatory approval for new products; costs to prosecute, defend and enforce our intellectual property rights; maintenance and enhancements to our information systems and security; and possible acquisitions and joint ventures, including potential business integration costs. We continue to evaluate additional measures to maintain financial flexibility, and we will continue to closely monitor our liquidity and capital resources through the recovery from, and any further disruptions caused by, COVID-19. Our principal cash requirements include costs of operations, capital expenditures, debt service costs and other contractual obligations.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations is based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The preparation of financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, revenue and expenses and disclosures of contingent assets and liabilities at the date of the financial statements. On a periodic basis, we evaluate our estimates, including those related to sales returns and allowances, inventories, share-based compensation and income taxes. We use authoritative pronouncements, historical experience and other assumptions as the basis for making estimates. Actual results could differ from those estimates under different assumptions or conditions. Our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 includes additional information about the Company, our operations, our financial position and our critical accounting policies and estimates and should be read in conjunction with this Quarterly Report on Form 10-Q.
Recent Accounting Pronouncements
As of March 31, 2022, there were no material changes to the information provided in Note 2, “Recent Accounting Pronouncements” in the Company’s Form 10-K for the fiscal year ended December 31, 2021.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As of March 31, 2022, there were no material changes to the information provided under Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” in the Company’s Form 10-K for the year ended December 31, 2021.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company’s management, with the participation of the President and Chief Executive Officer (the Principal Executive Officer) and Chief Financial Officer (the Principal Accounting and Financial Officer), has evaluated the effectiveness of the Company’s disclosure controls and procedures, as defined in Rules 13(a) -15(e) and 15(d) -15(e) of the Securities Exchange Act of 1934 as amended (Exchange Act), as of the end of the period covered by this report. Based on this evaluation, we concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective in providing reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s forms and rules, and the material information relating to the Company is accumulated and communicated to management, including the President and Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.
Control systems, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that control objectives are met. Because of inherent limitations in all control systems, no evaluation of controls can provide assurance that all control issues and instances of fraud, if any, within a company will be detected. Additionally, controls can be circumvented by individuals, by collusion of two or more people or by management override. Over time, controls can become
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inadequate because of changes in conditions or the degree of compliance may deteriorate. Further, the design of any system of controls is based in part upon assumptions about the likelihood of future events. There can be no assurance that any design will succeed in achieving its stated goals under all future conditions. Because of the inherent limitations in any cost-effective control system, misstatements due to errors or fraud may occur and not be detected.
Changes in Internal Control Over Financial Reporting
In the ordinary course of business, we routinely enhance our information systems by either upgrading current systems or implementing new ones. There were no changes in our internal control over financial reporting that occurred during the three months ended March 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Information with respect to legal proceedings can be found under the heading “Legal” in Note 8 – Commitments and Contingencies to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q, and is incorporated herein by reference.
Item 1A. Risk Factors
In addition to the other information set forth in this report, careful consideration should be given to the factors discussed in Item 1A, “Risk Factors” in our Form 10-K for the year ended December 31, 2021, all of which could materially affect our business, financial condition or future results. The risks described therein are not the only risks facing us. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, also may adversely affect our business, financial condition and/or operating results. There have been no material changes with respect to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.
Item 6. Exhibits
Exhibit No.Description
10.1#
31.1
31.2
32.1
32.2
101.INSXBRL Instance Document
101.SCHXBRL Taxonomy Extension Schema Document
101.CALXBRL Taxonomy Extension Calculation Linkbase Document
101.DEFXBRL Taxonomy Definition Linkbase Document
101.LABXBRL Taxonomy Extension Label Linkbase Document
101.PREXBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
____________________________
#    Compensatory plan or arrangement.

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
AtriCure, Inc.
(REGISTRANT)
Date: May 4, 2022
/s/ Michael H. Carrel
Michael H. Carrel
President and Chief Executive Officer
(Principal Executive Officer)
Date: May 4, 2022
/s/ Angela L. Wirick
Angela L. Wirick
Chief Financial Officer
(Principal Accounting and Financial Officer)
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