0001564590-21-042620.txt : 20210809 0001564590-21-042620.hdr.sgml : 20210809 20210809160623 ACCESSION NUMBER: 0001564590-21-042620 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 62 CONFORMED PERIOD OF REPORT: 20210630 FILED AS OF DATE: 20210809 DATE AS OF CHANGE: 20210809 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Shockwave Medical, Inc. CENTRAL INDEX KEY: 0001642545 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 270494101 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-38829 FILM NUMBER: 211156476 BUSINESS ADDRESS: STREET 1: 5403 BETSY ROSS DRIVE CITY: SANTA CLARA STATE: CA ZIP: 95054 BUSINESS PHONE: (510) 279-4262 MAIL ADDRESS: STREET 1: 5403 BETSY ROSS DRIVE CITY: SANTA CLARA STATE: CA ZIP: 95054 FORMER COMPANY: FORMER CONFORMED NAME: ShockWave Medical, Inc. DATE OF NAME CHANGE: 20150515 10-Q 1 swav-10q_20210630.htm 10-Q swav-10q_20210630.htm
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

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: 001-38829

 

Shockwave Medical, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

27-0494101

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

 

5403 Betsy Ross Drive

Santa Clara, California

95054

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (510) 279-4262

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class of securities

 

Trading symbol(s)

Name of each national exchange and principal

U.S. market for the securities

Shockwave Medical, Inc., common stock, par

value $0.001 per share

SWAV

The Nasdaq Stock Market LLC

(Nasdaq Global Select Market)

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      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      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

Emerging growth 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 

As of August 4, 2021, the registrant had 35,150,341 shares of common stock, $0.001 par value per share, outstanding.

 

 

 

 


 

Table of Contents

 

 

 

Page

PART I.

FINANCIAL INFORMATION

4

Item 1.

Financial Statements (Unaudited)

4

 

Condensed Consolidated Balance Sheets

4

 

Condensed Consolidated Statements of Operations and Comprehensive Loss

5

 

Condensed Consolidated Statements of Stockholders’ Equity

6

 

Condensed Consolidated Statements of Cash Flows

8

 

Notes to Unaudited Condensed Consolidated Financial Statements

9

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

19

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

30

Item 4.

Controls and Procedures

30

PART II.

OTHER INFORMATION

32

Item 1.

Legal Proceedings

32

Item 1A.

Risk Factors

32

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

34

Item 3.

Defaults Upon Senior Securities

34

Item 4.

Mine Safety Disclosures

34

Item 5.

Other Information

34

Item 6.

Exhibits

35

Signatures

36

 

 

 

2


 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains statements relating to our expectations, projections, beliefs, and prospects, which are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify these statements by forward-looking words such as “believe,” “will,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “might”, “plan,” “expect,” “predict,” “could,” “potentially” or the negative of these terms or similar expressions. You should read these statements carefully because they may relate to future expectations around growth, strategy, and anticipated trends in our business, contain projections of future results of operations or financial condition, or state other “forward-looking” information. These statements are only predictions based on our current expectations, estimates, assumptions, and projections about future events and are applicable only as of the dates of such statements.  These forward-looking statements are subject to certain risks and uncertainties that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. Factors that might cause such a difference include, but are not limited to the following:

 

the impact of the COVID-19 pandemic on our operations, financial results, and liquidity and capital resources, including due to the pandemic’s impact on our sales, expenses, supply chain, manufacturing, research and development activities, clinical trials, and employees;

 

our ability to design, develop, manufacture and market innovative products to treat patients with challenging medical conditions, particularly in peripheral artery disease, coronary artery disease and aortic stenosis;

 

our expected future growth, including growth in international sales;

 

the size and growth potential of the markets for our products, and our ability to serve those markets;

 

the rate and degree of market acceptance of our products;

 

coverage and reimbursement for procedures performed using our products;

 

the performance of third parties in connection with the development of our products, including third-party suppliers;

 

regulatory developments in the United States and foreign countries;

 

our ability to obtain and maintain regulatory approval or clearance of our products on expected timelines;

 

our plans to research, develop and commercialize our products and any other approved or cleared product;

 

our ability to scale our organizational culture of cooperative product development and commercial execution;

 

the development, regulatory approval, efficacy and commercialization of competing products;

 

the loss of key scientific or management personnel;

 

our ability to develop and maintain our corporate infrastructure, including our internal controls;

 

our financial performance and capital requirements; and

 

our expectations regarding our ability to obtain and maintain intellectual property protection for our products, as well as our ability to operate our business without infringing the intellectual property rights of others.

These factors and others are discussed in more detail in the section entitled “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2020, together with any updates in the section entitled “Risk Factors” of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 and in this Quarterly Report on Form 10-Q. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. There may also 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. We undertake no obligation to update any of these forward-looking statements for any reason, even if new information becomes available in the future, except as may be required by law.

 

3


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

SHOCKWAVE MEDICAL, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands)

 

 

 

June 30,

2021

 

 

December 31,

2020

 

 

 

 

 

 

 

(1)

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

84,268

 

 

$

50,423

 

Short-term investments

 

 

90,478

 

 

 

151,931

 

Accounts receivable, net

 

 

24,955

 

 

 

11,689

 

Inventory

 

 

36,149

 

 

 

29,859

 

Prepaid expenses and other current assets

 

 

3,781

 

 

 

2,398

 

Total current assets

 

 

239,631

 

 

 

246,300

 

Operating lease right-of-use assets

 

 

6,825

 

 

 

7,568

 

Property and equipment, net

 

 

21,467

 

 

 

16,362

 

Equity method investment

 

 

6,750

 

 

 

 

Other assets

 

 

1,686

 

 

 

1,812

 

TOTAL ASSETS

 

$

276,359

 

 

$

272,042

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Accounts payable

 

$

2,633

 

 

$

1,466

 

Term notes, current portion

 

 

4,125

 

 

 

3,300

 

Accrued liabilities

 

 

28,317

 

 

 

19,942

 

Lease liability, current portion

 

 

920

 

 

 

873

 

Total current liabilities

 

 

35,995

 

 

 

25,581

 

Lease liability, noncurrent portion

 

 

6,911

 

 

 

7,488

 

Term notes, noncurrent portion

 

 

12,833

 

 

 

13,319

 

Related party contract liability, noncurrent portion

 

 

12,273

 

 

 

 

TOTAL LIABILITIES

 

 

68,012

 

 

 

46,388

 

STOCKHOLDERS’ EQUITY:

 

 

 

 

 

 

 

 

Preferred stock

 

 

 

 

 

 

Common stock

 

 

35

 

 

 

35

 

Additional paid-in capital

 

 

476,001

 

 

 

469,283

 

Accumulated other comprehensive income

 

 

10

 

 

 

9

 

Accumulated deficit

 

 

(267,699

)

 

 

(243,673

)

TOTAL STOCKHOLDERS’ EQUITY

 

 

208,347

 

 

 

225,654

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

276,359

 

 

$

272,042

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

(1)

The consolidated balance sheet as of December 31, 2020 is derived from the audited consolidated financial statements as of that date.

 

4


 

SHOCKWAVE MEDICAL, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(in thousands, except share and per share data)

 

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product revenue

 

$

55,908

 

 

$

10,286

 

 

$

87,808

 

 

$

25,483

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of product revenue

 

 

9,934

 

 

 

3,592

 

 

 

17,826

 

 

 

9,243

 

Gross profit

 

 

45,974

 

 

 

6,694

 

 

 

69,982

 

 

 

16,240

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

11,815

 

 

 

8,101

 

 

 

22,092

 

 

 

19,991

 

Sales and marketing

 

 

25,713

 

 

 

11,206

 

 

 

49,705

 

 

 

21,617

 

General and administrative

 

 

8,626

 

 

 

5,398

 

 

 

15,852

 

 

 

11,622

 

Total operating expenses

 

 

46,154

 

 

 

24,705

 

 

 

87,649

 

 

 

53,230

 

Loss from operations

 

 

(180

)

 

 

(18,011

)

 

 

(17,667

)

 

 

(36,990

)

Share in net loss of equity method investment

 

 

 

 

 

 

 

 

(5,523

)

 

 

 

Interest expense

 

 

(318

)

 

 

(306

)

 

 

(630

)

 

 

(583

)

Other income (expense), net

 

 

146

 

 

 

220

 

 

 

(89

)

 

 

724

 

Net loss before taxes

 

 

(352

)

 

 

(18,097

)

 

 

(23,909

)

 

 

(36,849

)

Income tax provision

 

 

73

 

 

 

21

 

 

 

117

 

 

 

44

 

Net loss

 

$

(425

)

 

$

(18,118

)

 

$

(24,026

)

 

$

(36,893

)

Unrealized gain/(loss) on available-for-sale securities

 

 

(6

)

 

 

(82

)

 

 

1

 

 

 

(14

)

Total comprehensive loss

 

$

(431

)

 

$

(18,200

)

 

$

(24,025

)

 

$

(36,907

)

Net loss per share, basic and diluted

 

$

(0.01

)

 

$

(0.56

)

 

$

(0.69

)

 

$

(1.16

)

Shares used in computing net loss per share, basic and diluted

 

 

35,030,036

 

 

 

32,156,476

 

 

 

34,914,361

 

 

 

31,900,259

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

 

5


 

 

Shockwave Medical, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

(in thousands, except share data)

 

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Accumulated

Other

Comprehensive

 

 

Accumulated

 

 

Total

Stockholders'

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income

 

 

Deficit

 

 

Equity

 

 

Balance — December 31, 2020

 

 

34,684,337

 

 

$

35

 

 

$

469,283

 

 

$

9

 

 

$

(243,673

)

 

$

225,654

 

 

Exercise of stock options

 

 

159,325

 

 

 

 

 

 

773

 

 

 

 

 

 

 

 

 

773

 

 

Unrealized gain on available-for-

   sale securities

 

 

 

 

 

 

 

 

 

 

 

7

 

 

 

 

 

 

7

 

 

Issuance of common stock under

   employee stock purchase plan

 

 

20,594

 

 

 

 

 

 

1,141

 

 

 

 

 

 

 

 

 

1,141

 

 

Issuance of common stock in connection

   with vesting of restricted stock units

 

 

107,237

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxes withheld on net settled vesting

   of restricted stock units

 

 

(42,529

)

 

 

 

 

 

(5,114

)

 

 

 

 

 

 

 

 

(5,114

)

 

Stock-based compensation

 

 

 

 

 

 

 

 

5,394

 

 

 

 

 

 

 

 

 

5,394

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(23,601

)

 

 

(23,601

)

 

Balance — March 31, 2021

 

 

34,928,964

 

 

 

35

 

 

 

471,477

 

 

 

16

 

 

 

(267,274

)

 

 

204,254

 

 

Exercise of stock options

 

 

149,101

 

 

 

 

 

 

1,085

 

 

 

 

 

 

 

 

 

1,085

 

 

Unrealized loss on available-for-

   sale securities

 

 

 

 

 

 

 

 

 

 

 

(6

)

 

 

 

 

 

(6

)

 

Issuance of common stock in connection

   with vesting of restricted stock units

 

 

71,761

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxes withheld on net settled vesting

   of restricted stock units

 

 

(20,537

)

 

 

 

 

 

(3,223

)

 

 

 

 

 

 

 

 

(3,223

)

 

Stock-based compensation

 

 

 

 

 

 

 

 

6,662

 

 

 

 

 

 

 

 

 

6,662

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(425

)

 

 

(425

)

 

Balance — June 30, 2021

 

 

35,129,289

 

 

$

35

 

 

$

476,001

 

 

$

10

 

 

$

(267,699

)

 

$

208,347

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

 

 

 

6


 

 

Shockwave Medical, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

(in thousands, except share data)

 

 

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Accumulated

Other

Comprehensive

 

 

Accumulated

 

 

Total

Stockholders'

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income

 

 

Deficit

 

 

Equity

 

 

Balance — December 31, 2019

 

 

31,446,787

 

 

$

31

 

 

$

370,561

 

 

$

35

 

 

$

(177,974

)

 

$

192,653

 

 

Exercise of stock options

 

 

356,128

 

 

 

1

 

 

 

1,112

 

 

 

 

 

 

 

 

 

1,113

 

 

Issuance of common stock under

   employee stock purchase plan

 

 

24,691

 

 

 

 

 

 

842

 

 

 

 

 

 

 

 

 

842

 

 

Unrealized gain on available-for-

   sale securities

 

 

 

 

 

 

 

 

 

 

 

68

 

 

 

 

 

 

68

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

1,871

 

 

 

 

 

 

 

 

 

1,871

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,775

)

 

 

(18,775

)

 

Balance — March 31, 2020

 

 

31,827,606

 

 

 

32

 

 

 

374,386

 

 

 

103

 

 

 

(196,749

)

 

 

177,772

 

 

Exercise of stock options

 

 

137,178

 

 

 

 

 

 

480

 

 

 

 

 

 

 

 

 

480

 

 

Issuance of common stock in connection with public offering, net of issuance costs of $6.1 million

 

 

1,955,000

 

 

 

2

 

 

 

83,380

 

 

 

 

 

 

 

 

 

83,382

 

 

Issuance of common stock in connection with vesting of restricted stock units

 

 

41,229

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restricted stock units withheld in net settlement for tax

 

 

(15,456

)

 

 

 

 

 

(616

)

 

 

 

 

 

 

 

 

(616

)

 

Unrealized loss on available-for- sale securities

 

 

 

 

 

 

 

 

 

 

 

(82

)

 

 

 

 

 

(82

)

 

Stock-based compensation

 

 

 

 

 

 

 

 

2,605

 

 

 

 

 

 

 

 

 

2,605

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,118

)

 

 

(18,118

)

 

Balance — June 30, 2020

 

 

33,945,557

 

 

$

34

 

 

$

460,235

 

 

$

21

 

 

$

(214,867

)

 

$

245,423

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

7


 

 

 

SHOCKWAVE MEDICAL, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)  

 

 

 

Six Months Ended

June 30,

 

 

 

2021

 

 

2020

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net loss

 

$

(24,026

)

 

$

(36,893

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

1,597

 

 

 

877

 

Share in net loss of equity method investment

 

 

5,523

 

 

 

 

Stock-based compensation

 

 

11,662

 

 

 

4,262

 

Amortization of right-of-use assets

 

 

791

 

 

 

734

 

Accretion of discount on available-for-sale securities

 

 

397

 

 

 

201

 

Amortization of debt issuance costs

 

 

339

 

 

 

313

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(13,266

)

 

 

1,012

 

Inventory

 

 

(5,676

)

 

 

(10,965

)

Prepaid expenses and other current assets

 

 

(1,383

)

 

 

(1,220

)

Other assets

 

 

126

 

 

 

(116

)

Accounts payable

 

 

1,270

 

 

 

(282

)

Accrued and other current liabilities

 

 

8,107

 

 

 

(41

)

Lease liabilities

 

 

(578

)

 

 

(237

)

Net cash used in operating activities

 

 

(15,117

)

 

 

(42,355

)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Purchase of available-for-sale securities

 

 

(27,243

)

 

 

(16,020

)

Proceeds from maturities of available-for-sale securities

 

 

88,300

 

 

 

59,000

 

Purchase of property and equipment

 

 

(6,757

)

 

 

(8,952

)

Net cash provided by investing activities

 

 

54,300

 

 

 

34,028

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Payments of offering costs

 

 

 

 

 

(179

)

Proceed from issuance of common stock from public offering, net of issuance cost paid

 

 

 

 

 

83,784

 

Principal payments of term loan

 

 

 

 

 

(1,111

)

Net proceeds from term loan

 

 

 

 

 

3,265

 

Payments of taxes withheld on net settled vesting of restricted stock units

 

 

(8,337

)

 

 

(616

)

Proceeds from stock option exercises

 

 

1,858

 

 

 

1,593

 

Proceeds from issuance of common stock under employee stock purchase plan

 

 

1,141

 

 

 

842

 

Net cash provided by (used in) financing activities

 

 

(5,338

)

 

 

87,578

 

Net increase in cash, cash equivalents and restricted cash

 

 

33,845

 

 

 

79,251

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

51,873

 

 

 

140,495

 

Cash, cash equivalents and restricted cash equivalents at end of period

 

$

85,718

 

 

$

219,746

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

 

 

 

 

 

 

 

 

Interest paid

 

$

292