AtriCure(ATRC) - 2020 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, stockholders' equity, and cash flows, along with detailed notes on accounting policies and financial details Condensed Consolidated Balance Sheets The condensed consolidated balance sheets provide a snapshot of the company's financial position as of March 31, 2020, compared to December 31, 2019, showing a decrease in total assets and stockholders' equity, while liabilities saw a slight reduction | Metric | March 31, 2020 (in Thousands) | December 31, 2019 (in Thousands) | | :------------------------------------------ | :---------------------------- | :------------------------------- | | Total Assets | $527,734 | $557,880 | | Total Liabilities | $300,368 | $310,537 | | Total Stockholders' Equity | $227,366 | $247,343 | | Cash and cash equivalents | $21,766 | $28,483 | | Short-term investments | $46,771 | $53,318 | | Accounts receivable, net | $22,131 | $28,046 | | Inventories | $32,063 | $29,414 | | Contingent consideration and other noncurrent liabilities | $188,871 | $186,417 | Condensed Consolidated Statements of Operations and Comprehensive Loss The statements of operations and comprehensive loss for the three months ended March 31, 2020, reveal a significant increase in net loss and operating expenses compared to the prior year, despite a slight decrease in revenue | Metric | Three Months Ended March 31, 2020 (in Thousands) | Three Months Ended March 31, 2019 (in Thousands) | Change (YoY) | | :------------------------------------------ | :--------------------------------------- | :--------------------------------------- | :----------- | | Revenue | $53,225 | $53,966 | -1.4% | | Cost of revenue | $14,341 | $14,095 | +1.7% | | Gross profit | $38,884 | $39,871 | -2.5% | | Research and development expenses | $11,587 | $8,176 | +41.7% | | Selling, general and administrative expenses | $42,751 | $37,015 | +15.5% | | Loss from operations | $(15,454) | $(5,320) | -190.5% | | Net loss | $(16,408) | $(5,635) | -191.2% | | Basic and diluted net loss per share | $(0.42) | $(0.15) | -180.0% | Condensed Consolidated Statements of Stockholders' Equity The condensed consolidated statements of stockholders' equity illustrate the changes in equity for the three months ended March 31, 2020, and 2019, primarily reflecting the impact of net loss and equity compensation plans | Metric | March 31, 2020 (in Thousands) | December 31, 2019 (in Thousands) | | :------------------------------------------ | :---------------------------- | :------------------------------- | | Total Stockholders' Equity | $227,366 | $247,343 | | Net loss (Q1 2020) | $(16,408) | N/A | | Impact of equity compensation plans (Q1 2020) | $(3,356) | N/A | Condensed Consolidated Statements of Cash Flows The condensed consolidated statements of cash flows for the three months ended March 31, 2020, show a net decrease in cash and cash equivalents, primarily driven by cash used in operating and financing activities, partially offset by cash provided by investing activities | Metric | Three Months Ended March 31, 2020 (in Thousands) | Three Months Ended March 31, 2019 (in Thousands) | | :------------------------------------------ | :--------------------------------------- | :--------------------------------------- | | Net cash used in operating activities | $(16,087) | $(13,438) | | Net cash provided by investing activities | $17,331 | $11,017 | | Net cash used in financing activities | $(7,834) | $(8,970) | | Net decrease in cash and cash equivalents | $(6,717) | $(11,511) | | Cash and cash equivalents—end of period | $21,766 | $20,720 | Notes to Condensed Consolidated Financial Statements These notes provide comprehensive details on the company's accounting policies, recent accounting pronouncements, fair value measurements, intangible assets, accrued liabilities, indebtedness, leases, commitments, contingencies, revenue recognition, income tax provisions, equity compensation plans, and segment and geographic information 1. Description of Business and Summary of Significant Accounting Policies AtriCure, Inc. is a leading innovator in treatments for atrial fibrillation (Afib) and left atrial appendage (LAA) management, selling products globally, with this section outlining key accounting policies including revenue recognition, inventory, depreciation, leases, intangible assets, contingent consideration, and share-based compensation - AtriCure is a leading innovator in treatments for atrial fibrillation (Afib) and left atrial appendage (LAA) management, selling its products to medical centers globally through its direct sales force and distributors[13] - Revenue is recognized when control of promised goods is transferred to customers, generally upon shipment of goods[18] Inventories (in Thousands) | Inventories (in Thousands) | March 31, 2020 | December 31, 2019 | | :----------------- | :------------- | :---------------- | | Raw materials | $11,122 | $11,126 | | Work in process | $2,316 | $1,260 | | Finished goods | $18,625 | $17,028 | | Total Inventories | $32,063 | $29,414 | - Intangible assets with determinable useful lives are amortized on a straight-line basis, while In Process Research and Development (IPR&D) is accounted for as an indefinite-lived intangible asset until project completion or abandonment[28] - Contingent consideration, primarily settled in common stock, arises from the nContact Surgical, Inc. and SentreHEART, Inc. merger agreements[31] - Share-based compensation expense was $4,384 thousand for the three months ended March 31, 2020, compared to $4,154 thousand for the same period in 2019[38] 2. Recent Accounting Pronouncements The company adopted ASU 2016-13 (Credit Losses) and ASU 2017-04 (Goodwill Impairment) as of January 1, 2020, neither of which had a material impact on its consolidated financial statements - Adopted ASU 2016-13, 'Financial Instruments – Credit Losses (Topic 326),' on January 1, 2020, which requires financial assets measured at amortized costs to be presented net of expected credit losses; the adjustment did not have a material impact[41] - Adopted ASU 2017-04, 'Intangibles – Goodwill and Other (Topic 350),' on January 1, 2020, simplifying goodwill impairment accounting; the adoption did not have a material impact[42] 3. Fair Value Fair value measurements are categorized into a three-level hierarchy, with contingent consideration liabilities from acquisitions classified as Level 3 due to unobservable inputs and showing an increase in fair value due to accretion in Q1 2020 - The fair value hierarchy is based on three levels of inputs: Level 1 (quoted prices in active markets for identical assets), Level 2 (observable inputs other than Level 1), and Level 3 (unobservable inputs)[43] Assets and Liabilities (in Thousands) | Assets and Liabilities (in Thousands) | Level 1 | Level 2 | Level 3 | Total | | :------------------------------------ | :------ | :------ | :------ | :---- | | Assets (March 31, 2020): | | | | | | Money market funds | $— | $18,235 | $— | $18,235 | | U.S. government agencies and securities | $5,556 | $— | $— | $5,556 | | Corporate bonds | $— | $24,739 | $— | $24,739 | | Asset-backed securities | $— | $16,476 | $— | $16,476 | | Total assets | $5,556 | $59,450 | $— | $65,006 | | Liabilities (March 31, 2020): | | | | | | Contingent consideration | $— | $— | $187,615 | $187,615 | | Total liabilities | $— | $— | $187,615 | $187,615 | - Contingent consideration liabilities from nContact and SentreHEART acquisitions are Level 3 measurements, valued using an income approach (e.g., probability-weighted scenario method) with unobservable inputs such as the probability of milestone achievement[47][48][49] Level 3 Fair Value Measurements (in Thousands) | Level 3 Fair Value Measurements (in Thousands) | Three Months Ended March 31, 2020 | Twelve Months Ended December 31, 2019 | | :--------------------------------------------- | :-------------------------------- | :------------------------------------ | | Beginning Balance | $185,157 | $18,773 | | Amounts acquired | $— | $171,300 | | Changes in fair value included in earnings | $2,458 | $(4,916) | | Ending Balance | $187,615 | $185,157 | 4. Intangible Assets This section summarizes the company's intangible assets, including technology and In Process Research and Development (IPR&D), and goodwill, with technology assets amortized over their useful lives, while IPR&D and goodwill are tested annually for impairment Intangible Assets (in Thousands) | Intangible Assets (in Thousands) | Estimated Useful Life | March 31, 2020 Cost | March 31, 2020 Accumulated Amortization | December 31, 2019 Cost | December 31, 2019 Accumulated Amortization | | :----------------- | :-------------------- | :------------------ | :-------------------------------------- | :------------------- | :----------------------------------------- | | Technology | 3-15 years | $11,691 | $8,620 | $11,691 | $8,131 | | IPR&D | N/A | $126,321 | $— | $126,321 | $— | | Total | | $138,012 | $8,620 | $138,012 | $8,131 | - Amortization expense of intangible assets with definite lives was $489 thousand for the three months ended March 31, 2020, compared to $484 thousand for the same period in 2019[51] Goodwill (in Thousands) | Goodwill (in Thousands) | Three Months Ended March 31, 2020 | Twelve Months Ended December 31, 2019 | | :---------------------- | :-------------------------------- | :------------------------------------ | | Beginning Balance | $234,781 | $105,257 | | Amounts acquired | $— | $129,524 | | Ending Balance | $234,781 | $234,781 | 5. Accrued Liabilities Accrued liabilities significantly decreased from December 31, 2019, to March 31, 2020, primarily due to reductions in accrued commissions and bonuses Accrued Liabilities (in Thousands) | Accrued Liabilities (in Thousands) | March 31, 2020 | December 31, 2019 | | :--------------------------------- | :------------- | :---------------- | | Accrued payroll and employee-related expenses | $7,434 | $6,748 | | Accrued commissions | $3,529 | $8,734 | | Accrued bonus | $1,151 | $10,840 | | Sales returns and allowances | $3,940 | $3,979 | | Accrued royalties | $663 | $732 | | Accrued taxes and value-added taxes payable | $1,171 | $1,658 | | Other accrued liabilities | $267 | $59 | | Total | $18,155 | $32,750 | 6. Indebtedness The company maintains a Loan and Security Agreement with Silicon Valley Bank, comprising a $60,000 thousand term loan and a $20,000 thousand revolving line of credit, both maturing in August 2024, with $8,750 thousand in borrowing availability as of March 31, 2020 - The company has a Loan and Security Agreement with Silicon Valley Bank, which includes a $60,000 thousand term loan and a $20,000 thousand revolving line of credit, both maturing on August 1, 2024[56] - As of March 31, 2020, the company had no borrowings under the revolving credit facility and had borrowing availability of $8,750 thousand[58] - An amendment to the Loan Agreement on April 29, 2020, modified a covenant related to the company's liquidity ratio and increased early termination fees[58] Future Maturities of Long-Term Debt (in Thousands) | Future Maturities of Long-Term Debt (in Thousands) | | | :----------------------------------------------- | :----- | | 2020 (excluding the three months ended March 31, 2020) | $— | | 2021 | $14,286 | | 2022 | $17,143 | | 2023 | $17,143 | | 2024 | $11,428 | | Total | $60,000 | 7. Leases The company adopted ASU 2018-11 for leases, recognizing operating right-of-use (ROU) assets and lease liabilities, with this section detailing weighted average remaining lease terms, discount rates, lease expense components, and supplemental balance sheet information - The company adopted ASU 2018-11, 'Leases (Topic 842),' effective January 1, 2019, resulting in the recording of operating right-of-use assets of approximately $1,884 thousand and operating lease liabilities of $2,189 thousand[61] Lease Metrics | Lease Metrics | March 31, 2020 | December 31, 2019 | | :-------------------------------------- | :------------- | :---------------- | | Operating Leases | | | | Weighted average remaining lease term (years) | 3.1 | 3.5 | | Weighted average discount rate | 5.9% | 5.9% | | Finance Leases | | | | Weighted average remaining lease term (years) | 10.4 | 11.0 | | Weighted average discount rate | 7.0% | 7.0% | Components of Lease Expense (in Thousands) | Components of Lease Expense (in Thousands) | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :--------------------------------------- | :-------------------------------- | :-------------------------------- | | Operating lease cost | $349 | $159 | | Amortization of right-of-use assets (Finance) | $263 | $250 | | Interest on lease liabilities (Finance) | $216 | $221 | | Total finance lease cost | $479 | $471 | Supplemental Balance Sheet Information (in Thousands) | Supplemental Balance Sheet Information (in Thousands) | March 31, 2020 | December 31, 2019 | | :---------------------------------------------------- | :------------- | :---------------- | | Operating lease right-of-use assets | $3,739 | $4,032 | | Total operating lease liabilities | $(3,945) | $(4,261) | | Property and equipment, net (Finance Leases) | $10,273 | $10,536 | | Total finance lease liabilities | $(12,343) | $(12,527) | 8. Commitments and Contingencies This section details the company's royalty agreements, standard purchase agreements, and legal matters, including a Civil Investigative Demand from the USDOJ regarding potential False Claims Act violations and an ongoing dispute over earnout payments related to the nContact acquisition - The company has royalty agreements requiring payments of 3% to 5% of specified product sales, with royalty expense of $677 thousand for Q1 2020 and $709 thousand for Q1 2019 included in cost of revenue[70] - The U.S. Department of Justice (USDOJ) is investigating the company for potential False Claims Act violations related to the promotion of certain medical devices for off-label use and submission of false claims to federal and state health care programs[73] - The company received an 'earnout objection statement' from representatives of former nContact stockholders, disputing the calculation of commercial milestone payments under the merger agreement[74] 9. Revenue Revenue is primarily generated from the sale of medical devices, recognized at a point in time upon transfer of control to customers, categorized into open ablation, minimally invasive ablation (MIS), appendage management, and valve tools, and sold through direct sales and distributors - Revenue is generated primarily from the sale of medical devices and recognized when control of promised devices is transferred to customers, typically upon shipment or delivery[75] - Sales of devices are categorized as open ablation, minimally invasive ablation (MIS), appendage management, and valve tools[75] - Products are sold primarily through a direct sales force and distributors in select international markets, with consistent terms of sale[76] - The company generally does not accept product returns unless a product is defective as manufactured, and recognized an allowance for sales returns and refunds of $2,240 thousand in connection with the SentreHEART acquisition[78] 10. Income Tax Provision The company computes its income tax provision using the asset and liability method, applying an estimated annual effective rate, which for Q1 2020 was (0.05)%, differing from the US statutory rate primarily due to a full valuation allowance against net deferred income tax assets Effective Tax Rate | Effective Tax Rate | | | :----------------- | :--------------------------------------- | | Three months ended March 31, 2020 | (0.05)% | | Three months ended March 31, 2019 | (1.19)% | - The company has recorded a full valuation allowance against substantially all net deferred income tax assets, as it is more-likely-than-not that the benefit will not be recognized in future periods[34][82] 11. Equity Compensation Plans The company operates two share-based incentive plans, the 2014 Stock Incentive Plan and the 2018 Employee Stock Purchase Plan (ESPP), with share-based compensation expense totaling $4,384 thousand for Q1 2020 - The 2014 Stock Incentive Plan allows for grants of incentive stock options, restricted stock, restricted stock units, nonstatutory stock options, and performance share awards to employees, directors, and consultants, with 1,140 shares available for future grants as of March 31, 2020[85] - Performance Share Awards (PSAs) vest based on achieving specified performance measurements, such as revenue CAGR, over a three-year period, with payouts ranging from 0% to 200% of the target amount[86][87] - The Employee Stock Purchase Plan (ESPP) allows eligible employees to purchase common stock at a 15% discount, with 491 shares available for future issuance as of March 31, 2020[89] Allocation of Share-Based Compensation Expense (in Thousands) | Allocation of Share-Based Compensation Expense (in Thousands) | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :---------------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Cost of revenue | $287 | $189 | | Research and development expenses | $655 | $495 | | Selling, general and administrative expenses | $3,442 | $3,470 | | Total | $4,384 | $4,154 | 12. Segment and Geographic Information The company operates as a single segment, developing and selling medical devices globally, with revenue disaggregated by geographic area and product type, showing a slight increase in U.S. revenue and a decrease in international revenue for Q1 2020 - The company operates as a single operating segment, developing, manufacturing, and selling devices for surgical ablation of cardiac tissue and left atrial appendage exclusion globally[92] Revenue by Geographic Area (in Thousands) | Revenue by Geographic Area (in Thousands) | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :------------------------ | :-------------------------------- | :-------------------------------- | | United States | $43,473 | $43,004 | | Europe | $5,945 | $6,785 | | Asia | $3,537 | $3,914 | | Other international | $270 | $263 | | Total international | $9,752 | $10,962 | | Total revenue | $53,225 | $53,966 | United States Revenue by Product Type (in Thousands) | United States Revenue by Product Type (in Thousands) | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Open ablation | $19,218 | $18,996 | | Minimally invasive ablation | $6,561 | $7,762 | | Appendage management | $17,419 | $15,670 | | Valve tools | $275 | $576 | | Total United States | $43,473 | $43,004 | International Revenue by Product Type (in Thousands) | International Revenue by Product Type (in Thousands) | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Open ablation | $5,115 | $6,300 | | Minimally invasive ablation | $1,545 | $2,129 | | Appendage management | $3,062 | $2,454 | | Valve tools | $30 | $79 | | Total international | $9,752 | $10,962 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial performance and condition, emphasizing the adverse impact of the COVID-19 pandemic on revenue and operations, updates on clinical trials, and strategies for managing liquidity and capital resources Overview AtriCure is a market leader in surgical treatments for atrial fibrillation (Afib) and left atrial appendage (LAA) management, offering various ablation systems and devices sold globally through direct sales and distributors, with future revenue expected primarily from current or developing products - AtriCure is a leading innovator in treatments for atrial fibrillation (Afib) and left atrial appendage (LAA) management, offering product lines such as the Isolator Synergy™ Ablation System (FDA-approved for persistent Afib) and the AtriClip Left Atrial Appendage Exclusion System[99][100] - The company sells its products to medical centers through a direct sales force in the United States and certain international markets, and through distributors in other international markets[102] Recent Developments The COVID-19 pandemic has significantly decreased demand for the company's products due to deferred non-emergent surgical procedures, adversely impacting 2020 results, leading to delayed capital investments, hiring, and other expense-reduction measures, while clinical trials CONVERGE and aMAZE are ongoing - The COVID-19 pandemic is adversely impacting 2020 results of operations and financial condition due to a significant decrease in demand for products as non-emergent procedures are indeterminately deferred[103] - In response to COVID-19, the company has delayed certain capital investments and hiring, and implemented other expense-reduction measures[105] - For the CONVERGE IDE trial, an initial meeting with the FDA was conducted in April 2020 following a pre-market approval (PMA) submission in December 2019[106] - Enrollment for the aMAZE study was completed in December 2019, and a Continued Access Protocol (CAP) was approved in January 2020 for additional patient enrollment[107] Results of Operations Revenue decreased by 1.4% due to global surgical procedure declines, while gross profit saw a 2.5% reduction, and operating expenses significantly increased, leading to a substantial rise in net loss for the three months ended March 31, 2020 | Metric | Three Months Ended March 31, 2020 (in Thousands) | Three Months Ended March 31, 2019 (in Thousands) | Change (YoY) | | :------------------------------------------ | :--------------------------------------- | :--------------------------------------- | :----------- | | Revenue | $53,225 | $53,966 | -1.4% | | Gross profit | $38,884 | $39,871 | -2.5% | | Research and development expenses | $11,587 | $8,176 | +41.7% | | Selling, general and administrative expenses | $42,751 | $37,015 | +15.5% | | Loss from operations | $(15,454) | $(5,320) | -190.5% | | Net loss | $(16,408) | $(5,635) | -191.2% | - Revenue decreased 1.4% (1.0% on a constant currency basis) due to the global decline in surgical procedures as healthcare providers limited activity not related to addressing the COVID-19 pandemic[109] - Research and development expenses increased $3,411 thousand, primarily due to $2,122 thousand incremental costs related to SentreHEART operations, including aMAZE clinical activities, personnel, and product development[112] - Selling, general and administrative expenses increased $5,736 thousand, primarily due to a $4,125 thousand fluctuation in the contingent consideration liability adjustment and $2,970 thousand headcount growth, partially offset by a $2,437 thousand decrease in variable compensation and travel expenses due to COVID-19[113] - Net interest expense increased $681 thousand due to a $366 thousand increase in interest expense from higher borrowings and a $315 thousand decline in interest income from a lower investment balance[114] Liquidity and Capital Resources As of March 31, 2020, the company maintained $68,537 thousand in cash and investments, with $60,000 thousand in outstanding debt, and utilized cash in operating and financing activities while generating cash from investing activities, anticipating sufficient liquidity for the next twelve months despite pandemic uncertainties Liquidity Position (in Thousands) | Liquidity Position (in Thousands) | | | :-------------------------------- | :------------- | | Cash, cash equivalents and investments | $68,537 | | Outstanding debt | $60,000 | | Unused borrowing capacity (revolving credit facility) | $8,750 | | Net working capital | $87,953 | | Accumulated deficit | $(298,605) | Cash Flow Summary (in Thousands) | Cash Flow Summary (in Thousands) | | | :-------------------------------- | :--------------------------------------- | | Net cash used in operating activities | $(16,087) | | Net cash provided by investing activities | $17,331 | | Net cash used in financing activities | $(7,834) | - Net cash used in operating activities was $16,087 thousand, driven by a net loss of $16,408 thousand (including $9,816 thousand of non-cash expenses) and a $9,495 thousand net increase in cash used related to changes in operating assets and liabilities, primarily a $14,545 thousand decrease in accrued liabilities[115][116] - Net cash provided by investing activities was $17,331 thousand, primarily from $19,163 thousand of maturities of available-for-sale securities, offset by $1,832 thousand of purchases of property and equipment[117] - Net cash used in financing activities was $7,834 thousand, primarily due to $11,776 thousand for shares repurchased for payment of taxes on stock awards, partially offset by $4,036 thousand from stock option exercises[118] - The company believes its current cash, cash equivalents, investments, and access to its revolving line of credit will be sufficient to meet anticipated cash needs for working capital and capital expenditures for at least the next twelve months[123] Seasonality The company typically experiences a moderate decline in revenue during the third quarter, primarily attributed to the elective nature of certain procedures and fewer people choosing to undergo them during the summer months - A moderate decline in revenue is typically experienced during the third quarter, primarily attributed to the elective nature of certain procedures and fewer people choosing to undergo them during the summer months[125] Critical Accounting Policies and Estimates The company's financial statements are prepared in accordance with GAAP, requiring management to make significant estimates and judgments related to sales returns and allowances, accounts receivable, inventories, intangible assets (including goodwill), contingent liabilities, and share-based compensation - Management makes significant estimates and judgments in preparing financial statements, particularly concerning sales returns and allowances, accounts receivable, inventories, intangible assets (including goodwill), contingent liabilities, and share-based compensation[126] Recent Accounting Pronouncements This section refers to Note 2 in the Notes to the Condensed Consolidated Financial Statements for a discussion of recent accounting pronouncements - Refer to Note 2 in the Notes to the Condensed Consolidated Financial Statements for a discussion of recent accounting pronouncements[127] Item 3. Quantitative and Qualitative Disclosures About Market Risk As of March 31, 2020, there were no material changes to the company's market risk disclosures compared to its 2019 Form 10-K, apart from the negative impact of the COVID-19 pandemic on its business and results of operations - As of March 31, 2020, there were no material changes to market risk disclosures, other than the negative impact of the COVID-19 pandemic on the business and results of operations[128] Item 4. Controls and Procedures Management, with the participation of the CEO and CFO, evaluated the effectiveness of the company's disclosure controls and procedures as of March 31, 2020, concluding they were effective, with no material changes in internal control over financial reporting occurring during the quarter - Management, with the participation of the President and Chief Executive Officer and Chief Financial Officer, concluded that the company's disclosure controls and procedures were effective as of March 31, 2020, providing reasonable assurance for timely and accurate financial reporting[129][130] - No changes in internal control over financial reporting occurred during the three months ended March 31, 2020, that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting[132] PART II. OTHER INFORMATION Item 1. Legal Proceedings Information regarding legal proceedings is incorporated by reference from Note 8 – Commitments and Contingencies in the Condensed Consolidated Financial Statements - Information with respect to legal proceedings is incorporated by reference from the heading 'Legal' in Note 8 – Commitments and Contingencies to the Condensed Consolidated Financial Statements[133] Item 1A. Risk Factors This section highlights that the COVID-19 pandemic is materially and adversely affecting demand for the company's products, impacting clinical trials, and disrupting business operations, leading to a significant decrease in surgical procedures, with the extent of its future effect remaining highly uncertain - The outbreak of coronavirus (COVID-19) is materially and adversely affecting demand for the company's products and impacting clinical trials, causing disruption to business and negatively impacting results of operations and financial condition[135] - Government 'shelter-in-place' orders, quarantines, and travel restrictions have resulted in slowdowns and delays, negatively impacting operations, including personnel travel, customer access, regulatory approvals, and product development efforts[136] - The spread of COVID-19 may divert healthcare resources from clinical trials, interrupt key activities, and cause delays in FDA or other regulatory authority operations, impacting review and approval timelines[137] - The extent to which the COVID-19 pandemic may impact the business and financial results is highly uncertain and depends on future developments, potentially heightening many other risks described in this section and the Annual Report on Form 10-K[139][140] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including various certifications (e.g., Rule 13a-14(a), 18 U.S.C. Section 1350) and XBRL taxonomy documents - Exhibits include Rule 13a-14(a) Certifications of the Principal Executive Officer and Principal Accounting and Financial Officer, and Certifications pursuant to 18 U.S.C. Section 1350[142] - Various XBRL taxonomy extension documents (Schema, Calculation, Definition, Label, Presentation Linkbase) and the XBRL Instance Document are included[142] Signatures This section contains the official signatures of the President and Chief Executive Officer, and the Chief Financial Officer, certifying the report on behalf of AtriCure, Inc - The report is signed by Michael H. Carrel, President and Chief Executive Officer, and M. Andrew Wade, Chief Financial Officer, on April 30, 2020[144]