swav-20230630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

___________________________________________________

FORM 10-Q

___________________________________________________

(Mark One)


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

For the quarterly period ended June 30, 2023


o			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 x No o

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 o

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	x	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	o
Emerging growth company	o

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. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of August 2, 2023, the registrant had 36,750,397 shares of common stock, $0.001 par value per share, outstanding.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION	3
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Operations and Comprehensive Income	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	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4.	Controls and Procedures	43
PART II.	OTHER INFORMATION	45
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3.	Defaults Upon Senior Securities	45
Item 4.	Mine Safety Disclosures	45
Item 5.	Other Information	46
Item 6.	Exhibits	47
Signatures		48

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. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

•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 ability to successfully execute our commercialization strategy for our approved or cleared products;

•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;

•the impact of government laws and 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 ability to scale our organizational culture of cooperative product development and commercial execution;

•the expected benefits of our recent acquisition of Neovasc Inc., a corporation existing under the Canada Business Corporations Act;

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

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

•our estimates regarding expenses, future financial performance and capital requirements;

•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; and

•the impact of macroeconomic conditions, including inflation, rising interest rates, the federal budget, instability in the global banking system and volatile market conditions, and global events on our operations, financial results, liquidity and capital resources, sales, expenses, supply chain, manufacturing, research and development activities, clinical trials and employees.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q. We have based these forward-looking statements on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions and other factors 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, including those described in the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022, together with any updates in the section titled “Risk Factors” of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 and in this Quarterly Report on Form 10-Q, and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report on Form 10-Q. 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. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Except to the extent required by law, we undertake no obligation to update any of these forward-looking statements after the date of this Quarterly Report on Form 10-Q to conform our prior statements to actual results or revised expectations.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

SHOCKWAVE MEDICAL, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands)


	June 30, 2023		December 31, 20221

ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	141,458	$	156,586
Short-term investments	117,131		147,907
Accounts receivable, net	96,562		71,366
Inventory	92,093		75,112
Prepaid expenses and other current assets	9,118		8,292
Total current assets	456,362		459,263
Operating lease right-of-use assets	31,117		32,365
Property and equipment, net	59,803		48,152
Equity method investment	2,543		3,512
Intangible assets, net	94,692		—
Goodwill	39,789		—
Deferred tax assets	94,699		97,568
Other assets	7,599		5,229
TOTAL ASSETS	$	786,604	$	646,089
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	12,869	$	6,721
Accrued liabilities	65,769		55,375
Lease liability, current portion	1,582		1,278
Total current liabilities	80,220		63,374
Lease liability, noncurrent portion	33,205		34,928
Debt, noncurrent portion	24,266		24,198
Related party contract liability, noncurrent portion	12,273		12,273
Deferred tax liabilities	10,421		—
Other liabilities	9,307		—
TOTAL LIABILITIES	169,692		134,773
STOCKHOLDERS’ EQUITY:
Preferred stock	—		—
Common stock	37		36
Additional paid-in capital	586,092		548,960
Accumulated other comprehensive loss	(391)		(867)
Retained earnings (accumulated deficit)	31,174		(36,813)
TOTAL STOCKHOLDERS’ EQUITY	616,912		511,316
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	786,604	$	646,089

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

1 The condensed consolidated balance sheet as of December 31, 2022 is derived from the audited consolidated financial statements as of that date.

SHOCKWAVE MEDICAL, INC.

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited)

(in thousands, except share and per share data)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenue:
Product revenue	$	180,165	$	120,746	$	341,231	$	214,377
Cost of revenue:
Cost of product revenue	24,493		16,730		45,559		29,620
Gross profit	155,672		104,016		295,672		184,757
Operating expenses:
Research and development	36,829		20,760		63,800		37,779
Sales and marketing	56,738		40,515		110,749		76,476
General and administrative	29,731		13,165		48,935		25,554
Total operating expenses	123,298		74,440		223,484		139,809
Income from operations	32,374		29,576		72,188		44,948

SEC Form 10-Q filed by ShockWave Medical Inc.