swav-10q_20190630.htm

 

 

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, 2019

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 

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.     Yes      No  

As of August 1, 2019, the registrant had 28,026,863 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

3

 

Condensed Consolidated Statements of Operations and Comprehensive Loss

4

 

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)

5

 

Condensed Consolidated Statements of Cash Flows

7

 

Notes to Unaudited Condensed Consolidated Financial Statements

8

Item 2.

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

18

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

25

Item 4.

Controls and Procedures

26

PART II.

OTHER INFORMATION

27

Item 1.

Legal Proceedings

27

Item 1A.

Risk Factors

27

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

27

Item 3.

Defaults Upon Senior Securities

27

Item 4.

Mine Safety Disclosures

27

Item 5.

Other Information

27

Item 6.

Exhibits

28

Signatures

29

 

 

 

2


PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

SHOCKWAVE MEDICAL, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands)

 

 

 

June 30,

2019

 

 

December 31,

2018

 

 

 

 

 

 

 

(1)

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

41,924

 

 

$

39,643

 

Short-term investments

 

 

83,213

 

 

 

 

Accounts receivable, net

 

 

5,242

 

 

 

2,850

 

Inventory

 

 

8,291

 

 

 

5,131

 

Prepaid expenses and other current assets

 

 

1,953

 

 

 

1,112

 

Total current assets

 

 

140,623

 

 

 

48,736

 

Operating lease right-of-use assets

 

 

2,398

 

 

 

 

Property and equipment, net

 

 

3,244

 

 

 

2,619

 

Other assets

 

 

542

 

 

 

2,066

 

TOTAL ASSETS

 

$

146,807

 

 

$

53,421

 

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’

   EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Accounts payable

 

$

2,216

 

 

$

1,487

 

Term notes, current portion

 

 

5,000

 

 

 

1,667

 

Accrued liabilities

 

 

7,378

 

 

 

6,217

 

Lease liability, current portion

 

 

806

 

 

 

 

Total current liabilities

 

 

15,400

 

 

 

9,371

 

Lease liability, noncurrent portion

 

 

1,732

 

 

 

 

Term notes, noncurrent portion

 

 

10,262

 

 

 

13,383

 

Convertible preferred stock warrant liability

 

 

 

 

 

313

 

Other liabilities

 

 

 

 

 

136

 

TOTAL LIABILITIES

 

 

27,394

 

 

 

23,203

 

Commitments and contingencies (Note 6)

 

 

 

 

 

 

 

 

Convertible preferred stock

 

 

 

 

 

152,806

 

STOCKHOLDERS’ EQUITY (DEFICIT):

 

 

 

 

 

 

 

 

Preferred stock

 

 

 

 

 

 

Common stock

 

28

 

 

 

2

 

Additional paid-in capital

 

 

269,582

 

 

 

4,275

 

Accumulated other comprehensive income

 

 

75

 

 

 

 

Accumulated deficit

 

 

(150,272

)

 

 

(126,865

)

TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

119,413

 

 

 

(122,588

)

TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK AND

   STOCKHOLDERS’ EQUITY (DEFICIT)

 

$

146,807

 

 

$

53,421

 

 

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

(1)

The consolidated balance sheet as of December 31, 2018 is derived from the audited consolidated financial statements as of that date.

 

3


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,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product revenue

 

$

10,012

 

 

$

2,279

 

 

$

17,282

 

 

$

3,601

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of product revenue

 

 

4,133

 

 

 

1,179

 

 

 

7,205

 

 

 

1,973

 

Research and development

 

 

6,926

 

 

 

5,530

 

 

 

14,410

 

 

 

11,046

 

Sales and marketing

 

 

6,961

 

 

 

4,372

 

 

 

12,831

 

 

 

7,810

 

General and administrative

 

 

3,245

 

 

 

1,392

 

 

 

6,247

 

 

 

2,768

 

Total operating expenses

 

 

21,265

 

 

 

12,473

 

 

 

40,693

 

 

 

23,597

 

Loss from operations

 

 

(11,253

)

 

 

(10,194

)

 

 

(23,411

)

 

 

(19,996

)

Interest expense

 

 

(250

)

 

 

(40

)

 

 

(495

)

 

 

(58

)

Change in fair value of warrant liability

 

 

 

 

 

10

 

 

 

(609

)

 

 

51

 

Other income, net

 

 

913

 

 

 

138

 

 

 

1,133

 

 

 

323

 

Net loss before taxes

 

 

(10,590

)

 

 

(10,086

)

 

 

(23,382

)

 

 

(19,680

)

Income tax provision

 

 

18

 

 

 

21

 

 

 

25

 

 

 

21

 

Net loss

 

$

(10,608

)

 

$

(10,107

)

 

$

(23,407

)

 

$

(19,701

)

Unrealized gain on available-for-sale securities

 

 

75

 

 

 

 

 

 

75

 

 

 

1

 

Total comprehensive loss

 

$

(10,533

)

 

$

(10,107

)

 

$

(23,332

)

 

$

(19,700

)

Net loss per share, basic and diluted

 

$

(0.38

)

 

$

(5.79

)

 

$

(1.25

)

 

$

(11.42

)

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

 

 

28,002,887

 

 

 

1,745,499

 

 

 

18,735,307

 

 

 

1,725,414

 

 

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

 

 

 

4


Shockwave Medical, Inc.

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(Unaudited)

(in thousands, except share data)

 

 

 

Convertible Preferred

Stock

 

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Accumulated

Other

Comprehensive

 

 

Accumulated

 

 

Total

Stockholders'

Equity

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income

 

 

Deficit

 

 

(Deficit)

 

Balance — December 31, 2018

 

 

18,670,328

 

 

$

152,806

 

 

 

 

1,824,852

 

 

$

2

 

 

$

4,275

 

 

$

 

 

$

(126,865

)

 

$

(122,588

)

Exercise of common stock warrants for cash

 

 

 

 

 

 

 

 

 

50,331

 

 

 

 

 

 

110

 

 

 

 

 

 

 

 

 

110

 

Issuance of common stock upon net exercise of warrants

 

 

 

 

 

 

 

 

 

101,744

 

 

 

 

 

 

133

 

 

 

 

 

 

 

 

 

133

 

Conversion of preferred stock to common stock upon

   initial public offering

 

 

(18,670,328

)

 

 

(152,806

)

 

 

 

18,670,328

 

 

18

 

 

 

152,788

 

 

 

 

 

 

 

 

 

152,806

 

Conversion of Series A-1 warrants to common stock

   warrants upon initial public offering

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

789

 

 

 

 

 

 

 

 

 

789

 

Issuance of common stock in connection with initial

   public offering, net of issuance costs of $11.3 million

 

 

 

 

 

 

 

 

 

6,555,000

 

 

7

 

 

 

100,132

 

 

 

 

 

 

 

 

 

100,139

 

Issuance of common stock in connection with private

   placement

 

 

 

 

 

 

 

 

 

588,235

 

 

1

 

 

 

9,999

 

 

 

 

 

 

 

 

 

10,000

 

Exercise of stock options

 

 

 

 

 

 

 

 

 

80,515

 

 

 

 

 

 

169

 

 

 

 

 

 

 

 

 

169

 

Vesting of early exercised options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18

 

 

 

 

 

 

 

 

 

18

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

412

 

 

 

 

 

 

 

 

 

412

 

Adjustment for fractional shares resulting from reverse

   stock split

 

 

 

 

 

 

 

 

 

(114

)

 

 

 

 

 

(3

)

 

 

 

 

 

 

 

 

(3

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(12,799

)

 

 

(12,799

)

Balance — March 31, 2019

 

 

 

 

 

 

 

 

 

27,870,891

 

 

 

28

 

 

 

268,822

 

 

 

 

 

 

(139,664

)

 

 

129,186

 

Issuance of common stock upon net exercise of warrants

 

 

 

 

 

 

 

 

 

79,208

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of stock options

 

 

 

 

 

 

 

 

 

73,608

 

 

 

 

 

 

148

 

 

 

 

 

 

 

 

 

148

 

Vesting of early exercised options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9

 

 

 

 

 

 

 

 

 

9

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

818

 

 

 

 

 

 

 

 

 

818

 

Offering costs related to the initial public offering

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(215

)

 

 

 

 

 

 

 

 

(215

)

Unrealized gain on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

75

 

 

 

 

 

 

75

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,608

)

 

 

(10,608

)

Balance — June 30, 2019

 

 

 

 

$

 

 

 

 

28,023,707

 

 

$

28

 

 

$

269,582

 

 

$

75

 

 

$

(150,272

)

 

$

119,413

 

5


 

 

 

Convertible Preferred

Stock

 

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Accumulated

Other

Comprehensive

 

 

Accumulated

 

 

Total

Stockholders'

Equity

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

(Deficit)

 

Balance — December 31, 2017

 

 

17,510,045

 

 

$

137,469

 

 

 

 

1,627,032

 

 

$

2

 

 

$

2,470

 

 

$

(1

)

 

$

(85,763

)

 

$

(83,292

)

Exercise of Series A-1 warrants

 

 

52,169

 

 

 

312

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock warrants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

104

 

 

 

 

 

 

 

 

 

104

 

Exercise of stock options

 

 

 

 

 

 

 

 

 

143,422

 

 

 

 

 

 

215

 

 

 

 

 

 

 

 

 

215

 

Unrealized gain on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

1

 

Vesting of early exercised options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

22

 

 

 

 

 

 

 

 

 

22

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

273

 

 

 

 

 

 

 

 

 

273

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9,594

)

 

 

(9,594

)

Balance — March 31, 2018

 

 

17,562,214

 

 

 

137,781

 

 

 

 

1,770,454

 

 

 

2

 

 

 

3,084

 

 

 

 

 

 

(95,357

)

 

 

(92,271

)

Exercise of Series A-1 warrants

 

 

17,506

 

 

 

105

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of stock options

 

 

 

 

 

 

 

 

 

27,067

 

 

 

 

 

 

60

 

 

 

 

 

 

 

 

 

60

 

Vesting of early exercised options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

20

 

 

 

 

 

 

 

 

 

20

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

312

 

 

 

 

 

 

 

 

 

312

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,107

)

 

 

(10,107

)

Balance — June 30, 2018

 

 

17,579,720

 

 

$

137,886

 

 

 

 

1,797,521

 

 

$

2

 

 

$

3,476

 

 

$

 

 

$

(105,464

)

 

$

(101,986

)

 

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

 

 

6


 

 

SHOCKWAVE MEDICAL, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)  

 

 

 

Six Months Ended

June 30,

 

 

 

2019

 

 

2018

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net loss

 

$

(23,407

)

 

$

(19,701

)

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

516

 

 

 

283

 

Stock-based compensation

 

 

1,230

 

 

 

585

 

Amortization of right-of-use assets

 

 

496

 

 

 

 

Accretion of discount on available-for-sale securities

 

 

(354

)

 

 

 

Loss on write down of fixed assets

 

 

88

 

 

 

25

 

Change in fair value of warrant liability

 

 

609

 

 

 

(51

)

Amortization of debt issuance costs

 

 

212

 

 

 

17

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(2,392

)

 

 

(1,064

)

Inventory

 

 

(3,160

)

 

 

(2,092

)

Prepaid expenses and other current assets

 

 

(841

)

 

 

(81

)

Other assets

 

 

5

 

 

 

(60

)

Accounts payable

 

 

713

 

 

 

338

 

Accrued and other current liabilities

 

 

1,848

 

 

 

44

 

Lease liabilities

 

 

(496

)

 

 

 

Other liabilities

 

 

 

 

 

(9

)

Net cash used in operating activities

 

 

(24,933

)

 

 

(21,766

)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Purchase of available-for-sale securities

 

 

(82,784

)

 

 

 

Proceeds from maturities of available-for-sale securities

 

 

 

 

 

1,807

 

Purchase of property and equipment

 

 

(1,191

)

 

 

(821

)

Net cash (used in) provided by investing activities

 

 

(83,975

)

 

 

986

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock upon initial public

   offering, net of issuance costs paid

 

 

100,762

 

 

 

 

Proceeds from issuance of common stock in private placement

 

 

10,000

 

 

 

 

Proceeds from term loans

 

 

 

 

 

9,988

 

Proceeds from stock option exercises

 

 

317

 

 

 

375

 

Proceeds from warrant exercises

 

 

110

 

 

 

101

 

Net cash provided by financing activities

 

 

111,189

 

 

 

10,464

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

2,281

 

 

 

(10,316

)

Cash, cash equivalents and restricted cash at beginning of period

 

 

40,093

 

 

 

51,923

 

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

 

$

42,374

 

 

$

41,607

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

 

 

 

 

 

 

 

 

Interest paid

 

$

276

 

 

$

18

 

Income tax paid

 

$

8

 

 

$

4

 

NON-CASH INVESTING AND FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Common stock issued on conversion of convertible preferred stock

 

$

152,806

 

 

$

 

Issuance of Series A-1 convertible preferred stock on net exercise of warrants

 

$

 

 

$

316

 

Common stock issued upon net exercise of warrants

 

$

133

 

 

$

 

Common stock warrants issued on conversion of preferred stock

   warrants and the reclassification of the warrant liability

 

$

789

 

 

$

 

Offering costs included in accrued liabilities

 

$

215

 

 

$

 

Right-of-use asset obtained in exchange for lease liability

 

$

73

 

 

$

 

Property and equipment purchases included in accounts payable and accrued liabilities

 

$

93

 

 

$

6

 

Issuance of common stock warrants in connection with debt financing

 

$

 

 

$

104

 

 

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

 

7


 

SHOCKWAVE MEDICAL, INC.

Notes to Condensed Consolidated Financial Statements

1. Organization and Basis of Presentation

ShockWave Medical, Inc. (the “Company”) was incorporated on June 17, 2009. The Company is primarily engaged in the development of Intravascular Lithotripsy (“IVL”) technology for the treatment of calcified plaque in patients with peripheral vascular, coronary vascular and heart valve disease. Built on a balloon catheter platform, the IVL technology uses lithotripsy to disrupt both superficial and deep vascular calcium, while minimizing soft tissue injury, and an integrated angioplasty balloon to dilate blockages at low pressures, restoring blood flow.

In 2016, the Company began commercial and manufacturing operations, and began selling catheters based on the IVL technology. The Company’s headquarters are in Santa Clara, California. The Company is located and operates primarily in the United States and has a subsidiary in Germany.

Initial Public Offering

On March 11, 2019, the Company completed an initial public offering (“IPO”) of its common stock.  As part of the IPO, the Company issued and sold 6,555,000 shares of its common stock, which included 855,000 shares sold pursuant to the exercise of the underwriters’ over-allotment option, at a public offering price of $17.00 per share. The Company received net proceeds of approximately $99.9 million from the IPO, after deducting underwriters’ discounts and commissions of $7.1 million and offering costs of $4.4 million, of which $1.5 million was incurred as of December 31, 2018. Prior to the completion of the IPO, all shares of Series A, A-1, B, C and D convertible preferred stock then outstanding were converted into 18,670,259 shares of common stock on a one-to-one basis.

In addition, on the completion of the IPO, all the Company’s outstanding preferred stock warrants were converted into 54,903 common stock warrants, which resulted in the reclassification of the convertible preferred stock warrant liability to additional paid-in capital. Furthermore, 101,744 shares of common stock were issued upon net exercise of warrants at the time of the IPO. 

Concurrent with the IPO, the Company issued 588,235 shares of its common stock in a private placement for net proceeds of $10.0 million.

Reverse Stock Split

In February 2019, the Company’s board of directors approved an amended and restated certificate of incorporation to effect a reverse split of shares of the Company’s common stock and convertible preferred stock on a 12.2-for-one basis (the “Reverse Stock Split”). The par values of the common stock and convertible preferred stock were not adjusted as a result of the Reverse Stock Split. All references to common stock, convertible preferred stock, warrants to purchase common stock, warrants to purchase convertible preferred stock, options to purchase common stock, early exercised options, share data, per share data and related information contained in the financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented. The number of shares of the Company’s common stock contained in the financial statements includes fractional shares resulting from the Reverse Stock Split, aggregating to 45 whole shares of common stock and 69 whole shares of preferred stock as of December 31, 2018, which fractional shares were settled in cash in fiscal 2019.

Need for Additional Capital

The Company has incurred significant losses and has negative cash flows from operations. As of June 30, 2019, the Company had an accumulated deficit of $150.3 million. Management expects to continue to incur additional substantial losses for the foreseeable future.

As of June 30, 2019, the Company had cash, cash equivalents and short-term investments of $125.1 million, which are available to fund future operations. The Company believes that its cash, cash equivalents and short-term investments as of June 30, 2019, together with available borrowings under a revolving line of credit, will be sufficient for the Company to continue as a going concern for at least 12 months from the date the unaudited condensed consolidated financial statements are filed with the Securities and Exchange Commission (“SEC”). The Company’s future capital requirements will depend on many factors, including its growth rate, the timing and extent of its spending to support research and development activities and the timing and cost of establishing additional sales and marketing capabilities.

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SHOCKWAVE MEDICAL, INC.

Notes to Condensed Consolidated Financial Statements

 

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of SEC regarding interim financial reporting.

The interim condensed consolidated financial statements are unaudited. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s consolidated financial position, results of operations and cash flows. The results of operations for the three and six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019 or for any other future annual or interim period. The condensed consolidated balance sheet as of December 31, 2018 included herein was derived from the audited financial statements as of that date. These condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements included in the prospectus dated March 6, 2019 (“Prospectus”) that forms a part of the Company's Registration Statements on Form S-1 (File No. 333-229590), as filed with the SEC pursuant to Rule 424(b)(4) promulgated under the Securities Act of 1933, as amended.

 

 

Cash, Cash Equivalents, and Restricted Cash

The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents. Cash equivalents consist primarily of amounts invested in money market accounts.

Restricted cash as of June 30, 2019 and December 31, 2018 relates to a letter of credit established for a lease entered into in May 2018 and is recorded as other assets on the condensed consolidated balance sheets.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same amounts shown in the condensed consolidated statements of cash flows:

 

 

 

June 30,

2019

 

 

December 31,

2018