Impact of the COVID-19 pandemic

Components of Our Results of Operations

Product revenue is primarily from the sale of our IVL catheters.

Our gross margin has been and will continue to be affected by a variety of factors, primarily production volumes, the cost of direct materials, product mix, geographic mix, discounting practices, manufacturing costs, product yields,

Research and development ("R&D") expenses consist of applicable personnel, consulting, materials, and clinical trial expenses. R&D expenses include, but are not limited to:

•certain personnel-related expenses, including salaries, benefits, bonus, travel, and stock-based compensation;

•cost of clinical studies to support new products and product enhancements, including expenses for clinical research organizations, and site payments;

•materials and supplies used for internal R&D and clinical activities;

•allocated overhead including facilities and information technology expenses; and

•cost of outside consultants who assist with technology development, regulatory affairs, clinical affairs and quality assurance.

Loss from equity method investment

Interest expense consists of the interest and amortization expense related to our outstanding term loan, which matures in December 2023.

Other income (expense), net consists of interest earned on our cash equivalents and short-term investments and the net impact of foreign exchange gains and losses.

Comparison of the Three Months Ended June 30, 2022 and 2021

The following table shows our results of operations for the three months ended June 30, 2022 and 2021:

The following table represents our product revenue based on product line:

Cost of product revenue, gross profit and gross margin percentage

Total research and development expenses $ 20,760 $ 11,815 $ 8,945

Loss from equity method investment

Comparison of the Six Months Ended June 30, 2022 and 2021

The following table represents our product revenue based on product line:

Cost of product revenue, gross profit and gross margin percentage

Total research and development expenses $ 37,779 $ 22,092 $ 15,687

General and administrative expenses increased by $9.7 million, or 61%, from $15.9 million during the six months ended June 30, 2021 to $25.6 million during the six months ended June 30, 2022. The change was primarily due to a $5.0

Loss from equity method investment

Interest expense of $0.6 million for the six months ended June 30, 2022 was related to our outstanding term loan which matures in December 2023. The term loan requires monthly repayments of principal starting in July 2022.

As of June 30, 2022, we had $224.9 million in cash, cash equivalents and short-term investments and an accumulated deficit of $212.7 million. In the short term, we believe that our cash, cash equivalents and short-term investments will be sufficient for at least the next 12 months to meet our requirements and plans for cash, including supporting working capital and capital expenditure requirements. In the long term, our ability to support our working capital and capital expenditure requirements will depend on many factors, including but not limited to:

•the cost, timing and results of our clinical trials and regulatory reviews;

•the cost of our R&D activities for new and modified products;

•the cost and timing of establishing sales, marketing and distribution capabilities;

•the terms and timing of any other collaborative, licensing and other arrangements that we may establish including any contract manufacturing arrangements;

•the timing, receipt and amount of sales from our current and potential products;

•the degree of success we experience in commercializing our products;

•the emergence of competing or complementary technologies;

•macroeconomic conditions, including a potential recession, inflation, and rising interest rates;

•the cost of preparing, filing, prosecuting, maintaining, defending and enforcing any patent claims and other intellectual property rights; and

•the extent to which we acquire or invest in businesses, products or technologies, although we currently have no commitments or agreements relating to any of these types of transactions.

The following table summarizes our cash flows for the periods indicated:

Net increase in cash, cash equivalents and restricted cash $ 10,704 $ 33,845

Critical Accounting Policies and Estimates

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