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| PART I | | |
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| Item 1. | Business. | 3 |
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| Item 1A. | Risk Factors. | 18 |
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| Item 1B. | Unresolved Staff Comments. | 33 |
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| Item 1C. | Cybersecurity. | 33 |
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| Item 2. | Properties. | 36 |
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| Item 3. | Legal Proceedings. | 36 |
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| Item 4. | Mine Safety Disclosures. | 36 |
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| PART II | | |
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| Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. | 37 |
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| Item 6. | [Reserved]. | 37 |
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| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 38 |
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| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk. | 51 |
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| Item 8. | Financial Statements and Supplementary Data. | 52 |
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| Item 9. | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. | 90 |
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| Item 9A. | Controls and Procedures. | 90 |
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| Item 9B. | Other Information. | 92 |
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| Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. | 92 |
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| PART III | | |
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| Item 10. | Directors, Executive Officers and Corporate Governance. | 93 |
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| Item 11. | Executive Compensation. | 93 |
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| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. | 93 |
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| Item 13. | Certain Relationships and Related Transactions, and Director Independence. | 93 |
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| Item 14. | Principal Accountant Fees and Services. | 93 |
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| PART IV | | |
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| Item 15. | Exhibits and Financial Statement Schedules. | 94 |
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We useGlaukos, our logo,iStent,iStent inject W,iStent infinite,iPrism,iDose TR,iPRIME,*MIGS,*Avedro,Photrexa,iLink,KXL,Epioxa, iLution, Retina XR, PRESERFLO Microshunt and other marks as trademarks. This report contains references to our trademarks and service marks and to those belonging to other entities. Solely for convenience, trademarks and trade names referred to in this report, including logos, artwork and other visual displays, may appear without the ® or ™ symbols, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other entities’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other entity.
References throughout this document to the “Company,” “we,” “us,” “our,” or “Glaukos” refer to Glaukos Corporation and its consolidated subsidiaries.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA
This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act). All statements other than statements of historical or current facts in this report or referred to or incorporated by reference into this report are forward-looking statements. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Forward-looking statements in this Annual Report on Form 10-K include statements regarding: future operations; expected operating results and financial performance; the Company’s strategy for growth; product development activities; regulatory approvals, including timing and likelihood of success; facility expansion and development; reimbursement rates and trends; market position and expenditures, and may be included under Item 1 - “Business,” Item 1A - “Risk Factors,” Item 7 - “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Annual Report on Form 10-K. These forward-looking statements are based on management’s beliefs and assumptions based on the information currently available to management. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Annual Report on Form 10-K, we caution you that these forward-looking statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements.
You are urged to carefully review the disclosures we make concerning the risks we face and other factors that may affect the outcome of our forward-looking statements and our business and operating results, including the risks set forth below under “Risk Factors Summary” and further described in the “Risk Factors” section of this Annual Report on Form 10-K, which includes a discussion of important factors that may cause actual results to differ materially from those expressed or implied by any forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this Annual Report on Form 10-K will prove to be accurate, and actual results may differ materially from those expressed or implied by the forward-looking statements. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans or that any of our expectations will occur in any specified time frame, or at all. You are therefore cautioned not to place undue reliance on the forward-looking statements included in this Annual Report on Form 10-K, which speak only as of the date of this document. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
This Annual Report on Form 10-K contains market data and industry forecasts that were obtained from industry publications. These data involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such information. Although we believe that the industry publications on which the market and industry statements are based are reliable and we are not aware of any misstatements regarding any market data or industry forecasts presented herein, we have not independently verified any of the third-party information.
WEBSITE REFERENCES
In this Annual Report on Form 10-K, we make references to our website at www.glaukos.com. References to our website through this Form 10-K are provided for convenience only and the content on our website does not constitute a part of, and shall not be deemed incorporated by reference into, this Annual Report on Form 10-K.
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Risk Factors Summary
Investing in our securities involves a high degree of risk. The following is a summary of the principal factors that make an investment in our securities speculative or risky, all of which are further described below in the section titled “Risk Factors” in Part I, Item 1A of this report. This summary should be read in conjunction with the “Risk Factors” section and should not be relied upon as an exhaustive summary of the material risks facing our business. In addition to the following summary, you should consider the information set forth in the “Risk Factors” section and the other information contained in this report before investing in our securities.
Risks Related to Our Business
| ● | Failure to achieve commercial success of iDose TR could materially impact our business. |
| ● | Downturns or volatility in general economic conditions and public health crises could harm our business. |
| ● | Supply and/or manufacturing disruptions impacting our principal revenue-producing products could reduce our gross margins and negatively impact our operating results. |
| ● | We may not reach sustained profitability. |
| ● | We may fail to generate sufficient sales of our commercialized products or to develop and commercialize additional products. |
| ● | We are subject to a variety of risks associated with our international operations. |
| ● | We may not meet our customers’ expectations for the quality or delivery of our products, which could harm our reputation and sales. |
| ● | If ophthalmic surgeons do not use or if they misuse our products, our business could be harmed. |
| ● | We may fail to manage our anticipated growth effectively and may not be able to meet customer demand. |
| ● | We may be unable to retain or recruit qualified personnel for growth. |
| ● | We have and may continue to enter into acquisitions, collaborations, in-licensing agreements, joint ventures, alliances or partnerships with third parties that could fail. |
| ● | Cybersecurity incidents, service interruptions, or data corruption could materially disrupt our operations and adversely affect our business. |
| ● | Failure to comply with data privacy and security laws could have a material adverse effect on our business. |
| ● | Our net operating loss tax carryforwards may not be available, or may be subject to certain limitations, to offset future taxable income. |
Risks Related to Our Indebtedness
| ● | If we incur future indebtedness, our debt service obligations could limit our cash flow, and may adversely affect our financial condition and operating results. |
| ● | The capped call transactions may affect the value of our common stock, par value $0.001 per share (Common Stock) and subject us to counterparty risk. |
Risks Related to Our Regulatory Environment
| ● | Healthcare legislative reform measures and changes in U.S. and international trade policies may have a material adverse effect on our business and results of operations. |
| ● | Compliance with applicable regulations can be costly and failure to comply with such regulations could harm our business, financial condition and operating results. |
| ● | Legislative or regulatory reform of the healthcare system could hinder or prevent our products’ commercial success. |
| ● | Inadequate or inconsistent reimbursement for our products may adversely impact our business. |
Risks Related to Our Intellectual Property
| ● | Failure to protect our intellectual property could substantially impair our ability to compete. |
| ● | Intellectual property claims or litigation could be costly, time-consuming and unsuccessful and could interfere with our ability to successfully commercialize our products. |
Risks Related to Our Common Stock
| ● | Provisions in our Certificate of Incorporation and Bylaws limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts. |
| ● | Our Certificate of Incorporation designates the sole and exclusive forum for certain types of actions and proceedings, which could limit our stockholders’ ability to obtain a favorable judicial forum. |
