SANUWAVE Health (SNWV) Financial Report Summaries

Risks

• The Business Combination is subject to conditions, including certain conditions that may not be satisfied on a timely basis, if at all.
• The Merger Agreement includes a Minimum Cash Condition as a condition to the consummation of the Merger, which may make it more difficult for SEP Acquisition Corp.(“SEPA”) and the Company to complete the Business Combination as contemplated.
• There can be no assurance that the shares of the Combined Company’s Class A Common Stock that will be issued in connection with the Business Combination will be approved for listing on Nasdaq, or another U.S national exchange, following the Closing, or that the Combined Company will be able to comply with the continued listing rules of Nasdaq, or another U.S. national exchange.
• The announcement of the proposed Business Combination could disrupt the Company’s relationships with its customers, suppliers, business partners and others, as well as its operating results and business generally.
• The Company and SEPA will incur significant transaction and transition costs in connection with the Business Combination.
• If the Business Combination does not meet the expectations of investors or securities analysts, the market price of SEPA’s securities (prior to the Closing), or the market price of the Combined Company’s Class A Common Stock after the Closing, may decline.
• We have identified material weaknesses in our internal control over financial reporting. If we are unable to remediate these material weaknesses, or if we identify additional material weaknesses in the future or otherwise fail to maintain effective internal control over financial reporting or disclosure controls and procedures, it may result in material misstatements of our consolidated financial statements or cause us to fail to meet our periodic reporting obligations, which may adversely affect our business, financial condition, and results of operations.
• If we are unable to successfully raise additional capital, our viability may be threatened; however, if we do raise additional capital, your percentage ownership as a stockholder could decrease and constraints could be placed on the operations of our business.
• The medical device/therapeutic product industries are highly competitive and subject to rapid technological change. If our competitors are better able to develop and market products that are safer and more effective than any products we may develop, our commercial opportunities will be reduced or eliminated.
• Many of our product component materials are only produced by a single supplier for such product component. If we are unable to obtain product component materials and other products from our suppliers that we depend on for our operations, or find suitable replacement suppliers, our ability to deliver our products to market will likely be impeded, which could have a material adverse effect on us.
• We have entered into an agreement with companies owned by a current board member and stockholder that could delay or prevent an acquisition of our Company and could result in the dilution of our stockholders in the event of our change of control.
• The loss of our key management would likely hinder our ability to execute our business plan.
• We face an inherent risk of liability if the use or misuse of our products results in personal injury or death.
• We are dependent on information technology and our systems and infrastructure face certain risks, including from cybersecurity breaches and data leakage.
• We generate a portion of our revenue internationally and are subject to various risks relating to our international activities, which could adversely affect our operating results.
• Provisions in our Articles of Incorporation, Bylaws and Nevada law might decrease the chances of an acquisition.
• We are subject to extensive governmental regulation, including the FDA.
• Regulatory approval of our products may be withdrawn at any time.
• If we fail to obtain an adequate level of reimbursement for our approved products by third party payers, there may be no commercially viable markets for our approved products, or the markets may be much smaller than expected.
• Failure to obtain regulatory approval in foreign jurisdictions will prevent us from marketing our products abroad.
• Uncertainty surrounding and future changes to healthcare law in the United States may have a material adverse effect on us.
• If we fail to comply with the United States Federal Anti-Kickback Statute, False Claims Act, and similar state laws, we could be subject to criminal and civil penalties and exclusion from the Medicare and Medicaid programs, which would have a material adverse effect on our business and results of operations.
• Failure to comply with the HIPAA Privacy, Security and Breach Notification Regulations, as such rules become applicable to our business, may increase our operational costs.
• We face periodic reviews and billing audits from governmental and private payors, and these audits could have adverse results that may negatively impact our business.
• Product quality or performance issues may be discovered through ongoing regulation by the FDA and by comparable international agencies, as well as through our internal standard quality process.
• The use of hazardous materials in our operations may subject us to environmental claims or liability.
• The protection of our intellectual property is critical to our success, and any failure on our part to adequately protect those rights could materially adversely affect our business.
• Patent applications owned by us or licensed to us may not result in issued patents, and our competitors may commercialize the discoveries we attempt to patent.
• Our patents may not be valid or enforceable and may be challenged by third parties.
• Issued patents and patent licenses may not provide us with any competitive advantage or provide meaningful protection against competitors.
• The ability to market the products we develop is subject to the intellectual property rights of third parties.
• Our stock price is volatile.
• There is currently a limited trading market for our common stock, and we cannot predict how liquid the market might become.
• As an issuer of “penny stock”, the protection provided by the Federal securities laws relating to forward-looking statements does not apply to us.
• We have not paid dividends in the past and do not expect to pay dividends in the future. Any return on investment may be limited to the value of our common stock.
• The rights of the holders of common stock may be impaired by the potential issuance of preferred stock.
• We have not sought an advisory stockholder vote to approve the compensation of our named executive officers.
• If the Company fails to comply with our SEC filing obligations, our stock may become subject to limitations or reduction in stock price, liquidity, or volume.