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Financial report summary
?Competition
Abbott Laboratories • Medtronic • Koninklijke Philips • Boston Scientific • STRATA Skin Sciences • Cardiovascular Systems • Avinger • MedtronicRisks
- We may be required to raise additional funds to finance our operations and remain a going concern; We may not be able to do so when necessary, and/or the terms of any financings may not be advantageous to us.
- We will not be able to reach profitability unless we are able to achieve our product expansion and growth goals.
- We have entered into joint marketing agreements with respect to our products, and may enter into additional join marketing agreements, that will reduce our revenues from product sales.
- Royalty agreements with respect to our surgical vessel closing pressure device in development will reduce any future profits from this product.
- If we experience significant disruptions in our information technology systems, our business may be adversely affected.
- Litigation and other legal proceedings may adversely affect our business.
- If we make acquisitions or divestitures, we could encounter difficulties that harm our business.
- Failure to attract and retain sufficient qualified personnel could also impede our growth.
- Failure to maintain effective internal controls could cause our investors to lose confidence in us and adversely affect the market price of our common stock. If our internal controls are not effective, we may not be able to accurately report our financial results or prevent fraud.
- Our revenues may depend on our customers’ receipt of adequate reimbursement from private insurers and government sponsored healthcare programs.
- We may be unable to compete successfully with companies in our highly competitive industry, many of whom have substantially greater resources than we do.
- Our future operating results depend upon our ability to obtain components in sufficient quantities on commercially reasonable terms or according to schedules, prices, quality and volumes that are acceptable to us, and suppliers may fail to deliver components, or we may be unable to manage these components effectively or obtain these components on such terms.
- If hospitals, physicians and patients do not accept our current and future products or if the market for indications for which any product candidate is approved is smaller than expected, we may be unable to generate significant revenue, if any.
- The recent coronavirus, or COVID-19, outbreak adversely affected our financial condition and results of operations and we cannot provide any certainty as to whether there will be future impacts from COVID-19 or another pandemic.
- A variety of risks associated with marketing our products internationally could materially adversely affect our business.
- The impact of the military action in Ukraine, and the actions that have been and could be taken by other countries, including new and stricter sanctions and actions taken in response to such sanctions, have affected, and may continue to affect, our business and results of operations, including our supply chain.
- If the third parties on which we rely for the conduct of our clinical trials and results do not perform our clinical trial activities in accordance with good clinical practices and related regulatory requirements, we may be unable to obtain regulatory approval for or commercialize our product candidates.
- We may be adversely affected by product liability claims, unfavorable court decisions or legal settlements.
- Our ability to use our net operating loss carryforwards may be limited.
- Risks Related to Government Regulation and our Industry
- We may have to make milestone payments under the Settlement Agreement we entered into with the DOJ.
- Product clearances and approvals can often be denied or significantly delayed.
- Although we have obtained regulatory clearance for our VIVO product in the U.S. and certain non-U.S. jurisdictions, it will remain subject to extensive regulatory scrutiny.
- If we or our suppliers fail to comply with the FDA’s Quality System Regulation, or QSR, or any applicable state equivalent, our operations could be interrupted, and our potential product sales and operating results could suffer.
- If any of our products cause or contribute to a death or a serious injury, or malfunction in certain ways, we will be required to report under applicable medical device reporting regulations, which can result in voluntary corrective actions or agency enforcement actions.
- Healthcare reform initiatives and other administrative and legislative proposals may adversely affect our business, financial condition, results of operations and cash flows in our key markets.
- Healthcare cost containment pressures and legislative or administrative reforms resulting in restrictive coverage and reimbursement practices of third-party payors could decrease the demand for our products and the number of procedures performed using our devices, which could have an adverse effect on our business.
- We are regulated by federal Anti-Kickback Statutes.
- We are regulated by the federal Stark Law.
- We must comply with Health Information Privacy and Security Standards.
- If a breach of our measures protecting personal data covered by HIPAA, the HITECH Act, or the CCPA occurs, we may incur significant liabilities.
- A cyber security incident could cause a violation of HIPAA, breach of customer and patient privacy, or other negative impacts.
- We must comply with environmental and Occupational Safety and Health Administration Regulations.
- We must comply with a range of other Federal and State Healthcare Laws.
- Governmental export or import controls could limit our ability to compete in foreign markets and subject us to liability if we violate them.
- Changes in trade policies among the U.S. and other countries, in particular the imposition of new or higher tariffs, could place pressure on our average selling prices as our customers seek to offset the impact of increased tariffs on their own products. Increased tariffs or the imposition of other barriers to international trade could have a material adverse effect on our revenues and operating results.
- If we are unable to obtain and maintain patent protection for our products, our competitors could develop and commercialize products and technology similar or identical to ours, and our ability to successfully commercialize our existing products and any products we may develop, and our technology may be adversely affected.
- The price of our stock has been and may continue to be volatile, which could result in substantial losses for investors. Further, an active, liquid and orderly trading market for our common stock may not be sustained and we do not know what the market price of our common stock will be, and as a result it may be difficult for you to sell your shares of our common stock.
- The ownership of our common stock is highly concentrated, and may become more so in the near future, which may prevent you and other stockholders from influencing significant corporate decisions and may result in conflicts of interest that could cause the company stock price to decline.
- In the future, we may be a “controlled company” within the meaning of NYSE American rules and, as a result, we may qualify for, and may choose to rely on, exemptions from certain corporate governance requirements.
- We are an emerging growth company and a smaller reporting company, and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies and smaller reporting companies will make our common stock less attractive to investors.
- Future sales and issuances of a substantial number of shares of our common stock or rights to purchase common stock by our stockholders in the public market could result in additional dilution of the percentage ownership of our stockholders and cause our stock price to fall.
- Anti-takeover provisions under our charter documents and Delaware law could delay or prevent a change of control which could limit the market price of our common stock and may prevent or frustrate attempts by our stockholders to replace or remove members of our board of directors or our current management and may adversely affect the market price of our common stock.
- Our certificate of incorporation provides that the Court of Chancery of the State of Delaware and the federal district courts of the U.S. are the exclusive forums for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
- We are subject to the continued listing requirements of the NYSE American. If we are unable to comply with such requirements, our common stock would be delisted from the NYSE American, which would limit investors’ ability to effect transactions in our common stock and subject us to additional trading restrictions.
- We have not paid dividends in the past and have no immediate plans to pay dividends.
Management Discussion
- During the year ended December 31, 2022, net cash used in operating activities of $22.6 million consisted of a net loss of $26.9 million, partially offset by non-cash expenses of $3.8 million, consisting primarily of non-cash restructuring costs of $2.9 million and stock-based compensation and depreciation and amortization each of $0.4 million, partially offset by a non-cash gain of $0.1 million related to the write-off of our right-of-use asset and liability due to the termination of the lease for our manufacturing and office space. In addition, there was a net change in operating assets and liabilities of $0.5 million.
- During the year ended December 31, 2021, net cash used in operating activities of $27.6 million consisted of a net loss of $25.1 million, non-cash gains of $6.0 million consisting of the gains on the sale of the Dermatology Business of $3.5 million, the extinguishment of the PPP promissory note of $2.0 million and the sale of fixed assets of $0.5 million, partially offset by non-cash expenses of $3.8 million consisting primarily of stock-based compensation and depreciation and amortization of $2.2 million and $1.6 million, respectively, and a net change in operating assets and liabilities of $0.3 million.
- During the year ended December 31, 2022, net cash provided by investing activities of $21,000 consisted of proceeds from sales of property and equipment of approximately $38,000, partially offset by purchases of property and equipment of approximately $17,000.