What changed in this filing

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Item 1A. Risk Factors

2023-02-22 compared with 2022-02-17 · 76 added, 101 removed, 488 unchanged (27% of the section changed)

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The following is a summary of the principal risks that could adversely affect our business, operations, financial results and stock price.

COVID-19 Pandemic Risks

• COVID-19 pandemic may continue to affect the demand for our products, adversely impact our clinical trials and limit our ability to execute our business strategy.

Commercial Execution and Product Performance Risks

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• Clinical data may be negative, or our trials may not satisfy requirements of regulatory authorities, slowing or reversing the rate of adoption or reducing use of our products by the medical community.

• Our success depends, in part, on the commercial success of the EPi-Sense device for the treatment of Afib following 2021 FDA pre-market approval of this product.

• Our success depends, in part, on the adoption of the EPi-Sense device for the treatment of Afib following 2021 FDA pre-market approval of this product.

• We may be unable to promptly train sufficient numbers of physicians in the use of our products, resulting in slower market acceptance.

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Industry Condition Risks

• A prolonged downturn in macroeconomic conditions may materially adversely affect our business.

• Rising healthcare costs may result in efforts by government and private payors to contain or reduce healthcare spending, including for procedures that utilize our products.

• Adverse changes in payors’ policies toward coverage and reimbursement for surgical procedures would harm our ability to promote and sell our products.

• International sales may decrease if coverage and adequate levels of reimbursement from governmental and third-party payors outside of the United States are not obtained and maintained.

• Adverse changes in governmental and third party payors’ policies toward coverage and reimbursement for surgical procedures would harm our ability to promote and sell our products.

Operational Risks

• Unfavorable publicity relating to our business and industry could negatively impact our operations.

• Reliance upon single and limited source third-party suppliers and logistics providers could harm our business if such third parties cannot provide materials or products or perform services for us in a timely manner.

• Our manufacturing operations are highly centralized and any disruption at our manufacturing facility could harm our business.

• Unfavorable publicity relating to our business or industry could negatively impact our operations.

• Reliance upon single and limited source third-party suppliers and service providers could harm our business if such third parties cannot provide materials or products or perform services for us in a timely manner.

• Our manufacturing operations are highly centralized and any disruption could harm our business.

• Our business could be negatively impacted if we fail to successfully integrate acquisitions.

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• We may fail to achieve our publicly announced guidance about our business which could cause a decline in our stock price.

• Securities analysts may discontinue coverage for our common stock or issue negative reports which could have a negative impact on the market price of our common stock.

• Securities analysts may discontinue coverage for our common stock or issue reports which could have a negative impact on the market price of our common stock.

• Our common stock may experience extreme fluctuations in the price and trading volume causing our stockholders to lose some or all of their investment.

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• Our stockholders must rely on stock appreciation for any return on investment as we do not expect to pay dividends in the foreseeable future.

COVID-19 Pandemic Risks

The outbreak of coronavirus (COVID-19) is materially and adversely affecting demand for our products and with prolonged delays, could continue to affect the demand for our products and impact our clinical trials, causing disruption to our business and negatively impacting our results of operations and financial condition.

We are subject to risks related to public health crises such as the global pandemic associated with COVID-19.

The COVID-19 outbreak has negatively impacted and, in the future may negatively impact, our operations and revenues and overall financial condition by significantly decreasing the number of procedures performed with our products.

The number of procedures performed during 2020 and periods of 2021 significantly decreased as health care organizations globally deferred non-emergent procedures to preserve resources and prioritized the treatment of patients with COVID-19.

For example, in the United States, governmental authorities recommended, and in certain cases required, that elective, specialty and other procedures and appointments be suspended or canceled to avoid non-essential patient exposure to medical environments and potential infection with COVID-19 and to focus limited resources and personnel on the treatment of COVID-19.

Although we observed a decrease in such measures in mid-2021, emergence of the Omicron variant in late 2021 led to such measures being reinstated in many areas globally.

We expect that challenges resulting from these recommendations and requirements will likely continue for the duration of the pandemic, and may significantly reduce our revenue.

Our business was most impacted in the second, third and fourth quarters of 2020, in terms of the decline in patients and revenue from the shelter-in-place restrictions in a majority of countries and limitations on procedures in hospitals.

We experienced sequential quarterly improvement beginning with the third quarter of 2020 as patient procedure volume trends and availability of healthcare resources improved as certain restrictions were lifted and limitations eased even though our third and fourth quarter 2020 revenue was below that in prior year periods.

Despite these challenges, we experienced increased recovery in patient utilization and revenue during 2021;

however, there continues to be variability as variants of the virus emerge and impact both procedure volumes and hospital staffing, which may significantly reduce our revenue while the pandemic continues.

Numerous state and local jurisdictions have imposed, and others in the future may impose, shelter-in-place orders, quarantines, vaccination requirements, executive orders and similar government orders and restrictions for their residents to control the spread of COVID-19.

Such orders or restrictions have resulted in slowdowns and delays, travel restrictions and cancellation of events, among other effects.

Other disruptions or potential disruptions include restrictions on our personnel and partners to travel and access customers for training and case support;

delays in approvals by regulatory bodies;

delays in product development efforts;

and additional government requirements or other incremental mitigation efforts that may further impact our or our suppliers’ capacity to manufacture, sell and support the use of our products.

We expect that challenges resulting from these recommendations and requirements will likely continue for the duration of the pandemic, which is uncertain.

We may experience diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites.

Key clinical trial activities, such as clinical trial site monitoring, subject visits and study procedures, may be interrupted due to limitations imposed or recommended by federal or state governments, trial sites, employers or others.

We may also encounter interruption or delays in the operations of FDA or other regulatory authorities, which may impact review and approval timelines.

In addition, the COVID-19 pandemic may impact the trading price of shares of our common stock and could impact our ability to raise additional capital on a timely basis or at all.

The COVID-19 pandemic continues to rapidly evolve.

The extent to which COVID-19 may impact our business, including our nonclinical activities, clinical trials and financial condition, will depend on future developments, which are highly uncertain, such as the geographic spread of the disease (including new variants of COVID-19);

the duration and severity of the pandemic, travel restrictions, business closures or business disruptions;

the distribution and efficacy of vaccines and other treatments;

and foreign government actions to respond to the reduction in global economic activity;

and how quickly and to what extent normal economic and operating conditions can resume.

To the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks set forth in this “Risk Factors” section.

Commercial Execution and Product Performance Risks

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The medical device industry, including the market for the treatment of Afib, is highly competitive, is subject to rapid technological change and can be significantly affected by new product introductions and promotional activities.

There is no assurance that our products will compete effectively against drugs, catheter-based ablation, implantable devices, other surgical ablation devices or other products or techniques to occlude the left atrial appendage.

There is no assurance that our products will compete effectively against drugs, catheter-based ablation, implantable devices, other surgical ablation devices, other products or techniques to occlude the left atrial appendage or other products and techniques to manage post-operative pain.

Our products may become obsolete prior to the end of their anticipated useful lives, or we may introduce new products or next-generation products prior to the end of the useful life of our current products, either of which may require us to dispose of existing inventory and related capital equipment and/or write off their value or accelerate their depreciation.

In addition, other products may be sold at lower prices.

Due to the size of the Afib and LAA management markets, we anticipate that new or existing competitors may develop competing products, procedures and/or clinical solutions.

Due to the size of our markets, we anticipate that new or existing competitors may develop competing products, procedures and/or clinical solutions.

There are few barriers to prevent new entrants or existing competitors from developing products to compete directly with ours.

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and the ability to comply with the eligibility and exclusion criteria for participation in the clinical trial and patient compliance.

Our products will be measured on their efficacy which is dependent on the number of patients that experience Afib or stroke following treatment with our products and the number of patients that have serious complications resulting from ablations or LAA exclusion using our products.

We cannot provide any assurance that the data collected during our clinical trials will be compelling to the medical community because it may not be scientifically meaningful, may identify unexpected safety concerns, and may not demonstrate that procedures utilizing our products are an attractive option when

compared against data from alternative procedures and products.

Our products will be measured on their efficacy which is dependent on the number of patients that experience Afib, stroke, or continued arrhythmias such as IST, following treatment with our products and the number of patients that have serious complications resulting from ablations or LAA exclusion using our products.

products are an attractive option when compared against data from alternative procedures and products.

Negative data could affect the use of our products and harm our business and prospects.

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• not approve the labeling claims necessary or desirable for the successful commercialization of our product candidates.

These factors would affect the rate at which our products are adopted in the medical community.

Our success depends, in part, on the commercial success of the EPi-Sense device for the treatment of Afib following FDA pre-market approval of this product.

These factors would affect the rate and extent to which our products are adopted in the medical community.

Our success depends, in part, on the adoption of the EPi-Sense device for the treatment of Afib following 2021 FDA pre-market approval of this product.

On April 29, 2021, we announced FDA approval of the EPi-Sense System to treat patients diagnosed with long-standing persistent Afib.

Our success depends, in part, on the medical community’s acceptance of this and other of our products in the United States.

We expect that our future revenue will depend largely on the increasing acceptance by the medical community of our products as standard of care for treating Afib.

We expect that our future revenue will depend on the increasing acceptance by the medical community of our products as standard of care for treating Afib.

medical community’s acceptance of the EPi-Sense System and other of our products will depend upon our ability to demonstrate long-term clinical performance and advantages and cost-effectiveness of our products.

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Negative publicity resulting from incidents involving our products, or similar products, could have a significant adverse effect on the overall acceptance of our products.

Market acceptance could be delayed by lack of physician willingness to attend training sessions by the time required to complete this training, or by state or institutional restrictions on our ability to provide training.

Market acceptance could be delayed by lack of physician willingness to attend training sessions by the time required to complete this training, or by restrictions on our ability to provide training.

If we are unable to gain and/or maintain such support, training services and collaboration, our ability to grow the market for our products may be impacted and we may not be able to increase our revenue enough to achieve or sustain profitability, and our business and operating results may be seriously harmed.

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Continued market acceptance could be delayed by lack of surgeon willingness to attend training sessions, by the time

required to complete this training or by state or institutional restrictions on our ability to provide training.

required to complete this training or by restrictions on our ability to provide training.

If we are unable to gain and/or maintain such support, training services and collaboration, our ability to market our products and, as a result, our financial condition, results of operations and cash flow, could be materially and adversely affected.

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Industry Conditions Risks

A prolonged downturn in macroeconomic conditions in which we operate may materially adversely affect our business.

A prolonged economic downturn as a result of the collateral effects of inflationary pressures, increases in interest rates, slower economic activity, a future outbreak of COVID-19 or a similar infectious disease, among other factors, may adversely impact our business.

Specifically, impacts to procedure volumes and hospital staffing may result in reductions of our revenue and materially and adversely affect our results of operations and cash flows.

We may experience diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites.

Key clinical trial activities, such as clinical trial site monitoring, subject visits and study procedures, may be interrupted.

We may also encounter interruption or delays in the operations of FDA or other regulatory authorities, which may impact review and approval timelines.

Geopolitical issues around the world have impacted the global supply chain and could materially adversely affect global economic growth, disrupt discretionary spending habits and generally decrease demand for our products and services.

Our customers’ ability to borrow money from their existing lenders or to obtain credit from other sources to purchase our products may be impaired, resulting in a decrease in sales.

We are unable to predict the extent to which current or future worldwide economic conditions may impact our business.

Healthcare costs have risen significantly over the past decade.

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have adopted or are considering a managed care system in which the providers contract to provide comprehensive healthcare for a fixed cost per person.

Healthcare providers may attempt to control costs by authorizing fewer elective surgical procedures or by requiring the use of the least expensive devices possible, which could adversely affect the demand for our products or the price at which we can sell our products.

Healthcare providers may attempt to control costs by authorizing fewer elective surgical procedures, eliminating incremental procedure costs or by requiring the use of the least expensive devices possible, which could adversely affect the demand for our products or the price at which we can sell our products.

Some healthcare providers have sought to consolidate and create new companies with greater market power, including hospitals.

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This has resulted and likely will continue to result in greater pricing pressures and the exclusion of certain suppliers from important marketing segments.

Adverse changes in payors’ policies toward coverage and reimbursement for surgical procedures would harm our ability to promote and sell our products.

Adverse changes in governmental and third party payors’ policies toward coverage and reimbursement for surgical procedures would harm our ability to promote and sell our products.

Third-party payors are increasingly exerting pressure on medical device companies to reduce their prices.

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Often, these denials can be overcome through an appeals process, but there is no guarantee of success in these cases.

If coverage and adequate levels of reimbursement from governmental and third-party payors outside of the United States are not obtained and maintained, sales of our products outside of the United States may decrease, and we may fail to achieve or maintain significant sales outside of the United States.

Our revenue generated from sales outside of the United States is also dependent upon coverage and reimbursement within prevailing foreign healthcare payment systems.

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Operational Risks

We may experience unfavorable publicity relating to our business and our industry.

We may experience unfavorable publicity relating to our business or our industry.

This publicity could have a negative impact on our ability to attract and retain customers, our sales, clinical studies involving our products, our reputation and our stock price.

We may experience a negative impact on our business from newspaper articles or other media reports relating to, among other things, our compliance with FDA regulations for medical device reporting, adverse patient and clinical outcomes and concerns over disclosure of financial relationships between us and our consultants.

We may experience a negative impact on our business from newspaper articles or other media reports relating to, among other things, our compliance with FDA regulations for medical device reporting, adverse patient and clinical outcomes, potential impact to our business from competitors or emerging technology and concerns over disclosure of financial relationships between us and our consultants.

We believe that such publicity would potentially have a negative impact on our clinical studies, business, results of operations and financial condition, or cause other adverse effects, including a decline in the price of our stock.

We rely upon single and limited source third-party suppliers and third-party logistics providers, making us vulnerable to supply problems and price fluctuations which could harm our business.

We rely upon single and limited source third-party suppliers and third-party service providers, making us vulnerable to supply problems and price fluctuations which could harm our business.

We rely on single and limited source third-party vendors for the manufacture and sterilization of components used in our products.

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We have significant concentrations with a limited number of vendors.

We also rely on a third party to handle our warehousing and logistics functions for European and Middle Eastern markets on our behalf.

Additionally, our devices are sterilized prior to use using ethylene oxide at third-party sterilizers.

Recently, certain sterilization facilities have experienced mandated temporary closures due to concerns over the impact of emissions of ethylene oxide from such facilities, and the Environmental Protection Agency has proposed regulations aimed at reducing hazardous air pollutants.

We also rely on third parties to handle our warehousing and logistics functions for European and several international markets on our behalf.

Our reliance on outside manufacturers, sterilizers and suppliers also subjects us to risks that could harm our business, including:

• we may not be able to obtain adequate supply in a timely manner or on commercially reasonable terms;

• we may have difficulty timely locating and qualifying alternative suppliers;

• switching components may require product redesign and new submissions to FDA which could significantly delay production or, if FDA refuses to approve the changes, completely eliminate our ability to sell our products;

• we may have difficulty timely locating and qualifying alternative suppliers or sterilizers;

• switching components may require product redesign and new submissions to FDA which would increase our costs and could significantly delay production or, if FDA refuses to approve the changes, completely eliminate our ability to sell our products;

• future regulatory actions to modify sterilization processes may cause sterilizers to close, even on a temporary basis, or require new regulatory approvals for us to use, creating lost sterilization capacity and delays;

• our suppliers manufacture products for a range of customers, and fluctuations in demand for the products those suppliers manufacture for others may affect their ability to deliver components to us in a timely manner;

• our suppliers may encounter financial hardships unrelated to our demand for components, which could inhibit their ability to fulfill our orders and meet our requirements.

Identifying and qualifying additional or replacement suppliers for any of the components used in our products or a replacement warehousing and logistics provider, if required, may not be accomplished quickly and could involve significant additional costs.

Any interruption or delay in the supply of components, materials or warehousing and logistics, or our inability to obtain components or materials from alternate sources at acceptable prices in a timely manner, could impair our ability to meet the demand of our customers and cause them to cancel orders or switch to competitive products and could therefore have a material adverse effect on our business, financial condition and results of operations.

Our manufacturing operations are conducted at a single location, and any disruption at our manufacturing facility could increase our expenses and decrease our revenue.

Our manufacturing operations are conducted at a single location in Ohio.

While we take precautions at the Ohio location, we do not maintain a backup manufacturing facility, making us dependent on the current facility and production workers for the continued operation of our business.

Identifying and qualifying additional or replacement suppliers or sterilizers for any of the components used in our products or replacement of warehousing and logistics providers, if required, may not be accomplished quickly and could involve significant additional costs.

Any interruption or delay in the supply of components, materials, sterilization or warehousing and logistics, or our inability to obtain components or materials from alternate sources at acceptable prices in a timely manner, could impair our ability to meet the demand of our customers and cause them to cancel orders or switch to competitive products and could therefore have a material adverse effect on our business, financial condition and results of operations.

Our manufacturing operations are currently conducted at a single location, and any disruption at our manufacturing facility could increase our expenses and decrease our revenue.

Our manufacturing operations are currently conducted at a single location in Ohio.

While we take precautions and are in process of qualifying a second building on our Ohio campus, we do not maintain a backup manufacturing facility, making us dependent on the current facility and production workers for the continued operation of our business.

A natural or other disaster could damage or destroy our manufacturing equipment and cause substantial delays in our manufacturing operations, which could lead to additional expense and decreased revenue due to lack of supply.

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These problems could result in delays in product availability and increases in expenses.

Any such delay or increased expense could adversely affect our ability to generate revenues.

Any such delay or increased expense could adversely affect our ability to generate revenues and adversely impact our operating results.

Future growth will also impose significant added responsibilities on management, including the need to identify, recruit, train and integrate additional employees.

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We rely primarily on direct sales employees to sell our products in the United States and in Europe, and failure to adequately train them in the use and benefits of our products will prevent us from achieving our market share and revenue growth goals.

We have key relationships with physicians that involve procedure, product, market and clinical development.

We have key relationships with physicians that involve procedure, product, market and clinical development and training.

If any of these physicians end their relationship with us, our business could be negatively impacted.

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We have invested in our systems and the protection of our data to reduce the risk of an intrusion or interruption, and we monitor our systems on an ongoing basis for any current or potential threats.

We can give no assurances that these measures and efforts will prevent interruptions or breakdowns.

give no assurances that these measures and efforts will prevent interruptions or breakdowns.

If we are unable to detect or prevent a security breach or cyber-attack or other disruption from occurring, then we could incur losses or damage to our data, or inappropriate disclosure of our confidential information or that of others;

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We maintain insurance designed to provide coverage for ordinary risks associated with our operations and our ordinary indemnification obligations, which we believe to be customary for our industry.

The coverage provided by such

insurance may not be adequate for claims we may make or may be contested by our insurance carriers.

The coverage provided by such insurance may not be adequate for claims we may make or may be contested by our insurance carriers.

If our insurance is not adequate or available to pay liabilities associated with our operations, or if we are unable to purchase adequate insurance at reasonable rates in the future, our business, financial condition, results of operations or cash flows may be materially adversely impacted.

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• Medicare laws and regulations that prescribe the requirements for coverage and payment, including the amount of such payment, and laws prohibiting false claims for reimbursement under Medicare and Medicaid;

• state consumer protection, fraud and business practice laws, including the California Consumer Privacy Act (“CCPA”), which became effective on January 1, 2020, which among other things, requires new disclosures to California consumers and provides consumers new abilities to opt out of certain sales of personal information;

• state consumer protection, fraud and business practice laws, including the California Consumer Privacy Act (“CCPA”), which among other things, requires disclosures to California consumers and provides consumers new abilities to opt out of certain sales of personal information;

• state laws that prohibit the practice of medicine by non-doctors and by doctors not licensed in a particular state, and fee-splitting arrangements between doctors and non-doctors, as well as state law equivalents to the Anti-Kickback Statute and the Stark Law, which may not be limited to government-reimbursed items;

• federal and state healthcare fraud and abuse laws or laws protecting the privacy of patient medical information, including the Health Insurance Portability and Accountability Act (HIPAA) which protects medical records and other personal health information by limiting their use and disclosure, giving individuals the right to access, amend and seek accounting reasonably necessary to accomplish the intended purpose;

• laws and regulations with respect to the collection, use, disclosure, transfer and storage of personal data that we may collect from our employees, consultants or in conjunction with clinical trials such as the General Data Protection Regulation in the European Union;

• laws and regulations, such as the General Data Protection Regulation in the European Union, that govern collection, use, disclosure, transfer and storage of personal data that we may collect from our employees, consultants or in conjunction with clinical trials;

• the Federal Trade Commission Act and similar laws regulating advertising and consumer protection;

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In the event of contamination or injury, we could be held liable for any resulting damages, and any liability could exceed any applicable insurance coverage we may have.

Our manufacturing operations may result in the release, discharge, emission or disposal

of hazardous substances that could cause us to incur substantial liabilities, including costs for investigation and remediation.

Our manufacturing operations may result in the release, discharge, emission or disposal of hazardous substances that could cause us to incur substantial liabilities, including costs for investigation and remediation.

If our past or present operations are found to be in violation of any of the laws described above or the other governmental regulations to which we, our distributors or our customers are subject, we may be subject to the applicable penalty associated with the violation, including civil and criminal penalties, damages, fines, exclusion from Medicare, Medicaid and other government programs and the curtailment or restructuring of our operations.

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that such products are safe and effective for such uses or otherwise promote them for such uses.

Similar restrictions exist outside of the U.S.

Similar restrictions also exist outside of the U.S.

There is no assurance that future clearances or approvals of our products will be granted or that current or future clearances or approvals will not be withdrawn.

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FDA requires every medical device company to make the determination as to whether a 510(k) must be filed, but FDA may review any medical device company’s decision.

We have made modifications to our products and concluded that such modifications did not require us to submit a new or supplemental 510(k).

We have made modifications to our products and concluded

that such modifications did not require us to submit a new or supplemental 510(k).

FDA may not agree with our decisions regarding whether submissions were required.

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If we or our third-party vendors fail to comply with extensive FDA regulations relating to the manufacturing of our products or any component part, we may be subject to fines, injunctions and penalties, and our ability to commercially distribute and sell our products may be hurt.

Our manufacturing facilities and the manufacturing facilities of any of our third-party component manufacturers, critical suppliers or third-party sterilization facility are required to comply with FDA’s QSR, which sets forth minimum

standards for the procedures, execution and documentation of the design, testing, production, control, quality assurance, labeling, packaging, sterilization, storage and shipping of the products we sell.

Our manufacturing facilities and the manufacturing facilities of any of our third-party component manufacturers, critical suppliers or third-party sterilization facilities are required to comply with FDA’s QSR, which sets forth minimum standards for the procedures, execution and documentation of the design, testing, production, control, quality assurance, labeling, packaging, sterilization, storage and shipping of the products we sell.

FDA may evaluate our compliance with the QSR, among other ways, through periodic announced or unannounced inspections which could disrupt our operations and interrupt our manufacturing.

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The Company provided the USDOJ with documents and answers to the written interrogatories, and cooperated with the investigation.

In 2021, USDOJ informed the Company that the investigation resulted from a lawsuit filed in Western District of North Carolina by a private individual, or "relator," under the federal False Claims Act, and that USDOJ was electing not to intervene in the lawsuit.

The relator has indicated that he intends to pursue the lawsuit.

The Company sought and obtained a transfer of the case to the Southern District of Ohio, and intends to defend itself vigorously.

However, the Company cannot predict when the lawsuit will be resolved, the outcome of the lawsuit or its potential impact on the Company.

In 2021, USDOJ informed the Company that the investigation resulted from a lawsuit by a private individual, or "relator", brought on behalf of the United States and various state and local governments under the qui tam provisions of the federal and similar state and local laws.

Although the USDOJ and all of the state and local governments declined to intervene, the relator continues to pursue the lawsuit.

During the third quarter of 2022, the relator filed a Fourth Amended Complaint, which dropped allegations of off-label promotion and now alleges that the Company paid illegal kickbacks to healthcare providers in exchange for using or referring the Company’s products, in violation of the federal Anti-Kickback Statute and various comparable state and local

While the Company is contesting the case, it is not possible to predict when the lawsuit will be resolved, the outcome of the lawsuit or its potential impact on the Company.

While the Company believes its practices are lawful, there can be no assurance that the lawsuit will not result in findings of violations of federal laws that could lead to the imposition of damages, fines, penalties, restitution, other monetary liabilities, sanctions, settlements or changes to the Company’s business practices or operations that could have a material adverse effect on the Company’s business, financial condition or results of operations, or eliminate altogether the Company’s ability to operate its business.

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We could be required to pay damages that exceed our insurance coverage, and such amounts could be significant.

Any product liability claim, with or without merit, could also result in an increase in our insurance rates or our inability to secure coverage on reasonable terms,

Any product liability claim, with or without merit, could also result in an increase in our insurance rates or our inability to secure coverage on reasonable terms, if at all.

Even in the absence of a claim, our insurance rates may rise in the future.

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Foreign countries generally do not allow patents to cover methods for performing surgical procedures.

If our intellectual property does not provide significant protection against foreign or domestic competition, our competitors could compete more directly with us, which could result in a decrease in our revenue and market share.

If our intellectual property does not provide significant protection against foreign or domestic competition, any current or future competitors could compete more directly with us, which could result in a decrease in our revenue and market share.

All of these factors may harm our competitive position.

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However, irrespective of these safeguards, or as a result of monitoring compliance with such safeguards, it is possible that we or certain other parties may discover or receive information at some point that certain employees, consultants, sales agents, or other business partners may have engaged in corrupt conduct for which we might be held responsible.

Violations of the FCPA or other foreign anti-corruption laws may result in restatements of, or irregularities in, our financial statements as well as severe criminal or civil sanctions, and we may be subject to other liabilities, which could

negatively affect our business, operating results and financial condition.

In some cases, companies that violate the FCPA may be debarred by the U.S.

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Our quarterly financial results are likely to fluctuate significantly because our sales prospects are uncertain.

Due to current worldwide economic conditions, natural disasters and other factors discussed in this “Risk Factors” section which may impact our sales results, our quarterly operating results are difficult to predict and may fluctuate significantly from quarter to quarter or from prior year to current year periods.

Due to differing rates of adoption of our devices, our quarterly operating results may fluctuate significantly.

Current worldwide economic conditions, natural disasters and other factors discussed in this “Risk Factors” section also may

impact our sales results, causing our quarterly operating results to be difficult to predict and may fluctuate significantly from quarter to quarter or from prior year to current year periods.

These fluctuations may also affect our annual operating results and may cause those results to fluctuate unexpectedly from year to year.

We have a history of net losses, and we may never become profitable.

Even though we reported net income of $ 50,199 in 2021, we have a history of net losses, including, most recently, net losses of $ 48,155 in 2020 and $ 35,194 in 2019.

Even though we reported net income of $50,199 in 2021, we have a history of net losses, including net losses of $46,466 in 2022, and $48,155 in 2020.

As of December 31, 2022, we had an accumulated deficit of $326,619.

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We expect to continue to incur substantial expenditures and to potentially incur additional operating losses in the future as we further develop and commercialize our products.

If sales of our products do not continue to grow as we anticipate, we will not be able to achieve profitability.

If sales of our products do not continue to grow as we anticipate, we may not be able to achieve profitability.

Our expansion efforts may prove to be more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses.

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Our federal tax net operating loss (NOL) and general business credit carryforwards generated or acquired may expire or will be limited because we experienced an ownership change of more than 50 percent, which could result in greater future income tax expense and adversely impact future cash flows.

Section 382 of the Internal Revenue Code of 1986 imposes limitations (Section 382 limitation) on a company’s ability to use net operating loss and general business credit carryforwards if a company experiences a more-than-50-percent

ownership change over a three-year testing period.

The Company has not utilized any net operating losses that could be subject to an ownership change.

Additionally, in connection with acquisitions, certain acquired NOLs are also subject to Section 382 limitation.

Additionally, in connection with acquisitions, acquired NOLs are also subject to Section 382 limitation.

The Section 382 limitations could limit the availability of our net operating loss and general business credit carryforwards to offset any future taxable income, which may increase our future income tax expense and adversely impact future cash flows.

Federal net operating losses generated prior to 2018 are also subject to expiration under current IRS regulations.

We have total federal income tax net operating loss carryforwards that began to expire in 2020 and federal and state research and development credit carryforwards that will begin to expire in 2022.

We have total federal income tax net operating loss carryforwards that began to expire in 2020 and federal and state research and development credit carryforwards that began to expire in 2022.

We have available federal net operating loss and research and development credit carryforwards, subject to expiration, of $331,169 and $13,205 as of December 31, 2022.

We also have various state and foreign net operating losses and development credit carryforwards with varying expirations.

We also have various state net operating losses and research and development credit carryforwards with varying expirations.

Governmental authorities may question our intercompany transfer pricing policies or change their laws in a manner that could increase our effective tax rate or otherwise harm our business.

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Additionally, the Organization for Economic Cooperation and Development, or OECD, has issued certain proposed guidelines regarding base erosion and profit sharing including minimum taxation.

As these guidelines are formally adopted by the OECD, it is possible that separate taxing jurisdictions may also adopt some form of these guidelines.

As these guidelines are formally adopted by the OECD, it is possible that separate taxing jurisdictions in which we operate may also adopt some form of these guidelines.

In such case, we may need to change our approach to intercompany transfer pricing in order to maintain compliance under the new rules.

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The Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) 350, “Goodwill and Other Intangible Assets” requires that goodwill be tested for impairment at least annually (absent any impairment indicators).

The testing includes comparing the fair value of each reporting unit with its carrying value.

We may have future impairment adjustments to our recorded goodwill.

Any finding that the value of our goodwill has been impaired would require us to record an impairment charge which could materially reduce the value of our assets and reduce our net income or increase our net loss for the year in which the impairment charge occurs and increase our accumulated deficit.

Any finding that the value of our goodwill has been impaired would require us to record an impairment

charge which could materially reduce the value of our assets and reduce our net income or increase our net loss for the year in which the impairment charge occurs and increase our accumulated deficit.

An inability to forecast future revenue or estimate life cycles of products may result in inventory-related charges that would negatively affect our gross margins and results of operations.

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An inability to forecast future revenue or estimated life cycles of products may result in inventory-related charges that would negatively affect our gross margins and results of operations and increase our accumulated deficit.

We are subject to credit risk from our accounts receivable related to our sales, which include sales to countries outside the United States that may experience economic turmoil.

We are subject to credit risk from our accounts receivable related to our sales, which include sales into countries outside the United States that may experience economic turmoil.

The majority of our accounts receivable arise from sales in the United States.

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We provide financial guidance about our business and future operating results.

In developing this guidance, our management makes certain assumptions and judgments about our future operating performance, including projected hiring of sales professionals, continued increase of our market share and continued stability of the macro-economic environment in our key markets.

In developing this guidance, our management makes certain assumptions and judgments about our future operating performance, including rate of adoption of our products, projected hiring to support our growth, continued increase of our market share, potential impact from competitive devices and therapies, and stability of the macro-economic environment in our key markets.

Furthermore, analysts and investors may develop and publish their own projections of our business, which may form a consensus about our future performance.

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If one or more of these analysts ceases coverage of our company, we could lose visibility in the market, which in turn could cause our stock price to decline.

The trading market for our common stock may be affected in part by the research and reports that industry or financial analysts publish about us or our business.

The trading market for our common stock may be affected in part by the research and reports that industry or financial analysts publish about us, our business or our markets.

If sufficient securities analysts do not cover our common stock, the lack of research coverage may adversely affect the market price of our common stock.

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These factors, some of which are not within our control, may cause the price of our stock to fluctuate substantially.

We believe the

quarterly and annual comparisons of our financial results are not necessarily meaningful and should not be relied upon as an indication of our future performance.

We believe the quarterly and annual comparisons of our financial results are not necessarily meaningful and should not be relied upon as an indication of our future performance.

The market prices of the securities of medical device companies, particularly companies like ours without consistent revenue and earnings, have been highly volatile and are likely to remain highly volatile in the future.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors